What to Do When All Your Stocks Go to the Moon | WAYT?
Summary
Market Outlook: The market has been steadily grinding higher, with the S&P 500 remaining close to its all-time high, causing frustration for those waiting for a pullback.
Investment Strategy: Investors are finding it challenging to identify a bear case, with some suggesting that the lack of a bear case itself could be a warning sign.
AI and Hyperscalers: The AI sector is experiencing significant investment, with companies like Nvidia and Oracle making substantial capital commitments, potentially leading to a debt-fueled arms race.
Stock Market Dynamics: While major sectors like tech and industrials are performing well, there are still many stocks significantly below their 52-week highs, indicating a mixed market environment.
Retail Investor Activity: Retail investors are seeing substantial gains in speculative stocks, reminiscent of past market manias, while traditional IPO and M&A activity remains subdued.
Global Economic Outlook: The OECD has raised its global growth forecast, noting resilience in emerging markets and a reduction in inflationary pressures from tariffs.
Energy Sector: Energy stocks are gaining attention with potential opportunities in refiners and oil field services, suggesting a renewed interest in this sector.
Transcript
[Music] Ladies and gentlemen, it's what are your thoughts? Good evening. >> Shalom. Happy New Year, Josh. >> Somebody in the chat, Gary wants to know, is Michael going to be dressed up again or in a Nick shirt? Wrong on both guesses. What is that? Is that >> like 70s uh supersonics? Yeah. Peace in peace. >> All right. And um this was accidental, but we each have the uh >> Oh, yeah. >> We each have the compound trucker hat on. >> I love them both. Honestly, I love them both. >> Yeah. I've been alter I've been alternating seagullman stable and uh one one of our two compound truckers. >> Guys, if you don't have one yet, idonshop.com um for in my opinion the illst trucker cap in the game. You want to get these while supplies last. Let me say hello to some people uh in the chat. Chris Brown is here. Evan Bochamp, Matt White, let's go. I agree. Biff Grebles, I see you. Um, who else is here? Georgie Cam, Dave Alva is in the chat. Blake is here talking about the risk sniffer. You're damn right. We're going to sniff out some risk tonight. >> Hey, what was the origin of that sniffing? I can't remember. I don't know, but it was funny. There was a chart that was called that and I just couldn't stop laughing about it. >> Walter Benin says, "Josh, pounding it down here in Bokeh. Pound it hard, Walter. Pound it hard. That's weird. All right, we have a sponsor. Um, Betterment Advisor Solutions. Today's show is brought to you by our sponsors at Betterment Advisor Solutions. If you happen to be thinking, there's got to be a better way to grow my RAIA, you're not alone. >> With Betterment Advisor Solutions, we do the heavy lifting so you can focus on what matters most to your clients. From improved service that makes asset transition smoother to fast paper free on boarding that delights clients on day one. We've built a digital first platform designed to streamline your operations and make life easier. Now if you're thinking >> now if you're thinking wow >> wow they take the paper out of paperwork. Then you'd be right. Grow your raia your way with Betterment Advisor Solutions. Learn more at betterment.com/advisors. Investing in risk performance not >> guaranteed guaranteed. All right. Shout out to uh shout out to Betterment. Uh we like those guys. Okay. Um the market is uh I So this would have been a better this would have been a better leadin for us if uh the market had stayed green today. >> The market is what were we about to say? The market is >> like I I guess like the market has been screaming. We took a little bit of a break today and like from my perspective, thank thankfully because I don't like those seven straight day up, you know, moments cuz you know what they normally lead to. So, we took a little bit of a breather. Um, but there are now this is all right. So, the question is, is it too good? And man, I remember reading a Jim Kramer column in 1998 on the Street.com and I'm pretty sure it was called, "Is it too good?" Like, this is a perennial problem for investors in bull markets. There are these moments where you just feel like, "No, this is too good." Like, it's it can't stay like this for long. And that's a per and it won't. And it's a perfectly natural feeling to have. And um Jim was saying there was a time in the internet boom in the late 90s and he I remember him writing a column about he he used to get his breakfast when he came into Manhattan from Summit, New Jersey where he used to live. He used to come through the Holland Tunnel and there was a diner on the other side of the Holland Tunnel and the griddle was like a thousand degrees and he would watch the guy crack two eggs on the griddle for him and it's like you have to know the perfect moment to pull those eggs up because if you leave them on for 30 seconds too long they're just burnt to a crisp and unedible and he was like comparing that to the NASDAQ which you know it ended up being true. it was just too hot. Like, is it too hot to put more money to work into this market atmosphere? So, for starters, Mike, would love to hear your your thoughts on the environment itself. >> Um, all right. So much to say. I guess I'll start here. It's not we're not screaming higher. We're steadily grinding higher, and there's a big difference. The S&P 500 hasn't been hasn't closed 3% below its all-time high since the beginning or since the end of April. Isn't that wild? >> It's driving people absolutely crazy. >> We've gone May. So, if you >> The semis are screaming. >> Yeah. No, no, no. We'll we'll get there. Okay. If you if you got out of the market in after liberation day as the market was screaming lower as it was as it was falling through the four through the floor we got that V-shaped recovery and you're like all right there'll be some sort of maybe it won't retest the whole thing but maybe it'll you know give me a better entry. Nope. No better entry. No better entry. >> Like not even close. >> Not even close. Um, so there are pockets of screaming euphoria. There are pockets of nothingness, but I would describe this market as, I guess, frustrating if you're looking for a better entry. Other than that, it's been beautiful. No pullbacks, no screaming higher. >> Unforgiving. It's unforgiving for people that insist on buying dips. It's It's just unforgiving. It is not giving you a chance to put money to work if like I I can't buy at an all-time high. Well, I don't know what to tell you. >> All right. Well, um, so we'll let's talk let's talk about what's going on like front screen first and then we'll get to other areas in the market. What's front page stuff? >> Well, I want I wanted to say this. Sean and I keep this uh best stocks in the market list, which we'll talk about later in the show. We have some some charts to show you guys. Um, but we're looking for constantly looking for where the strength is. And, uh, the size of the list will undulate based on, you know, how good the market is. And sometimes a lot of names get wiped out all at once, like they did this spring. And then when it rebuilds, the longer a rally like this grinds higher, the larger the list can grow. We have 209 names on the best stocks in the market list. And our universe is the Russell 1000. profit profitable companies in the Russell 1000. So it's not really a thousand but like 200 of let's say hypothetically I don't know how many companies in the Russell 10,000 you think are profitable 900ish >> a lot >> probably regardless there are a lot of best stocks in the market right now and I there's no story to tell when I peruse the list I look at it by sector I look at by market cap size I look at it by value versus growth any way you want to slice and dice it almost doesn't matter you got stocks working from every corner of the investment uh um I don't know stock sphere. It's like it's just agnostic. If you're a stock, you're probably going up right now. And um I don't think in and of itself there's a lot of meaning there, but I just think it's important for people to understand there are there are a lot of stocks that are doing well. >> Mhm. >> Um one other thing, I got a text from a very famous man yesterday. You know, my phone is filled with texts from famous people. Um, this is a really famous person, and I can't say who, but I can read the text. Mike, you could probably figure it out, but don't guess it out loud. Okay. >> Mhm. >> Um, bear with me one. Sorry. Oh, here it is. Okay. So, I hit him. I'm like, "Yo, Uber hit 100red. We did it." like joking around because I've been yelling I've been yelling at this guy, don't sell Uber at 70, 80, 90. Great job. So he says, uh, I haven't sold any either. Can this market continue? Everything I have is to the moon. Can it continue? And then I don't answer because I'm busy. And then the next text is fine. What are your best three for the rest of the year? >> Is this a cl Is this a client of ours? >> No, not a client of ours. Um, like in other words, I probably gave it 30 minutes without answering because it just because I couldn't. It's like, all right, fine. So, it goes from everything is to the moon. Can it continue? 30 minutes go by, no answer. All right, what are your what are your next three favorite stocks? This is everyone right now. I feel like because even if you walk away, even if you take some stuff off, and I have personally a little bit, it's like you're still looking for the all the other stuff that's going up, it's really really hard to not um to not participate right now. And I don't you feel like that's everybody? Yes. Yes. Yes. If you own stocks, you're making money. Uh I do want to point out that there are a lot of stocks that are sucking wind right now. Like there's there's two things are true. There are more stocks working right now concurrently than there have been in a long time but there are also pockets of weakness particularly those that are getting crushed by AI. The trade desk is a great example but there's a lot of them. Um I don't feel like there's a lot of them. I feel like there are a few there are a few notable ones. >> I don't know. That's kind of the that's kind of the camp that I'm in. There are a few notable companies that are that are as you describe. Um I think there's way more stocks that just look up and to the right right now. I don't know. I mean, unless you have five more examples of that cuz that's an obvious one. I agree with you. Um do you have five more of those? I can't think of any. Are we frozen? >> My internet is sucking wind. Let me close some [ __ ] out. Oh, >> all right. Close some tabs because we're a little we're a little bit live here. Verizon, you bastards. You pieces of [ __ ] What are you in your new house? Get it right. It's unbelievable. >> Are you in your new house? Are you paying up for the business uh class Wi-Fi? >> Dude, I'm paying for the quantum the quantum internet. >> How's it going? >> Horrendous. Worse than the stocks. Is it really that bad? >> No, you're okay now. >> Okay, we're back. >> Yeah, we're back. Okay. >> The question was, "Why does your internet suck so much?" Um, I agree with you. The trade desk and some of these AI casualties are notable. I just don't think there are as many as you think there are. I think there are only a few and you just you happen to know what they are off the top of your head. >> All right, we'll see about that. So, look at this. For example, I'm going to go look at stocks that are 15% or more below their 52 week high in the in the in the S&P 500. Okay, >> there's a lot, dude. >> Hey, >> hang on a sec. Index. Index. Not any. >> All right, it's not working right now. Let's just keep talking. What else you got? >> Great. Okay. Um, one thing that's concerning is that there isn't a bear case. And our friend Adam Parker points out that the lack of a bear case is the bear case. And I sort of get where he's coming from. And I think I agree with him. Those are usually not the best times to put new money to work when you can't think of a reason not to and there's nothing holding anyone back. And uh I sort of feel like that's where we are. So I just want to go into his piece for a second because I thought it was really good. He talks about a dinner. He's with seven crossasset whatever geniuses. Um, Adam doesn't waste time with people who aren't a minimum of 180 IQ. Um, and they're all laughing like what's the bare case? Like maybe if Jamie Diamond gets bullish, like there's there's almost like nothing to to point to. And then um so here's what he said. Even more than not being able to address a believable bare case, um it's challenging to even know what to monitor to get increasingly bearish. investors largely know that the paradigm has shifted with regard to using valuation as a primary or even secondary rationale for security selection. As for like financial conditions, which would be another thing people would be watching, they probably tighten concurrent with a market pullback, not in anticipation of one. So, in other words, that's not going to help you. That's going to be a stock market driven thing. um monitoring comments from BFA about credit card spending and consumer conditions, tracking the the card delinquencies, looking at employment data from LinkedIn, card data at Mastercard and Visa. These are all reasonable approaches to assessing the consumer, but they don't enable you to preposition for a downturn without alleviating the fear of missing out on further upside. So he's saying it's like the only two choices are you either have to admit you will be down when everyone else is down or you have to not participate at all on the way up. And those are two really shitty choices but we know everyone's going to make the first one. And as far as all this consumer data is concerned the consumer he says the consumer has been solid but slightly eroding all year. Meanwhile the market has just absolutely ripped it the the erosion didn't matter. So, he comes up with three, and we're not going to read through all these. He comes up with three bare cases, potential bare cases, and can you guess them without looking? What do you think they are? If you had to guess, what are the three bare cases that Adam would have come up with? >> Uh, not valuation. >> Okay, fine. Agreed. >> Um, well, he's smart. So, he I think that Adam would also not say hypers scaler slowing down their spending because that's not going to happen. They're all in. That's not a real bear case. >> Bearcase one. Oh, really? But they but he doesn't believe it. >> But that's not a but that's not a bare case because Zuckerberg said yesterday, I'd rather I'd rather go bankrupt than underspend. I'd ra I'd rather overspend a few hundred bill. That's not a real bear case. So what are what are the threats? >> Allow me. Quote, many are arguing that hyperscaler capital spending could balloon further. Forget about a bare case. Some believe the return for the spending is incredibly high. This past week, one investor told us Microsoft gets its return back in one year. Another investor said the aggregate return on hyperscaler capital spending breaks even in 3 years, has an ROIC of 15 to 20% in year four and a 30 to 40% return in year 5. This means reasonable people in the investment world in addition to those at the companies believe that for now even more capital spending could be justified. So he says, "No way. That's the wrong bare case." >> Correct. >> Case two, government deficits force interest rates to back up, which eventually hits the stock market. Quote, "We are worried about this, but we don't know how to time when it will matter, and positioning for its inevitability would have destroyed returns nearly every year for two decades." So he throws that out. Barecase three. This one actually I think is is the big one. My personal opinion, AI/productivity boom hits white collar employment. Quote, recent data have indicated higher than normal unemployment from recent college graduates. The truth is, we don't have a great answer for this other than every other technological innovation cycle that focused on productivity caused labor to be deployed in new and different areas. AI feels like it has the potential to be different, but for now, we think what's good for margins for the top 500 US equities will probably matter much more for US equity investing than long-term higher unemployment. >> That's what I was going to say. So, so >> but but my caveat is for now. >> Yeah, sure. All right. So, the three bare cases that he laid out, they're they're not real bare cases. So, >> he's like that's that I think that's the point. He's like scratching and coing for something and he can't find it. >> Okay. Well, all right. I just want to So, I got the list. Let me ask you just circle back to when my computer froze. You said that the trade desk is just one example that's easy to pull from the top of the dome. Let me ask you this. So, what do you think? Let me Let's use 20%. Okay. How many stocks in the S&P 500 do you think are 20% or more below their 52- week high? So, >> okay. Uh, the number is 150. >> It's a lot >> higher than I All right. Higher than I thought. >> Almost one in three stocks are So, and if I if I expand that down to 15% or more, it's 203. >> So, not everything is up and to the right. >> If you're 15% below, you see that on the chart. >> It's it's yeah, >> it's 203 stocks. So, this is my point. The stock market is not screaming. The hyperscalers are screaming. The semis are screaming. The [ __ ] nonsense pre-revenue companies are screaming. I credit to you if you're making money there. That's what's screaming. Everything else in the middle is sort of blah. There's a lot of blah. There's a lot there. There's a lot of blah. I guess for me, the fact that it's industrials, tech, communications, and financials that are all at highs means so much more than just a raw count of how many S&P names. You're right. I don't give a [ __ ] about I don't give a [ __ ] about all those consumer staples and [ __ ] uh drug companies that are 15% off their highs. A I don't think anybody cares. B I don't think they're the drivers of earnings growth for the S&P. Most of their market caps don't matter. And I think if they went to zero, nobody would even notice. >> I mean, that last part's not true, but you the point that you made is is is the right one that the stocks that you need to be making alltime highs are and that's all that matters. >> You see that? Um now is it too good? >> No, it's not too good. >> Um for the hyperscaler part of the market for the AI story. So this happened uh I don't know last night. Nvidia to invest up to a hundred billion dollars in open AI linking two artificial intelligence titans. You know what this is like? This is like that episode of Scooby-Doo where the Harlem Globe Trotters show up or like Batman arrives and it's like whoa, what are they doing? Like what? >> Is that is that is that a is that a 44 year old reference? What year are we talking about? >> I'm 48. Yeah. No, in the early 80s you could a thing that could have happened is you could have been watching Scooby-Doo and then like they're trying to solve a case and [ __ ] Batman and Robin show up and if you're seven years old when that happens, he you have to Like you have to run a lap around the block. >> Yeah. Like they could they could do that. >> All right. But it finally happened. The only way this story would have gotten better is if Nvidia is investing a hundred billion into Open AI and Dan Ies is delivering the cash in a brief in a in a [ __ ] tie-dye briefcase. Like I don't even know what else could have made this story like a a more exciting story. And the rally kind of faded immediately after. But there were some really great memes. And if you're like sensitive, um, now would be a good time to look away from >> Hold on. Before the memes, I told I told you that I I I spoke to you. Dan is the [ __ ] best. >> Excuse my language. >> I was at dinner with him the other night in a in a sixperson booth >> and there's two pe So Dan me and Dan are middling and the two people to the side of him are in very traditional navy blue suits and he's in the rainbow outfit. I love him. I love him so much. >> Let's go to the Let's get to the memes. >> All right. Um I guess this is like a Nintendo joke. Yo, if you I heard if you press up up down down, left, right, left, right, ba in San Francisco, there's an infinite money glitch. So that's uh Contra. uh how you get 30 free lives in in uh okay >> so talk speaking of 80s references but like >> o okay so like open AAI is going to spend hundred billion dollars in the Oracle cloud Oracle is going to take hundred billion dollars by GPUs Nvidia will take that hundred billion and it make an equity investment into open AI and it's just round and round we go these three companies are building the Stargate whatever that is it's going to be huge uh here's the next one I like this one this is a great meme format at underused. Nvidia is investing how many billions into Open AI to build 10 gigawatts of AI data centers because you know the person in the picture has never thought of a gigawatt um or an AI data center in her entire life or ever will. Um here's another version of the uh merrygoround. Open AAI buys capacity from OCI. That's the Oracle cloud. Oracle stock goes up, buys more chips from Nvidia. Then Nvidia stock goes up. Then Nvidia invests 100 billion in OpenAI. Then right back to OpenAI buys capacity from OCI. Look, there's like it's not quite this neat. Oh, there's one more, guys. Get over it. All right. Um, Nvidia investing 100 billion into OpenAI in order for OpenAI to buy more Nvidia chips. And I will not describe the uh the picture if you're listening. You'll just have to trust me. It's uh it's a funny meme. All right. So, this is like not and not unfounded concern because this is sort of the way the dot and telecom buildout in the late 90s, early 2000s came to an end. you had a lot of companies um that were doing these kind of like vendor financed equipment sales where they would like literally give a potential customer money. The customer would take that money and buy equipment from them. They were like financing their own growth and they were doing it with routers, servers, storage, um they were doing it with fiber optic stuff and like it sort of like represented the capex boom slamming into the wall. >> Yeah. So this is exactly where we are. I was speaking about this with Ben this morning. Uh Ben Thompson wrote about this uh over the weekend that this Oracle and he was quoting somebody else. this Oracle deal going negative free cash flow and making sure that uh there's now leverage involved because the hyperscalers it was all free cash flow and they don't give a [ __ ] We've you know >> self self financed out of cash flows. So now you add the leverage, you add the the debt involved and oh my god, this is a freight train and uh I don't know S&P 10,000. >> Yeah. Coreweave putting in the Dow. Look, we we had like we had this whole thing and um I know a lot of the time I go back to that bubble because honestly it was the greatest show on earth. It was the most insane thing I ever witnessed. But we really did have like companies like Cisco and there were a lot of Cisco back then. And there was Juniper and Sycamore and Sienna. These were companies that were trying to sell as many routers and switches as they could into a telecom boom. The telecoms were being financed by IPOs and junk bond sales. >> But this is how it all this is how this is the end, right? Not not not like >> Yeah, that was this at some point in time once we start getting debt involved because the free cash flow can't support it like this is how eventually it ends. and whether it ends uh you know four quarters from now or 20 quarters from now eventually it's probably uh oh somebody can't make the can't make >> but it's but it's coreweave like look I I missed the runup in that stock and I really don't care and I'm missing the new runup I missed the original runup in in core when it came public I was skeptical it dropped and then it ran from 35 to 183 and then it sort of had a slow motion collapse back to 87 and I I don't know if that's because of like a shareholder lockup expiry. Okay. So, a lot of people were able to sell and then sometime around the first day or two of September, >> it just launched all over again. 87 back to 130. That doesn't sound like a lot, but this is a large market cap company. 64 billion market cap. And it is just careening back and forth between double digits, triple digits, double digits. This is for for me for me ground zero in this whole thing. This is hugely debt financed. Yes. In the hottest business in the world, cloud computing. Um, another strike against it is it's in in New Jersey. Another strike against it, it's in it's in Livingston, New Jersey. And I know everyone that lives in Livingston, New Jersey. Um, I don't invest in companies based on Long Island. I definitely don't invest in companies anywhere around that Livingston Short Hills area. So, it has a lot of strikes against it. And if if that concept of like vendor financed purchasing hits the wall, that's where you're going to see it in that stock. People are going to get really scared of that thing. What do you What are your thoughts? Yeah, I don't know enough about the core reef specific part of it, but I would just say again it's really important that this is the next phase in the market. Um, so this is this is from Doug Olaflin. This is really important. He said, okay, um, the implications are profound for Amazon, Microsoft, and Google. They can no longer treat AI infrastructure as a discretionary investment. They must defend their turf. What have been a disciplined cash flow funded race may now turn into a debtfueled arms race. That's a vibe shift of if I've ever seen one. Welcome to the next and newest phase of the capital cycle. I believe the Oracle quarter achieved something more elusive than just revenue. I believe Oracle has just sparked the elusive animal spirit to life. For me, Oracle is the quarter that will remember in history. I'm starting to think that the tariff tantrum anyway. He says like this is it. Oracle is going negative free cash flow. >> Negative free cash flow. >> Wait, can you explain for everyone what was the significance of the Oracle? So this was the Oracle earnings report last week which took place a month after earning season and the stock had its biggest move ever. It went up 40% in a day which in dollar terms is just an insane amount of money. What was it about what they said that caused that kind of a stock reaction and why does that ignite this debtfueled arms race when before all these companies were comfortable spending out of cash flow and like what like what it what was it about what Oracle said that makes this guy feel that way? >> So one more quote and I'll tell you that he said compare the spending of the big three with that of Oracle. Oracle is going to go negative free cash flow to win and it's likely that incumbents will respond. I believe it's time for technology incumbents to start spending a lot more and most already indicated that they will. But on Thursday, but when one >> on th on Thursday, Mark Zuckerberg was on a was on a podcast and he said, "If we overspend >> by a few hundred billion dollars, that is much less d He goes it'll be unfortunate, but that will be much less dangerous than falling behind." So the contract that we learned about in the Oracle call, was that a $400 billion contract? >> I think $300 billion contract with AI. It was like $50 billion annually and I can't remember the details but OpenAI is only doing $10 billion worth of revenue and they're committed to like 50 a year for the next six years. Whatever the number is there is not enough free cash to justify it and uh enter private credit or or public and and public credit, right? Blackstone's going to get involved. All of these giant pools of capital are going to get involved. And if this does not translate into gobs and gobs and gobs of cash flow, and maybe it will, maybe it very well may will, but this will be the time where we look back on and say, "Okay, that was it. That was like the beginning of the end." And who knows when the end can be. The end can be 15,000 on the S&P. Who knows? >> But I guess I'm trying to figure out where is the cash flow that gets generated from going negative cash flow to make these capex investments. Is it coming back in the form of subscriptions to OpenAI, $20 a month from a billion people? Cuz then I sort of get it. Is it more like an enterprise customer spend and all of these companies are now going to take whatever spending they're doing and migrate it into the AI and leave behind legacy spending that they used to do. Yes, >> it's all of these things. I think it's all it's I think it's the 493 that are not doing anything that are basically at zero, >> totally rebuilding their entire stack. >> In the chat, um, Air Max Elitist says a trillion dollar spend for a new search engine doesn't seem financially responsible. So, I know he's being sarcastic, but like I do feel a lot of people are like, I don't understand. It's just a software I could talk to differently than I talk to Google. And that's where all this all this listen listen. I I I understand that sentiment too, >> but don't be so naive. >> Like think about >> I think he's being a smart saying this is what people think. >> Think about what what happened when we got the iPhone 7. I'm sorry. The iPhone 7. Think about when we got the iPhone. What year was that? 07. When did we get the first iPhone? >> Yeah. >> Could you >> 07? But nobody bought one until iPhone 3, which was uh 2010. You never in a million years could have predicted everything that was to come. >> The GPS unlock, the Uber, the app store, the n like not maybe not Netflix. You could never you could never ever have guessed what's coming. So don't act like this is the final version and that it's done and that all of the that Mark Zuckerberg is an idiot and you're smarter than him. Um just don't don't be that guy. I said that on TV today about Jensen Wang and like Frank So Frank Holland was guest hosting. I don't think Scott would have asked this question. Um, shout out to Frank, but he's like asking me, Joe Teranova, and Jim Leenthal. >> Like, is Nvidia making a mistake committing to spending 100 bill? And I'm like, dude, >> yeah. >> Are dude, are you you [ __ ] kidding me? Like like in other words, like can you imagine the audacity it would take for somebody sitting their ass on the New York Stock Exchange in a suit um critiquing what Jensen Wang thinks is the right investment to be making in AI. >> Good for you. >> Give me like like come on. Like what are we doing here? Um now we could critique like the shareholder reaction and of course there's like room to discuss like whether or not the stock reacted well to it. I would argue it did not. I think if if that announcement came six months ago, Nvidia would have gone right to 220 and Nvidia did not. It reversed. Um I I think I think it had a I think it had a weak day today. That could change because M uh yeah, it was down 3% today. That could change because Micron just had great earnings after the bell, but Nvidia had this huge pop on that news and then gave it up. >> All right. Market's open tomorrow, too. >> Uh All right. But but this is this anyway the point is I know we're going long here. The Oracle quarter and what's happening now because I feel like we've been saying the same [ __ ] every week for the last I don't know six months. This was an inflection point. So all right wait before we so before we move off of this the question is what do you do? So my opinion and then I want to hear yours. You do not buy any more AI unless you're willing to trim some of your other AI. I don't, in other words, for this for me, I'm not telling other people what to do. I will not commit more dollars into the AI theme unless I'm taking profits from something that's already gone up a ton. I don't want to keep >> What is the AI theme specifically? >> Well, I guess at this point, it's probably half the NASDAQ 100. It's all the utilities and the um and the natural gas transmission companies that are related to the buildout. It's the industrials that are digging up ground and and assembling all of these new data centers. It's a really big theme and I guess from my perspective, I'm I'm glad I'm in it. It's done really well. A lot of stocks have gone up a lot a lot of points or percentages for you. And uh that's great. I'm not looking for my 12th AI stock. And if I find one that I really want to be in, I think my my argument would be, okay, but the money's got to come from somewhere. I am not going negative equity to win the AI race as a as a common stockholder. I'm not I'm not willing to play it the way that um Oracle is willing to play it. Yeah. >> What do what do you think is the answer here, >> man? Shut shut up and buy. >> I don't know. No, this is the fun part. I don't know. This is like what we're doing here talking about. I I don't know what the answer is for everybody, but >> another answer is um focus less on valuations and price targets and and all that old school [ __ ] and maybe just um focus more on your own position size. >> Hang on. I I mean I hate I hate this entire conversation because specifically it's like are we talking about your brokerage account? Like I hope we're talking >> you I'm just saying I hope the listeners like we're talking about like if you have a fund trading account, right? This is not like your this is not financial advice for your, you know, your your retirement account or anything. I'm talking about your if you have a stock trading account. >> Yeah. Self-directed or you work with a broker and you've got 25 stocks in your portfolio. Should you be looking for 26 stock and your whole portfolio is like um Micron, Broadcom, Nvidia, AMD right now? Right now? No. No. Of course not. >> So that's I that's how I feel. And if you come across something that you feel like, all right, this is going to be the next phase of the AI trade, that's fine. Maybe lose maybe lose a little bit of Microsoft then. >> Yeah. Yeah. >> Maybe lose a little bit of meta. >> Okay. Um, so it is a very interesting market. We have on the one hand and like the market who the participants there's so many different storylines and areas of the market. You have the American Association of Individual Investors that we've spoken a lot about not participating in in in the euphoria. You have Charles Schwab's quantitative literally what are the clients doing? This is not a >> this is my quant. >> This is not a quantitative. This is not a survey. What are the clients doing? They're not very bullish like at all. The last five months it's been sort of flat. Um and then you have of course uh you have this one corner of the market. So I opened up my Twitter and I saw Buco Capital who is one of the best accounts on the platform in my opinion tweet and he nailed it. My feed is just retail investors posting screenshots of literal millions in gains from unprofitable and even zero revenue businesses and then some fundamental investor slowly going insane screaming into the void. >> When have you seen that before? >> Um I saw >> 2021 2021 >> you know the original somebody tweeted this I can't remember. It was so good. This is like 2016 about people just screaming, professional investors screaming into the void. >> Anyway, >> 21. >> Okay, so the people that are now forget Schwabin and and the AI talk about young people that are into trading the Robin Hood like the re the retail investor when you think about them, they're on fire. They are absolutely on fire. So Goldman Sachs has a has a basket. Um the con so on please. This is from Sherwood. Luke Kawa. Luke said a Goldman Sachs basket of stocks widely held by the retail community is going straight up and to the right poised for a record 10th straight day of gains. It's up. >> Look at that bar. The bar is the number of days of >> consecutive days. It's up 13% over a 10day period. Now Liz Anaunders and I'll stop talking one sec. Liz Anne Saunders tweeted um the meme the meme stocks are up 73% on the year and credit to us >> we created a DJ Dow unfortunately it's not investable >> and chart off for a sec John I just want to set this up so we first unveiled this in December 2024 and we were like listen if this is the top we'll own it our bad sorry if this is like negative ju guu bad vibes >> people are mad at us >> okay the djen dowo is up 67% % year-to- date. And interestingly, a lot of the names that I would think are in the meme index, a lot of those things are not in here. So, we have uh look at that. Up 67% and yeah, >> holy [ __ ] >> it got so even more impressive is than that, it almost tripled off the lows. So, here's the thing. You have hyperscalers going berserk, the AI trade, and then you have all of these not even unprofitable names, although yes, they are unprofitable in some cases. You have pre-revenue companies. So Josh, you know what's going on with Olo, the nuclear company, >> the mini nuclear reactor company that Sam uh Alman is invested in. >> So this company, >> it looks honestly it it looks like they just invented uh GLP1s. >> So this the stock is going straight up 1500% over last year. Whatever. It's It's a $20 billion market cap. No revenue. >> Yep. Why Why would you need revenue? No. >> No anticipated revenue next year. Maybe in year 27. And they speak a lot on the on the on the call about the administration and data centers and nuclear energy. And listen, investors aren't stupid. Okay? It is going up for a reason. And not only the people that buying it not stupid. Now, maybe some of the people that are buying it today are stupid, but credit to them if they made money. Making money is not stupid. I don't I don't put smart as investors. In fact, making money is the opposite. Making money is the opposite of stupid. However, I got a a text from my brother-in-law who is a an artist. Okay? He's an artist. He's a musician. He doesn't ask about the stock market, and when he does, I pay attention. So, he said, uh, "My dad made some adjustments to my portfolio." This is on on Saturday recently, and asked me to pass along a question for you. He purchased shares of OKO, a startup work on nuclear reactors to power AI. >> Adjustments to my portfolio. >> Since then, the stock has got up about 20% of my account. He's curious if you have any perspective on Ocula specifically or more broadly on the rebirth of the nuclear industry. So I said, "Oh boy, lol." I was just looking at this. So I said, "I haven't done any work here, but" and I'm just showing him a few tweets. >> Yeah. >> Um somebody tweet, I shared I shared this with him. Here's a tweet from uh sad value investor. My boy who thinks that Olo is almost the same size as Nvidia because the share prices are similar is up 200% this year. All right, let me read that again. My boy who thinks that Olo is almost the same size as Nvidia because they have the same share price. His account is up 200% this year. >> You know how frustrating that You know how frustrating these moments are for people that know anything. The more you know, the worse you're doing right now. >> Correct. So, to Buo's point. So, here's what I said. This is a speculative mania. It's a $20 billion market cap. I have zero insight into the fundamental hope driving these moves, but it's wild [ __ ] Doesn't mean it has to stop going up tomorrow, but yeah, ride the wave, but don't risk more than you could lose. I hate talking about this type of stuff. I'm not educated on, but this type of vertical move higher usually ends very poorly. So again, if you just have a few bucks in this name, then by all means, who cares? >> You have a million-doll portfolio, maybe you could just take $10,000 and buy VIX call options um December or January strike and just wait for some [ __ ] [ __ ] to happen. And uh that's that's like if if you want to buy insurance because your portfolio is so much and you have so many of these names >> and you can't believe how much they're up. >> If you want to if you want to peel 10 grand 1% out of a million dollar portfolio >> 1% >> do it. >> Yeah. >> Oh. Oh, I'm sorry. You're 100% right. Yeah. Yeah. Yeah. Fine. >> 1% of of a million dollar portfolio. Buy VIX 25 calls. >> Oh, >> don't even don't even look at the premium. forget whatever it is doesn't matter because um if we get one of these swift 10% ass kickings because of how insane things are right now. You're going to be thrilled that you did that. This is not financial advice for me to you. I'm speaking rhetorically. I don't know you. I don't know I don't know anything about you um personally. >> So Tyrone just texted us uh a text that he got this morning. Good day. How do you feel about Ollo? Like everybody knows. Everybody's in. Um >> it's the next it's the new pal it's the new palent. >> So all right. So I I said I've said this now several times. >> Put up the DGEN DAO real quick. We don't have this one, do we? >> So none of these. [ __ ] We don't have ionic in here or MQ, whatever it is. We don't have the quantum computing that we're getting. >> Ionic. That's the quantum computing. >> Uh and QBt. >> What do we have in here that needs to be um >> We don't have ri We don't We don't have rieton. Get Get DraftKings out here. That's That's >> We don't have Rieton. >> We don't riot. DraftKings might as well be Apple at this point. Get that out of here. We need to We need to take >> Dude, I just realized you're not a Sopranos's guy. This like one of the best ever. One of the best ever Anthony Jr. lines. >> My bad. What? >> There's like a fight at the family dinner. >> No, no, no. It's like a family fight at the dinner. And he goes, he's like 8 years old. He goes, "What?" So, no [ __ ] ziti now. >> Um, all right. >> What's Regetti Computing? >> Regetti. I want I want to end with this. It's really hard not to see this nonsense. All of these unprofitable and in some cases pre-revenue names going up 20% a day with a 20 million market cap. It's really hard to see that happening and not want to take all your money out of the market. However, this is the world that we live in. This type of activity is not going away ever. Get used to it. This is the game now. Don't let it distract you from the fundamentals and the reality that th this is a legitimate bull market and this nonsense is just going to happen when there's risk appetite. You're going to see these type of moves. Get used to it. Last point, throw up this chart. I asked Sean to make me a chart. Great work, Sean. Um chart off, please. Actually, let me set this up. I said, Sean, how many plus 1% days have we've seen in the equal weight since July? I just put picked a random date. um and he made this chart. Look look look back please chart on. So we've have we've had seven 1% days for the equal weight index since July 1st. That's 59 days. So Sean zoomed out and made a 59day window. And look at >> normal >> and this is normal. This is this ain't nothing. This is nothing. So when you say we're screaming higher there's a it's a speculative mania. Yeah. In some places but it's but this is nothing. I mean, we're going to like now mass-roduce mini nuclear reactors, like igloo cooler sized nuclear reactors. >> Dude, they're going to be in your ear. >> Can I have one in my backyard? Look, I I know we're joking. All of the capex spending, the trillions of dollars in capex spending for data centers, it's worthless if you can't power the facilities. And you literally cannot power the facilities with and Michael assembblest um explained this to us in many different ways on many different occasions. You absolutely cannot light all of these facilities with the current energy infrastructure. There's literally no chance that you'll be able to do it. It's not going to be wind. It's not going to be uh solar. You like you literally need something that's that's nuclear. Now, do we want to build like 10 more 3M islands in this country? I don't think there's the appetite for that. So, the Olo bull case and all the uranium stocks, like I totally get it. And we talked about this with uh with um Yan Vanek and they have an ETF that owns all this nuclear stuff or like right like all the miners. Okay. So, I totally understand the story that almost like you can't have the the AI projections they're making, the usage projections. You can't have them if you don't accept the fact that there's going to be a heavy nuclear component. So, fine, I get it. I still don't want the exposure to it because I'm not convinced it happens in a linear fashion, like in a straight line. Um, and if I miss, if I miss, I miss. But I can envision a scenario where these stocks are all cut in half in in the course of 20 days and people like, "Holy [ __ ] what just happened?" >> I'm I'm looking at Foranx when I was on, did he say this was their biggest one? Oh, NLR. Is that the one? >> NLR, nuclear. He said it was their biggest in biggest inflows this year. >> This thing has $3 billion in assets >> probably all in the last uh 12 months. So anyway, in conclusion, it is a fun and interesting and boring and psychotic insane market all at the same time. There's a lot of different things going on. >> Okay, here's something interesting. We got a we got an update to the um OECD um global growth outlook. And it turns out that a lot of our worst fears about tariffs really just are not showing up in the way that they were expected to show up. Not really serving as that much friction. And you know, we're hearing once more, well, you haven't felt them yet. All right. So, but definitely I will like at this point, right? >> Is that what they're saying? It's a little bit It's a little bit like um waiting for you know it's like waiting for GDAU and I don't know do you know the reference? So waiting for GDAU is a famous play um it's horrendous by 21st century standards unwatchable. The the point of the play is that nothing happens. It's two characters um having a two-hour conversation that just goes in circles while they're waiting for somebody to show up for some reason. Um GDAU never shows up. Spoiler alert. It's a complete [ __ ] waste of time. But I guess for people in the late 1800s, this was like the height of entertainment. Anyway, waiting for these tariffs to Yeah. No, it's amazing. Um waiting for these tariffs to like show up, it's a little bit like waiting for GDAU. We're just talking ourselves in circles. But let me uh let me quote a few things and then I want to hear what your thoughts are. >> Okay. >> The the OECD now expects global growth of 3.2% this year compared to the 2.9% expansion it had forecast in June. Global growth was more resilient than anticipated in the first half of 2025, especially in emerging markets. The full effect of tariffs is yet to be felt. However, um we are warning of significant risk to the economic outlook. That sounds like they put that in every report. >> That's a that's a Grand Rapids hedge >> big time. That you could just automatically include that. Um but what's notable is that they are now raising the global outlook and the US outlook for GDP. Um the OECD now expects uh headline inflation to amount to 3.4% 4% across G20 countries, slightly lower than June's 3.6% uh projection. So, they are reducing the tariff shock inflationary pressures that they were worried about and raising the um the global economic growth. Um and I just one last thing that I wanted to pull out. Um let me see if I could find it. Oh, growth expectations for the US alone went to 1.8% 8% for 2025. The June essay was 1.6%. >> All right. Enough. >> So, so all right. But so like that's the backdrop. So you talk about a lack of a bare case. >> Yeah. >> This is not a situation where the global economy is teetering. We're getting rate cuts and they're raising growth expectations simultaneously. Think about that. >> I'm thinking I'm thinking I'm liking. Uh I don't think that this is just a US phenomenon, although it's probably more pronounced here. this K-shaped economy that we live in. It is what it is. And obviously like the the the the fabric of our society part. Let's just let's not talk about that for a second. Just purely the economic ramifications. Okay. Purely economic. The people with money have so much of it and are spending so much of it and I don't know what stops that. >> There is stock market stock market crash. >> Yeah. It's circular. It's circular logic, right? right? Like as long and as long as it keeps spending, the stock market will keep going up and up and up and it's it's the meme that we were talking about earlier. >> But but you made you made the most important point that it's not a US only phenomenon. I follow a lot of celebrity DJs and these are people that go around the world playing parties and depending on the time of year it is, they're going to the same spots because that's like where this global elite class is gathering. And sometimes the top 1% in the world, sometimes like the top 10%. So Ebiza Ibiva is not all 1enter global 1enters. It's just the the place to be. But this is like a migrating party. It's the same people. They go around the world and it's one point of the year they're in Sanrope. Then they're in Monaco. Then they're at the F1 race in Miami, the F1 race in Austin. Uh >> Monaco or Monaco? Shut down. >> No, it's not. Um but like uh they're in St. Bars at the end of the summer. It's like this this thing, but like the amount of people who have the money to be at these things at this point is like what what I think has changed. Like imagine like these velvet rope opportunities to go to these places to see like [ __ ] Marshmallow DJ or something and >> right it doesn't matter how much money you have, you can't get in because the sheer amount of people who have the money to do this >> has exploded. And I think that that's really what changed >> and it's not debt. It's equity. We've got equity and cash equity. >> So, you know, I'm a wealth effect guy. >> I know. >> So, you ask me you ask me um like what what changes this. I just think it's the stock market. >> You you get a 20 another 2022 without a V-shaped recovery at the end. That's what changes this. >> Sure. Yeah. >> But like you you want to you want to like bet on that happening? >> No, dude. It ends it ends when it ends. It'll right like I don't know. That's it. >> It's true. All right. Um, one last thing on this. Powell spoke today in Rhode Island. Neil Dutter had an instant reaction. We could put this up if we have it. In Powell's speech, two things stood out to me. First, the recent pace of job creation appears to be running below the break even rate needed to hold the unemployment rate constant. Second, quote, the increased downside risks to employment have shifted the balance of risk to achieving our goals. So Neil is saying policy still be characterized as modestly restrictive. There's reason to expect Powell to be on board with rate cuts at each of the next two meetings. So like assume assume Powell's pivot toward being more outwardly concerned with the uh labor market versus inflation. Another two rate cuts. Last thing, I'm seeing a lot of versions of this chart going around. Put this up. Have you seen one of these yet? >> I have not. I hate these charts, but what's >> that's why I'm pulling it out for you. >> 2018 versus 2025. We had this really scary dip earlier in the year in 2018 when the tariffs started. Then we had a big recovery in the S&P and then in the fall, the wheels just completely fell off and the market crashed into Christmas. And a lot of people are taking that action and they're plotting this year. Now, obviously there were more differences than similarities, but I wanted to just uh >> This is criminal. >> I wanted you to get a little fired up with this because I've seen a few versions of it. >> This is criminal. Show me the percent change. That's That's horshit. >> No, cuz that ruins it. >> The percent change actually is not that bad. >> Yes, the truth. No, it's bad. >> Uh how much was the April uh how much was the April correction? 19%. >> Is that all it was? >> I think Yeah, I think the March correction in 2018 was 19%. >> Oh, really? Cuz I remember March was was 19. And it was only 19 this time around. All right, maybe I stand corrected. Either way, so what? Lines can only go two directions. Okay, they can go up a side three up down sideways. Oh, shut up. This is nonsense garbage. >> Um, all right, next next topic. So, I want to go through this quickly because it's enough already. But uh but Josh Schaefer tweeted this chart from bank from uh Savina Supermanian and she said since 2023 consensus has been overestimating earnings growth for the 493 while underestimating growth for the Mag 7. It's just remarkable like the dark blue lines the forecast has has continually come in lower than expectations. They've been underestimating and overestimating on the on the on the light blue line. It's just remarkable. >> Remarkable. Uh, next chart. Todd Sen. Uh, semis. Holy [ __ ] >> They're 15% of the market now. >> Unbelievable. Broadcom is larger than Meta. What in the world? >> Not for long. You know the thing about market tracking changes in market cap or dollar amounts in market cap, man. That overnight overnight. >> Yeah. Yeah. You're right. You're right. We've seen hundreds of billions come out of Apple at the drop of a hat. >> So, perfect segue. Next chart. Apple and Nvidia now 14%. >> 14% of the S&P 500. >> Wow. >> The two stocks combined are 14%. What is it? What is the thing we used to talk about where like AT&T and um and General Electric 40 20%. >> In the 1960s or 50s. >> No. Yeah. It was uh man in my head I think it's like 17%. We're getting there. We're not too far away. It's it is right. It's wild. Uh all right. However, um although 3000 spent years under water, so finally >> we got the Dow, the S&P, the NASDAQ, and the Russell for the first time since 2021. >> All right, I I've said this before. It's like there's so much data and information. It's really easy to make to paint any picture you want about the market. I mentioned earlier, and it's fine. There's nuance involved. It's not black or white. I mentioned earlier the euphoria in that segment of the retail market which is let's call it what it is and I'm not mad about it but it is euphoria. Um and then other places in the market it's like you know sort of yawn. So Urine at Fidelity Yurian Timmer uh is talking about he's talking about lack of froth in the market. So Urine says another sign of froth in the market would be a surge in IPOs and M&A activity. So far there are no signs of this. The chart below shows that IPOs and secondaries remained at average levels and far below the extremes experienced in the easy money liquidity bubble in 2021. Chart on. Look at this. >> So the purple and blue lines at the bottom uh that represents IPOs and secondaries and nothing I have a counterpoint to this. Would you like to hear it? >> Sure. >> Okay. We don't need new IPOs for that to have that froth. >> Agreed. We're dredging up the old IPOs that were broken. >> I agree. You're right. You're right. >> Open door. Um, all the [ __ ] Eric Jackson's doing with all I don't even know what those stocks are, but those were 2021 vintage IPOs. When you have a stock at $2 that runs to 10, there's no need for there to be a wave of of new IPOs because we have the old ones. Um, >> I'm in Joby and Archer Aviation. These are 2021 vintage bubble uh stocks. Um, but they've made a lot of progress in their business over the last four years. But like that's what's replacing >> Yep. >> all of that supply. But then we do, >> we don't have a bubble in IPOs, but [ __ ] we got coreweave this year and we got a bunch. >> All right. So, next chart shows M&A activity or lack thereof. It's almost fallen off a cliff. Not almost. It has fallen off a cliff. But Josh, to your point, you're right. I US IPO activity picks up after Labor Day. Uh, September strong start stands out for most recent years. That's Bloomberg. So, we are getting more IPOs, but you're right. You're right. I I think the the context that you give around Yurian's lack of IPOs is is is important. So, >> there you have it. More of that. And then lastly, do you have anything else? Let's just let's let's wrap up. >> Um the AI glasses, >> we got to do you want to do maybe 30 seconds on the AI glasses? >> So, Meta is really going for it. $800. It can show uh text messages, video calls, turnbyturn direction, and maps. Uh they predict that Meta will sell over 100,000 units. Uh and so >> 100,000 units by next year. By the end of next year. >> All right. This might end up being my worst take. And Nicole can save a copy of it. Um I think these are for virgins. And uh I don't I don't think they're selling 100,000. And I don't think it's socially acceptable, at least not yet, to walk into a room wearing uh glasses with [ __ ] cameras on the front of them. And now could that change with Gen Alpha like based on >> Yeah, I agree with you. I totally agree with >> it could. It could for for people in my demo. Don't step to me with this [ __ ] on your face. >> Don't worry. I don't think anybody's going to, but I agree with you. >> Okay. All right. Um, let's do Make the Case. I wrote this up for CNBC Pro with Sean. The We talked at the end of the show last week about these energy stocks. They they were ripping again this week, man. I'm telling you, there's something percolating here. >> I don't own any of these. Okay, this is the worst corner of the market. I'm going to show you the best stocks. I have five. And um we gave these letter grades. Let's roll through these. Valero. Um this is the best one. >> This one like for some people they'll look at this and they'll be like, "Gard, I missed it." And I get it. >> What do you mean? I know, but I understand it. >> No, I don't. No, I don't. I reject that. This thing has gone sideways out. >> This thing went sideways for a year. It's only starting to move. >> Okay. Another refiner, Marathon. Pull this up. This one looks even better. You buy this, right? >> Yeah. >> Yeah. Um, here's Baker Hughes. This If this one takes out 50, >> I feel like the stock never works. >> It never works, but it sometimes works. If this one takes out 50, who's selling it? >> Okay. >> Who's selling it? Honestly. >> Yeah. >> This is This is not a refiner. This is oil field services, and they have done a really good job managing. >> Don't give me fundamentals, dude. You don't know [ __ ] Next chart. >> Thank you. Uh Philip 66 is the other refiner. This is the one that hasn't broken out yet. It's the juiciest. >> It's juicy, right? >> Yeah. I like it >> because if you like the marathon chart, this is the marathon chart, but three weeks ago. >> Yeah. >> You understand? >> Yeah. >> Okay. Um and there's an activist. I think Elliot is in this stock in size. Um so I thought that was an interesting one. Here's I I do own this one. Chevron. I'm finally green. I got murdered in this stock when I first bought it. Take a guess where I bought it on this on this chart. >> I mean, that did look clean. >> I know it was a it was a failed breakout because of Liberation Day, but I um I averaged down and I survived. Uh I don't trust it. So, I think it's a good dividend stock right now, but I don't think this one's going to go. So, I gave that one a C. Anyway, my make the case is time to start looking at energy stocks again. I know there have been a lot of false uh there's been a lot of false promise in this space, but someday you're going to wish you did. Um and that's uh and that's my story. You got a mystery chart for me? >> I do. Um All right. So, let's go. Let's chart on, John. All right. We're looking at a one-year time frame. Uh uh. All right. I'll give away the orange line. It's an I mean, the orange line is an index. It's the index. And the purple line is another index in a different area of the world that you'd be surprised that it's beating our index. >> Okay, this is uh Chinese internet is purple and the orange line is either the NASDAQ or the XLK. >> So the orange line is the S&P and the purple line is not that. >> Let's zoom out a little bit. >> Good. I did really good then. >> Let's zoom out a little bit. This is a tough mystery chart, but like >> can you give me something else? >> I will. This is five years. Okay. So would you say that five years is not cherrypicked? >> It's five years. >> Yeah, these are the same chart. >> It's five years. >> Almost perfectly identical. Not perfect, but almost. >> Um All right. The purple line is is basically the opposite of what >> international uh European banks versus uh the >> close enough. It's international value. Isn't that wild? >> I'm really good at this. >> No, but no, it was it's a tough guess. But isn't that isn't I only just want to show you like isn't that very >> Wait a minute. How was I supposed to guess the Fidelity International value? >> I told you it's international value index. I told you it was a tough one. >> You This is not guessable. >> My Okay, my bad. I I'll let you up next time. I'll lay you up next time. This is not guess. >> No, but you you have to say it's an investing style. >> This This is not guessable. Forget it. My bad. My bad. But isn't that wild? >> You see the [ __ ] I pull out for you next week. Penny stocks [ __ ] bull. >> Isn't that surprising? International value has outperformed the S&P for 5 years. I would not have believed it if you didn't show me the >> best way. >> Um, I think the foreign banks would probably be the key to that. I But who knows? Maybe. I have no idea what I'm talking about. They have a lot of miners and gold is up a lot. Maybe that helps. >> Yeah, sure. I don't know. >> Value. >> Biff Grievil says, "As a wealth manager, I should have memorized all mutual funds." All right, guys. Thank you so much for hanging with us today. We really appreciate it. We miss you when we're not here. Thanks to everybody who joined us in the uh in the chat. As Michael pointed out, it is a wet and wild market. Um obviously, some things will end badly. That doesn't mean the whole thing needs to end badly. Stay focused. Do what you think is best for your own long-term investing and do not uh fall sway to the madness of the crowd. Tomorrow is an all new edition of Animal Spirits, my favorite podcast starring Michael Badnik and Ben Carlson. We'll do Listen to the Koala and subscribe as you could see on screen. We'll do uh we'll do a new edition of Ask the Compound and then uh end of the week is an all new compound and friends. Keep it locked. We'll talk to you soon. [Music]
What to Do When All Your Stocks Go to the Moon | WAYT?
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[Music] Ladies and gentlemen, it's what are your thoughts? Good evening. >> Shalom. Happy New Year, Josh. >> Somebody in the chat, Gary wants to know, is Michael going to be dressed up again or in a Nick shirt? Wrong on both guesses. What is that? Is that >> like 70s uh supersonics? Yeah. Peace in peace. >> All right. And um this was accidental, but we each have the uh >> Oh, yeah. >> We each have the compound trucker hat on. >> I love them both. Honestly, I love them both. >> Yeah. I've been alter I've been alternating seagullman stable and uh one one of our two compound truckers. >> Guys, if you don't have one yet, idonshop.com um for in my opinion the illst trucker cap in the game. You want to get these while supplies last. Let me say hello to some people uh in the chat. Chris Brown is here. Evan Bochamp, Matt White, let's go. I agree. Biff Grebles, I see you. Um, who else is here? Georgie Cam, Dave Alva is in the chat. Blake is here talking about the risk sniffer. You're damn right. We're going to sniff out some risk tonight. >> Hey, what was the origin of that sniffing? I can't remember. I don't know, but it was funny. There was a chart that was called that and I just couldn't stop laughing about it. >> Walter Benin says, "Josh, pounding it down here in Bokeh. Pound it hard, Walter. Pound it hard. That's weird. All right, we have a sponsor. Um, Betterment Advisor Solutions. Today's show is brought to you by our sponsors at Betterment Advisor Solutions. If you happen to be thinking, there's got to be a better way to grow my RAIA, you're not alone. >> With Betterment Advisor Solutions, we do the heavy lifting so you can focus on what matters most to your clients. From improved service that makes asset transition smoother to fast paper free on boarding that delights clients on day one. We've built a digital first platform designed to streamline your operations and make life easier. Now if you're thinking >> now if you're thinking wow >> wow they take the paper out of paperwork. Then you'd be right. Grow your raia your way with Betterment Advisor Solutions. Learn more at betterment.com/advisors. Investing in risk performance not >> guaranteed guaranteed. All right. Shout out to uh shout out to Betterment. Uh we like those guys. Okay. Um the market is uh I So this would have been a better this would have been a better leadin for us if uh the market had stayed green today. >> The market is what were we about to say? The market is >> like I I guess like the market has been screaming. We took a little bit of a break today and like from my perspective, thank thankfully because I don't like those seven straight day up, you know, moments cuz you know what they normally lead to. So, we took a little bit of a breather. Um, but there are now this is all right. So, the question is, is it too good? And man, I remember reading a Jim Kramer column in 1998 on the Street.com and I'm pretty sure it was called, "Is it too good?" Like, this is a perennial problem for investors in bull markets. There are these moments where you just feel like, "No, this is too good." Like, it's it can't stay like this for long. And that's a per and it won't. And it's a perfectly natural feeling to have. And um Jim was saying there was a time in the internet boom in the late 90s and he I remember him writing a column about he he used to get his breakfast when he came into Manhattan from Summit, New Jersey where he used to live. He used to come through the Holland Tunnel and there was a diner on the other side of the Holland Tunnel and the griddle was like a thousand degrees and he would watch the guy crack two eggs on the griddle for him and it's like you have to know the perfect moment to pull those eggs up because if you leave them on for 30 seconds too long they're just burnt to a crisp and unedible and he was like comparing that to the NASDAQ which you know it ended up being true. it was just too hot. Like, is it too hot to put more money to work into this market atmosphere? So, for starters, Mike, would love to hear your your thoughts on the environment itself. >> Um, all right. So much to say. I guess I'll start here. It's not we're not screaming higher. We're steadily grinding higher, and there's a big difference. The S&P 500 hasn't been hasn't closed 3% below its all-time high since the beginning or since the end of April. Isn't that wild? >> It's driving people absolutely crazy. >> We've gone May. So, if you >> The semis are screaming. >> Yeah. No, no, no. We'll we'll get there. Okay. If you if you got out of the market in after liberation day as the market was screaming lower as it was as it was falling through the four through the floor we got that V-shaped recovery and you're like all right there'll be some sort of maybe it won't retest the whole thing but maybe it'll you know give me a better entry. Nope. No better entry. No better entry. >> Like not even close. >> Not even close. Um, so there are pockets of screaming euphoria. There are pockets of nothingness, but I would describe this market as, I guess, frustrating if you're looking for a better entry. Other than that, it's been beautiful. No pullbacks, no screaming higher. >> Unforgiving. It's unforgiving for people that insist on buying dips. It's It's just unforgiving. It is not giving you a chance to put money to work if like I I can't buy at an all-time high. Well, I don't know what to tell you. >> All right. Well, um, so we'll let's talk let's talk about what's going on like front screen first and then we'll get to other areas in the market. What's front page stuff? >> Well, I want I wanted to say this. Sean and I keep this uh best stocks in the market list, which we'll talk about later in the show. We have some some charts to show you guys. Um, but we're looking for constantly looking for where the strength is. And, uh, the size of the list will undulate based on, you know, how good the market is. And sometimes a lot of names get wiped out all at once, like they did this spring. And then when it rebuilds, the longer a rally like this grinds higher, the larger the list can grow. We have 209 names on the best stocks in the market list. And our universe is the Russell 1000. profit profitable companies in the Russell 1000. So it's not really a thousand but like 200 of let's say hypothetically I don't know how many companies in the Russell 10,000 you think are profitable 900ish >> a lot >> probably regardless there are a lot of best stocks in the market right now and I there's no story to tell when I peruse the list I look at it by sector I look at by market cap size I look at it by value versus growth any way you want to slice and dice it almost doesn't matter you got stocks working from every corner of the investment uh um I don't know stock sphere. It's like it's just agnostic. If you're a stock, you're probably going up right now. And um I don't think in and of itself there's a lot of meaning there, but I just think it's important for people to understand there are there are a lot of stocks that are doing well. >> Mhm. >> Um one other thing, I got a text from a very famous man yesterday. You know, my phone is filled with texts from famous people. Um, this is a really famous person, and I can't say who, but I can read the text. Mike, you could probably figure it out, but don't guess it out loud. Okay. >> Mhm. >> Um, bear with me one. Sorry. Oh, here it is. Okay. So, I hit him. I'm like, "Yo, Uber hit 100red. We did it." like joking around because I've been yelling I've been yelling at this guy, don't sell Uber at 70, 80, 90. Great job. So he says, uh, I haven't sold any either. Can this market continue? Everything I have is to the moon. Can it continue? And then I don't answer because I'm busy. And then the next text is fine. What are your best three for the rest of the year? >> Is this a cl Is this a client of ours? >> No, not a client of ours. Um, like in other words, I probably gave it 30 minutes without answering because it just because I couldn't. It's like, all right, fine. So, it goes from everything is to the moon. Can it continue? 30 minutes go by, no answer. All right, what are your what are your next three favorite stocks? This is everyone right now. I feel like because even if you walk away, even if you take some stuff off, and I have personally a little bit, it's like you're still looking for the all the other stuff that's going up, it's really really hard to not um to not participate right now. And I don't you feel like that's everybody? Yes. Yes. Yes. If you own stocks, you're making money. Uh I do want to point out that there are a lot of stocks that are sucking wind right now. Like there's there's two things are true. There are more stocks working right now concurrently than there have been in a long time but there are also pockets of weakness particularly those that are getting crushed by AI. The trade desk is a great example but there's a lot of them. Um I don't feel like there's a lot of them. I feel like there are a few there are a few notable ones. >> I don't know. That's kind of the that's kind of the camp that I'm in. There are a few notable companies that are that are as you describe. Um I think there's way more stocks that just look up and to the right right now. I don't know. I mean, unless you have five more examples of that cuz that's an obvious one. I agree with you. Um do you have five more of those? I can't think of any. Are we frozen? >> My internet is sucking wind. Let me close some [ __ ] out. Oh, >> all right. Close some tabs because we're a little we're a little bit live here. Verizon, you bastards. You pieces of [ __ ] What are you in your new house? Get it right. It's unbelievable. >> Are you in your new house? Are you paying up for the business uh class Wi-Fi? >> Dude, I'm paying for the quantum the quantum internet. >> How's it going? >> Horrendous. Worse than the stocks. Is it really that bad? >> No, you're okay now. >> Okay, we're back. >> Yeah, we're back. Okay. >> The question was, "Why does your internet suck so much?" Um, I agree with you. The trade desk and some of these AI casualties are notable. I just don't think there are as many as you think there are. I think there are only a few and you just you happen to know what they are off the top of your head. >> All right, we'll see about that. So, look at this. For example, I'm going to go look at stocks that are 15% or more below their 52 week high in the in the in the S&P 500. Okay, >> there's a lot, dude. >> Hey, >> hang on a sec. Index. Index. Not any. >> All right, it's not working right now. Let's just keep talking. What else you got? >> Great. Okay. Um, one thing that's concerning is that there isn't a bear case. And our friend Adam Parker points out that the lack of a bear case is the bear case. And I sort of get where he's coming from. And I think I agree with him. Those are usually not the best times to put new money to work when you can't think of a reason not to and there's nothing holding anyone back. And uh I sort of feel like that's where we are. So I just want to go into his piece for a second because I thought it was really good. He talks about a dinner. He's with seven crossasset whatever geniuses. Um, Adam doesn't waste time with people who aren't a minimum of 180 IQ. Um, and they're all laughing like what's the bare case? Like maybe if Jamie Diamond gets bullish, like there's there's almost like nothing to to point to. And then um so here's what he said. Even more than not being able to address a believable bare case, um it's challenging to even know what to monitor to get increasingly bearish. investors largely know that the paradigm has shifted with regard to using valuation as a primary or even secondary rationale for security selection. As for like financial conditions, which would be another thing people would be watching, they probably tighten concurrent with a market pullback, not in anticipation of one. So, in other words, that's not going to help you. That's going to be a stock market driven thing. um monitoring comments from BFA about credit card spending and consumer conditions, tracking the the card delinquencies, looking at employment data from LinkedIn, card data at Mastercard and Visa. These are all reasonable approaches to assessing the consumer, but they don't enable you to preposition for a downturn without alleviating the fear of missing out on further upside. So he's saying it's like the only two choices are you either have to admit you will be down when everyone else is down or you have to not participate at all on the way up. And those are two really shitty choices but we know everyone's going to make the first one. And as far as all this consumer data is concerned the consumer he says the consumer has been solid but slightly eroding all year. Meanwhile the market has just absolutely ripped it the the erosion didn't matter. So, he comes up with three, and we're not going to read through all these. He comes up with three bare cases, potential bare cases, and can you guess them without looking? What do you think they are? If you had to guess, what are the three bare cases that Adam would have come up with? >> Uh, not valuation. >> Okay, fine. Agreed. >> Um, well, he's smart. So, he I think that Adam would also not say hypers scaler slowing down their spending because that's not going to happen. They're all in. That's not a real bear case. >> Bearcase one. Oh, really? But they but he doesn't believe it. >> But that's not a but that's not a bare case because Zuckerberg said yesterday, I'd rather I'd rather go bankrupt than underspend. I'd ra I'd rather overspend a few hundred bill. That's not a real bear case. So what are what are the threats? >> Allow me. Quote, many are arguing that hyperscaler capital spending could balloon further. Forget about a bare case. Some believe the return for the spending is incredibly high. This past week, one investor told us Microsoft gets its return back in one year. Another investor said the aggregate return on hyperscaler capital spending breaks even in 3 years, has an ROIC of 15 to 20% in year four and a 30 to 40% return in year 5. This means reasonable people in the investment world in addition to those at the companies believe that for now even more capital spending could be justified. So he says, "No way. That's the wrong bare case." >> Correct. >> Case two, government deficits force interest rates to back up, which eventually hits the stock market. Quote, "We are worried about this, but we don't know how to time when it will matter, and positioning for its inevitability would have destroyed returns nearly every year for two decades." So he throws that out. Barecase three. This one actually I think is is the big one. My personal opinion, AI/productivity boom hits white collar employment. Quote, recent data have indicated higher than normal unemployment from recent college graduates. The truth is, we don't have a great answer for this other than every other technological innovation cycle that focused on productivity caused labor to be deployed in new and different areas. AI feels like it has the potential to be different, but for now, we think what's good for margins for the top 500 US equities will probably matter much more for US equity investing than long-term higher unemployment. >> That's what I was going to say. So, so >> but but my caveat is for now. >> Yeah, sure. All right. So, the three bare cases that he laid out, they're they're not real bare cases. So, >> he's like that's that I think that's the point. He's like scratching and coing for something and he can't find it. >> Okay. Well, all right. I just want to So, I got the list. Let me ask you just circle back to when my computer froze. You said that the trade desk is just one example that's easy to pull from the top of the dome. Let me ask you this. So, what do you think? Let me Let's use 20%. Okay. How many stocks in the S&P 500 do you think are 20% or more below their 52- week high? So, >> okay. Uh, the number is 150. >> It's a lot >> higher than I All right. Higher than I thought. >> Almost one in three stocks are So, and if I if I expand that down to 15% or more, it's 203. >> So, not everything is up and to the right. >> If you're 15% below, you see that on the chart. >> It's it's yeah, >> it's 203 stocks. So, this is my point. The stock market is not screaming. The hyperscalers are screaming. The semis are screaming. The [ __ ] nonsense pre-revenue companies are screaming. I credit to you if you're making money there. That's what's screaming. Everything else in the middle is sort of blah. There's a lot of blah. There's a lot there. There's a lot of blah. I guess for me, the fact that it's industrials, tech, communications, and financials that are all at highs means so much more than just a raw count of how many S&P names. You're right. I don't give a [ __ ] about I don't give a [ __ ] about all those consumer staples and [ __ ] uh drug companies that are 15% off their highs. A I don't think anybody cares. B I don't think they're the drivers of earnings growth for the S&P. Most of their market caps don't matter. And I think if they went to zero, nobody would even notice. >> I mean, that last part's not true, but you the point that you made is is is the right one that the stocks that you need to be making alltime highs are and that's all that matters. >> You see that? Um now is it too good? >> No, it's not too good. >> Um for the hyperscaler part of the market for the AI story. So this happened uh I don't know last night. Nvidia to invest up to a hundred billion dollars in open AI linking two artificial intelligence titans. You know what this is like? This is like that episode of Scooby-Doo where the Harlem Globe Trotters show up or like Batman arrives and it's like whoa, what are they doing? Like what? >> Is that is that is that a is that a 44 year old reference? What year are we talking about? >> I'm 48. Yeah. No, in the early 80s you could a thing that could have happened is you could have been watching Scooby-Doo and then like they're trying to solve a case and [ __ ] Batman and Robin show up and if you're seven years old when that happens, he you have to Like you have to run a lap around the block. >> Yeah. Like they could they could do that. >> All right. But it finally happened. The only way this story would have gotten better is if Nvidia is investing a hundred billion into Open AI and Dan Ies is delivering the cash in a brief in a in a [ __ ] tie-dye briefcase. Like I don't even know what else could have made this story like a a more exciting story. And the rally kind of faded immediately after. But there were some really great memes. And if you're like sensitive, um, now would be a good time to look away from >> Hold on. Before the memes, I told I told you that I I I spoke to you. Dan is the [ __ ] best. >> Excuse my language. >> I was at dinner with him the other night in a in a sixperson booth >> and there's two pe So Dan me and Dan are middling and the two people to the side of him are in very traditional navy blue suits and he's in the rainbow outfit. I love him. I love him so much. >> Let's go to the Let's get to the memes. >> All right. Um I guess this is like a Nintendo joke. Yo, if you I heard if you press up up down down, left, right, left, right, ba in San Francisco, there's an infinite money glitch. So that's uh Contra. uh how you get 30 free lives in in uh okay >> so talk speaking of 80s references but like >> o okay so like open AAI is going to spend hundred billion dollars in the Oracle cloud Oracle is going to take hundred billion dollars by GPUs Nvidia will take that hundred billion and it make an equity investment into open AI and it's just round and round we go these three companies are building the Stargate whatever that is it's going to be huge uh here's the next one I like this one this is a great meme format at underused. Nvidia is investing how many billions into Open AI to build 10 gigawatts of AI data centers because you know the person in the picture has never thought of a gigawatt um or an AI data center in her entire life or ever will. Um here's another version of the uh merrygoround. Open AAI buys capacity from OCI. That's the Oracle cloud. Oracle stock goes up, buys more chips from Nvidia. Then Nvidia stock goes up. Then Nvidia invests 100 billion in OpenAI. Then right back to OpenAI buys capacity from OCI. Look, there's like it's not quite this neat. Oh, there's one more, guys. Get over it. All right. Um, Nvidia investing 100 billion into OpenAI in order for OpenAI to buy more Nvidia chips. And I will not describe the uh the picture if you're listening. You'll just have to trust me. It's uh it's a funny meme. All right. So, this is like not and not unfounded concern because this is sort of the way the dot and telecom buildout in the late 90s, early 2000s came to an end. you had a lot of companies um that were doing these kind of like vendor financed equipment sales where they would like literally give a potential customer money. The customer would take that money and buy equipment from them. They were like financing their own growth and they were doing it with routers, servers, storage, um they were doing it with fiber optic stuff and like it sort of like represented the capex boom slamming into the wall. >> Yeah. So this is exactly where we are. I was speaking about this with Ben this morning. Uh Ben Thompson wrote about this uh over the weekend that this Oracle and he was quoting somebody else. this Oracle deal going negative free cash flow and making sure that uh there's now leverage involved because the hyperscalers it was all free cash flow and they don't give a [ __ ] We've you know >> self self financed out of cash flows. So now you add the leverage, you add the the debt involved and oh my god, this is a freight train and uh I don't know S&P 10,000. >> Yeah. Coreweave putting in the Dow. Look, we we had like we had this whole thing and um I know a lot of the time I go back to that bubble because honestly it was the greatest show on earth. It was the most insane thing I ever witnessed. But we really did have like companies like Cisco and there were a lot of Cisco back then. And there was Juniper and Sycamore and Sienna. These were companies that were trying to sell as many routers and switches as they could into a telecom boom. The telecoms were being financed by IPOs and junk bond sales. >> But this is how it all this is how this is the end, right? Not not not like >> Yeah, that was this at some point in time once we start getting debt involved because the free cash flow can't support it like this is how eventually it ends. and whether it ends uh you know four quarters from now or 20 quarters from now eventually it's probably uh oh somebody can't make the can't make >> but it's but it's coreweave like look I I missed the runup in that stock and I really don't care and I'm missing the new runup I missed the original runup in in core when it came public I was skeptical it dropped and then it ran from 35 to 183 and then it sort of had a slow motion collapse back to 87 and I I don't know if that's because of like a shareholder lockup expiry. Okay. So, a lot of people were able to sell and then sometime around the first day or two of September, >> it just launched all over again. 87 back to 130. That doesn't sound like a lot, but this is a large market cap company. 64 billion market cap. And it is just careening back and forth between double digits, triple digits, double digits. This is for for me for me ground zero in this whole thing. This is hugely debt financed. Yes. In the hottest business in the world, cloud computing. Um, another strike against it is it's in in New Jersey. Another strike against it, it's in it's in Livingston, New Jersey. And I know everyone that lives in Livingston, New Jersey. Um, I don't invest in companies based on Long Island. I definitely don't invest in companies anywhere around that Livingston Short Hills area. So, it has a lot of strikes against it. And if if that concept of like vendor financed purchasing hits the wall, that's where you're going to see it in that stock. People are going to get really scared of that thing. What do you What are your thoughts? Yeah, I don't know enough about the core reef specific part of it, but I would just say again it's really important that this is the next phase in the market. Um, so this is this is from Doug Olaflin. This is really important. He said, okay, um, the implications are profound for Amazon, Microsoft, and Google. They can no longer treat AI infrastructure as a discretionary investment. They must defend their turf. What have been a disciplined cash flow funded race may now turn into a debtfueled arms race. That's a vibe shift of if I've ever seen one. Welcome to the next and newest phase of the capital cycle. I believe the Oracle quarter achieved something more elusive than just revenue. I believe Oracle has just sparked the elusive animal spirit to life. For me, Oracle is the quarter that will remember in history. I'm starting to think that the tariff tantrum anyway. He says like this is it. Oracle is going negative free cash flow. >> Negative free cash flow. >> Wait, can you explain for everyone what was the significance of the Oracle? So this was the Oracle earnings report last week which took place a month after earning season and the stock had its biggest move ever. It went up 40% in a day which in dollar terms is just an insane amount of money. What was it about what they said that caused that kind of a stock reaction and why does that ignite this debtfueled arms race when before all these companies were comfortable spending out of cash flow and like what like what it what was it about what Oracle said that makes this guy feel that way? >> So one more quote and I'll tell you that he said compare the spending of the big three with that of Oracle. Oracle is going to go negative free cash flow to win and it's likely that incumbents will respond. I believe it's time for technology incumbents to start spending a lot more and most already indicated that they will. But on Thursday, but when one >> on th on Thursday, Mark Zuckerberg was on a was on a podcast and he said, "If we overspend >> by a few hundred billion dollars, that is much less d He goes it'll be unfortunate, but that will be much less dangerous than falling behind." So the contract that we learned about in the Oracle call, was that a $400 billion contract? >> I think $300 billion contract with AI. It was like $50 billion annually and I can't remember the details but OpenAI is only doing $10 billion worth of revenue and they're committed to like 50 a year for the next six years. Whatever the number is there is not enough free cash to justify it and uh enter private credit or or public and and public credit, right? Blackstone's going to get involved. All of these giant pools of capital are going to get involved. And if this does not translate into gobs and gobs and gobs of cash flow, and maybe it will, maybe it very well may will, but this will be the time where we look back on and say, "Okay, that was it. That was like the beginning of the end." And who knows when the end can be. The end can be 15,000 on the S&P. Who knows? >> But I guess I'm trying to figure out where is the cash flow that gets generated from going negative cash flow to make these capex investments. Is it coming back in the form of subscriptions to OpenAI, $20 a month from a billion people? Cuz then I sort of get it. Is it more like an enterprise customer spend and all of these companies are now going to take whatever spending they're doing and migrate it into the AI and leave behind legacy spending that they used to do. Yes, >> it's all of these things. I think it's all it's I think it's the 493 that are not doing anything that are basically at zero, >> totally rebuilding their entire stack. >> In the chat, um, Air Max Elitist says a trillion dollar spend for a new search engine doesn't seem financially responsible. So, I know he's being sarcastic, but like I do feel a lot of people are like, I don't understand. It's just a software I could talk to differently than I talk to Google. And that's where all this all this listen listen. I I I understand that sentiment too, >> but don't be so naive. >> Like think about >> I think he's being a smart saying this is what people think. >> Think about what what happened when we got the iPhone 7. I'm sorry. The iPhone 7. Think about when we got the iPhone. What year was that? 07. When did we get the first iPhone? >> Yeah. >> Could you >> 07? But nobody bought one until iPhone 3, which was uh 2010. You never in a million years could have predicted everything that was to come. >> The GPS unlock, the Uber, the app store, the n like not maybe not Netflix. You could never you could never ever have guessed what's coming. So don't act like this is the final version and that it's done and that all of the that Mark Zuckerberg is an idiot and you're smarter than him. Um just don't don't be that guy. I said that on TV today about Jensen Wang and like Frank So Frank Holland was guest hosting. I don't think Scott would have asked this question. Um, shout out to Frank, but he's like asking me, Joe Teranova, and Jim Leenthal. >> Like, is Nvidia making a mistake committing to spending 100 bill? And I'm like, dude, >> yeah. >> Are dude, are you you [ __ ] kidding me? Like like in other words, like can you imagine the audacity it would take for somebody sitting their ass on the New York Stock Exchange in a suit um critiquing what Jensen Wang thinks is the right investment to be making in AI. >> Good for you. >> Give me like like come on. Like what are we doing here? Um now we could critique like the shareholder reaction and of course there's like room to discuss like whether or not the stock reacted well to it. I would argue it did not. I think if if that announcement came six months ago, Nvidia would have gone right to 220 and Nvidia did not. It reversed. Um I I think I think it had a I think it had a weak day today. That could change because M uh yeah, it was down 3% today. That could change because Micron just had great earnings after the bell, but Nvidia had this huge pop on that news and then gave it up. >> All right. Market's open tomorrow, too. >> Uh All right. But but this is this anyway the point is I know we're going long here. The Oracle quarter and what's happening now because I feel like we've been saying the same [ __ ] every week for the last I don't know six months. This was an inflection point. So all right wait before we so before we move off of this the question is what do you do? So my opinion and then I want to hear yours. You do not buy any more AI unless you're willing to trim some of your other AI. I don't, in other words, for this for me, I'm not telling other people what to do. I will not commit more dollars into the AI theme unless I'm taking profits from something that's already gone up a ton. I don't want to keep >> What is the AI theme specifically? >> Well, I guess at this point, it's probably half the NASDAQ 100. It's all the utilities and the um and the natural gas transmission companies that are related to the buildout. It's the industrials that are digging up ground and and assembling all of these new data centers. It's a really big theme and I guess from my perspective, I'm I'm glad I'm in it. It's done really well. A lot of stocks have gone up a lot a lot of points or percentages for you. And uh that's great. I'm not looking for my 12th AI stock. And if I find one that I really want to be in, I think my my argument would be, okay, but the money's got to come from somewhere. I am not going negative equity to win the AI race as a as a common stockholder. I'm not I'm not willing to play it the way that um Oracle is willing to play it. Yeah. >> What do what do you think is the answer here, >> man? Shut shut up and buy. >> I don't know. No, this is the fun part. I don't know. This is like what we're doing here talking about. I I don't know what the answer is for everybody, but >> another answer is um focus less on valuations and price targets and and all that old school [ __ ] and maybe just um focus more on your own position size. >> Hang on. I I mean I hate I hate this entire conversation because specifically it's like are we talking about your brokerage account? Like I hope we're talking >> you I'm just saying I hope the listeners like we're talking about like if you have a fund trading account, right? This is not like your this is not financial advice for your, you know, your your retirement account or anything. I'm talking about your if you have a stock trading account. >> Yeah. Self-directed or you work with a broker and you've got 25 stocks in your portfolio. Should you be looking for 26 stock and your whole portfolio is like um Micron, Broadcom, Nvidia, AMD right now? Right now? No. No. Of course not. >> So that's I that's how I feel. And if you come across something that you feel like, all right, this is going to be the next phase of the AI trade, that's fine. Maybe lose maybe lose a little bit of Microsoft then. >> Yeah. Yeah. >> Maybe lose a little bit of meta. >> Okay. Um, so it is a very interesting market. We have on the one hand and like the market who the participants there's so many different storylines and areas of the market. You have the American Association of Individual Investors that we've spoken a lot about not participating in in in the euphoria. You have Charles Schwab's quantitative literally what are the clients doing? This is not a >> this is my quant. >> This is not a quantitative. This is not a survey. What are the clients doing? They're not very bullish like at all. The last five months it's been sort of flat. Um and then you have of course uh you have this one corner of the market. So I opened up my Twitter and I saw Buco Capital who is one of the best accounts on the platform in my opinion tweet and he nailed it. My feed is just retail investors posting screenshots of literal millions in gains from unprofitable and even zero revenue businesses and then some fundamental investor slowly going insane screaming into the void. >> When have you seen that before? >> Um I saw >> 2021 2021 >> you know the original somebody tweeted this I can't remember. It was so good. This is like 2016 about people just screaming, professional investors screaming into the void. >> Anyway, >> 21. >> Okay, so the people that are now forget Schwabin and and the AI talk about young people that are into trading the Robin Hood like the re the retail investor when you think about them, they're on fire. They are absolutely on fire. So Goldman Sachs has a has a basket. Um the con so on please. This is from Sherwood. Luke Kawa. Luke said a Goldman Sachs basket of stocks widely held by the retail community is going straight up and to the right poised for a record 10th straight day of gains. It's up. >> Look at that bar. The bar is the number of days of >> consecutive days. It's up 13% over a 10day period. Now Liz Anaunders and I'll stop talking one sec. Liz Anne Saunders tweeted um the meme the meme stocks are up 73% on the year and credit to us >> we created a DJ Dow unfortunately it's not investable >> and chart off for a sec John I just want to set this up so we first unveiled this in December 2024 and we were like listen if this is the top we'll own it our bad sorry if this is like negative ju guu bad vibes >> people are mad at us >> okay the djen dowo is up 67% % year-to- date. And interestingly, a lot of the names that I would think are in the meme index, a lot of those things are not in here. So, we have uh look at that. Up 67% and yeah, >> holy [ __ ] >> it got so even more impressive is than that, it almost tripled off the lows. So, here's the thing. You have hyperscalers going berserk, the AI trade, and then you have all of these not even unprofitable names, although yes, they are unprofitable in some cases. You have pre-revenue companies. So Josh, you know what's going on with Olo, the nuclear company, >> the mini nuclear reactor company that Sam uh Alman is invested in. >> So this company, >> it looks honestly it it looks like they just invented uh GLP1s. >> So this the stock is going straight up 1500% over last year. Whatever. It's It's a $20 billion market cap. No revenue. >> Yep. Why Why would you need revenue? No. >> No anticipated revenue next year. Maybe in year 27. And they speak a lot on the on the on the call about the administration and data centers and nuclear energy. And listen, investors aren't stupid. Okay? It is going up for a reason. And not only the people that buying it not stupid. Now, maybe some of the people that are buying it today are stupid, but credit to them if they made money. Making money is not stupid. I don't I don't put smart as investors. In fact, making money is the opposite. Making money is the opposite of stupid. However, I got a a text from my brother-in-law who is a an artist. Okay? He's an artist. He's a musician. He doesn't ask about the stock market, and when he does, I pay attention. So, he said, uh, "My dad made some adjustments to my portfolio." This is on on Saturday recently, and asked me to pass along a question for you. He purchased shares of OKO, a startup work on nuclear reactors to power AI. >> Adjustments to my portfolio. >> Since then, the stock has got up about 20% of my account. He's curious if you have any perspective on Ocula specifically or more broadly on the rebirth of the nuclear industry. So I said, "Oh boy, lol." I was just looking at this. So I said, "I haven't done any work here, but" and I'm just showing him a few tweets. >> Yeah. >> Um somebody tweet, I shared I shared this with him. Here's a tweet from uh sad value investor. My boy who thinks that Olo is almost the same size as Nvidia because the share prices are similar is up 200% this year. All right, let me read that again. My boy who thinks that Olo is almost the same size as Nvidia because they have the same share price. His account is up 200% this year. >> You know how frustrating that You know how frustrating these moments are for people that know anything. The more you know, the worse you're doing right now. >> Correct. So, to Buo's point. So, here's what I said. This is a speculative mania. It's a $20 billion market cap. I have zero insight into the fundamental hope driving these moves, but it's wild [ __ ] Doesn't mean it has to stop going up tomorrow, but yeah, ride the wave, but don't risk more than you could lose. I hate talking about this type of stuff. I'm not educated on, but this type of vertical move higher usually ends very poorly. So again, if you just have a few bucks in this name, then by all means, who cares? >> You have a million-doll portfolio, maybe you could just take $10,000 and buy VIX call options um December or January strike and just wait for some [ __ ] [ __ ] to happen. And uh that's that's like if if you want to buy insurance because your portfolio is so much and you have so many of these names >> and you can't believe how much they're up. >> If you want to if you want to peel 10 grand 1% out of a million dollar portfolio >> 1% >> do it. >> Yeah. >> Oh. Oh, I'm sorry. You're 100% right. Yeah. Yeah. Yeah. Fine. >> 1% of of a million dollar portfolio. Buy VIX 25 calls. >> Oh, >> don't even don't even look at the premium. forget whatever it is doesn't matter because um if we get one of these swift 10% ass kickings because of how insane things are right now. You're going to be thrilled that you did that. This is not financial advice for me to you. I'm speaking rhetorically. I don't know you. I don't know I don't know anything about you um personally. >> So Tyrone just texted us uh a text that he got this morning. Good day. How do you feel about Ollo? Like everybody knows. Everybody's in. Um >> it's the next it's the new pal it's the new palent. >> So all right. So I I said I've said this now several times. >> Put up the DGEN DAO real quick. We don't have this one, do we? >> So none of these. [ __ ] We don't have ionic in here or MQ, whatever it is. We don't have the quantum computing that we're getting. >> Ionic. That's the quantum computing. >> Uh and QBt. >> What do we have in here that needs to be um >> We don't have ri We don't We don't have rieton. Get Get DraftKings out here. That's That's >> We don't have Rieton. >> We don't riot. DraftKings might as well be Apple at this point. Get that out of here. We need to We need to take >> Dude, I just realized you're not a Sopranos's guy. This like one of the best ever. One of the best ever Anthony Jr. lines. >> My bad. What? >> There's like a fight at the family dinner. >> No, no, no. It's like a family fight at the dinner. And he goes, he's like 8 years old. He goes, "What?" So, no [ __ ] ziti now. >> Um, all right. >> What's Regetti Computing? >> Regetti. I want I want to end with this. It's really hard not to see this nonsense. All of these unprofitable and in some cases pre-revenue names going up 20% a day with a 20 million market cap. It's really hard to see that happening and not want to take all your money out of the market. However, this is the world that we live in. This type of activity is not going away ever. Get used to it. This is the game now. Don't let it distract you from the fundamentals and the reality that th this is a legitimate bull market and this nonsense is just going to happen when there's risk appetite. You're going to see these type of moves. Get used to it. Last point, throw up this chart. I asked Sean to make me a chart. Great work, Sean. Um chart off, please. Actually, let me set this up. I said, Sean, how many plus 1% days have we've seen in the equal weight since July? I just put picked a random date. um and he made this chart. Look look look back please chart on. So we've have we've had seven 1% days for the equal weight index since July 1st. That's 59 days. So Sean zoomed out and made a 59day window. And look at >> normal >> and this is normal. This is this ain't nothing. This is nothing. So when you say we're screaming higher there's a it's a speculative mania. Yeah. In some places but it's but this is nothing. I mean, we're going to like now mass-roduce mini nuclear reactors, like igloo cooler sized nuclear reactors. >> Dude, they're going to be in your ear. >> Can I have one in my backyard? Look, I I know we're joking. All of the capex spending, the trillions of dollars in capex spending for data centers, it's worthless if you can't power the facilities. And you literally cannot power the facilities with and Michael assembblest um explained this to us in many different ways on many different occasions. You absolutely cannot light all of these facilities with the current energy infrastructure. There's literally no chance that you'll be able to do it. It's not going to be wind. It's not going to be uh solar. You like you literally need something that's that's nuclear. Now, do we want to build like 10 more 3M islands in this country? I don't think there's the appetite for that. So, the Olo bull case and all the uranium stocks, like I totally get it. And we talked about this with uh with um Yan Vanek and they have an ETF that owns all this nuclear stuff or like right like all the miners. Okay. So, I totally understand the story that almost like you can't have the the AI projections they're making, the usage projections. You can't have them if you don't accept the fact that there's going to be a heavy nuclear component. So, fine, I get it. I still don't want the exposure to it because I'm not convinced it happens in a linear fashion, like in a straight line. Um, and if I miss, if I miss, I miss. But I can envision a scenario where these stocks are all cut in half in in the course of 20 days and people like, "Holy [ __ ] what just happened?" >> I'm I'm looking at Foranx when I was on, did he say this was their biggest one? Oh, NLR. Is that the one? >> NLR, nuclear. He said it was their biggest in biggest inflows this year. >> This thing has $3 billion in assets >> probably all in the last uh 12 months. So anyway, in conclusion, it is a fun and interesting and boring and psychotic insane market all at the same time. There's a lot of different things going on. >> Okay, here's something interesting. We got a we got an update to the um OECD um global growth outlook. And it turns out that a lot of our worst fears about tariffs really just are not showing up in the way that they were expected to show up. Not really serving as that much friction. And you know, we're hearing once more, well, you haven't felt them yet. All right. So, but definitely I will like at this point, right? >> Is that what they're saying? It's a little bit It's a little bit like um waiting for you know it's like waiting for GDAU and I don't know do you know the reference? So waiting for GDAU is a famous play um it's horrendous by 21st century standards unwatchable. The the point of the play is that nothing happens. It's two characters um having a two-hour conversation that just goes in circles while they're waiting for somebody to show up for some reason. Um GDAU never shows up. Spoiler alert. It's a complete [ __ ] waste of time. But I guess for people in the late 1800s, this was like the height of entertainment. Anyway, waiting for these tariffs to Yeah. No, it's amazing. Um waiting for these tariffs to like show up, it's a little bit like waiting for GDAU. We're just talking ourselves in circles. But let me uh let me quote a few things and then I want to hear what your thoughts are. >> Okay. >> The the OECD now expects global growth of 3.2% this year compared to the 2.9% expansion it had forecast in June. Global growth was more resilient than anticipated in the first half of 2025, especially in emerging markets. The full effect of tariffs is yet to be felt. However, um we are warning of significant risk to the economic outlook. That sounds like they put that in every report. >> That's a that's a Grand Rapids hedge >> big time. That you could just automatically include that. Um but what's notable is that they are now raising the global outlook and the US outlook for GDP. Um the OECD now expects uh headline inflation to amount to 3.4% 4% across G20 countries, slightly lower than June's 3.6% uh projection. So, they are reducing the tariff shock inflationary pressures that they were worried about and raising the um the global economic growth. Um and I just one last thing that I wanted to pull out. Um let me see if I could find it. Oh, growth expectations for the US alone went to 1.8% 8% for 2025. The June essay was 1.6%. >> All right. Enough. >> So, so all right. But so like that's the backdrop. So you talk about a lack of a bare case. >> Yeah. >> This is not a situation where the global economy is teetering. We're getting rate cuts and they're raising growth expectations simultaneously. Think about that. >> I'm thinking I'm thinking I'm liking. Uh I don't think that this is just a US phenomenon, although it's probably more pronounced here. this K-shaped economy that we live in. It is what it is. And obviously like the the the the fabric of our society part. Let's just let's not talk about that for a second. Just purely the economic ramifications. Okay. Purely economic. The people with money have so much of it and are spending so much of it and I don't know what stops that. >> There is stock market stock market crash. >> Yeah. It's circular. It's circular logic, right? right? Like as long and as long as it keeps spending, the stock market will keep going up and up and up and it's it's the meme that we were talking about earlier. >> But but you made you made the most important point that it's not a US only phenomenon. I follow a lot of celebrity DJs and these are people that go around the world playing parties and depending on the time of year it is, they're going to the same spots because that's like where this global elite class is gathering. And sometimes the top 1% in the world, sometimes like the top 10%. So Ebiza Ibiva is not all 1enter global 1enters. It's just the the place to be. But this is like a migrating party. It's the same people. They go around the world and it's one point of the year they're in Sanrope. Then they're in Monaco. Then they're at the F1 race in Miami, the F1 race in Austin. Uh >> Monaco or Monaco? Shut down. >> No, it's not. Um but like uh they're in St. Bars at the end of the summer. It's like this this thing, but like the amount of people who have the money to be at these things at this point is like what what I think has changed. Like imagine like these velvet rope opportunities to go to these places to see like [ __ ] Marshmallow DJ or something and >> right it doesn't matter how much money you have, you can't get in because the sheer amount of people who have the money to do this >> has exploded. And I think that that's really what changed >> and it's not debt. It's equity. We've got equity and cash equity. >> So, you know, I'm a wealth effect guy. >> I know. >> So, you ask me you ask me um like what what changes this. I just think it's the stock market. >> You you get a 20 another 2022 without a V-shaped recovery at the end. That's what changes this. >> Sure. Yeah. >> But like you you want to you want to like bet on that happening? >> No, dude. It ends it ends when it ends. It'll right like I don't know. That's it. >> It's true. All right. Um, one last thing on this. Powell spoke today in Rhode Island. Neil Dutter had an instant reaction. We could put this up if we have it. In Powell's speech, two things stood out to me. First, the recent pace of job creation appears to be running below the break even rate needed to hold the unemployment rate constant. Second, quote, the increased downside risks to employment have shifted the balance of risk to achieving our goals. So Neil is saying policy still be characterized as modestly restrictive. There's reason to expect Powell to be on board with rate cuts at each of the next two meetings. So like assume assume Powell's pivot toward being more outwardly concerned with the uh labor market versus inflation. Another two rate cuts. Last thing, I'm seeing a lot of versions of this chart going around. Put this up. Have you seen one of these yet? >> I have not. I hate these charts, but what's >> that's why I'm pulling it out for you. >> 2018 versus 2025. We had this really scary dip earlier in the year in 2018 when the tariffs started. Then we had a big recovery in the S&P and then in the fall, the wheels just completely fell off and the market crashed into Christmas. And a lot of people are taking that action and they're plotting this year. Now, obviously there were more differences than similarities, but I wanted to just uh >> This is criminal. >> I wanted you to get a little fired up with this because I've seen a few versions of it. >> This is criminal. Show me the percent change. That's That's horshit. >> No, cuz that ruins it. >> The percent change actually is not that bad. >> Yes, the truth. No, it's bad. >> Uh how much was the April uh how much was the April correction? 19%. >> Is that all it was? >> I think Yeah, I think the March correction in 2018 was 19%. >> Oh, really? Cuz I remember March was was 19. And it was only 19 this time around. All right, maybe I stand corrected. Either way, so what? Lines can only go two directions. Okay, they can go up a side three up down sideways. Oh, shut up. This is nonsense garbage. >> Um, all right, next next topic. So, I want to go through this quickly because it's enough already. But uh but Josh Schaefer tweeted this chart from bank from uh Savina Supermanian and she said since 2023 consensus has been overestimating earnings growth for the 493 while underestimating growth for the Mag 7. It's just remarkable like the dark blue lines the forecast has has continually come in lower than expectations. They've been underestimating and overestimating on the on the on the light blue line. It's just remarkable. >> Remarkable. Uh, next chart. Todd Sen. Uh, semis. Holy [ __ ] >> They're 15% of the market now. >> Unbelievable. Broadcom is larger than Meta. What in the world? >> Not for long. You know the thing about market tracking changes in market cap or dollar amounts in market cap, man. That overnight overnight. >> Yeah. Yeah. You're right. You're right. We've seen hundreds of billions come out of Apple at the drop of a hat. >> So, perfect segue. Next chart. Apple and Nvidia now 14%. >> 14% of the S&P 500. >> Wow. >> The two stocks combined are 14%. What is it? What is the thing we used to talk about where like AT&T and um and General Electric 40 20%. >> In the 1960s or 50s. >> No. Yeah. It was uh man in my head I think it's like 17%. We're getting there. We're not too far away. It's it is right. It's wild. Uh all right. However, um although 3000 spent years under water, so finally >> we got the Dow, the S&P, the NASDAQ, and the Russell for the first time since 2021. >> All right, I I've said this before. It's like there's so much data and information. It's really easy to make to paint any picture you want about the market. I mentioned earlier, and it's fine. There's nuance involved. It's not black or white. I mentioned earlier the euphoria in that segment of the retail market which is let's call it what it is and I'm not mad about it but it is euphoria. Um and then other places in the market it's like you know sort of yawn. So Urine at Fidelity Yurian Timmer uh is talking about he's talking about lack of froth in the market. So Urine says another sign of froth in the market would be a surge in IPOs and M&A activity. So far there are no signs of this. The chart below shows that IPOs and secondaries remained at average levels and far below the extremes experienced in the easy money liquidity bubble in 2021. Chart on. Look at this. >> So the purple and blue lines at the bottom uh that represents IPOs and secondaries and nothing I have a counterpoint to this. Would you like to hear it? >> Sure. >> Okay. We don't need new IPOs for that to have that froth. >> Agreed. We're dredging up the old IPOs that were broken. >> I agree. You're right. You're right. >> Open door. Um, all the [ __ ] Eric Jackson's doing with all I don't even know what those stocks are, but those were 2021 vintage IPOs. When you have a stock at $2 that runs to 10, there's no need for there to be a wave of of new IPOs because we have the old ones. Um, >> I'm in Joby and Archer Aviation. These are 2021 vintage bubble uh stocks. Um, but they've made a lot of progress in their business over the last four years. But like that's what's replacing >> Yep. >> all of that supply. But then we do, >> we don't have a bubble in IPOs, but [ __ ] we got coreweave this year and we got a bunch. >> All right. So, next chart shows M&A activity or lack thereof. It's almost fallen off a cliff. Not almost. It has fallen off a cliff. But Josh, to your point, you're right. I US IPO activity picks up after Labor Day. Uh, September strong start stands out for most recent years. That's Bloomberg. So, we are getting more IPOs, but you're right. You're right. I I think the the context that you give around Yurian's lack of IPOs is is is important. So, >> there you have it. More of that. And then lastly, do you have anything else? Let's just let's let's wrap up. >> Um the AI glasses, >> we got to do you want to do maybe 30 seconds on the AI glasses? >> So, Meta is really going for it. $800. It can show uh text messages, video calls, turnbyturn direction, and maps. Uh they predict that Meta will sell over 100,000 units. Uh and so >> 100,000 units by next year. By the end of next year. >> All right. This might end up being my worst take. And Nicole can save a copy of it. Um I think these are for virgins. And uh I don't I don't think they're selling 100,000. And I don't think it's socially acceptable, at least not yet, to walk into a room wearing uh glasses with [ __ ] cameras on the front of them. And now could that change with Gen Alpha like based on >> Yeah, I agree with you. I totally agree with >> it could. It could for for people in my demo. Don't step to me with this [ __ ] on your face. >> Don't worry. I don't think anybody's going to, but I agree with you. >> Okay. All right. Um, let's do Make the Case. I wrote this up for CNBC Pro with Sean. The We talked at the end of the show last week about these energy stocks. They they were ripping again this week, man. I'm telling you, there's something percolating here. >> I don't own any of these. Okay, this is the worst corner of the market. I'm going to show you the best stocks. I have five. And um we gave these letter grades. Let's roll through these. Valero. Um this is the best one. >> This one like for some people they'll look at this and they'll be like, "Gard, I missed it." And I get it. >> What do you mean? I know, but I understand it. >> No, I don't. No, I don't. I reject that. This thing has gone sideways out. >> This thing went sideways for a year. It's only starting to move. >> Okay. Another refiner, Marathon. Pull this up. This one looks even better. You buy this, right? >> Yeah. >> Yeah. Um, here's Baker Hughes. This If this one takes out 50, >> I feel like the stock never works. >> It never works, but it sometimes works. If this one takes out 50, who's selling it? >> Okay. >> Who's selling it? Honestly. >> Yeah. >> This is This is not a refiner. This is oil field services, and they have done a really good job managing. >> Don't give me fundamentals, dude. You don't know [ __ ] Next chart. >> Thank you. Uh Philip 66 is the other refiner. This is the one that hasn't broken out yet. It's the juiciest. >> It's juicy, right? >> Yeah. I like it >> because if you like the marathon chart, this is the marathon chart, but three weeks ago. >> Yeah. >> You understand? >> Yeah. >> Okay. Um and there's an activist. I think Elliot is in this stock in size. Um so I thought that was an interesting one. Here's I I do own this one. Chevron. I'm finally green. I got murdered in this stock when I first bought it. Take a guess where I bought it on this on this chart. >> I mean, that did look clean. >> I know it was a it was a failed breakout because of Liberation Day, but I um I averaged down and I survived. Uh I don't trust it. So, I think it's a good dividend stock right now, but I don't think this one's going to go. So, I gave that one a C. Anyway, my make the case is time to start looking at energy stocks again. I know there have been a lot of false uh there's been a lot of false promise in this space, but someday you're going to wish you did. Um and that's uh and that's my story. You got a mystery chart for me? >> I do. Um All right. So, let's go. Let's chart on, John. All right. We're looking at a one-year time frame. Uh uh. All right. I'll give away the orange line. It's an I mean, the orange line is an index. It's the index. And the purple line is another index in a different area of the world that you'd be surprised that it's beating our index. >> Okay, this is uh Chinese internet is purple and the orange line is either the NASDAQ or the XLK. >> So the orange line is the S&P and the purple line is not that. >> Let's zoom out a little bit. >> Good. I did really good then. >> Let's zoom out a little bit. This is a tough mystery chart, but like >> can you give me something else? >> I will. This is five years. Okay. So would you say that five years is not cherrypicked? >> It's five years. >> Yeah, these are the same chart. >> It's five years. >> Almost perfectly identical. Not perfect, but almost. >> Um All right. The purple line is is basically the opposite of what >> international uh European banks versus uh the >> close enough. It's international value. Isn't that wild? >> I'm really good at this. >> No, but no, it was it's a tough guess. But isn't that isn't I only just want to show you like isn't that very >> Wait a minute. How was I supposed to guess the Fidelity International value? >> I told you it's international value index. I told you it was a tough one. >> You This is not guessable. >> My Okay, my bad. I I'll let you up next time. I'll lay you up next time. This is not guess. >> No, but you you have to say it's an investing style. >> This This is not guessable. Forget it. My bad. My bad. But isn't that wild? >> You see the [ __ ] I pull out for you next week. Penny stocks [ __ ] bull. >> Isn't that surprising? International value has outperformed the S&P for 5 years. I would not have believed it if you didn't show me the >> best way. >> Um, I think the foreign banks would probably be the key to that. I But who knows? Maybe. I have no idea what I'm talking about. They have a lot of miners and gold is up a lot. Maybe that helps. >> Yeah, sure. I don't know. >> Value. >> Biff Grievil says, "As a wealth manager, I should have memorized all mutual funds." All right, guys. Thank you so much for hanging with us today. We really appreciate it. We miss you when we're not here. Thanks to everybody who joined us in the uh in the chat. As Michael pointed out, it is a wet and wild market. Um obviously, some things will end badly. That doesn't mean the whole thing needs to end badly. Stay focused. Do what you think is best for your own long-term investing and do not uh fall sway to the madness of the crowd. Tomorrow is an all new edition of Animal Spirits, my favorite podcast starring Michael Badnik and Ben Carlson. We'll do Listen to the Koala and subscribe as you could see on screen. We'll do uh we'll do a new edition of Ask the Compound and then uh end of the week is an all new compound and friends. Keep it locked. We'll talk to you soon. [Music]