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CEASEFIRE INCOMING? STOCK MARKET TALK
Recorded: March 24, 2026 Duration: 2:47:03Space Recording
Full Transcription
What is up?
What is up, everybody? Another day of stocks on spaces, a red day in the
markets. A couple names are green, but mostly a red day. Oh, actually, I didn't look for
a little. My portfolio turned green in the middle of the day. Let's see. Yeah, my portfolio
is green interesting
I was a couple minutes late my bad
I appreciate everyone for hanging us out
hanging out with us today here on
this space it should be another day
another great day another wonderful day
I had to give my portfolio a quick refresh is it actually green
that we're having a little red day
alright not bad
what's up Brian what's up Mike how you guys doing
hey buddy Gavin how are you
uh the so the the etfs are down uh but the single stock portfolio is up a rare day of
outperformance there what's happening apple's holding in well tesla is up one percent okay
amd also holding in i guess bmr is not down that much as well
AMD also holding in.
I guess BMNR is not down that much as well.
Hey, where's Stock Talk been?
Haven't seen him for a while.
Are you still setting things up in New Mexico?
So we were at GTC last week.
This week, I know he had some ARIDs or something that he was doing
in the last couple yesterday.
I was going to say in the last couple days, the last i was gonna say in the last couple days but
yeah no that was yesterday there were a couple news stories that happened this morning so far
a little bit more news stories than yesterday there was pretty much nothing that happened
yesterday but today we had stuff from amazon their uh robo taxi service zooks is apparently
expanded in austin texas and miami now they've been testing out there but these are the fully
autonomous ones that should be coming see some more people requesting to get up. Mike's been
having trouble in the spaces getting up. But there was another story today that came out around
arm holdings than possibly making their own chips. There's another story around them that
meta platforms and arm holdings are working together to create another chip. Semiconductor
build out. I believe the one with
meta was more on CPUs. So probably just trying to bring down side costs. Shopify posted some
stuff around allowing people to use chat GBT to sell more of their products. Apple announced a
new Apple business suite, they're going to start selling ads in more places. Apple Maps is going to start to have some search ads.
So watch out for that coming forward.
We did also have Claude put out a whole post yesterday.
Anthropic put out a post.
I'm sure maybe some software stocks are down.
I don't know.
But basically this perplexity computer, these kind of hijantic tasks coming more towards
to task coming more towards BOD.
Claude.
I know that was an announcement that a lot of people were watching.
I know that was an announcement that a lot of people were watching.
Amazon Web Services data center in Bahrain
actually had its second outage during the war hit by a drone,
I believe is what the insinuations for it didn't directly say that,
but we're having some disruptions.
For the ETF watchers out there, this one's a little interesting.
Did you know that VUG, MGK, VOOG, VO, and VGT, a lot of their biggest ETFs, not the VOO, not the big dog, but the rest of them pretty much, they're all going to be doing stock splits.
So between 4-1 to 8-1, you can look at what they're going to be.
April 21st, a month, a little less than a month from now.
But a lot of stock splits happening for some
of Vanguard's largest ETFs. We did also have another one, SK Hynix plans to buy $8 billion
of EULV equipment from ASML. This is, I believe, one of the biggest orders ASML has received, but
SK Hynix buying more of the chip making machines that you need for the most advanced types of semiconductors that there are.
What did ASML stock do today?
Is it moving a little more with the market, or is it up?
My guess would be up 2.5%.
That does make sense.
Wow, ASML is up 24% of the year.
Look at that.
So ASML had that story today.
United Airlines, UAL, they came out with a story this morning
talking about they are taking delivery of more than 250 airplanes
by April of 2028.
That is the most any airplane carrier
has ever taken in a two-year period of time.
They did also say
that all United Airlines flights are expected
to have Starlink
in the dual cabin versions of them by the end of
2027. I don't know. Trying to get
Tuck and Cole in there, but most of them are going to
be having Starlink. We did also
have New York Stock Exchange doing more
stuff around tokenized stocks
and trading platform. There was more developments, obviously, in the war in the Middle East or
whatever you want to call it. It's still in the have they talked, haven't they talked. There was
some more people saying that they have. I don't know necessarily what's true or not, but market
is not horrible today. We'll see. And then, yeah, that was most of the news stories that I was watching.
When I look towards the earnings calendar for after the close today,
we do have a GameStop.
GME, Braze, KB, Holmes.
So nothing really that people are going to be watching too much.
I know GME still has some fin-twit lovers,
but it's not really like an earnings play.
It's more of just the in-between the earnings play is what we could say it so I don't even know if they're going to do
an earnings call. Yeah, that is a couple of the news stories that we have from today.
I'm just going to pull up my watch list, see what's on the top and the bottom of it. Then I'll
come into some of the friends send us some of the invites do all of some of the good stuff.
We're gonna throw it around the panel Amcor is the one at the top of the list.
Then Dell, then Vertiv, Thurman,
then a 2X Corweave ETF, CRWG.
Shout out to channel sponsors, Leverage Shares.
CRWG is the top five.
Coinbase, Axon, another channel,
again, another Leverage Shares ticker,
channel sponsor, Leverage Shares, shout out.
Hoog, H-O-O Hoog is down 7.4%.
Sorry for the people in long,
but I guess if you're trading it short.
TTD and Figma.
TTD has been just a rough one.
Whoa.
Damn, TTD is an ugly chart.
Did either of you gentlemen trade
trade desk at all?
I guess if you were doing it doubt it would be to the downside it's been a long time since I touched that man yeah I could see why if
we're trying to the upside but yeah mr. options Mike tell me more how we how we feeling obviously
we had some thoughts yesterday markets a little lower today but it's not day. You know, it's been all over the place today.
It's a headline driven market.
There's some of the toughest markets to trade.
I mean, Trump was just on putting out Iran, you know, the same Iran wants a deal.
They sent me a gift today.
They sent me a gift of oil and gas.
We have, you know, it's a regime.
We constitute a regime change.
I mean, there's just nonstop stuff like this coming out. The market is gyrating on it, but holding, it's not sure we we constitute a regime change i mean there's just non-stop stuff like
this coming out the market is gyrating on it but holding it's not sure what to make of it at the
same time we're sending thousands and thousands of troops to uh to the middle east so you know the
market is trying to figure out what's real and what's not here and you look at oil is still above
90 so it's saying it's not sure too um that said the market here you know looked like it was going to be weak this
morning and it bounced back up and we went green for a bit we're just back a little bit red here
on the s p 500 and you know the energy sector continues to have the strength the xle exxon
mobile chevron put in new all-time highs today it's funny some of the names that looked good
yesterday like palantir and circle they absolutely puked a couple of minutes after the open.
AMD continues to hold in and looks constructive.
We'll see if that actually means anything here.
The financials bounce back a little bit today, but it kind of feels like we're just waiting.
The market's kind of waiting to see what's real and what's not.
And I think it's now having a very hard time telling what's real and what's not,
and it doesn't know how to react to this. So get these instant algo moves and then usually they're pretty quickly
undone uh i have not done a lot today i was you know i got myself in the hole early with a couple
trades got myself out of with a quick trade as well but uh you know today was just not easy you
know even when you were right you felt you know well i got stopped out being right twice because you know it pulled back beyond my stops and then it decided to go a little bit later just
trading exxon mobile a couple times so i need to be more patient and didn't really give it there
today so you know it wasn't until i grabbed a nice little trade on one of those bounces on the spy
that actually made some nice money i appreciate you for starting us out there, Mike.
Let's go over to Brian, and then I say also me joining us up here.
I'm excited to talk more on some of the stocks you're watching.
But Mr. Brian Lund, why don't you just give us your initial thoughts on today?
And I think, look, the chattering class around the stock market usually can only focus on
one issue at a time.
And sometimes you get to the point where you hyper-focus on it, and that is very close
to a turning point.
You know, all we hear is Iran, Iran, Iran, Iran, Iran.
And sure, I get it.
Iran is weighed on the market, but
it could also just be a cover. Remember when, was it Block, I guess it was, announced a few
weeks back that they were laying off a bunch of people and the implication was that it was AI,
but it really wasn't. It was just that they had overhired during COVID and they suck at managing their workforce.
So, yes, Iran could be holding this market down a little bit, but, you know, it could be some other things under the surface.
I mean, if you go across the, I mean, look at the Mag 7.
Look where they're at now.
You got Google and Apple are both 13% off their 52-week highs.
NVIDIA, 17.
Amazon, 18.
Tesla, 23.
Meta, 24. 24, Microsoft 31. That all started before that degradation in those names started way before the war. I would think that's a bigger factor
than the war. So the point I'm trying to make is don't be so hyper-focused on the war or even what
the reasons are that the market is down. I would be more inclined to just look at the price action.
Hopefully you have some sort of a technical approach from the markets.
Right now, what I would just be looking for is if this week could just settle back above the 200.
Now, I use the EMA, so it might be a little bit different for some of you out in the audience instead of the SMA.
But if we could just close back above the 200
this week on a daily. 6.61 on the daily on the SPY on the Assemble, Brian. Yeah, okay. So we're
looking at like right now on the EMA, it's a 65.94 on the SPX, give or take. We literally tagged it
today with the high of the day on the SPX. If we can settle above that this week, I think we have at least the foundation of a potential
pop next week.
The reason being is next week is Good Friday, which I've been doing this for almost, well,
more than 40 years now.
And I still forget every goddamn Good Friday that the market is closed, but not this year.
I remembered it.
So the market's going to be closed a week from Friday, four-day week.
That's usually a little bit more bullish.
So I think if you're a short-term trader, that's the setup I would be looking at.
That's the scenario I'd be looking at to see if maybe we can get a little bit of a pop next week.
Now, where that pop goes, I don't know.
It might just be short-term.
But as I told my subscribers today, I would just be happy if we could settle back above the 200.
But we're not able to do it as we sit here right now.
Of course, that could all change with one truth social post.
I think Space has been giving you guys trouble getting up here. I know options Mike for sure.
I think Hamid might have gotten kicked off.
Oh, dude, the last couple days, it just constantly
kicks me the first couple times.
As soon as I open my mic,
it just kicks me off. Kills it out.
Yeah, you might need to request back up again, Hamid.
But Brian, I want to ask you more.
Mike, you got to upgrade from that Blackberry.
You know, man,
I thought just having an iPod would be fine, man.
What am I doing here?
What phone are we on, gentlemen?
iPhones?
I'm on a 16e iPhone.
I'm on either a Pixel, the new one, the 10, whatever it is, or a 6.
Loser.
They know.
You know, we can't all be an Apple bastard.
Listen, Mux doesn't like Apple.
He still has an iPhone.
Doesn't like the company, though.
It's okay.
But, Mr. Bronwyn, I'd like to hear a little more on maybe what you're watching for going on this weekend to kind of confirm those levels. Obviously, I'd imagine Good Friday is maybe a good time to have a good week, possibly.
We'll see. I don't know. Maybe the market disagrees, but maybe some of the levels you're
watching this week. Yeah, I mean, that's the real level right there. I mean, if we can close above
that 200. But in terms of individual names, you know, yesterday we talked about or I talked about
the concept of a shopping list. While the market is going up and down, barcoding, you know, moving
on every tweet, and you're just waiting for a better market environment, you should be getting
together a watch list, right? A shopping list. And so you can just like look at some of the names
today that are acting better. And these are some of the names I talked about yesterday.
We're looking at Amcor, which is obviously one of Stock Talk's favorite names.
CCJ is doing well.
AMD is doing well.
MBIS looks actually pretty good.
ASTS had a really nice reversal.
Now, I'm not just saying this because it's a one-day thing, but these are the names you want to be keeping on your radar. You want to, you know, if you're a, if you're a longer term investor or what
I call an active investor, meaning you're not necessarily buying hold, but you're not necessarily
a day trader, just, just watch for the names that are holding up relative to what the market is
doing. If the market's down a lot and they're only down a little, or if the market's up a lot and
they're up more, that's the sort of relative strength you're looking at. Then when you marry those two, right, when you marry a market that's
found its footing and maybe gets a little bit of a pop and you combine that with names that have
already shown relative strength, you're just putting the odds in your favor. And that's all
this is about, right? I mean, I get so annoyed by people that try to predict stuff like they have
any insights as to what the market could
do. Like I never predicted or recommended a stock in my life. All I've ever done is say,
hey, I think this chart puts the odds somewhat in our favor. And that's all I'm saying is you
get a universe of things that are in your favor. As long as you're cutting your losers quick,
you're going to find names that are going to more than account for your
losses. And if you do that consistently over time, that's the easiest way to become a consistently
profitable trader and investor. Some good points. Those are some good points.
Hamid, do we have you up here yes I'm fine it's finally working for some reason but it kicked me off a couple of times
you got to stop with the negative Elon posts they know you got to stop going off but they're
the Elon fans that's funny how are we doing sir it's been uh it feels like it's been a week or two since we've
had you on i don't know if anything new is happening in your world do you have any new
stocks or anything like that but i always love to hear your thoughts on the show
the the stock that i've been um building the most uh the biggest position in most recently
has been micron it just uh actually passed um passed Rivian as my largest investment into a single company.
It's now, what, the second or third largest?
No, second largest investment in my portfolio or representation in my portfolio.
It's the single largest investment I've made dollar-wise,
but Rocket Lab has grown,
which is why it's a bigger portion of my portfolio.
But yeah, Micron,
the quarter it had was just absolutely mind-blowingly good.
You know, it just reminded me of the quarters just from a couple years ago, three years ago, roughly, of NVIDIA and how it was just destroying its estimates.
And the expectations just continue to go up.
It's such a fast growing company.
It's mind boggling how fast this company is growing it it now has a forward pe
that is like around six so micron seems to be like insanely undervalued right now in my opinion um
which is why i have i've been investing heavily in it but yeah that's been the sort of like main factor.
Micron isn't an interesting one.
One of the arguments we've been hearing
when people talking against it on this one
is like how good of a quarter that was
and the stock didn't move
and it maybe feels...
It's known to be a cyclical industry.
Obviously, the cycle's built different.
AI super cycle is very different.
But yeah, people seem to are sitting there thinking hey it's run so much it can't
go any further it seems to be what people are talking in the argument
against it and maybe that would be like similar to to me I mean I basically
thought that for Nvidia three years ago right it had gone up so much that I thought when it hit $300 a share, which split adjusted is like roughly $30 a share, that it couldn't go up any further.
But of course, we're looking at NVIDIA today at $180 a share.
So it's all relative.
And the people who think that it can't go up any further because it's cyclical,
A, none of them can tell you when the cycle ends. They've been screaming that the cycle
of Micron, Micron is at peak cycle from four quarters ago when the revenue was less than half
what it's expected to report this next quarter. So that's one.
And then two, when you look at the investments
that each one of these hyperscalers are making
in AI data centers,
well, unless they plan on cutting those investments,
all of a sudden,
there's no reason why they wouldn't need more memory.
And the entire world memory supply is constrained.
It's made by three different companies, Micron being one of them, one of the major suppliers.
And everybody is at major shortage with no additional sort of supply capability coming online until 2027 and 2028.
2027 and 2028.
So they're in a really, and by the way, even that supply might still be sold out if the
estimates of Jensen Wong and others are correct, that we're going to just continue to soak
up more and more AI chips.
And each one of these chips needs more and more memory, and they need more and more storage,
NAND storage.
So the Micron story to me is the best it has ever been.
And then the price is the most attractive it has ever been, despite its most recent run-up.
Because when it started this run-up, it wasn't this profitable.
But now it's extremely profitable generating huge amounts of
cash and soon it's going to start buying back its own shares um because of the amount of cash that
is generating because there's no better place to put that money if the if the stock is trading at
a p e of five or six you know so it has no choice in my opinion it's so unidirectional thing obviously on a day-to-day basis it doesn't
do that but if you fast forward a year from now uh the company will have generated roughly
80 dollars per share of profits and it's trading at 400 so uh that's kind of that's kind of a crazy number what you're saying um with all that cash what you would want to see is buybacks
i don't know maybe it's expansion maybe it's other stuff maybe they make investments into
other areas i don't know but what do you think i mean i don't know what they spend the money on
maybe they get back into the consumer space so our prices on memory comes down wouldn't that be nice
consumer space so our prices on memory come down wouldn't that be nice it's not get crazy here mike
i know
take this out i bought 64 gig of 6 000 speed memory last year for my new computer for 230
it was crucial i think or like i forget what it was it was one of the better ones
That is going for $1,300 today.
that is going for 1300 today that is just insane
That is just insane.
That is a crazy increase in price.
But that goes to show you that memory demand is going to continue to be there.
And who's using AI less today than three months ago even.
It just doesn't make sense that all of a sudden the memory demand would decrease.
In fact, it's accelerating based on AI needs.
And what's crazy about Micron is that this past quarter,
they were expected to have, initially the estimates were that they would have $18 billion in revenue,
up from record $13 billion in revenue,
which $18 billion was already 120% year-over-year growth.
But they didn't just beat the $18 billion,
they just destroyed it at $23 billion.
But the estimates were updated to like 19 billion
by the time the quarter ended.
But they came in at 23.8 billion,
which is a mind blowing beat.
And then they were estimated to have $8.60 of EPS.
They came in at $12 of EPS.
So the beat was just like a better beat than you'd basically see from any company in general.
Then they guided for next quarter, which was expected to have somewhere around also $19 billion in revenue.
They guided to $33 billion in revenue. They got it to 33 billion in revenue. And the EPS guide
went up also to between 18 and 20 dollars of EPS. So if they come in at the high end of that guide,
which is, you know, fully expected at this point, they're in a 20 dollar per share EPS run rate.
That alone puts them at $80 annualized.
That's assuming they don't even grow over the next year,
which they have said the next year's supply is completely sold out,
and they're now starting to make three- and five-year contracts.
So if you fast forward a year from now,
they have made $80 per share of profits.
They have 1.1 billion shares.
So that means they will have made over $88 billion of profits. There aren't too many companies that make $80 billion of profits.
There's only basically Google, Apple, and Microsoft that make that level of profits.
And all of them are multi-trillion dollar companies.
And media as well.
So the company that they're with is kind of insane in terms of like, here they are at
a $440 billion valuation.
And they're on par in terms of profitability with with the companies that are
between three and five trillion dollars in valuation so the valuation to me there's a huge
mismatch this is you know this this is what i do like this is why my portfolio has done well over
the past several years is just because I find these type of opportunities and
double down on them. Now, I mean, obviously, I could be wrong. My con might, you know,
all of a sudden flop and have a disastrous quarter. That's always a possibility. But
this is the way in which I invest.
What's your time frame on this? Because I um when people are talking about this as well it's
the three years to build out a new fab is the the kind of what's talked about a lot
i'd be curious to you know i'd imagine the landscape looks different in three years but
who knows me if this super cycle continues maybe we we kind of stay in this perpetually
uh supply constraint area.
So I'm curious on how you're thinking about this.
Is it like a one to two year play in your mind
and an easy double over the next bit?
Or is it something a little else, a little longer?
I mean, as an investor,
you have the right to evaluate at any given time
with additional information, right?
That's just the way I approach it my uh investment approach is generally long term i don't mind holding on to something for
uh years before it pays off and that has happened multiple times where i've had to
hold on to something for years before it pays off but with new information that can change there's
also been you know investments that i made with the long-term mindset but then as new information, that can change. There's also been investments that I made with the long-term mindset.
But then as new information came in, I exited those positions.
And going into Micron, I'm viewing this as Micron has an extremely bright future over the next at least two or three years, possibly much longer.
bright future over the next at least two or three years, possibly much longer. But what's more
important is that the current valuation is ridiculously low, in my opinion. So, you know,
if I was to sort of summarize my investment strategy in one line, it would be buy good
companies or great companies rather at good prices. And right now, Micron is a great company
at an insane price in terms of what its performance is.
There's only three companies in the world
that make the type of product that Micron makes.
And the naysayers or the bears call memory a commodity
despite the fact that there's only three companies that make it.
There's no other commodity in the world that only three companies make.
So there's in fact more companies that make AI chips,
for example, than there are memory chips.
So for this narrative that it's cyclical and it's a commodity,
which is the bear thesis on Micron.
It just doesn't pan out for me.
None of it holds water.
It doesn't hold that test of sanity check.
So it's easy for me to brush that off.
Do you buy any options or leaps or anything in your position as well?
I do dabble in options a little bit.
I don't include that in my portfolio.
We don't support options trading on Savvy Trader.
But it's a very, very small percentage of my portfolio, sub 1% at any given time.
sub 1% at any given time. And usually the way in which I buy options is that if I want to buy even
more of a given stock, because I'm very bullish on it, I generally am buying call options that are
relatively short term, like meaning months. And almost like the vast majority of them expire
worthless, but then I end up buying the shares because i just want to give myself a
little bit more time to to accumulate more shares that's the general path in which i i buy options
but um uh it's not a significant portion of my portfolio do you have some leaps on this one or
like a tiny bit is that where you would normally go for? You seem like the dabbling would be leaps.
Maybe not on this one specifically.
Is it leaps?
Leaps are generally over a year.
No, usually I'm buying options for months, not years.
The premiums on Micron in particular are really high.
The premiums on Micron in particular are really high.
I did buy some options before it reported earnings because I want to own more of it.
But then after it reported, the stock tanked anyway, so my options became worthless.
But then I went ahead and bought some more shares, significantly more than the investment
I had in options, obviously, which was kind of a nice way to hedge that like in case it rips after earnings,
I still had the option to buy those shares or some of those shares.
But I ended up actually making a much larger investment in Micron after the stock tanked,
after it reported the quarter, Because the quarter was just unbelievably good
in every possible metric that you can count
or measure by, rather.
But yeah, the stock just reacted negatively anyway.
So sometimes the market likes to be irrational
and that's fine.
With options, you sort of limit your time frame in terms of how long the market can be irrational.
And the famous saying that the market can be irrational longer than you can be solvent is a great quote, which is why I don't really invest heavily in options.
It's almost always less than 1% of my portfolio.
I haven't been traveling a lot recently, so I haven't gotten the chance to look at some of the stocks.
Micron being back under 400. Interesting.
It's only spent a day or two down here.
Yeah. Oh, okay.
Yeah, but Micron reminds me of NVIDIA when it had, you know,
when it had that, after that huge move and it had these blowout reports,
it did the same thing and it's been sideways now for a while.
I don't think there's anything wrong with Micron.
I agree with that. It's just into a consolidation phase.
You know, NVIDIA did the same thing after it started its huge run.
So I kind of put it in the same way right now.
It's going to go into a little consolidation phase here and we'll figure it out.
But the quarter that NVIDIA had versus the quarter that Bicon had are not really comparable.
And also NVIDIA's price earnings ratio is roughly 36 um and
its forward pe is i don't know roughly 20-ish um for the next year in the best most optimistic
scenarios i'm not saying nvidia is not a good buy here at 175 it's attractive but the difference is that micron's pe is less
than 20 it's growing way way faster and it's forward PE is five so it's yeah
it's roughly it's also for cheaper than than Nvidia on a per dollar of profits
and that has faster growth rate but it's also run a metric ton. I mean, NVIDIA has, you know,
ever since that earnings report back on August of last year,
even though their blowouts are just not moving. I mean, I like Micron,
don't misunderstand me, but, you know, look at the size of this move.
It went from 114 to 470 in the space of less than six months.
I think it's just in a consolidation phase now. It's just doing the same thing.
And the memory space to me is always problematic.
It's very cyclical.
It has these moves and then again,
it goes into, they overbuild and it gets into huge problems.
And I think a lot of people remember that too,
when they trade these names.
Yeah, the cyclical argument could have also been made
for Nvidia with respect to them basically having revenues that were in declining phase post the crypto run up, if you will.
And then their revenues were declining and then all of a sudden AI started to take them off.
started to take them off.
And in NVIDIA's case, it has exploded, what,
15-fold since the AI cycle, if you will, started.
And no one can kind of tell
when exactly the cycle is going to end.
And then what happens when the cycle ends?
Does NVIDIA's revenue go back down significantly
from where it's at right now?
Or does it just sort of plateau at $300 billion, $400 billion revenue run rate?
And those are very, very different outcomes than cyclical that implies it's going to go
back down to where it was.
When you look at Micron revenue, for example, this is a company that has never in its history had a $10 billion quarter.
And then in the past three quarters, it has broken that $10 billion barrier to have $11.3 billion.
Then it went from $11 billion to.3 billion. Then it went from 11 billion to 13 billion. Then it's gone from 13
billion to 23 billion. Then it's projecting that it's going to go from 23 billion to 33 billion
next quarter. So, you know, anybody who says, oh, it's cyclical, well, tell me exactly when this
cycle will end and then tell me what happens after. Does the 33 billion
plateau or does it come back down to 10 billion? What happens after this cycle ends?
So, you know, the whole sort of recognizing patterns where there is none theory comes into
play where people are like seeing patterns that don't exist.
Like nothing like this has ever happened before.
So I don't know what pattern people are looking for.
Stock talk.
Do we have you here?
What's going on?
Hello, good sir.
You got any thoughts on the Micron, the memory, the side of this discussion?
Yeah, I think Hamid covered it pretty well there.
I think the memory trade has been obviously a great trade to be in the last couple months.
I don't have any exposure to it, but I do think the stocks are still reasonably priced for what it's worth.
The cyclicality argument is always going to be there, obviously, because memory has traditionally been a cyclical business.
But GPUs were sort of a cyclical business, too, before the AI trade.
And so if there is an argument to be made that AI is going to break the cyclicality of the semiconductor business, which is a fair argument to be made, then there is a structural argument there.
Yeah, there's a structural thesis there, right?
That this is going to be an extended cycle.
And even when it does end in terms of peak sales, that it'll normalize to higher levels of volume than we saw before, you know, pervasive AI.
And that's a pretty good argument.
I mean, I don't hate that argument.
So yeah, I like the memory trade as a bottleneck trade.
I think if you're already long those names, I think it makes sense to stay long.
I think of the group, Micron is probably the best in terms of their ability to sustain an advantage in that choke point.
I think Western Digital and SanDisk are a little bit more commoditized.
And I think, frankly, they're trading more sympathies to Micron than anything.
But, yeah, bottom line is, I think, unlike other parts of the semiconductor supply chain, it takes a long time to bring on additional memory capacity.
And that's serving as a tailwind for these guys in terms of their pricing power.
And you've seen that with Micron's margins, which I don't remember what their gross margin was in the last quarter, but I think it was like 80% or something insane like that.
And that's evidence of that, right?
That's evidence of their pricing power becoming stronger as demand increases
and there's just simply not enough supply to meet it.
And, you know, I was at a – when we were just at GTC, we were talking.
We had dinner with somebody from Broadcom who was there,
one of their employees. And he was talking about this and said, there's just no way around it.
There's no way around building additional clean rooms for memory capacity. He was himself very
bullish on the memory space, but he was talking to us about just about clean room capacity and how
it takes, you know, two to three to
sometimes even four years to bring on additional clean room capacity. And that doesn't even include
the time it takes on to bring production capacity online and all the tools that are required to
bring actual memory production capacity online. That's just the clean rooms. And so when you have
a choke point in an industry like this, a supply choke in a critical component like memory,
and then it takes two or three years to bring the clean rooms online,
another year, year and a half to bring the memory production capacity online,
that's a big leg, right? And it creates a window,
three or four year window where you have enormous pricing power. And
that's what the memory guys
are enjoying right now. So yeah, I don't have any qualms with memory thesis. I think there's
other parts of the supply chain, like photonics, where people are projecting the same type of
dynamics that are not the same type of dynamics like it doesn't require three
or four years to bring supply online in every category that is true with memory but a lot of
these other chokes i think will be a lot more short-lived but yeah memory is in a great position
especially based on that last quarter i think that if you're long any of the memory names i
think that last micron quarter should have um made you smile because that was a crazy quarter.
And if they can put up another quarter like that, you know, a couple months from now, then I think that'll be even more proof that this is going to be an extended cycle.
I mean, it's already an extended cycle, right? Revenue highs a year, two years arguably pass when their cycle typically peaks,
which means there is a structural shift happening.
That's just like plain, simple proof of that.
You don't need a rocket scientist to see that.
Now, if it extends for another two or three years,
then you're really breaking the cyclicality of the business.
And then you have to start asking yourself the question,
do all these stocks need to be repriced to compensate for that?
So yeah, I don't have any problems with the memory thesis.
I don't have any exposure personally,
but I don't think it's a bad trade or a bad thesis.
It sounded like one that you're...
Yeah, that was a...
Okay, cool.
That was a good one.
I did get to say, I also got to meet the Micron CEO last week at CES.
Oh, nope, at GTC.
Three-letter word.
OpenAI said to discontinue Sora video platform app.
Amit, I don't know if you have any thoughts.
He basically just agreed on everything he said,
so I don't know if you need to go deeper on that one.
Obviously, I agree with everything he was just saying.
But yeah, those are all the reasons that Micron is the largest investment
into a single company that I have ever made.
And it happened relatively quickly.
Like my investment in Rivian,
which is the second largest,
at least happened over the course
of a couple of years.
But with Micron, it has happened
over the course of roughly less than three months.
So yeah I mean I think it's inconceivable to me how it could potentially be trading at
$400 price point a year from now if it can generate $80 per share of profits.
So you know that just just seems like it.
The one thing I will say is,
is there is probably always going to be a cohort of investors in that space
that think the cycle's over this quarter, the cycle's over this quarter.
And so you're always going to have a little bit of that as a headwind,
I think, but that's normal.
I mean, that happens in every type of stock. There's always a cohort of investors that want to call
the party. I mean, people have been doing that with NVIDIA for two years as well. So yeah,
that would be the only, I guess, it's not a caveat, but that'd be like the one
price risk that I would put on the table, which is just that, and I think the reaction last quarter
is kind of a reflection of that, where there's just
certain investors that are like, oh, OK, great quarter, but this might be the peak of the
cycle.
And, you know, some of those guys might miss the story because of that type of thinking.
But yeah.
Yeah, 100 percent.
And I think what ends up sort of removing some of that pressure, downward pressure, is the company buybacks, right? Because
right up until this point, the company has hardly had buybacks, meaning the buyback numbers have
been in the hundreds of millions. It's not significant because they have had like $10
billion of debt to pay off, and they haven't been generating the amounts of cash that they just started generating starting this last quarter.
And they will be going forward.
So in the next year, if the projections are accurate, they're likely to generate somewhere between $50 and $80 billion of cash even after their CapEx spend.
So that would be just a mind-blowing amount of cash
to just have sitting on the sidelines.
So I would expect that their board will spend some of that to do buybacks
and that'll remove the downward pressure
from people who are ready to get out after every quarter.
But yeah, you're absolutely right
that that is creating some downward pressure on it.
What's up, Wolfie?
Appreciate you joining us on the panel.
I don't know if you have any thoughts on the memory trade,
the Microns of the world, an area you're interested in.
I mean, I was short Micron until today for what it's worth.
That was one of the names I shorted on Friday.
When we had that broad sell-off, I thought it gave you just a technical double top.
I covered most of it today.
I think these types of names are, for me, trading vehicles.
Sandisk, Micron, some of these names are trading vehicles. I'm SanDisk, Micron.
Some of these names are like trading vehicles at this point.
I think a lot of stuff's kind of been baked in,
even regardless of how great the numbers are or the quarters are.
And I think that for things like that,
I don't want to overstay my welcome in either direction.
I think that's just kind of like how the market is in general, um, for a lot of the,
a lot of the sectors in the market currently.
Any areas you're liking?
I feel like,
have you been trading clear secure?
I think that's the right up Wolfie's alley.
That,
yeah,
that's one of my names for 2026 actually.
yeah,
clear was a name for 2026.
the TSA stuff's kind of helped.
I think they have a B2B segment that people sleep on.
I think once people use it, they're kind of trying to get to a point where basically your face is basically your digital ID across the internet across services across the web stuff
like that one of the tailwinds i have for 2026 is like the world cup um you know stocks up
pretty aggressively on the back of earnings a couple surprises in there and then the tsa stuff
every time you get you know tsa lines in the in the news cycle you see this thing kind of take off. So there's a lot of tailwinds for the name.
Outside of that, you know, the energy stuff.
I think if you're chasing energy at this point,
you're just kind of like, you know,
you're basically calling a shot for like a longer, larger hot war.
It's not something I'm looking to add to currently.
I think you can get an opportunity to just add at lower levels potentially.
It kind of reminds me of some of this gold and silver stuff
that was happening earlier in the year
where some of the notable Bitcoin people
were holding gold and silver spaces.
I'm not saying that like that uh that's
always a tell but you know generally when you get stuff that's not supposed to move with risk that
starts to move with risk that's effectively some sort of signal um i thought that a lot of the
energy stuff was uh pretty discounted at the end of last year.
I think I was on your space and like Austin space and other spaces talking about it.
I think at this point you got to be a lot more selective.
And it's not something that I want to, I want to potentially chase. I think some of the NatGas stuff, like some, like I own BG, for example,
that might have a little bit more room.
Things like Golar and things like that might be worth nibbling or taking a look at.
I think some of the names like Mosaic got crushed on the back of the input cost stuff, even though they're in the crop business.
So you see stuff like CF Industries really take off and see stuff like Mosaic get hammered.
And I think that, you know, that spread might need to come in a little bit.
And then there's other names, like there's other things to kind of like, you know, pick and choose at.
I was taking a look today.
I think Lily's like eight bucks from its 200 day.
So it basically gives you like a really clear shot to take a look at. Breaks 200-day,
you're out, holds, might be due for a mean reversion. But for the most part, I think
these headlines are just basically violent and volatile. So if you're not looking at something
that's idiosyncratic or a special situation or something that you know you can kind of like map out beyond the six months
that is going to potentially be accretive to the business, you know, then you're not...
Those are types of things you look for.
But if you're not looking at that, then I think it's one of those things where you sit tight.
I saw a tweet yesterday that basically said,
from now till June, the S&P is basically pricing at
175 points a day based on where volatility is. It doesn't mean that it's going to go up or down
175 points. I think that's a thing that people need to remember, that sometimes you can get
situations where you go up 20, down 30, up 50, down 50, and then effectively kind of go nowhere for the session.
And I heard him talking about options.
And if you're like, most people that I encounter on here, you know, dabble in the options.
And that's like really disrupt, it's a really easy way to destroy capital.
So I think that's something that people need to keep in mind.
I think that's something people need to keep in mind.
Outside of that, like, you know, I think for me, it's pretty telling when you see, you know, like Microsoft basically catching a bid.
I think Google last I checked was loads of the session.
Some of these mag seven names are turning into like bag seven names.
And, you know, Tesla was another name
that I shorted on, I think it was Friday, whenever it was breaking its 200 day. And I think like,
you know, when you see stuff like that, you just gotta, you have to honor it. You have to understand
that that's like the way that things are going. If it's not something that you're comfortable,
the other stuff's not stuff you're comfortable trading. If it's not something that you're comfortable,
the other stuff's not stuff you're comfortable trading. I think we have the benefit as like retail investors
or people who don't manage money for a living
to basically kind of sit pat.
You don't have to be in stuff.
And then sometimes you get these like dislocations
or some sell-offs uh and names that are that are pretty you know solid
and still have the story intact and the bottleneck's still there and so on and so forth so if i just
pick on like stock one of stock talk's favorite names amcor and porous ran at 55 when everybody
wanted it i think it traded down to 40 bucks, traded into like a major support zone, supply, demand, and balance zone, trend zone, like all at once.
Really gave an opportunity for a nice little trade off that level.
I think last I checked today was trading north of 50.
So, I mean, you don't need to catch, you know, exact bottom, exact top type of thing.
But like, you know, 10% moves, 10% move, right?
Or 12% moves, 12% move.
In this case, obviously it went 20 but i'm
saying that you're not going to catch everything every dollar of it so i think if you're i think
the for me the way what i've effectively been doing first of all like i've been fortunate
i've been a lot of the stuff that's kind of worked i was big on energy going into the year still long
like slb despite the sell-off yellow cop cvx a little bit of exon those like the
the main ones um along on some lng and vg stuff like that um but you know outside of that like
i think not being in the stuff that's getting dislocated when it's getting dislocated is really like kind of like saved
um and obviously you're not gonna not be in everything that gets sold but like you know
for for the better part of the year not being in the software names that got destroyed you know
really kind of buys you ammo for when you get these uh disloc. So for me, once I've seen the major moving averages kind of break,
I'm just looking for like the major weekly ones.
And, you know, generally when you get these sell-offs into the major weekly moving averages,
the first attempt, unless there's like a headline,
the first attempt usually gives you
some sort of mean reversion event i mean we saw that earlier in the year with uh the igv i was
on here and i was talking to you guys about it back when it was happening came into like i think
like a 15 year uptrend 200 week like major uh anchored vwap, et cetera, et cetera.
So like, I think that's kind of like the year that we're in,
at least for the foreseeable future.
And I think the other main thing, if, I mean, just in general, if you struggle with like not being able to see downtrends,
just flip the chart.
And if you can see an uptrend and like a negative chart,
it'll basically kind of reinforce to you
that like things are not being bought, they're being sold.
And I think some of these names that I've loved,
a lot of people in here have loved
and people in general on Twitter have loved
are in some kind of like selling pattern currently.
You know, Microsoft's the best example I can give of that.
Microsoft used to be one of those stocks
that's just like slow and steady, do no wrong.
And now I look at it every day and it's like,
oh man, it can never catch a bid.
So until that changes or until something,
constructive changes, I think you just kind of have to
take it for what it is and start to look,
kick tires elsewhere. You mentioned you, like I said,
you for me for 2026 is like there's a B2B side, the world cup tailwind,
you know, things like that. And now you've got this TSA thing.
So I think if, and when we get, if I just focus on that one, for example,
if, if, and when you get some sort of resolution on the TSA front, I wouldn't be shocked to see that name kind of give back a sizable amount in a short term period.
But if it's like you do your homework and you really believe that they are in like a growth phase, that's something that could come back into support, provide a meaningful base to trade from.
And then outside of that, there's just like,
you know, there's other names that are smaller names
and we'll see how they play out.
But like, I'll throw one out right now.
For example, like RDW.
RDW is supposed to be a Golden Dome name.
Last year, they got discounted.
They got sold off 75% or something like that
on the back of the belief that like the contracts weren't going to be available.
Management came out and said the contracts got pushed out.
They are available.
They're just pushed out.
So if they actually do come through, the stock's trading at a severe discount to where it's supposed to.
Beyond that, Hamid and I have talked about Rivian before. Rivian trading
into its 200 day on the back of the headline that you got last week from Uber and Autonomy.
They got the R2 rollout. If you start to see some of these R2 numbers hit or exceed what some people
have mapped out for expectations, it could be a name that you see some sort of momentum in
on a short to midterm basis. So just like things like that, like you just look for dislocations or things that are
trading below what expected value is or where the floor has kind of been, where the baby's kind of
been thrown out the bathwater and set in the floor. And that's mostly like where I'm at.
I think some of these moves in the gold and gold miner names have been a little bit overdone. You know, even some of these moves in the financials are a little bit extreme. You know, I take a look at every day, I take a look at and I share with subs like, you know, the 12 week, excuse me, the every sector relative performance for the last 12 weeks and for the
better part of the last like two and a half three weeks uh financials have been you know the worst
um and you know over time you start to see like the ones that are at the top kind of hold position
or maybe start to dwindle a little bit the ones at the middle start to rise or go down and that and then you you plot that with like moving averages or like dislocations
between moving averages and rates of change and kind of kind of can take shots around that but
that's effectively kind of like where we're at um i i don't i don't think that it's a be a hero time
but um i do think that if you're if you're going to look for opportunities,
I think some of these baby out with the bathwater days
like we got on Friday kind of set an opportunity to take shots.
I appreciate the run through there, sir.
We got some good names, some good directions.
Interesting ones to watch.
I was looking at Rivian there.
Quite the reversal today.
It was down like 2-3%.
It's now up 2%.
It was moving higher while we were talking.
I don't know if it got a headline or something.
I mean, it basically sold off on the back of the Uber news.
I think it was Thursday of last week.
It basically got to $17.
Sold back off to its 200-day and held its 200-day. So if you take a look at that chart, just dumb it down that dumb.
You want to take a shot, you're basically taking a shot against $15, $14, $80, somewhere around
there. So pretty straightforward. And like I said, they did have the autonomy headline with Uber. So you've got something on top of the R2 rollout.
You know, just trying to know certain specific stories that are independent of, you know, the overall Iran-Trump deal-no-deal, you know, mantra.
You got any Honeywell
thoughts, the one you're watching?
It's pulled back a little for you guys.
I still own Honeywell. I think Honeywell's
fine.
Like you said, it has pulled back.
I think the next level I'd watch
for is that 200A on Honeywell,
which sits at like 210.
That's effectively where it broke out from earlier
in the year. You can go back and take a look at the chart.
You have this like consolidation back and forth
in the first week of January.
And then basically once it broke 210,
it was up and to the right.
You know, at 210, should it get there,
it would be 20, 22% sell off somewhere around there
into a major support.
I mean, that again,
that would potentially provide an opportunity to take a shot long.
I'm doing a little bit of homework on, I don't have enough,
but I'm doing a little bit of homework on a stock MDA.
It's benefiting from interest in the space and defense ecosystem.
And it has like an industrial tailwind.
So I don't have enough to speak on it,
but it's like a name I'm kicking a tire on,
trying to like dig into.
But, you know, that'll kind of give you like an idea.
I'm usually like, you know, larger cap.
And I think that for this type of environment,
if you're going to go larger cap, you want to go to the strength stuff.
Strength stuff is like energy.
I think it's a little too far to try to take shots at energy right now.
I'd want to buy it on dips and on support
than trying to chase it.
For now, I'm looking elsewhere.
Gotcha. Makes sense.
Makes sense. We did get the market closed while you were talking there.
You should definitely make sure you check it out, giving the speakers a follow.
Appreciate everyone who joins in. It's been a fantastic conversation so far.
We got another hour coming up here.
Arm just released some guidance or something I'm seeing.
Is the stock moving higher
i also saw sam altman changing some responsibilities or something within open ai
yeah arm holdings with a two and a half percent move upwards and after hours let's see if i can
find what's exactly happening here arm holdings sees total revenue grown fivefold to 25 billion within five years arm says
sees sales
of 15 billion dollars from new
chip unit within five years all right
big if true i mean
i mean the stock is up 4%
now people are liking these arm
holdings comments
let's see if i can get more in front of me
gamestop did also just report quote unquote
earnings Let's see if I can get more in front of me. GameStop did also just report, quote-unquote, earnings.
That sales of $1.1 billion compared to $1.3 billion from the same quarter last year.
What's up, Sam?
Not much, man.
Great show today as always.
It was actually interesting because Trump was talking live and a lot of people were quoting things that he was saying.
So when I went in the stream, I played it.
It was like two or three minutes behind, but still.
I don't know, man.
It's like any press conference a guy goes to is going to be about the stock market.
Anything that affects the stock market.
They're at a Department of Health Services
or secretary meeting
and they're asking about the wards.
The media people,
they are ruthless, man.
I got to be honest,
this price action you're seeing today,
it just makes yesterday look like
a fake dead cat bounce.
And VIX is just floating up here.
Like it is not, the VIX is not like deteriorating or crushing.
Usually you see that when you have really good news.
Like yesterday, the VIX was as low as $20 as soon as that tweet came out.
But since then, it's been just floating higher.
Like VIX is in a structurally higher regime, which means that
it'll take a lot to bring the VIX down. And if it does, it'll probably be a bleed of the VIX
more than anything, which is not going to constitute a V-shaped recovery until we get
a random spike in the VIX. So as Wolfie was saying, there are certain days where it might
be a good time to buy things
that are leading the market.
Like today, Circle pulled back quite a good amount, but it has been a massive leader in
the stock market this whole year.
So I took an opportunity to kind of buy the dip in Circle as a swing trade.
I mean, we'll see.
I set my stop a bit lower from where it is today, where it closed.
So I'm going to hold on to that one.
But yeah, just like these small stabs I'm doing, small size.
I mean, my trading career, I've learned that, look, if you're going to be trading high volatility, keep the size small.
And try not to like shoot for the moon every time you hit something.
You know, maybe like take some trades off or whatever.
Like I know Empanol of them will probably tell you the same thing in this environment.
Because you can make like 10% in one day and lose all that plus more the next day. So it's
better to just keep trades short, keep its stops tight, and try not to fire at every single
opportunity you see because a lot of it can be a fake bounce. So there is some good news that came in today from Trump regarding the war, but the market is just selling off every single rip that it has.
Every time the market goes up from anything, it just sells it right off.
And honestly, that's what you're continuing to see today with certain sectors.
Like you had software down three and a half percent while the queues were down 70 basis points.
And you had socks or semiconductors up over 1% today.
So it's not all a massive sell-off.
You had a lot of the chip packaging and a lot of the chip picks and shovel plays up a lot today, which is really good.
On-semic connectors is up a lot today.
Amcor is up a lot today.
Basically, anything that Stock Talk owns is up today.
I don't know.
I don't know if maybe the market's catching on that or anything, but anyways, kudos to him for that one. But I'm still, I'm not
seeing like a massive breakdown in the stock market. Like we're still in range, right? So we
could just drift a little bit high from here and still not recover the 200-day moving average or
any of the critical moving averages over here. And still you'll continue to see sell-off in software and the leaders will continue to lead. That's
really the story that's being played right now. Even other things involved with photonics is up
today. VIAZ is up a lot today. AOI, they definitely bought the dip on that one. That's up considerably
today. Marvel Technologies is up about 2.5% today,
which is really good to see because I'm in that one. It's not an all-around sell-off,
and the leaders are continuing to lead. But the majority of what brought down the market today
were mega caps being down. Like NVIDIA is down 20 basis points, so it's down a lot more earlier.
Netflix, 2.5%. Microsoft, almost 3%. Google, 4%. That's a $3 trillion market cap. So that is going to move the markets,
if anything. But yeah, see your hand is up, Wolfie. Go ahead.
Yeah, I was just going to piggyback on your VIX comment. Basically, VIX at 26 implies a 1.6% move daily in the S&P. And basically,
you take 252 trading days, you take the square root of 252 trading days, and you divide 26
divided by that number, which is 1587. Round up 16, so you get one six. And what that means is that with the S&P at 6,600,
you're basically, you know, your upside is 67, downside 65.
So basically, that's your range on a daily basis.
And when you see stuff like that, then, you know,
typically a VIX 16 is like around average. So when you get a 1.6 times
average on the index, you do the same thing with the average true range of any stock.
And so if you get a stock that's on average, trades 4%, so basically it would be like six and a half six and a quarter
um and so you would have to shrink your size to account for that which is what he was saying but
i just want to put numbers around it um so when you see spice like this it means that a stock that has a 14-day ATR of $3 at VIX 16 would come out to $5 or $6 on a daily basis.
So you're basically going to get ranges that are wider.
And in ranges that are wider, you don't want to be as exposed as you would be in ranges that are smaller.
I just wanted to put numbers around what you were saying, Sam.
Yeah, no, I agree. you would be in ranges that are smaller. I just wanted to put numbers around what you were saying, Sam.
Yeah, no, I agree. I mean, my trading portfolio is like very little utilized right now
because this crazy chop that we've been in since October
could just be mind swirling.
I mean, it's just you think you're up a lot and it's doing good
and the next day just gives up all those gains plus more.
And it's a very difficult environment to be trading in and i'm i'm not trying to take too many shots and
you know what i think when it comes to long-term portfolio just staying conviction right like i
don't think amazon's gonna go out of business so i'll just hold on to that position but if i'm in
a theme that theme entire theme is not doing good i'll cut it you know the writing was on the wall
with software for the last four months and And I cut a couple of software positions, like very early in that. So look where it is today, right? It was kind of giving you these signals ahead of time. And, you know, while I am in certain software stocks right now, I've narrowed it down to a very small amount of software stocks that I'm bullish on in the long-term and I'm willing to sit down with Robin.
Yes.
$1.5 billion share buyback program and stock moving at all.
And that post up, but yeah, Robinhood didn't move.
Okay.
But yeah, $1.5 billion share buyback program, Robinhood.
You know, it's funny
because robinhood is actually a rookie number if his numbers up two percent of the market cap i don't
know yeah i mean when you think about it robinhood has been a big beneficiary of crypto for quite some
time and now it's not and now the company that is leading in the crypto move was Circle.
And we'll see where it goes on after today, but it's like the market decided,
I'm going to focus on this stock instead of Robinhood and no longer giving Robinhood that premium.
If that announcement came out like a year ago, Robinhood would be up like 5% after hours.
But it's not.
It's only about 1%.
So we'll see.
It'll probably take a lot more than just micro news for Robinhood to go back up.
It's moving with a bunch of other fintechs.
You had Shift4 up about 25% today, and it pulled back a decent amount from that, still
up about 20%.
But that was on the back of Jared Isaacman announcing that NASA is going to make headway
to go to space, right?
Let's go to the moon and build bases on the moon and stuff.
And that obviously is bullish for NASA.
I guess the reason why Shift 4 might be gaining some headway on that one is because he's the director, or he's the chair of the board for Ford.
And he's also the founder and previous CEO of it.
So I guess the algos are hitting that one hard.
But, you know, FinTech is just getting whiplashed in this market.
And it's been saying for a long time, this is not where you want to be at for short term exposure. And it's just been a massive downturn for fintech. So while it seems that SoFi
is a quote unquote good deal right now, the sector moves in all of fintech is going to have a lot
more pressure on SoFi. And honestly, the Muddy Waters report probably just amplifies that.
But I think it's more attributed to the continued downtrend of fintech in general. When you
see this downward move.
Muddy Waters report was an interesting one. They were going stock talk. Did you see the
Muddy Waters SoFi report?
I did not. Nope.
They were going hard calling it like Enron, basically calling.
I mean, maybe someone could give it a little more,
but it sounds like they were calling out basically fraud and stuff.
So Muddy Waters and the head of Muddy Waters
or one of the head traders of Muddy Waters, I forget his name.
head traders of Mudderwas.
I forget his name.
He was actually on the compounding news and it was actually on the podcast too.
and it was actually a good podcast too.
Yeah.
So basically,
they are not bullish at all.
They think there's a credit cycle developing.
And we haven't had one for a while.
The last two that we had was in 2000.
But I think what I was more pointed to
is they were talking about
SoFi misstating information and stuff.
That seemed to be more of the real stuff there.
Well, what he was basically saying, and it was actually the first point that they had
in the short report, was that SoFi basically loans out a lot of money to people,
and then they sell that debt to companies at a fraction of that yield. So they pocket the
yield. So they pocket the difference. That's net interest margin. That's basically how banks make
difference. That's net interest margin. That's basically how banks make money.
money. The issue here that Money Waters is pointing out was that you have the people who
are buying the debt demanding more insurance against the debt they're buying, even though
SoFi has low risk scores for who they're loaning their money out to, right? But in Money Waters
perspective, they think that they're doing a lot of bogus reporting and that it's actually impacting other portions of their balance sheets and their financials.
Now, that set aside, I mean, I don't know.
I don't know all about that.
But I do know that fintech is being hit hard.
And that from what I was hearing yesterday through the interview was that he was saying that they
think a credit cycle is developing, they are bearish on private credit, and that SoFi was
the best exposure they can get to it. And they're not even shorting SoFi stock. They have out of
the money puts on SoFi. He didn't say which strike, he didn't say which expiration, but they're not
like all out shorting SoFi. But again, take this with a grain of salt because this is what he's saying. So I don't know if
we're actually seeing reported holdings and everyone knows that short reports come out
usually when these companies are already positioned for the short and they usually exit shortly after.
So again, grain of salt, we don't know if what he's saying is actually true,
but what is definitely true is that there is a large amount of weakness
in fintech right now.
So would I be buying a dip in fintech right now?
Probably not.
Even if it does get a bounce,
you've seen bounces get sold off,
which we just saw today with a lot of software.
Okay, I thought there was a little more nefarious stuff
going on in that report. Okay. SoFi stock has there was a little more nefarious stuff going on in that report.
Okay, SoFi Stock has been struggling a little.
1670.
Stock Talk, maybe we can cycle it over to you.
I know it's been a couple days, actually a week or two since we've had you on Stocks on Spaces.
We were at GTC last week.
Yachtney,
I'm sure we'll sprinkle them in as Steph goes on. But
how are we feeling in the market? What's
standing out for you? Maybe stuff that's changed since we
last talked. Yeah, I really
haven't done anything in
close to a month.
My style is not
accommodative to...
I'm not a scalper.
I don't look for chart setups
and then like buy them and scalp them.
Like that's not how I trade, right?
I do research and then I find choke points in industries.
I find stocks that I think can benefit from those choke points.
I buy them and I hold them for extended periods of time.
Like that's my style.
If I was a scalper or a trader,
I would have just been all cash
for the last month and a half, right?
But I'm not.
And so instead of that, I just sit on my hands, right?
That's the way that I approach environments
like this when we're in shop.
Now, on a day like today where, yeah, the indexes are red,
but there's a little bit of pressure coming out of equities, these days tend to be pretty good for my portfolio because I have a lot of stocks that sit at those choke points, right?
Like Amcor was up 9% today.
Viavi and Amcor are my two biggest positions.
They were up 9% and 7% today, respectively.
So it was a fantastic day for the portfolio.
And, you know, several other names, ENS, Sina actually had a fantastic day for the portfolio. And several other names,
ENS, Sina actually had a nice day today too. IRDM keeps pushing higher. That's a pure options
position for me. I've reduced options exposure in the portfolio dramatically since February.
I was sitting at about 16% options exposure prior to this chop. Now I'm at about three or 4%. So that's a big drop
in options exposure. I'm still very much net long, but I've reduced the volatility in the portfolio
by reducing options exposure. IRDM is one of those few positions where it is all options on that
particular stock. But yeah, I mean, I understand that there are points in markets like this
where you have two or three months of chop and sideways action in the indexes.
And I don't mind it.
It doesn't make me panic or freak out.
You know, a lot of newer traders get really stressed out in environments like this.
I just keep it pretty chill and just watch the action.
And, you know, if there are names that I already own
that come into really, really compelling spots of support,
I'll grab some more maybe.
But outside of doing that, I haven't done much.
Reduced options exposure.
Haven't really caught any positions,
any significant positions at least.
All my core positions I'm still holding.
A lot of carryovers from last year have done very well this year.
Obviously, for me, the big winner so far this year has been VIAVI,
which has been a high conviction position.
I ended up exercising my 14 calls, not all of them,
but a large lot of them on Friday that raised the weighting for that position
over 17% in the portfolio.
So it's my biggest position by far.
And that added another great day today.
It's actually curling up into the local highs.
Looks like it's about to break out further.
But they've been executing well.
They're sitting at a perfect, I think, intersection in all of the stuff that's going on around Photonics with network testing.
I think it's just going to be a huge opportunity for them.
They really are the foremost player in network testing now after their acquisition of Spirin
from Keysight Technologies last year. You know, sitting now at an 8 billion market cap when I
bought it last year at 13 bucks, it was, you know, a third of that. So that's good to see. It's acted
really well. But yeah, I'm not doing much in this environment.
And I won't be doing much in this environment
until the S&P 500 and the Qs can repair index structure.
And they're just not there yet.
Today was a very bright green day for my portfolio,
but not a green day for the overall markets.
Qs closed down 0.7%.
SPY closed down 0.3%.
They're tucked under the 200-day moving average,
failure to reclaim. So from an environment standpoint, I'm still not satisfied.
Even though the portfolio is doing well, the individual stocks that I have are doing well,
the market, the major indexes in the market have not yet given me the confidence to say,
okay, I'm going to start throwing more darts. There are four or five stocks. I've narrowed down the list. It was like 10 or 12 a couple of weeks
ago. I've narrowed it down to four or five that I want to buy, but I'm not going to buy them
with the indexes tucked under the 200-day. I'm just not going to do it. I've learned over the
years that you should wait for index structure to be accommodative before you start being aggressive in markets.
To me, really, what makes you money in markets is knowing when to push the gas and knowing when to take your foot off the gas.
That's it.
And you push the gas when market conditions are accommodative.
When the S&P 500 is trading above all the moving averages, even if it's
chopping, even if it's trading sideways, that's fine. You can still get an accommodative environment
if it's above moving averages. It's not, right? It's below all the major moving averages on the
daily right now. The weekly structure doesn't look great either. It's below the 9 and 21
week moving averages. So it's set up for further downside. That doesn't mean we'll get it, but it's set up for that.
And when markets are under a condition like that,
and I know that there's an opportunity for a bigger gap down the indexes,
I'm not just going to waste my time and money just buying a bunch of shit
and hoping that it works.
Because as a lot of people touched on today before I started speaking,
there is a lot of babies being thrown out with the
bathwater in this environment. And when you get sell the days, even the good stocks with recent
catalysts or recent great earnings report, they get tossed too. And so I know that to some extent,
first of all, it is a stock pickers environment in this market, but also to some extent that can't
save you if the indexes see enough pressure. And so I'm waiting for index structure to look more accommodative, more favorable,
and then I'll buy more stuff. But for now, I have plenty of long exposure. I'm more than enough
stocks that I own. Sorry, sorry, sorry. Breaking news. Israeli Channel 12 reports that there's a ceasefire for up to one month,
and queues are up 60 basis points by the 50 basis points after that.
Yep.
I don't know how credible this channel is.
I mean, maybe they are.
I don't know.
But Wall Street posted it.
No, Channel 12 is a pretty legitimate
Israeli news
okay
but you do want to hear it from the
you probably do want to hear it from Trump
before you take it without a grain of salt
but yeah
my read though is the Israelis would be ones
that are not necessarily in favor of this
as the other ones
so to hear it from that side
does make me think it's more believable than like you know hey iran telling us they're not talking
or uh or whatever you know when it's against what i would think that they their base would be
i don't know we'll say market does seem to believe it with a small tick up here in queues
this is the one thing though about these this headline driven market like and the reactivity of it the market wants to go up you can see it the market wants to go up like
it's it's it's biting at every possible crumb even if it's coming from channel 12 or it's coming from
like there were rumors uh going into sunday night you know that were that were being floated not by
trump or anyone else and people were biting at the bait. So the market wants to go up, but right now there's just so much unfavorable uncertainty
that it is difficult to build a trend in either direction, in either direction. And that's
important to emphasize. In the very short term, if you look at like the last six or seven daily candles on the S&P 500 and the Qs, yeah, it's not nice action.
You're getting rejected at all the moving averages.
But no one's going to or no one in their right mind would stand up on a podium right now and say we're in a bear market.
We're not. We're down 6% from the highs. Now, that being said,
We're not.
We're down 6% from the highs.
the market does want to chomp at these headlines, but you need sustainable changes in the actual
risks. Like, we can say, yeah, there's a one-month ceasefire, or US forces are going to do this and
that, or, you know, we like a new leader for Iran. All that stuff is great.
You know, there was a report last night about Iran's parliament leader being considered
by the US, a political report of that last night.
But whether you believe or don't believe any of these headlines, none of them change the
commodity reality, which is what's driving markets.
So I think you need to see a sustainable change in that,
in the reality around commodities, right?
Or not only around oil and gas and that gas,
but around fertilizers as well.
You need to see a real shift in that, right?
A reopening of the straight, I think,
for markets to really sigh relief here.
So that's what I think.
But yeah, clearly the market does want to react to these headlines, and it's what I think. But yeah, clearly the market
does want to react to these headlines
and it's doing so again.
I would think any ceasefire
that would be agreed on from the
US side would include some
opening of the straight-over moons.
It's dangerous to say
anything before, but that would be my
guess, that there would be some sort of part of that.
And I do also know
there were sort of starting to kind of work in some
fears over the last couple
weeks, days, whatever it was
that escalation has been going in the
direction of Targ Island
and going after
Iranian energy
infrastructure, more of it.
UCO's down 8%
on this headline.
Like what?
Jets is up 1.8% after hours.
IWM's up 1.5%.
This would definitely include an opening of the straight-up moves for a month.
I would hope so.
I mean, the Iranians this morning said,
if you're not helping the United States,
you can pass. That's what they basically said this
morning in their statement from the Iranian foreign
ministry. It came out like 5 a.m. this
morning. They said, if you are not
providing bases to the United States
or Israel, we'll let you pass.
That's effectively what they said in summary.
I mean, it was a long statement, but that's what they said.
So I don't know whether that's true
or not, but yeah, I would hope that a one- month ceasefire involves reopening the strait. The strait is clearly what's bothering Trump, right? I mean, he does not like when markets go down and he doesn't like when markets react to this. He certainly doesn't want to see gas prices go up. That's a big thing that he has called on gas prices are lower year over year because he wants to push that into the elections.
But I mean, I don't think that there's, I don't think this is a headline solvable problem.
This is a, you need to see like material change in the situation and the straight, I think,
to solve the actual commodity pressure.
Until then, you might keep seeing these gap ups and gap downs in oil every other day i mean uco was up uh what six percent today now it's down seven percent
after hours like we'll see how it settles into the into the regular session tomorrow but iwm is
almost up two percent now after hours on the headline i mean war is one thing right stock talk
but it's it's the straight being closed down is the real issue.
Yeah.
And a ceasefire is what settles this down.
Because if they're not launching missiles at anybody, they're saying we're not going to launch missiles at any of the boats that go through there.
That solves, I don't want to say it solves all the problems, but it solves 65% of the problems that are happening, especially when it comes to the economy and the markets.
Yep.
I agree with that.
Yep.
And that's what matters. I mean, the market doesn't to the economy and the markets. Yep, I agree with that. Yep. And that's what matters.
I mean, the market doesn't care that we're dropping bombs.
I said this at the start of the conflict too.
No, the market does not care if stuff is blowing up.
The market cares if stuff is blowing up that affects commodity prices, then it does matter.
And that's what's happened here.
So yeah, I mean, look, I want there to be a resolution.
I don't like war.
I'm not like somebody that's like rooting for us to be in forever wars in the Middle East. I don't want that to happen personally. But that's just my political opinion. I mean, outside of, you know, debating whether or not you're in favor of the conflict, the reality is, is you don't want to see additional inflationary pressures in an environment like this. And that's what spooked the markets. I mean, the ECB for the last three weeks has been talking about rate hikes. The Fed mentioned in their last policy speech and the
Powell Q&A. I mean, you don't want that possibility to arise again, right? Then you're putting yourself
back. I don't want to say back into a 22 scenario because in 22, we knew for sure that rates were
going up and we knew that they were going to go up probably sustainably for a while. And that put
a lot of pressure on markets for the entirety of the year.
You don't want to put yourself back in that, not in that exact position, but in a similar
position where there's concerns about inflation and also concerns about the job market at
the same time, while the AI trade has already, you know, expanded valuations quite a bit
and multiples quite a bit.
So you're kind of at a situation where at the height of a three-year bull market, with us only 6% off the highs, you have all these
new uncertainties popping up, especially commodity-related uncertainties. That's just not
a nice thing for the markets. Markets don't love that. And they want to clear it. They want
clearance here. And that's why you're seeing such, I think, ecstatic reactions every time a headline like this drops.
We're already seeing this cool off a little bit after hours, but UCO is still down about 5%.
So stocks are liking it for now.
We'll see if that gets followed through.
I'm pretty sure the market wants to see confirmation from Trump or from the Israelis themselves rather than a Channel 12 headline.
But it's working for now.
There's also still a lot more information behind what this even actually looks like and what it means.
There's also ways that this could be a limited version of it.
There's been different ways that it's been, hey, we'll stop.
There's one specific part of it. Maybe it's naval attacks.
Maybe it's whatever.
You know what's interesting is that
the stocks that have been leading today
are up a lot more after hours.
Like, I mean, it's just...
One thing that I used to do in the past
and I stopped doing some time ago
was just continuing to buy falling knives.
And just look at what was leading
today they're up about two amcor is up over one percent after ours fastly is up two percent after
ours on semiconductor is up two percent after us enos someone it's like these are the stocks that
are leading and in fact these were the ones that bled the least in the last week i don't i would
it would be nice to see the laggards catch up a little bit. You know, if you look at IGV down over 4% today, which is crazy.
You know, like if these recover, then maybe we do have a meaningful recovery coming.
But as far as what we've seen, every pop gets sold off on the queues in SPY.
You know, we need to see this hold.
But I wouldn't be surprised if Trump tweets something later and the market gaps up like 1% to 2% tomorrow
and then probably chops back and forth.
Is there a meaningful resolution here?
I don't know.
Well, the other thing is like the mechanical nature.
How many people are short this market
or head short this market right now?
And these headlines with these big pops
are just people covering those shorts.
Nobody's confident enough to really buy the market yet,
but they will cover the shorts.
Yeah.
It is still, I don't know.
We're kind of just holding on to some of these gains.
We'll see.
But I imagine this is something that we're going to,
Trump's going to be asked about within the next 12 hours or so he has been speaking a lot
over the last little bit so we will get more confirmation or denial around this
apple is up one percent after hours congratulations nice nice nice
something we will continue to monitor we'll continue to monitor that situation you could
say something open is open ai is apparently going to wind down its uh partnership with disney
that is a little headline that came out
they're what is your open ai ending its relationship with disney
all the drought is reporting wall street engine a draft framework for the U.S.-Iran deal would require Iran to dismantle some of its nuclear facilities,
hand-enrich uranium over to the IAEA, and keep the Strait of Hormuz open.
And scale back.
This feels like fake news.
They didn't just agree to that, but okay.
I think it's just I'm going to stop reading some of the stuff and wait for
us to get a little bit more information the initial headline that came out from israeli
channel 12 says a ceasefire for a period of one month will be announced according to a mechanism
that wickhoff and kushner are working on so it doesn't sound like it's definitive it doesn't
sound like it's coming out today or right now but situation to monitor stock talk you were uh in the middle of some thoughts
there i don't know if yeah it's hard to just pick back up and oh i saw where we got cantor
joining us up here hello mr cantor how are you doing sir i'm good how are you uh doing well
doing well obviously we're getting
a little bit of uh in a headline driven market another headline we got here in the last 30
minutes or so 15 minutes or so obviously the market's trying to digest it a little bit initial
reaction is good for for the bulls but um i wonder if you have any thoughts on that and i saw you
listen a little any any maybe stuff you want to throw into the mix?
Yeah, I mean, it's headline-driven, which is driving oil,
which is driving bond yields, which collectively are driving equities. I think intraday equity oil correlations, 92% most of this month.
I think intraday oil interest rate correlations roughly the same.
So it's a really bigger issue for risk.
What I mean by that, like credit spreads and market multiples rather than economic data.
I mean, this would take months to really have a broad impact on the economy. That would be
sustained. And obviously, we're not there. And I don't think that's where we're going.
But just the persistent anxiety around interest rates going up and inflation going up,
even before this, for the last, really since 2022, that that's entirely explained the market
weakness so far. And, you know, we've had so many months and quarters over the last three years of
bad news is good and good news is bad, particularly, you know, with labor data. And that's because
there's a fear around inflation because of, you know, I haven't heard people talk about the deficit, but usually at these levels of interest rates or at least the change we've seen, that's a popular topic.
But I haven't heard that.
But of course, you know, everyone's getting distracted by what's going on overseas.
This event is just going to, you know, this is going to last well beyond this event is just going to personally you know this is going to last well be well beyond
this event uh when i mean by this just this negative correlation with rates and equities
so you get oil coming down obviously you get rates coming down markets take off um yeah i agree
markets want to go up um you know the earnings keep improving, but you got to get oil down, plain and simple. And
even if oil stays at these levels, it's going to be a bit of a cloud on multiples being able to
expand very much, if at all. And it probably means that rates continue to slowly move up to some
extent. And that's the issue. You can get
oil staying here, but you may still see in that environment rates move higher. So again, I mean,
it's a complicated situation, but also it's a very simple situation for the equity market,
you know, get oil down, which is, you know, kept an obvious, but that's kind of how I see it right
now. Do you buy into the idea that we could see hikes if this sustains?
No, no, not at all.
What's keeping you
confident in that?
The Fed's
own work on
shocks and their impacts,
which, you know, if you look at the
FRB's own papers
on this, and if you listen,
you know, certainly Powell and I think Warsh thinks similarly, you'll get a hit to headline
inflation, obviously, or an increase, but, you know, their models show you're going to get a,
it's going to have a demand impact on core inflation, essentially.
It's going to, if it lasts long enough, could lead to weaker labor data from the sluggish
data we already have.
So that's not a backdrop with the Fed hikes.
And, you know, this is not Arthur Burns.
This is not 1970.
This is not 2022.
You know, a lot of people are kind of, I think have a lot of PTSD or muscle memory from
2022. They hear inflation, they look back at 2022 and see what happened. This is nothing like that
whatsoever. You know, consumers were flush with cash back then and rates were still very low.
A lot of people forget that that oil shock took place while rates, you know, really before the
Fed started hiking. And then when the Fed started hiking, oil started coming down.
So you haven't had a period where oil and interest rates were moving higher.
And again, I don't think the Fed's going to hike here.
But also, I don't think the, I think companies, you know, you saw this with tariffs.
Consumers are kind of protesting with their wallets in different sectors uh any further
pricing from companies so you know unless we had a backdrop where there was a massive windfall for
the consumer then yeah it could cause a broader inflation hit like we saw in covet or after covet
but um i don't think well we don't have that and i don't think the fed is going to hike now
other countries are going to hike because you Fed, I think the Fed among, I think there's another one or two central banks that also have a bit of a dual mandate like the Fed.
But the ECB just has a single mandate, it's price.
And I remember back in 2011 when we also had an oil spike, that was the Arab Spring and the rebound from the GFC where China
was, you know, and emerging markets were on fire in 2010 and 2011 and the ECB hiked. I also remember
the ECB hiking in 2007 a couple of times. Actually, most countries did besides the Fed was done by
June 06, but the rest of the world was hiking in 07. And that was all really commodity driven.
And that was obviously a mistake in hindsight, as was the ECB's hike in 2011.
So the Fed is not those central banks.
And they do have a dual mandate.
And the employment data is, it is not hard to find employment data to prevent a Fed chairperson from saying, we're just going to keep watching.
And if employment increases during an oil shock, I think they would cut.
So you think there's a real possibility the ECB could hike?
0.8%.
Yeah, they've got quite the hell of a pattern of doing it.
I mean, they literally did it in 2011 when oil, oil in Europe hit an all-time
high in 2011. You know, it was higher than it hit in 2007 because the euro was strengthening in 07
into 08. So when oil hit 150 bucks here, I think the peak here in 2011 was, I don't know, 120, 130.
was, I don't know, 120, 130.
We didn't get to 148 or 147.
But in Europe, they had a new high.
And that was a broad commodity pickup too.
And coming out of, you know, the Fed announced QE in late 2010
and then everything reflated into 2011.
But yeah, but I think the market's dead wrong on the Fed,
though I wouldn't necessarily bet against it right now because perception is reality.
But I don't think the Fed's going to hike.
Especially given we're getting very close to a new Fed chair, potentially.
I know Powell made the comments about being a possible interim one, but I don't know if I see a Trump appointee coming in and hiking rates right off the start i
mean i i guess we can make i personally think he wouldn't have picked someone who wasn't probably
going to cut rates at some point when when we get to a point where it's maybe a little bit more
opportune but i would be hard to see that that first move being higher and not going over well
well yeah i think can't just point about the base of rates is probably a great point which is you
know that's a big differentiator is like where rates were when we started hiking in 22 versus
where rates are now and where the consumer was when we started hiking rates in 22 versus where
the consumer is now i think you know that's probably the most resonant point which is that
we're in a very different economic scenario than we were then a couple of years ago. So yeah, I agree with that.
But the market's behavior though is acting as if, and that's my point that I started with is that
2022 changed the way psychology of investors behave basically in the way they perceived risk
and the way they were worried about inflation
everyone's always fighting the last war and so it's it's classic reference bias
which creates an opportunity but you don't want to bet against that initially until there's
um you know that's not a bet i'd want to, I wouldn't want to bet against the market pricing in hikes.
I don't think the Fed's going to do it,
but we get one soft employment report,
those go away, period.
Yeah, and based on the last one,
I wouldn't be surprised to see that.
Yeah, and we're going to get weak data.
We're not
getting any uh march inflation data for a little bit the only place we're getting march inflation
data right now is in the pmis the regional pmis which uh today definitely showed up um we're
getting import prices in a couple days that's february so and i don't think we're you know
we're not going to get anything till another couple weeks for for the month of march that's february so and i don't think we're you know we're not going to get anything till
another couple weeks for for the month of march that's going to show this but it's going to come
and it's going to be on the headline bad but um i think the core is going to be far more important
That's coming up in a couple of days.
and then also we're going to see consumer confidence you know that's that's coming up in a couple days so you know their inflation expectations especially short term are going to pop
So, you know, their inflation expectations, especially short term, are going to pop because that just basically follows oil prices.
So I think that, you know, if oil's at this level or rising and the data starts rolling in, like right now, again, we haven't seen any data.
We haven't seen really any earnings downgrades, you know, besides like very oil obvious you know airline things and
something like stuff like that but that's all going to come and if oil's still elevated or rising and
rates are you know around these levels too it's going to start to more heavily weigh on the market
earnings typically take a couple months before they start falling
um but if the market's still down they will
uh and then if you get again if you get oil down the market will look i think and it usually does
the market will look through all the bad news that comes after that because it's not going to matter
anymore did that uh last ppi report concern you at all? Are you not a big PPI
guy? Do you think we could have a really, really ugly PPI print next month after this oil shock
stuff is priced in? What are your thoughts on that? Yeah, I mean, that's going to, again, Again, commodities were rising into this.
Again, the skew, the asymmetries up for all inflation data.
But again, I think it's also, history is pretty clear.
This is going to take money out of people's wallets, and it's going to increase the cost of a lot of the stuff we consume.
So that's going to have a hit.
Again, very different consumer backdrop today compared to 2022 where consumers kept spending.
So based on what I'm hearing from you, you seem to still have a pretty neutral to bullish stance, I would say, or you don't sound too bearish, or maybe I'm interpreting that. The way I think about it is more in a framework and kind of scenarios.
I'm not worried about the economy.
I'm more worried about, again, the pricing of risk in the market because of this persistent inflation anxiety that when we start to see the data that people, you know, again, they'll price in more hikes as the inflation data rolls in.
It's not going to change my opinion, but I just think in terms of positioning,
you got to be really balanced here and really diversified. You know,
people, I mean, I was, I was listening to spaces, you know, the last couple of weeks and people were getting crazy bearish two weeks ago,
you know, or I think it was two weeks ago when oil hit 120 on a Sunday night.
And it was like the end of the world to see these people. And then, you know or i think it was two weeks ago when oil hit 120 on a sunday night and it was like the end of the world to see these people um and then you know you've just gotten whipsawed if
you've been too binary uh binarily positioned you can't yeah certainly you know it's just you
get whipsawed on these and that's that's even adding to it just all these headlines you're
just getting torn apart if you're too if, if your portfolio basically has a deep positive or deep negative correlation with oil, you are just getting whipped around.
Yeah, that's part of what's kind of kept me from chasing exposure into this.
Like, I know a lot of people are like, oh, pick up long oil exposure or pick up long fertilizer exposure or whatever.
I've been a little hesitant to do that just because, you know, again, like you said, headline
driven market, you can get a 6% gap down on those things pretty easily.
And if you time your entry wrong, you can get buried pretty fast.
So yeah, I've been hesitant to do that too.
Not that I think it's a bad idea, just that, you know, if I'm using it as a hedge against
against the market.
the market, I just don't want to time it wrong.
I just don't want to time it wrong.
Yeah.
And also, this situation, I think,
is far less linear, or it's not linear,
compared to last year with tariffs,
where it was like literally things could turn on a dime.
And I guess they could turn on a dime here,
but it's going to be multiple parties that have to hear from.
Trump takes more than one to taco in this scenario.
I will say, this headline in After Hours is quite the taco.
Again, I don't know if we can believe it.
We're from one source that isn't really – I don't know.
We'll see what ends up happening here.
But this conversation about a one-month ceasefire does feel pretty turn on a dime, like unexpected.
And it really hasn't been that turn on a dime here.
It's definitely a positive, just like the headline, again, perceptions reality.
So all of these headlines are reducing conviction,
which essentially buys everybody time and actually keeps the market more stable.
Too much clarity is a dangerous thing right now.
I mean, here's a really economic parallel, but you think about the Fed.
The Fed never announced rate hikes and cuts back in the 60s and 70s. You would just find out, oh, the Fed raised rates because you'd see to the Fed. The Fed never announced rate hikes and cuts back in the 60s and 70s. You would just find
out how the Fed raised rates because you'd see to the market. They didn't have minutes. They didn't
have press conferences. But beginning, I think it was in the early 90s, they started announcing
their policy decisions. And the Fed got more and more transparent. And, you know, and that's a good thing.
But it also led to a lot more risk taking.
And that was one of the results of that.
And more transparency gives people more confidence, which allows them to take more risk one way or the other.
And I think the Fed talks too much and they try to be too transparent.
And I think the Fed talks too much and they try to be too transparent.
And then you can cause more volatility in the market if you get extreme shifts.
And in this case, again, if everyone was this crazy bearish, yeah, oil would be spiking, the market would be crashing.
But one of the things Trump is doing, and he did it with tariffs last year, is just creating this uneasiness among conviction.
is just creating this uneasiness among conviction.
And in a way, that's a good thing because it prevents the masses
from picking one side or the other while this is playing out,
which I'm sure there's a ton that we don't hear of or know of.
As long as there's that carrot in front of us,
that hope that this in front of us,
that hope that this could end any minute,
which we're all conditioned,
that's a volatility mitigator.
That's a good thing.
Yep, the chop is not necessarily ideal for traders,
but at some point we'll resolve in one direction or the other.
But I agree with you right now, but the perception is reality argument. And like,
what really matters in the short, medium term is the pricing of risk more than the actual materialization of any changes in rates. I think that that's pretty on point. So I would agree with
that. I'm seeing a little New York Times article saying the U.S. sent a 15-point plan to end the Iranian
war. They are putting a lot of caveats in this that they don't even know if... They're basically
saying, I mean, the U.S. took the step, but nothing further than that, that anything will
happen here. I don't know if this is related to the other thing. I would hope not if they're actually agreeing to a ceasefire,
but I've seen a New York Times article just out now
talking about a 15-point plan being delivered via Pakistan,
whose army chief has emerged as a key interlock
between the United States and Iran.
This is a New York Times article for those who can trust them.
Yeah, I've to do this article.
What do you think?
Cantrell, if I can ask you,
I'm curious your thoughts on the position of Jerome Powell here
going with literally one meeting left.
I mean, is there anything you could say?
I know there's some talks.
He made a comment around maybe having to stick around for an extra one, but I'm just curious your thoughts on, I mean, is there anything you could say? I know there's some talks. He made a comment around maybe having to stick around for an extra one,
but I'm just curious your thoughts on, I mean, any expectations around Powell.
Is there even anything you could say in the next little bit that would make the market do anything?
Is this something you're watching?
Yeah, it's funny.
You know, all the higher for longer, you know, that now could be oil higher for longer.
But I keep thinking about we could have Powell for longer, you know, that now could be oil hire for longer. But I keep thinking about we could have Powell for longer, too, with this ongoing investigation, which the DOJ seems to not want to drop.
I think Powell is going to say the exact same thing he said in the last presser.
the last presser. Unless we see some major collapse in employment, which would be odd
and certainly don't see in the claims data, I think Powell is extremely predictable because
he's extremely clear about his reaction function. So I don't think he'll surprise the market much at
all. I wonder if he's going to say anything about sticking on uh after as fed chairman unless i
missed this or as not as a fed member he i was saying on he said he'd stay as the chair chairman
if they can't get i believe there's something on his term being uh for a little bit and there
were some questions if he will remain as a Fed governor, I believe it was.
Oh, yeah.
He's not going to answer that.
He said he's not going to answer that until the investigation is over.
Gotcha.
Okay.
Interesting stuff going on in that department.
I've been also kind of watching mortgage rates a little bit.
I know they've been ticking up, and I hope I'm saying the right thing here.
This is, I believe is the last week.
So I'm curious on the mortgage, the housing side of it is any updates in that area.
Yeah, tomorrow we'll get the purchase data from the NBA.
We get every Wednesday.
So that to me is probably one of the
most timely and best economic indicators to follow um but again i think everything starts
and ends with housing that's my hope framework but if um we'll just we'll see how sensitive um
i mean i expect it to drop you know because not only are rates up, but oil's up plus uncertainty's up plus the stock market is down.
Even though it's not down a lot, it is down.
So it's not a typical backdrop where consumers are going to make major purchases if they're on the fence.
So I would expect to see a commensurate drop in purchase activity to reflect that.
But again, it's just another variable driven by oil.
Doesn't mean it's necessarily long-term.
We've seen housing activity, especially purchase applications and home sales,
extremely rate-reflexive.
The worst of the housing data was really in 2023, which is the
peak of interest rates. And then
rates came down slowly
and steadily, and
housing data
modestly
improved.
Apologize for switching the topic up again.
I'm seeing a lot of people are tweeting more about this 15-point plan going across.
I don't really see the market still continuing that move up.
The ceasefire seems to be the more kind of pertinent headline there.
But yeah, the New York Times article was a little, it was, there's not much information about what was in the plan and if it will pass.
Or if they'll even agree to any part of it.
You got to hear from Iran too.
Yeah.
So the ceasefire one feels like, as you were saying, you know, and U-turns are a little harder here when it's not just Trump and there's other people on the other side.
The ceasefire language seemed a little closer to something that might actually be close to happening now i mean you also don't know if whoever they're
talking to has full control over stuff but any sort of opening of the straight of her moves
as stock talk was also saying earlier that listen the market doesn't necessarily care about bombs
dropping it cares about the commodity implications of it yeah 100 again very simple it's just getting there is complex but um
a very very simple kind of binary market right now yeah there were still some fears coming into
even before this iran situation um you know the market was still a little bit off the highs i do
you kind of think that once we kind of this is the boogeyman right now and kind of coming after it
obviously if something else shows up and it leads to the other cracks you kind of think that once we kind of, this is the boogeyman right now and kind of coming after it? Obviously, if something else shows up and it leads to the other cracks, you kind of do it.
But if we get a situation that's solved pretty quickly and oil starts to flow and, you know, it's back up to similar rates that it was pretty quickly,
that maybe that's kind of the boogeyman that can start to move us higher?
Yeah.
I mean, again, if you're looking at the S&P 500, you're looking at the MAG7, and yeah, they were weak January and February.
But at the same time, you had small caps up over 12%, 13%.
You had equal weight S&P, again, same index, just different weight, which was up 7% by late February.
So I actually, and globally, you had the best global equity market breadth in five years.
So I actually completely see it the other way,
that things were broadening out
and tech stocks were financing that broadening
because you finally had a reason to buy other stocks.
You had better macro data.
You had the best macro data in five years globally
and in the US or the broadest, I should say.
You have earnings that were going up across market caps.
So I would say things, as of February 26th, before this started, or 27th,
we had one of the better macro backdrops we've had, and more organically, since COVID.
and more organically since COVID.
Kind of reminds me almost of a little bit of actually right before COVID in 2019,
when you had that big sell-off in the fourth quarter of 2018,
and then rates finally came down because Powell pivoted and the market rebounded strongly.
Housing massively V-shaped in January of 2019,
and the economy by the early mid-summer started broadly improving again in the U.S. and around the world, and things were actually starting to look pretty good in the U.S. and Europe, and then COVID hit.
This isn't that, but again, we've had these disruptors pretty frequently.
pretty frequently. The funny thing I keep hearing is that, and a client said this to me,
the market was too expensive. So here's the irony. The NASDAQ is one of the best performing
markets around the world since this conflict began, and it's the most expensive market.
around the world since this conflict began,
and it's the most expensive market.
So does this really have to do with high valuations
or anything to do with high valuations?
And markets around the world that are cheaper,
or even in the US, like small caps are cheaper,
they've been hit harder.
So I think people that are looking at the market
and being like, well, it fell because it's expensive
or we were due for a correction.
That's absurd, that statement.
The data kind of argues the exact opposite.
So far in the last four weeks, the U.S. equities have strongly outperformed the rest of the world.
And it's because the reason they're expensive, because there's a much higher quality set of companies.
because there's a much higher quality set of companies.
That's the same reason the U.S. market's underperformed in January and February,
because it's a much higher set of companies.
But when you get a broadening out, people move beyond those.
That's my two cents.
Yeah.
I'm kind of sitting here thinking about it.
Do we go coming out of this?
Does it kind of return to that January, February market?
Or does it return to that 2025?
Does it return to the kind of...
Well, I would say, well, I mean,
definitely coming out of this means lower oil and lower rates.
And if you're getting lower oil, lower rates,
I think the leadership there is not going to be MAG7 at all.
It's going to be everything else that's gotten crushed and is more cyclical and is more rate sensitive and is more oil sensitive.
Again, U.S. equities and tech and large cap growth is holding up better because they are not sensitive or as much as sensitive to those issues so initially it's always a beta rally after you know again even
though this has been a modest sell-off at the index level it's been a much worse sell-off
underneath the index level there's tons of stocks that are down a lot but you know immediately you
would see a very high beta rate sensitive cyclical bounce and then againally, if this is over, oil's lower, rates are lower, and I don't think that would only further the likelihood with a bump in the road of the data that's going to be after the fact that we should continue to see what we were beginning to see late last year, which was economic data broadening out for the first time in four years.
late last year, which was economic data broadening out for the first time in four years.
If this lasts a very long time and it has lasting impacts on the economy and behavior
and investment, then sure.
But we're talking a minimum of six months or oil goes to $200.
Okay.
Well, I don't want that.
Sorry, I have a question for Cantrell.
Okay.
Yeah.
What are your thoughts, though, if big tech remains weak,
how does the market stay up?
Like, I understand the broadening,
but if you think about what was happening
just before the Iran conflict, you had RRSP up, you had all these sectors
up, you had tech down, and that resulted in basically a flat S&P.
Yep. Yeah, I think you answered your own question.
So you think that's what will continue? You think S&P, basically passive
investing, is going to take a backseat while active investing starts
to really take off from there.
Yeah, I would frame it a little. I mean, that's the derivative of how I would have framed it. But
yeah, it would have been a broadening out. And we have the most concentrated market in history
in the US and money's got to come from somewhere. And if things are broadening,
And again, kind of definitionally, other things outside of the old AI high or large growth MAG7 story are improving.
And that's where the money was coming from.
But don't you think that because of the amount of market cap you're talking about in big tech and the amount of that market cap that's leaving, it has to go somewhere, right?
and the amount of that market cap that's leaving,
it has to go somewhere, right?
And that's what you're saying is that,
essentially, it would just get rearranged into new buckets
or reallocated.
But is there enough buckets, like big enough,
to be able to absorb that level of liquidity?
Like, what happens when low gross margin industrials
start going and getting a 50% multiple expansion?
multiple expansion i mean at some point they're going to be overvalued and they're not good
I mean, at some point, they're going to be overvalued
and they're not good investments either.
investments either what then well the evaluation tends to move based on fundamental catalysts or
What then?
narratives on top of that so um you know as long as the data are improving and broadening out you're
likely to see that persist because people will extrapolate it until it stops. Are there not? I mean, again, we saw the equal weighted index up over 7% while the MAG7 was down, I think,
about 5% by the end of February.
And again, a lot of money went overseas because, you know, it was a hunt for cyclicality.
And the US doesn't have a lot of it in the S&P 500.
You got to go down into mid and small cap or into value or overseas.
So there's, yeah,
I mean, it will go places. And that's why I think we saw such a surge in that rotation. You know,
we've had these head fake rotations over the last few years that were massive, but short-lived because they weren't rooted in fundamentals. They were rooted really in interest rates falling and
people getting excited about the Fed cutting.
And two years of that has now had led to, and I still say is leading to, better economic data.
So you're getting better earnings.
Again, look at small caps.
Their earnings went down for three straight years, and now they're moving higher.
And with that, you're likely to see a re-rating. So, you know, the S&P 500 value index hit a new high, I think a four-year or five-year high in the multiple, while large-cap growth multiples were coming down and were down like 7%, 8%, 9% at the same time.
And it was clear rotation there.
And it was following earnings and following multiples so and that'll persist until the reason that got it going no longer is the case which is why this rotation started back in october because ai being the only thing that was
starting you know that was improving was no longer the case by late last year.
Yeah, but like exactly,
like think about like consumer staples, right?
Like we went to 30 times,
35 times earnings on some of these names just after a quick re-rate
in the beginning of the year.
It's kind of like,
isn't there at some point,
even if there is acceleration,
let's say in the deals,
like at some point,
doesn't the multiple get a little bit too exhausted
for some of the growth profiles,
the low margin profiles that you see in industrial?
Yeah, yeah.
And again, to me, there was two reasons for that.
I think some of the money coming out of tech because of the question that was just asked.
And look, the market was flat year to date.
The MAG7 stocks were down. I think that was getting people bearish because all they've looked at in the last three years was the Qs, the SPY, and the MAG7.
And they were down or flat.
And so people were buying staples, I think, for, again, the money had to go, it can't all go into the Russell 2000, or, you know, in transport stocks, they're not that big.
So I think money was just getting generally diversified.
plus you had the narrative earlier a month ago or a month and a half ago two months ago of with
ai disruption and people were hiding in staples because you know they're not going to disrupt
coca-cola making coke i i forget i need to cut in here sorry i appreciate you uh i do want to
just say we have to we're a little past the top of the hour obviously whenever mr cancer comes up here respect him so much great addition to the show always a really smart guy but um but yeah
chief investment strategist over at piper sandler make sure you go in and give his page a follow
uh honestly a lot of really great research coming out from there uh we appreciate you sir definitely
can stick on here but i do definitely definitely need to keep the conversation going on.
We do have Mr. Paul up here, who I know is also on a vacation schedule joining us here.
So I want to make sure we get over to you in a timely manner.
But make sure you're following the speakers. I appreciate Mr. Cantro.
I appreciate everyone else for joining us in here today.
And we're going to keep going on this next part.
Paul, I don't know if you saw the headline that we got out here in After Hours.
There's been a couple around a possible ceasefire.
Israeli media, Channel 12, coming out saying a one-month ceasefire to be announced under a mechanism being developed by Wyckoff and Kushner.
There's another headline that's going around from the New York Times saying that the U.S. has submitted some sort of proposal here.
You know, I don't know what's necessarily happened there,
but obviously defense is one of the topics
that we talk about a lot here,
and the market is reacting closely here.
So I don't know if you had any initial reaction thoughts
coming off of it, if you saw any of the headlines.
So full and fair disclosure, I want to tell you guys,
I'm on a vacation with my family.
It's rare that I get all three of my kids together because they've got incredible schedules.
And we're down in St. Lucia, not far from the Wolf team in Puerto Rico.
And we're having a great time.
But I do want to jump in here a little bit because, look, it really depends.
Look, it really depends. This ceasefire is because I think the United States and Israel
thinks they've accomplished what they set out to do, and that is disrupt and disarm the Iran
regime. And if they feel that they're comfortable in doing that, that's the first reason why they are proposing a ceasefire. The second reason is
because, let's face it, the Trump administration does not want to see inflation take off and fuel
prices have risen, for sure. And they're worried about that because even if they're doing this for
national security, for the United States, for the long-term benefit,
they do have midterms that they have to recognize, and they want to be cognizant that
the midterms are important for the administration and for who they back and all that stuff,
and that's incredibly important, right? So what's going to matter the most is whether Iran will engage.
And what I mean by that is, is the regime going to dig in and try to assert itself,
thinking that the ceasefire and the politics of it all is more important than the ultimate end goal, which is to have a more stable
Middle East. And I think having a more stable Middle East is the most critically important
thing to the administration. And while the administration tends to be pragmatic,
they're going to respond based on what Iran's response is. So I love the fact that a ceasefire has been put out there.
I love the fact that we're trying to get to negotiations,
but now it really rests on Iran and whether or not they're going to be willing to come to the table
and sort of concede that they are it really depends on optics here like can iran get to a place where
they feel um they can make an agreement so on and so forth and move forward uh without feeling like
they have lost and i don't think iran wants to put forth the fact that they've lost,
but let's face it. They're losing, and they will lose ultimately if this thing goes any further.
Now, that said, defense is critical. And I think that's just one of those things that people have to really put into focus, because the largest defense companies, especially within NATO member countries, are going to thrive.
And that's because the United States has already doubled down on what they want to spend on defense.
They have to rearm.
They have to build back what they've spent spend on defense. They have to rearm. They have to build back what they've
spent on this war. And NATO member countries also are on alert that they have to build their
militaries, build their defense, because it's just an expectation and basically a requirement now that they do that.
So I think aerospace and defense, the prime contractors, all of that stuff, that's very
much in play. And we have an amazing ETF, NATO, and ATO that is positioned for that very well.
that is positioned for that very well.
But even moving forward,
if we get to a place where the straight-up-form rules opens up,
where energy starts to flow better,
I think you could see not only it get back to where it was,
but I think you could see a double down on that
because we're going to use what we've done in Venezuela
to increase supply. I think the OPEC countries are going to really increase supply. So I think
you see oil come back into play. And when you talk about AI, when you talk about the megatech companies, the hyperscalers, the Mag7, I can't
see why they're not positioned well. I mean, I'm just being sort of clear-minded about this.
What in their prospects have changed? And so even if you've seen the market sort of look at those hyperscalers,
the semiconductors, the Mag 7, and potentially position themselves to rotate out of them,
I still don't think that they're vulnerable. And I still think their valuations are very strong.
When you look at what the metrics are and what the earnings are for a company like
NVIDIA or even AMD or Broadcom or ASMD, all these companies are really positioned very, very well
to grow and to continue to grow and to build earnings and revenues and all those things.
So when I take a look at the marketplace, a lot of this has been disruptive.
I think you've seen a move down in the market.
And from my perspective, I like the opportunity to get in now for the future and for the rest of the year because
I think this presents tremendous amount of growth moving forward.
And so I wouldn't be so concerned with what people did to rotate out of that in advance
of this.
What I would be more concerned with is what are you going to do now
to position yourselves and your portfolio for growth moving forward? And I would not be
so skeptical of the large tech players in the space. I think they're positioned very well.
I think you're going to see the semiconductors come back, humanoid robotics
come back, AI
come back, and
I see this
as a long-term growth story
and a place where people can get
back into the market
at better valuations,
positioning themselves for growth.
positioning themselves
for growth.
I appreciate that intro there, Paul.
I got a couple of comments, thoughts, questions
I want to go off of that,
but I do want to read off a quick disclaimer
so we can talk a couple of the tickers.
Obviously, Leverage Shares has been
a good long-term partner of the Wolf team.
We do appreciate working with them.
And any single time we're talking about something like this,
any single time there's something you can buy into it,
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This isn't the end of the research.
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before investing. We're excited to be working with the themes ETFs team. I do want to circle
in a little bit more on the defense side of this one, on the NATO side of this. I was seeing some interesting headlines around how the Iran
conflict has been escalating. And one part of it was around Iran shooting a missile towards the
Diego Garcia Island, which is a US military base where they have their B-2 bombers. But I think
the more significant thing that I was reading through the headlines was that that kind of distance puts 2,500 is capitals in general are kind of questioning a little bit more stuff around
this conflict as possibly more of their mainland kind of becoming within range or being shown to
be within range. So I do wonder if this conflict and more, and I was kind of reading some stuff
around the Balkans and other things going on, Who knows? But I would imagine this theme of Europeans increasing their spend on defense would continue.
Of course.
I mean, how could they not?
I mean, so we know Iran has range if they so choose to do that, right?
So that's been the biggest concern.
And I think that's why the United States and Israel took the position that they did for two reasons. One, they knew they had the range. That's number one. And number two is they don't have the best interests of anybody else except for that Iranian regime in mind. And so they're kind of getting desperate. And so they started
with the Middle East and they're what, you know, quote unquote allies. And now they're expanding
that. And so Europe needs to be on guard. And, you know, the United States is always there to help.
But I think this administration has made it very clear that they want European nations inside
of NATO to take a bigger stance on their own defense.
And so when you think in those terms, you have to say, Europe is now deemed to build
their own defense systems.
And it's not an if, it's a must. So if they are going
to, even if Iran just starts to go a little bit rogue here, defense is the number one sort of
priority, not just for the US, not just for Israel, but also for all the other NATO member
countries, because they're going to have to get involved in their own defense. And so my point is,
when you think about defense, this is not a short-term issue. This is a long-term issue.
long-term issue. And now it is at the precipice of, like, we need to invest now, we need to build
now, and then we need to build for the future. So we love this theme. We love this sector.
We think defense is very, very strong. And we believe that this is an ongoing
investment opportunity
that just continues to grow.
So for anyone who doesn't know,
there's two tweets pinned up in the nest above,
or at least one.
We are talking about the NATO ETF, N-A-T-O,
transatlantic defense ETF.
It is going across the EU and NATO member countries. I'm looking at
the country breakdown, 67% US, 12% France, 11% UK, 5% Germany, 12% Italy. So mostly is the US,
but there is a lot of European exposure. Stocktalk, if I can come over to you,
I do know that you are interested in the geopolitical side,
and I'm sure you're watching this stuff.
I'm curious your thoughts on the European defense side of this.
We've obviously defended the sector you're interested in.
I know most of your exposure is through the US,
but I know your research takes you across the world.
So I'm curious.
I could see that this conflict's on the doorstep of Europe and just
more and more of them would continue to increase that spending. I'm curious what you've looked at.
I don't have any pure play like European defense exposure. There are some names looked at
and owned in the past that have like peripheral exposure to European defense. But I think ever
since the NATO 5% commitment, which Trump pushed the EU into,
I think it's been a very interesting category. A lot of European nations are prioritizing using
domestic defense companies for that reason. The tricky thing with defense, single stock
investing in general globally, is that I tend to lean into US exposure because the United States makes up roughly 45 to 50%
of global military spend.
We're one country, you know?
So it's tough to be like a really massive scaled defense
company if you don't have the U.S. as a market.
And a lot of European defense companies do,
so I'm not discounting them for that.
But yeah, I personally don't.
I mean, for me, my biggest defense position
is Huntington Ingalls, HII,
which is the U.S. nuclear shipbuilder.
They're the biggest U.S. subcontractor on ships.
That's my largest defense position currently.
I actually raised weighting on that
by exercising some calls on Friday. So it's up to like an 8% waiting for me in the portfolio.
Then I have IRDM, which is Iridium Communications. They do pull-to-pull
communications for the United States. But yeah, in terms of European defense, I don't have any
major positions. My three defense positions are Huntington, Iridium, and Kratos currently.
There's other names I've liked in the past, Mercury Systems, Leonardo DRS.
There's several I've owned and liked in the past that I still like.
But I don't have any pure play European defense exposure here.
That being said, I do think the thesis is good because it's going to take NATO,
in my estimation, it's going to take NATO five to seven years to meet that 5% commitment.
And in the meanwhile, they are going to,
for their own security purposes,
prioritize European defense companies, right?
I mean, they're going to have to give some of that money
to the United States because when it comes to things
like missile interception, when it comes to things
like precision-guided munitions, autonomous systems,
the U.S. is just too many generations ahead to where you have to buy those things from us.
I mean, even some of our, not our enemies, but even some of our countries that don't really like us a lot
still come to the United States for those things because of how much more well-funded our defense industry is.
But yeah, I think the thesis around investing in European defense
is a solid one, is the point I'm making.
Yeah, and I think there's a reason why.
I 100% agree with Stock Talk.
And I think the reason why the majority of the portfolio right now
is in U.S. defense stocks is because they are the premier defense companies.
They have better technology, better munitions,
better missile defense, better drones, like all that stuff. And so Europe has to invest in them,
but because of supply chains, um, and because of national security, they have to
invest in their own companies. And so they're trying to get up to speed. They have some expertise in, you know, certain areas, jet engines, things like that. And they're building those.
But they have to invest both for today, which is the U.S., and then for tomorrow, which is,
you know, onshoring their supply chain for defense inside of their own companies inside of NATO member
countries. And so, you know, it's, I've been asked this a lot, you know, is it U.S. or is it
Europe? And again, I say it a lot. It's both. Like, you're going to get the majority of the
spend right now today in U.S. companies, but that doesn't mean that there's not a great growth story
ahead for the European nations and the defense companies that are domiciled there. Because again,
they have to build that up and they have to build that competency in order to have national
security. And so that's underway. We,
we really love this sector. We're bullish on it. Um, we, we see tons of interest and,
you know, I think the question I get most is have I missed it? And it's literally like,
just look around the world and see what's happening. You haven't missed it. Like the
investment is being made. It's going to increase. It's increasing in the U S by leaps and bounds. It's certainly
increasing by leaps and bounds in the, in the European nations. And so it's going to get spread
out. Um, maybe not proportionally, maybe the higher proportion will be to the U.S., but I think over time, that leads to a really well-diversified portfolio in both U.S. and NATO member countries when it comes to aerospace, defense, munitions, drones, high-tech armament, whether that's drones or that's autonomous aircraft or, uh, naval ships,
so on and so forth.
So it's just one of those spaces where, again, I never like to use the word no brainer, but
the money's going there.
So just look where the investment's going and you can make a pretty good assumption
that these companies are going to do well over the next several years
one is okay um you're on vacation with the family so we're not going to go over on this one
i'd like we could this is that unfortunately we're in a world where we're going to continue
to talk about this NATO ETF a good little bit here. One day, the world will be in a place where
we don't get to do this, but it doesn't feel like the one that we're getting in right now.
There is a lot of conversations here with this piece fire. I'm sure that it impacts a lot of
other areas of the market. a lot of other of these
thematic ones that we have pinned up in the nest above is a list of pretty much all of them
i'm curious if there's another conversation here that that feels pertinent obviously we got the
uranium and nuclear one uran a part of that 15 point proposal was iran kind of stepping back on
some of their nuclear ambitions, which
I don't know if we'll see. If anyone is interested in banks, I know that's one that we kind of get
brought up here, GSIB, a little bit of globally, systemically important banks ETF. But yeah,
also BOTT, the humanoid robotics conversation. I was actually at GTtc this past week so i saw a lot of humanoid robots
going around and i was actually wearing my nvdg hat so we were uh at least one humanoid robot has
seen now seen the nvdg hat there you go it's it's somewhere in the processing units but
i'm curious what other topics what other stuff is kind of top of mind for you in this in this
world some of the conversations you've been having over the last couple weeks? tech because of the high energy needs that are needed for high compute. And that disruption
is meaningful because that's where they get their energy from. Not only in the humanoid robotics
sector, because our bot ETF is comprised of a high percentage of South Korean humanoid robotics companies that generate more than
50% of the revenues from humanoid robotics, but also Hong Kong and China. So we think there's a
great entry point if there could be some kind of resolution that allows those straight-of-form moves to open up and create a better energy supply
to Asian countries, but also our China AI strategy, which is Dragon. Again, because
once the energy needs are sort of satisfied and that market calms down, we think that we could see a rebound
in both Chinese AI and humanoid robotics because of the exposure that we have across Asia. We think
that could be a nice rebound. So going back to what we've talked about many times before,
many times before, growth at a value price. This disruption has given investors the opportunity
to get back into the market at a better price point than they were just even two months ago.
And so again, we think the growth continues. We think you're at a better price point now. We're optimistic that energy will sort of resolve itself.
And you'll see a rebound in the valuations of some of these high-tech,
humanoid, robotic, semiconductor, AI plays in Asia as well.
And we think that's going to be a nice little bounce
we pinned up in the nest above has a bunch more information paul is a regular on the show
leverage is a great supporter of the squad. And honestly, we only really work with companies doing very reputable things.
This is ETFs.
This is your money putting it into work in different areas.
You should definitely believe in the theme.
Please do your research.
Tweet in actually down in the comment section below.
Has the link to the website.
It's a great place to start your research.
And also, Paul and other people coming on these spaces to share their thoughts.
And they can answer any questions that they do have.
So please feel free to do your research into this.
We're going to be talking about them a bunch.
We really do appreciate the team.
Ticker we really focused in on this one was NATO, the Transatlantic Defense ETF.
You guys should take a little deeper dive into that one
and we can talk more about it on the next space.
But yeah, Paul,
is there anything you want to leave the people with on this one?
We appreciate you for joining us here,
even from vacation.
No, like I said,
your audience is amazing.
The guest speakers that you have are fantastic,
educated, very knowledgeable about the markets.
And so we always appreciate having the conversation.
And we're grateful for your partnership.
So outside of that, no, I don't have much else to add.
Hey, Evan, I got to give a shout out because shout out to Leverage Shares because both the picks that I had for Monday Night Stock Picks were winners this week.
I had the highest return, and both of them were from Leverage Shares.
Which one were they again?
So the two that I did was I was short RTXG and short HOOG.
And I think that return for both those last week was, I think it was 12%.
I think it was a return.
So I used those two in stock picks and they worked out well.
And I've been using, and this week, my long pick was AMD G.
So double long AMD.
I like that one.
So hopefully that works out because the other one was short oil and long AMDG.
So hopefully this de-escalation will maybe put me back in the winner's circle Monday night.
Well, someone always knows.
What's your day job again?
What government position do you have?
Yeah, no, it's I think it's interesting.
You know, I said this earlier just just a
quick follow-up is that i think that um i was just texting mp and we were chatting back and
forth and i was like you know i'm like thinking now at this point with kind of the rhetoric that's
going on that i think that we're past peak fear and probably the night of 120 oil a couple sundays
ago i think i don't want to i mean i'm going to jinx myself that i want to say maybe the highs peak fear and probably the night of $120 oil a couple Sundays ago.
I think I don't want to, I mean, I'm going to jinx myself.
Did I want to say maybe the highs in an oil and what we saw is maybe the high for the year.
It reminds me when you go back and you look at that Ukraine, Russia invasion,
oil peaked basically right when they invaded.
And we had a couple kind of back and forth and then oil ended up drifting
lower over
time. So maybe we're past peak fear. Maybe we get a de-escalation off ramp for the next month or
whatever they're going to do while they work out this deal. But I think to some point, the
administration now is kind of in the camp where, as I've been saying, we cannot have a 10-year yield
north of 450 or the 30 year bond north of five percent
along with hundred dollar oil or you're going to be taking a wrecking ball straight to the economy
and if that sustained high oil prices and high rates for the next you know 30 to 60 days i mean
that's going to start to have implications for growth and take a bite out of gdp and consumer
spending and and you look at uh you know i'm in the midwest chicagoland area diesel prices are I mean, that's going to start to have implications for growth and take a bite out of GDP and consumer spending.
And you look at, you know, I'm in the Midwest, Chicagoland area, diesel prices are already at $6 here.
So transit and shipping and trucking is not going to be good.
So I think that they probably need to tone it down and maybe use a little bit of rhetoric to calm down the oil markets and the bond market as well.
Yeah, and I think you also have to take a look at gold.
Gold is sold off.
That was the safe haven trade.
And maybe people are feeling a little bit better about the markets based on the move in gold, right?
It's based on the move in gold, right?
So it looks to me like risk is potentially coming back to the market.
You see crypto stabilizing.
It's volatile for sure.
But I think you just have to look to the future and where the market is going. And I really don't see a big disruption in the AI trade,
whether that's in the US or in Europe. I don't think humanoid robotics is slowing down.
And I think you need to take a look at this transitory disruption in fuel and oil, right? And energy and say, okay, did that impact the market? Absolutely.
Is it for the longterm and make that decision? And I don't think it is. I don't think it's for
the longterm. Right. So when you, when you look at that, you have to say, how do I want to position
myself? And if I could get in at these prices six months ago when they
were at their highs, would I have? And I think a lot of people might say, yeah, I would have.
Well, now's your chance. So think about it from the perspective of how confident you are
in certain themes, in certain sectors, and then say, do I think I'm getting in at a better
valuation now because of this disruption? And if you are, then I think that's a really good place
to be in. Yeah, I think to your point, that's a great observation. And the thing is, is if this
does calm down a little bit, I think you can look through the short-term um the short-term
disruptions in in the oil market in the bond market and to your point to gold i mean gold
did sell off dramatically the last two nights and i think that's um that's rebounded obviously and i
think some of that is that that big spike in the move index and yields really moving up in the past
couple days
obviously took a bite out of gold as well as a dollar but i think i think you're right i think at this point um there's still some things that are out there that i think that if we get a relief
rally from maybe a de-escalation in the war that we still have to be cognizant of and that's going
to be the credit markets have have widened and continued to widen out.
And obviously, there's some issues in private equity.
Do I think they're systemic?
No, I do not.
However, there's still some risk lurking out there.
And then you look at things like the consumer side, like subprime autos, delinquencies,
and are higher than they were in 2008.
So there's definitely a little stress under the surface. And then you got the jobs market where there was job losses the last couple
of months. So I think that there, are we out of the woods? No,
I think the market could go into maybe like a little malaise where maybe we
just chop back and forth. Maybe we, you know,
we're not going to rip back to the upside,
some V bottom and just go straight higher to new all-time highs because
constructively,
at least from a technician standpoint, some of these charts, like we talked about Microsoft today, you look at Google, that's, I think, kind of breaking a head and shoulders top on a daily
chart. There are some significant breakdowns and some big names. So I think you need to just be
cautious, go into the names that you like and, and start
to nibble.
I think you can nibble.
I just, I wouldn't be gorging here is what I would say.
Just be, be selective on what you're buying and be in, and stay small, keep your size
small and you'll be fine.
Yeah.
And I think, think about what you just said, like you talked about, um, you know, when
you think about rates and you think about the Fed, right, they're slow right now to move because you have the spike in oil and energy, which is creating what I would say is a temporary inflationary concern that wasn't there before.
So that's making people nervous. But then on the opposite side of the dual mandate of the
Fed, we know unemployment is going to go up, unemployment is going to go up because of AI.
And because we have so many companies now coming out and saying, hey, we're really considering
eliminating jobs. And we're doing that at a really considerable rate. So if you can get the
temporary spike in energy to go down and you can get inflation a bit under control and you have
unemployment going up, then the dual mandate for lower rates is in place. Plus eventually once all the political, uh, BS settles, you're going to have
Kevin Warsh in there who has said that he doesn't deem lower rates to be inflationary. So he'll
be on the, on the, the, the mark to lower rates because of unemployment, because hopefully because,
and again,
yet to be determined energy prices come down.
So that stems inflation a little bit.
So you have the fed in a position with a new fed chairman to lower rates
substantially because of unemployment and because energy gets settled and inflation gets settled.
So that to me leads me to believe that we have a nice little growth story heading into the back end of 2026.
I would agree.
Because the other thing, too, to your point, the higher oil prices and higher interest rates right now, while they're the short end of the market, obviously the two years rallied, you know, 70 basis points and there are 65 base points in the last two weeks.
And now they're pricing out Fed cuts all the way to next year.
The problem with that is, is higher rates and higher oil are going to impact growth in the short term and consumer sentiment, etc.
oil are going to impact growth in the short term and consumer sentiment, et cetera. So the difference
is now you're not going to have rapid goods inflation like we had during COVID, where you
have all these goods that people are just trying to get because there's excess demand from all the
stimulus that we had during COVID. So to your point, I'm more in the camp that I think that
there will still be rate cuts in the back half of the year because I do think the jobs market will continue to be just so-so.
And I think what happens is oil ends up coming down.
They probably make a deal.
And the bond market will probably respond.
And I think bonds probably rally out of this situation versus go materially higher.
versus go materially higher. Because the other problem is, if we all of a sudden have 7%, 8%,
9% mortgage rates, the housing market will get wrecked. It's already very slow. There's very
little sales. We're basically bouncing around 40-year lows in actual transaction volume.
So if you throw an 8% 30-year mortgage in the mix, housing is going to start to get crushed
even more than it already is
now. It'll be completely frozen and transactions will probably even decline further. So I think
to your point, I think in the short term, you get this pop in rates, you get this pop in oil,
and I think you fade both of them into the back half of the year. And I actually think that it
will be okay as long as this is resolved in the next, let's say, 30 days where
we don't have oil that's at $90 to $100 a barrel for the next three or four months. Because if we
do, that is going to take a big bite out of growth. And then the flip side is whenever oil
does come down, interest rates probably fall dramatically behind it because it's going to be
such a negative impact to growth along with
jobs. So I think those two things, to your point, if this gets calmed down, rates come down,
I think the back half of the year could actually be a little bit better scenario with falling
yields and lower oil prices. And this temporary shock will be transitory and we'll be able to
move on from it. Yeah. And I think housing is something that everybody is going to have to look at in isolation
because it's such a mess. There's no easy solution to housing in the United States because we set so long for so long, and we increase valuations on homes to levels that most young people cannot
afford in the United States with any kind of reasonable expectation for the future.
So that is going to have to work itself out. And rents are high in certain metropolises,
but what we're seeing is it's coming down. And whenever they say it's a supply issue,
I laugh because there's plenty of housing. There's just no transactions. And the reason
there's no transactions is because people who are locked in at low
interest rates will never sell to buy something else at a higher interest rate, at a higher
valuation. So at some point that has to settle itself out. And that's not quick. That's going
to take a long period of time. But what we're seeing now is certain markets that
were way overheated. They are starting to come down and they're coming down fast.
And you may see a disruption in the real estate market. However, I think over the long term,
the growth that we're seeing in certain sectors like AI and robotics and big tech could sort of offset that economically, but it won't impede the Fed from making decisions to lower interest rates and sort of stimulate the economy. And I think all those things combined lead to
a growth story versus some kind of stagflation, which is what some people are predicting.
Well, to that point is, if you look at from an inflation standpoint, you have so many people
saying we're going to have this huge inflationary spike. Well, you could obviously have some headline inflation, but if you look at core CPI,
50% of core CPI is new and used vehicles and housing. So if interest rates continue to move
higher, those two sectors of core CPI, which is, I think it's actually 55%, believe it or not, you're not going to have a ton of growth in autos at higher interest rates, if that were to be the case,
the inflation is only going to be on the headline side. And the Fed is most likely to look through
that because they know that higher oil prices and tighter financial conditions are going to
inhibit growth over the medium term if they stay elevated. So I'm more in the camp that I'm thinking that in the back half of this year,
they start pricing rate cuts in much, much more than we think right now.
I think at least two cuts will happen.
And if the jobs market ends up being softer than what the consensus is,
I think they could maybe price maybe three and don't even rule out four if
the labor market continues to weaken. So I think those rate cuts, once oil comes down, will come
back to the table. I would say maybe the earliest you get a cut is September and then maybe December
and then, you know, who knows, depending on how the labor market responds. On the flip side of it,
if oil comes down,
you could actually have the flip side,
which is what I think you see in gold.
I said this the other day,
is gold selling off a indication of what's to come later?
And maybe that is a deflationary move after oil comes down and then rates come down with it.
Because if oil stays elevated and it does hurt growth,
you will see the long end of the curve probably become bid on the long bonds
because growth is going to come down
and you're also going to have unemployment that could potentially go up.
So like people say, you want to chase being short bonds here.
I don't think that would be the trade.
The trade is not that it's probably to fade it.
And I'm more in your camp that we could have potential better growth in the second half of the year.
If the oil comes back to a more reasonable level.
100 percent, I have nothing else to add to that.
I have nothing else to add to that.
Nothing that I love more when two smart people come together and have a good conversation on the spaces.
I think that's the best time here.
Shout out to both of you, gentlemen.
You guys should make sure that you are following the LeverageShares account.
Follow the Will account that's up here as well.
We'll definitely make sure to get you back on one or two more of these but um but yeah awesome conversation again tweet pinned up in the nest
above go in check that out paul he is a big fan of our audience here a big fan of what we're doing
guy is on vacation with his family is going to go in and uh live the life there in a second here but
he took his time out of his day to come in and talk with us for a little bit so we are very yeah if i could just say one thing um i've been out in the caribbean all day today i've
been on the boat uh we've done some amazing things uh we've um uh done a you know hot springs uh
mud baths like all this stuff and i literally literally went to the, the captain of our boat.
And I was like, you need to get me back so I could be on with Wolf Financial by five. And they were
like, well, you can go a little longer. I was like, Nope, we're getting back. So we're having
an amazing time. Generally I would be off and I wouldn't even be, uh, I would be working. I wouldn't even
be talking about this, but the commitment that I have to Wolf Financial, its audience,
uh, the people who run it and, um, just, just how much I enjoy being a part of these conversations,
um, means a lot to me. And so, um, I'm thankful for the time that I have with you guys.
I'm thankful for the partnership.
And if it was anybody else, there's nothing else I'm doing this week except for Wolf Financial.
So thank you guys very much.
Love the conversation.
Love the audience.
Love the participation.
And I will always make time for you.
You are the best, Paul.
Shout out to the Leverage Shares team.
Tweets pinned up in the nest above.
Go check them out. Like we were saying, goals
to create informed investors. That's what they want
because when you get
informed, I'm sure they're confident and know
that they're confident that these are the products that you're going to come in
and enjoy.
Check them out. Do your research.
Shout out to Paul. I appreciate everyone
and we will catch you all
same time same place tomorrow follow that leverage shares account you're going to get some fire
memes sorry fire uh graphics maybe some memes but fire graphics geez that was a tough freudian split
but uh uh freudian slip i'm just gonna close this pace horrible outro you're the best paul bye
