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Market Talk- MASSIVE BTC AND CRYPTO MOVE SOON!? BULLISH OR BEARISH!?
Recorded: Feb. 10, 2026 Duration: 3:49:33Space Recording
Short Summary
In a dynamic discussion on the evolving crypto landscape, participants highlighted the increasing institutional adoption of Bitcoin and Ethereum, the potential for significant growth as market conditions shift, and the challenges posed by declining retail confidence. Key insights included the need for Bitcoin to surpass $100,000 to reignite investor interest and the impact of upcoming earnings reports on market sentiment.
Full Transcription
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.meme
んご視聴ありがとうございました Music Music Music
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Music Music Music Music Music Music Music Music Oh, yeah, man. I've been pulling up no rhythm. Reach the top, but still you gotta learn how to keep it.
It's going really down on the stakes.
The throttle wide open like a flat out of hell.
You crash the gates.
Crash the gates.
Going for the back of the yard. Nothing gonna stop you. Welcome to the limits.
Take it maybe one step home.
Our game's still playing, so we better win it. Thank you. Music Music Music Music
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Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Thank you. . Welcome to the limit Stand on the razor edge
Don't look down, just keep your head
If you're kidding
Welcome to the limit
Welcome to the limit yo what's going on guys hope you're all having a fantastic tuesday or wednesday
welcome back to market talk brought to you by bb my name is wabi and uh today is going to be
an interesting show we've got a lot of stuff going on here in a few moments we have uh i think we
have some coin earnings today um or hood earnings as well and uh we also have the dow jones in uh in price
discovery which is which is really weird like you've got all other uh indices like uh the iwm
pulling back the q's are pulling back as some peace pulling back, MSCR, IRN, SanDisk has been getting absolutely slaughtered.
I think it was last Monday.
It was a few sessions after they reported earnings.
I was stating that I think this thing is probably cooked for a bit, but long term, it might actually still be a thing.
Kind of like Hood back in q4 when
it was trading at like 140 130 and um honestly crypto is uh really just been doing a whole lot
of nothing since friday i remember i cut that solana position at 87 and hasn't really been doing much at all. OnChain is practically dead on soul,
with the exception of, you know, the usual Fortnite trenchers.
They spike coins up to like 3 to 5 mil over the span of two days,
and they just effectively go back to zero.
But there is some stuff happening on base.
Bankers and price discovery um you also
have tickers like ray showing some good volatility um some other stuff as well that stems from like
the whole plot ai stuff but again nothing nothing fruitful as we saw last year over the summer time
or in q4 of 2024 but uh we do have some other earnings coming in um and perhaps that
does actually move the crypto market by the slightest bit but you know we'll see we'll see
um we'll see how that goes but uh i got some all caps up here got bitcoin ai guy is going to come
up um in a few moments as well probably
going to have some of our other guys as well during the second half um of the show but uh
i tell you during this time in the market where it's really just kind of like trying to find a
range after a huge breakdown you you really want to see, do I still want to maintain focus as I did when things were trending,
or do I want to step away for a bit from the market?
And that is something that I've been seeing.
A lot of people have actually stepped back really since Christmastime.
A lot of people are just really inactive. And I think the one thing that we're likely going to have to see before a lot of the people that left were to come back is, I would honestly say, a break above $100,000.
That would be something that would spark a lot of interest back.
And I think it's really similar to when btc broke 50k in 2024 that's when you started to see a lot of
the money that escaped after luna went to zero or shortly before that when nfts were going crazy
and people said you know what this market is way too wonky there's no signal it's just a bunch of
people buying on cosmos and a bunch of nfts i'm just gonna hang up my hat and come back when times are
fruitful um and even even the market before that uh retail interest didn't really spike up
until bitcoin crossed 12 000 in q4 of 2020 that's when you started to see a lot of people
coming back into the market after the 2017 run so i would say 100,000 is roughly that same area. And we would probably
have to see the S&P trade a bit higher from here. The stock market is definitely running out of
places to hide. You can't really hide in SanDisk anymore, some of these other ai names you can't hide in amd or intel and i mean
now you have staples that have been running right we had coca-cola hit an all-time high on friday
and yeah that's that's that that is pretty hilarious things like berkshire hathaway
have been running as well year to date and usually when that happens there's there does tend to be a
broader market correction um I'm just wondering like where does bitcoin find itself uh when the
stock market does correct and and I'm of the belief that it's actually going to be a bit higher than
what consensus is which for whatever reason it's consensus that we're going to be bottoming between 30K to just over 40K.
And I hate to be that guy, but if we just reverse it,
wasn't sentiment that we would top out at 180K or 160K just a few months ago?
And then CZ came out and just caused 1010 he went on a podcast
he went on a podcast and literally an hour later the entire market just got obliterated and he had
50 billion dollars effectively wiped out um mostly from retail people that came into the market over the last few years,
made money, and they just got absolutely drenched.
I mean, you had Pepe.
I think Pepe hit a market cap of like 300 mil with that wick on 1010.
A few other gnarly wicks as well.
other gnarly wicks as well yet cosmos adam going to zero like that was the worst liquidation than
You had Cosmos Adams going to zero.
what happened on december 4th of 2021 which i guess you can say that's what started our bear
market that huge liquidation um and before that when bitconnect went to zero you also had a ton
of wicks on a lot of these alts that actually touched that actually literally touched zero and
a few weeks after that you had exchanges rug i think one of them was cryptopia if anyone remembers
that that that that is real onk if anyone here remembers things like cryptopia then you are
effectively uh a crypto onk i also got evan here. So today's conversation is going to be pretty interesting.
I wonder where the bottom of this range is going to be or if we're just going to start imploding
like we did around this time last year, where you started to see some some weakness in the
equity market, some distribution. And there were very few places to hide and
then you know the trump effect kicked in and we all know how that plays out when volatility kicks
in to the downside or the upside but we're gonna go ahead and get started guys spaces are recorded
as always you guys already know what to do click the spaces tab and uh show some lots of space like retweet all that stuff with a little
link above so i want to hear from crypto uh i was i was going to call you crypto ai guy man
but i'm just going to call you ai guy just ai guy what's going on bro how have you been it's been uh
it's been a minute what did you think of the volatility that uh we saw last week
What did you think of the volatility that we saw last week?
Can you hear me?
Yeah, I thought spaces were rugging.
I know Elon is doing some weird update with the chats and all that stuff,
and spaces yesterday were horrible, man.
It was honestly atrocious, but glad to have you here man you know first i think i'd
i'd love to know your thoughts on on uh the price action that we saw last thursday btc
hit 60 000 right on the dot um it did break just below 60k on curve but i'm not really gonna count that i'm really not gonna count that at all
but uh we did see some crucial levels hit and it was the largest vol candle that we've had
in almost two years and i know you've been involved in the space for a very long time man so
what are your thoughts man do you think this is this is, uh, just, um, another
leg down in the bear market before something bigger later on? Or do you think this is like,
like, like this is it, man? Like that, that was it. I was, uh, I was getting,cing about 58K gain, right? I remember just a few years ago when,
you know, Bitcoin seemed to be pinned at 58 and, you know, the price, 58,000 became a meme in
itself. And when people started calling for 58, I got excited. I was like, whoa, you know, not many people were around in 2022, 2023.
And 58K was just like a, you know, it was just like a pain point, right?
Like it seemed like Bitcoin was stuck.
You know, the cycle was over back then, right?
And people started getting off Twitter, panicking.
You know, all the Bitcoin equity proxies, whatever, were, you know, were being heavily manipulated.
They still are manipulated, but that's a game.
But it made me feel kind of like excited because I've trained myself over the years to just look for pain.
Right. And I've taught myself that pain is opportunity. Right. And, you know, if I was an
institution right now, this is like an exciting time to be accumulating Bitcoin, Bitcoin in itself.
Right. Because an institution, you know, isn't thinking
about the next 10 weeks, right? They're thinking about, okay, this asset is here to stay.
Over the next 10 years, there needs to be an allocation based on this, you know, this trajectory,
based on this trajectory, power law, whatever model makes you feel good, right?
But investors are taking an allocation in Bitcoin, and we're still in the cycle that started in 2024.
I'm not talking about the four-year cycle right now.
I'm talking about the institutional adoption of Bitcoin, right?
option of Bitcoin. And that started when the ETFs happened. And I still think we're still,
And that started when the ETFs happened.
my thesis is we're in that cycle still. We've entered the second, third year of Bitcoin in
its institutional age, era, whatever you want to call it. So that's going to shake out a lot of
tourists and it's going to create an opportunity for the long-term holders to slowly
trim as the price, you know, you know, goes higher into the hundred thousand, two hundred thousand
to a million dollar range. Right. So, you know, it's, it's going to be in an accumulation for,
for a long time. And I, you know, the tourists are gone, right?
They've all been shaking out of MetaPlanet, MicroStrategy, some of the Bitcoin miners.
And that's when I want to speak on spaces and really start having discussions with serious people because when the prices are really high,
everyone wants to talk about Bitcoin, Ethereum, BMNR, and all the leveraged proxies. That's when
you start seeing the spaces with the ordinals, the NFTs know people are talking about memes uh and i'm not seeing that right now so
you know you've invited me on a couple spaces that uh you know the past few days that i just
haven't joined because i i wanted to wait for a moment like this when i could feel the pain
and now i feel it so now there's something to talk about. Right. There isn't that much material news. Right. I think we're, you know, some people are still talking about quantum and and all this other stuff. But I think it's just the price that's bullying people. Right. And I see Bitcoin as a long term savings vehicle for the every, you know, the everyday person.
I see Bitcoin as a great asset to accumulate over a long period of time, over decades.
So my thesis on Bitcoin hasn't changed, right?
But I like getting discussions going when the prices are low and when the sentiment is low. Because I want to build
relationships, friendships with serious people that are going to stick around when the times
are tough. You're a serious person. You're holding these spaces. You know, some of these other speakers here are serious individuals. They're still here. Right? I'll be here when you know, Bitcoin goes from 200,000
to 120,000. And people are gonna say, you know, is this gonna be over? Right? That those
are times where you want to really start getting aggressive and accumulating more if you can, or you just sit
tight, right? And the hard part about holding is holding, right? Like, it's not, investing is not
supposed to be fun, right? Over a long period, if you're right, and if you've endured, and you
haven't been killed, right, I think the game is surviving, right?
And people get too excited and they get wiped out, whether it be leveraged or they FOMO into something else, right?
People sell their winners and they look for safety.
But, like, I'm here to make money, right?
Like, I'm not here to be safe.
If I wanted to be safe, you know, I'd be in bonds or I'd buy real estate. I'd buy an index fund. Right. I mean, these are great assets. But if I want a 30 percent, 40 percent CAGR, I'm going to have to work for it, I mean, like sit on my hands and actively work on, you know, embracing the
volatility. Because that's where the edge is, right? It's controlling your emotions. And I see
people in high beta stocks, like, you know, they sell when the price goes down, and then they FOMO
in when the price goes parabolic, right? Like this is textbook,
right? Like we, we, we talk about this all the time and make memes and make fun of it,
but it's going to happen repeatedly. You know, if you're in 140% CAGR equity or, or, or, or
crypto or stock or whatever it is, right?
There's no cheat code, right?
There's no button you can press to say,
hey, I'm going to get a 10X in three years, right?
And you can't skip the hard part.
The hard part is going on Twitter and reading all this FUD and looking at the price, right? And you can make a
decision and say, hey, I'm going to succumb to my fears and I'm going to let the market bully me
because I'm not a serious person. I've over-allocated. I'm over-leveraged. I should have listened to my mom and bought index funds. I should have bought that house. Right. Like you're going to start to doubt yourself. Right. And it takes a really tough person to, you know, to step back and say, like, hey, like, has the thesis actually changed or is the market telling me how to feel about this particular
moment in time, right? And, you know, I'm a human being, right? I'm not a robot. I feel emotions.
And I think that's one of my superpowers is like, I can empathize with other people.
And I've learned to appreciate pain and volatility, right?
It's not that I'm emotionalist.
It's the fact that I can empathize.
And this is what growth is supposed to feel like.
If you're going for these high volatility, high beta names,
high beta, right, names, and if you're in particular size, this is the cost of performance,
right? And if you're not willing to be a community member, then, you know, have your bags packed and
just be a tourist because that's what you are, right? I mean, if you haven't sized your bets correctly,
the market's going to test you, right?
And the market loves testing weak bulls, period.
Like the market loves testing weak bulls.
Everyone loves to say that they're an investor
until they have to do what investors do, right?
They capitalize on opportunities and, you know, they hold, right?
That is the whole game.
And in reality, few investors, few people make all the money, right?
Like this is an individual game and you could be part of whatever
community you want, but at the end of the day, you have to make a decision. And a lot of people
make the wrong decision and that's where the volatility comes from. So if you're excited,
right, you know, you're on a, you feel like you're on a rocket ship.
Your friends are cheering you on. You know, everyone around you is saying how smart you are. That's probably a signal to do the opposite of what you want to do. Right.
When everyone's worried. And everyone's fearful and posting that they're trimming.
and everyone's fearful and posting that they're trimming,
and they should have learned to manage their greed, their position size,
that's when you should start leaning in and saying,
hey, this is an opportunity.
But it's very difficult to think that way when you're over-leveraged,
you're at risk of a margin call, And the people around you, your wife is
saying, hey, we should have sold the local top. I knew we should have bought that house. We could
have bought a new car. We could have got that. That's a private school yearly tuition. That's
college tuition, right? That we just lost in an hour and a day of paper gains. but that's a private school yearly tuition. That's college tuition, right? Like, that we just lost in an hour, in a day of paper gains.
But that's where the opportunity is, right?
Like, that's when you have to step up and say, like, nothing has changed but the price.
This is what growth feels like.
And I'm willing to stick it out because I'm committed, right? Like this is a four-year, 10-year, 12-year opportunity, and we're 10% of the way there. We're 10% of the way there. Like how do you expect to outperform the market if you can't hold?
to outperform the market if you can't hold, right? And it is just a game of endurance,
resilience, and you also have to be right. You can't just, not everything is going to go up,
right? There has to be some losers. Something has to get wrecked. People have to get wrecked.
And, you know, if you've, if you've correctly, you know correctly underwrote the risk, just sit on your hands.
And you can control what you consume.
You don't have to enter a space where everyone's crying.
That's also a signal right there, right?
If everyone in every Twitter space is crying, that is your sign to say something is going to happen. It could happen a week from
today, a month from today, a year from today, right? But it's signal. And again, like pain is
opportunity. So the prices that you see today are probably not going to be the same price as you see in four years, eight years, 12 years. And it's
always the tourists that are first to leave, first to post in FUD,
first to say that they're trimming when the prices are low. So
take what you see on Twitter and hear
on Spaces with a grain of salt because not everyone is an
expert and everyone loves sharing their opinions.
And that was an absolute master class, man, I tell you what.
And I would agree with you that connecting with serious individuals on spaces is a good use of your time.
And thank you for the for for the positive comments man yeah i've been
doing spaces close to four years now um but my first ever spaces was actually a space hosted by
naka it was naka chimp zoo and i think trader xl and sz were also on there and it was right when
the ukraine war was starting and all that stuff and i had ran into matt
and then naka did his own space after chimp space and that was like that was like where i kind of
first started and honestly like the market that we uh we operate in now is so different than
the one in uh 2020 21 and also 2017 because you could have just had a coinbase
account and made it but this cycle i mean if you didn't just buy btc and solana you you didn't
really perform at all i mean with the exception of like xrp for like those two weeks where it was up
only after the election right like retail did actually have their moment but it was up only after the election, right? Like retail did actually have their moment,
but it was very short-lived
and it was nothing like previous cycles, right?
So spaces in a way have actually been
some of the greatest tools that you can use
to find outsized returns in crypto
because the gains that people have been used to in crypto
have effectively moved on over to the stock market.
NVIDIA, SanDisk more recently,
which I think that's topped for a while.
I was starting to see it like two weeks ago
as we were mentioning here on these spaces,
like, all right, crypto bros are starting to talk about SanDisk.
It's kind of semi going viral like iron was
i remember recommending iron oh hang on uh i agree with you know what you're saying and i
i was one of the first crypto bros right like i uh you know i was in pretty uh
i think i mentioned this on a space, three spaces, four spaces ago.
But I was talking to some very high level crypto individuals in late 2022, early 23.
And I was saying like, hey, the stock market has some serious opportunities.
And these guys have hundreds of millions of dollars liquid, right, after the crash, right?
And, you know, I was in the crypto game longer than some of those players.
But, you know, a lot of them have an extremely lucky performance.
extremely lucky performance. And they're still very wealthy, but the OGs that I'm talking to
And they're still very wealthy.
or referring to weren't really participating in this AI boom or the Bitcoin equity boom.
They've stayed in spot Bitcoin and Ethereum and some Solana. But that's a good sign, right? Like if I was, if I made a ton of money in the
stock market, I would start actually looking at crypto now, right? Because it's not popular,
you do the opposite, right? When every crypto dude is an AI expert, all of a sudden, after 10x,
100x, 50x, whatever, crypto is now more interesting right like if
you're just a contrarian uh so you know bitcoin ethereum are like the the elephants in the room
right uh bitcoin hasn't really done anything price wise in four or five years right so that
that's a clear opportunity and I think institutions are capitalizing this
right now. Right? I don't really care about how retail feels because retail, you know,
is really just focused on today's price action, right? So they chase, right? And like, literally 2% of retail investors make all
the money, right? So 98% of people should be ignored. And especially people that have been
in the market for a long time, right? I mean, just because you've been in crypto for 10, 12 years,
doesn't mean you're going to make a lot of money, right? It means you were around, right?
Like, this doesn't mean much, right? Like, I've been in Bitcoin for 12 years. It doesn't mean
I'm Satoshi, right? Like, I'm just one guy. And I see a lot of, well, not a lot. I see some crypto
OGs that still don't own a brokerage account. They don't own any stocks, right? They're not participating
in this AI boom, which to me feels like it's still pretty early in this AI revolution
because a lot of, some of the very ultra high net worth individuals that I know are not
participating in this yet. And they see the gains that are happening in Sandus. They saw the iron
pump. They saw the wolf and cyber pump, right? They saw a microstrategy pump and they see the gains that are happening in Sandus. They saw the iron pump.
They saw the wolf and cyber pump, right?
They saw a microtrrategy pump,
and they weren't even involved in that.
And it was a Bitcoin story too.
So, you know, fade retail, right?
There's 2% of retail that, you know,
has made money, is gonna make money,
and everyone else is gonna chase, right?
And it's your job to...
But that 2% is right here in this space.
Potentially, right?
By the way,
could just beat earnings by a good amount,
and they're like almost 10% after hours.
Jeez, man.
The market does not care about earnings at all now.
You saw the same thing with hyperscalers, right?
Like Google, Amazon, AMD, right?
They sold off right after double beats or beats, whatever, right?
They sold off right after double beats or beats, whatever, right?
So I think you just have to endure if you're an investor, right?
If you're a trader, I don't know, because everyone has their own trading strategies, right?
There's people that are long short, short only, long only, zero date options, DGENs, right? I don't know what people's trading strategy is, but
my perspective is I'm a long, lonely type of person, right? I buy spot in size and I hold,
right? And if something material changes in my thesis, I rebalance, I reposition,
thesis, I rebalance, I reposition, and I'm always looking for opportunities to test my thesis.
And I look at the price action too. I'm not a TA expert, but I do understand that prices influences sentiment drastically.
You know what I noticed, man?
I saw a good buddy of mine.
His name is Sullivan McGee.
He comes on here sometimes, and he overlaid meta price action with Bitcoin,
and it is scary identical, man.
It is scary identical man it is scary identical my goodness that truly is uh terrifying
um yeah to go back to your point about like you know retail and all that stuff like people in
stocks should go over to crypto i do think that's going to happen at some
point and i think we probably need like another scary vol event um because vault of the upside
really only comes back after scary vault of the downside um and even last year we saw like
two big vol events um we saw our first one in early february where i think if you remember
east spiked down to 2 000 and then spiked back up to 2 800 um and then we had that last vol event
in april so it's usually two vol events in a short period amount of time um maybe this was our second of all event if we count 10 10 as our as our first
one but i'm not i think the whole game is a ball event right so you should ask yourself how many of
these are you willing to endure to get the next 10x right are you willing to endure five round
trips 10 round trips to get the 10x right like uh Like, you know, what is the ROI, right?
It's not like if you're just talking about Bitcoin, right?
You're not just paying 60, whatever, a thousand for Bitcoin, right?
You're holding for a period of time, ideally, right?
Like you're saying, I'm going to hold this until it's, you know, $2 million, $3 million.
And that's going to take about 12 to 15 years, right? And if that's the
target, what are you willing to pay for that, right? It's not just the price, it's what are
you willing to endure? You know, you're going to endure the quantum flood for at least 10 years,
right? You're going to endure people calling you crazy for at least 15 years. You're going to,
you know, if you self-custody, right,
there's pain in every step of the way. It doesn't matter if you're doing self-custody, MSTR, IBIT,
whatever it is, like there's a cost to it in addition to the price, right? And that is,
you know, you're going to see opportunities to FOMO into something else that's flying, right?
That seems safe, like the Sandisk,
right? Like people are going to sell their Bitcoin at 60,000, chase something that has pumped 50X,
20X, 30X at the top. And then when that thing corrects 50 to 75%, they're going to wish they stayed in Bitcoin, right? Like you have to, you know, you have to make a decision based on a thesis, right?
And you got to be there for the ugly times, right?
Which is right now, right?
I mean, Bitcoin could do nothing for two years and you have to be prepared for that.
And no one wants to hear that, right?
Like I think Bitcoin can hit 170 000 this year i'm bullish
but i'm also prepared for for bitcoin to do nothing for 12 to uh you know 24 months
but that the thesis still doesn't change right like it is still i'm gonna say the same thing
in two years when bitcoin's 120k when everyone thought Bitcoin was going to be at $400K, I'm going to say, well, we're still in this 2024 institutional cycle, but now we're four, five, six years into it, right?
And I think the conversation is just going to be the same as today.
It's like, hey, in the next 10 years, we're still growing at a 30 kager right uh but are you
willing to hold right and um that that's the hard part like this is this is where investors are made
and created and tested and uh you know you're either a community member or a tourist like pick
one right it's it's one or the other. I don't think
Bitcoin can maintain 30%
CAGA. I don't think that's happening.
I think the long
term CAGA for Bitcoin is 10%.
And we're...
Over what? 100 years? Over
how many years?
Annualized. 10%
annualized. CAGA means annualized.
That's what the aim is.
Over 10 years? Over over 5 years over 3 years
over
annualized over the next century
10% CAGA
that would be better than the S&P
500 or any asset
in history over the last century I think
that would be better than I could be
mistaken but real estate
I think
I think it will I think it would be better than I could be mistaken. Yeah. But real estate. I think, I think it,
well,
I think it,
I think it will be better.
Like you've got to calculate a $60,000 Bitcoin,
a 10% CAGR over a period of a hundred years.
That's a 826 million dollar Bitcoin in a hundred years.
It does that.
Yeah.
But you've,
you've got to,
you've,
you've got to take into account how much a house is going to have gone up by then.
Like, they have about a, what,
7% or something.
Let's think about a decade at a time, right?
So what do you think Bitcoin is going to do
over the next 10 years?
In 10 years?
I mean, well, give me a CAGR.
So if we're going to use CAGR,
let's stick to a decade.
I don't think any of us listening are going to live 100 years from now.
So let's do something more realistic.
So give me a number to plug in my calculator while I have it open.
So over 10 years.
Let's say, yeah, let's say we do a CAGR of 10% over the next 10 years, then I would expect the realized price to be around $140,000 in 10 years.
That's an incredible opportunity.
If that happens, I would be a very high percentage. Most of the time you won't be able to buy at
below the realized price. So most of the time, the bull market price
might be 100%, 150%
above the realized price. So maybe what you can actually buy
at the bull market in 10 years is like 300k or something.
So you're saying 300k or something so okay so you're saying are you talking
about right uh in 10 years so that's like uh seven uh 17.5 uh percent kegger right at the
local top and then you're saying it could crash 50 percent
i mean when i say the realized price i mean like the you know you have mvrb metrics and stuff to
realize price is like the price that each satoshi last traded at so the realized price around about
55k at the moment i think that will grow at about a 10 kager sounds like a cereal, man. It just means compounded annualized growth rates.
What's going on?
It means annualized growth rates.
Like, what is the rate?
You know, you've got this special ability, Naka, I tell you what,
to come up with these topics that I couldn't even think of myself.
And, you know, I'm an individual that knows the answers to questions
that people don't even know how to ask. But you bring up topics that people can't even think about i mean i didn't bring up
kega i didn't bring up kega it's just like what is the average rate which isn't that like more of a
british term keger am i mistaken that's more of a british it's a finance term it's basic i don't
know man but it sounds like it sounds like i don't know if it, but it sounds like I think you did bring it up Dude, this is like a
I don't know if it's a top signal or bottom signal
when a crypto guy says CAGR, so take that with a great assault as well
My goodness, man
Before you know it, like the link marines are going to come back
No, it sounds like at a pub, like a CAGR, a beer
or something
It's like CAGR, it's like MNAT
No, that's a CAGR
Oh, okay
It's an acronym, C- No, that's a CAGR.
It's an acronym.
C-A-G-R.
Compounded Annualized Brocious. That's what I literally say.
I think it's basically
going to go up
about 10% annualized, and then
on top of that regular
sort of secular 10% trend,
there's going to be a cyclical trend, whether
there are bear markets or there are bull markets.
And so I think in 10 years,
I think the sort of the realized price,
which is going to be kind of like
a bearish price,
like a low price,
is going to be about 150K.
Bull market price is maybe 300, 350K.
Which is reasonable, right?
You can buy a Bitcoin for 60K today
and then in a decade, it's going to be, you know,
6X more valuable at the height of the next bull market.
Evan, you had your hand up, man.
What's going on?
How's the voice, Max?
Oh, yeah, I'm just, you know, making this voice sound as Batman-like as fuck.
Well, you got to back up the truck, man.
Oh, yeah. You got to back up the truck man oh yeah you gotta back up the
truck dude you know i don't even think my voice is that deep it's it's certain people find it but
um anyway so your voice is cracked when you said that yeah yeah i'm trying to make it higher now
but um anyway you just got frame mogged i'm sorry yeah i'm just i'm getting mogged here yeah
clavalure would be you gotta start start a YouTube channel reading bedtime stories for younger kids.
Yeah, yeah, yeah.
That's yeah.
Oh, boy.
Yeah, let's keep it a little bit.
Let's keep it.
Let's get into Bitcoin.
So, yeah, I mean, I'm looking at Bitcoin Ethereum right now.
It don't look the best.
You know, I think it's going to be range bound for a bit.
I think it's kind of like more of a scalpers market at the moment for the next probably
couple of weeks.
I think once we get into Chinese New Year, it'll probably break down more.
Year of the Firehorse officially starts, what is it, February 17th or something?
So I guess a week of range bound than the Chinese.
So I'm just kidding but um you know i think then we'll probably drop down or whatever and then um yeah i mean it's
i think you probably will make i think the big debate is like will eth bottom before bitcoin
again this time eth has been so weak the past few years i mean probably not this time if it keeps
going but they're going the way it's been.
But there's surprises.
You know, there's always surprises here.
I know Naka mentioned like, you know, triple digits for ETH.
It ain't impossible given what we've seen.
You know, I mean, I would be a little bit more optimistic.
But I mean, when I look at like ETH versus Bitcoin, I think Bitcoin looks stronger, at least for the next few months.
I think that even micro strategy looks quite a bit stronger in ETH right now.
That chart's interesting, like micro strategy versus Bitcoin, micro strategy versus ETH.
The only reason I care about it is, one, the chart looks pretty good.
It looks pretty bullish.
But number two, that's the only thing that bottomed out before Bitcoin and ETH in 2022.
So if history somehow repeats and it could bottom out earlier, I think we're similar to May of 2022. So if history somehow repeats and it could bottom out earlier, I think we're similar to May
of 2022, you know, in a lot of ways, like May of 2022. And I wouldn't really count FTX. I feel
like there's one black swan, like in every kind of cycle, like, you know, COVID, obviously FTX was
kind of a black swan. It didn't hurt ETH too much. ETH didn't make a lower low, but Bitcoin obviously
did. If you don't count that, Bitcoin would have bottomed in June. So you could see a bottom before June.
I think it's likely, you know, April, May. Yeah, but hang on, hang on, hang on, hang on.
I can't let you get away with that. There wasn't, there was not just one Black Swan. It wasn't just
FTX, okay? It was like, nobody was expecting Celsius. Well, okay, some people were, but most
people, certainly people who had their money in it,
were not expecting Celsius to blow up.
A lot of people were not expecting Luna to blow up.
Now, Luna, kind of not.
But there were three or four of these things.
I feel like Celsius blew up because Bitcoin went to $17,000.
It wasn't really the other way around.
Well, so did FTX.
So did FTX.
Are you sure, bro?
Everything bad comes out. Are you sure about that i think it was more if 100 if if bitcoin if bitcoin hadn't gone down all of this
dirty shit would never have been exposed right because what what what spf was doing was he was
basically leveraging people's deposits to gamble in his hedge fund and he lost money on
the hedge fund because the market went down yeah but then he didn't have the assets but i mean that
was like he got screwed because the market went from freaking 25k or 22k to 17k like that's not
like that's you're gonna get no no that happened when no that happened that happened when he got
liquidated, right?
When the news came out, we went down from somewhere in the 20s to 15 on the news that FTX was no longer...
So you're saying, let's say Sam Bankman-Fried was not doing the sketchiest shit
we've seen in our entire lives and putting Caroline Ellison in charge of $8 billion,
then Bitcoin would not have gone to 15K, that's what you're saying or bitcoin would would have still um it probably probably probably
it probably wouldn't have done i think that gave it that final little kick yeah i did
um and it didn't stay there for very long so i think i think probably we would have bottomed
maybe you would have had another little low,
but it would have been like 18K or something.
That's a higher low, bro. That's a higher low, yeah.
Yeah, marginally higher.
Maybe if you exclude the Wix, it's a marginally lower low.
But I think FTX did send things to a certain amount of desperation.
It sends us to a place that of desperation that, you know,
it sends us to a place that nobody wanted to go.
Except the bears wanted to go there.
The bears were absolutely fucking euphoria.
Yeah, I agree.
We're on board. But I think this time, I think there's an argument to make
that Bitcoin could hit a low, you know,
by the end of May i would argue and that low could be it could yeah and that low could be anywhere from let's say for why may though
why i i hear on multiple spaces people are calling for a bottom particular in may why why may you
know i don't even freaking remember that's okay a great, just the way in the chart, the way I'm mapping out.
I mean, we don't know.
It's very, it's very, it's very harsh.
It's Powell leaving and this Warsh guy coming in.
And when Warsh comes in, everyone gets long
and then they get, I'm just looking at Crystal Ball.
It's going to happen.
It could be priced in today, right?
So just, I'd be careful.
The reason, listen, the real reason,
I just say one sentence,
the real reason is because Ethereum bottomed in June of 22.
So I would think it's likely that it could be before then,
as well as MicroStrategy bottomed in May of 2022.
Didn't Bitcoin bottom December?
November of 22, November.
But Bitcoin's always bottomed earlier.
It's always bottomed earlier.
That's the point.
Go ahead.
Yeah, the thing is with Ethereum,
I kind of got burned on this
because I was expecting lower on Ethereum
and I didn't get it.
But I do genuinely think
that Ethereum was quite exceptional
in that previous cycle. Because if you look at something
like, say, Total 3, so basically all of the other altcoins, that bottomed in December.
So basically every other coin apart from ETH bottomed in December, right?
And by quite a decent way.
In fact, some of them, like Total 3 almost made a double bottom in fucking June of 2023.
Like it was very close.
But it was basically the December, you know, December, late December of 2022,
Total 3 was at 285 billion, down from 323 billion in june so we so basically yeah the
whole rest of the crypto market apart from eath did bottom in december now maybe eath bottoms early
again maybe it doesn't like i know there were a lot of i mean like like look at this. Total three was lower in October of 2023 than it was in June of 2020.
So like a whole 18 months later, it was still lower.
So I do think Ethereum is a little bit exceptional there.
I think there may have been some hedge fund institution bros who were kind of like accumulating because they'd bought into the Vitalik thesis and they were like, yeah, it's going to 20k. Or I mean, if they're institutions,
they don't even care if it's going to 20k. If it just does like a 4x, that's fine for an
institution, right? So yeah, it could do. If the institutions want to accumulate ETH again,
it might just do the same thing again. In which case, you know, it probably bottoms,
maybe it's already bottoms, maybe the bottom's already
in, and, you know,
then it just kind of crabs
around like an absolute piece of
shit for like, you know, 18
months, and then in
mid-2027, we go into the next bull
market, and Ethereum does
whatever it's going to do.
I don't think it's institutions
that want a 4x i think retail would kill for a 4x today too right and uh uh how i mean how shitty
is that how like how bad things gotten when people are excited about a 4x and crypto well
because the opportunity like we're now look crypto people are now in AI stocks, right?
So, you know, crypto is competing against tech stocks, right?
And so far, the tech stocks are winning, right?
And I think people are not comparing Ethereum to Solana to whatever coin now.
They're comparing Ethereum to NVIDIA, right? They're comparing uh ethereum to nvidia right they're they're comparing uh ethereum
to core weave right uh so it's different right because there's so many other opportunities to
get out for 10x outside of crypto and uh there's a you know there's real earnings there's real
income uh coming from some of these companies.
I mean, if you're a small account, okay, and unfortunately I still am, and you want to make
it, and you're looking at things that have like real earnings and income and stuff like that,
you probably shouldn't be, you know, you should probably just get a job, right? Like,
if you want something that's going to absolutely moon, it had better not have real earnings or
anything like that. Yeah, you're going to be forced to absolutely moon, it better not have real earnings work or anything like that.
Yeah, you're going to be forced to gamble, right?
So now is crypto the only opportunity to gamble?
No, you could sports bet.
You could play Polymarket.
There's other opportunities outside of crypto that may not rug pull you as bad as crypto.
But then again, you're not going to get a thousand or a million
X, right? And some of those things, you just have to pick what game you want to play, right? But
to me, like Ethereum, you know, it's about the same size market cap that Bitcoin was at the bottom
of the last cycle, November, December 22, right? Bitcoin was $300 billion market cap. Ethereum is $300 billion market cap today,
right? So what's changed since December 2022, 23? We're now in an institutional era of crypto
accumulation. So if Ethereum is going to do something, now is the time between now and four years from now.
Right.
And we have the Ethereum spot ETFs.
Right.
We have the Bitcoin spot ETFs.
We have real accumulation happening in Bitcoin. So if you were to make a trade in crypto, I think the best risk adjusted
in the short term is Ethereum over a longer period of time with Bitcoin, right? Like over 10 years,
you want to own more Bitcoin than pretty much any other crypto. But over a period of four years,
I think Ethereum has the opportunity to really outperform Bitcoin on a percentage basis.
But, you know, what are you going to do with that gain?
I mean, you're probably going to buy some more Bitcoin.
I think if Ethereum does what you guys are saying, I mean, freaking BMNR, that's your freaking, MicroStrategy did a 30x in the last bull run.
I mean, that could do a 20 or 30x.
Assuming what you guys are saying could happen, assumingath gets up to what's a 4x i mean 6k you know 8k those areas i mean you're looking at a moonshot
with bmnr um i would be careful though the sequel is always worse than the original you know i i own
some micro strategy i've i've just bought it you, in the last like week. I've never owned it before in my life.
And I may put a little bit, just a tiny weenie little bit into BMNR.
And that's like one of those where you could get a 10 to 30 X, but that money could also
be completely gone.
I wouldn't bet completely against ETH.
But I mean, when I look at freaking what it's done, I mean, factoring in inflation, you haven't made a new all time high, obviously, since November of 2021.
I mean, this sequel for BMNR is going to have to be one of the best sequels,
you know, that we've, that we've seen if, if that does play out. You know, I'd be curious too,
on some of your guys views on like XRP. I mean, that hit the, could mean nothing, but it hit the weekly, you know, 200 SMA.
I mean, in terms of fundamentals and alts, I feel like XRP is always,
it's still going to be somewhat relevant, you know, for, into the end of this decade, you know.
I mean, XRP doesn't really have, XRP doesn't really have any fundamentals,
basically a scam coin for your kind of like Gen X uncle,
you know, or...
Maybe if you have...
Yeah, maybe if you have a cousin
who was dropped on his head as a baby or something,
he might be interested, but...
I mean, like, yeah, you know, you can
buy it, but it's always like...
When you get into these low IQ coins,
right, like, there's always the risk
that you're late to it. If you're kind of high IQ and you try to play
a low IQ coin, you almost always
do it late because like
it's very hard for somebody
who's high IQ to
know what's going to be
appealing to stupid people. It's very
hard to do in advance.
Let me ask you, what is high IQ?
What IQ lover are we talking about?
What do you need to be high IQ? Over 100. If you're over 100, what is high IQ? What IQ lover are we talking about? What do you need to be high IQ?
Over 100.
Over 100?
Over 100.
If you're over 100, you're high IQ.
Really?
By global standards, the global average IQ is 85.
Right?
So if you are IQ 100 or above, you're plus one standard deviation.
That's pretty good.
Well, I don't think there's a same thing as low IQ coins.
I think there's low same thing as low iq coins i think there's low iq sizing right like if you're xrp 90 of your portfolio you're nine you're low iq because
not because you're trading xrp but it's because you're 90 allocated to xrp right you could you
could smell those bags right when you come into spaces and you're hearing those uh shit corners
shill their their their shit coin bags and they're 99% down on fiat and Bitcoin.
But you could trade XRP, whatever you want.
I have no issue with that.
I'm not an XRP bull, but it should be a 1% position.
But that's not popular to say.
Nobody's going to make it from a 1% position in XRP, right?
Well, that's the problem.
That's why the...
I mean, there was this one post, okay?
If you want to get really super bearish, right?
There was this one post that I think Ari Paul,
who's like a big VC guy, made,
which I think I've just got on my profile,
and it says, big VC guy made, which I think I've just got on my profile.
And it says, high-level crypto market take.
I'm 50-50 between two scenarios, A and B.
Scenario A, the high is in forever, right? This was the final wave in organic adoption.
Everyone has heard of Bitcoin and crypto and have had it pushed on them,
even by presidents.
Regulation is non-existent, so you can't blame that.
We've had every tailwind imaginable, El Salvador adopted it, etc., etc., etc.
In this scenario, crypto might be in a place like tech in 2000.
The internet didn't go away, but most of the specific companies behind it did.
Quote-unquote, cryptocurrency is real, valuable, and world-changing as an idea,
but that doesn't mean that any specific protocol or asset will survive or indeed deserves to.
Okay, and position B is this pullback is just that.
It's just a pullback.
It's in a correction.
We're in the final illings of late-stage capitalism and financial nihilism.
Bitcoin and crypto should be big winners to the speculative animal spirits,
desire for fiat alternatives, etc.
What is that last part?
What? Animal spirits?
Animal spirits.
Animal spirits is a technical term.
What?
The market getting excited.
They call it animal spirits.
It's from John Maynard.
So basically this guy,
this guy, Ari Paul,
who's like a big crypto VC guy
made billions of dollars
shilling Solana to us, whatever.
He's basically saying
there's a 50-50 chance
that the top is in forever.
That's it.
You'll never see Bitcoin above
whatever it was at, 125. You'll never see it above 5K, never see bitcoin above whatever it was at 125 you'll never see
above 5k 4.8 whatever it was at like i think that's a little bit too pessimistic but like
this is a fairly serious guy saying this right and then he's saying the other 50 is like no no
it's just gonna it's just gonna get more degenerate right i that's kind of interesting i would probably
more like 30 70 like 30 like 30% forever top,
70%. It'll just keep getting
more and more degenerate.
I think altcoins,
my take on altcoins is probably
that altcoins are going
to become more and more of a shitshow
moving forwards.
If you look at Total 3,
Total 3 actually managed to do
a double top, basically. Now it's like a very, very slight game 3 actually managed to do a double top, basically.
Now, it's like a very, very slight game, but it's basically a double top on macro timeframe.
So in 2021, November 2021, it was like 1.1 trillion.
And in September 2025, it was like 1.16 trillion.
It was basically the same.
So you've got a double top on Total 3.
And so, you know, maybe we make a lower low, lower high.
Like, I don't know.
Altcoins look like kind of a shitshow at the moment.
ETH is 50-50.
Maybe, maybe not.
Bitcoin, I think it's quite likely that Bitcoin carries on,
but that people are very disappointed with the returns.
I wouldn't even be surprised if the next bull market
high is marginal.
It's like 130K
or something.
Over what period of time?
Over what period of time?
The next high
at the next bull market
in 2028, maybe we only get like 130 or 140 or something very marginal.
And, you know, people are so disappointed by that.
But then maybe the next low is a much higher low.
So maybe this low goes to 30K.
Then we go to like maybe 140 in 2028.
And the next low is maybe like 60k or something so
although the highs are getting less exciting the lows are wrecking you a lot less so it could be
okay i have an interesting take so everything usually has a lost decade once in a while like
the s&p 500 had the 1970s at from 2000 to 2010, gold has had many lost decades.
It seems like everything is a lost decade, like a 10-year period where it doesn't really,
it makes very marginal new all-time highs, if anything.
And when you factor in inflation, you really didn't make any money.
Do you think that's Ethereum right now, man?
It's been five years.
Maybe, but my bigger fear on that would be Bitcoin between 2030 and 2040.
If we top out by the end of the decade at $200K or $400K or wherever, it'll still be at that number by the end of the 2030s, by 2040.
That's kind of my fear.
kind of fear like let me just say like what i what i would guess is like the s&p 500 tops out at like
um i don't know somewhere between eight to like 10k by the end of this decade berkshire hathaway
tops out around like a million dollars by the end of this decade and then they're still at those
numbers like 10 years later you see like because 1970s you saw two big drawdowns 2000s you saw two big drawdowns
like i would kind of surmise that you'd go you'd say you peak out at 10k for s&p 500
then you come back to like your typical 50 correction around 5k like in 2032 but then you
really don't like it takes you longer to recover and you're really not back at that 10K range by the end of
the 2030s. And that's what history would tell you. You know, you're due for that kind of lost
decade. I mean, I think the 2030s will be kind of similar historically to the 1930s in the UK.
And that means it's going to be way better than it was for the US during the Great Depression,
because UK stock market only came down 45, 50 percent during the Great Depression. And a lot of that
was mainly because they were still considered the world power at the time. People had a bit more
trust in the UK stock market. They also were more willing to print money. They kind of handled it
quite a bit better. There are also more social programs in the uk like you
didn't have anywhere near if any like bread lines and all the bad crap that kind of happened in the
us so i would think as kind of and what's interesting is our debt is pretty similar like
to the uk's debt back then they old all old all their debt to kind of the U S which is kind of ironic because now it's kind of China.
That's who, who do we own, own all our debt to it's essentially China. But the ironic thing is
for all the people that think, you know, that maybe the Ray Dalio is that think China is going
to just cleanly, you know, take over, they could fricking collapse. Like the U S did, you know,
way worse than, than the U S in the next 10 years. And then they could come out stronger, just like the U.S. did.
It's something to think about.
And when you think when you really look into this stuff enough, you just realize, like,
God, it's hard to predict this stuff because the markets will find a way to screw you no
matter what.
When you look at all this, like, it's tough to it's tough to figure out, you know what
I mean?
It's supposed to be tough, right?
Because if it wasn't tough, everyone would be rich, right?
And I think when we're talking about crypto, you know, instead of just talking about CAGR, I think a good topic to talk about is, like, why people choose crypto outside of the returns.
And it's because people lost trust of institutions and governments, period.
Right. So is government corruption in the world?
Has that stopped?
Have the government stopped printing money?
Right. If corruption still exists, there's still opportunity, right?
Because nothing, you know,
I think it's still pretty early to say, you know,
Bitcoin has failed or crypto has failed when there's,
when there's wars going around,
when we're seeing major nations lose 99% of their purchasing power overnight.
Right. So I think this is exciting for Bitcoin in particular. I think it's exciting to be in
crypto. I think it's exciting to own assets. And when people say like, you know, there could be a
decade where S&P does nothing, Nasdaq does nothing, Bitcoin does nothing, Ethereum does nothing.
It basically says you're in a fantasy world where governments are never going to be corrupt again for the next 10 years.
I don't think that's the case.
The world's not at peace.
There's nations at war as we speak people are dying left and right right that's chaos war is going to happen money is going to be printed
people are going to people are losing their jobs their their their nice white collar jobs in the
united states are uh at risk, right?
There's a lot of unemployment.
And do you trust the numbers that the government is telling you?
Do you trust the money?
Do you trust the leaderships of the governments that you're a part of, right?
And if you don't, if you have any sort of doubt what is
your hedge against that right and i think bitcoin has an opportunity just like gold right uh and uh
you know i i think that's not priced in fairly i i think the the big thing that's bullish for me
about bitcoin is a lot of it's it's simple enough for the tradfied boomers to understand it.
Like I was listening to this podcast with Michael Howell,
who does his global liquidity index thing.
And he's like telling people to buy Bitcoin.
He's saying like, yeah, you should pick up some Bitcoin at 60K.
Right.
So, you know, Bitcoin is,
Bitcoin doesn't have smart contracts or MEV or, you know, L1s and L2s.
It's simple, you know, simple things for simple minds, right?
And I think, like, the boomers will basically adopt Bitcoin as their little baby pet cryptocurrency and keep it going,
which is why I think it gets a 10% CAGR because the finance boomers are not going to let it have a CAGR that's bigger than that.
They also have all the money. They also have all the money.
They also have all the money.
But the fact that they have all the money is why it can't have a CAGA bigger than 10%.
Because they're going to plow all their money into it until they don't have any more.
And then their money only grows at about 10%.
Because that's how quickly central banks create new money.
People don't live for 100 years. people don't live for 100 years.
Capital does not live for 100 years.
The wealthiest families
in history have not kept their
wealth.
Wealth is not
historically
I'd say most families
that are very wealthy
lose their wealth within two, three generations.
Yeah.
The other thing, too, what's kind of ironic almost is like the biggest things that actually lessen wealth inequality.
And fun fact, I mean, wealth inequality is the highest now than it was since the 1920s for the U.S. at least.
now than it was since the 1920s for the U S at least. And the thing that actually lessened it
a ton was when the great depression and everything crashed because all the people with money, what
did they have their money in? It was stocks. It was the U S economy. So it went down and I know
there's certain people that were able to make money, you know, during the great depression,
if they were in gold mining or whatever, stuff like that, but it was not the vast majority.
Like most of the millionaires, most of the people, I don't know, what like that. But it was not the vast majority. Like most of the millionaires,
most of the people, I don't know, what was that top 30% control or what is the top? I forget what
is the top 1% control, 30% of the wealth, something like that. They all got crushed and
wealth inequality went a lot less. And if you look at every single time there's a major crash,
when it goes down, that actually lessens wealth inequality 2008 like every 50
crash for the even 2022 lessened wealth inequality quite a bit in the in the U.S. because you look
at Elon Musk's net worth all these billionaire net worths they've got cut in half a lot of them
you know down 30 those types of situations that's the only way you really lessen wealth inequality
generally. Now, the billionaires, I think what you said was really smart because the billionaires,
there's no way to go after their billions of dollars. They'll just leave. If you try to tax
them, they'll just leave. If you try to kill them, they'll just leave. They're able to get away with
it. But the only way they lose the money is it's gone in three or four or five generations because
their kids don't really care. Their kids are not as ambitious.
Millionaires, you know, the same type of situation.
I think the millionaires get crushed the most when S&P 500 goes down.
And I think we will see that sometime between 2028 to 2032.
I think that's when the bubble really pops because it's looking similar to the 1920s in terms of, I don't know the exact numbers on it,
but wealth inequality in the U.S. is similar to the 1920s. You're getting into a major area of
transition. And I think if you see the S&P 500 go down about 50%, that's going to be a major
change in situations. I do think if you look into things like universal basic income,
universal healthcare and all that, they're not going to be taxing the billionaires.
That money is not going to come from the billionaires.
Who are the people that are going to they're going to actually be able to tax?
Probably a lot of baby boomers or by then it'll be older Gen X or whatever that are in mainly blue states that are multimillionaires.
They'll be able to go after them because they're not resourceful.
Like I know a lot of very wealthy baby boomers, like multimillion, technical multimillionaires, maybe
worth less than 10 million, but they're not even willing to go to fricking move to Florida for six
months in one day to save 20 or 30 grand a year in taxes. Like they won't even, they're so
unresourceful. So they're going to go after that money, I think. And that's, what's going to lessen
a lot of your wealth inequality in the U S. And I think it's obviously going into UBI with AI, you know, because of AI and all that,
that's not going to be a nice path. There's going to be a lot of populism, a lot of nonsense. You
could see the state, individual states will gain more power, probably going to become more like
the European Union. You've seen right-wing populism a lot with Trump, but wait till you
get to left-wing populism. If you see the S&P 500 go down 50% between 2028 to 2032, and let's say J.D. Vance is president,
very ineffective president, likely if the Democrats control the Senate and the House,
who gets in in 2032 when people are annoyed and angry and complaining about all this stuff and
AI taking their jobs? It's probably going to be somebody like an AOC, maybe a Gavin Newsom if we're lucky,
but it's going to be somebody way left wing doing an agenda, probably universal health care and probably some type of UBI.
And that's where, you know, who are the who is the only target where you could actually get money off of that?
Baby boomers. They may go after inheritance tax and especially baby boomers in blue states that are basically asking to give away their money.
They're completely unresourceful.
Mic drop.
I mean, like, my hope.
Go ahead, man.
Matt, you can go ahead and raise your hands.
Matt, you can go ahead.
Oh, go ahead, Matt.
Yeah, Matt, what's up, bro?
Yeah, Matt, what's up, bro?
Hey, what's going on, guys?
I just want to rewind a second here.
And, you know, we only get this opportunity once every three years,
another Bitcoin bear market,
and it's time to take stock of what's happened,
what have we seen, what lessons did we learn.
And honestly, if we went back three years ago, January 2023,
that was basically the end of the previous bear market.
2022 was a pure bear market.
If you bought Jan 2023, that was basically the end of it and the start of the bull.
So if you could go back to Jan 2023 and you were only allowed to buy Bitcoin, silver, gold,
NASDAQ, S&P 500, or ETH, which do you think performed better today, from then to today, over three years?
Surprise, surprise, it was Bitcoin.
And it wasn't even close.
And you can put it up on your own trading view, pull it up on your own chart.
It's still not even close.
And Bitcoin is in a bear market and a huge drawdown.
But Bitcoin is up over 300%.
Next up is silver over 230%. Gold's barely 160%.
NASDAQ's lower. S&P 500's lower. And ETH is barely up 55% in three years. So truly,
what are we talking about? We just lived through an entire Bitcoin cycle again.
And everything underperformed again. And you have this beautiful opportunity to re-up
or get in or um you know average up and we're talking about our e-sizing in bmr what
are you kidding me like sign me up we i've been waiting for three years for another bear market.
Sign me up for Bitcoin to 2020-30.
2030.
I mean, I think, honestly,
all of the bullishness that I'm hearing about ETH
indicates to me that it needs to have more punishment.
Because I really do think people need to give up.
Because when you look inside Ethereum,
when you look at what really goes on,
there just isn't enough effort being put into actually developing the protocol at the moment.
It's lazy.
It's like everyone's happy because people are buying it.
ETH has no adoption.
ETH achieved something incredible this cycle.
It performed pretty well.
It made a marginal high off of the absolute worst technical track record it's ever had, right?
Like ETH is in a worse position in terms of market dominance than it was in 2021 by a long way.
Solana has kind of like actually usurped it which if you'd said to me naka in 2026 solana
is going to be like the smart contract blockchain where people go to actually do stuff and nobody's
going to use ethereum i'd have been like nah there's no way that's happening solana's dead
you know it's like spf coins going to zero right but it actually has happened and yet despite ethereum just absolutely
ethically failing and vitalik having to do a very late but nevertheless welcome uh 180 on the l2
thesis it still made a new high it still performed people still made money on ethereum right um so i
think it needs more punishment it's's like, if you reward failure,
you know, if you keep rewarding failure,
what's going to happen?
And I think the problem with Ethereum,
and it's kind of sad,
is that Ethereum is becoming captured
by the boomers, right?
The finance boomer bros
who've never transacted on chain.
And they're like, oh, well, old chap,
I think we need a little bit of exposure to crypto it's
like i can't be fagged with that i'll just go and put some eth options on on you know on deribit
you know you're fucking uh what is it cme right like just you know put some options on get some
exposure and fuck off and like those people have kind of adopted ethereum as they're like okay i
don't get crypto i'm a bit worried about
buying a scam, right? This is
like the safest play. And then, you know,
the actual Ethereum devs, the people who are
working on it, are like, yeah, we don't actually
need to build anything. These boomers will just
fund us that infinite item, right?
They'll just pay for us to have like
circle jerks and tree hugging
and we don't actually have to have
any smart contracts. They're hilarious, bro. You crack me hugging. Um, we don't actually have to have any smart contracts.
They're hilarious, bro. You crack me up. Sorry.
It's pretty funny.
Go ahead.
It's true. That's what's happened, right?
Like, basically, the boomers
have adopted Ethereum as their little,
you know,
not their first.
Not their first.
I'll tell you why. I'll tell you why.
I'll tell you why they've adopted it.
Because again, you go on the Michael Howell
podcast,
and he's like, well, get some Bitcoin
and Ethereum exposure.
Don't touch any of the other 22 million
cryptocurrencies, but get Bitcoin and Ethereum.
And people actually did it. That's the problem.
Despite
disappointing results in terms of actual... get bitcoin ethereum and people actually did it that's the problem right like despite
disappointing results right in terms of actual people the uh the investor class that are
allocating towards bitcoin and eventually ethereum they're they're not like your standard xrp holder
they're not going to go 99 percent in with their portfolio they're going to take a less than one
position ethereum right uh yeah but it doesn't matter it doesn't matter how many percent it portfolio, they're going to take a less than 1% position in Ethereum, right?
Yeah, but it doesn't matter. It doesn't matter how many percent. It doesn't matter how many percent because they're very rich. Collectively, these people are very, very rich. They have a
lot of money. So if this class of people collectively take a 1% position in your shitcoin,
your shitcoin goes through like, you know, half a trillion dollars, right? And because these
people are very dumb money, like they have no idea what they're buying
no idea what it does it means that if you can get into the brains of these lizard people right who
live you know who are like one step away from the retirement home you can be like you know up
forever without actually doing anything which is kind of disappointing and bad for ethereum that's
what uh that's what the ethereum heads
are saying uh bitcoin's about right not the other way around yes the problem is ethereum is
ethereum is becoming ethereum is becoming bitcoin it's becoming bitcoin that's not yet because i
i still think bitcoin's in price discovery right i think over the next 10 years yeah to the downside
over the next 10 years i think boomers are increasingly going to be more bullish on Bitcoin being more than 1% allocation.
Well, maybe not the boomers, though, dude.
I mean, like, my parents are boomers.
They're getting old.
I'm worried about them dying.
You know, these people aren't allocating to Bitcoin.
They're allocating to bonds, right?
Because, you know, they've only got, like, 10 years left.
You don't allocate to Bitcoin when you've only got 10 years left in your life, right?
You allocate to cash and bonds.
Naka, dude, that was a funny statement that you said.
If you're like, uh-oh, cheerio, we have to allocate to there a bit.
Well, hang on, let's finish the thought because it's not that—
I was going to pass it on over to Swank.
Hang on, hang on.
Let me finish this point because people,
if you've got wealth
and you only have 10 years left to live,
you're not investing in Bitcoin
because you want to maximize
the last 10 years of your life.
You're investing
probably for the next generation.
And maybe the next generation, aka you,
right, the siblings of the boomers, want an allocation to assets that they care about and
actually will deliver growth. So maybe there's an opportunity to influence the parents, the boomers, not just from the institutions like the Black Rocks,
but the kids saying, hey, you don't need to buy, you don't need to give me a down payment
for the house, a house.
I can just rent for the next 10 years, just buy me a Bitcoin.
I think they're not thinking about dying.
Yeah, I'm misguided.
I'll say this, man. As far as like baby boomers and all that other stuff, I actually hear more
people, and mind you, I'm in South Florida, and a lot of the older people, they just say,
I'd rather just buy Tesla. And then they give the whole speech on SpaceX and X and all that so it's combining robotics as well
So they're like I'm just gonna buy
Tesla instead of Bitcoin because I
That's my point is
Bitcoin's competing against tech stocks like Tesla, but Tesla's also kind of like a a
Treasury company as well like micro strategy and um some of these
people like they lived through dot-com and they got shrekt and um for those that don't know
micro strategy uh when they went down 99 they had the biggest lawsuit um ever for any publicly traded company in the united states and um yeah i just hear more
bullishness on tesla um for now at least for now because i think bitcoin mania um from 21 17
what we saw in 24 wasn't even close to those time periods at all, man. At all.
Elon has barely even talked about BTC over the last few years.
Because he's pumping his stock.
He wants a multi-trillion dollar IPO
for XAI and SpaceX, right?
Like, he doesn't give a fuck about Bitcoin
because he's trying to raise
hundreds of billions of dollars.
And I think he could actually do it successfully
and have that whatever, one or two trillion dollar IPO
and he's targeting it within the next year or so,
whatever it is.
So that is the competition that crypto and Bitcoin have.
It's like these other hot opportunities
like OpenAI, right?
And SpaceX and Tesla, all these other sexy things that seem like,
you know, they're going to grow 10x in a year.
And then sometimes, you know, more often than not, you know, retail is the exit liquidity.
And as soon as that IPO happens, people take a 50% haircut chasing the IPO,
and then Bitcoin starts mooning.
Yeah, I think another thing that's good, too,
and I think that obviously we talk about crypto
because I think that's still going to be one of the most best-performing assets.
Obviously, Bitcoin anywhere, I think, from 40 to 60K.
Even if we do the worst possible case scenario and hit 130K into the end of this decade,
that's the high, let's say.
That's still a freaking double.
That's still probably going to outperform the S&P 500 in that amount of time.
I also think if you look at Tesla as part of an AI company, too.
I wouldn't touch Tesla right now.
I think it's going to go down farther over the next six to eight months.
If you look at other, you know, things like Planety or Palantir, stuff like that, AI stuff, you know, I would definitely, I'm definitely going to sprinkle some money in those.
I wouldn't touch Palantir right now.
I think that's going to dump a lot more, but six to eight months, I think a lot of those AI stocks are going to be kind of like Coinbase or Robinhood in 2022.
Robinhood's probably going to go down farther.
I think that could be a good buy, too, in six to eight months.
Those areas, too.
So I would sprinkle some definitely in those areas.
You're making the point that you should be diversified, right?
And I think that's what changed over the past four years, right? When I was, you know, an anonymous person with, you know, that wasn't a poster, right?
The previous crypto cycles, people weren't talking about stocks, right?
You are talking about investing in companies that are innovating and have revenue and earnings right in the same breath
as Bitcoin and crypto that was that never happened before until 2024 and it wasn't really popular
until it's still not popular right so I'm bullish because I have some perspective, you know, and I've been in this ecosystem for a while.
And I was a weird guy talking about Bitcoin mining stocks in 23, right, on Twitter, while Bitcoin was like, you know, 16 to 30K.
And people were accusing me of like shilling like as if I was talking about XRP, right? And it was not a popular idea to invest in crypto Bitcoin equities in 2023, right? Matt was there, he remembers.
the new wave of this, you know, of the investor class.
It's people talking about Bitcoin, Ethereum, Tesla, high beta stocks, and other good investments
like real estate, gold, etc.
Right.
It's not like just being diversified. It's investors just talking about assets and risk equities and just normal investments.
That's what's different.
Four years ago, no Bitcoiner knew what an MNAV was.
Four or five years ago, no Bit no Bitcoin knew what cash flow was.
Now everyone's talking about EBITDA and MNAVs and NAVs, right?
These terms were non-existent just a few years ago.
And now everyone's, you know, looking at, you know, other stocks in the same breath as crypto.
at other stocks in the same breath as crypto.
That is alarming to me, which is also a signal.
I think that's a positive thing for Bitcoin, that it's reached the investor class.
I would say on crypto Twitter, yeah.
For the average person, not completely.
Because people were always talking about Robinhood, Coinbase back then.
But I do agree.
I mean, my exposure to crypto is Twitter.
I don't think crypto is popular to discuss in the general public, right?
I don't step into a Starbucks.
When it's high.
When it's high. When it's high, yeah. That's when you should be public, right? I don't step into a Starbucks. When it's high. When it's high.
When it's high, yeah.
That's when you should be selling, right?
Like when you walk into a Starbucks or your Uber driver is driving you downtown and you see the chart of XRP, you know, on his app, right?
Those are times to be cautious.
Now is not the time for caution.
No one's talking about crypto.
You got to be on crypto Twitter, right?
And once you look into crypto Twitter,
people, you know, in this space even,
are talking about diversification
while crypto is at the local bottom
or whatever, near the bottom.
I think it's a lot more nuanced than that,
if you don't mind me.
I think it's a little bit more nuanced than just kind of looking at overall
sentiment exposure across the board. I mean, sure, it can work within a contextual framework, but there needs to be, you know, more analysis
than just like people are talking about it, people aren't talking about it, because it's,
I mean, that kind of goes for the entirety of just the finance sector in general. Like,
you go to a Starbucks, you don't hear bros talking about, you know, the S&P 500 or like,
talking about the S&P 500 or like oil or commodities, I mean, maybe most recently, but I mean,
that's not like the norm just for our sector in general, right?
Right. And as crypto is more falling into a more traditional finance framework,
we are a niche industry, right? We are an industry that is closely guarded,
just like traditional finances, right? Where that has been the historical norm for, you know,
a hundred years, you know, that's why people pay other people millions and millions and millions
and millions of dollars to manage their money is because it's not common knowledge, right?
And I don't think it has to be common knowledge
for, you know, it to be kind of placed into the bucket that, you know, we're at an overvaluation
or an undervaluation, right? Depending on whichever bucket it may fall into. And I,
and I, I understand the framework where people are kind of, you know, how they're thinking
within that framework of it being kind of like a know, how they're thinking within that framework of it
being kind of like a contrarian trade and that can work. But I, I do think that there needs to
be more context. There needs to be a bigger picture that's painted and, and does it fall
into that bigger picture? Like, um, like if I hear like macro guys talking and I, the more I
listen to macro guys, the more I just, the more
I think like these guys aren't actually real and how do they actually get paid to do anything?
Um, because you know, they paint this super subjective, um, kind of like landscape on the
market where there's a million different ways to like, sure the market, there's a million different ways to like, sure, the market, there's a million different ways to approach it. But, you know, they paint a super like subjective picture, like I said,
that can be interpreted a million different ways. And there's no objectivity behind a lot of, you
know, the macro guys that I have heard discussed, I think that if you can build a framework, and if
you can build a thesis, and you can build a thesis and you can build like rails and
boundaries and guards in which, okay, X happens, you operate within this, Y happens, you operate
within that. But the idea that people aren't talking about it is not enough, right? Because
what drives the markets? It's not people talking, right? It's not people. It's not voices.
It's money.
Money drives the market.
Supply and demand, right?
Buyers and sellers.
And that's far more important, in my opinion, than who's talking about it. And from what we've seen, this cycle is when we were at the highs, there was no mass euphoria.
I mean, there was people talking about talking about at 120k but it wasn't
like it was apathy man pure apathy well and it was more so if you look at this asset class over
history right and you look and you look back we did have a bubble in 21 right it that's when
everybody found out about it and i think people are using Maslow's hammer where they're like, oh, you know, like last cycle, everybody was, you know, everybody was talking
about it. And, and that marked the cycle top. And we didn't get that this cycle, but this cycle is
contextually different, right? It's not this new shiny thing that, you know, nobody knows about
going into the bull market, right? Everybody knew about
crypto from last cycle. I mean, you had Elon on SNL talking about Dogecoin. You had grandmas,
you had uncles, you had aunts, you had people buying crypto on Coinbase, buying Dogecoin,
you know, buying Litecoin, buying Ethereum, the list goes on and on and on and on. And because
of that, we don't have that same framework to now work within this cycle, right? Because not everybody's going to talk about it and a lot of people aren't going to talk
about it because a lot of people lost money.
And so the idea that we should be thinking of a sentiment convexity, from a sentiment
convexity standpoint, that a discussion point, in my opinion, is not a valid contextual piece
to go through from an analysis perspective.
And the driver of this market has not been retailed. Discussion point, in my opinion, is not a valid contextual piece to go through from an analysis perspective.
And the driver of this market has not been retailed, so we can't even use retail as a driver for a contextual framework.
What has been the driver? It's been institutions.
It's been money managers finally being able to allocate a portion of their portfolios that they manage within crypto, right? It's been the Black Rocks
of the world. It's been, you know, the getting the trad fibros in it. And because of that,
that's far more important to be looking at, in my opinion, is, okay, if we look at these flows now
for the ETFs, they're anemic, right? The flows are completely anemic. And if they've been the driver of this cycle,
what is left, right? Because retail is broke, right? Retail is poor. Retail can't drive this
market. We've seen that time and time and time again. And so I look at the driver now this cycle
because it's contextually different. It is. The driver has been institutions.
Institutions aren't buying anymore. We tap that well, right? That well has been drained. We had companies, we had a lot of digital asset treasury companies. How much frothier can we really get
from an institutional perspective? And if you want to get on a retail perspective, look at PumpFun,
right? If I could hop in here, Hermitius, and ask you some follow-up. I haven't seen any institutions.
What institutions?
I think we confuse just because it says BlackRock spot ETF, Fidelity spot ETF, Valkyrie spot ETF.
That's still retail money.
XYZ money manager is adding Bitcoin to their approved asset list.
They're still managing retail money.
Now, rich retail, rich boomers that have made their money over decades for sure,
but it's still just retail.
I mean, come on, other than MicroStrategy, do we have any company of size buying Bitcoin?
No, obviously not.
This was still purely retail driven.
The only difference is they're using new rails.
They're coming in through TradFi rails.
They're coming in through Family Office and stodgy boomer rails.
But it's still all the same mom and pop and auntie and uncle and maybe some forward-thinking grandpa and grandma too.
But it's really still just retail.
And I'm not trying to sound like bearish or like depressed about it.
to sound like bearish or like depressed about it. I'm actually very excited about it because
I come back to my point earlier, you know, a half hour ago, you go back, if you went back
and you had to put a bag of money and again, all you could buy was S&P 500, NASDAQ, silver, gold,
or Bitcoin, Bitcoin won over the last three years. And if you want to go back to 2020,
I mean, it's not even close. That's a joke. So just go back to 2023. And Bitcoin beat everything
by more than 2x. So I mean, excuse me, by more than 100%. So yeah, I see so much upside still. I see very little actual adoption still.
I see new higher highs and new higher lows in a completely de-risked environment out there.
I absolutely agree with you that it's depressed out there.
It's low volumes out there.
No one wants to talk about it out there.
And yet, Bitcoin's barely 50% off of its all-time high. So far this is the
shallowest, easiest bear market we've ever witnessed. So yeah I mean to your
to your point like yes the ETFs like the label of BlackRock ETF does not mean
that necessarily BlackRock does not mean that BlackRock is the sole flows.
It is customer funds and then they obviously buy Bitcoin.
But we have seen the micro strategies, the Tom Lees of the world.
And the idea or the notion that there's going to be…
But those are the kooks. Those are the quacks.
Those aren't…
Well, there's been a lot more than that.
No offense.
There's been a lot more family offices, you know, and family offices are borderline institutions.
Right. You know, there's been serious money managers that have gotten into the space now and they've been able to.
And it's not like we're going to see, you know, wide scale adoption.
It's not like everybody has, not everybody owns gold,
you know, not everybody owns, I mean, majority of people in the S&P 500, but, um, you know,
like not everybody owns, you know, every single asset class and that is completely fine. Um,
but you know, more so too, we've been talking or we talked about this map, but I think it's
really important from a time-based perspective, right? And price, I keep, I always mention this is a reflection of human
emotion. We just exited a multi-year euphoria phase. In my opinion, we are towards or heading
into or just starting to get into the hysteria phase of the market. And I don't think we reach
that, you know, peak hysteria. I think that there
are, in my opinion, it's either going to be reflected in lower prices or it's going to be
reflected in major news headlines, quote unquote bearish news headlines. Either one, does that
mean that price goes to below 60K? Maybe, maybe not. But I think that we need from a cyclical perspective
to enter back into that hysteria phase.
And to your point, we generally do have months and months
and months and months to acquire within the bear market.
And so I don't think that there's any reason why, you know,
people should be looking to, you know,
oh, I need to be buying the bottom, right?
I need to be FOMOing, right? Because FOMO goes both ways. It goes both in a, you know, an uptrending
market and a downtrending market, right? And people are like, I got it. I can't, I can't miss
out on buying the lows. And it's just like, just be patient. Let the price tell you that whales are accumulating because they will you'll see them
sit there as passive bidders or buyers within the market and you'll enter into this and what we've
seen historically at the lows is a multi-month you know but the pico bottom is a multi-month
low volatility compression period where whales are just opening up their mouth and saying,
anybody who wants to sell, do so. We're going to gobble you up, right? And we're going to pin
price here. And we are not going to move price up or down in a meaningful way until we're
fat and happy with our bags. And then, and that is your signal, I need to get into the freaking
market. As of right now, I still think there's way the freaking market as of right now I still
think there's way too much volatility in the market I still think there's way
too much or there hasn't been enough time to really say for certain or not
we've reached that macro pico low but that's kind of that's kind of what I got
you guys are both making my points we're now in an investor class for crypto.
Just because you're not an institution, it doesn't mean you're not an investor.
I think that's what people get confused about.
It's not about institutional adoption per se.
It's who's adopting it.
It's the investor class.
It's the millionaires, the multimillionaires, the billionaires that are making a percentage allocation. It doesn't mean BlackRock or Vanguard or whatever. It means people who have money are allocating to crypto, Bitcoin, Ethereum, etc. That's what's
different. And the same individuals own stocks. They own gold. They own real estate. They own bonds. They own other stuff. They own everything. And that's what's different. And the fact that you're talking about nuance, crypto people don't talk about nuance, period. That's the signal for me. Four or five years ago, if you were in a conversation with a crypto dude, there was no
nuance. It was Bitcoin's good, Ethereum's bad, or Ethereum's good, Bitcoin's bad, right? That was
the whole conversation. Now, you're hearing some depth. You're hearing other facts and figures and
charts and people with degrees, right? That wasn't there just a few years ago.
I'm with Prometheus that if this bear market is anything like our previous cycles,
there's no need to FOMO. Strap yourself in for the next three to six months. You'll have plenty of time to accumulate.
You certainly should not be buying any, like,
out-the-money calls or anything yet.
We need to put in a stable base, you know?
Matt, we got to wait for Hood to bottom, bro.
That's the ultimate situation.
Well, that's the thing.
Well, Hood's not going to bottom.
So, Hood reacts to...
Hood's like Solana.
Hood is the Solana of Tradify.
Yeah, but Hood reacts to whats like solana hood is the solana of tradify yeah but but hood hood reacts to what
uh uh bitcoin and crypto and and some of your more popular tech stocks do you know you remember how
long it took for palantir and hood to actually start moving with crypto it's a late quarter
2023 yeah it took quarters that was agonizing it was pure agony
now imagine if it's the other way around that imagine if it's crypto that does that and stocks
just rip oh boy oh man but i mean i don't think it's going to be like that because look at the reaction that Solana had. That was a 30% rally in 24 hours.
I think we forget that crypto is the definition of escape velocity.
Now it's just a matter of like, what major is it going to be that pulls off a soul?
Maybe it's hyperliquid.
That's like my only base case.
Pump fun probably later on. Small what's up man hey what's up brother yeah i i just wanted to kind of piggyback off of a couple of the
points um that were made i think it was by prometheus and then you know bitcoin agai too
um when comparing like the cycles and kind of just like in the past how how bitcoin's always
uh just persevered through the bear markets and everyone said it was going to die etc it never has
uh it's always come back always won as far as like right now i mean i'm i'm very i think all
of us here are very confident that that's going to happen. And like, eventually we're going to make our, so our way back to a hundred K, 125 K and up to one 50, 200. But I think that just like comparing it,
previous cycles and previous like recoveries to now today, there's some key differences. So in the past, Bitcoin bear markets that have ended, or I guess just like
accelerated recoveries, it's usually happened when the Fed has cranked up the liquidity hose.
So massive quantitative easing in 2020, 2021, it ballooned the Fed's balance sheet to over $9 trillion, and it flooded the markets with a lot of cheap money that poured into risk assets like crypto.
And I think that's what Prometheus was kind of getting at.
It's like following the money and the rotation of the money is what moves markets.
As of today, we're not there yet.
The Fed did conclude QT last year at the end of December.
And, you know, they shrunk the balance sheet from $9 trillion to like $6.5 trillion.
And, you know, treasuries are at like about $4 trillion.
Mortgage-backed securities are declining, et cetera.
That's irrelevant.
But QT is over, right? There's no more aggressive runoff of securities, maturing securities without full reinvestment. And reserves
are ample. Money markets are calm. But as far as us being in QE, we are. But I think the Fed has
shifted to a reserve management mode. So they're rolling over maturing treasuries
and gradually letting mortgage-backed securities decline while buying enough to keep reserves
strong and grow slowly with economic demand. Long story short, it's not like expansionary,
it's not explosive or expansionary QE. The market, I think, is kind of feeling that. And it's like liquidity isn't flowing back. It's
kind of just stabilizing. So it's more like we're holding steady. And I think just a gradual
normalization after what we saw over the last four to five years, right? Like NVIDIA
45X from the beginning of COVID or right before COVID till today. Google, we saw go from, you
know, in the last two years is 5X or it might be more than that. And I think that, you know,
the markets are kind of just pricing in uncertainty. So, you know, worst case for the bear,
if you want to call the bear case flip, right?
We got a new Fed share coming in in May.
And I think that that's,
there's a lot of fair points
as to why people are talking about May
and stressing May.
He, you know, Warsh is a,
or Warsh, Warsh, however you pronounce it.
He's a vocal critic of the bloated balance sheet
and qe distortions he's like in the past obviously uh every market every time period is different but
he's been a vocal critic of uh the bloated balance sheet and um distortions with qe so he's he has
pushed for tighter discipline um you know besant the other guys, they kind of just signal with caution.
They don't really make quick moves, take a year to decide.
I think that the markets are kind of saying, like, if Warsh leans hawkish, right, on the sheet, even if it's modestly, it could drain that excess liquidity over time, which was that same liquidity that really helped, you know, Bitcoin rocket during the previous explosive QE
phase in 2020 to 2021. So, you know, I think that it just feels a little bit different
also beyond liquidity, right? Like the cycle evolution, the post halving in 2024, it was the
softest one yet.
And as you guys were saying, I think you said it while we peaked at 126, and it came on apathy, not euphoria.
There wasn't real retail mania.
So drawdown so far has been about 50%, a little bit over 50% at the lows, which is somewhat milder than historical winters, if you want to call it, or bear markets at like 70,
80%. But I think that that could possibly mean that there is some more room to fall below if macro drags on. And I think that's why we're seeing money just flow into safer, more just risk-off assets and equities. I think that the cycles are, today, they're way
more macro-tied than anything else in previous history. And there's no real catalyst as of today
for reversal. And we had some triggers for previous, you know, previous cycles, right?
Like we had COVID stimulus, ETF approvals, not that they did too much.
Institutional, if you want to call it FOMO or just institutions kind of getting in.
I think just here right now, adoption steady, right?
With ETFs and there's some corporations stacking, but there's no real like explosive new narrative.
But there's no real like explosive new narrative. And Bitcoin is, you know, the broader market corrections and correlations are going to hurt Bitcoin the Fed is going to pause, resume,
or expand their liquidity injections kind of amplify downside without the old QE backstop.
So I think that just like in essence, when we're seeing investors, we're seeing the money flow,
right? Like Microsoft lost a trillion dollars in market cap in the last however many months from
high. That money doesn't just disappear. It gets allocated elsewhere. And you can see that
across all tech. But I just think that without the massive liquidity injections to kind of juice
the recovery, we can see the bear market definitely grind longer. But I'm not the one that's like not going to buy Bitcoin because
I'm targeting like 40K or 30K or 20K. I don't think that's happening. I think that there's
an incredible buying opportunity. I mean, there was one last week, we tapped the 200 moving
average on the weekly at 60. I had limit orders at 60, 61, 62.
And, you know, if we crack again, I'm going to I'm still going to take chances and buy more Bitcoin in the 50s and even in the high 40s, like 58, 56, you know, 52.
Give it to me. I'm not I'm not too worried about it.
And I think that that kind of just stanced the idea that some of the guys were talking about as things could be slow for a little bit, right? And it's a matter of if you're going
to just, you know, if you're running away, then you run away. But, you know, the people who are
in it, you know, like myself, I'm going to hold or accumulate more. But I still want to take
advantage of some of the opportunities that we're seeing across the market. And at the same time, this doesn't kill the thesis for Bitcoin at all.
It's far from it.
Still long-term bullish on Bitcoin.
Fundamentals were rock solid.
And I think that once liquidity normalized, or if maybe some pro-crypto policies accelerate,
the scarcity and demand equation wins out.
But just looking at the market in general
you know as i was and we've been kind of talking about it every day um on on this space like we're
seeing money um move quite a bit around the market like as i said mic Microsoft and some of the larger like Mag7 tech names, they're broadening out a bit.
The capital rotation so far this year towards the end of last year and obviously, you know, through the first month and a half of this year,
it's definitely a clear pattern of broadening out from the concentrated like mega cap, you know, some AI, software hyperscalers like Microsoft, Amazon, towards the
more of what you would call the real economy, right? Like cyclical value oriented defensive
sectors. It's not a, it's not like a full flight from tech. You know, there's some, some dip buying
that's definitely occurred, but there's like, we've seen a reallocation after quite a few years of narrow leadership in
the MAG-7 and the AI-themed stocks.
And you could just take a look at a few of the sectors, right?
Like energy, take a look at XLE, Chevron, XOM.
There's another name, tickers OKE or like 1OK is the company name.
I think that that stock's going to 90.
It's got a gap to fill.
It's trading like $83 right now.
A lot of the energy names that were down towards the end of last year have started to bottom and really trend higher and break out multi-year ranges.
And then just across materials, industrials, staples, they're all up anywhere from 12% to 15%, even more than that.
I just think the shift kind of reflects there's some AI skepticism, right?
Like the massive CapEx pledges and billions of dollars that we're seeing.
We're seeing the CapEx go from euphoria and growth to a little bit
more of like near-term ROI and cashflow compression and whether AI is going to disrupt software models
or boost them. Just the market's kind of wanting to see some return on that investment. And I think
that when that happens, you know, and people are started going risk off a little bit, crypto is going to get hit, of course, you know, Bitcoin is going to get hit from that from that sentiment, too.
So I think just like the cycle and where we are as far as the Fed and just everything happening in the world in general is kind of why we're seeing money flow a little bit into the more defensive sectors.
I mean, it's not just the Fed either.
We have geopolitical tensions every single day. So there's a lot going on. And,
you know, I think that we're going to kind of trend around in this range and possibly even,
you know, go a little bit lower before like really bottoming out and trending higher for the next,
at least until the new Fed chair gets in.
So I think liquidity is a pretty big deal. And like the question now is, is the Fed, are we going
to get, are they going to increase their injections? Because, you know, in 2020 to 2021,
I believe we were at like $120 billion. It was, I think it was 80 in mortgages or it was like an 80-40 split.
Nonetheless, that's 200% more than the injections we're seeing today, plus accounting for inflation over the last five, six years.
So it's just a little bit different, but that's kind of what I'm thinking about as far as the market goes and in the short term, right?
Short term, next six months.
Did you look at hood earnings?
Yeah, I did actually. I was looking at it when you were talking. So they missed on their revenues.
They hit EPS. I really didn't look at anything other than the numbers. But listen, again,
that's another name that I think, I don't know, man, I think that they can for sure go lower, right?
Especially like last year, the revenue that they had that exploded was, I mean, I'm not gonna say it was all due to crypto trading, right?
But it was partly due to the surging crypto related revenue, right?
That jumped like 300% in some quarters and it was a meaningful portion of their their entire total
revenue i think was like 20 25 percent um so obviously when you know bitcoin is we're having
these flash crashes and just just bear market money's going to be pulled out and i i think
there's just like a it's kind of crazy like robin hood was 150 billion dollar company 160 billion
dollar company and it happened so fast. I just think that like,
there's some valuation de-risking right now with a lot of these, these names and these growth stocks.
You know, the multiple was crazy for, for Robinhood, right? I think it was over 60
at peak price to earnings ratio. So yeah, I don't know. I, I, I kinda, I kinda think Robin hood is going to come down to like the low sixties.
I wouldn't, I honestly wouldn't be surprised if we see Robin hood at anywhere
between 45 to 50 within the next, you know, five, six months. But, uh,
what do you think about it while, because I, I heard you brought it up.
Yeah, I mean, the price action is telling, right?
Yeah. I mean, the, the, the price action is, is telling, right. Um,
And to me, kind of like the SPX kind of looks like, I don't want to say, yeah, distributive.
What else is there to say?
It's kind of been distributive over the last month, really.
It looks like it needs a HIMSS prescription, brother.
Yeah, it's...
I mean, we had that slight downturn in November.
That lasted, like, three weeks.
But for the most part, it's just kind of been in this range since October.
Same thing with the Qs.
And this is...
I've never really seen, like, a distribution for this long that doesn't result in a correction.
But if you do see that correction as Powell, I mean, I think when this Warsh guy comes in, if I were to bet, I think markets would dip like crazy his first week in.
And that's the bottom, I think.
And Trump comes out and says, now's a good time to buy and i mean the real guy is beset he's the real guy because powell was
insanely hawkish throughout all of 2023 and it was yelling injecting money into the system, and that's what probably Basant is going to do.
But Basant gave the call in December.
He's like, just taper your expectations,
take your foot off the gas pedal for a few months.
And what happened after that?
All you had were a few small caps rallying and Sandisk taking the lead.
And, yeah, that's it. I i'm gonna pass it on over to mar and
then i'm gonna wrap up the show mar what's up bro what's up brother be a little bro rg suffering
i need more i need more stable coins man i need more stable coins yeah fiat mining man yeah uh yeah listen uh robbie and well i hope everyone is
doing great um back in 2020 man we were sitting at 200 million dollar market cap and we had covid
retail got injected with so much free money and then we had these coins like you know we had dogecoin uh shiba and of course bitcoin
the new you know the new kids in town everyone is seeing all these assets pumping getting free
money sba loans ppp loans i mean it was like the perfect storm for crypto and the stocks too but
especially crypto being so young and then from there people just
started realizing what what's happening here why is it going down so fast they're not used to this
you know crypto compared to stocks then uh and then you touch etfs back in uh late 23 24 that
drove the that helped the market now because they're all institutions are getting in some
retail probably saw like oh okay crypto is an investment let me get in didn't hold that strong
the altcoins didn't hold that strong and retail is now they're not broke you know money just
doesn't disappear they're not broke it's just they're going they went more to stocks more to
tri-fi than altcoins and my thing is man and i'll
land the plane with this is what's next what's going to bring investors not people gambling
into crypto and uh a lot of and this is my opinion you know and i could be wrong for me it's all about
the genius act and the and and the banks with the stablecoins and pushing those stablecoins to clients on-chain, however it's going to work.
And just the clients getting into even investing in stocks on-chain.
And then they can move on to and they'll start seeing, you know, new altcoins, new blockchains, whatever it is, you know.
But I think it's all about the stablecoins and the banks. People rooting against the banks to lose there's no way those people are going to
lose they didn't even lose in 2008 uh during the crisis so that that for me right there it's what's
going to help move uh uh crypto to you know the trillions eight nine ten trillion uh total market
cap for the whole space it's all about the the stable coins, man, and the banks.
And we also need those
runners, too. We need those few
smart contract
tokens to run to 60,
70 billion.
Ethereum hit
all-time high by like 10 bucks.
Why? The only runner
he truly had was Pepe that hit
what, nine, ten9, $10 billion?
That's nothing compared to 2020.
That's nothing.
Yeah, I know, man. I know. I know.
It's a different market, bro.
We flopped. We flopped like a movie.
This time, all coins, the last three years flopped like a movie.
It did not sell anything.
It didn't do nothing.
It was just pure gambling, movie, fucking liquidity just transferring from one project to the other one.
I think I said this.
Why before?
Why do we have this season, Solana, these three months?
AVAX these three months.
I don't even think AVAX ever had a season.
Ethereum, why can't all these blockchains and projects pump at the same time?
You know?
Why do we always have to go season after season?
But, yeah, it flopped.
And it still, for me, it's the banks and the stable coins, man.
Hey, O'Hare, what's up, man?
How are you?
What's up, dude?
Not bad, man.
Just hanging around.
Working from home and jumping around,
listening to all these different spaces.
What's your view on the market, man?
Which market?
Crypto?
No, TradFi.
I know that's your field.
Oh, well, I mean, it's a mixed market, you know.
I mean, some stocks up, some stocks down, TradFi. I know that's your field. Oh, well, I mean, it's a mixed market, you know. I mean, some stocks up, some stocks down, you know.
I mean, today was kind of an interesting day, you know.
We had a lot of green, but there's a lot of red.
So there's a lot of rotation happening, you know.
It kind of depends, you know.
It's a stock picker's market. It is a stock picker's market it is a stock picker's market you're absolutely right about that yeah I just feel like the pool is getting smaller and smaller
and where to hide yeah it's interesting I mean the mega cap stocks kind of you know took it on
the chin but you had Tesla was up you know know, Microsoft was up a little bit.
You know, I don't know.
It's hard to say.
I just think we're in the, you know, like I've been saying for a while now,
we're in the last kind of, the last innings here.
I think there's going to be some type of a meaningful correction.
You know, we're having a slowdown and, you know, as it relates to, you know, Bitcoin,
you guys are talking about Bitcoin.
I mean, I was in Kruger space earlier.
Everybody was like wondering why Bitcoin hasn't really performed very well.
And I think, you know, my take has always been that Bitcoin is a representation, kind of a manifestation of risk taking. And it's kind of the first thing, you know, to react.
It's like the canary in the coal mine, if you will.
So I think a lot of what you see lately, the last few weeks in Bitcoin, is kind of an indication of kind of where things are in terms of risk appetite as a whole for risk assets.
You've had this kind of, you know,
pretty fairly significant rebound off that sell-off,
but we, you know, we're under 70, you know,
we're under, actually we're under 69 right now.
So I think the next level,
if we do get a meaningful, you know, continuation of the sell-off in Bitcoin, I think the real, for me anyway, and again, there's nothing other than technicals for Bitcoin, sentiment and things like that, you know, kind of like where we were trading right before the election,
let's say. We had a big move from 2023, 2022 into 2024. We traded sideways for, you know,
the better part of the year. And then we had a big move after the election. Well, we're below that
now. So I suspect we're going to revisit those lows prior, the levels before the election. And if we can't hold those, you know, all bets are off.
So, and it depends again on what happens with the broader market, you know.
But again, I think we've had a lot of dispersion in the market the last year or so.
And there's a lot, there's a rotation that's been happening and we're seeing it every day.
I mean, today, for instance, you know, value outperformed.
I mean, our strategy alone was up, we were up almost 2%
today. Now, one of that, you know, we had a few names that really, really, really were outliers
today on the upside. We had a few names that were red, but it's an indication to us, you know,
that things are, you know, we've talked about this in some of these other spaces, things are moving around and portfolio managers, you know, institutional money managers are moving
money around, you know, I think ahead of what they believe to be a slowdown.
This wouldn't be happening if people didn't believe that there was a, you know, that there
was a slowdown that's going to happen. I think we wouldn't see the rotation. The fact that we're seeing it tells you that I think people are preparing for it,
for a slowdown.
Oh, here.
What's up, man?
Hey.
Who's this?
Dude.
Tantro.
Oh, hey, Mike.
I couldn't hear you.
You sound like you're in a bucket.
You sound like you're in a hollow.
You're a listener.
That's why I can't see you.
Okay, you're a speaker.
I couldn't see you.
Yeah, what's up, man?
I'm on my car. Isn't this the market you've been waiting for for four years?
Well, we haven't been – we don't wait for markets. I mean, as you know, I mean, 2022, we were up while the entire market was down, including value. So 2022 was a really interesting market because even the
Russell 2000 was down something like 12.5%. And we finished the year net about 6.5% positive.
And since then, we haven't had a negative year. So the reality is we haven't been,
when you say you've been waiting for this, no, we haven't really been waiting. I think what you mean to say is I think the market at large has been waiting for rotation out of kind of expensive into cheap, right?
I think that's the way we can look at it.
Yeah, you're getting better breath in the market that's sustainable for the last five months for the first time in four years. I'm just saying for
an active picker, I know you're in the value camp and definitely down cap. This has been the best
market for that space. And so what I meant by it, it's a lot easier for active managers to make
money this year that are not large cap growth managers.
Well, it's never easy, but it is easier, maybe.
Easier.
Yeah, it's easier.
Oh, yeah.
If I said easier.
Beating the benchmarks are tough, as you know.
You know, beating the benchmarks is not easy.
But yeah, you're right. I think looking for asymmetric opportunities in, and by the way, it's not just in value.
I think there's a lot of those in growth as well.
It's just not in the growth.
Yeah, but it's the cheap stocks.
It's not in the growth.
It's the cheap stocks.
It's not in the green.
So I would, that's exactly right.
I would categorize it more as a cheap versus expensive, right?
If you were looking at those two factors,
expensive versus cheap.
And again, what does that mean?
Well, it means different things to different people.
So if you're a quant shop, you may be using certain type of metrics
to value what cheap means to you versus what expensive means to you. So it runs the gamut.
But you're right. I think that's the way we look at it. It's markets rotating from expensive
to cheap. And that can mean a lot of different things. And I think there's going to be a
lot of up and down gyrations this year, which we've already seen.
I don't know if Bitcoin, I don't know if I agree with you that Bitcoin, I mean, it's definitely
a risk on asset, no debate there. But I'm not sure if it's the risk on asset in this market.
I think you're right. I think it's changed a bit. You're right.
I think it's changed. I think Bitcoin is in the midst of a change. And the reason for that is...
The market is in the midst of a change. Yes, it is. But what I'm saying with Bitcoin specifically,
I think when you talk with the Bitcoin community and the folks involved with Bitcoin,
and they're scratching their heads thinking, why is the equity market kind of doing OK and up and Bitcoin not?
And I think that has a lot to do with the ecosystem around Bitcoin in terms of all of the different things that now are available to investors, ETFs, all the treasury companies, all this kind of stuff.
So it's muddled the waters a bit for Bitcoin.
And I think Bitcoin's changing from a pure risk on, risk off into something else.
And I don't really know what it's changing into, to be honest.
It's anybody's guess.
Because it should be acting better, I think, but it's not.
So the question is then, is it a leading indicator of what's to happen with
risk assets going forward? Or is it really changing its stripes and it's becoming something
different now? I don't know. Yeah, I guess that's the difference between people's interpretation
right now, whether weakness in the large caps and crypto, basically the leaders of the last
three years, is that underperformance indication
of something to come or just a rotation?
Yeah.
That's the debate.
That's right.
Yeah.
I agree with that.
So your comments about market leadership suggesting a slowdown kind of sounds like
you're in the former camp.
Yeah.
Look, I mean, I think i was in a space this
morning i know i know you've been in in with you know fred krueger another bitcoin guy had a space
i was in there for a while i was working from home today so i had some time while i was working here
to to jump in there and we talked a little bit about kind of you know you could make a case and
you have been able to make a case for the last several years of a good economy versus like a bad economy.
What does that mean?
What is a good economy?
What is a bad economy?
And I think this is where in lies the hard part, which is that K-shaped economy that
we're all living in.
And again, you know, you know, you can make a case for either.
You can make a case that the economy is fine and it'll continue to be fine, especially if the Fed does cut rates later this year and kind of
puts a floor under any kind of, you know, systemic risk that's out there. Or we can make a case that
we're headed into a slowdown and any rate cuts are just going to spook the market and, you know,
and by, you know, default, you know, kind of maybe potentially create kind of a
cascading effect. You know, as you know, whenever the Fed has cut in the past,
cutting rates is an indication of a weaker economy, right? And so if the Fed does cut,
people are going to go, well, wait a minute, whoa, whoa, whoa, you know, you know, maybe things
aren't as good. And people might step back from making, you know, investments and, and, and, and
business formation and things like that and
hiring people. So, you know, I don't know. I think it's still out there to, you know,
it's hard to say which one of those two things is going to happen. I don't know.
My gut's telling me based on kind of what I'm seeing just in California.
And California is a good indication of kind of for the rest of the country. I mean,
this is a large economy here. And we have a lot of friends friends that are business owners and I'm getting a lot of mixed messages.
And I have to tell you, Mike, it's most of the business owners that I talk to,
they're not happy with what's going on. They're not happy with the economy. And there's, you know,
there's a lot of concern about, you know, slowing, you know, a slowdown.
How much, I got to ask the obvious question,
how much political bias is in your sample?
Well, it's interesting you ask that
because a lot of them are Republicans.
A lot of them, as you know,
business owners tend to be Republican.
And by the way, this runs the gamut.
I mean, I have friends that are
in the construction business here in California.
I have friends that are in the tech industry in California.
I have some friends that are dentists
and doctors and lawyers and a lot of people that I know that own restaurants, you know, small and large.
And so it runs the gamut.
But, you know, I would say I would say that the my feeling is that most people just are not as happy as they were just a year or two ago.
They sense something is not quite, you know, they're insecure.
quite, you know, they're insecure. Let's put it that way. And that, as you know, that might not
Let's put it that way.
show up in the numbers quite yet. And I made a point today in 2008, right before, you know,
at the end of 2008 was Armageddon. But the way we started 2008 was actually like, everything's okay.
The market was actually at an all time high at the beginning of the year, as you know,
if you remember.
So the reality is, you know, we don't know how quickly things can unravel.
I'm not saying we're going to unravel.
I'm not saying there's a cataclysmic drop here.
But I'm saying, based on kind of what we're seeing, you know, the market's sending a message.
I mean, you know, stock market's certainly sending a message.
You know, stock market's certainly sending a message.
Crypto is now sending a message.
Crypto's now sending a message.
There's some signals out there.
There's some signals out there.
Plus, if you talk to people, you know, it's hard to say.
But I think people are positioning for something other than a robust environment going forward.
I think that's the way I would put it.
I don't know.
And I know you've mentioned, and I've listened to you.
I was this weekend, I was in a space listening to you and George. And I think Joe was in there.
There's a bunch of other guys. And my wife and I were driving around.
I was listening to you in the car. And I know you're you're pretty optimistic about kind of the the backdrop.
You were on CNBC yesterday. I saw that. And and I get it.
And I and I kind of agree with some of your takes. You know that this is why it's so hard, because I think for me, well, you know, it's it's definitely more of a positioning call than a market call.
It's probably the biggest difference between a market call and position call ever just because the concentrations of the market has never been this,
you know, based on 10 stocks. So it's definitely not, you know,
I think people often hear me talk and it's very positive on different parts of
the economy getting better. And then they look at the S and P and, um,
I'm not talking about the S and P 500 cap index. Definitely.
I don't think this is a year to own that.
Yeah, I would agree.
And it's interesting, you're starting to see layoffs in the mega cap stocks.
They've been announcing layoffs.
That doesn't bode well for the economy.
These are high-paying jobs.
And the fact that it's not like, these are high paying jobs. And if you get,
you know, the fact that there's, you know, it's not just a one-off, you know, one company,
you know, for one reason or another, laying people off, it seems to be kind of a going thing.
Where are those people going to find work? You know, so when you get laid off, especially like in the Bay Area, for instance, like there's a lot, these are, these are high paying jobs. People tend
to slow spending when they get laid off, even though most of these people that are getting laid off,
they are, they have the financial wherewithal to be laid off for, you know, for, for a while.
And some, in some cases they can retire. And so it doesn't really kind of hit, hit as hard in tech
initially, initially, but, but it, it, it takes some time to kind of see, you know what I'm saying?
Like these are people that have means, you know, I have friends that, you know, that have gotten laid off in the past and they could stay laid off for a year or two.
They could take some freelance jobs in the meantime.
You know, these people generally are, you know, have some cash set aside.
And, you know, so we're not talking about construction guys, you know, making $30 an hour that end up getting laid off. And now they're on unemployment, you know.
So, again, it's kind of an interesting environment.
It's very murky.
It's not clear one way or the other.
You know, I was talking with my partner this morning and, you know, we've made some, you know, we've made some changes in the last couple of months.
you know, we've made some changes in the last couple of months where we're,
we're inclined to start making some pretty significant changes to our,
our portfolio in the next few quarters, just because we're, we're uneasy.
You know, this is unsettling. What's kind of what's happening.
And even down in cap a little bit,
I would stay away from the really small stuff. I mean, I agree with you.
I think, I don't know. I if there is a contraction, obviously, the small stuff,
these smaller, smaller companies that they're very sensitive to economic ebbs and flows.
And we want to stay away from companies like that at this point. And again, if I thought that we were in kind of a rebound,
you know, obviously those are the Beto names
that we want to own,
but, you know, we're shying away from those right now.
Like, for instance, I know there's a lot of people
that are hell-bent on owning banks right now.
We literally have no financial exposure.
In fact, for the better part of the last five years,
we had a financial exposure.
Our financials exposure was primarily in the insurance space.
So as a proxy for financials, rather than owning banks,
we had insurance companies, which did quite well.
We had some reinsurance.
We had, I think, four names, and they were all reinsurance companies. And they did very well. We had some reinsurance. We had, I think, four names, and they were all reinsurance
companies. And they did very well. And then at the moment, we own none. There's no reason,
as far as we can see, to own any of the banks, to be honest. I mean, I know a lot of people,
I was listening to Mike Mayo, and he's hell-bent on owning Citibank. Funny enough, you know what
he said? I think, I don't know if you saw this clip, but I kind of laughed. He said Citibank is at an all-time high, and then he had to correct
himself, all-time high since the GFC. Because what he meant to say is like, after the 50 for
one reverse split, it's still way, way, way, way, way down, but it's all-time high in the last 15
years. So I just thought it was kind of funny, but I don't know. So financials, yeah,
we're, you know, we're staying away. I think, you know, materials are interesting. Uh, you know,
materials space is interesting. I think staples are very interesting. We have an overweight in
staples, um, at the moment. And we have for a while, uh, there's some really, really interesting
things happening in staples. I think there's going to be a lot of consolidation in the Staples space, food and beverage stocks.
And, you know, so healthcare is interesting too.
Biotech, certain areas of biotech is very interesting.
You know, there's some opportunities there.
Precious metals.
I know that our friend George is very, you know, excited about gold and silver and precious metals. I know that our friend George is very, you know, excited about gold and silver
and precious metals. I think, by the way, Mike, I mean, you have to admit the signal that gold
and silver have been sending for a while now is not to be dismissed. I mean, we did have that big
blow off in silver, but silver is right back to 85. And like I said, I tweeted in the South the
other day, I wouldn't be surprised if we see a new all time highs and precious metals by the end of this quarter. And I'm not kidding. I think I think that's
coming, especially, you know, once you know, once we get kind of more clarity as to what
the Fed is actually going to do in terms of, you know, cutting rates here in the in the
short term. So I don't know. It's I you know, anyway, that's kind of my take. But
like I said, I kind of agree with you.
I'm not saying there's an imminent crash coming,
but I'm a little bit unsettled as to kind of,
you know, this rotation seems to be taking hold, and why?
You know, rotations like this don't happen, as you know,
in the context of like a broader, you know, a bull market, you know?
Well, I'll give you some data points um if you look at you know usually
value and cyclicals do well when the breadth of the economy is improving which i would argue it is
um you're getting manufacturing pmi data, which have been contracting for three years, now move into expansion territory for the first time since 2021 in the US.
Last week, we had that ISM manufacturing report, which hit 57 on new orders, which was like a three-year high.
You got transport stocks going straight up.
And globally, you're also seeing cyclical PMI data also improve.
So that's the backdrop where value, I mean, that's why I made that change last year because
that lead that are all pointing up.
Let me ask you.
I'm just wondering, this kind of shift into areas like transports, for instance, rails, truckers, value-oriented areas, typically just – again, going back to what we said earlier, expensive versus cheap.
These two ideas of like, hey, expensive versus cheap.
In my mind, maybe this time around, it's a little bit different.
Maybe it's not necessarily driven by economic factors, but more by the fact that the market's heavily weighted into, you know, technology, specifically the top, you know, 15, 20 names.
top 15, 20 names.
And all we're seeing now is kind of an unraveling,
money flowing out of the most expensive names
and into the stuff that's cheaper,
not because the economy is really changing.
It's like the tail wagging the dog here,
but more so because people want to buy the cheaper stuff
versus the expensive stuff.
Maybe that's what's happening.
Yeah, but again,
the data that you'd want to see improve while that rotation is taking place is absolutely 100%.
There is no debate or question about it.
The data are improving, and that's, to me, the trigger why that rotation happens.
So instead of thinking expensive versus cheap, think of growth versus value, which is the same idea, right?
So people bid up growth when earnings are scarce, which has been the last three years, right?
It was only AI, that's it.
Now you've got the broadest earnings improvement in both index numbers and individual stock breadth.
And again, four years on the back of some better housing data, better manufacturing data like this.
This is pretty classic, I would say.
Yeah, I hope so.
I mean, for all, you know, I generally want to be positive. And I do agree,
you know, that there, again, this is why I think it's so muddled. It's,
you know, because I have to admit, I do agree with that take. But then, you know,
but I'm not sure, you know, I'm not sure that it's, it's another, how do I say this?
I think it's, it's, it's, it's, you know, the runway's short.
So, you know, it's yet to be seen how sustainable that it really is.
And like I said, just, just from just talking with people and I do regularly, I mean, I,
I literally, wherever I go, I, I talk with folks about this kind of stuff, just ask questions. And, you know, and, you know, remember Wall Street, when Wall Street does its research,
when people in New York, Chicago, you know, major financial centers do their research,
you know, it's quite different oftentimes than when you're just boots on the ground,
actually talking with folks all over the countries in your local areas.
So by the time Wall Street gets the actual numbers
of what's actually happening in the economy,
it's already started to happen oftentimes.
This has been my take.
And so while I agree with you,
on the surface, things appear to be okay.
And just underneath the surface,
when you actually go out there and you talk with
folks, you know, for example, inflation is really still very persistent and high,
and it doesn't seem to want to come down. I mean, PPI came in really hot last week.
And, you know, that that is having an effect on earnings. I mean, companies, large and small, are struggling with input costs.
So, you know, you can only eat so much of that
in your margins before you, you know,
you pass that on to your consumers.
And that's what's happening.
And, you know, I think I actually talked about this
this morning in Fred's space.
If you're a small to medium-sized business owner
and you're kind of concerned about, you know, what's about what's happening, you have a lot of pressure on you.
Your costs are going up, but you can't pass those costs on as quickly.
So it's kind of crimping your margins, which means it's crimping your income.
So if you're a small to medium-sized business owner, say you have 10, 50, 100 employees, you're probably less likely to expand.
You're less likely to hire new people.
You're less likely to give raises, you know, or meaningful raises, bonuses, things like that.
So that is happening. There's no question about that. You know, people are really kind of
slowing, you know, slowing down on kind of, you know, they're feeling
uncertain about what the
outlook is, you know, going
forward, even though
when you look at the numbers
you talk about, even though those numbers appear
to be good on the surface, you know, so that's kind of
what I'm saying. It's a little bit, and by the way,
we see this, by the way, in our earnings reports
that are coming in, even from the
across the board, by the way, we see this, by the way, in our earnings reports that are coming in, even from across the board, by the way, in every industry sector.
I wouldn't expect companies to be sounding like I do.
Companies are persistently backward looking and they extrapolate the recent past.
So you're never going to hear it first from companies ever.
So you're never going to hear it first from companies ever.
And there's no value in any company ever, even if they're seeing something positive, really inflate it to set expectations high.
Why would they do that?
You know, why would you set the bar high?
Yeah, but I think, yeah, I agree.
But I think discounting what these, what people, you know, are actually doing on the ground, you know, I don't want to dismiss that either.
Because, again, if you're a business owner like I am,
and we see now our business is totally different, right?
Managing money is different than running a restaurant
or running a car dealership.
We have, by the way,
we have clients who are car dealership owners in California.
And we talk to them regularly
and they tell us that things are slowing down substantially.
They're not hiring people. They're actually laying people off. Their costs have increased over the last few years and
they're having a hard time passing that on. And that's across, again, in every industry sector.
So this is, by the way, why gold and silver have made such a big move. I think people,
I think the market in general, collectively, right, is smart.
I mean, people understand that no matter what you hear from folks, you know, there is high inflation.
Costs are out of control. They don't seem to be kind of reined in yet. Now, you can pick certain
areas. You know, I know people love to talk about, you know, hey, egg prices are down or hey, this
is down or that is down. You know, the reality is I just got gas yesterday, for instance. Now,
again, California is different than New Mexico or Kansas. But the reality is, you know, I was paying
$3.99, $3.89 for premium three months ago, and now I'm paying $4.79 for premium yesterday.
So gas prices, you know, people talk about gas prices have come down.
They haven't come down.
They've actually gone up.
So I don't know.
I just think there's a lot of mixed signals.
And I think what you're seeing in the rotation is telling you clearly that people as a whole
are making those decisions based on what they're saying.
Otherwise, they wouldn't be doing it.
Why would anybody be making these changes?
I don't know. We'll see. I mean, again, I want to stay optimistic,
but, you know, at the same time, I want to stay kind of, you know, you know, level-headed here.
I want to keep my feet firmly on the ground and not think that, hey, it's all great. This is why we don't have financials, for instance, you know, uh, we, we, we were recently talking with some folks about that. And everybody seems to be, you know, very, you know, optimistic about the financials.
And, you know, we don't own any.
And for those reasons, I think, you know.
Even regional banks?
No, no, I think the regional banks are going to have a lot of problems.
No, no, I think the regional banks are going to have a lot of problems.
Yeah, you look at the regionals, fifth, third US bank and others, you know, there's some,
you know, when you start to look at kind of where they are, what they own, how they're
positioned, I don't know.
I'm not a fan.
You know, I think that, I think there's some things underneath the surface bubbling up
that are being kind of suppressed that I think once they are evident, it'll be – I don't want to say too late, but you're going to start to see, I think, some coming to to have a financial exposure, it would be in the insurance companies.
We don't because they've run so much, as you know, you know, these things have been on fire.
So at some point, you got to cut, at some point, you got to say, hey, listen, we've made a lot of
money. I mean, how long do we want to hold on to these things? These are not growth industries,
and these are not growth stocks, you know, so, but they trade like they are, you know,
so then the question is, you know, at some point, do I want to hang out? And, you know, so, but they trade like they are, you know, so then the question is, you know, at some point, do I want to, do I want to, do I want to hang out? And, and, you know, I have,
I've always said, and this is something I've come up with years ago, if you don't take your profits,
somebody will take them for you. You know, and you learn that the hard way, but I, we have
certainly over the years, you know, so if you don't take your profits, somebody will take them
for you. That happens all the time. You know, people overstay their welcome. And the next thing,
you know, a quarter or two go by and you're like, wait a minute, we were up X. Now we're
now we're only up, you know, X minus 50%. You know, we're at half of what we were.
Why did we stick around? Even though we talked about, you know, the writing was on the wall,
we just didn't, you know, didn't act. I don't know. The more important question here is, Mike, I mean,
and this is something you guys talk, you and George were talking about on Saturday,
is the tenure. This is really the perplexing thing, is the stubbornly high long bond. You know,
the long end of the yield curve is stubbornly high. And, you know, what's going to bring that
down? And we talked about this a couple of weeks ago. Well, hold on. Why should it be much lower than where it is today?
Well, that's a great question. I don't think it should be, but I think a lot of people do.
Well, why, so then why, why are you saying it's stubbornly high?
Because that's what I'm hearing. This is what I'm hearing. And I, you know, this is, you know,
you've been hearing this too. I mean, everybody seems to be convinced that we need to have,
you know, uh, lower interest rates, including, rates, which, by the way, are benchmarked to the longer end of the yield curve, not the short end.
So, you know, how in the world are we going to get lower mortgage rates when the 10-year is stubbornly high, persistently high?
Well, we do. We're at 6.6.
We're lower than we were in 2023 or 2020. I get that, but I'm saying it's still –
That's all that matters.
Well, we're not that significantly lower.
Let's put it that way.
And I guess my main concern about it's not really the rates as far as like driving mortgage action.
It's more of the underwriting standards because you can drop rates.
You're right.
They're lower than they were, but they're still pretty high, all things considered.
And given where underwriting standards are – this is one of the reasons we don't own banks, by the way.
I'm not sure that the banks are going to be willing and able to kind of loosen their underwriting standards once bitten twice shy.
Well, the Fed survey of senior loan officers suggests they are not they're not not loose, but they were, they were much tighter in 22 and 23. And they've, they've gone back basically back to neutral, which is effectively when thinking about cycles is, is the beginning, you know, is easing.
It's either easing or tightening.
It's either getting worse or getting better.
You know, nothing's about, is it high or low?
Is it lower or higher? So I would say mortgage rates are down quite a bit. Yeah,
they're still high and affordability is still a problem. But again, I'd rather have six than eight
and mortgage rates are where they are because of unemployment. You, we have a nice kind of self-correcting economy.
When unemployment goes up, interest rates come down.
And once that happens for long enough, and this has been two years now,
things eventually start to get better.
And I think, again, that's my opinion of what we're seeing,
at least one of the reasons why we're seeing better macro market
and earnings breadth for the last four months. Yeah. Obviously could be very wrong, but at least
the way I think in my framework, I have a lot of checks and balances and I keep seeing more data
that corroborate what I'm saying. And of you know, of course we could always have a bias, cognitive
bias. And the thing too, is that, you know, you know, I don't have to tell you, but it's,
the thing is like, is it leading or lagging? Right. And that's really the important thing.
Well, I would, yeah, I mean, everything I'm looking at, I would, I would argue is
leading or coincident. In yesterday, in today's small business, uh, NFIB data, this was one of the most bullish
small business reports in three years. And I say that because for the first time in three years,
in aggregate, small businesses said that interest. Yeah. Let's see the survey is,
but see, here's the thing, you know, everybody, you have to remember when these surveys are done, the questions that they're asked, I think a lot of people are anticipating rate cuts.
So they're more optimistic, right?
If we get the rate cuts, it's going to be good for business.
And I think, you know, so the question is going to be whether those rate cuts actually do come, when they will come, or if they will come at all.
And that's yet to be seen again we've already
we've already had we've already had a we have you know year and a half worth of rate cuts and
again that's why i think we're seeing things one of the reasons we're seeing things
improve and a lot of the rate sensitive air i mean look at home buildings housing stocks this
year are doing great transportation you know all of the early cyclical, maybe not all, but like
machinery, top
industry this year is up 20%.
A lot of that is
you know, there's some accounting
you know
you know, they've
oh, I'm just looking, Eric has
his hand up here, maybe you want to jump in.
But anyway, you know, part of that I think is, you know, you've had
acceleration and depreciation and I think a lot of people, of people, if you were looking at buying equipment or you
were looking at implementing some new things for your small business, medium-sized or large
business, I think you were doing that to take advantage of some of these things. But I think
that's a massive, massive tailwind. Well, it is until it isn't. And I think
once that – I don't know how sustainable that is until it isn't. And I think, you know, once that, you know,
I don't know how sustainable that is. I mean, maybe, maybe it's sustainable. Maybe not. I don't
know, but I hope it is. Eric, did you want to? Well, that's policy. That's, that's policy now
set in for, for multiple years. That's not changing anytime soon. Yeah, you're right. I mean,
we don't know. I mean, look, the other thing, I think the booger in the ointment here for me is
the fly in the ointment or the booger in your water is, you know, the massive amount of refinancing that we're going to have to do here this year.
You know, like I think 11 trillion just this year.
So, you know, you want to cut, you know, and by the way, that's at the same time that they want to cut rates.
So we're having the one we're going to cut rates and refinance, you knowance just a tremendous amount of debt here.
So the question is, who's going to be buying that at a lower return to them,
knowing that it's just refinancing and we're going to have to come to the trough here again?
So that's unsettling.
I think it should be for most investors.
How does that all play out here over the next six to 12 months?
By the way, in a midterm election, they're going to do everything.
By the way, I agree with you.
They're going to do everything that they can to try to keep us going into the end of the year.
There's a million things to worry about.
The most common reasons equities go down is because
rates spike or unemployment spike or something comes out of left field which is always unpredictable
which is yeah which is you know that every day you wake up the tariffs the tariffs were that
last year you know yeah yeah 100 but you can't but you know we know that that's not a you know
that's rarely a reason and rarely are people ahead of it.
You can't plan around that.
We can't plan of what – hey, this could happen, that could happen.
You're right.
We can't plan that.
What we can plan is we can plan and we know that there's $11 trillion in refinancing that's going to need to be done.
That's something we can plan around because that's a fact.
That's going to happen.
The question is how is it going to happen?
Is it going to be messy?
Is it going to be clean?
Are rates going to go up?
I mean, we could have a spike in rates because of it.
That's my concern.
Yeah, well, it's never happened, but it could.
Well, we've never had this much debt either.
When's the last time we had $11 trillion of refinancing to do?
That's the point.
Never.
Well, yeah, again.
But hard to make that a big thesis there. I think people have obviously been shouting about that for five years.
Here's the thing, Mike. I think a lot of people have been accustomed, and I think you'll agree with this. A lot of people have been accustomed. Most people on Wall Street have been accustomed to believe that no matter what happens, we're going to get rescued. We're going to get bailed out. There's going to be, no matter what happens, there'll be money printing. No matter what happens, the Fed will come to the rescue, the Congress will come to the rescue,
and it'll be okay, because that's what we've been led to believe. And I'm not sure that that's going
to be something that we can depend on going forward. I don't know, maybe. You know, maybe.
The problem, the problem why that's become more necessary is because the market's gotten so big,
right? It's twice the size of our economy right now. So you could argue the market drives the economy more than ever, which makes us more
susceptible to markets more than ever. It's the tail wagging the dog. Yeah. But again, that creates
a bigger incentive for policymakers to do whatever they can as they have and will continue to do to
prevent picks and shovels in the streets.
Hence, that's the result.
Exactly right, Mike.
Hence the allocation to precious metals.
Hence why we have gold at 5,000.
Who would have thought a year and a half ago the gold is going to be at 5,000?
I talked about it, but even I had a hard time believing it.
And here we are.
You know what I mean?
Like, think about that. So to your point, point i mean this is why we are where we are
it's really interesting um well i think again i think that's a reflection of you know we're
we're going to run six percent deficits forever and affordability is a problem so people think
inflation and debasement and yeah it's a really easy hitch to sell especially when you know the
assets got momentum yeah so i don't disagree with that. I get it.
I don't think anything's radically changing. And maybe when the labor
data really starts to improve, the dollar strengthens, rates go up.
But hold on. You're saying when the labor data starts to improve.
I hear that all the time. I just read a piece recently.
I hear that all the time.
I just read a piece recently.
I'm saying at some point it will.
I'm saying at some point it will,
at some point it will.
I'm just saying,
I'm saying,
think about what you just said.
When it starts to improve,
literally we have the low,
we've had for years,
the lowest unemployment rate in history.
So when people say,
when the labor market starts to improve,
I mean,
that's what I,
see,
that's what I,
this is so,
think about that.
Think about what you just,
we have the,
we have the,
we've had for years now, the lowest unemployment unemployment rate but we need it to improve but but again o'hare
is it getting better or worse forget about level no i know it's been getting weaker for three years
for three years it's been getting weaker it's why we cut rates and why the dollar was under
question this is one of the reasons why my thesis is that we're pushing on a string we can't afford
we have gotten so much leverage in the system.
There is so much of it in the system right now that we cannot afford to let this thing unravel.
And that's why, to your point, they're looking at having to cut rates.
We can't let this get out of hand.
Because if it does, it literally could be Armageddon.
I mean, this is how, this is why, we're kind of in a pickle here.
Because if we don't cut rates and the economy slows, we're going to be forced to cut rates.
We're going to kill the dollar.
We're going to have higher inflation, which we can't afford.
We already have persistence.
I mean, all of these things, when you start to think about like all of the cause and effects
here, I mean, it really is kind of a, you know, it could be, I should say, could be
a perfect storm.
You know, remember, it's always calmness before the storm, right?
And so, again, I'm not saying we're going to have one this year.
I'm just saying I'm not as optimistic as a lot of people are, you know,
and maybe that's just the way I'm built.
I'm optimistic, but I'm a realist.
I just think that things have been so good for so long.
And then you think, okay, why have...
But they haven't.
They haven't.
Well, they've been narrow for three years.
Listen, home prices are at all-time highs.
The stock market's at an all-time high.
401ks are all-time...
I'm talking about the breadth, but the breadth in the economy has been horrible.
Exactly.
So you're making my point now.
See, that's the point.
So you have all these different things happening all at once, right?
How do you square all that?
That's never happened, by the way.
And it's happening.
It's been happening now.
And I think it's happening because we've had 15 years of unfettered fucking with the economy.
I mean, the Fed has really orchestrated this fucking Frankenstein market, as I've called it for years. We've had 15 years of unfettered fucking with the economy.
I mean, the Fed has really orchestrated this fucking Frankenstein market, as I've called it for years.
And by the way, we can't put the G back in the model. If we didn't have AI and if everyone didn't have a 3% mortgage rate. We would have had a recession.
Certainly the probabilities would have been drastically higher if home prices didn't go up because of lack of inventory when the Fed was raising rates and mortgage rates were going up.
So that was an anomaly.
It makes sense in hindsight.
And AI obviously has been a boom for parts of the economy.
Listen, AI spending has been a boom. I'm not economy. AI spending has been a boom.
I'm not sure that the other side of that spending,
we haven't really seen the fruits of that labor yet.
Agreed.
Yeah, but we're talking about the aggregates now.
I know, I get it.
But just like in the dot-com,
there was a lot of spending,
and then that spending,
people realized that at some point,
that spending just literally fell off a cliff,
and people said, whoa, we've overbuilt, and it took 10 years for that to normalize.
An important point, though, in 1999 and 2000, cyclically, you had a nasty tightening cycle.
Oil spiked, rate spiked, short and long. And that's not this year.
We're at the opposite end of that spectrum this year.
But you also have to admit, we never had budget deficits like we have now.
We didn't have $35 trillion in debt.
I mean, there's a lot of things we didn't have back then that we do now.
Well, hold on.
But O'Hare, we had a surplus then and we still had a recession.
But we had a recession because we overspent on something that didn't produce a return.
And people realize that. And I think that's AI is that thing right now.
And I've said this many times. I think, well, you know, we, you know, it's I mean, at some point, listen, Mike, at some point, I know you and I will be using AI.
We have friends that are using your firm, maybe using AI.
We're starting to incorporate a little bit of AI into what we do, our research.
You're not even speaking to me now.
You're speaking to my LL.
It's going to be like that one cartoon my kids watch where their heads are in jars and they're in a spaceship.
What is that?
You know what I'm talking about?
Some of you guys don't know that cartoon.
Anyway, you know.
Anyway, what is that?
Anyway, God, that's going to bug bug me i'll have to ask my son you know they're they're in a spaceship they're in like uh you know uh and
they're about the jet no no no no no this is a newer cartoon somebody probably put it in that
in but anyway my point is you're right at some point you know it's all gonna be uh you know but
then the question is you know the interesting thing about ai is you know, but then the question is, you know, the interesting thing about AI is, you know, especially for our industry, for Wall Street and for finance as a whole,
for accounting. I was listening to somebody talk about this the other day,
for accounting, for finance, for medicine, for law. I mean, think about these professions. If AI
is able to just put together research reports,
tell you which stocks to buy, which ones to avoid,
what the allocation should look like,
what the optimum asset allocation should be given the backdrop.
I mean, if all this stuff is being done by AI,
what happens to all the jobs?
What happens to your job?
What happens to the traders and the portfolio managers?
And if all of a sudden you could just, you know, push a button and, you know,
replace, you know, literally the majority of people
because, you know, trading on Wall Street,
the quantitative trading shops,
that's been happening for 30 years now.
You know, a lot of it's automated.
You know, they just, you know,
you just have people that are putting together
the quantitative models and, you know,
the computers are doing the rest.
Citadel is a great example of this.
Now, that doesn't mean you're not going to need people.
It's just you're not going to need as many people.
And so then the question is, what are those people going to do?
And I think throughout history, there's always going to be some replacement.
It'll take some time.
But I don't know.
I don't know if AI is there yet.
And I don't think it'll be there for a long time. But it is it is an interesting question, you know.
Yep, fortunately. Well, yeah, and that's hitting markets. I mean, look at look at today, the brokers.
Right. That's a great point. Yeah. Yeah. Schwab. Yeah. Who was that that announced that? Yeah, I did see that.
They all took a hitter because, you know, all of a sudden everybody's worried that holy shit you know uh yeah i i uh i i saw that i mean a lot of brokers
including the one i work for you know if you look at this an etf iai no recommendation no
recommendation uh but that is a broker's etf and everything in that got clocked today and again it
also shows you the
market structure issues, stocks that are not in wealth management, but are in that broker ETF got
hit. Yeah. People are probably trading the ETF, which had, I think, record volume today.
You know what we're going to be, Mike? We're going to be like Wally. All of us are going to be like
on some spaceship circling the moon.
Like Elon wants us to be going.
You know, the Tesla story is fascinating because I don't want to switch the subject here,
but it's fascinating because they pivoted from Mars.
Now we realize that they're like, okay, Mars was always a farce. So now we're going to go to the moon and we're going to have like private trips to the moon.
So we're all eventually just going to be AI.
There's going to be UBI. No one's going to have private trips to the moon. So we're all eventually just going to be AI. There's going to be UBI.
No one's going to work.
And we're all just going to float around in space like in the movie WALL-E.
And what kind of an existence is that?
You know what I mean?
No one will have to do anything.
That's a prison, man.
That is a prison.
That's a prison.
It is a prison.
All right, let's get some other people up here.
Probably sick of hearing me and you. Believe it or not, there's
actually nobody
that's requesting.
George is in here. Bring George up.
Maybe George has got some input.
He's not requesting
to speak, but I'll send him an invite.
Yeah, but I mean, so the AI thing
is interesting because it's happened
so quickly. I mean,
I've been fiddling around with AI, and it is interesting.
I mean, but remember, AI is only as good as the input, right?
So whatever the, you know, it's like garbage in, garbage out.
You know, so it's only as good as the data.
So if the data is garbage, you're going to get garbage results.
So the question is, like, whoever's got the best data, the most accurate data is going to have the best results, right?
Grain of salt. What's up, man? Hey, guys, how's it going? So, hey, Michael Contro, just to be clear, i was the guy that did that uh that quick survey
do you think we're in goldilocks based upon our conversation from a day or two ago
yeah so it's the question go ahead well yeah i was i i i i answered it but again, I wrote back. I didn't hit the survey or the vote.
But I think what was – surveys are always as good as how well the questions asked.
And it wasn't a bad question.
But the way – again, I was talking about it specifically for the stock market, not as much for the economy. And even the way I'm talking about it in the context
of the economy to most people is not going to make a lot of sense. And what I mean by that,
we had an inflation shock three years ago, four years ago. And historically speaking,
going back 70 years of data, 80 years of data, when you have an inflation shock or have high inflation,
stocks go up when unemployment goes up because it brings rates down. And the higher unemployment
creates more relief on interest rates and inflation going up than higher unemployment
creates destruction in terms of growth with respect
to the market. So that's why I said we're in a Goldilocks backdrop, because everyone's the last
four years been worried about rates going up and inflation going up, which is why I was arguing
the last two years that higher unemployment is very bullish. Still believe that. And that is
very common throughout history. But again, the classic form of Goldilocks is low inflation, broad, strong growth, which we don't have today. But that's not the inflation-seasoned Goldilocks. A little different.
Goldilocks, a little different. Yeah, agreed. So I totally agree with all your points. So I think
there's, when I listen on these spaces, there are people like, I don't believe any government data,
no matter what we get. It's all been compromised or it's all been, it's been compromised in order
to purport some narrative that is, that there's some group that's controlling everything. So the data is
all bad. If you're there, then you can't believe the data. And then it just comes down to what's
the market sentiment. And that goes around my poll. So look, I believe that the market data
is probably about right. That's my view. What's your view on the data?
Well, at the end of the day, I agree. And the government data has gotten atrocious since COVID. It's always been bad. And now it's atrocious because the sampling rates are down and there's problems from what the BLS is addressing in the payroll report.
going to lead to softer payroll data because that's why we've had these big revisions.
So instead of getting every year a huge downward revision, we're going to have softer data
throughout the year.
But at the end of the day, there's plenty of other private data that you can use to
corroborate the government data, which is certainly what I do.
And then what really matters for markets is earnings because, you know, companies can obviously manipulate earnings data legally and illegally, and they do in plenty of ways very legally.
But at the end of the day, if the earnings data, you know, that's where the buck stops.
And you're seeing, again, better earnings data finally or broader earnings data, not not just in the MAC-7, for the first time in four years.
So I don't really care about the macro data in that context,
because as long as the earnings data is doing what I think it should be doing,
given the macro data, then I can rely on the macro data if it's being confirmed and corroborated.
Right. So I'm asking you a very simple question. So based upon the private data that you can see
that's not generated by the government and the government data and earnings reports,
do you think that we will probably have rates go lower, probably, and that growth will continue to go and things are looking net positive going forward.
Is your outlook net positive?
Based upon everything that you know, are you net positive?
Yes.
Okay, that's it.
Yeah.
My view is that things are going to continue broadening out, and they've just started to.
to. We're in the second inning of that. In some areas, maybe even the first. And rates is going
We're in the second inning of that.
In some areas, maybe even the first.
to continue to be a function on the long end of whatever the jobs data do, which I think will
continue to be somewhat soft, not problematically soft, but soft, kind of like what we've been
experiencing. So my base case is that we get a rotation in the economy, a broadening out,
a broadening in the market, and rates stay contained because the job market stays soft at least into at some point later this
year. And we can revisit that later this year. But for now, I think, again, that's why it's
kind of Goldilocks for the market. We don't want, this sounds counterintuitive, markets don't,
it wouldn't be a big positive for the equity market right now if all of a sudden the unemployment rate came back down
to 4%.
Because then the 10-year would probably go above 5% and then we'd be back in the same
place we were.
I agree with you.
So we kind of want to say it's better to have stability and trend towards lower interest
rates at a slow
measured pace so the stocks can have better eps that that that would be yeah i'm in agreement
with you and remember remember goldilocks remember is not too hot or too cold it's not
goldilocks is not the epitome of strength it's it's a it's a moderate backdrop it's in the middle
yeah so i'm in alignment with you i think that when i go in a lot of these spaces the epitome of strength. It's a moderate backdrop. It's in the middle.
Yeah. So I'm in alignment with you. I think that when I go in a lot of these spaces,
the narrative that I hear is the data is all manipulated. Things are horrible for whatever reason. Look, we're $38 trillion in debt. Big, beautiful bill allows us to go to $41 trillion in debt. We have a $1.8 trillion yearly budget deficit. It's one of the top interest payments or one of the top expenses in the federal budget. And so, yeah, that's not going away tomorrow. It's not going away at all.
going away tomorrow it's not going away at all and so with yeah exactly that's not changing
so things that drive markets are things that are changing yeah you and i are in agreement on this
so we get in these spaces people like you know everything is corrupt and everything's wrong i'm
like okay yeah i i that could be that could be true that could that could be true at the same
time the stock market's going on so i'm like like, okay, water's wet and ice is cold.
I'm like, okay, great.
The only question is, do you want to be risk on or risk off really?
And I caught this at the beginning of the call.
I think the other person said this really well.
When you're in profit, you have an unrealized gain.
This other person said this, do you want to take the profits or do you want somebody else to take it? And I think what I would hear in a lot of spaces is that, oh no,
I'm going to hold this, you know, for a really long period of time. And I'm like, you know,
if you're in profit and, you know, the reason why people don't take profits is because they have to
pay taxes. Now, if it's in an IRA account or a tax advantage account, then you don't.
But I, in my opinion, this is not financial advice. If you've got long-term capital gains,
you've been in something for more than a year and you're up a massive amount of money.
I've said this before, and it's not financial advice. Take 20% off the table. You're still 80%
in it. Pay your taxes and go live your life. But I don't know, some people are like against that. I don't know why, but. And just to bring it back to Bitcoin, because I know most of the people are
on here for that, that's just, I don't think that's an asset that at least now cyclically
investors are going to be running towards because if you look at what the market's telling you,
what people are buying incrementally is short duration,
high dividend yield, value, and cyclicals.
That's what's working this year.
That is the antithesis of Bitcoin.
I disagree on that.
So what you said there, I think for most people, yes, I agree with you on that.
I think for the Bitcoin army, which probably comprises
of a few million people worldwide, our belief is that, or I'll just say my belief of it is that
given that the Fed has to print monetary debasement, if we get a move like in gold or
silver, if that goes over into Bitcoin, if that happens, then you want to be positioned in Bitcoin. That's the big F.
Again, but that's that, this is a secular story that people just have a view on
and that's not going to work every year. There's very few stocks. Even if you look at the Mag7,
I don't think any of them, or certainly as a basket, have outperformed, well, maybe that's not true as a basket, but
individually, you rarely get the fastest growing stocks to outperform back to back every year in
terms of relative performance. Again, the last couple of years was unique, but even if you had
perfect foresight, I did a study like a decade ago, and basically it was a perfect foresight, we, I did a study like a decade ago and, and basically it
was a perfect foresight study. And the idea was if you knew this year and I could give you in the
S and P 500, the 50 companies that are going to have the best, uh, earnings growth, like guaranteed
definitively, these, the 50 companies that at the end of the year had the best earnings. And if I did, and I bought that basket every year, you know, you only outperform 50% of
the time, even if you knew future earnings.
And the reason that doesn't work all the time, number one, because there's cycles and other
things are changing and looking.
And two, ultimately it's expectations that matter.
So if you're growing at 20%, but the street thought you were going to go at 25%, that's a stock that's down, even if you're the best grower.
And I think some of that is starting to bleed into some of these large-cap growth stocks.
Or other questions around, again, long-term capital structure balance sheet health you know again
expectations are changing and that's why the multiples have come in a bit for the nasdaq in
the last four months not because they don't have the best fundamentals they do but relatively again
everything's not about level it's about change change. I agree with that. I think what the
Bitcoiners would say, and this is a massive BTC and crypto move soon. I think on the purpose of
this call, the Bitcoiners are like, well, last year it was a negative year in terms of the
starting price and ending price. And so from that view view it's like can can bitcoin retake an
all-time high this year and the all-time high last year was a relatively meager bull run so i think
for the bitcoiners the way that i would look at it is yeah it can retake an all-time high but if it
if it doesn't blow through the all-time high of let's say 126 or 127 and at least go to 150
high of, let's say, 126 or 127, and at least go to 150, then the asset has a lot of volatility
for not a huge amount of return.
And I think that's the bummer from the Bitcoin group here is where if you look at-
I think that's where we are.
Yeah.
And if you look at the companies that are incomes, well, everything except for Bitcoin
treasury companies and Bitcoin, because Bitcoin is a commodity.
If you look at it from that perspective, then your view would be the MAG7 or the top whatever 10 or 15 income producing
companies, if they continue to buy back shares because they're throwing off tons of cash,
then people are like, well, I get a better risk-adjusted return in MAG7 and stay there.
I guess it's the old, nobody gets fired for buying Google. I just made that one up. I mean,
it used to be nobody got fired for buying IBM. But if you were to say to somebody, hey,
I bought 10 different stocks and they said, what was your criteria? Well, I picked the 10 biggest cash
flowing, the best earnings per share companies of free cash flow. And they had with more than
a market cap of more than a half a trillion dollars. Go ahead. But that's going down though.
I know that's going. Free cash flow is coming down and that's why stocks are going down.
Yeah. But then what else would you buy then if you're
not going to buy those companies the best income statement companies again that's over the long run
yes that's a generally a good strategy but year to year it's a coin toss so what what what what
what i you know what was i recommending this year?
Again, cyclical stuff that probably has among subpar, below average cash flow, but I think it's going to get a little better.
And that is where you can make a lot of money too, as we've already seen year to date.
So again, it's all about expectations and how they're changing.
So again, I agree long-term, yeah, buying profitable companies, you don't lose your job, you don't get fired, but it doesn't mean you outperform every year.
And when you're having a macro rotation take place, again, like people are not just buying
cheap stocks because they want to buy cheap stocks.
They could have done that for the last 20 years they're doing it i would say speaking to
institutional investors because there's data that's starting to improve that they know when
that data starts to pick up like look at transportation stocks those are very
manufacturing pmi sensitive and we just got the strongest data point there in four years.
So people have been, I mean, how, I mean, if you've been on spaces for the last three years,
you've probably heard people talk about the recession in transportation.
And that's starting to change, which makes it a really attractive asset because expectations are really low.
At the same time, you've had three years of gangbuster returns and earnings and fundamentals and AI related names.
And again, I'm not trying to take away from that.
Sure, there's going to be some great stocks in that theme.
I just don't think the theme is the best place to be this year.
I just don't think the theme is the best place to be this year.
It's a difference between like a cyclical framework versus longer term.
And I'm talking cyclical, i.e. 18 months.
So the risk on regime really played well for 2024 and 2025, let's say for the MAG-7.
And now you see in this type of environment going forward that there's, you're saying from the institutional investor's point of view, they will begin to rotate into transportations or other stocks that it's already happened.
And they will rotate into something else where they think they'll get, where they're comfortable with that asset class to say, this is going to return better in 2026. That's your...
Yeah. Where they see the fundamentals relatively improving. I mean, that's the name of the game.
You know, when different size and style and US markets versus global markets,
the only consistent variable that explains relative performance is
relative fundamental performance. So again, a company can grow 20% versus a company that's
growing zero. If the company that's growing 20 actually grows 15 and the company that was thought
to grow zero grows five, most often the company that grows five, that stock's going to go up more than the
one that was growing 15.
Expectations.
Do you see that the CEOs of those companies are setting the right expectations or do you
think they downplay them?
Just in your view.
I mean, you don't have to name any companies, but in your view of listening to that.
I think companies just speak of their last quarter and they tend to extrapolate it and they hold things close to the vest otherwise.
So I wouldn't say no one's setting expectations high.
Again, this is a data-driven story that's starting to play out.
Companies are usually the last ones on their earnings call to talk about things getting
better.
How often do you hear a company talk about things getting better in a stock that's going
straight down?
It's usually the stock's gone up because investors have sniffed something out.
And then the company comes out in the earnings call, beats earnings and confirms what the market already knew.
So, yeah, it's not something about companies setting expectations.
It's again, it's it's just putting the puzzle together and seeing how things are changing.
So with that said, and I agree with what you're saying, could you say that, hey, these
transportations are doing well because the price of oil has stabilized at a lower level? Specifically, I believe natural gas has been priced lower also. Can you say that because oil and gas are now fundamentally lower, gasoline prices in the U.S. are lower, that leads to the economy running up. And the other way you can look at it
as the strong prices, let's say in copper or silver, leading to industrial uses that the
economy is doing pretty good because of, in a sense, low energy price being oil and natural gas.
And yet the commodity price, copper and silver being used in industrial uses going up signifies that that's a good indicator that you see things are being net positive going forward for manufacturing.
Well, I think the industrial metals is more related to AI buildouts rather than the old way people used to look at copper.
rather than the old way people used to look at copper you know i mean certainly copper has done
much better than the macro data would have suggested it should do but again that's kind
of a narrow it's been a narrow demand story there um i'm trying to remember your first question part
of that question no it's just just do are you net bullish that way because of oil and gas prices being lower,
natural gas and regular gasoline being lower? It allows trucking to be better because you have lower diesel prices. Yes. Yeah. And that's in a long list of reasons that I think we're seeing
what we're seeing take place in the data, the macro backdrop and in the market backdrop and
in the earnings backdrop. It's lower short
rates, lower long rates, lower energy prices. The fiscal stimulus from the bill this year,
easier lending standards that have eased over the last year and a half from the Fed's quarterly they? Those are the major ones. It's all incrementally positive. And again, this is
what drives the business cycle. Agreed. It's the volatility and interest rates and commodities and
costs and incentives. Okay. I have not looked at this recently. And by the way, if other people
want to chime in, ask to be a speaker and chime in, it's not my space. But my question to you is I don't track the housing sector.
I haven't done it recently.
So in terms of new housing starts or permits or that sector, assuming, again, if they're the housing market for building new houses, is that sector looking positive? And the reason why I bring up that sector,
I believe that, I think that it's one of the highest, you know, construction workers or one
of the largest cohorts of employment in the US. You can correct me if I'm wrong,
but is that area looking more positive also going forward?
It's one of the, I don't know if it's the biggest, it's probably not the biggest.
Maybe within the cyclical, it's probably one of the more important because it's definitely one
of the most cyclical. I mean, I imagine healthcare, education is pretty big, but also pretty stable.
In terms of the housing data, for me, the most important data that's improved is the MBA
purchase data, which has been a mirror image of interest rates and finally started improving last
year. And again, you look at it and it's still very weak, but it's strengthening. It's been going
up for 12 months now. And to me, that is one of the most bullish macro early green shoots of macro data
in all of the macro data. And that, again, that started improving last year. And this year,
you're starting to see manufacturing PMIs improve. And again, that's a summary of my
hope cycle. Housing leads orders, and it did exactly that, or it's doing exactly that thus far.
Some of the housing data is, again, improved.
We look at home sales.
They were sideways for three years, and now maybe we're starting to see an uptick in that.
I think we're above 5 million total homes now for the first time in a few years.
Again, it's still weak, but it's getting better.
I think that's what investors struggle with. Too many people look at something, and they're like, oh, it's still weak, but it's getting better. I think that's what investors
struggle with. Too many people look at something and they're like, oh, it's still weak. It's not
back to 2019 levels. All the money's going to be made between the bottom and halfway up to
whatever the previous reference point was. It's again, when things are getting better relative to expectations.
So I think the housing data has been stable for the last three years at a very weak level.
And there are pieces of it that are starting to improve those most sensitive to rates.
There's a lot of lagging data that's getting worse, but again, that's lagging.
Can I ask you to speculate for a second on this? And based upon what you just said, because I was going to ask you about this,
and you kind of hinted at my point. This is not about politics at all that I want to say.
What I can say and what I've seen anecdotally, I live in San Francisco, and I've been here now
for about a year and a half. What I can tell you is that forcing people back to work, going to an office, literally
in the past year and a half, it has made a demonstrable difference in the city.
And I can see this when I walk to the gym, particularly at either at 7.30 in the morning
or 8.30 in the morning when I do this.
So anecdotally, I see this.
I think my question to you is very simplistic. You made this point that people are comparing it to pre-COVID 2019.
My theory is that, again, what happened with COVID ended up leaving a five or six-year
inflection point, just to pick a term, and that we're still dealing with this
basically three or four years after it was declared ended. So what you just said before
is that, oh, people are comparing us to 2019. And I think what you're saying is that you have
to pick the sector that you're comfortable in, invest in the ones that you think will do well,
that will recover, but not necessarily to a 2019 level, just to look at that relative change.
So do you think that we're still suffering the aftermaths of COVID, even though it's already
2026? Or however you want to respond to that. Sorry, I don't know if I, the only part of that question I followed was, do you need to get me, if any data go back to 2019 levels in housing, I mean, we're going to be in a boom.
I'm not saying we're getting, I'm not saying that's what's going to happen.
getting better or are they getting worse? Not focusing on some reference point or anchoring
bias, which has really no relevance going forward. Because at the end of the day, the deficit,
yeah, it's a really big deficit. And it's not great, but here we are. Okay, so should I just
be a perma bear? No. Is it going to get better at some point? Well,
maybe if the economy picks up and tax revenues pick up from corporate profits, maybe it'll get
a little better. Maybe it'll get a little worse. I don't know. But you can't have reference points
on historical levels because they really don't matter. It's about how things, because expectations
are, you know, when that's known, expectations are reset.
And then from there, stocks will move on incremental change, right?
I mean, my view of the market is that it's always at a fair value because what is known by everyone is in the market.
All the debates, all the data that's known, all the data that, you know, is expected,
it's all known and it's expressed in the market every day.
And then we get a new data point and the market reacts.
Investors shift their expectations and so on and so forth.
Okay.
So I don't really care where it was in 2019, I guess.
No worries.
And by the way, like I said, if somebody else wants to chime, but I think this is great that Michael's given us a lot of his time. So my other question to you is, Kevin Warsh,
are you, do you think, I don't want to go through anything in detail about him in the past and
whatever he said, but do you think that he's, if it's not, do you think he's going to be a net
positive or would you advise your institutional clients to say, look, if this guy gets in there, then we have to be like a wait and see approach.
I mean, would you hold off in investing or do you think he's like still net positive?
No, because at the end of the day, I don't think he's going to do anything drastic to
change the earnings outlook.
And that's again, what everything boils down to.
Is this going to change the earnings outlook, right?
Is the deficit blow, is the deficit, you know, it's a, it's, it's a big deficit. Is this going to change the earnings outlook, right? Is the deficit, you know, it's a big deficit.
Is that going to change the earnings outlook?
If interest rates go up 50 basis points, is that going to change the earnings outlook, right?
That's the question for everything.
So, no, it's very much let's wait and see as he walks out his reaction function.
So, again, I'm not expecting any, uh, any shock and awe from, from him. Um, I,
I apologize. Uh, I got to run. Um,
have a good night. Hey, thank you. Thank you very much. You guys.
Hopefully that was helpful. Later.
Well, there it is. We've, we've've we've figured it all out now
buy bitcoin cheese guys i think the interesting the interesting question oh here i listened to
you for like 15 20 minutes do you do does does my questions to michael change your views based
upon what you're saying or is it still about the same? No, that's still about the same, I would say.
Yeah, I mean, look, nothing against you, Brian.
I mean, you know, this is one of the things that's so nice about social media,
and you get all these people that hop in with different viewpoints,
and that's great.
Everybody's got a different view, and I appreciate everybody's view.
And, you know, the thing is, it's hard to change people's minds.
You know, once somebody has a view on anything, you know, it's really hard to change that view. And, you know, the thing is, it's hard to change people's minds. You know, once, once somebody has a view on anything, you know, it's, it's really hard to change that view.
And the only thing that changes that view is, is, you know, you know, results, right? They're
either good or they're bad. And, you know, and so, you know, there's nothing wrong with your view.
It's your view, right? And I may be wrong, or Mike may be wrong, or you may be wrong.
We don't know. We'll have to see.
I'm open to the idea that I'm always questioning my view
because I've been wrong plenty of times.
I've also been right plenty of times.
So the question is, this time, is my view the right one
Is my view the right one or am I off somewhere?
or am I off somewhere?
Right?
And I think most people that are in this business, I think the really good ones, you know, second guess themselves.
You know, you're constantly kind of reevaluating your position.
What am I missing?
I don't think you're missing anything.
In fact, that's the reason why.
No, no, I'm just saying.
No, no, no, no. That's not a question. I'm just saying like, what am I missing? I'm think you're missing anything in fact that's the reason why i'm just saying well no no no no that's not a question i'm just saying like what am i missing i'm asking myself that that's oh yeah and by the way that that's why my my x handle is grain of salt take
everything with a degree of skepticism um right and and no matter what i say you should take
everybody take what i say with a degree of skepticism. And I think you and I are aligned on that aspect.
I think that when we look at the data, what I hear is like, oh, all the data is manipulated.
Okay, well, if you know it's manipulated, then you have to, what indicators do you use to make your decision then, right?
That's not rhetorical.
That's a straight, not, you don't have to answer that.
You have to make it, either you make a decision on sentiment or you make it based upon data and on stocks, it's simply
either the fundamentals or the technicals.
Technicals would be like MACD or RSI or, um, uh, uh, what do you call moving averages
and so forth?
That would be, this is why, this is why we don't really like, this is a great question,
by the way, or that great point you're trying to make here.
Like, uh, um, This is why the people that
manage money, not everybody, but a lot of people, like, you know, a lot of my cohort,
the really, really good ones, we take the information. I mean, we look at all the data
every day. Anything that comes in that has a significant weight to it, we'll take a look at it.
But, you know, if you were just to manage money or manage your
portfolio based on whatever data is being printed, you'd probably be doing it wrong
over time. I think ultimately where the rubber meets the road is earnings, ultimately. I mean,
I think we can all agree on that. You either have earnings or you don't. You have revenues or you
don't. You have increasing revenues or you have decreasing revenues. You have increasing earnings
or you have decreasing earnings. I mean, ultimately, all of the other stuff, the macro stuff that Mike
and I were talking about, what you guys were talking about, that's all important. And it's
good to take into consideration, but it just gives you a picture, a view into what might be
happening. Ultimately, it's really the earnings that drive the picture. A great example that would be like NVIDIA, right? You know, I was a bear on NVIDIA for a very long time.
And a good friend of mine who's also in the business, Chichbol, who's in my spaces a lot,
he was a bull on NVIDIA. And we went back and forth, back and forth. And he was bullish on
NVIDIA simply because, you know, he thought that the earnings power, the revenues are going to continue to come in because of the fervor around the AI, the excitement around AI.
And he thought that, you know, that's going to continue longer than people think.
And I was the opposite opinion.
And so that's what I'm saying.
And I was wrong because ultimately NVIDIA's earnings did go up every quarter, quarter after quarter after quarter as reflected in the stock.
You see what I'm saying? So ultimately, everything basically, you know, when you distill it to its
lowest common denominator is really earnings. And if the earnings are good and increasing,
that's reflected in the stock. And if people, you know, by the way, the anticipation of those
earnings, the anticipation of the revenues and earnings are what drive stock
prices in the short term. In the long term, it's the result of those earnings. So, you know,
and this happens all the time where, you know, a great example might be hood today, right?
Everybody was anticipating maybe better than expected or maybe in line and, you know, they
miss and, you know, it just wasn't as good uh the expectations were missed and so the stock is down and that happens quickly so those things can happen you know um on a dime you know
they just happen very quickly the the the sentiment changes and and it just it gets reflected in the
stock price i don't know if that makes sense but that's kind of you understand what i'm saying
you're making complete sense you know one of the things that I've said, this has happened, I don't know, for the past
25 years, I'll say, this company is going to come out with earnings and the stock is
trading at an all-time high and they come out and they report the best earnings ever.
And then the stock tanks and people are like, you told me that this company, you know, it's
at an all-time high.
And we're not saying that I told them to buy it or sell it.
And they come out with their earnings report.
And it's all true.
They even, they surpassed the best earnings.
But then it comes down to what Michael Cantrell just said is, yeah,
but the forward guidance is they didn't confirm that they can continue at that
same prodigious rate.
And these are a great example. Look at that same prodigious rate. Well, AMD's a great example.
Look at AMD.
Yeah.
Yeah.
And so then the stock price comes down.
Everybody's like, well, we just got screwed.
You know, or the CEO, he told you what he thinks.
He's like, hey, we had these best returns.
Now, the other thing that sometimes happens, and guys, this is not illegal, but I've seen
this happen throughout my career.
Sandbagging.
You know that you beat your earnings.
So what you do is you turn off your accepting the orders.
So you allow some of the orders to flow one other day into the next quarter.
You don't drain the swamp all in that one quarter and you kick it over.
Now, you know that if you did that,
even though it didn't get reported, you're like, oh, we're going to look good for the next quarter. And then you feel more confident on the call. But if the CEO, if the perception is, or the exec team
is not confident that they could recreate what they did in that current quarter and you get that
sentiment, then you're like're like oh the stock sells off
and and so that's where you can see everything can go right all the numbers look great the best
earnings ever and the stock trades down because they did not give that forward guidance that will
continue higher so i think you and i are in alignment go ahead yeah you have to remember
there there are very few cases if ever i mean I mean, you know, where prices of a publicly traded security are perfect.
In other words, securities are typically overpriced or underpriced.
And they can stay either way for a long time.
They can stay overpriced for a long time and they can stay underpriced for a long time.
They're never perfectly priced, right?
And that's why there's a lot of
room for interpretation. What is the right price? Right. There's discovery, what we call price
discovery every day. AMD, you know, just recently hood today. Right. You know, obviously, they didn't
meet expectations. Investors didn't like what they saw and they sold, you know, they just pulled the,
meet expectations. Investors didn't like what they saw and they sold, you know, they just pulled a,
you know, pulled their bid and the stock drops. Or conversely, if the expectations were met and
exceeded and it was an unexpected thing, then, you know, you see a gap up. You see people that
maybe have been short the stock anticipating a bad number. You know, typically that's what happens.
You know, people are going short and now all of a sudden you have a massive gap up, not because
people are excited, you know, to buy it necessarily, but, you know, people are going short. Now all of a sudden you have a massive gap up, not because people are excited, you know, to buy it necessarily, but, you know, you have people
betting against it and, you know, now they have to, you know, they want to get out of the way,
you know, so they do it, you know, very quickly. And so prices tend to, you know, reflect kind of
what is, you know, what is happening right now, whether those prices are correct
is another story, right?
They may or may not be.
I mean, like I said, I very rarely do you see something priced perfectly.
And what does that mean?
Price perfectly, you know, it's it's so it's either underpriced or it's overpriced.
And then the question is for an investor is, you know, how overpriced or how underpriced?
And am I getting, you know, the old saying, you know, price is what you pay, value is what you get.
So what is the right price?
And when it comes to something like Bitcoin, that's really, really hard because there's no really, you know, it's really difficult to know what the right price is, right, with something like Bitcoin.
something like Bitcoin, because there's really, you know, very few ways to kind of
value it other than, you know, maybe sentiment indicators or technical indicators, you know,
oversold, overbought, you know, things like that. Over time, you know, if everybody agrees that
this is something that should be held, the price will go up. If over time people decide that that's
not something that they want to do, then the price will reflect that and it will go down. I mean, you know, so, but that's a long term. And of course, we all want
results yesterday, right? I think you can agree with that, Greg. I mean, you know, we want those,
you know, we want the big bangers yesterday. We don't want to wait. I don't want to wait two,
three years to get a good result. I want it today. I want it yesterday. Yeah, yeah.
In other words, investors are not patient. You know, people are generally not that patient.
Totally agreed. So unfortunately I have to drop for another phone call. So I just want to thank
you everybody. And I'll probably, I'll join this call again. This was a great exchange.
This is one of the better spaces that I've been on the past few days. So thank,
thank you for letting me hijack it. So I really appreciate it. Thank you.
Yeah, that was good to talk to you. Yeah, you're good. You're good, man. We go live here Monday through Friday at 3.30 p.m. ESC. My
name is Wabi, by the way. So you're welcome to come on anytime, man. No problem. Tina, what's up,
brother? Oh, here just said something that's very important. I've noticed this for a while,
and nobody seems to actually know or understand this i actually heard
the term price discovery for the first time when i was getting my mba at nyu called stern and i was
in a class called equity markets and the professor was talking about price discovery
what people seem to think is that price discovery is only when the stock or whatever is going higher.
It's actually not correct.
At all times, prices are in price discovery.
Because what O'Hare said is correct.
We actually don't know what the right price is. And the markets are trying to discover what the right price is.
That's why stocks move down rapidly or up rapidly.
And so do other assets as well.
Because all markets that are trading are always in price discovery.
You're not moving into price discovery when you're making new highs.
You're moving into price discovery when you're trading flat or breaking down.
You're always in price discovery.
And this is the thing that I've heard
that is singularly the most wrong thing
I've heard from people
trying to have intelligent market discussions
because it's completely wrong.
Markets are always in price discovery
because the world is always changing.
World is not constant and unchanging.
It is not a static world. it is not a static world we live in a dynamic world and
that's why prices are always in discovery and o'hare said it it probably passed by most people
but it is the singularly most important concept in markets because it's always happening and this is
if you will listen you will hear people misuse this term regularly.
I have not heard it once correctly used, except by O'Hare a couple of moments ago.
All right, Tina, those Satoshis should be in your wallet now
uh send me dollars
i'm kidding anyway no that's that was that was nice of you but you know
no no it's true and i i didn't say i didn't say to compliment you i said it because i've heard
people say this and it grates on me because it demonstrates a complete lack of understanding of markets.
Prices are always in discovery because we don't know what the right price is.
Well, the right price, as I always say, the right price is what the next buyer is willing to pay you for what you have, whether it's a house, whether it's trading cards, whether it's Bitcoin, whether it's stocks.
But that's why it's in discovery. Exactly.'s trading cards, whether it's Bitcoin, whether it's stocks, whatever it is.
That's why it's in discovery.
Exactly.
Because we don't know what the next price is.
Price discovery is a constant thing.
It's a constant thing that's evolving every single day.
That's exactly my point.
That's correct.
You're completely correct.
Yeah, and we had an interesting discussion
in Kruger's space today about private equity
and venture capital investing
and the lack of price discovery
in those types of investment vehicles,
the lack of mark to market and the potential drawbacks
and kind of where we are in the cycle
and what can happen and the fact that a lot of these-
O'Hare, O'Hare?
Yeah.
O'Hare?
There's a term for that.
Do you know what the term is?
What's that? Pig in a poke.
Pig in a poke.
Pig in a poke.
I like that.
That's what the term is.
Yeah, yeah.
You know, and by the way, I said it this morning in Fred's space, and it bears repeating, this is all a function, and I think you would agree, of what has happened. I think all of the
things we talk about, whether it's crypto, whether it's stocks, whether it's whatever you want to talk
about, real estate, all of it is a function of what the Fed has done since the GFC. I mean,
it's the bastardization of the capital markets. And so, you know, when you have zero interest
rates for a prolonged period of time, when you have zero interest rates, the interest rates are the cost of money, right? That's all it is.
What does the money cost? Interest rates are the cost of money. And if the cost of money is
effectively zero for a prolonged period of time, it doesn't take a genius to figure out that there's
going to be malfeasance. There's going to be a lot of malinvestment. And we had, you know, 15 years of that.
So the question is, how bad is it really?
And no one really knows.
I mean, we have an idea of people, you know, I've read some research recently.
I've read some research over the last 15 years.
And no one really can put their finger on how, you know, what is kind of really out there,
how bad it is, and how it gets resolved.
All we know is there's a lot of leverage
and, you know, this manifested in things like private equity in venture capital. You know,
it used to be, you know, hedge funds were kind of the kings, the titans of Wall Street.
Those went away, you know, the whole hedge fund business kind of, you know, it's still an important
business and it's still a very lucrative business, But, you know, the most lucrative business in the last 15 years has really been private
equity and venture capital.
Why?
Precisely because of lack of price discovery.
Hedge fund business is all about, you know, mark to market, right?
I mean, think about what hedge funds typically are.
Not all hedge funds, but most, right?
It's mark to market, you know, publicly traded securities.
With, you know, venture capital and private equity,
whether it's in real estate or whatever,
or private companies, there is no mark-to-market.
So by design, it lends itself to nefarious activities.
You know, no one running a private equity firm is going to mark their securities down, ever, right?
It's not in their interest. What are they going to do? As you know, Tina, they is going to mark their securities down ever, right? This is not in their interest.
What are they going to do?
As you know, Tina, they're going to mark it up.
So every year, if you look at, you know, the price performance of, you know, of, you know,
of most of these vehicles, it's like linear.
It's like you can put a ruler on it.
It's straight.
It's up and to the right.
How is that possible?
Stocks don't go up linearly, right?
They go up and down. It's
choppy. Prices change from day to day, week to week, quarter to quarter, you know, year to year,
but not in private equity and venture capital, right? Now, the only time they change is when
you have to sell something for real, you know, whether it's like an exit, you know, an IPO,
then you kind of get an idea. You book the, you know, you kind of book the
price at that point, right? Whatever the market is willing to pay, that's what it's worth.
Up until that point, it's worth whatever you say it is, you know? And so to your point,
this whole bastardization, this has been an ongoing theme for a very long time. So
how bad is it? I don't know. One thing I do like about Bitcoin or crypto, but specifically Bitcoin,
because there's a lot of shit coins out there, is the fact that its price discovery is 24-7, 365.
You know what it is. You know what the price is today. The question is, is it worth what it is today? That's the real important question.
Right. But at least you know what it's trading at right now. Right. I know Saturday night, Sunday morning, Wednesday evening, whatever. Again, Monday through Friday, Monday through Sunday, seven days a week, what it's trading for and what I can buy it or sell it at.
That's one thing.
That is a plus.
I do like that, right?
I mean, that's something that very few things have.
Oh, oh, oh, oh.
And I love the blessedness of the TradFi markets being closed from 5 o'clock.
Sometimes we like to shut the market.
It's like the meme, shut the market, right?
When stocks are going up, keep the market open.
When stocks are crashing, you've got to shut it down.
No, no, no, no.
I just like it being closed because I can actually rest and not watch prices moving around. 24-7
pricing is going to be the worst thing in the world for anybody who wants to get sleep.
Well, that's the, yeah. And that's where they want to go, right? They want to go,
you know, they want to go like overnight trading for, they have it now actually. So they're,
they're opening the door to like 24-7 trading. So your 401k, your retirement account is going to be marked to market every second of every day.
I guess that's – maybe it's good.
Maybe it's bad.
I don't know.
It's yet to be seen.
I think there will be a lot of volatility.
Oh, here.
Oh, here.
It's 24-5 right now.
24-7 is horrible.
Yeah.
Yeah. But they're pushing for it. And likely that's going to be the outcome. There's money, money to be made. So if you can make money, if Wall
Street can make money. And the funny thing is, we are Wall Street. I mean, you spend a lot of time,
your whole career, certainly on it. So in a funny way, this is, you know, kind of what Wall
Street wants. But I'm not sure that, you know, I'm not sure the old guard, you know, you look at
guys like Warren Buffett, you know, I think if you were to ask him, he would say, you know,
if stocks traded from nine o'clock in the morning to noon, three hours a day,
three days a week, he'd be happy with that right so that's
that same professor oh here so that same professor who talked about price discovery also had a theory
that we'd be much better off with batch trading where you traded three times a day in batches
putting in putting in you know your your bids and offers for securities,
and you would actually net-net.
And that wouldn't be good for Wall Street,
but it would be great for the average investor.
Oh, sure. Right. Yeah, yeah, yeah, of course.
Which is, by the way, the high-frequency trading.
You know, I remember reading a research report.
I still remember, this was probably 2005.
I remember reading this.
I don't know why, you know, sometimes you remember weird things. I was in a swimming pool with my son, my oldest swimming lessons. And I was reading
this research report while he was taking swimming lessons on high frequency trading and kind of the
things that were going on. And this was early days, but I was thinking about it.
I'm thinking, you know, the dark pools basically, right?
Like all of these trades were being routed
to these dark pools and being executed away
from kind of the lit market,
the New York Stock Exchange or the NASDAQ.
And, you know, I was thinking about like,
what are the implications of this
and how far is this gonna go?
And I couldn't have fathomed.
And I talked to friends in the business about this as I remember reading it and just had a really kind of an impact on me for whatever reason.
And you fast forward all those years and think about where we are now, what we're talking about, 24-7 trading.
You got Robin.
You did?
Hey, guys.
There's no commissions on GDP. Hey, guys. you you did hey guys hey guys i i cut this
conversation yeah yeah yeah yeah yeah i mean i wish i can keep it going but thank you i do i do
have to i do have to go somewhere in the next few minutes but it was great you guys are welcome to
come on tomorrow man to finish up this. Yeah, no anytime man. Yeah Usually when the markets they usually when the markets get like this
There's a lot to the there's a lot to discuss right people love
Talking markets when volatility starts to trend whether it's up or down. It's it's the crab that you have to fear
it's the crab but
Yeah, but either way guys I want to thank all, guys, um, I want to thank all the speakers
for coming on.
I want to thank O'Hare, Tina, Evan, Naka, Matt, Prometheus, Cantro, um, Grain of Salt.
Also, he's a new speaker that came up a couple of moments ago, actually, no, a couple of
minutes ago, like probably 30 minutes ago.
He was having a discussion, a very interesting discussion with Cantro.
But guys, if you've been tuning in over the last, call it four hours, just under four hours,
and you've enjoyed the conversation with myself and all the other speakers here,
my name's Wabi.
I go live here on the Because Bitcoin page Monday through Friday,
usually between 3.30 to to 3 40 p.m est
and we talk all things markets whether it's bitcoin all coins anything in regards to trad
fi whether it's um stocks or commodities anything that's tradable we yap about whether it's lower
time frame price action higher time frame price action positioning narratives all that good stuff
higher timeframe price action, positioning, narratives, all that good stuff.
And we usually have some colorful banter.
We have some nice characters that come up on the stage, like Tina, for example.
He's had some classic moments here on Market Talk over the last few years.
Same thing with Naka and Matt and some of the other people that have come on over the last couple of hours.
But yeah, guys, feel free to give the because bitcoin profile
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Thank you. Thank you. Thank you.
And for those of you that's just want to know a little bit more about us, we also have a YouTube show that we host Monday through Friday, usually at 11 a.m.
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sometimes two to three hours or on a day like today where we've had a couple of volatile trading
sessions and also the recent price action in crypto um the shows usually go on for about three
to four hours also shout out to uh bitcoin ai guy for joining us small cap sniper as well um the panels
lately have been very colorful man um incredible content really from from all of you and um looking
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