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NOW IN CORRECTION TERRITORY | The Solid Report
Recorded: March 27, 2026 Duration: 1:14:37Space Recording
Full Transcription
shout out to public.com for sponsoring the stream it's a platform built for serious investors with
stocks options crypto bonds, plus AI tools.
And they're offering an uncapped 1% match when you transfer your portfolio.
Check them out at public.com forward slash wolf.
Investing involves risk and this is not investment advice.
All right, all right, all right.
We are opening the stream at the low of the day, which is the worst possible time. Hopefully,
the start of the stream is the bottom, but it really doesn't look like it, to be completely
honest. I'm trying to have fun over here. Clearly, it is not a fun week for everyone.
It's pretty ironic because we did get that top on Wednesday, which has been happening for the
last few weeks, and we just kind of go down
into Friday, making lower lows Thursday and Friday. And here we are. The queues are at 562.
I think we're sitting down about 4% on the week, if I do think so. Yeah, we are down pretty nastily
in the week. Actually, let me look at this price range over here so this is where we
close on friday and the queues are down about four three and a half percent not too shabby i guess i mean that's could be worse could be worse but we are definitely in correction territory
on the queues spy we i think we're actually in correction territory, period. We made the all-time high back here.
I think this is the all-time high, all-time closing high.
And we're actually, no, we're not even correction territory on SPY,
now that I think about it.
Maybe in intraday, we're at correction territory.
Intraday, correction, 7,000.
No, we're still not in correction territory.
That's be 500, but we do have oil sitting here, uh, back above a hundred dollars.
It was comfortably above a hundred dollars a few minutes ago.
Uh, and now we're sitting at about a hundred dollars oil did peak here back on March nine,
around $120.
So we are 20% lower from there, but oil is having a massive strain on the market.
If you look at a lot of the oil stocks, especially XLE, XLE continues to make new all-time highs.
Yeah, actually a fund for wheat. And this one continues to be trading near all-time highs not
all all-time highs but what is this d grow when i keep on hearing about i shares core dividend no
that's not the one i was thinking about but arguably though we do have gold kind of sitting
all the way up over here gold has been taking a little bit of a hit lately but gold has since
then recovered since March 23rd.
And we're sitting at about $4,500 gold.
Silver kind of did have a little bit of a pump action going on here, but still on a downtrend.
A few other stocks that a lot of people are into.
VG, I think this is a new, it's not a 52 week all time high, but it is a new high for the entire year on VG.
And we could be getting a new closing high over there.
Next is not doing as well as vg next is more of like a longer term story but that one still continues to
push toward the uh year-to-date highs over here so let us get started on the show what is going on
everyone uh we do have elon yeah i did see that i did see that one earlier i don't even know what
this is supposed to mean if it's actually have any impact on um on the war but it is pretty interesting that elon musk was over there yes i'm
late i am working at cali time of course uh so we are going to be late as usual um you know but
everyone is here for the meetup this weekend it's going to be a great time if you guys are in la or
in the area i would really i really uh recommend coming out to Amit's meetup.
I believe that I don't have the link here.
I'm going to post the link in a little bit once I get a clip going.
I'm going to post in the background in case you want to come and check out the meetup.
It's in Culver City in Southern California in Los Angeles.
There's going to be a lot of us over there.
Obviously, Amit is going to be there.
I'm going to be there.
Chris is definitely going to be there. Steve Milkman, Milkman Steve. Maddie Capital is going to be a lot of us over there obviously Amit is going to be there I'm going to be there Chris is definitely going to be there Steve Milkman Milkman Steve Maddie Capital
is going to be there Matt VG Capital of course and more than a few other people more the gang
is going to be there I think June said she was going to be there too Stephanie's going to be
there Ray's going to be there a lot of other people are going to be there it's going to be
a great time guys come check it out tomorrow evening I think it starts around 6 p.m i'm going to post
the link in the chat in case you guys are around but let's get started with the show all right we
have a couple of things to talk about today not really a whole lot i don't have a massive agenda
but who knows i'm actually more interested in seeing if we're going to get some sort of headline
after the market close which is what we've usually been seeing for the last five trading days i think
as soon as the market close it's like let's release this big headline. The market pumps up about 0.8%. And it's been fading that off
lately, but we'll see what that news is going to be. It's very likely we're going to get something
after hours over here. We're going to give a little bit of a war update. Rubio did make some
comments. That's the US Secretary of State. Rubio did make some comments after his G7 meeting.
And Trump did have a few
words up there. In addition to that, we're going to be talking about oil and the possible scare
of stagflation. This has been a quite big headline and quite the talk on the street.
Ed Yardini has commented about this. I'm going to play a clip from Ed Yardini. Great guy. I love
reading a lot of his work. It more macro focus more looking at correlations
and earnings growth he's been a pretty big bull for the last three years i did play a clip
yesterday from ed yardini this one's a little bit different where you talk specifically about
stagflation also from cnbc but a different news outlet or a different version of cnbc versus what
we saw yesterday and we're also seeing a major sell-off in cybersecurity today.
Anthropic Mythos documents were leaked yesterday
that did show that Anthropic is heading
toward AI native cloud security,
which is the reason why you see a lot of software stocks
selling pretty big today.
I did want to do like a little bit of a segment
talking about different cybersecurity sectors
because whenever people hear about cybersecurity, think about CrowdTrack or Palo Alto, but it's a little bit of a segment talking about different cyber security sectors because whenever people hear about cyber security think about crowd check or palo alto but
it's a little bit more than that and they all have like their own verticals right so you have crowd
you have network security which is mostly palo alto you have crowdstrike which is more endpoint
security client and you have data security which is where rubric falls into we're going to dive a
little bit into those stick a little bit more to the fundamentals today because i know a lot of
people are probably buying the dip and things they're looking at of course you know we're going to dive a little bit into those, stick a little bit more to the fundamentals today because I know a lot of people are probably buying the dip and things they're looking
Of course, we're going to talk about some MAG7 stuff as well as additional anthropic
news.
So let's go ahead and get started today.
We have two minutes until the market closes.
I want to be able to get this one on the screen as soon as it closes.
Yeah, I got to make sure I'm not muted, man.
Seriously, I did say this morning, I'm probably going to do the market close today since I'm
not going to be streaming.
Making sure the show, of course, guys, does go on and it will be unmuted.
I promise.
I will not mute myself when I should not be muted.
I will not mute myself when I should.
Yeah, that is the correct way to say that one.
All right.
So we got about one minute until the market closes over here.
Let me go ahead and share the terminal.
And let's bring up SPY here on the market close. Having a little bit of recovery here in the
close, which is very good news to see. We don't want to go into this weekend closing at the lows.
That wouldn't be so great, but still it has been a pretty nasty day lately. We're sitting here about 15 seconds for the market close.
Let's see where everything ends up at in about 10 seconds.
We do have the queues down 1.89% today, 1.6% for the SPY.
We have Amazon below $200.
I didn't think we're going to see below $200, but here we are, guys.
Market is now closed.
Back market is now closed. Back market is now closed.
Yes, sir.
Yes, sir.
All right.
Pretty bad way to end the week, to be honest even though we didn't we did close at the
lows pretty much it pulled back right before the close we have amazon below 200 bucks over here
meta down another four percent at 525 we did not go below 500 today but my goodness it looks like
it's heading there which is pretty insane to think about i was buying meta 480 after april it is just it's
really hard to believe that meta is almost there again like i i don't know the market just gets
very irrational when things sell off um but this is quite a different scenario from what we are
looking at with the tariff tantrum and liberation day last uh last march and April, and we are still in March.
So if we're heading toward the Liberation Day era, that's going to be coming up, I believe it was April 9.
So we got a couple more weeks till then. Are we going to have a couple more weeks of pain?
Who the heck knows, guys? We are down at 562 after hours on the queues.
Apple is finally red today. They've actually been muscling through a
lot of this pain lately but they squeezed in a red day today and apple down 1.6 google is at 275
2.3 down today microsoft continuing to make lower lows down 2.5 nvidia down a 2.2 over here
really surprised to see amazon below 200 again again. That is just freaking wild.
Bitcoin didn't have a great day today, but still fairly resilient as the market continued to
trend a lot lower. And we do have a few other stocks down today. This definitely did hurt
the portfolio because on Semiconductor, Amcor, and Amazon are three very large positions in my portfolio.
So yeah, today's not really a great day, but still going to keep the head up.
Going to enjoy tonight with the fellas and the crew.
Also going to enjoy tomorrow at the meetup again.
Let me try to look for that link.
All right, so we did have Trump cover a few things earlier today.
I'm not going to play the entire clip.
Let's actually see here.
I got, actually, I don't know if to play the entire clip. Let's actually see here. I got, um, actually,
I don't know if I have the Trump clip over here. No, I don't have the Trump clip over here. He
didn't really say a lot, but Rubio had a few things to say. So I'm going to go ahead and
play the Rubio clip, which was, who is the secretary of state. In case you guys don't
know, he attended the G seven meeting today. And I am certainly not Gav Blacksburg who is the CEO of Wolf. Let me just
change this one real quick so that way no one gets confused. I'm definitely not Gav Blacksburg.
So let me just change that real quick. All right, I'm going to share this stream with
Marco Rubio. They did catch him when he was about to get on the Air Force Two, I think.
I don't know if it's Air Force Two.
That is definitely on mute.
And I know that's on mute.
So don't worry about that one, guys.
Let me just share the screen one more time.
All right.
Sound is on.
OK, here we go.
Same thing.
But we can achieve all of our objectives with our ground troops.
But we are always going to be prepared to give the president maximum optionality and maximum opportunity to adjust to contingencies should they emerge.
We haven't gotten it yet. We haven't gotten it yet. Look, we've got messages. We've had an exchange of messages and indications from the Iranian system, whatever's left of it, about a willingness to talk about certain things.
system, whatever's left of it, about a willingness to talk about certain things. We're waiting for
further clarification about who will we allow, who is it that we would be talking to, what will
we be talking about, and when will we be talking. I don't have any news for you.
I guess that is it. It wasn't a whole lot. I did want to play this on CNBC. Rick Santoli is, of course, screaming about rates again.
So I'm going to go ahead and play this one for you guys,
which is on the CNBC live stream.
And, of course, there's no sign.
Let's go to a two-day chart, okay,
where the long-term correlated over the last two days.
Hold on.
If so.
All right, Christina, thanks so much.
Want to get to Rick on bonds. A lot for the treasury market to contend with this. Let me know
if you guys can't hear that one. There was a lot of supply. And then, of course, you have the push
pull of inflation from oil and mint some growth concerns. Yeah, I mean, it's getting it from all
directions, which really makes today a fascinating session.
Let's look at two-year versus crude oil prices starting right before the conflict began on the 26th of February.
And do note that we're up about 50 basis points since that Friday on the 27th close.
You'll see that little spike on the left side of the chart, that little that's the close and we're up about 50 basis points now let's go to a two day chart okay where the long term correlated over the last two days two years have waived off crude oil as a matter of fact right now a two year is down nine basis points on the day, and it is unchanged on the week. Let's look at
twos and tens for the week. We see that 10 years up about five basis points on the week. But this
is very interesting because maybe it's disengaged from oil for a variety of reasons. One of them
might be that the equity markets are paying such close attention to energy aspects and they have been in the red.
Maybe there's a little bit of flight to safety showing up in twos.
But no matter how you slice it, delinking from that oil is an important dynamic, especially occurring on a Friday.
Mike, back to you.
Yeah, that was absolutely a fascinating swerve over the course.
So what he's basically talking about is rates so usually when you have oil go up you do have a lot of rate yields going
up as well and the reason why is because as oil goes up people are basically buying oil in u.s
dollars the more u.s dollars that they buy the more the dxy goes up and that would mean they'd
have to the u.s dollars goes up usually when the rates come down i'm sorry when thexy goes up and that would mean they'd have to the u.s dollars goes up usually when the rates
come down i started when the rates goes up as well because they're selling the yields they're
selling the bonds to buy the u.s dollars right so if this continues to happen if the u.s dollar
continues goes up that will continue to put more pressure in yields but it was interesting because
he did say today that you did have yields actually go down let me actually double check that once i didn't look at the yields over here i'm going to share the
rates real quick all right so i have the two-year yield did pull back about two percent while the
10-year did continue to go up the the 10 year is actually trading just as high
or near as high as where it was last year.
I remember the 10 year peaked around pre-liberation day in February, as well as post-liberation
day.
And it was up about 4.6%.
So we're still about 15 basis points away from that, which is still pretty high for
the 10 yield.
But more importantly, it's the degree of how fast the 10 year is actually going.
And that's what he was commenting on because the same thing for the two year,
the two year is also rising as well.
But the indication that he made was that the two year is actually contracting a little bit while the 10 year goes up.
So you do have that yield curve continuing to steepen,
which is kind of good news. When you think about the
economy, that's the, the two year and the 10 year curve went up about 25% today. It's at 53 basis
points. So not as bad when you think about that in that case, remember for a long time, the yield
curve was inverted for like three or four years. And I remember a lot of bears are patting the
table on this one. And it was pretty interesting because the yield curve ended up steepening and ended up being not inverted, but uninverted.
And we ended up pushing new all-time highs in the S&P 500.
So I don't want to say don't get too worried about the yields.
Be more concerned about how fast the yields do go up.
If the yields go up very quickly, that usually makes the markets very concerned.
But if they're kind of tapering around here, kind of tapering just a little bit,
the market is definitely going to be okay with that. The dollar though,
the dollar continues to push up, closed above a hundred dollars today,
which is definitely not going to be good for equities. Gold, like I mentioned,
gold is up today about 3%. Precious metals are up about 3%.
And the interesting part was that oil was also up as well. Oil did close below $100, which is good news to see.
But we're going to see what happens over this weekend.
If things start to de-escalate a little bit into the weekend,
maybe we might get a gap up on Monday, on Sunday futures.
And we will see.
I would say just take the time and enjoy this weekend.
You're obviously going to get a lot of headlines,
and I will be reporting on those headlines during the weekend on my Twitter as well.
So if you guys want to check out my Twitter, this is my handle over
there, Sam underscore Bidawi. I'm going to be reporting on a few of that stuff over the weekend
because that's just what I like to do. But thank goodness the markets are closed because then we
can't lose more money over the weekend. So I guarantee you no one's going to lose money while
the market is closed tomorrow. That is a good thing. Unless of course you're invested in crypto
and crypto falls off a cliff, that won't necessarily be good for anyone all right so i have this round table
that i want to play from cnbc where these analysts do give a little bit of their input as far as where
how the war is impacting the market so let me go ahead and play this one for you i'm not going to
play the whole thing only about five minutes worth over here We're now on track for their fifth straight negative week.
Obviously, oil remains the big story. Bottom of your screen, about 98 bucks for WTI. Yields have
been higher too. Now they are back almost flat, but nonetheless, the 10-year yield and that backup
there, we were getting kind of close to 450. Let's take a look at yields, guys, if we could throw those up. There it is, 442.
So we need to watch that. Steve Leisman says now 50% odds of a rate hike this year. Bank of
America suggests we think markets are now anticipating a more hawkish Fed reaction
function and possibly a broader commodity shock. Steph, I mean, the commodity shock already has
been rather dramatic. It's the biggest supply disruption ever for the global oil market. COMMODITY SHOCK. THE COMMODITY SHOCK ALREADY HAS
BEEN RATHER DRAMATIC.
IT'S THE BIGGEST SUPPLY
DISRUPTION EVER FOR THE GLOBAL
OIL MARKET.
THERE'S REALLY BEEN NO ANSWER
FOR THAT YET.
AND IN TERMS OF THE FED,
RICHMOND'S BARKIN THIS MORNING
THE FED SHOULD PAUSE, HE SAID,
TO FIGURE OUT WHAT TO DO.
IT'S HARD TO IGNORE THE
INFLATION DATA AND PHILLY'S
PAULSON WAS FAIRLY SIMILAR IN
HER COMMENTARY AS WELL. WHAT DO YOU MAKE OF ALL THAT? I JUST DON'T THINK ANYBODY CAN MAKE A CASE FOR DOING ignore the inflation data and Phyllis Paulson was fairly similar in her commentary as well.
What do you make of all that? I mean, I just don't think anybody can make a case for doing
anything right now. There's so much that we don't know. So no cuts, no raises. I'm not thinking
about raises. And if we're talking about the fall, a million things can happen between now
and the fall. So the headlines are coming fast and furious every single day back and forth.
And that's not inspiring confidence for sure. But there's a lot we don't we still don't know we don't even know who the U.S. is talking
to number one number two will other countries get involved number three will boots on the ground go
on the ground over the weekend especially so I understand the anxiety I understand that people
want to take risk off I've taken a little bit of risk off, too, but I'm looking for other areas to be buying.
We'll talk about that later.
I still believe this to be short-lived.
Spreads are tame, so that's really good.
And I think it's really interesting and noteworthy that what is winning,
do you know, the Russell 1000 value is up 12 percent year-to-date.
I'm sorry, it's flat year-to-date.
Growth is down 12 percent year- date. I'm sorry, it's flat year to date. Growth is down 12% year to date.
And the energy sectors, the material sector,
even the SMH are still up.
Everything that has worked in the past couple of years
is not doing well.
Tech, comm services, MAG7.
MAG7 is down 15%.
Nothing's doing well since the war started
except for the energy.
Yeah, that's something that i've
said before xle is continuing to push all-time highs and i think the more that xle does continue
to outperform the entire market including other sectors you're going to get a lot of fund managers
trying to of course chase that performance the only thing that i got to kind of word a little
bit of caution here chasing in size i mean i don't mind a little bit of rotation to it i was playing the oil trade for
a little bit earlier um this month but it's not really my expertise my guess is that if you're a
trend follower you're probably already in the bandwagon as far as following xle in those oil
stocks i know a lot of you guys have already been positioned in vg and next so kudos to you um i did
mention about a few days ago take some profits profits on VG. If you are already in
that one, we are reaching around IPO levels. So you could see a little bit of resistance here,
but if this war continues to happen, VG is going to continue getting a bid as a number one exporter
of natural gas in the US. So I think that's about it for that. There's probably a little bit more
input people provide over there, but I do want to go over something real quick. There was this X article or there's this X post
that came out yesterday, which is very interesting. I took a read through it for a little bit and
kind of summarized it for you guys. I want to just pull it up here. No, that's not the one.
Um, no, that's not the one.
All right, here we go.
So I'm going to share this screen for you guys.
No, I don't want to actually share that one.
Okay.
So this article basically talked about this, this plan, this big plan that Trump has had this whole time.
And obviously he didn't come up with this on his own. He probably had a cabinet of people
decided to come up with this plan. And they basically laid out exactly what they're going
to do during the entire presidential election. So what it started out was that you had the
recent moves in Ukraine, Syria, and Venezuela and Iran, uh, are being interpreted as part of a broader effort to reshape control over global oil
and liquefied natural gas supply chains.
Any disruption tied to Hormuz, lithium natural gas, sorry, liquefied natural gas,
pushed Brent above a hundred dollars and lifted European gas prices sharply.
This shift strengthens dollar based energy trade, reinforces us export
leverage across global markets. sharply. This shift strengthens dollar-based energy trade reinforces U S export leverage
across global markets. Markets reflected the move with a stronger dollar and declines in gold and
Bitcoin. So I'm going to put this post over here in case you guys do want to check it out. But for
the most part, what this is, it kind of goes through, um, the time limit events that did
actually start back in 2022 when Russia did did attack ukraine and don't forget guys
when that happened of course there was a lot of battle going on between but there was that news
that the nordstrom was destroyed and the nordstrom is actually pumping a lot of lng or natural gas
from the northern region into the rest of europe and once that was cut off the u.s the the u.s went from supplying 28
of your europe's liquefied natural gas in 2021 to 58 by 2025 that's a major shift in terms of
supplying energy for most of europe and then you had syria happen uh which basically cut off uh the
critical node connecting china's belt and the road initiative to the Mediterranean.
And that continued to put more dependency on Iran as well as Venezuela for basically exporting most of the world's oil.
And then Venezuela happened. We took over Venezuela. We basically jumped in there.
We infiltrated the palace or whatever the Venezuelan president Mandara was in.
We took them and we basically took control of the supply in Venezuela.
And now all those great oil companies, including, I forget the name of those two companies that
they mentioned in this article.
Now they're able to profit off of that and pump a lot of oil out of there.
And then now finally, we're in Iran, which is one of the large suppliers of oil in the
entire world.
Actually, it looks like here, Iran, Southpars Gas, the world's
largest natural gas reservoir. Iran retaliated against Qatar's Raslevan, the single largest
liquefied natural gas facility in the earth responsible for a fifth of the global supply.
Qatar's energy-owned assessment is that 17% of export capacity has gone into recover,
will take up five years. The Shredose is closed europeans gas prices spike 70
so what this is really saying is that this all really comes down to getting the us in
made in control of the supply of liquefied natural gas as that will continue to be the dependency on
powering all these data centers and the aiie and so on if the u.s controls
the liquefied natural gas supply that means that if somebody wants to buy it if another country
wants to buy it they're going to need to buy it in u.s dollars which is the reason why you're
seeing the dollar go up right obviously there's a lot of rotation into the u.s dollar as it's being
as it's being uh calculated the index for the dollar index is being calculated against five currencies.
And of course, you have oil continuing to go up or you still have a scarcity of supply and energy.
They're going to have to buy that energy using US dollars,
and that will help fuel the petrodollar as well as the dollar index on its own.
This is all really saying that the strategy is to, quote unquote, make America great again.
If you have U.S. basically supplying most of the energy around the entire world, that means that rather than the world depending on Qatar, Iran, Venezuela, the Nord Stream, which was how it was before, or Europe was depending on Nord Stream for a lot of the liquefied natural gas supply before. Now they're going to depend on the US.
So I think what this really comes down to is, was this all planned, right?
Or maybe there was there a higher plan in this Iran war would be a lot sooner and Trump
would be able to resolve all these things before the midterm elections to be able to
get his ratings up.
I think that's where all this backfired on him
to think that the war would be done very soon. But is this plan actually going to come down
in Trump's hands? It's kind of crazy when you think about it, because if this really was all
planned, I would make a lot of people, including myself, feel like we're nothing more than a
piece of chess, chess pieces on the board.
But it's kind of scary to have that much power here.
I mean, I guess there's a reason why it was good that there was a dispersion of control of energy across the entire world.
It wasn't just the U.S.
But going from 18 to nearly 50 percent supply of liquefied natural gas in Europe and then going to further increase that supply.
It's great. I'm pro-America, but when you put all the power in one nation's hands, and irrevocably, if it's in the US's hands,
it's going to be in a group of people's hands. We're not really going to have all that much
say in it as voters. It's a little bit scary. I mean, it's a little bit going to have all that much say in it as voters.
It's a little bit scary.
I mean, it's a little bit scary to have that much power.
And we all know what happens when power becomes an obsession.
We've seen it time and time again.
I mean, this really had me thinking when I read this article.
It is great.
Yeah, we are in the U.S., but just having that much control might just cause more conflict, in my opinion.
And even though it is in the U.S., that's great.
There's going to be other higher powers that are going to be competing for part of that control.
And that might cause further tension, leading to further conflict, which might lead to more war and that's kind of the scary part about all this is because
is there ever going to be what trump had hoped to be was world peace in the beginning of 2026
and that was all blasphemy we knew that there was not really going to be world peace anytime soon
but are we actually heading further away from world peace versus heading closer to it. I think that these events could continue.
We're probably heading further away from it. It's a little bit scary when you think about it, but
honestly, the world is really run on power and greed and money. And unfortunately,
that is the source of what we're all seeing today. I don't think what we're seeing today
is for the good and for the righteousness
of the entire world i think it's highly driven by power and control right it's usually what it is
in most of these scenarios and unfortunately being investors in the stock market you have us as not
really being beneficiaries of it.
If of course you were in the trade that you've been in for the last three or
four years. And now look, the cues are making lower lows after hours. I was there,
was there actually a headline that must've happened?
That's a very big drop after hours. There must've been something.
Let me check this out here. Air raid, siren sound in southern Israel.
I don't know.
They're always like saying crazy stuff like that.
U.S. Wikov, Trump,
met with Micron's CEO, Merota.
That's pretty interesting.
I don't see anything.
We expect an answer from Iran on U.S. 15-point plan.
Yeah, there's really nothing. It's just more after
hours selling off, it appears. But that is a pretty big drop after hours. So we will see.
I mean, you know, these aren't like geopolitical facts. This is just facts, period. If you think
about the Roman Empire, the Ottoman Empire, and all these crazy empires, they all were built around power and strength,
right? And these empires grew and grew and grew until they finally topped out and
they were replaced by another power. But during that transition phase, there was a lot of war
going on, right? Where it was like, who's going to take the next power? Like between the,
between the, the Rome, actually the Romans took control for the longest period of time
earlier in a couple of millennia ago. But before that,
I believe you had the Greeks or the Greckans, whatever it's called.
I'm not like a huge history buff,
but there's always been like a torch being handed around to who's the most
powerful.
But I always remember like in between all of those regimes, there was a lot of conflict happening.
And it just, it really makes me worry.
Like, what are we in between right now?
Or are we heading toward the point where there's going to be that high point?
And okay, it might be great as American to see that we're going to be on top of it.
But like, I don't know if that's going to last forever.
And that's kind of a little bit of the scary thing that happens. I try not think about
that too much, but just seeing how much is happening in the world, how quickly things are
happening in the world, how used to we are getting toward conflict. Like, I got to be honest, like
15 years ago, after the Iraq, after the Iraq war ended, you know, things were pretty peaceful for quite some time.
And we've been introduced to conflict ever since 2022.
And it has just become the norm at this point.
And I don't know if it's going to end anytime soon.
And it's nice when the market's going up during it, cause it kind of takes
your attention away, but now that the market's going down, this starts
to becoming front and center, not just for us on TV, but also the news, but also for a lot of people who are making money off the
stock market.
And I'm surprised at this point, Bill Ackman hasn't released a novel yet on Twitter.
I'm sure we're going to get that very soon, considering the guy's probably down more than
20% year to date right now, which is pretty crazy to think about.
So how can Trump taco us out of this mess now?
He can't.
I don't think Trump can taco us out of this.
Um, he, there probably was a point where he could have tacoed his way out of it, but let's
be completely honest.
Even if he pulls out of there, can he really tell Israel to stop?
Right.
And if you really think about it, these other countries in the middle East, um, they'd like
the high oil prices because it basically makes them more money.
And I think there's a lot of money being incentivized around here. um they like the high oil prices because it basically makes them more money and i think
there's a lot of money being incentivized around here now the question is who is money working for
well that's a big question i don't want to sit over and make judgments i'm going to be very
neutral when i think of this from political stance but it's all this war and stuff it's
definitely not fun to see as it continues to be on the news every single day day in day out and
you know it's really at a point where it's like,
someone mentioned to me this other day on Twitter
where they were basically saying that,
hey, you're always talking about the war all the time.
Well, it's like, well, that's every single headline.
The war is moving the market right now, right?
So if we were at a point where maybe headlines and updates from the war
were not moving the markets,
we probably wouldn't be talking about it that much.
But we're really at a point where it doesn't matter what fundamentals you are. It doesn't
matter how much free cashflow you're producing. It doesn't matter any of this right now. The
market is being driven by war, right? Any headliner update that comes to it is going to move the
market up or down. You've seen earnings over and over and over again, extraordinary earnings get released
for everything to just be sold off. I mean, we all saw that meta earnings. It was explosive.
Meta was up 10% after hours, closed 10% the very next day. But since then, Meta's down 30%. And since its peak, Meta's down almost 35%, right?
These fundamentals in this current market do not matter.
And unfortunately, that's just the way the game goes when we are getting these major pullbacks and corrections in the SP500.
You're getting the babies being thrown out with the
bathwater. The question is, who are those babies that you want to buy while they're getting thrown
out? In my opinion, the easy ones are the max seven, right? These companies are very profitable
companies that have weathered many corrections, recessions, and so on. Maybe not so much meta,
but Amazon has been through two recessions, at least
including the great financial crisis and a few quick flash recessions as well.
And bear markets, Amazon is going to be just fine, right?
The problem is that the market's bringing the price down.
It's below $200 again.
Uh, Sam, thanks for doing this.
Thanks for the market close.
We appreciate it, man.
No problem.
Thank you for being here.
Could you elaborate a bit on what nation you'd prefer to rule?
Hey, I'm, I don't, I apologize. I don't really want to get into that. Um, I don't like to take sides on it. I'm here to talk about the stock market. Um, I sometimes do get a little bit into,
uh, theory and geopolitics and everything when it does affect the stock market.
But honestly, I'm somewhat more of a proponent that I'd rather see peace than anything and maybe war when it's controlled. But like this certainly
is getting a little bit out of control, in my opinion. Yeah, I'm not really comparing Iran to
Venezuela. The Iran situation, the Venezuela situation happened very quickly. This one was
things were fine. Things were totally fine before after Venezuela. And of course, you know,
the war had to start and yes, it was underestimated and Trump opened a Pandora's box and I don't think
he can close it anytime soon. And I don't think it's really up to him whether it can close anytime
soon. My thing is that this might last a lot longer than people think we're kept on saying,
or they kept on saying that it's going to end in like a week or not. I think it's going to last a bit longer. But the question is, at what point
is the market okay with this war and start looking back at the fundamentals versus looking at stocks,
companies, earnings, and so on, which is more of the fun stuff versus just the headlines.
That is the big question. Am I buying the dip? Am I waiting for it to get worse?
I'm waiting right now.
I'm not trying to buy the dip heavy.
I have been de-risking for the last few weeks.
I think I'm sitting at about 10% plus cash right now, but the pain is obviously hurting.
Haven't trimmed Amazon.
Like I said, I should have. I should have trimmed Amazon.
I did not trim Amazon.
I did trim a lot of options positions, so I barely have any options now in the portfolio.
So the volatility is definitely reducing the portfolio.
But when almost 40% or 30% of your portfolio is in Amazon, On Semiconductor, and Amcor,
which are both down 2%, 4% today, Amazon is down 4% today as well.
The portfolio is definitely hurting.
So I'm right there with you guys.
I'm not really someone who just goes in the cash because I've been through many bear markets,
many crashes and corrections and so on we usually do end up recovering uh
the question just a matter of when and i'd rather buy the recovery when that happens versus uh
just continuously to buy the dip into perpetuity uh however i am looking to and that that is with
the big portfolio um however i'm looking to um start a dollar cost averaging fund where I'm just going to start
buying the Mag7 as a custodial fund for my family and just going to start doing that
regardless, putting maybe like a few hundred dollars in there a week just to start something
for my family where I don't need to really like worry about it and manage it.
More of like a HODL portfolio.
A few companies that I'm looking at starting to do that would probably Amazon for sure.
I'm probably going to do it with Microsoft as well.
Not sure if I'm going to do NVIDIA.
I think NVIDIA, the cycle that – NVIDIA is definitely in a cycle right now.
The question has always been like how long is the cycle going to last for?
And I do think that leaders are definitely going to merge to this.
And I do think NVIDIA is definitely going to be very relevant in the future.
But once data center expansion as well
as ai capex spending does come to a top which it probably will the next three years um i would
expect that at some point around there nvidia is also going to top as well unless of course they
do expand into more of their software vertical uh versus just focusing on gpu and hardware they do
have nv link they do have um cuda and other segments within the company as well as
the gaming segments and autonomy um but that's not where all the growth is coming from their 70
plus growth is coming from their data center which is amassed to about 64 billion dollars
uh a year i believe or a quarter i forget which one but yeah i mean if you're buying sp500 you
could do that one too about 50 sp500 of the SP500 is the MAG7.
And a lot of that is NVIDIA.
And if NVIDIA does pull back, NVIDIA will be less concentration in the SP500.
So you are somewhat getting a managed portfolio by doing that.
I am a tech person.
I do believe that tech is going to continue to push the stock market up in the long run.
So I'd rather stay concentrated in the ones that are producing a lot of cash flow uh besides the mag 7 there are a few other stocks
that i'm looking to include there but probably not as aggressive dc to those as other ones
i'll keep you guys posted but some of the names that i want to continue buying not in size but
as part of that fund that i'm starting i'm probably going to throw some service now and
they're probably going to throw some crash track in there. Probably going to throw some CrowdStrike in there.
Likely throw some rubric.
I'm looking closer at certain software stocks
to include in there, but nothing like,
I'm not really going to include like
very unprofitable companies
that are burning cash left and right.
Something more sustainable where I know
the company's definitely going to be around
for a long time.
And I'm pretty confident that those companies are going to be around for a long time.
Now, if we're talking about other companies like Datadog, GitLab, Klaviyo, Monday.com,
MongoDB, I think some of these companies are still going to be relevant in the future,
but some of these might have their moat in trouble, right?
in trouble, right? I mean, Datadog is more in the observability market. And I would think that if
I mean, Datadog is more in the observability market.
as AI does progress, as Agenic AI does start to get a lot better, having an in-house build tool
centralized around observability might be something that companies might look at versus
paying millions and millions and millions of dollars toward Datadog. If I think about the
observability bucket, Datadog is definitely a leader in that sector. But if you look at Datadog if i think about the observability bucket datadog is definitely a leader in that sector but if you look at datadog if you look at dynatrace if you look at certain parts of other
observatory observability products they're all kind of going down right so i'm going to play
myself mostly concentrate in cyber security if i am going to buy any portion of software
and that would definitely be crowdstrikerike. But even after this massive pullback
in CrowdStrike, guys, it is still an expensive stock trading above 15 times price to sales.
It is for good reason. CrowdStrike is a very strong company. They are nearly profitable,
just breaking above profitability. They're free cash flow positive. They are a dominating
company when it comes to endpoint security clients or endpoint detection and response. The thing is, is that software just
getting thrown out, right? Palo Alto is also an amazing company. This is more of a gigantic
cybersecurity platform. I think this will be around for a long time. Their market cap is
sitting at around $120 billion. And I think they're roughly about 30% away from its all-time high. So let's see over here. They are sitting at about 35%
away from its all-time high. In fact, actually there is a, hold on.
There is a sub stack that I always follow called Clouded Judgment by Jamminball over here,
where he usually shares the valuations for a lot of these companies. He just released it today.
And he always posts this chart all the time. Right. So Palantir is trading at enterprise value
over next 12 months revenue. It's trading at 48 times, which is a lot better than where
I was trading at a few months ago. Still very expensive. Um, but you know, pounds here is
something that you're looking at. You know, if you want to buy in small increments and dollar
cost average over a long period of time, there's really nothing wrong with that. Um, just remember
that it's probably going to go low if the market does pull back more in the same thing for pretty
much any of these companies. Uh, Datadog still sits here pretty expensive at 10 times.
Shopify 10 times.
Snowflake even after the dramatic pullback is still an expensive stock when you think
about it.
Palo Alto 9.4 times, CrowdStrike 16.1.
If you look on the other side, next 12 months revenue growth, Palantir is still growing
62%, the fastest growing out of all of these top companies over here with, of course, the largest gross margins.
And that's the reason why it's earned that place over here, right?
Well, Palantir only earns $4 or $5 billion a year.
Why is it trading at egregious multiple?
Well, this is exactly why, guys.
32% gross margins, 40% free cash flow margins, reducing costs, increasing revenue.
Basically, so many defensive
contracts of the government. That's your case why, right? And this is literally the forefront
of software and AI, right? So you have your hardware and AI, which is your NVIDIA and your
software and AI, which is basically your Palantir. And as long as we're in this bull market for AI,
then tool will lead. Like you're never going to get that premium taken off of there unless we're in a massive bear market or crash. But even then there will always be buyers of Palantir. So
better, less guessing than not, and continue to dollar cost average to Palantir. If that
is your thing, I personally don't need to, I'm fine with that. But you know, there's nothing
don't edit. Don't let anyone ever tell you like, oh, you're buying pounds or it's egregious valuation.
You're crazy.
It's like, well, if that's what you want to do with your portfolio, go ahead and do it.
Don't let anyone give you crap about that.
And who, who, anybody gives someone crap about their, about the, about a portfolio that they're
not managing really is nothing else better to do.
And you probably shouldn't even be listening to that person anyway.
Uh, Melly is still super expensive.
Melly isn't the most cheapest stock out there but they they're
basically the amazon of latin america um their aws is basically meccano pego and that is growing
very rapidly and quickly becoming more profitable am i keeping zeta shares of course i still have my
zeta shares haven't added to it yet i'm actually pretty happy with my Zeta position. I don't think I want to continue adding to it unless we get like some sort of
bottom in the stock market and then I'll be aggressively buying.
But until then,
I have no idea how low the stock market is and I have no idea how low Zeta
will go.
So I will continue to hold on to that one.
All right,
guys,
I wanted to play this clip here from Ed Yardini real quick regarding where you see stagflation and oil and energy with the economy.
Question that they've struggled with before in the past.
And that is whatever we're seeing in terms of inflation.
Let me know if you can hear that. whatever we're seeing in terms of inflation pass-through from the war in the middle east is this transitory is this one-off or has there been enough damage structurally that you know
it's going to take a long while for us to get out of this where do you fall on this spectrum
well you know the war clearly has brought to the fore the possibility that this will be a kind of a replay of the 1970s.
Until the war, it kind of looked like the roaring 2020s.
Global growth was strong, real GDP in the U.S. all-time record high, stock market booming.
But yeah, the longer this war lasts, the more we have to consider the possibility that this is a turns into a stagflationary
situation, which is a real bind for central banks because, well, especially for the Fed,
the Fed has a dual mandate.
And if you have inflation going up and the economy slowing, maybe even going into the
recession with unemployment going up, the Fed's kind of between, what can I say, a ran
and a hard place.
I mean, they're kind of stuck.
And other central banks will have to respond to inflation.
That was good.
Usually the term is a rock and a hard place.
And the dude said Iran and a hard place.
Like that, I love Ed Yardini, man.
He's the man.
I only have one mandate.
So that really creates a very grim outlook.
I mean, the 70s were a lost decade for
the stock markets in the U.S. and around the world. But I think there's so much at stake here,
and we all know how bad this can get if we remember the 70s. I think there'll be a lot of
push against Iran. I think Iran is going to have to fold one way or the other. And meanwhile,
as I said, commodities are common. Commodities have to fold one way or the other. And meanwhile, as I said, commodities are common commodities will get out one way or the other.
Hmm. Yeah, listen, your shop, your epitome shop is an independent one, right? But folks like
Goldman also city, they're still holding to the view that the Fed is going to cut two,
in some cases, three times this year.
I mean, everybody wants to be an optimist, right?
But to be honest, I mean, so much is just unknown about how this could unfold.
I'm really sort of pushed to try and figure out how people can actually be holding on to that kind of view.
Wouldn't you argue or wouldn't you
think that the risks are more to the upside, the central banks are going to have to hike?
Absolutely. I mean, almost all central banks other than the U.S., as I said,
have only one mandate, and that's to keep inflation down. And that would clearly mean that
has to keep inflation down and that would clearly mean that the ECB, the BOJ, the Bank
of England, all central banks, big and small, would have to move towards tightening. The
Fed, because of the dual mandate, may be kind of stuck in the middle. But the stagflationary
environment is one that can't be ignored.
Even the industry analysts are very optimistic.
It's really remarkable.
But we watch weekly analyst expectations for earnings, and they're actually increasing their numbers for 2026 and the fourth quarter, the first quarter of 2026, by the way.
And they're also increasing
their outlook for 2027. So maybe Wall Street didn't get the recession memo that's out there.
I raised my recession ads from 20% to 35% a couple of weeks ago when I concluded that
with the fog of war, how can you not get a little bit more pessimistic?
But 35% is not my base case. My base case is this too shall pass. This may very well be more
akin to what we saw in 2020 when there too oil prices surged. had our russia and create invade ukraine there were commodity issues
with grain um so um that's uh that's what i'm thinking is going to happen but honestly as you
said it's more hope than than anything based on on fact yeah and very quickly the white house
obviously watches uh bond deals right anytime you get anywhere near five you
see a change in policy I think people have noted that a number of times right
the other metric that they're watching very closely is the the national
nationwide price of gas which is past four bucks a gallon and if you live in
California right there net energy importers it's more like eight bucks a
gallon that's gonna be something that they watch very closely.
At these levels, and we're just tucked under four right now, the national average across the country,
is that a taco signal right there? I think it might be. I think arguably the postponement of
the bombardment on Monday and extending it for five days was a kind
of a taco moment.
But it may be kind of late here for the president to declare victory.
I mean, he can obviously do it.
But I'm saying in terms of the impact on the economy and the elections. I watch poly markets pretty closely and the odds of the Republicans losing the House are
85 percent according to poly markets.
And it's kind of even, Stephen, when it comes to the odds of losing the Senate.
So things are messy geopolitically now.
Imagine if they're still messy come the midterm elections and the result is an even messier domestic politics.
Yeah, that's something I was actually pretty surprised about. I did not think that he would be okay with things happening like this as he's getting so close to the midterms.
he would be okay with things happening like this as he's getting so close to the midterms.
Obviously, the midterms is very important for Trump because he doesn't want to lose power of the House.
Right. So right now, the Republicans have the majority in the House.
And if the midterms come along and Trump's approval ratings are terrible,
people might come in and vote the other way and then they would lose control over the House.
And then his entire administration would probably lose control over the house and then his entire his entire administration would
probably lose control of a lot of the uh pushing a lot of bills um through the house through
congress and so on so i would think that that would be something pretty important that's probably the
reason why he wants the war to end the problem is is that he can't he can't end the war anytime soon
or if he does it's not really definitive if it will actually end because Israel might just continue doing it.
So I think that's where the negotiations come to place here.
And we're still waiting to see if they're actually going to come up toward its end soon.
So I did want to just take a look at something here.
Let's just take a look at the after hours action on the market.
Yeah, I mean, the market is pretty volatile after hours over here.
I'm expecting at some point we're going to definitely be getting some news here
that they reached some sort of a deal.
But again, if we do look at SPY and we look on the weekly chart over here we
we had it we had our first close below the uh 50 uh below the 50 day the 50 weekly moving average
um which would really not set great precedence because the 100 100 week is down here at 606.
here at 6.06. 20% correction would put us around as far as 5.56 on SPY. But usually a good point
of contention here is the previous highs in the market. So that would be here around 6.10. So we
have a point of confluence between the 100 week as well as the previous all-time high here. I would expect
some sort of bounce in this area, if anything. So I might take a step over here and buy a few
dips around this area. But we do have a long ways to go. We got like about 5% down from here.
Obviously not going to be a straight line down but if the market continues
to fall cliff which it looks like it is uh then that might be the next target we have here I mean
if you look at the monthly chart guys like like nothing it's this is like nothing right this is
literally nothing on the monthly chart I mean actually yeah you can kind of see the monthly
chart but like in the grand scheme of things, guys, like this is nothing.
This is literally nothing.
Bitcoin has had a massive retracement, though.
That is for sure. Bitcoin has had a massive retracement.
We're actually sitting around the previous all-time highs of Bitcoin.
And that's probably the reason why we're finding some support here is because the all-time highs in 2021, 2022 are like literally right here.
And if you see here at 2024, we kind of sat around there for a
little bit uh for my opinion the way that bitcoin moves is that it likes to make a big move and then
chill there for a little bit and then make another big move up or down so might take a little bit to
see what's actually gonna happen here but we're still like in range between like 73 000 and like
60 000 so i don't expect anything big to happen there unless we get some like really big news.
But we'll see this weekend.
Usually Bitcoin likes to make its moves like Sunday night, Saturday morning.
So we'll see what happens there.
But we definitely did retrace a lot of that action.
We got up to 75,000.
We're back here at the mid 60s.
To intervene if hostiles against Iran escal escalate i don't know that's not really moving markets so
i don't know if that's like a major headline uh 613 590s right yeah i would think that it would
it would naturally head to that point uh we'll see one second let's's go check something.
No, there it goes again.
All right.
So let us see what happens with that one.
All right, let's take a look at cybersecurity, guys.
We have more than a few cybersecurity stocks here.
I know this has been a little bit of a question now for quite some time.
I do comment on it from here and there, specifically the rubric.
I am long rubric in the portfolio.
Keep in mind, though, the only reason why I'm continuing to hold this one is because my cost basis is very low like right here around the ipo levels
i the last time i added here was 85 in a small amount and that's when i was right around it's 200 a day moving average so i haven't added since then um this was a much larger position
of portfolio when i was at 100 but obviously it's not hundred dollars anymore if we do come back here to this region over here i'm probably gonna start adding to it um it really depends if we're
at that confluence area in spy i'll probably throw some money at it um but again i already mentioned
that i'm starting a uh family fund uh and i'm gonna start dc into it regardless but like we're
talking about in size or i'm actually putting like an extra one or two percent in rubric
i'm probably going to be waiting around here but till then you know we got to wait and see
what's going to happen uh i don't know where it's going to be at maybe software or bounce but today
we did make a new 52-week low rubric so stay tuned for that one uh vg is the only stock portfolio
that is green yeah i mean really anything energy related is green if i look at um
i always bring this up all the time but i look at xle and let's look at the components in xle
i'm actually bringing this up over here
Let's look at these XLE holdings and I guarantee you most of them are green.
XLE is up 1.6% of the day and you have ExxonMobil, Chevron, ConicalPhillips, WMB, SLB, and all these companies.
Kinder Morgan is flat in the day.
EOG is green in the day eog is green on the day slb is green on the day
williams green today i'm still sharing that screen i just realized i'm still sharing that
other screen but yeah i mean energy is definitely going up definitely So, you know, stay mindful of that.
Not everything is red.
It's mostly what's been working in the stock market for quite some time.
That's actually red right now.
So you got to keep that in mind.
Now the tech trade has been pulling back pretty considerably.
If I go back to the charts over here and I'm going to go to my cybersecurity bucket.
CrowdStrike is down 6% today.
Fortinet is down 3.5% today.
Okta is down 8% today.
Palo Alto 6%, Rubrik 4%, Sentinel 1 6% today.
Zscaler 6% today.
Zscaler continues to pull back.
Zscaler has not been trading down here since 2023.
Is that just crazy to think about?
2023 Zscaler was trading around here and arguably a much better company than it was four years
ago, three years ago.
But Zscaler has never been my number one pick when it comes to cybersecurity.
One, because of their stock-based compensation.
If I go to Fiscal AI, I'm going to share the Fiscal AI screen right here.
I'll go to the cybersecurity dashboard that I created.
that i created you can see a lot of the cyber security stocks that i have over here rubric is
trading at a 5.7 times forward price to sales crowd strike 16.1 still expensive palo alto 10
center one is very cheap octa is very cheap zeascalers at a 6 40 dance at knee so why don't
you why don't we buy sentinel, why don't we buy Sentinel one?
Why don't we buy Octa?
Well, the reason why that these are trading so cheap
is for a very good reason.
One, the revenue is around 20% for Octa, it's at 11%.
Free cashflow is at 7% for Sentinel one.
And Sentinel one is slowing down in growth.
And they are not a profitable company on the bottom line.
They are profitable, free cashflow.
Okta has a much better profitability metric, but they're slowing down growth dramatically.
And to be completely honest, Okta is a secondary leader compared to CyberArk.
So when we think about cybersecurity, we have your endpoint client management.
You have your network security.
You have your identity and access management, which is your Cyber arcs as well as okta and a few other companies and you have your data security which is
rubric um not coherent i forget the name of that other company that's also in there you also have
a com vault and a few other stuff that will be your data security as well you have your leaders
in each segment and if i open um, I usually like going to the
gardener magic quadrant. And if I go here to
the leaders for client endpoint management, CrowdStrike, Microsoft, Sentinel
one, Palo Alto, Tread, Microsoft, and so on.
I mean, Sentinel-1 would definitely be trading a lot more expensive.
The only thing that their profitability metric is just terrible.
And they're not really improving it.
If I go down here to their margins,
their gross margins are at 74%, you know, they're, they're a software company. So they're going to have high gross margins. Their operating margin is minus 32%. And if you look at these past few
years, like they've gotten a little bit better, but like not that much better. You'd expect that
a company that's been around for over five years, even 10 years, that would be at least profitable
by this point, but they're not. And then I'd not even close to it. So I think that's the reason why the company's not trading
too cheap, too expensive at all. In fact, they're very cheap. Net profit margins still minus 45%.
So like, they're still not even close to there. And arguably they have basically gotten nowhere
in the last two years. So I think that's the reason why Wall Street doesn't really like it.
So I'd be very careful with stocks like this. Free cashflow is expanding, but you know,
the market is wants to see profitability and if it's not getting it,
it's not going to buy it. Right?
So let's look at CrowdStrike as the leader in here and let's look at their
margins margins still 75%, but look at their operating margins.
They're very close to being operating profitability if I look at the quarterly metric
operating margins are about flat which is great to see last quarter they actually
really good earnings last quarter but the market sold it off anyway they are
profitable but I think that was a one-time write-off so they're not a
profitable company but they're the dominator when it comes to this entire sector in cyber security i think they have
like somewhat like 40 percent of uh all endpoint security clients are a client of cyber security of
crowd strike and remember when they had their outage about a couple years back
that was like one-third of the system's lines taken down in airlines right they own a lot of the field
and that's why they have a premium
attached to them. Free cash flow margins are 30%, right? So the company is doing very well.
Palo Alto is another great leader in cybersecurity. He's still trading pretty expensive, but definitely
a lot more attractive than it was before. Gross margins, 75% operating margins. They are a
profitable company, but more mature when it comes to cybersecurity. Even the margins, 23% net profit margins are at about 50%. And they're supposed to be expanding
more on free cashflow margins as well. So this is obviously a very great company, right?
Anthropic is not going to win over crotch. They're not like who is going, if you have a compliance
approved outsourced security products, you're not going to build an in-house one
and completely get rid of all of it, right? The fear though, is that all of the dependency that
these companies have had the whole time might come into question as far as their budget. Maybe
they don't need to allocate such a big budget to them. Maybe they're going to downsize their
contracts. That's where the fear comes.
Not that they think they're going to go to zero,
but because of the fact that their dependency on them
might not be as much anymore,
and that's why the market's selling it off.
I think with some of these software stocks,
it makes sense why they're being sold off
because they don't really have that much pricing power.
And I think a lot of that comes with 701.
They basically have to negotiate their contracts
with small and medium-sized businesses,
and that's the issue they're going to come into uh but i know a lot of people that
have been pounding the table and signed a one when it was 17 bucks and now we're 20 lower so
you know be careful which one you pick guys be careful which one you pick
finally let's look at rubric rubric is obviously one of my favorite data security um high gross
margins 82 operating margins are still negative, minus 22%.
They are more of a fairly new company,
but they are growing pretty quickly.
Net profit margin still minus 22%.
But if you look at this profitability profile,
it's gotten significantly better.
That's kind of the trajectory you want to see.
If you look at their income statement,
their revenue growth is still 40%, 50%.
So even though they are not profitable,
they are still growing very quickly.
Now, if Rubik was growing at like 20% range,
they probably would be trading at about $20,
but they're not.
They're growing much faster
and they're sustaining their growth.
That's the important part.
If you're paying for the growth,
you have to be getting your premium
from something other than profitability. If it's not there, it needs to be through growth. And
that's the reason why you see a lot of these stocks, like even though it's not cybersecurity,
they still are growing very quickly. Your IRNs or Nebius and so on, they're growing like triple
digits guys. And they might not be profitable, but they're growing pretty quickly. That's the
reason why they're still trading at premiums for that very reason. Now, if you take a unicorn like NVIDIA, already
a very profitable company, but they ended up growing at triple digits. That's the reason why
their valuation expanded very quickly over a short period of time, because you went from a company
that was growing at low double digits to growing at triple digits, which was already powerful.
double digits to growing at triple digits, which was already powerful. They were printing money.
And that's why everyone bought NVIDIA. The issue is that people think that that growth
is slowing down from here. It has not slowed down from here. It has actually accelerated.
So why? It's fear. It's mostly fear. It's mostly fear. All right. So what else do we have here?
Is there anything going on in CNBC right now?
Let me see what's going on live here.
We don't have anything over there.
Let's see if there's something here.
Trump is actually going to be talking in 30 minutes.
I don't think I'll be able to do that one.
I thought I saw something earlier.
Stocks close at a session lows.
Oh, Tesla's supposed to be having their deliveries data soon.
Let's take a look at this one.
This is going to be everyone's favorite analyst, Gene Munster.
Gene Munster managing.
Sarcastic.
A lot of people don't like Gene Munster.
I mean, he's an analyst.
He's going to say things people don't like. This dude got very bearish in Google and it's low.
So let's hear what he's got to say.
Partner at Deepwater Asset Management and no doubt inventor of many words.
Gene, it's been a long week. We're glad to have you on the program. I saw Kevin Gordon Schwab with a great tweet as he is
want to do that the PE, the forward multiple on the Nasdaq 100 is now about 20 down from over 30
just five months ago. At what point does this sell off stop?
five months ago, at what point does this sell-off stop?
It stops with a catalyst, and I think the catalyst is beyond the geopolitical piece.
What you've just described is beyond the geopolitical side, the sell-off here.
And the catalysts come in the form probably of those Mag 7 that haven't had the big catalysts.
And so, for example, we saw Nvidia last Monday,
they essentially took up their calendar 27 revenue growth from 30 to 40%, big step up there.
Last quarter when meta reported, they took their numbers up from for growth for this March quarter from 25 to probably what's going to be 35%. So we've had some of these
kind of resets higher, but I think the catalyst to answer your question comes in the form of some
of these other companies that really haven't shined. And the closest catalyst amongst this
group would be, of course, Tesla, with them reporting their deliveries next Thursday. We
can talk more about those, but that's a potential catalyst.
Obviously, it has fallen below the fold in terms of pay metrics.
So there are catalysts.
And then what we have coming kind of later in the spring, I think, from Apple, from Google, on personalized AI.
So I'm still optimistic.
Like that truck we're showing in the graphic, I want to back it up for a second.
Because do we know what the cause
of this selling is? The war is obviously the easy answer for the market at large, right? Oil prices
up, interest rates are up. But the sell-off began before the war began. All these highs were kind
of hit July to October of last year. So is the war an add-on reason for the selling,
or is it the main reason?
I don't think so, but what is it?
Yeah, it's an add-on.
I would probably put it at maybe 25% of this.
The bigger topic, essentially what's going on here,
and we started to see this back in the beginning of November,
these numbers kept getting much higher, especially
for the big companies.
And it just created this concern that it really couldn't get much better, this idea of that
the growth is going to somehow slow.
I think what kind of represents this in its purest form was, again, that step up and guidance
that NVIDIA gave for next year from 30 to 40 percent, the stock traded
off 8 percent in the following two and a half days after that comment. The Nasdaq was down about 3
percent during that period. And what that tells me is even me being optimistic, I wasn't expecting
them to make that strong of a guide. And so what I think we're really underscoring here is that this idea about the sustainability of AI, this concern that camp, what is the, what's going to be the
trigger as these companies continue to beat numbers, of course, then the bar gets even higher
for that out year growth. And so that's the piece I feel really good about the fundamentals
kind of triggering or trying to define at what point the investors come to grips with this is
going to be growing higher for longer. That time and that dynamic is
the piece that I think is going to be more difficult to manage.
Jean, the thing on my mind, you know, you go back 10, 15 years and so many guests on our airwaves
or, you know, I talk to people and they all, anyone who sold one of these big tech platforms
often comes to regret it given the performance that they've had. But do you think that these companies fundamentally
can grow wealth over the next five, 10, 15 years
like they did in the past?
You know, are we chasing a dream from a former era?
Well, I think that not of all of our created equal,
of course, in the case of Microsoft,
I'm a believer that they're gonna be more challenged.
You talked about that 63% upside to the average target.
I mean, I think that the consensus is it's a buy-down here, the conturing consensus.
I think, Kelly, that's an example of a company that's going to be impacted on a seat growth basis.
But a lot of these companies, we recently increased our position around Apple.
And part of the reason was after Opus 4 came out and what we saw with this
personalized AI I think that there is an a massive opportunity for Apple really to get this right I think
Also has a similar opportunity and so I do believe that
Some of these companies are still should fundamentally be owned. I also believe that if you're looking for
Outperformance, I think you need to own the AI trade outside of, of, uh, the mag set.
I mean, he's got a point there. Um, what's continued to lead the market upwards in the
last three or four years will continue after all this is said and done. Cause ultimately tech is
50% of the S&P 500. All right, right guys so that is it for today's show um
if actually let me see if i can find uh omit's meetup event i actually think i found it over
here so this is the lake if you want to go ahead and check it out uh to omit's meetup event. It's going to be in Southern California. Starts tomorrow at 6pm,
goes until midnight. And there's hotels there and everything, but you can go ahead and check this
actually, let me go ahead and share this screen real quick. And then I got to close the stream
out. This was from the New York one. If you guys see that guy right there, see that? See,
see this buffoon right here? This guy right here? Yeah. That's me. Let me see if I got, that's Nate dog.
Who are some people over here who I can tell? That's, that's, it's Adam.
I can't really tell. I don't know who this guy is. I have no idea who that guy is,
but yeah, guys hope to see you there.
If you're going to be heading out there, I'm going to be there as well.
It's going to be a great time.
Great time to all hold hands and cry together.
No, I'm just kidding.
We're not going to be doing that.
We've all been through this before.
We've been through Bear Marksburg Corrections before.
I would say if you've been through these before,
this is just another show on the rodeo, right?
The best thing you can do in these situations is to not try to buy calls
and leaps thinking this is the bottom.
That is a loser's game.
It's not going to sustainably work over a long period of time.
Oh, Zoe, are you going?
Let me know if you're going, dude.
That would be totally cool to meet you.
I don't think I've ever met you before, so it would be really cool if you're going uh yep yep keep buying keep buying
if that's your thing i i i'm not gonna be buying my big port but i i want to start i mean i technically
have been buying um because i always dca into my kids portfolios every single week
my family's portfolios every single week so i technically am buying we're talking about
executing in the big portfolio um no i have not been buying there. That's a little bit different story,
but regardless, you know, it's always about accumulating wealth. And the only way you can
accumulate wealth is to buy assets. And the only way you can buy assets is by deploying money.
And that's whether real estate, stock markets, bonds, whatever it is, because you are losing
2% every single year by having just cash under
the mattress.
So we will see.
I was up 8%, started buying, dipped, and then coughed up a lot of profit.
Yeah, that's usually what happens, man.
It's usually what happens.
I didn't see what the mark was at this morning.
I woke up late, but we will see.
You're too busy?
Too busy to see your boy?
All right.
It's all good.
It's all good, man.
I know you're a nurse.
You're going to be pretty busy there.
All right, guys.
Take care. Really enjoy coming here. The's all good, man. I know you're a nurse. You're going to be pretty busy there. All right, guys. Take care.
Really enjoy coming here.
The show, of course, must go on.
I don't know the next time I'm streaming, maybe Monday morning or something.
But, yeah, hopefully see you guys there tomorrow, right?
Take care.
