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OPPORTUNITY OR TRAP: HEALTHCARE AND UNITEDHEALTH $UNH $UNHG
Recorded: July 29, 2025 Duration: 3:16:24Space Recording
Short Summary
In a volatile market, UNH's revenue growth of 16% year-over-year stands out, despite a 7% drop in stock price post-earnings. The company is navigating regulatory challenges while exploring strategic partnerships to enhance its market position.
Full Transcription
Thank you. hello how are we doing today
you got me i'm sorry i had a i was trying to get plugged into my charger. I had a bunch of stuff going off all
here at once. You're good. You're good. My problem is I would just run into it, but I don't know if
anyone can hear me or not. So all I need is that one confirmation and we are good. I appreciate
everyone being back here. Another day of stocks on spaces. My portfolio is down a little bit. I'm
seeing one or two green names as I'm scrolling through google amd at 180 it filled
the gap to the upside i thought amd would have maybe taken a little bit of a break it did not
showing some clear out performance this felt like a day in the past where apple might be like hey
let's do the opposite of the market and be up but definitely not happening today that's that's
unfortunate options mike shout out to you uh good day for you on that one coca-cola up raytheon up most of the names in the portfolio are red we have had a lot of earnings
come out this morning sofi was one of the ones that i did see was performing pretty well but
besides that a lot of the popular ones were down paypal spotify united health boeing procter gamble
etc we had the china talks kind of came out.
The conclusion of them were in an interesting place.
Doesn't sound like we got any certainty on anything.
And then when we kind of look forward to this spaces,
there are a couple earnings coming out right around the close.
Starbucks, Visa, Booking, Electronic Arts,
Mondelez for all you Oreo fans out there, and a bunch of others.
So I'm looking forward to this conversation.
We have a really great panel up here and, uh, and yeah,
I don't know what you are watching off the start here and then, uh,
new window.
Yeah. I mean, I don't know if you mentioned SoFi, what, uh,
what a move that made this morning on, on earnings outside that. I mean,
yeah, Google stuck out to me. The VIX is popping up. Oil.
We had a bunch of comments from Trump on Air Force One a little bit about an hour ago or so,
and some talk around Russia, some sanctions and stuff there. Oil is up 4% right now. It was up a
little bit more just about 15 minutes ago, but a huge move over in oil. That seems to be where
most of the action is. Everything else pretty flat here in the afternoon. I saw HIMSS was having a nice day as well. I don't know if you saw Novo Nordic
this morning came out, lowered some guidance, showed some weakness in the US weight loss drug
market, which is something we have not seen before. Stock is down 20%. Now that was a big
driver for HIMSS and Eli Lilly. Eli Lilly is down 5%.
We haven't seen that read through yet. I don't know when exactly they're reporting earnings.
You're good. And then hims, I don't know what that move is intraday. So it's interesting
up 3% there, but that Novo Nordisk play was a pretty big one. Options, Mike, I see you have
your hand up. And then i know we got
daniel who's uh there's a newer guest up here and then we'll go around the panel from him after
that what's up mike hey ben uh you had me at oreos man you know oreos and oreos and apple
red on the day i i know i was gonna hit options mike being happy um listen i don't hate apple
i actually love the company the stock i'm not a bit. I'm not an iPhone guy, but it doesn't matter. I need to run out shortly, so I want to get up here quickly and give you guys some quick thoughts.
GDP, then we have the Fed decision, and then we get Microsoft and Meta and Harm and a whole
bunch of other companies reporting tomorrow night. And it just continues on Thursday and
into Friday with data and earnings. So the market here is just kind of quietly going along doing
its thing. And yeah, are we down on the day? Yeah, we hit a new all-time high in the SPY.
We're on the lows here. The VIX is definitely up a little bit, but yeah, I'm trying not to read too much into it. Although I will say again, earnings to me today,
other than SoFi, which by the way, I mentioned that in the previous space we did, that was a
game changer type of report. Like you look at that report and like that's now has my attention
as something I may want to own moving forward and look for a big move. I mean, they really just
knocked it out of the park, diversifying student loans, no longer their number one business,
adding customers left and right.
I mean, that's exactly what you want to hear when you hear a report.
Boeing was not good.
UPS wasn't good.
Procter & Gamble was okay, but it warned the consumer showing sign of distress.
You know, so none of the names this morning.
Spot guided down, missed and guided down, right?
And they've been on a rampage.
So, you know, the market's taking this all i think kind of in stride google which i thought had a great report and sold off for two days come
screaming back up today nice move on that one as you said amd i would have you know like today's
day five don't chase it well i traded it today but i mean god i mean this thing doesn't want to
quit all of a sudden nvidia another new all-time high microsoft and oracle new all-time highs i
mean they're kind of just sticking with the same theme the same names right now
and until we get more this market is where it is is it seasonality against
us yep we talked about it but doesn't mean we need to dump and could just kind
of go sideways and see what we get I think you know I think overall just kind
of stay the course pick the names you want if you're day trading like I am
right now just look for names that have momentum.
Names like AMD this morning can Google.
And I shorted Tesla out of the gate.
Oh, and I traded SoFi.
I made money on SoFi for the first time in forever.
I almost always lose on that stuff.
I appreciate you, Mike.
I'm going to keep us going.
Daniel, how are you doing?
Hey, thanks for having me.
We appreciate you being here.
First time caller. Appreciate the opportunity to join.
I've been seeing you doing a lot of stuff. I've seen the show with Shai and Daniel, we appreciate you having here.
And I've seen a lot of your interviews always on TV and stuff.
And I know you probably take a little bit of a different angle.
I've seen you doing some interviews with all the CEOs and talking with teams, getting an inside kind of
look on there. So I'm excited to hear your thoughts around this earnings season we have
going around right here. If there's been any interesting tidbits, any companies, or I don't
know if there's topics in general that you want to talk about, but we do appreciate you being here.
For the background, and I'll take less than 30 seconds just to share, but Futurum, we
advise about 600 high-tech companies.
We talk to about 200 Fortune CEOs a quarter, varies 100 to 200, I'd say.
And we advise a lot.
So there's certain names we work closely with these companies.
Can't own them, but definitely have a lot of insights.
And that's probably the CNBC interviews and stuff you see. And then, of course, I've got my book. So for
instance, I'm a four and a half year SoFi bull. I've been accumulating it from the top to the,
from peak to trough, built a very, very large position in the company, bought a lot of it at
$4 and $5 when it went down, always always bought into the company it was a remarkable report today you know they've had a lot of good quarters when i say good like where where
you were like it felt like it was over sold it felt like it'd been unfairly treated maybe it was
because it was a spack maybe it's because nobody believed it was anything more than a bank but
today it kind of fired on all cylinders and it was really great. And probably the biggest thing I reflected on and you could see in the kind of content I was sharing for the week up to this was it had a completely different pattern.
I'm not a trader. I am an investor. So I buy companies. I hold them for a long time.
I'm very concentrated, you know, 10 or less names, big positions.
I play all the options, but I don't trade companies.
I invest in them and I own them for long periods of time.
But I watched the SoFi run up and it was remarkable because the last six earnings I could think
of at least, it actually rallied into the earnings and then, of course, sold.
It faded hard on the news.
This one was weird because for about seven or eight days after a tremendous run up to
like $22, it sold off every day except for one over the last
seven days, but it only went down a dollar. So it had these weird slow sell-offs that we're actually
seeing a ton of dip buying. Everybody was buying the sell and was accumulating. And then you saw
a lot of institutions starting to come in. I think they're closer to 50%. The short interest dropped
just a small amount. And I basically said the setup was really, really good. Now it's faded throughout
the day today. It certainly hasn't held, I think it was up almost as high as 16, 17%. It's probably
hanging around more like nine or 10. But I think a lot of that's more about people that have just
been in it forever, probably see this as a final opportunity to actually make money. If you were in it from the IPOE days, you lost your rear.
If you sold it at any time between then and now.
And then, of course, I think there's some August fear.
I think a lot of people think August is going to have a mini sell-off.
That's my overall take.
I'll add one or two notes, and maybe I can come back in later if you guys will have me.
But most of my attention is on Microsoft, Amazon, AMD, ARM.
I will talk to the CEOs of ARM and Qualcomm over the next couple of days, and I'll have some insights there.
I mean, the AI chip trade is incredible. It's robust. Everybody's seen it with TSMC, with NVIDIA.
Everything outside of AI has been really, really weak.
But the big number to watch for this week, and I published something about this with Shai actually, is can Azure hit that whisper number, 35%.
If Azure gets close to that 35%, beats Alphabet, it will definitely beat AWS on cloud growth.
I think the AI trade is fully intact for the long term. And I think any sell in August will
get bought up in the last four months of the year.
I'm curious and more of like,
I don't know if you've talked with any CEOs that have kind of looking back
in the last couple of weeks,
but what do you think you're going to be asking them?
Obviously we're waiting for the reports to come out.
Do you have any thoughts on Qualcomm arm where you're kind of watching?
And maybe I had the chance.
I've been on the record with a few.
I've talked to Bill McDermott from ServiceNow last week.
The sentiment is really bullish for companies
that have a strong posture around the AI transformation.
There's still this kind of underpinnings
of like, where do gains come from?
Is it efficiency gains?
Is it productivity gains?
A lot of what you're reading about,
whether it's Microsoft firing all of its attorneys with less than seven years of experience
and all the cuts they're making around the organization, or you heard Bill McDermott himself,
who's been the ultimate, never doing the layoff, never reducing staff, talking about the fact that
hiring might slow. So there are some productivity concerns, and that's a macroeconomic impact that
could lead to some job displacement over a period
of time. And you saw at the AI Summit with President Trump that one of the big tenants of
that event in DC last week was all about job creation, upskilling. We're not seeing people
being able to keep up with the pace of change, but we are seeing companies being able to rapidly
implement AI to gain big efficiencies. We actually track this at Futurum and we had something like a five plus trillion dollar cost takeout estimated, you know, over the next couple of years in terms of where dollars are going to come out.
So we think that EPS and OpEx will continue to accelerate for most companies that are going to play the the, you know, the AI and agentic trend line.
that are going to play the AI and agentic trend line.
But what we're not as sure about is, you know, we've got numbers of everywhere from 20 to 30 trillion by the end of the decade in terms of economic productivity gained from AI.
And what we're not sure is where sort of the humans fit into this right now, because unlike the past transformations of the last 40 years where it was a little bit more of we would see sort of a shift and then we'd start to see new jobs, whether it was developers,
whether it was social media managers, it's not as obvious yet to any of these CEOs I'm talking
to. And a lot of them will still pitch the fact that there will be more jobs coming.
But whether it was Arvind Krishna from IBM that came out early and said, you know, we're replacing
people with AI, we're seeing a lot more of that than we're actually seeing jobs created.
The good news is if you're an investor, if you're an asset holder, these companies will
continue to deliver.
They have multiple ways now to get there through growth and through cost management.
The harder part, though, is if you're an employee and you're depending on a paycheck, it's looking
more and more grim over the next few years as to how AI is going to impact jobs.
We still believe top performers will always have a place, but that sort of middle of the pack,
those that have sort of struggled to differentiate, big tech companies, Andy Jassy, Satya Nadella,
Sundar Pichai, you're hearing from all these companies, are looking very rapidly at efficiency
gains, and that's mostly human capital.
There has definitely been a theme in this market of these older tech companies doing very well.
Wolfie has been one talking about that a lot. And it's not just the tech companies too,
Wolfie's been talking about. But, you know, the IBM, I did have a little bit of a runoff or fall off off the earnings I haven't looked recently, but that was one that's been doing
really well.
Oracle has been performing really strong recently.
It sounds like a couple of those names fit in that basket as well. Yeah, I said what's old is blue about IBM.
I mean, I had a long talk with their CFO on earnings day, Jim Kavanaugh.
They've just done an incredibly good job of cash and operational management.
So their growth trajectory and plan
actually increased from somewhere around one to five percent. So as much as people are like,
that's not a really great growth rate, it's not that much smaller than Apple's growth rate at
this point. So IBM has the enterprise tech, it has the transactional world. So, you know,
it actually still sells mainframes, but they're the biggest
and the best at this. It's huge margin for the company. And it delivered that 5% growth with
huge op-ink. So IBM is solid. Oracle is the juggernaut though. Like Oracle has completely
made a pivot. They are no longer just an old kind of tech company. They are cool again,
whether it's Stargate, whether it's the partnership with OpenAI, whether it's the partnership with NVIDIA, they announced a $30 billion a year cloud
contract potentially over the next couple of years coming in. They're going to be as big as
Google Cloud, very likely. It does. It feels like Oracle is gathering that momentum to make a move
at being the next trillion dollar company. They're like 700 billion right now.
It's been an incredible run. I mean, we were making the call. We made the call on a number
of networks when it was in the high 70s and 80s saying it was undervalued. They've got this really
sticky, about 75 or 80% of the revenue is more predictable. It's not all pure ARR, but it's
subscription. They of course have the enterprise apps business, the database business. They have
the most important data in the enterprise out of pretty much all enterprise data platforms. So Oracle and SAP have that critical
ERP data. But the fact is, that's all old stuff, but what they've done with cloud, what they've
done with AI, is they've really made the company interesting again. And so investors buy into it.
It's very robust. It's a cash machine.
And so we love Oracle.
And so we've been recommending investors to really pay attention to what Oracle is doing.
And like I said, we've been calling it since about $200 ago.
So we saw this stuff early.
Like we saw it in India at $15.
I want to ask you a cool question.
And I also want to bring Wolfie another into it. Okay, we're $200 higher now. Obviously it's not the same, like,
oh, this is great or whatever, but like, how do you feel about it now?
Is it still some of those,
obviously you've seen a big change and seen that story you would have want to
seen over the last couple of years.
Do you still feel comfortable with that or do you feel,
think it's more of like a kind of a hold, you know, it's hard.
I don't want to put you in that basket.
That's a great, that's a great question. And of course, you know, our role as industry advisors a kind of a hold? You know, it's hard. I don't want to put you in that basket. That's a great question.
And of course, you know, our role as industry advisor is a little different than, you know, we don't set buy and sell.
But we think there's a trend line that says this could still have value, you know, because like I said, they trade on kind of historically traded more as a value tech play with a dividend and kind of conservative growth, predictable revenue.
But now they've accelerated growth.
Cloud growth, actually, they're the standard now of the industry.
So they can keep that 50% OCI growth, keep the cloud growth, show agent platforms, deliver
on the promise of AI.
There is a lot of reasons to think it could go higher.
But I don't think I've really reflected on this for this group, but I do think the whole
market's a little frothy right now. I mean, even my beloved SoFi, my largest position by a lot,
if I wasn't such a long, this would be, I understand why people are trimming. I understand
why people would want to say, look, I've seen HIMSS make huge wrongs. These are some of my
personal names, like with HIMSS, with SoFi, with Robinhood. I've
written these things up 3 and 4X in short periods of time, in some cases. There is a case to be
made, even if you are a long investor, to take some principle down, because we do know there
will be some sort of pullback. That's going to be the same thing, I think, with these big tech
names. I mean, NVIDIA is at 170 plus. There's probably going to be another
shot to buy it at 150. I'm not saying you're going to get, I'm not a person that thinks it's
going to go back to 100. And then I also think there's rotation. I'm a big Oscar investor.
I do think HIMSS is pretty safe here, but if you did trim, I wouldn't blame you because it's had
such great gains. And then my favorite name, and this is just a personal personal trade but i think glp1s are here to
stay i don't like novo i don't like lily but i love viking therapeutics so this is me talking my
own book but it's got incredible option volatility on it and the average street price is over 90 bucks
and it's trading in the 30s because people are waiting to see if a buyout happens and phase two
and phase two data
I appreciate the thoughts there
I love the ending that was awesome
Wolfie actually you know what
Gary you've been emoting a lot during that
you got any thoughts
first off Daniel congratulations
on SoFi
I was incredibly impressed
by that
I guess podcast you put out with Shy yesterday on that one.
I kind of tweeted that, hey, that is a fantastic.
The thesis was perfect.
And again, it reminded me of way back in 2005 when I was talking to my friends about Apple.
It's just if you have that thesis, and like you said, if you're long on that one,
then get into it and make the thesis right.
And the thesis hasn't changed,
even though it's pulled back today.
I think you're right on the market.
I did a thing this morning.
I think I asked perplexity,
and by the way, if you're not using perplexity,
holy crap, that new browser is really good.
But I just asked, what's the S&P forward multiple? I think it was
like 24, 27, somewhere around that. We need earnings to catch up because it's clear the PE
won't expand. So I'm in Daniel's book. Hey, this is a great time to try and take some profits if
you've had them. I do think that you'll get a better time. If earnings come in big, then you
can always buy back in, but lock in those profits because it does seem a little extended. Oracle, I was emoting during
Oracle because when they announced that they were taking Uber from on-premise servers to cloud
servers, I think that was right in the time when Daniel, you were saying it's like 70s or 80s.
It's the perfect time. It seems a little stretched right now. Doesn't mean you go
and sell, take some profits, take it off the tables. I've been saying this for a while.
One of my big positions, CLS, Celestica reported earnings. Last I checked, it was up like 10,
15%. I don't even know if it went down. I took a little off the table. It's at a 52-week all-time high. It just, for me,
with the multiple of the S&P and VOO and all of those guys at the high, I think it's a very,
very good time to take profits. Now, where is it not a good time to take profits? Well,
I think financials with deregulation, I think they still traded at a pretty good multiple.
This morning, GLW, Corning, I put that one in my portfolio in January. It's
up like 30, 40% year to date. They make the glass that connects data centers. I love that one.
And then what did we hear? I read some tweet this morning from a meta engineer saying,
hey, we're not constrained by chips anymore. We are constrained by power.
One of the biggest winners that I've had year to date is TLN, Talon Energy. The only way that I
found that one was because I said last year, Vistra Energy, VST, which was one of the big
winners from the S&P 500, if not the biggest, this was right behind it, like literally from a ranking standpoint of
TLN talent energy. So I'm looking at some of the outside trade to add to, to a good portfolio,
meaning like, you know, just something power, you're not going to get rid of power. That's
still going to be there. They're still going to need that for the AI trade. Uh, but these high
flyers that have kind of run like hymns and stuff, just take a little off
the table.
It doesn't mean you have to get out of it.
But I do think if they're going to run, they're going to run even more.
So I'm in the camp of, hey, we're at all time highs with some of these.
Just take a little off the table.
I appreciate that, Gary.
Dan, I don't know if you have any thoughts on what he was saying.
Yeah, I mean, I appreciated, obviously, the call out. Like I said, it's been kind of wild to watch the action today,
but I do think there's a lot of macro sort of pulling on the market.
And I think a lot of people share Gary's thesis, just taking a little bit down, a little bit off.
You know, a lot of us like to flex. So, you know, I think it's important to be a little bit
vulnerable. You know, my biggest downside is I'm such a bull and such a commit. I'm so committed
and so convicted in names. I tend to never sell. Like I always joke, like when am I, I say this to
Shia all the time, like, when am I
going to sell this? Absolutely never. So it doesn't matter if SoFi is up two bucks or four
bucks today because I'm never going to sell it. It doesn't matter. Daniel, just so you know,
my largest position, 50% of my portfolio is Apple. So I'm not winning this year in any respect
whatsoever. Evan and I talk about this all the time. I think if they announce
an AI play with their earnings, I think it's a $260 stock. But yeah, I sold a $260, I sold a $240,
I trimmed a $220, and I trimmed a $200. And if it goes down to $180, I'll probably trim at that
space too. But you're right. Yeah, and I'm a bit of an Apple bear. If you follow me, I definitely am criticizing Apple hard.
I just don't know how they messed this up so badly.
It's not that Apple isn't a great company, that it's a cash machine.
It's got the most loyal customer base on the planet.
They have been given so much grace in their AI for pause so far,
but Apple intelligence is an abomination.
Those headsets are unusable with any with any scale they ditch the car industry uh they can't they
don't they're not making meaningful data center infrastructure at all right now um i just don't
know what they're doing i don't know what apple's doing and so uh but i will say they do have time
they can actually probably screw this up for another two years and still be OK just because their user base and install base is so great.
And I do think to your point, Gary, if it falls under 180, it may not be a trim.
It may be a buy because I don't think they will ultimately get this wrong.
But I also always say like the companies like BlackBerry's and the companies like Blockbusters and Xerox's that were the biggest in their industries also didn't think they could get it wrong. So, you know, Apple and the size and scale and balance sheets of these companies
today versus the fortune companies that have fallen off historically is much different. It's
not the same as it was. But having said that, like, I mean, even Tesla, which again, is you
can judge it as an AI company, you can judge it as a car company. It's valued like the best AI
company on the planet. It
produces revenue making cars that are largely outdated. Not the ADEX. I'm just talking about
the look of the cars. But having said that, Apple, I don't know what to trade it as. Is it a value
stock? Is it a div stock? Is it a growth? It's not really a growth company. It's single digits at
this point. And the biggest question I think investors in Apple need to ask themselves is, are phones going to be the platform in five years? Because if phones are not the platform in five
years, that's where Apple becomes a real risk. That's where Joni Ives and OpenAI, that's where
Meta and superintelligence and headsets and glasses and wearables. It just feels like Apple can't get
to the next device. But as long as the device is what we're using today, which is an iPad or an
iPhone, I think they're going to be fine.
And you read my mind exactly. I was going to bring up, I am not worried about Apple getting
AI right. I am way more worried about Johnny Ives and chat and open AI getting it right.
I mean, they get it right. I think that's the biggest threat to Apple versus Apple, you know, just spending,
what's perplexity worth? 150 billion bucks, all they'd have to do-
No, perplexity is worth about 16, which is why I keep saying they should buy them.
And it makes sense.
16 billion, maybe 20 to get a deal done. But the, and I said, like, it doesn't actually fix
Apple's problems, but it shows intent, which they've really lacked on AI.
They lost their best researcher, their COO stepping down.
They lost their best designer.
All they have is phone to phone with Apple intelligence.
Siri doesn't work.
Having said that, like, OpenAI is in a really bad position, too.
So I know all of us are excited that, you know, maybe in SoFi or Robinhood we can tokenize or get access to OpenAI.
But Satya Nadella has that company completely surrounded, completely surrounded right now.
They can't move.
They can't go public.
They can't become a public benefactor.
They can barely raise money.
All these things are working against them because Satya's agreement with them, if you
remember Satya's quote, we're over them, we're under them, we're around them.
They have access to all the technology up to AGI.
And who the hell knows what
AGI actually is? You know, that deal has not gone super well. I mean, maybe it, I don't know.
It feels like, yeah, for Microsoft, it was a good investment. I just don't see it. I just,
it seems like it's something that's slowly on its way out.
How do they get out?
Because they got mods.
It's just moving so fast the way AI is.
You have right now Zuckerberg trying and competing,
but it feels like you stagnate open AI for long enough
and that asset might just end up getting passed up didn't matter somebody else today too yeah from
Apple but you never like listen I mean you can overpay an AI researcher and bring them into other
places I have no idea the quality of the people or whatever, but there was definitely that headline today.
I did find it interesting. The head of the co-person of the AI super intelligence thing at Meta
was someone who was an open AI.
So when I see Zuckerberg take someone from open AI
and then put them to lead the team,
okay, I pay attention to that.
That's probably someone who was a big deal.
But some of the other ones, I don't know.
I did see a comment from Jensen Huang talking about it. that that's probably someone who was a big deal but some of the other ones i i don't know um i did
see a comment from jensen hong talking about it he was saying listen a team of 150 of the top
ai talented you know workers with a mission to solve this can go in and really create some big
stuff and create a lot of value so i mean maybe maybe it's if he knows that they're all going to
just buy his chips so that's what it is but yeah evan they're all going to just buy his chips. So that's what it is. But yeah, Evan,
to your point and,
and,
and just to wrap this one all around,
you invest in great leaders.
And I think Satya made a great,
great bed as a great leader.
I think Tim cook has led Apple through a great,
great time.
Is he continued to be a great leader?
I don't know.
Sam Altman hasn't proven himself to be a great leader.
Johnny Ives has proven himself to be a great designer, but we'll see how that works.
So, you know, even to Oracle, they've been great leaders.
So that's where I try and go to, you know, early in my investing career, I was good at
identifying the great leaders, but even to SoFi, great leader.
So I think that that's what you, where you look for
your long-term kind of thesis is in great leaders. Yeah. I think the real question for
meta and super intelligence is, can you, you know, I'm a big premier league fan. I don't know if
there's any other soccer fans. I'm an Arsenal fan. Don't hold it against me if you like another team.
But having said that, like we've seen over the years, whether it's been Man U, whether it's been Chelsea, Man City,
you know, they brought in,
you know, they brought in oil
from the oil money from the Middle East.
They bought, they bought championships.
The Yankees do it in baseball.
And it feels to me like what Zuck understands
is that there's multiple trillions
of market cap at stake.
And there's a few billion dollars
to invest in people.
And the truth, truth though is when
you bring all that talent together i just don't know what that strategy is like yeah i will say
the model you're going down i am a soccer fan psg did not work out well and liverpool won the
league this past year right but now psg played great and won the champions league with a
yeah the less galaxy you know young homegrown team. Yeah, the Leska Lasky method. You know, young, homegrown team. And so my point is, is like Chelsea spent billions and now they're
unwinding that, you know, you know, we've seen it where it's worked with Man City. They bought
more or less the championship. But what I guess I'm saying is like, so Zucks had some real successes.
He got some real failures, more success than failure. It's a great business. It's another
cash machine. It's actually the best implementation of AI in the market. They are using it for themselves. I'm not talking about
the cloud. I'm talking about using AI in their own products. I mean, you can't, we're having
this conversation. If you have a phone or a device in proximity, Facebook's listening to you and it's
serving you up, you know, content to the, to the T. They've been doing this a long time. Now how
they build super intelligence, all the top researchers. Now, how they build superintelligence,
all the top researchers.
I mean, they hired six or seven
top researchers from OpenAI
that actually were the lead researchers
on some of its most successful models.
So these are really talented people.
But you take Messi,
you take Ronaldo,
you name the best players in the world
and you put them all
in the same field together.
And that doesn't always,
and we saw it with PSG, right? You put Neymar and Messi and Boppy all
together on the field and they didn't win anything. And so the question is, is there is like with all
this investment being made, can you get there first? But what was certainly not happening is
they weren't doing it organically. You saw Behemoth that hit the wall, the pace of open source. They
were getting out clipped by China.
China open source models were outperforming the US. And I am not a believer in all the China FUD.
Huawei was never going to be a replacement for NVIDIA. But I am a believer that Zuck is clearly understanding that he doesn't have culture and the ability to organically build the talent,
and that it's a few billion dollars he's investing with the chance of generating multiple trillions in market cap.
I would rather have Tim Cook taking that route than whatever it is he's doing right now.
It probably should.
I think it's clear this is not making big acquisitions.
Maybe you want to wait till some AI valuations come down if that ever happens, but it's clear they're probably going to need to make some of those big moves, Apple.
Or some big partnerships. I don't know. It could go a different route, but we'll see.
Wolfie, I want to bring you into the conversation. We've talked a lot here. Also some areas that I know you have some interest in. Got any thoughts you want to add into the convo?
that i know you have some interest in got any uh thoughts you want to add into the convo
yeah um he made a comment that kind of encapsulates you know what what it is that i
when i talk about some of these boring names as i like to call them um he said
operational execution to revenue acceleration that's it right there right so you get some
that's it right there right so you get some of these good operator companies that are
of these good operator companies that are
well i think you got a phone call or something no i just i just went mute for whatever reason
that muted me um can you hear me yeah we got you now okay i don't know what happened there but uh
i don't know what where where and what I don't know where and what I got.
Looks like it happened again.
Maybe you got to disconnect from Wi-Fi or something.
Jeez, I'm not on Wi-Fi.
I'll just drop and come right back.
Does that work?
Wow, did you literally just go back?
That was half a second.
I think so.
All right, let's try it one more time.
You know, he made a comment.
He said operational execution to acceleration, revenue acceleration. I think that's the sweet spot for some of these, as I like to call it, boomer names.
They have a sticky customer base or large contracts, government contracts, et cetera.
So their current revenue would be predictable
and their current business is predictable.
And as long as they operate that fine,
then they just basically have an elevated baseline.
And then if they can catch any of these tailwinds,
then they can really accelerate and ramp on the back of that.
And so like some of the names you guys mentioned,
Oracle, IBM, Cisco is another one that's been kind of rocking on all cylinders.
And we actually have one today, right? So we have Seagate, which is another boring business,
another boring company, and they're kind of in the sweet spot for some of this data center growth.
And they kind of were left by the wayside for a little while
but they offer you know a three terabyte per disk situation which is like um been that been in the
demand for mass capacity storage so if you just take a look at that chart it's just kind of gone
vertical i don't know and i don't really think that, you know, they could, I don't think that the odds are stacked in favor of, you know, just another massive gap.
But I do think if you get some of these retests, as long as the business itself doesn't slow down, then you can get a re-entry at a better price because these things are not, you know, one and done usually.
These things are like multi-quarter.
So I think a lot of what
he said, I'm kind of in line with, uh, sometimes it's like a little bit of a, of a tactical game.
Um, you know, the, it's one of those things you just want to see things continue to click on all
cylinders. Uh, in the case of Oracle, like part of the reason that, you know, you just kind of
want to find your entries and stay in them is because you never know when that re-acceleration is going to happen or when
that upside surprise is going to happen so take a look at like last quarter uh oracle came out and
smashed it and then they you know revised upward and now if you didn't own oracle before if you
thought you missed the boat you had to chase it right you know, on the back of a gap up, it's going to get up like 190 post earnings. And now here we are 250. So that's like a word salad
to say, don't chase. But, you know, as long as these businesses continue to hit and continue to
continue to grow or find different pockets of growth on the back of some of these thematic
uh trend then then they're going to continue to win i think the same logic you can apply to
again some of these boring businesses as we like you know uh shore up industrial capacity
um both domestically and internationally a lot of these you know just take a look at like some of the um you know some of the
energy service names and and uh power names for example um you know we we were on a space last
week when i talked about i think it was last week when we talked about uh you know ocklow etr etc
and you know while we were on the space they came out and said that there's like a record, you know, a record cost per megawatt, basically, and that spiked a lot of those stocks. industrial, whether it be some of these agriculture names, whether it be some of these pipeline names,
some of these oil names. I think that same kind of logic is going to kind of find itself
trickling down that way. One name I can point to is Mosaic. If you just take a look at Mosaic,
broke out and it's been basing. If you pull up a weekly chart, it's pressing right up against its 200-week.
Any sort of reclaim or any sort of reacceleration on an industrial spot, that bodes well.
And then there's other setups as well, right?
So take a look at something like Newmont last week.
A lot of people were like, oh, man, Newmont's up a lot.
I don't know if I could chase it.
But actually, because of oil being suppressed where it's at, input costs come down, and they're able to accelerate their margins and revenues and stuff like that.
that. So there's a lot of different ways to kind of think of this stuff. I think, you know, if
So there's a lot of different ways to kind of think of this stuff.
you're trying to just chase it up and to the right, it's probably not going to work for you
in the short run, could work in long term, right? If these things are, you know, multi-quarter.
But I do think that, you know, taking that logic that we just saw from some of these, you know, data center chip type plays
and like applying it across different industry classes that, you know,
are set to benefit from, you know, a marginal investment
or from a reprioritization from a national security perspective
really kind of will find the sweet spot.
And then the last thing I'll say is the largest, you know,
there's two points that you want to, I think you want to be a part of, right?
The largest points are when you get these like left for dead names
that have based out for a long enough
period of time and they come under accumulation. And then that, that turn from bear to bull,
that will give you the largest Delta. Right. And then the second is when it runs and, and,
you know, people get to a point where like, there's no way this can go. And then they pull
another lever that, that is like a thematic that everybody's in favor of.
So just take a look at Oracle, for example, in this last quarter.
So those are the two biggest delta changes that you're going to see in those types of investments.
So I think if you find a theme that's just like a multi-year theme, you know, if you're going to commit to it, it's one of those things you just kind of want to add to over time as things base out.
And then as it continues to prove itself out, you know, don't fall by the wayside and try to get too smart and get too cute for the market.
And that's pretty much how I'd circle that conversation you had. And then the last thing I'll say is someone was talking about, I think it was Gary, he was talking about HIMSS.
It was raining a lot.
Yes, but as your resident HIMSS guy, I think if you just pull up a chart on it, giant cup and handle, and it's pressing up into a downtrend, any kind of follow-through above today's high,
probably goes to try to fill that gap back up to like that 64 level um in the next few days so
that's something that i'm paying attention to it's like uh a name that i've i've uh got a
still got a sizable position in and uh i'm looking to like add for a trade not not for like an investment.
Appreciate the thoughts there.
As always, if anyone wants to jump in at any points, it is an open mic.
We appreciate the smart people talking to smart people.
I'm going to keep us running around here.
Like I was saying, getting close to the market being done for the day. At that point, we got a couple earnings. Starbucks,
Visa, Bookings, EA,
Mondelez, etc. Seagate
as well, and a bunch of others, which we will
cover closer to
the close. Logical.
I want to bring you into the conversation.
What's on your
radar today?
Give me the one or two stocks on the radar.
Yeah, definitely's describing?
Lending club. I talked about this one yesterday. We had some mentions around SoFi. That's like
one that people kind of talk about in the same light. If SoFi had good results and so did PGY,
Pagai Technologies, then it seems like the lenders are probably in a good spot here.
The difference being that Daniel mentioned that the Daniel mentioned that, you know, the SoFi
valuation is probably getting a bit frothy, which is totally fair given a lot of these retail stocks
are kind of following a similar trend of the constant bid. But a name like Lending Club is
extremely cheap, trade just above tangible book value. The chart has been extremely strong.
Actually, just about 30 minutes ago, I saw a lot of calls come in for August,
like call spreads for August, September timeframe.
So, you know, I feel pretty good going into these earnings.
And, you know, this is a company I've followed for over two years now.
They have very conservative management.
Even in the downturn of 2022, they had never reported a gap unprofitable quarter.
So they've maintained gap profitability.
They are so conservative that the reason why they missed their last earnings and fell
was because due to the tariffs and the uncertainty, I was talking about this yesterday,
they set aside provisions for losses, which was a headwind to their EPS numbers that they report.
I think that led to basically the miss on earnings.
I think that now with basically no, you know, no tariff induced recession on the radar now,
it's likely that we see that those provisions potentially unwind and that'll provide a tailwind,
which was once a headwind.
So I'm excited to turn that into the print um i'm also long uh
teradyne ter uh again i was mentioning this one yesterday we'll see what happens um i want to see
that they'll talk about their uh partnership with amazon it's kind of it feels like it's been a bit
hush hush um because it's not very widely known. But again, as I mentioned yesterday, some really smart guys did some over-the-top research
on that name.
And the stock's been a bit weak after a couple of downgrades, but they didn't even mention
in those downgrades anything about the Amazon Robotics Partnership.
So if they have any sort of wording on that, this could end up going from a fallen angel
to a market favorite, so market darling.
We'll see.
And the IB has been pretty low.
So I'm long calls actually in both of those names
as my full position.
We'll see what happens, man.
I got smacked on this BMNR, this, you know,
Tom Lee sort of led, he's not the CEO or anything,
but he's on the board.
You know, they did the prospectus yesterday, which is honestly expected, but the market
kind of killed the stock anyway.
And, you know, so right now I'm kind of steering a little bit clearer of the treasury names.
I feel like they might be losing a little bit of momentum, especially as crypto kind
of bases here tries to flag out before the next leg higher.
Yeah.
They also announced a share buyback which is smart
morning yeah no i mean look the thing is that if this thing starts trading towards nav which
it's getting closer in the mid-20s um then it's a buy right because ultimately you're paying the
price that you know they have the ethereum on the balance sheet whenever you're buying these treasury
companies the reason why they're probably more advantageous than just owning the underlying asset
is because they're able to do things like,
hey, look, we're trading at a discount in NAV,
let's buy back our shares.
Hey, look, Ethereum is down,
let's raise some capital and buy the Ethereum.
So it's like a dynamic way to allocate to these things.
But obviously it's getting a little long in the tooth,
so perhaps we see a little bit of a cool down here.
So for now I've just exited, took a little bit of a loss there it is what it is
that's part of trading um i'm a very diversified investor i have like many many names over 30 names
at this point uh but i'm trying to stick to a little bit more of my wheelhouse um one more name
i'm watching into tomorrow earnings i know it's to sound stupid, sort of, but it's a sleep number.
I know people won't care about this, but obviously after all the open door stuff, it has nothing to do with open door.
It's actually a good business.
It's just over levered on the balance sheet.
Offsides positioning, high short interest at about 30%.
You know, trends are showing that it's possible that it's possible that this mattress market is headed back.
I know it doesn't sound like fun,
but a name like this could really fly
because they're extremely over levered.
And they have a new CBO in
who is basically talking about
these extreme cost cutting measures,
which are actually ahead
of what she had originally estimated.
So they're getting their costs under control.
They're gonna be able to manage that debt.
And, you know, if the cycle turns in housing,
then there's gonna be a major beneficiary.
You're basically, it's like a,
you know how people were saying,
oh, Opendoor is the Carvana of, you know,
this housing cycle.
I will push back on that
because Carvana was actually a pretty good business.
They were just over levered.
You know, Opendoor is notoriously known for selling houses at a loss. Carbono is actually a pretty good business. They were just over levered.
Open Door is notoriously known for selling houses at a loss.
So I will push back on that.
But a name like Sleep Number actually has positive cash flows and they're quite substantial relative to the market cap.
Obviously, a name with this much debt,
you want to look at it more on an enterprise value basis
and incorporate that debt.
But yeah, so I took a little bit of a swing here. Nothing too big, something small in calls where,
you know, if it works out, I can exercise the calls and ride the cycle. If it doesn't work,
then that's a paper cut. So yeah, I mean, those are a few names that I'm looking at for this next
24 hour period. I know that there's a highly contested biotech that's reporting data in the
after hours today, CRDF, that's been a point of contention i
was trying to short that thing and ivy's really high and i just decided you know i'm i'm way too
uh levered in my portfolio with too many positions i exited for now but you know the stock's been
extremely weak into these uh into the data but i don't know um the pricing on those options make
it really tough to profit um and they have a dollar cash. So realistically, those puts can still print
even with the high IV.
We'll have to see what happens.
What else?
There's a clinical bio company, WVE.
If, I don't know if anybody follows this one,
but it's Wave Life Sciences.
They report earnings.
I think it's gonna be tomorrow morning.
Let me check, is in the morning.
So we'll see.
They did move up some of their data that they were expecting in the back half this year.
And it felt like they were going to move it up, you know, from the back half, like, towards the end of the year to kind of more mid of H2.
So we'll see if we get any color on that.
But it's an interesting platform.
And you're basically buying the stock at $8 right now, where, you know, after that's basically
around the prices it was at before they reported positive data a few months ago
and the stock shot up like 16 bucks.
So, you know, you're the thesis is a bit more.
It's a lot more de-risk at this point,
but you're able to buy it and at the same prices.
So for me, I still feel like the bios offer great opportunity.
Two big winners in the portfolio today that are definitely standouts are
are terrorists, AIP up 11% today.
Very strong volume.
Something's going on there.
Another one is SNDX, Syndex Pharmaceuticals.
I've talked about this one quite a bit.
It I think it's because they're partnered with Insight Corporation,
who's up 10% today, and they reported earnings.
So their major drug is in collaboration with one another.
So, you know, there's been all sorts of speculation,
but there's clearly some read-through there.
So we'll have to see what's going on there.
But a lot of these bios are still extremely, extremely cheap.
And, you know, I'll just make some final general comments here.
You know, I understand everybody's
point of view talking about that this market is frothy and, you know, I expect some sort of a
pullback. Yeah, I get it. I totally understand. I think that the top 50 names that most people
talk about on the on these spaces are on these on Twitter are definitely frothy or have are
definitely overextended and have run quite ridiculously in
some regards. But I would say that a majority of the names that I follow have yet to really
participate in this bull run. So I am still very, very bullish. Today, I was a dip buyer,
because I feel that a lot of these names are essentially, we're getting discounts on them,
where nothing has really
changed on the fundamental aspect and the valuations just got more favorable headed into
uh these earnings so as i was mentioning yesterday you know when you're a technical trader you want
to see a strong stock but when you're headed into earnings a strong stock means that you've seen
strong price appreciation and with that comes multiple expansion so a higher valuation then
my thought is, you know,
I don't want to own a stock that's trading at a lofty valuation. I want to own a stock that's trading at a, you know, at a low valuation. So a lot of these names that I follow are low
valuations. And in the last few days, they've actually just gotten cheaper as we head into
a big part of the earnings for my portfolio in the next two weeks. So I've used this as a way to,
hey, let me just exit some of these high,
you know, lower conviction names. Let me buy more of these higher conviction stuff. Um,
these stocks look cheap to me, uh, charts look fine.
Did we get a bit of a sell off today? Yes. Is it orderly? Feels like it, um,
has anything changed? No. Well, yes, actually something has changed.
The valuations have gotten more favorable into the prints.
So that's why I'm picking my spots.
Logical, some interesting names going up there.
Wolfie, get your hand up.
Yeah, I kind of forgot.
I wanted to talk about something real quick,
but it's got earnings.
It's a name no one really pays attention to right now. But I always talk about something real quick but it's got earnings and it's a name no one really pays attention to right now um but you know we talk i always talk about like i try to find some of these
beaten up names that have like evaluation and like some sort of story that could work and i've found
one and i just wanted to share it um i'm i'm building a position in teledoc i know it sounds
blame and sounds boring and sounds beaten up and low 200
day and all that stuff, but it's got some pretty
interesting narrative
behind it that could work.
And I don't know if it'll happen
on this earnings or the next one or whatever,
but the setup
kind of reminds me of some of these
single digit names that are now like
market favors. For starters,
Teladoc's market cap's like 1.3, 1.4,
somewhere around there.
They have around 1.2 billion in cash
and cash equivalents on hand.
So it's basically one-to-one, right?
The second thing is Teladoc,
for their entire business up until now,
has had a cash pay service model,
which means people go into the,
for their product BetterHelp, excuse me, which means people go into the, uh, for, for their
product, better help, excuse me, which means people go into better help.
They hear the radio ads, podcast ads, they go to better help.
They sign up, they go through the funnel.
And then it's like, Hey, you want to talk to this therapist?
You got to pay in cash and use your insurance.
Uh, and that creates approximately an 80% funnel drop for those customers.
So 80% of people that go through that decide to leave and not sign up.
They recently had an acquisition that is going to allow them to onboard
benefits for those customers.
So what that means is people are going to start being able to use their
insurance for that product.
Given that they already have like 100 million customers, 102 million customers, their management has said if they could just get that 1% of that funnel drop to not drop, that creates a $40 million in that creates 40 million dollars in added revenue
so at that point it just becomes like an execution thing right um and it becomes like
an integration thing and from there you can you know create upsells you know uh other other
products that they have they might have and so on and so forth. But beyond that, just the
just the valuation, just just from what the market cap is, and how much cash they have on hand,
and this acquisition that they have, kind of makes them attractive for a takeout, whether it be,
you know, a company that may want to just consolidate a bunch of different, you know, digital telehealth
services, think like OMDA, think of this, and there's another one that's escaping you right now,
or whether it be like a private equity thing, right? So your private equity, you can come bid
the company for, let's say, 1.52 billion in cash. And then you, on the back of it, you're buying a company that has 1.2
billion in cash. Right. So I just think, you know, again, I don't know if it'll be this quarter,
next quarter. I don't know if it'll, you know, be a situation where it takes multiple quarters,
but I think, you know, just based off of, you know, the customer base that they have,
base that they have, the cash they have on hand, and where the valuation's gotten, how depressed
the cash they have on hand and where the devaluation has gotten, how depressed it's gotten,
it's gotten, it makes for an attractive situation where I've started to build a position there.
And it kind of reminds me, and I'm not making any promises that it'll be that way, that's not what
I'm saying, but it reminds me of when Robinhood was trading basically one-to-one with cash on hand.
People were talking about, at the time,
a lot of the same things,
left for dead, not going to work, whatever.
But just buying it for the cash they had on hand
kind of gave you an artificial, quote-unquote, floor.
And I kind of think that the situation here
might be similar.
So I just wanted to throw that in there
because they do have earnings coming up.
And I don't want to be the guy
that talks about it after the fact.
I want to be talking about it before all right we're talking uh logical
is t doc name you look at it however i know it as a kathy wood name from back to the day no definitely
not my my cup of tea so no comment there.
I see we got a hand up from Y. I wanted to ask Logical.
Okta with Palo Alto CyberArk.
Okta in the crosshairs for a purchase, perhaps?
I don't know, but I got to tell you that I originally was alerted to the name
because I saw they were slamming the November calls.
I take a look at the chart.
This thing has just lost the 200 day.
It was sitting at 90 bucks.
And I thought to myself, look, this is a very cheap name.
I look at the valuation.
It's sitting at, I don't know, 15 bill market cap at the time, like two bill free cash flow
or something like that, or I don't know what it was.
But anyways, the stock was extremely cheap.
Or they had two bill of cash and it was one bill of cash flow, something like that.
But it was trading at like 13 times free cash flow. I mean, this is a business that has highly predictable
revenue. They're still growing. I mean, it's more of a Garpe business than a fast growth business.
So from that fundamental lens, it was extremely cheap. Just a couple of days ago, I saw that
they slammed more calls. I don't know what someone is so bullish on, but I think it could just be
simply that this is far too low of a valuation. The stock has basically been trading in a range and it's been trading in
that range of 90 to 120. So I wouldn't be surprised to see a push back towards the highs of that
range. And who knows, maybe if we have a good report, then higher than that. I'm not really
trying to speculate on any sort of buyouts. I'm more just thinking about, look, this is a company
that I understand very well uh at my
last uh at my current job my last job we've always used okta the the fast pass sign in or whatever
um so i you know it's a very it's a product that's gonna stick in my view for a very long time
uh at least for what i can see we'll see but the stock is way too cheap in my view for the quality
of the company so when it comes to the privileged access management sector, when it comes to cybersecurity,
of course, you've got multiple sectors.
Okta is more on the access management, similar to CyberArk.
But CyberArk is just, they're the leader whenever it comes to the entire sector.
I was actually kind of surprised to see that Nikesh Arara was looking, or Palo Alto was
looking to buy
cyber arc for 20 billion dollars we've already seen the massive run that cybrox been and of
course leaders will continue to lead in this scenario uh but when you're thinking about an
all-around cyber security platform like palo alto they're going to want to bet they're going to want
the best and that's why i kind of think when it came to acquiring Sentinel-1, that that was more
of a rumor than anything.
Even though, yes, Sentinel-1 does trade very cheaply compared to its metrics, but it hasn't
been able to even get close to that leadership and that window of opportunity that it had
when CrowdStrike did have that outage.
Now, switching back to Okta versus CyberArk, Okta, if you guys forget, Okta had a very
bad PR. And I believe it was a
hack event and that took down the image pretty badly. I think this was back in like 2021 or 2022.
And that's continued to trail on and be scrutinizing the company for quite some time.
But when you think about the CEO of Palo Alto, which Dan probably knows a lot more than I do, is that they're going to want the best of the best.
If they want to add it to their all-around platform, they want to be the consolidating factor whenever other companies look to only purchase cybersecurity solutions from one company, they're going to want CyberArk in that case.
Now, I don't know if this is actually confirmed or not, but I did see the news show up with the cyber acquisition from Wall Street Journal, which is much more representative.
It was shortly after the other day when the Sentinel One news came out, and then the stock quickly sold off its gains once that was basically kicked to the curb by CNBC.
But we'll see what it comes. I mean, it kind of makes sense, but just like the way the market is today
with the evaluations and everything,
I'm not really surprised to see Palo Alto
continue to make acquisitions on that aspect.
But Okta as an acquisition candidate,
there would have to be some sort of growth story
to continue there,
some sort of leadership being taken.
But we've seen it happen with a few other companies,
but also in their separate sector.
What was that company? HashiCorp or the creators of Terraform, as well as Vault and so on.
They were recently acquired by, I believe, IBM. So this might be the time when a lot of these
A lot of these larger companies start to acquire smaller players in the realm.
larger companies start to acquire smaller players in the realm.
Yeah, I've had some time with Nikesh this year.
Apollo Alto is very accretive.
And the nice thing about the cybersecurity space is it's super fragmented.
So pretty much I think any acquisition barring one attempted by Alphabet will get done.
acquisition barring one attempted by Alphabet will get done. And Alphabet's in the Wizz deal
isn't being probably scrutinized as much because of the size of a cyber deal like Wizz. It's being
scrutinized because anything Alphabet does is being scrutinized right now. It's probably one of the
most compelling bear thesis against Alphabet is just its regulatory risk, which we don't see it
as all that substantial.
But anyways, I think we heard a week ago,
it was gonna be Sentinel.
I think what you know for sure is Nikesh Arora
and the team at Paolo is on the prowl looking for deals.
I mean, cyber has not been consolidated
in anywhere close to the way that other parts
of the technology and infrastructure stack have been.
And so I think Paolo realizes it needs to grow quickly and it needs to do so through inorganic means because it's not going to grow
quickly enough organically to keep its investors happy. By the way, we did get the market closed there uh and there was a a couple earnings cycling in in
here here uh booking i saw some numbers crossing i saw strategy closing the strike thing which i
again i don't i don't fully understand 21 000 bitcoin at 17 000 at 117k maybe is what they just
bought yeah it looks like they bought another 21 000000 Bitcoin a Logitech came in with a double beat booking I actually don't
have great numbers on booking yet we'll let all that come out but yeah getting
a lot of these live earnings coming in yes 405 booking comes out we got
Starbucks at 405 also and visa at 405 Marathon Digital at 405 as well.
I think there are some stuff with booking that I already did just start to funnel out.
Yeah, I am seeing booking revenue with 6.8 billion
being expectations of 6.6.
EPS was not a great number there.
Let some of these earnings come out
and we'll double back.
If you guys want us to make sure there's an earnings
that we make sure we don't miss covering,
throw it down in the Spaces chat,
that purple nine in the bottom of your screen.
I do want to bring Stock Geek into it.
Stock Geek, how you doing?
Do we got you here?
Man.
I don't know if there's any thoughts you want to throw into the conversation.
I wanted to be more excited this week. Hopefully we get a little more action. I'm kind of bored
as fuck to be honest so far this week. Not because of the space, because of the market action.
I am shorting some turds out there. I think we all talked about this correction
that was needed, not just this week. We talked about it a little last week, but
you're seeing the meme stocks pull back, Opendoor, Rocket Lab, QuantumScape, some of the
futuristic no-revenue tech names, Oklo, SMR, IonQ, ARKK, even pulling back today. Don't know
if it's the start of a real downward trend or a real meaty correction,
but I kind of want to short some more of these turds.
I am short a little bit, but I'm kind of waiting to see if we get a little bit more confirmatory action
before I go heavier on the short side.
Still overall, I think we're pretty obviously
in a bull market still until the price shows us otherwise. But yeah, there's a lot of stuff out
there that probably has a good 20 to 30% more to go on the downside, at least until it hits some
support at the longer term moving averages. And frankly, I just don't think from a fundamental
perspective, you can really justify a lot of this stuff.
But I thought we'd have a little bit more legs to the meme stock run.
I don't think we're necessarily, I don't think we've seen the end of the meme stock stuff this year.
We may just be in a little bit of a holding pattern here in the short run.
But so, you know, I am going to hunt long setups on some of the meme stuff for later this year, just kind of watching, doing the work.
But yeah, I think there actually might be some opportunities here in the correction.
Other thing I noticed today that I think is worth mentioning is on the bond side, TLT is up, long-term yields down.
Pretty big move in long-term yields down today, 9 and 10 basis points on the 10-year and the 30-year.
There's some, you know, I think there's some talk out there among some smarter analysts on the bond side that I've seen suggesting that we could see an acceleration of yields down on the long end, which would, I think, surprise a lot of people.
of yields down on the long end, which would, I think, surprise a lot of people because the
narrative so far this year has been, you know, how to control government spending and deficits
as far as the eye can see and the dollars down and, you know, all these, all these things that
have contributed to, to the risk on, you got to be in risk assets. Well, you know, if the last
three or four months, the deficits actually come in, actually has shrunk in the last four months, the deficits actually come in, actually has shrunk in the last four months. Some of that
seasonal, but not all of it is. And if you get into kind of a new narrative shift, you know,
you start to get Fed rate cuts, which are starting to be priced in for as early as September,
you get a little bit of dovishness there, you get, you know, just kind of a weakening of the narrative that yields maybe are not going to just continue being hot.
You could actually have a play here on TLT
and on longer-term yields coming back down
to kind of that 4% or maybe slightly lower level
kind of like we saw last fall.
So that's something I'm watching.
By the way, very quickly.
Yeah, first of all,
meme stocks and TLT.
I like the diversification.
Starbucks EPS was a miss.
Revenue was a beat.
Starbucks stock is doing weird stuff
and after hours was up,
was down, whatever.
And we'll get some more numbers out there.
Visa was a double beat
on the EPS and revenue.
So those numbers are coming out. I see a lot of you guys starting to come in here.
This is Starbucks. Revenue was a beat. Adjusted EPS was a miss. Operating margin was a sizable
miss, 10.1%. While she wanted 12%. Comparable same store sales was minus two percent wall street was expecting minus 1.5
percent for the u.s though u.s comparable sales was minus two percent the wall street uh wall
street was expecting minus 2.5 so same store sales miss was driven by outside the u.s
it's maybe a little bit of a not as bad there. And then Visa, I'm sure a lot of people care about.
Payments volume was up 8%.
Cross-border volume, X Europe was up 11%.
I want to see if I can find more, but that sucks.
Moving a little bit lower.
Logical, I cut you off there.
What else were you going to say?
I was just saying that you mentioned the TLT, et cetera.
And yeah, when you get the 10-year up to the 4-5 spot
or the 30-year at the 5 spot, it's kind of been like a ceiling get the 10 year up to the four or five spot or the 30 year at the five spot,
it's kind of been like a ceiling for it,
unless it's going to just completely break out.
But I saw today that they were selling puts on the TLT.
So that's something interesting going into that.
I'm seeing tomorrow.
One more comment real quick.
I'm trying to find these lending club numbers.
It's spiked to plus 13% after hours,
but now it's just,
it's faded a bit to plus seven.
So I'm trying to figure out what's going on there.
Lending club EPS was
$0.33. I'm getting a may not
compared to the $0.15 estimate. $248
billion revenue is
a beat on expectations of $227
million. Do you have any specific
things in here you were looking for?
Yeah, send it to me. I'm not sure.
I've got to check it out and read through it. Normally, normally so they put the filing in it will be on the website within the
next minute or so if it's not up there that's generally how this works it takes like a two
minutes because usually people are pretty fast with the ai stuff on uh twitter but i didn't see
it but okay it's out though and it was a 405 gotta check at that, dude. Look at that. Grew originations plus 32%.
Revenue plus 33%.
Net income plus 156%.
I mean, this thing is going to $30, man.
Not financial advice, but this thing is way too cheap.
What are we doing in after hours here what's up it's a nice move
gonna hit the refresh to see what we're doing in after hours
the move with
the move with blending club is always the next day
like the after hours move is just dumb
it doesn't really reflect anything
and then the next day it really doesn't move
so we'll see but I mean those numbers are incredible
for the valuation
yeah It does a move. So we'll see. But, I mean, those numbers are incredible for the valuation.
Nice.
Yeah, Earnings Hub's got some of the stuff updated.
Mondelez has a double beat.
Seagate, double beat.
A lot of green on here.
At least on them, it doesn't mean the stocks have gone up what does the a do well that that's cr that i was talking about crdf just had an update
and it's down 14 after hours but those puts were so expensive that like they're probably still
gonna end up being zero so i think i dodged a huge bullet there. I had way too big of a size, and I decided to exit
because it was out of my circle of competence.
And sometimes it's okay to just say,
you know what, man, I don't think this straight feels right for me,
and just bounce.
Electronic Arts is moving there.
No, Stuxniple, what's up, man?
You got the thumbs down.
What's going on?
That means there's tech problems, is generally what that means is for him.
So you say he can't.
Yeah, logical.
You're breaking up for me.
He was not breaking up for me.
It's honestly, it's a pretty useful thing.
I actually like what's type of does that.
So I know if I'm having problems.
No, I heard him say it's going to $30.
It's definitely going there.
I don't know how quickly, but since we're avoiding a recession,
that's what really put a damper on some of these lenders.
And that's why they were the most punished.
I mean, this stock went from $19 to $8.
And now it's back up at $13, $14.
Why aren't you in the name like a self-hire?
You know, I will say, though, it's really grown into its valuation, but it also recently just like doubled or tripled its stock price.
So just as it was growing into its valuation, I was getting more comfortable with it.
Stock price just ripped higher and the valuation is now again extended in my view.
But yeah, I mean, they put up good numbers, profitability now.
And, you know, you're getting growth growth but i'm not a growth at all costs
kind of guy i'm uh and you know people can argue like hey look this is a robin hood situation maybe
where you know the valuation might be a little higher but the forward opportunity is really big
in the next five ten years that's what i'm looking out to and you know that's a fair you know that's
a fair perspective you know when so if i was trading at like seven bucks or whatever like
yeah i mean dude you're looking pretty right now. So I'm just a guy who like looks at valuation and I put that as pretty high in my process personally.
And that's what would keep me from owning a name like that versus a Lightning Club.
That's exciting for sure.
Daniel, do we still have you up here?
Yeah, but I'm about to rip out of here.
Unfortunately, I've got to run.
We appreciate you being here.
Good to come and get a recap.
What is something you'd want to leave the people with? Maybe a company you're watching for later this week.
I know you gave us one or two names in there.
What was the name you gave?
I gave a bunch.
I think Viking was the one that I wanted on my mind.
But yeah, VKTX.
Any other interesting earnings this week you're watching?
I know you're talking Arm and Qualcomm.
A couple of the next couple of weeks.
I got a thesis.
I've shared it.
But for those that haven't heard it, they may appreciate this.
There's a lot of people that think the big AI semis are overvalued.
I think they're not.
I think they're going to grow into their valuation incredibly quickly.
We've got a forecast in the market.
Over a trillion of AI chips is the TAM by the end of the decade.
You know, we've broken it up for those of you that are trading.
If it's Broadcom, Marvell, if it's AMD, if it's, you know, ARM as an associate to those as a CPU head node.
Of course, NVIDIA, the reason we're so bullish, trillion dollars, 25 percent custom.
So we think about 250 million a year of custom.
We think about 75 to 80% of that.
On the low end, 70, we'll go to Broadcoms.
We love Broadcom.
We think it's incredibly sticky.
And of course, it's not just AI chips, it's the whole network.
So it's really deep.
And then we think about 20% Marvell and 10% all chip and media tech.
So for those of you that want to trade custom chips,
that's how we see that breaking down.
And then of course, on the GPU side,
we think NVIDIA will keep more than 80%
of what looks like to be about 800 million,
or sorry, 800 billion by the end of the decade.
So they still have four or five X run up
from their forward for next year.
And then of course, AMD, you know, they've only,
they stopped sharing their instinct number.
A lot of AMD bulls here and everywhere else.
We think they're going to come back to talking about it.
We saw they raised their price.
We think the demand is there.
The inference inflection is going to be huge. And they were in that five to 6 billion a year on instinct was what Lisa Sue
billion a year on instinct was what Lisa Su had been sharing. We see that by the end of the
had been sharing.
decade, easily 5X with a whole lot more potential upside there. So really watching closely there.
And of course, just some others, Qualcomm, ARM, both have a play in AI and the data center side.
They're kind of thought of as chips for phones, chips for PCs, CPUs for data center.
But we do think they're going to enter in meaningful ways, both in AI and robotics. Qualcomm trade is really cheap.
It's a very good company, well run. I know Cristiano Amon, the management team, very well.
I continue to be impressed by the business and I think on a Ford multiple, it's pretty
underappreciated. Whereas ARM is more appreciated, but I think ARM has a more direct and immediate
route into AI servers. The only question is whether ARM is going to compete with its own
customers at some point. It feels like that might happen, but love the semi-names attached to AI.
Of course, any semi-company that's not strongly attached to AI has tons of risk. It's been hard
to get their inventory. You've seen some of the numbers come out like Texas Instruments.
It's just been ugly.
All the momentum is going to AI.
As much as it feels cliche, I just, I know, I've heard a lot of value talk here.
Value in semis to me is scary unless there's a really strong AI narrative.
I appreciate you, Dan.
If you guys are not following Daniel, you are missing out.
If you aren't following the other speakers up here, everyone,
we appreciate them for joining in.
Thanks a lot.
Thank you for meeting with us.
We hope you come back.
Awesome.
Godfather, I see we got your hand up.
We haven't heard from you on this one.
How are you doing?
Yeah, pretty well, thank you.
It was off Friday and Monday, so I'm in a bit of up catch up mode but um the comment made by daniel i want
to follow up on that um i completely agree when it comes to the semi space and you know there are a
few other things that work here um in the second half of the year um that people should not lose
sight of i mean obviously everyone's focused on you you know, the Google CapEx numbers, and it was up
70% year over year. And, you know, they raised their guide by 10 billion. And, you know, we're
talking about a further 20% in 2026, there were over 100 billion just in Google, of course, we've
got all the biggies, Amazon, Meta, Microsoft to come this week week but in addition to that um you know this u.s
dollar weakness theme and to the extent that it impacts um favorably um international s&p based
companies um is is a real tailwind and uh for semis uh 67 percent on an average of their sales go internationally.
So they're benefiting there also.
And the other thing that people may have glanced over, because people tend to, eyes tend to glaze over when they talk about these accounting things if they don't fully understand it.
talk about these accounting things if they don't fully understand it. But the one big, beautiful
bill brought in a couple of other things that will have positive effects to the cash flow,
free cash flow profile of these companies. Obviously, the 100% immediate expense of domestic
R&D, but short life CapEx items, which includes things like servers and networks and things like that, can be expensed immediately.
So you're going to see this benefit at the Mach7s.
You're also going to see it at the semiconductor companies in terms of an additional tailwind to their free cash flow.
It's estimated to be about 12.5% just in 2025.
So that's just extremely material. So yeah, I agree.
Look, it's a cyclical sector, and this is the biggest cyclical wave we've ever seen for them.
So yeah, I sort of look the other way when people talk too crazy about semi-valuations.
Look, this year, we've seen 15 new record highs for the S&P.
Obviously, last week, we saw this kind of continue.
NDX, I think, was up eight of 10 days in that time period.
So the headline price action is pretty solid, but you're starting to see some
of this negative asymmetry around the earnings due to positioning. We get Texas insurance up 50%
in the 60 days prior to their numbers. It's not surprising to see the kind of reactions that we
have. We have had pretty good earnings across the board, several ways to look at this. 30% reported,
pretty good earnings across the board. Several ways to look at this, 30% reported, 82% of those
beat. The names that have beaten by more than one standard deviation are around 65%. The average
is generally around 50. So the earnings are solid and one would expect to see that. We're starting
to see some AI efficiencies come into the numbers, et cetera. We've seen some inflation, which is generally good for pricing.
But yeah, for companies that meet and beat, it's been relatively muted.
And for the companies that provide some sort of a hiccup, they've been taken to the woodshed
pretty quickly.
I think on average, the sell-offs have been 5% or more.
And that's a lot when it comes to some of these bigger companies.
So I think that speaks to the positioning.
And you can see it, of course, you know,
the S&P and the Qs are both above their upper Bollinger bands now.
I know RSIs are, you know, people have issues with that as an indicator.
But, you know, suffice to say, they're both in the overbought territories.
So I'm not going to go on at length about the lack of breadth in this market that's been beaten to death,
but we are seeing breadth in the earnings, but yet seeing the reactions according to how these things have been positioned.
you know, how these things have been positioned. And I thought it was interesting that 11 of eight
sectors in the US actually saw degrossing last week. In fact, some of the largest degrossing
by hedge funds in the last six months. But despite all that, you've got things like semi-conductor
exposure, you know, still sitting at five-year highs in the 94th percentile.
You've got software and services actually on the other end of things.
And this is one thing I wanted to bring up here.
People might not remember, but we saw this big catch-up last year in the second half of the year with software relative to semis.
with software relative to semis.
And, you know, again, you can look at this several ways,
but, you know, RSIs for semis or for softwares are extremely low.
Positioning is at five-year lows in like the second percentile
versus, you know, semis at 94.
You've got AI software set to ramp, right? You got CRM with Agent Force,
you got ServiceNow with Now Assist and AI Control Tower. It'll be interesting to see, you know,
in addition to, of course, the economic data and all the big earnings we've got this week,
we've got this Figma IPO on Thursday. It's an AI design platform that was failed to take over by Adobe, but there's a big AI element to this.
So it'll be interesting to see how that goes.
But I think that that's a group.
And I want to stay bigger rather than smaller, I think, in that group.
And look, if we see some more consolidation like we're seeing in the cyberspace, all of this sort of feeds into
potential further strength to semis in the second half of the year or to software in the second
half of the year. So that's one of the big themes that I'm looking at. And I think Wolfie brought up
the fact that there's been some relative strength in the industrials. And, you know, whether that's
reflective of domestic infrastructure spend, and that's starting to see some traction, I don't know.
But if you actually look at the fund flows, the biggest inflows in the last, well, since the
beginning of July, so the last three weeks now, have been in some of these industrials and encyclicals.
So it would be interesting to watch that continue as well.
So these are some things that I'm looking at.
I just wanted to pipe in.
Godfather, part of it has to do with the weakening dollar that we've seen this year as well.
that we've seen this year as well.
Just wanted to piggyback on some comments there
about the catch-up trade software versus semis.
I think that a lot of software is just being blindly painted
as the AI loser and semis are the AI winners.
And obviously, I think it's not that simple.
It's not black and white.
It's gray area.
It's like there's going to be some winners
and some losers in both baskets.
But I agree with you.
I think that mid-cap software is probably one of the best opportunities in the market right now.
I've been talking about this quite some, you know, time on these spaces as well.
I've been seeing them constantly slamming calls and a lot of these names that are basically showing signs of bottoming.
I mean, you have GitLab um which by the way has seen
very much bullish flow um but besides that it's growing 27 top line it's growing at it has like
35 free cash flow margins those numbers are in line with snowflake and snowflake trades at 16
times sales while gitlab trades at eight times sales uh and actually lower on a forward multiple um
sorry sam go ahead i know you have some comments on gitlab no i mean i'm totally with you on gitlab
especially from a value perspective i mean the the company was basically if you look at analysts on
wall street they have it as a top ai play uh and the median price target is about 10 bucks up from
here so you know that's not obviously the foretelling sign of where a company is going to be or where the stock should be. But like you're saying, 26 to
27% growth year over year, they are forecasting, I think, about 25% growth for the entire fiscal
year. They're basically on the inflection point of being profitable. Adjusted metrics are obviously
in profitable status nowadays. But when you think about DevOps platforms, where you're going to store all of your repositories,
workflows, and pipelines,
it's either this or GitHub.
That's pretty much the only choice
you have in any enterprise environment
if you want to stick with a really good
all-around platform that's integrated
with multiple applications.
It's really GitLab or it's GitHub.
Now, there is competition out there
when it comes to hyperscaler options.
When it comes to AWS, Azure, of course, has Azure DevOps,
but they are really pushing GitHub as that primary solution for it.
And then there's Google GCP.
They also have their other solution.
But the fourth player in that, besides hyperscalers, is GitLab,
and it's by a wide margin.
I mean, that's really the story when it comes to that.
It's the only pure play software play you could have in the DevOps workflow
dynamic in GitLab.
Otherwise, you know,
you're looking to possibly invest in Atlassian or team,
which does have a product in this case.
JFrog has a product in this case,
but it's not a pure play devops
platform product like gitlab look i just want to like explain because there's you know people on
here who are listening and there's a lot of different traders on here and different styles
and we all see something different when we look at the same stock you know there might be someone
here who's more short term and someone else who might be way more long term. You know, I'll clarify for me, I hold over 30 stocks today. Today, I actually
exited like maybe a handful of names to get that down a bit because I was probably pushing 40 names,
which is far too many. And I just said, let me just beef up in this. When we're in a kind of
this sell off a little bit across the board.
I rather consolidate into my higher conviction names.
So that's what I did today.
But when I look at a name like GitLab, for example, I'm not necessarily saying that I will hold this for long term.
Every trade is different for me.
But generally speaking, I am far more able to look at the valuation of a company,
the growth of a company, basically the business fundamentals and say, look,
Snowflake trades at 16 is very simple, by the way.
Snowflake trades at 16.
This trades at eight actually lower on a forward basis.
Should maybe this isn't as high of a quality of a business as Snowflake isn't,
but it is still a quality business
and it's trading at half the valuation now should this be trading at half the valuation i don't
think so i think this should probably be trading at you know maybe 12 times sales is a more
appropriate value which would probably get you back to you know um you know if you had 12 times
sales it's a 50 upside re-rate now what happens to the stock after that is none of my concern
because then um then you have to be a believer in the business long term, which is fine.
I'm specifically in a lot of these scenarios where I've been constantly saying I am bottom
fishing. That's what I'm doing. And I know that's not the style of many traders on here.
It's lost these technicals and I'm not touching that. I look at that and I say,
well, I have a different style this is the valuation
is cheap i think it's in the right segment i think that the market is overly pessimistic on it
when there's low sentiment that's reflected in the low share price which is reflected as a low
valuation people forget that share prices are actually their market caps you should just look
at a stock and never look at the share price you should only look at the market cap because that's
the only thing that matters here. Share prices are arbitrary.
It's just based on the shares outstanding number of shares outstanding.
So I know that's very basic and fundamental, but like, I think we forget a lot of these
things is that when a stock goes down in price, the valuation gets cheaper.
And I always bring up the house example.
If you go to a neighborhood and, you know, every, the average house is selling for a million bucks and you find one that's selling for 500k, maybe it needs a little bit of work.
I know, you know, you put 200k into it, all of a sudden you're 700k all in and now you have basically a $1 million house.
That's kind of how I look at it.
And I think that's maybe an easier way to relate to it.
But I think what people forget is that when you're trading stocks, you're actually owning equity, a percentage of the business. And so you're making investments. And I think that's constantly lost
on Twitter. So yeah, sorry, last thing I'll just say, I think there's a lot of scenarios where
you can take advantage of a re-rate. So like, you know, maybe someone will look at a stock like
GitLab and say, oh, I can underwrite 15% 10-year forward So like, you know, maybe someone will look at a stock like GitLab and say,
oh, I can underwrite 15% 10-year forward returns. Beautiful. Great. Fantastic. That would definitely
beat the market, right? From these prices. But when somebody says, oh, I can get 10-year,
you know, returns of 15% on average, you know, it doesn't mean that every single year you're
going to get 15%. It could mean you get 50% this year, 10%, you know, 20% next year. And then it
goes to like minus 10%, plus, you know, 10%, whatever. My point is, it's not linear. And
so I'm trying to capitalize on that hockey stick share price action, which is the re-rate.
And so that's kind of what I see in a lot of these software names. I think that they
should re-rate. And so that's kind of what I see in a lot of these software names. I think that they should re-rate higher. Sorry, yeah, I wasn't muted. You were good to keep talking there. I
appreciate your logical, interesting day in the market. Early season is a fun time. It's a fun
time. And I know logical. Wow. Okay. So I won't lie to you. I was waiting until I looked at Lending Club because I didn't want it to be down like 30%.
And then I'm like, all right, Logical.
How's your Lending Club looking now?
It's up 15%.
There you go.
Lending Club.
I'm listening to 20 bucks.
Nice move.
I told you, dude.
And I did it live on these spaces.
I did it live yesterday.
I did it live today.
Scott was on these spaces yesterday.
He asked me which calls to buy.
And I told you guys literally on these spaces before the market.
You did talk him out of it though after.
No, I just said I don't know.
It got too real.
I just said I don't know which.
I'm not going to recommend people on these spaces to buy a specific option and then it goes shit on them.
Like I'm not going to make stock recommendations like that, but I will pitch the stock.
Look, it's up to you.
You got to push the buttons.
It's not on me.
If I tell you what to push, then everyone is making my comments fucking killing me. I'm just not going to be that guy. But did I pitch you the idea? Did I say I was
long the stock? And did I even tell you today at whatever, 3.30, saying, hey, look, 30 minutes ago,
I just saw big call spreads come in for August and September september i mean did i not just say that very
clearly i i don't know how much more you know and these are names that nobody gives a crap about
right um so we'll see i mean and i by the way i also mentioned sleep number um what's really funny
about that is uh i don't know what they're gonna do tomorrow but what i can tell you is that purple
mattress uh just came out with a beat
uh so that is a direct peer and you don't know if that's going to be a perfect read through there could be different wholesale reasons why they're doing well but if there is any sense of um any
sense of demand being uh returned to the mattress market i know this stuff sounds like good
mattresses yeah dude mattresses i'm not buying know, this thing's trading at 50 times. It's just not my, it's not my vibe,
but there's 30% short interest in a name like Sleep Number. Now I'm only in there with small
size via calls. And that way, if it works, it's, I can exercise those calls and ride the cycle.
If it doesn't work, I'll take a paper cut and call it a day. So I wouldn't want to,
cause it's still very binary going into tomorrow. But the Google trends for luxury mattresses have been ticking
up to the last few months. I've anecdotally seen the housing volume in my like housing inventory
in my area go from three listings six months ago to about 50 plus today. So clearly there is movement.
It's not a big position, but if I were to exercise
these calls, they would be, it would be. So, you know, I want to give myself that option,
optionality. And I think that's a smart way to use options. And I think people just look at it
as like, oh, I'm going to slam these 200% IV weekly calls on a name that has no catalyst,
but every person is trading them. And then you get destroyed on some ball crush one day.
I'm just saying there's smart ways to do things like that but um yeah so i mean you know that's
another thing that i'm talking about right now is like we'll see what happens but with 30 short
interest on a real business if they show any anything on the call tomorrow saying demand has
come back and you couple that with the fact that they have been doing extreme
cost measures, cost cutting measures with the new CEO.
And you couple that with 30% short positioning.
I mean, that's a very offside stock.
So we'll see what happens.
By the way, I didn't really look into TerraDyne.
It's up 2% after hours.
I mean, that's basically expected.
I can't find anything on it. I won't even air in some.
Yeah. So I was going to ask like, what the heck's going on with that one?
But anyways, so yeah.
Anyways, yeah. Lending club, very, very happy about that.
When I saw the call spreads come in like an hour ago,
an hour before the close,
I added some September calls and I added some August call spreads. So I'm not going to lie though. I'm so over levered that I had a
little bit of butterflies in my stomach, which is why I exited a few other stocks to make sure I can
like hold this through with conviction in size. So, you know, I've had a brutal drawdown the last
two days. I'm going to be totally honest. I mean,'m gonna be totally honest um i mean i was down maybe
four percent today i'll down uh maybe i don't know how much yesterday maybe three or four percent as
well so it hasn't been fun for me either i know you know people are like what do you mean you're
down you know ten percent in two days um well i don't trade the spy so you know people are in my
comments like what pullback are you talking about it, dude, if you think there hasn't been a pullback underneath the surface, like
a stealth pullback, which by the way, happens frequently in a bull market.
I think it just takes time to trade stocks to understand that I have some names that
are down 30, 40% in a few weeks.
Like you're probably like, dude picked stocks no dude these stocks might
be up 150 200 so these 30 pullbacks and individual names are expected along the way and you got to
have the conviction to be able to hold through volatility and hopefully even add on these
pullbacks on the way up so that's the name of the game um anyways i've been talking so much but yeah
i'm very happy about lending club and i'm
glad i did it very publicly here well uh i mean you're talking about a bit of a pullback under
the radar i actually agree with you on a day like today if you look at the sp500 sectors
the outperformance today xle was up one percent xlu utilities was up almost 1%, over 1%. XLRE Real Estate up 1.5%.
XLP Staples was up 66 basis points.
And everything else, XLK was flat pretty much,
mostly because the semiconductor stocks
was helping pitching it up.
XLY Consumer Discretionary was down 70 basis points.
Financials were down.
Communications was down.
That's Google and Meta.
Basically, we had a pretty decent
pullback in tech and the leaders are defensives so whenever you see something like that happen
take note you know keep an eye on that because overall what we've seen for the last few months
was just tech just outlandishly leading and one day down doesn't really mean much it's just
something to take note of especially when we're coming on levels where you know we're seasonally
we're seasonally entering our bearish time or underperforming time.
Tacky, we have earnings coming up where the market's waiting for it.
We also have FOMC tomorrow as well.
Something to take note of for a lot of short term.
Obviously, if you're just looking at the charts and you're playing single plays, then it's
not really a big deal.
But this is something you just got to keep an eye on.
Just take a good heartbeat in the market, see where it's at.
VIX is up about 6% today.
That's pretty big for S&P only being down about 0.26%.
Bitcoin has pulled back quite a good amount.
Well, not quite a good amount, maybe like $4,000 or $3,000 from its highs.
And you're seeing a lot of high momentum stocks pulling back pretty considerably, slowing down momentum.
You're seeing a lot of great news, like an EU trade deal getting faded,
you're seeing China tariff delay getting faded. See those and you got to kind of consider like,
okay, well, am I just getting greedy now? Am I going to be decisive? Whatever it is,
obviously, you're tactical, you know, you're quick to move, change position to portfolio
very quickly. You know, that's, that's certainly the that's certainly the game,
and they'll probably see things a lot faster than I would.
But, you know, when you're thinking about putting long-term capital into play right now,
I'm not finding a lot of deals right now or anything I want to add aggressively to.
I'm still continuing to add to a cash position right now.
Not like I'm looking for a massive correction or anything.
But we were down 23% earlier this year at the April lows. Now we're up about 7% to 8% up for the year so far.
So that's almost a 30% intra-year reversal on the market.
When you think about that kind of move, and then you're expecting a much broader move to the upside in the near term, there's a certain point where the market just does not go up in a straight line.
It can.
I'm not going to say it's not going to.
It can.
But when you see momentum start to lose a lot of momentum here, the companies that have
been leading the market in the upper direction, and you're seeing good news being faded,
you're starting to get a little bit of that news failure action there.
You're starting to see not that great of a reaction from earnings, which are actually
pretty decent.
You're seeing a leader like Netflix report earnings and basically pull back,
even though it had a pretty crazy valuation.
There's a bit of a catch-up play happening there.
But at the same time, under the hood, you're seeing a lot of pullback,
which people don't necessarily see on an index level.
But when the leaders stop leading, it's a little bit of a sign.
a little bit of a sign not to run for the exit or anything,
Not to run for the exit or anything, but just something to keep note of.
but just something to keep note of.
You know, it's interesting.
A lot of those sectors that you mentioned had terrible days yesterday and
bounced back today while the other things pulled back today.
Like they just like flip flopped from yesterday.
Yeah. I mean, the, the money doesn't just vacate the markets and be gone.
The money rotates.
It goes into something else.
That's just how the market works.
Again, it's like, well, because like you don't just, we are in a liquidity expansion phase around the entire world.
Almost every single global bank around the central bank around the entire world is pumping
more liquidity into the system.
You're not just going to see the stock market drop like 40% out
of nowhere without going to something else. It's likely going to be somewhere else. And in this
case, it was defensives today. Maybe not have been the case for the last few months where it's
becoming out of healthcare, out of these staples, out of defensive, out of bonds, out of gold.
And then now you saw it going to tech. And then now you're kind of seeing a little bit of the
opposite. But at the same time, this Fed is dovish.
The Fed is outlandishly, I wouldn't say outlandishly, but the Fed is overall dovish.
And you're getting a fiscal policy that's essentially pumping money, more money into the system and pumping up more spending.
And then tax cuts and everything.
It's like it's very, very hard to be fundamentally bearish this market when you have that bullish backdrop.
Yeah, I just thought it was interesting. Your comment was kind of funny. It made me chuckle
too that it just didn't leave the market. But I just thought it was funny how quick the money
rotated. Last week, we saw the S&P stronger than the NASDAQ. And it was stronger today. But how
quick we saw yesterday,
like a rotation out of those names and then right back into some of those names again,
just like day by day that like you look, pull up like XLB or, or one of those charts and just look at like the daily yesterday versus the daily today. XLP was very interesting as well.
Just ugly red day yesterday and then pops right back up off the low this morning.
How dare you laugh at me.
Actually, it was Stock Talk that laughed at you,
but I know he's chomping at the bit.
We haven't heard from...
This is maybe the longest or deepest we've gone into the space.
I actually liked a lot of the commentary today from Logical
and a few other shows just listening
and listening to some smart comments from everybody.
You know, I was sitting here worried. I was like, God damn. I was like, God damn, we have 20 minutes left. few other shows just listening and uh listening some smart comments from everybody but you know
i was sitting here worried i was like god damn we have 20 minutes left he said everyone here
sounded smart except for me he didn't even mention my name look daniel started welling on apple and
i was like where's stock talk he would love this yeah i don't know i was i was late for a dentist appointment. But anyway, yeah, today was a night.
Well, not nice, but a nice slap in the face, I should say, for the portfolio.
I know most people probably saw drawdowns today.
It was hard to find places to hide.
I think most of the strength, at least that I saw on an anecdotal basis, was in the oil and gas names.
A lot of LNG names carried over strength from earlier in the week.
As we know, the EU deal had a lot of focus on LNG on it.
Those names, some of those charts are looking really, really fantastic now.
And speaking of bottomed out stocks, there's a ton in energy that just have not participated this year.
Obviously, outside of the nuclear stocks, but
a lot of energy names that are just bottomed out charts emerging above their 200-day moving average,
catching second day of continuation today into the middle of the week. You also had XLP have a
monster mid-session today. I think it was about 10 or 10.30 a.m. this morning. XLP just ripped to
the upside, overtook all the indexes uh that's obviously
consumer staples for those that are wondering what xlp covers but um you saw a big bid under
those today obviously semiconductors opened the session hot and sort of cooled off towards the
close um amd had a nice note uh from bank of america this morning with a 200 price target
raise you also had the news earlier this week that,
well, not news, but the note from Jeffries earlier this week
that NVIDIA's H20 supply will be insufficient
to feed China's AI demand.
That's implicitly bullish for AMD.
So AMD's caught a couple of good stories,
which is rare for them, in the last week or so and and that stock has um
sort of shaped up here i mean you know you got one two three four five sessions to the
to the upside on amd uh trader trader market news came here and saw the top of the gap around like
176 or whatever before this move i was like all
right it's not a word right out of my mouth maybe we pull back and here we are 179 yeah you took the
words right out of my mouth there i was gonna mention 175 but yeah 176 whatever i mean 175
to 177 really is the spot here and amd closed above both uh of those bands of that range at 177
44 so uh i mean everything's always incrementally bullish.
Things can change quickly,
but that's really, really, really strong
market-defying action from AMD for the last six sections.
And to top it all off,
you have, in my view,
one of the most bullish volume formations on AMD
where you have super high-volume candle
starting the upside breakout over the 200 days. So if you go back to June 16th, you'll see that high volume candle causing the 200
day break. And then you see a pear candle. So what these volume profiles sort of look
like is on the left side and the right side, you have these big tower green volume bars.
And then in the middle, you have a bunch of high volume accumulation.
And that's exactly what AMD looks like, like drop dead gorgeous volume profile going back
to June 16th on AMD and tremendous relative strength past six sessions.
I don't have a position, but I know a lot of people like AMD or long AMD have been waiting
for it to climb out of the hole.
It's made a hell of a climb since the April lows, right? 83 bucks, April lows, now 177. So technically speaking, I'm not going
to make any crazy fundamental commentary on AMD, but technically speaking, it has
started to defy gravity here in the last several sessions in the market. And
that stock was certainly a notable story from today. But yeah, the semis were, like I said,
hard at
the start of the session and sort of cooled off towards the close you also had vicks and gold
make a nice run intraday uh vicks sort of cooled off and then picked back up into the close um
i talk a lot about you know how you should review technical structure and um sort of the overview
of individual names and i spent a lot of today just doing that on my stocks.
There were a couple that I thought
were on the verge of breakdown.
So I did make one cut today.
I cut Cypher Mining today.
We entered that at $4.28 at the end of June.
So I closed it today for a 35% gain on equity.
That was quite a large position for me.
It was over an 8% weighting
and I fully closed it today. Generated quite a large position for me. It was over an 8% weighting, and I fully closed it today.
Generated quite a bit of buying power from doing that, which I'm happy I did,
because now I have some flexibility if things do go lower here
to start to nibble on my higher conviction stuff.
But I did close Cypher Day finally for a very nice profit.
I'm never mad about closing for profit.
Could it go higher tomorrow?
Yeah, we actually had really nice earnings from Mara after hours.
So maybe you get a little bit of a bounce in these Bitcoin mining names that sold off today, tomorrow, maybe on the Mara sympathy.
But I don't care.
I mean, I don't get mad when I sell stocks for a big profit and they go higher on me.
I know some new traders get like FOMO about that or, you know, they feel like they sold at the lows.
I just don't operate that way. If I sell
for a big profit, I'm like, okay, cool. I'll revisit the stock later. It doesn't really bother
me. So did close Cypher today. But I flipped through the rest of my charts, like, and I looked
at even some of these, like, more speculative names. And yeah, today was aggressive selling
from a percentage standpoint. But you look at the volume of the selling and you look at where these spots sold into.
And a lot of these names are holding their 21 EMA.
In fact, a lot of the market leading names sold directly into their 21 or 8 EMAs today.
Like Kratos and Joby, for example, direct sells into the 9 EMA, right?
Nebius, direct sell into the 20 and 21 EMA.
You know, I could go down the list here, but I'm not going to go through every stock in my portfolio.
But that gives you an example of what type of stuff I was seeing today.
A lot of selling into short-term exponential moving averages.
That sort of selling can be painful,
but it doesn't concern me yet. Now, here's the rub. Markets come to an inflection point at times,
and usually you start seeing that inflection point as a lot of stocks in the same thematics
or sectors all bleed into their 21 EMAs consecutively, right?
Or not, sorry, not consecutively, concurrently, right?
When like, okay, let's say you're looking at, I don't know, I'm going to make up an industry.
Let's say you're looking at trucking stocks, okay?
And all of them are super strong.
And then one day a leader in trucking stocks starts selling into the 21 EMA.
And then over the next few sessions, you see other trucking stocks selling into the 21 EMA.
Now, if you're really bullish on trucking and the narrative is good and there's a lot of catalyst rich environment for trucking stocks, a smart trader would say, well, I'm going to enter those stocks on these low volume 21 ema pullbacks right but sometimes what happens is
this these overall industry-wide pullbacks low volume pullbacks pull into areas of support and
then break down and they break down like concurrently, all together as a group. And that's when you get days like the deep seek sell-off that you saw in February.
So, yeah, that could be setting up.
If you get more red into the end of the week, you will see a lot of 21 EMA breakdowns.
And that is not bullish.
So, yeah, we're at an inflection point where
that could happen into the end of the week or we could get a stick save here for a lot of stocks
and you know find some consolidation or support into the end of the week so more selling here
could break technical structure on a lot of stocks the last couple of sessions it wasn't
concerning today it got to the point where you're at um very very critical support levels for a lot of stocks. The last couple of sessions, it wasn't concerning. Today, it got to the point where you're at very, very critical support levels for a lot of market-leading names.
Those start to break down. I think you have a higher propensity of seeing overall markets
unwind. And I think you probably have a higher propensity of seeing bigger downside moves in
these names. So it is the time to be alert, is what I will say, and to review technical structure as often as possible in as many positions as possible.
And to ask yourself, what level of risk am I taking on?
Like with Cypher, for example, today, which I cut, right?
Could I have held this? Yeah, I could.
I could have held this and hope that tomorrow it recaptures the 21 EMA.
that tomorrow it recaptures the 21 EMA.
And it might. It might.
But the alternative to me not cutting that today
was to open up potential for a pullback here
all the way into the 200 day, which is down at 470.
That would give back over half my profits on the position.
I have to choose, am I willing to undergo
that further additional level of unlocked risk
or do I want to just secure it and lock it
away here? And I chose to do the latter. Now, again, as I mentioned, there's going to be
instances where I make that decision and the stock ends up rebounding instantly. That's just
something you have to live with in risk management. You know, if risk management was easy, then,
you know, you'd just be selling stuff at the top and buying stuff at the bottom and
everything would be all gravy all the time. But it doesn't work that way. Sometimes you get
unpredictable price action in markets and you come to an inflection point on individual stock
where you have to say, look, am I going to let the daily unwind here or am I just going to get out
of the way and let the stock settle and let the structure rebuild? And sometimes it takes as soon
as one day for that to happen. Sometimes it takes several so um yeah all good for now but going into the end of the week i may make three or four more cuts if
things can't hold their spots so you know i don't have an like i said there's about five names in
my portfolio that i'm not going to sell five to six outside of that, uh, have no emotional attachment to anything.
You know, everything outside of those core names, it breaks down. I'm out. And that's that simple for me. And that's how I've always operated. And I don't operate with emotion when it comes to
my portfolio or I try not to. Um, so yeah, anyway, um, a lot of, like I said, low volume pullbacks
into support for now, and that could change going into the end of the week.
And then my decision making would also change based on that.
Um, I saw somebody tag me asking about GSRT.
Yeah.
GSRT had a pullback today with all of the other nuclear stocks still remains a very
low risk, uh, play in my view.
I sort of treating it like cash.
I'm long in the 10 fifties, uh, stock trade 10 50 today.
Could it fall to 1025, 1030? Yes. But again,
your effective risk is about 3%. So GSRT is what it is. I expected it to run more by this point,
but it hasn't, but I'm still holding it. I mean, I just don't have much risk on the position.
I'd rather hold something in this environment where I have three or 4% of risk,
as opposed to holding something where I could get gapped down on by 8% or 10%, like a ton of stocks did today.
So that's why I comment on GSRT for whoever pinned asking me about that.
What else was I going to comment on?
Damn, there's a few other things I wanted to comment on.
Oh, Materion.
So Materion, still long on this one. I want, ideally wanted to upsize on this one, but, you know, market action today just wasn't conducive for it.
All of the rare metal stocks held up really well in today's sell-off.
And I do think Materion's position in that is being underappreciated.
I mean, you look at your average rare metal stock.
You look at UUU.
You look at MP Materials.
You look at any of these.
Some of them are trading at like 60 times sales, not earnings, sales.
Some of them don't even have sales.
Okay?
So Materion trades at 1.1 times sales
1.1 times okay and they're the only beryllium producer in the western hemisphere
the stock has not run like every other rare metal stock and so that's one where i hope it works well
and if the earnings go well tomorrow
morning, reports tomorrow morning, I don't have much insight into the earnings. They do have risk
from tariffs. So, you know, if they mentioned some offhand comments about China tariff risk,
that could affect the stock. But, you know, there's so many red hot industries, nuclear reactors,
weapons, precision munitions, fighter jets, satellite mirrors, space telescopes, all of those things I just mentioned, they have one
critical material in common, and that's beryllium. And the reason beryllium doesn't get talked about
a lot is because it's a $250 million global market. It's not a big market. It's a niche
market, but it's strategically important. And it's controlled almost entirely by one player,
and that's Materion. And so I just love the story for Materion.
I just don't know enough about the fundamental path forward, if you will, to make it a high conviction position.
So it's sitting at roughly a 4.8% weighting in my portfolio.
If I end up having to take a loss on it tomorrow on a bad earnings report, that's okay.
Maybe I'll take a half a percent performance haircut
or something off of that.
But if it goes well,
my plan is to upsize that position
if the earnings go well.
Because I do think it's the only rare metals,
strategically relevant metals name
that hasn't performed.
And I also think we were talking earlier
about how all these stocks are trading at ridiculous valuations. 1.1 times sales for a globally, strategically important
rare metals play is just too cheap for me in this environment, even with the pullbacks. I mean,
you look at the peer valuations for these types of names and they are nowhere near planet Earth,
right?
And then you have one guy sitting there trading at 1.1 times sales.
So anyway, I think that name remains interesting.
We'll see what the earnings – I have no insight into the earnings, by the way.
So if people are trying to, like, gamble on the earnings, please don't do that.
The stock could go down 10%.
I have no insight.
But if the earnings are good and I like what I see, then I'll upsize material.
So, yeah, pullback day for me.
I know pullback day for a lot of people.
It happens in markets.
Markets don't go up in a straight line.
I'm just remaining cognizant about the stuff I own, monitoring the charts on a daily basis,
looking for stocks to find support on those weekly charts.
And as long as that remains in tune, then, you know, I'll continue riding the positions I have.
I'm going to spend most of Q3 and Q4 focusing on my five or six core positions.
It's generally what I do at the end of the year.
I've mentioned this before.
And as I focus on those positions, if pullbacks do come, that's where my capital will be spent.
Because I do have, after that cipher sale today, I do have quite a bit of buying power to allocate.
So, yeah, that's my thinking on the markets.
That's kind of where I am, what I'm looking at.
I do expect there to be more interesting opportunities at the end of the earnings season,
whether it's a good earnings season or a bad one.
I do expect there to be clearer and better opportunities into the end of earnings season.
And, you know, some people rely on earnings season to drive
their performance. They try to position themselves in names that can perform well in earnings. I
don't try to do that. I try to capture my performance intra-quarter, so in between the
earnings seasons. That's the way I've always done it. That's the way I'm doing it this year,
and that's the way I'm going to continue to do it. So I try to capture intra-quarter performance
instead of earnings-related performance. I think it's easier to predict i think there's less binary volatility and i think it's better for uh
overall entry or performance so yep those are my thoughts i know josh has his hand up i know we do
have a session coming up here in about two minutes so i'll throw it back to you amp
Yeah, absolutely. I saw Gav jumped up here as well. What's up, Gav?
Oh, okay. What just happened? We good?
Did you just wake up?
No, I was just...
Did we have silence there or something? What happened? Is it me?
No, you're good. I don't know if Evan can hear us right now, but we are chilling.
We're going to jump into a conversation in two minutes on UNH, which is very topical right now.
But before we do that, Josh, you had your hand up.
Let's just start talking about it right now.
What's up? Okay, I wasn't sure if Josh had a comment before we got into that, or if Josh made you want to comment on UNH.
Yeah, sure. No, I have no interest in health insurance, so I didn't mean to stumble into that.
I was going to say something, but I caught the tail end of that Stock Talk monologue.
Yeah, no, oil prices are up, which is fun. Apparently, Trump ended his war on American oil producers today, or at least declared ceasefire for now. So it's exciting. And I think there's the potential for re-rating if it continues.
Who knows?
There's a lot of stocks like Stock Talk was talking about that are very, very expensive.
And there's nothing like rising commodity prices, of which oil is sort of the biggest component of that sort of commodity index to potentially negatively affect growth stock or hype stock or whatever you want to call them, valuations. So we'll see what happens,
but there's a very, very big shift, at least in the way Trump has talked about this, and that's
been sort of a big negative for oil prices this year. So I figured I'd come up and say that. And
yeah, I have no view on health insurers and UNH has been wild. So I'm going to stick around to
So I'm going to stick around to go down to listen, and I'm interested in what people have to say about that.
go down to listen, and I'm interested in what people have to say about that.
Thank you, Mr. Ethan.
U&A supported earnings this morning, and the stock's been on a wild ride.
Lowest point since 2020 right now.
Paul, do we have you behind the leverage shares account?
Yeah, we do.
I can't see you guys, but I can hear you very well.
Well, we're glad we can hear you as well here on Spaces.
No video, just audio. So you are doing it correctly.
I know that there's a lot going on right now in this world of UNH.
And obviously, you know, part of why we're talking about this is LeverageShares
has created the first ever leveraged ETF ticker for UNH, which is UNHG.
So if anybody's sitting out there in the audience thinking that we're going to see a strong bounce back in this name,
this might be one to put on your watch list and start doing some research into.
But for now, we're going to talk UNH, which was down several percent today coming off of earnings.
Paul, what's your thoughts when it comes to this entire health care sector?
There's so many people who swear by this name. and it's a giant, I think, top 15 largest
company in the US.
What's going on with it right now?
Well, I think even the most bullish people were kind of surprised by how bad they did
in their earnings today.
It's a more challenging environment than anyone actually anticipated.
So there's a generational pullback in Medicare,
and there's a contraction in Medicaid,
and those are big numbers for a company like UNH.
And then you have the longstanding controversy over practices and policy claims
and just the nature of the healthcare market in general, right,
that's been weighing it down.
So if you go all the way back to that infamous day in December of last year, I think the stock
was trading at about 6.10 at that point. And then there's just been, you know, so much bad news
starting with that that has continued throughout, including a DOJ investigation that's happening now.
including a DOJ investigation that's happening now. So when all of that's combined, and then you
hear them not committing to their original forecasts and saying that the environment
is tougher than they thought it was going to be, right now, to me, it's not about the numbers.
It's really about, do people have faith in new management bringing back Stephen Hemsley?
And do they think that they can transition into the new paradigm of health care and what
that's going to look like?
And so, you know, today the stock got hit.
But I could tell you from our perspective, from what we see managing UNHG, you know,
the people are bullish.
The volume, we launched that stock only a week ago.
And we've had incredibly high volumes. In fact,
the volumes are the highest that we've seen for a new release, including increases in AUM every day.
It's the fastest clip that we've seen of any of our launches. We have 19 2x daily leverage products, and UNHG is the fastest growing one right out of the gate. So traders seem to be
very bullish. And, you know, maybe it's because, you know, most of the bad news is now baked in.
And it's what are you going to do moving forward? And if you're if you're a trader
and you're looking at where it was in December, like I said, 610. I think it closed somewhere around 262 today.
I think it may be worth a little bit of risk on if you're inclined to think that the transition is going to work and they're going to start to turn around.
The aisle here when it comes to this.
I was looking through just a little bit of the data and some of the pieces,
you know, why people might like it versus not like it.
I think we'll have people that'll make both sides of the argument here on the panel.
So that'll make for some good conversation.
But right now, that forward PE, and it's probably even better now after today,
right, approximately 12X and significantly below its five-year average, right,
where it's trading
at 25x PE. And so for people looking at this saying, hey, this could be a blue chip stock,
maybe seeing a rare opportunity. They've got the financials, they've got some other pieces,
things along those lines that continue to stack up here. What do you see? Maybe I'll ask you first,
Paul, what's the downside case here? How do you weigh the two and ultimately come out on the
positive side while not being oblivious to the downside? The downside risk is sentiment,
obviously. And you guys know this better than anybody. Stocks can go way lower than anybody
ever can dream of. Just when you think it's hitting the bottom, it could go further and
further and further and further. So it's really, really hard to predict bottom sentiment is so bad that you really have to be able to sort of set your positions appropriately.
I mean, I wouldn't take everything I had and put it into UNH right now because it could go lower.
I don't have a crystal ball. I never try to break the bottom of markets.
But that said, I mean, if you look at and I'm not again, I'm not an analyst and I'm not bullish.
We offer a product. That's it. So I don't want to make anybody think that I'm on one side or the other.
But when we look at the numbers, scale is important, especially in the health care services space.
Right. They have 51 million members like it's it's bigger than anybody else in the U.S.
So 51 million members, if they can start to optimize where they are profitable and transition
that business, one of those services being Optum Health, and they could continue to grow that and
continue to grow services, you know, use the data that they're building and become a more forward
thinking type of health care service provider. And if they could clear up all the stuff for the DOJ,
you know that a settlement is going to come. That's the way this administration operates, and that's fine.
Some type of settlement will come, and they'll get through that. And then they can get to the
other side. They have the ability, with all the members that they have, to grow and scale this
thing and get through all of the noise. And so right now, it's very noisy. The downside risk,
again, is sentiment. And I can't tell you
where that ends, because when things get bad, they can get really bad, especially from a trading
perspective and an investor perspective. But all in, again, the valuations look very good,
you know, for the level of earnings that they actually generate. And if they could just tweak
that business, get through all of the regulation and get on the other side of all of these bad news stories.
Potentially, they could start to grow again and form a base.
And I think they have the size and the scale to be able to ultimately get through and be a big winner.
Appreciate the details there. Nice breakdown.
Let's get into a little bit then. All right.
So let's have some pushback from both sides, because like you said, you know, you're looking
at it, right? You guys created a product. Oh, and I guess I should ask this real quick,
because people are going to want to trade stuff like this both ways and maybe with even more
leverage. Is there an option chain coming for UNHG? Not right now, but that could happen at
any moment. So there is no option chain for it right now, but that could happen at any moment so um there is no option change for it right now but that could happen all right we just launched this thing last week no no that's why i was saying like
coming i don't expect it necessarily right off the bat all right well let's dig in let's poke
some holes and go back and forth a little bit here evan stock talk gonna come over to you guys as well
as sam who've got up here on stage and m make your way around evan we want to jump in first you want to go stock talk i'm good i don't have too many opinions on on united
health itself it's definitely become a very volatile name recently going into this earnings
you can definitely see there's a lot of excitement on social media around this name a lot of people
finding this in a very different interest like clearly there's been a big move down this is one
of the largest american companies based on revenue when it's still one of the largest based on market cap
i saw you guys put out a post about the largest uh healthcare companies in the us and this was
that one so at this point there's a lot of people wanting to bet on this name now and i i find the
theme interesting these 2x single stock ones have been on the most volatile names out there.
And it's kind of extended to these newer tech, smaller names. And UnitedHealth is a very
different version of that, and maybe a different one here. So I'm very interested to see just in
general how this ETF does, maybe different from other people, but just how the AUM picks up what
that means for the ETF industry if more people go down this route. So that's one thing that I'm very interested in right now. I also wonder here,
people, 2x short ETFs do not get as much inflows, do not work as well as the 2x long ones. I wonder
if the 2x short UnitedHealth, I'm saying this after the earnings, we're down 5%, so maybe that's a little looking back on it.
This seems like a very volatile one where people are really on both sides of the aisle
here.
So I think you found the right area with this UNHG one.
I was looking at the assets under management and it spiked up pretty aggressively up to
like 28 million.
And that's a little bit delayed, so I have no idea what it's going to end up coming in at. My guess is though,
I think you're going to see a volume spike and it's going to, this is going to be one of the
more popular ones in the suite. I think you're, I think you're striking the right area. Even if
truthfully there's a chance. Yeah. Yeah. Go on. I'll come back. No, I'm just going to say,
I can't give you numbers, but that's going to, that's going to go up as soon as we can post
them. I can't say it until they're posted, but obviously, we had a really great day today, believe it or not, when the stock is down.
And just to jump in on the short 2x, it's been my experience that people are generally bullish.
So shorting stocks, even though you could do it in the form of an ETF, they're generally playing
for the stocks that are going to take off and go to the moon. And, you know, if they're shorting it, they're usually shorting a long position that they have
going into earnings just to cover themselves. And then if they get that wrong, the beauty of
the ETF wrapper is that you can get out of it right away. So you tend to see, you are correct,
way more assets going into the longs and the shorts are generally used to cover something or to make sure going
into earnings that you don't get it wrong. Yeah, that definitely does make sense,
and you've kind of seen that. This is definitely one that I think I'm watching. Can I actually
ask a question here, the expense ratio at 0.75%. So for leveraged ETFs, for a lot of people who don't know, I feel like 1.25, 1.3% is more
of the common that I'm seeing there. So why is that low? Is there another thing that I'm missing?
No, it's just our ethos at themes ETFs and leveraged shares by themes. So we want to be
a low-carst provider for highly convicted and high- investors. And, you know, we have
38 ETFs overall on the thematic and sector based side. We have 19 sector and thematic based ETFs.
And then we have these innovative two times daily leveraged ETFs. And all of our ETFs,
we try to be the lowest price on the street if we can be.
So this is just another example of us being able to offer a low-priced version of what exists in
the marketplace today. And then we're always trying to come out with innovative names,
things that haven't hit the street yet, because that's one way that you can catch investors' attention, traders' attention.
But there's no other rationale behind it, except it's in the ethos of themes and leverage shares by themes to, you know, be a low-cost provider.
Like, costs do matter. They do, even if you're trading a product, we believe costs do matter.
They do, even if you're trading a product, we believe costs do matter, that eat into returns over time.
And we want people to be able to come to us and know that they're getting a good value for the investment that they're getting.
I want to ask you a little bit more about this launch, though, because my feeling is this was probably a more successful launch than some of the other ones.
I think you hit a very right area here.
And listen, I don't know if UnitedHealth, if this is the bottom,
if there's maybe more time of sideways,
if we break below that level where we're around right now,
hey, who knows after that.
But I think you're seeing a lot of people are watching this game
and want to take that trade.
I have some thoughts here.
I don't know if right now,
but I feel like it will come back up at some point.
How are you seeing just the first day or two from before the numbers you have right now
compared to some of the other launches you've done?
Are you seeing a little higher?
No, this has been tremendous.
Like I said, it's been the highest volumes and the highest AUM that we've gotten out
of the first week of any of our single stock leveraged ETFs.
You know, when we first came to market in December, we were coming to market with some
names that had already been in the marketplace. And so, you know, that's not a
recipe for massive success because, you know, people, while we care about fees, not every
trader cares about fees and they're more interested in using something that they've been using for a
while. So if they've been using it for a while, if they've been trading it for a while, they tend to stick with that name. This was a first to market name. It's a very widely publicized name.
It's been in the news a lot. And I think the expectation going into earnings is we've got to
be close to a bottom. There's got to be something on the other side of this. And so that helps.
But we've had some success in some of our other names as well, but nothing quite like this. And I think you're right. It's a very high profile name, a lot of volume. And we've been getting interest not only from U.S. investors, but we see investors in Asia and other places that are really interested in the name. And, you know, sometimes you just hit it. And I think if
you look at this space, what you're going to find is the people who know how to put out single stock
leveraged ETFs, they put out a lot of them and they try to be first to market and they try to
do high volume names that are, you know, being watched by traders all over the place. And so sometimes you hit it and sometimes you don't.
And in this case, we feel really good about its presence in the marketplace
and how traders are responding to it.
That's a lot for me.
I pull back.
Great questions.
Good back and forth.
I yield the floor all right stock talk
tell me how you really feel about no no i mean i'm not i don't have a position long or short in it
um obviously health care is not uh really my biggest area but um i do think lately there's
been quite a bit of relative strength in healthcare stocks.
Even today, with all the selling, especially earlier in the session, you had a little bit
of strength that ended up fading into the end of the day.
Yeah, there has been a bid under more traditional industries in the last few weeks.
I think there is a good argument to be made that at least adding some traditional industry exposure to your portfolios.
And by traditional industry, I mean things like XLE, XLP, XLV, right, health care, consumer staples, energy.
This is where a lot of the rotation has been going, where a lot of the charts are shaping up.
You know, if this rotational action continues, then I think there'll be a tremendous amount of opportunities in healthcare and those other sectors, and maybe even UNH included.
For me, as a technically driven trader and investor, but it's not really just with my trading, it's with my investing as well.
I try not to buy stocks that are pinned, you know, under
significant moving average resistance. And, you know, I think with the UNH story,
one thing that did happen is there was a little bit of price anchoring, you know.
The stock was 600 bucks going back to April, right? And I think a lot of people look to that
and say, you know, well, it must be a deal
now because it's 280 and it was 600 bucks just a few months ago and it's not a shit code and it's
a multi-hundred billion dollar healthcare company and so on. I just think the difficulty with that
line of thinking sometimes is that sometimes sentiment is just, you know, not in your favor.
And on this name, when we got the first drop down from 600 to the 415 420 range a lot of
people tried to buy the dip there you know they were like okay well this is an overreaction and
you know so on and so on but if you look at the technical structure it was not i mean it's pretty
tough to paint as bear a bullish sorry you know down sloping 921 ema down sloping 50 day down
sloping 100 day downsloping 200-day.
And what happened? Price tried to get above the 9, couldn't, got rejected again, and we fell all the
way to the 200s. And over the last several months, you've seen pretty much the same thing. Price is
trying to get above that 21 EMA, and it just can't. It tried in July, failed again, and is now trying to get over the nine and can't do it
either. So yeah, technically speaking, like from a chart standpoint, I can't get bullish on it just
yet. But, you know, things can change quickly. If this stock can pitch a recovery back above 300,
which is where the 50 day is sitting, that'll be a setup that I would love to get long on.
But, you know, it may take a day for that to
happen. It may take two days for that to happen. It may take a few weeks for that to happen. But
that's what I'd be looking for on UNH is a recovery of the $300 spot before I feel
personally bullish on it. So that's kind of just my technical view. On the fundamental side,
yeah, I do think the fundamentals have gotten a bit detached from reality with the stock getting cut in a third.
And I think that's where a lot of the people who are looking along the same.
I think that's where their enthusiasm comes from.
And I think that's understandable.
The issue is with multiples in markets is that they're fluid, right?
I think a lot of people think of like industry multiples
as like, oh, you know, this stock's trading at 20X,
its peers should trade at 20X and so on.
They think of them as sort of this like benchmark,
like a qualification almost.
But I mean, obviously that's not the way it works in markets, right?
Like, I mean, you could have 10 stocks
with the same market cap in the same industry
that could all have different multiples.
And that's a product of many factors. It's a product of narrative. It's a product of thematic
relevancy. It's a product of general public interest. It's a product of, I mean, all of
these sort of arbitrary subjective factors that drive either multiple expansion or contraction.
So I think it's tricky to time these moves.
Certainly, it's always tricky to time anything in markets.
But for me, I feel a little bit more confident timing them
when the short-term technical structure is in my favor.
And obviously, I mean, this shouldn't be a surprise to anyone else.
The short-term technical structure right now is obviously pretty,
I don't want to say bearish, but I mean, it's not bullish.
It's every all the moving averages are pointing to the downside and the stock continues to cave. So, yeah, it's a stock that I need to wait.
If I if I do get interested in it, I would need to wait for it to get back over that 50 day.
What do you think, Paul?
Like I said, I'm not an analyst, and I don't tell people when to buy or when not to.
I just sort of think about the stocks and think about where they are and talk about them as
informatively as I can.
And I think there's two different types of investors, right?
So there's
the value investor that's going to start poking around down here because of all the things that
he said. And I agree with him. P is definitely fluid, right? And it changes over time.
And you either believe in management, you believe in the new transition, you believe in the cost
structure, and you start to dip in. But from a technical level, like he said, it's really, really hard to pick the bottom, right?
And even if you're a technical trader, it doesn't even make sense to try to pick the bottom, right?
What you're looking for is to find the bottom and then to try to find signals for, you know,
when it's going up and when there's a buy signal. So again, that's not for me to decide.
It's just been interesting to see what the street, the people who are interested in our
product are thinking. And like I said, we've just seen a lot of momentum, a lot of trading volume,
the highs that we've seen, and some AUM growth. So we want to offer the products so that people
have them at their disposal, and we'll let them do with them what they want
very nice sam you want to jump into the mix any thoughts here on unh and unhg yeah i mean i think
you know we are all talking about the technicals uh touch a little bit on the metrics but uh
wanting to kind of dive a little bit in the fundamentals of unh because i think you know like like uh like stock talk was saying
valuations are really more of a trailing valuation especially when people look at trailing p and so
on you can even take the expectation or the guidance as far as what ford p is but in my
opinion looking at the earnings i believe believe that this was an earnings where they
provided a guidance as the worst case scenario to set themselves up to possibly beat the next
earnings go around. You think about they got rid of the previous CEO and brought in a former CEO,
it kind of reminds me of the playbook that Disney did to kind of turn around that ship.
And I look where Disney is, it pretty much recovered like 50% of its losses when I was trading sub 80 bucks because they brought back Bob Eager,
who was the one who basically made Disney to where it was before the new CEO took over.
And I wouldn't say it was because it hit a way downhill, but the pandemic certainly didn't help
the situation. But Bob Eager was able to turn around that entire ship. We had a similar turnaround
story with UNH. They got rid of the CEO for the bad press. And then now they broke out this new CEO. And then to touch on the EPS and the guidance,
which was not nearly close to what Wall Street expected, Wall Street expected the guidance to
be about $21. And then they ended up guiding for about $16. They hated that. I don't want to
say whatever everyone already knows in the market.
That's probably the reason why the stocks sold at 7%.
But under the hood, there's also additional things that the market probably looked at
as being bad.
Think about the Medicare Advantage recovery, which is basically the amount of profit that
UNH earns after paying down all their expenses and so on.
Even though revenue did increase 16% year over year, that's not entirely
$100 billion this quarter revenue that they're going to actually get on their top line necessarily.
It's more of how much was actually paid to them. But then when you deduct everything,
they're down about, I think it was 1.5% or 1.7%. But they did guide to be back to the 2.5% to 3% Medicare Advantage recovery margin that is much more favorable when you think about a giant like this.
You're talking about a company that gets at least 1% of their revenue, which would equate to about $1 billion times 3, $3 billion in earnings.
earnings by end of 20 by 2026 that's something to kind of look on a positive side when you think
By 2026, that's something to kind of look on the positive side.
about the performance or the technical wise well it's no reason you get bad news bad news bad news
and kind of waiting for that time when you get the really bad news and the stock closes green
would be a good technical chart to look at in terms of the stock coming back but as far as
the earnings goes they were terrible um but can they get worse? They could probably get worse, if anything.
But health care is somewhat of a defensive play in the market.
So if we do have that kind of rotation from growth and strength back into what's been
lagging for some time, you could see a comeback in health care.
And also, on the last point to touch on that is a lot of people don't really like playing
options.
They'd rather purchase shares instead of
playing options and worrying about Delta and Theta and all these different Greeks in the market.
To buy something that's a low management fee like this one is probably much more favorable
from someone who wants to add a little bit of leverage into UNH without actually buying any
call options or leaps. My question to you is that I was going
through the prospectus, couldn't really get a good handle on it because UNH does pay a 3%
dividend yield. Does that translate in any way into the ETF or how do you guys go about that?
We usually pay that out on an annual basis. So if there is a dividend yield, we'll pay that out on
an annual basis to shareholders. And we'll put the date on the website.
I think we just launched last week, so we don't have anything declared yet, but we would
put that as far as distributions are concerned with the distribution date on the website.
Okay, cool.
And fundamental wise, like what were your thoughts about the most recent earnings?
Do you think it was like a sandbag quarter?
Do you think that in terms of guidance, they're just guiding for the lowest?
What are your thoughts on that, obviously, without giving information?
I think they have a lot of headwinds, like I said earlier in the show.
I mean, everything is going against not only UNH, but going against the healthcare space and medical costs are rising.
Like I said, there's been a crunch on Medicare and Medicaid. And when you're the largest,
when you generate the largest revenue from those two programs, it takes a big hit on you. They've
got the DOJ after them. And they you know, they really have that overhang
about their, you know, the way that they handle claims. So from my perspective, I think if I'm
the new CEO and I'm coming in and I'm trying to right the ship, I'm going to be ultra conservative,
right? And I'm not going to try to overguide. I'm going to try to handle the problems as they come.
And I'm going to under promise and I'm going to try to over the problems as they come, and I'm going to under-promise, and I'm going to try to over-deliver at some point down the line.
And so I think that's the right way to handle it, too, because I think the one thing that I could say about all the equities that I've seen in and around earnings is if you over-got and under-deliver, you get slaughtered.
So today was the day of the slaughtering, right?
So they got slaughtered today, but they set expectations lower than everybody wanted or expected.
And they're taking a beating for it. But at some point they bottom out and people start to dip their toe in it again because it becomes attractive just based on valuation.
And, you know, when they when they hopefully, you know, management gets their act together, they get some costs in line, and they start to transition the business.
And if they could do that and exceed expectations next quarter, that's when they start to get a little bit of a pop.
And so I don't know if they sandbagged it.
I think being conservative at this stage for Stephen Helmsley is probably the most prudent thing he could do.
He's been there for four months.
He's dealing with a lot of problems. He's dealing with a lot of legacy issues. And he's also,
you know, trying to transition the business to what's a more profitable business for him and
grow the Optum space. So I think he's just being conservative, being a little bit prudent and
hoping that he can turn things around over the next three months so that he can exceed expectations and get a bit of a pop in the stock.
Okay, cool.
And as far as the ETF goes, do you just want to explain or just kind of go through for the audience in terms of how you're able to get that two times exposure on it for people who haven't read the prospectus yet?
for people who haven't read the prospectus yet? Yeah. So we go through financial institutions
who offer us swaps, and that's how we get the exposure. So we don't use any options,
but we go through swaps providers, and that's what gives us the leverage exposure
on a daily basis. It's reset on a daily basis. So that's an important thing to know.
So in choppy markets, it could hurt you a little
bit. Even if you end up a little bit higher, it's not going to be exactly two to one. But the goal
is on a daily basis to be able to provide two times the return of that day. And then it gets
reset. And then it's two times the return of that day. Obviously, up or down.
Very cool.
Thank you very much.
Appreciate your time, man.
All right.
Thank you guys so much.
Thanks for having me on.
Oh, wait.
Real quick.
Before you jump off, I would just encourage everyone in the audience, if you haven't already,
click into that Leverage Shares account and give them a follow.
This is a company creating high-quality ETFs. You can check out the full suite.
Obviously we talked about UNHG here today.
I'm already following them.
I see Evan's following them.
So go ahead and just give them that file
before they jump.
Good content as well,
just around the general ETF ecosystem.
Paul, before you do jump off,
do you want to share any final comments?
Yeah, no, I just want to thank you guys a lot.
And like I said said we are themes and
leverage shares by themes so uh go to the website check us out and if there's anything that you like
just shoot us a note we'd be happy to talk to you about it amazing thank you so much appreciate you
uh for coming on and looking forward to the next one all right thanks so much guys have a great one perfect thank you bye-bye awesome yeah well i will say by the way we're still at 600 people a lot of people came in and enjoyed
that conversation so that was a good one i think there's a lot of interest around the stock for
sure i think there's interest in the stock but i also think the reason that a lot of retail finds leverage ETFs interesting is because they don't
really know how to use options well, you know, or they're scared to use options or they, you know,
whatever. I mean, there's many different reasons why people don't use options. They're either not
used to that or they're not experienced enough, or it's too much risk, or they don't want to,
you know, enter theta to get the same level of theta decay. And so some of them prefer to trade shares,
and when they want a little more leverage,
they look at these products.
So I think that's why people stay interested in these kind of things.
Yeah, I agree.
And I feel like they're all so innovating so quick in this space where
you know i have no idea what products gonna be next a fun time leverage on pretty much anything
you want these days now we're getting there you know the sec has kept it away from adding more
like of the 3x leverage ones obviously sqqq and tqqQ, Q, or grandfathered in. I wonder if that rule ever starts to change.
Because obviously right now we've been pushed here to two.
If anyone's wondering, that's why all these new ones are 2x leveraged.
You're not allowed to go past it.
And if you see one that is past it, it's either grandfathered in,
which is only five or six of them or whatever,
or it's not an ETF, it's an ETP,
and it's a whole kind of little different thing.
By the way, SoFi
also announced an offering there.
Great numbers.
I was literally going to say that.
$1.5 billion offering. Here we go.
Dillusion.
Yeah.
SoFi gave up
the entire day.
It was up to 70.
That's it.
A lot of these companies are doing a lot of stock offerings. That's why they gave up the entire move from today. They just gave up their entire day. That's it. Wow, it's negative.
A lot of these companies are doing a lot of stock offerings.
Kind of tells you a little bit of where they think their stock is at right now.
Yeah, I will say, though, to that point, it's the smaller ones that are doing it.
Yeah, I think, and Sam, this isn't a knock against you.
I feel the same way personally because you and I, one thing we share in common is we do both look at a lot of mid-cap stocks.
And same thing with Logical and same thing with Shai.
And I think when we operate in this space, all of our lenses sort of adapt to the environment, right? Like we're all looking, I don't want to say we're
looking at the market solely through the lens of these companies. Cause we're not, and I own large
caps too. And I know you do too. And, and, you know, we still look at the, what the mega caps
are doing every day, but I do think it corrupts the lens a little bit. And this goes for me too.
I'm not, again, this is what I'm saying. It's not pushback against you. I think it happens to me as well, where I get overtly focused on the
baskets of SmidCab names that I'm looking at, that at times it obfuscates my view of like the
broader market. Because in the grand scheme of things, right, we're dealing with this 55,
60 trillion dollar equity market, whatever we're're at now maybe even 60 trillion plus like that's a big number right 60 trillion dollars
is like an okay it's an unimaginably large number and like a lot of times i think we look at stocks
like the frothiest stocks in the market tend to be smaller stocks. Like, that's just, I mean, it's not universally true, but it's pretty true.
Like, in most bull markets, the names that, like, people are talking about, like, oh, my God, that's stock 5X.
Like, it's not, it's usually not a $200 billion company, right?
And, like, in this cycle, there's always exceptions to it.
Like, in this cycle, we had NVIDIA, which made an enormous move.
But, you know, Tesla's also up a thousand percent in five years and you know so
are a ton of other large cap stocks i don't know what met us up in the last five years but i think
it's probably some ungodly amount as well so yeah a lot of large cap stocks have gone up a lot but
like if you look at the companies where you're like oh this valuation doesn't is like doesn't
make any sense most of those companies i feel at least are
like sub 10 billion dollar companies right and then the question becomes like
how do we assess magnitude of froth with that lens and i think the short answer is it's really
difficult to do especially anecdotally i have a hard time assessing froth i i've never found like as a
guy that operates in speculative quote-unquote frothy names it's kind of my mo and and sam and
shy and logical we all sort i mean i don't want to say logical is a little bit more um uh conservative
but we all operate in these tech names these sort of high growth, high beta, you know, high relative
volatility, when you're operating in those, in those playgrounds, it, I don't want to say
everything always seems crazy, but it sort of does like, you know, the last two years,
the markets have, that's two and a half years, the markets have like basically gone up in a
straight line. I mean, obviously there've been corrections and pullbacks and all that stuff but you know we've gone a lot higher in the last three
years and at any point in the last three years you could go to start at 23 mid 23 and 23 start 24
mid 24 and 24 you could pick any quarter along the timeline in the past three years and just take a snapshot of the market.
And if you ask yourself, like, where's all the giga froth, it would have been in these types of names, like your quantum names, your eVTOL names, your small modular reactor names, your space stocks.
Like, this is where the true, like this is where the
frothy multiple expansion has occurred. Right. If I, if I look at meta or if I look at Amazon,
or I look at like Nvidia, I don't look at those companies and be like, those are disgustingly
expensive companies. Like are, is the, is the overall p ratio of the s&p 500 leaning expensive yeah it
is leaning historically expensive is that an issue can be markets want to get weak yeah then it can
be an issue um but like the big tech stocks are they historically expensive no are they expensive
yeah but they always are they have been for 20 years or 15 years but i don't know i think that sometimes froth gets misrepresented because
people are overtly focused on like you know sub 10 billion dollar companies and again i fall into
that basket as well so i think what helps is to say okay let me just monitor the technical structure like let me not guess where the froth
is coming out let me like let the price action tell me where it's coming out and you know before
i would say seven or eight years ago i like never i wasn't i don't say never looked at charts but
like i wasn't like a chart guy seven or eight years ago you, I was more of a, earlier in my trading and investing career,
I was more of a just like instinct stock picker. You know, I'd look at the balance sheets and the
fundamentals, the growth rate, the margin expansion. I'd look at these like general
metrics and try to make smart decisions about stock picking. I was okay at it. I mean,
I made money, you know, not as much as I do now, but I still did okay at
it and did well. But I didn't do as well as I could have nearly as well as I could have,
because I was trapped in that mindset of like, not having a technical grasp on the market. And
the reason I always pound the table on this and say everyone should know how to read a chart is
because there is a cohort of people in the market who think that it is just
technical analysis is astrology and it doesn't do anything and i always laugh when i hear that
because like the mark just pull up any daily chart you want and your your view on that should
be dispelled pretty quickly but once you learn how to read a chart you can look at these rotations in the market and ask yourself, is this the start of
something bigger? Or is this just an orderly and standard and nothing to panic about pullback?
That distinction can only be made if you can read price action. You cannot make that distinction
otherwise. Because if you don't know how to read a chart,
once you start seeing red,
then you don't know what's going on, right?
You're like, oh, well, this could be the top.
It could go down much lower than this.
It might keep selling.
You have no grasp on where price is going
when it starts going red on you.
And that's where most people start to panic
and mismanage positions and start to lean on things like,
hey, the
market's frothy.
These stocks are trading at crazy valuations.
I mean, stocks have been trading at crazy valuations for years.
And the markets keep going higher.
So yes, there's going to be corrections along the way.
Maybe we're at the start or the edge of one right now.
Like I mentioned, I just tweeted this earlier too.
A lot of stocks sold into the 21 EMAs today.
If they sell more into the end of the week, you will get a bloodbath.
You will.
You will get minus 8, minus 10% days on a lot of market-leading stocks.
That will happen if all of these stocks sell below their 21 EMAs at the end of the week.
It's like, it's not really even a guess.
That's just what happens when that happens.
You know, 21 EMA, daily 21 EMA is a very reliable barometer of market momentum.
Very reliable.
In fact, if I had to pick any moving average, somebody was like, take every moving average off your chart.
You only keep one thing.
I'd keep the 21 EMA.
And.
Yeah, I just don't.
I never consider myself smarter than the technical structure.
never consider myself smarter than the technical structure. And that's been the biggest change I've
made in my approach to the markets that has allowed me to consistently outperform.
Because I never, ever value my opinion over what the price action is telling me.
And I think I'm a smart guy. I'm not somebody that doesn't do the work. I do the work.
But still, if I do the work and I have an opinion, the price action is telling me otherwise.
I do not prioritize my opinion over the price action ever, ever, ever, ever.
And there are people that will say, well, you know, that's no way to invest.
You'll never catch a stock that way.
I mean, I disagree.
I've caught many, many stocks over my trading investing career that I've held for years with that approach. You don't have to buy bad
charts to do well. That is not a condition to capture alpha in the market. You don't have to
buy stuff that's oversold. There's like a propensity. Again, this is price anchoring
at scale. This was the same thing with UNH, what we were talking about earlier.
There's this propensity for people to believe that because a stock was somewhere, that it
must go back there.
That's a very widely adopted belief system in markets, especially with new traders.
They're like, yeah, I mean, the stock was 500 bucks.
I mean, it's 100 bucks now.
It's got to be a good buy, right?
Without context, that's a silly thing to say, right?
It depends what happened to the company, you know?
What happened to the narrative?
What happened to the hype?
What happened to the theme?
Like should the multiple be contracting?
In many cases, people say this all the time.
This isn't a novel phrase, but stocks are cheap for a reason when they're cheap.
A lot of times when stocks are expensive, they're expensive for a reason.
And if you really wanted to put stock picking in a nutshell, in a really, really small nutshell, that's the nutshell.
Stocks that are expensive are usually expensive for a reason.
And stocks that are cheap are usually cheap for a reason.
Your stock picking ability is entirely dependent on your ability to discern the quality of those reasons.
That is what stock picking is. Stock picking is saying, hey, this stock is expensive,
but it should be. And I'm going to stay long it. Or, hey, this stock is cheap,
but it shouldn't be. So I'm going to get long it. Or, hey, this stock is cheap, but it shouldn't be. So I'm going to get longer. Or, hey, this stock is cheap
and it's cheap for a reason. I'm going to get short. That's stock picking. It's your discretion
on the quality of the reason for why that stock is cheap or expensive. Because if you look at
Palantir, Palantir has been expensive pretty much the whole time. And it has continued to go higher. Right.
And the Palantir investors who held from nine bucks to 150 bucks.
And there are a lot of them in the retail community.
There was a willing battle there between what the technical structure looked like very early in that story
versus what the opinions of those people are versus when they were being told the stock was
expensive at 15 or 20 for those highly convicted investors to say, yes, it's expensive, but it's
expensive for a reason and it's going to go higher. That's a really hard and bold statement to make in markets. And it's
not even just a hard and bold statement to make. It's a hard and bold position to put yourself in
when you're putting your money where your mouth is. And so stock picking is a battle between your
personal conviction and the price of the stock. And by the price of the stock,
I don't mean like the dollar price of the stock. I mean, the multiple that it's trading at that
stock picking. Hey, it's too cheap or, Hey, it's expensive and it should be, or Hey, it's too,
too expensive and I should short it. Or Hey, it's too cheap and it's cheap for a reason.
And I should continue to short it. Like that's it. That's the whole game. And your ability to
discern the quality of those reasons improves with experience and time and process and the amount of data sets you consume, things like the chart and the flow and the fundamentals and the narrative and the earnings calls, like all those data sets, you consume those to thereby better be a better decision maker about the quality of the reasons that are driving multiple expansion or multiple contraction.
Because the best gains in the market are made in periods of multiple expansion.
That's it.
And multiples expand for a lot of reasons.
They sometimes expand because of earnings.
They sometimes expand because of narrative shifts.
They sometimes expand because of industry tailwinds. I go on and on. But multiples expand for any given number of reasons. Your goal in markets is to capture that expansion.
And some people, the fundamentally driven investors, they capture it with a different
lens, right? The fundamentally driven investor and trader says, I'm going to capture that alpha It's a highly rare asset. position in the industry. It's a
highly rare asset. It has no peers. It has a moat. So I'm going to get long this strong stock
and stay long as the multiple expands further. Those are two completely different approaches
with completely different data sets that will both produce generally successful results in a bull market.
Right?
If you're a good stock picker.
If your fundamental opinion is wrong, then obviously they won't produce good results.
But if you're a good stock picker, both of those approaches can produce good results in a bull market.
So, yeah, I mean, that's the way I think you should be thinking about stocks, especially where we are now,
I think you should be thinking about stocks, especially where we are now, where a lot of
names have gone up a lot and many of them, if not most of them are detached from fundamental reality.
And over the course of the next few months, you have to make the decision, which ones am I willing
to keep? Which of those names am I willing to say, yes, they're expensive, but I'm not selling. And I'm not
selling because of X, Y, and Z reasons. And those X, Y, and Z reasons are backed by your personal
work on the stock. And there's going to be other stocks that you say, hey, it was a hell of a ride.
I rode multiple expansion on this thing. The stock tripled. I did very well. Maybe I'll revisit it
another day when the picture becomes more interesting again. But I'm going to go ahead
and lock it here because the stock is breaking down and it could go a lot lower if the markets
turn unfavorable. Because it's a staircase up, elevator down environment. And it always has been.
And your gains will
disappear very very quickly if you get six or seven more days like today on the momentum side
you know stocks that doubled will be down 40 50 percent like in a snap of a finger so yeah you
you can choose in moments like that to be a bystander or you can choose not to and you can
choose to monitor technical structure intently and I really am going to emphasize the intently part of that,
because if you're just loosey goosey looking at charts every few days, that's not going to be
adequate. But in highly volatile market degrossing environments, which is what we've had over the
last two days and could continue to the end of the week, we'll see. But in market degrossing
environments where babies are being thrown out with the bathwater and everything is being sold
indiscriminately, the only thing that protects you against that is your understanding of the
things you own. That is your only protection against it. Because otherwise, you're just going
to sell everything because everything is going to get sold in these environments, right? Today,
a lot of stocks that didn't run hard in the last few weeks and months still got sold.
Right?
Why?
They're just babies thrown out with the bathwater during the momentum selling and during the smid cap selling.
So you have to, as a trader investor, say, yeah, I know that thing's selling today, but I know why I own it and I know it shouldn't be down.
And, you know, I know why these other names are down, but that one shouldn't be.
So, yeah, I'm'm gonna sit through the volatility that's like the hardest part the single hardest part of trading
and investing is making the decision to sit through discouraging volatility stomach curling
volatility at times that's like the whole that's the hardest part. Like markets are not hard. It's the, it's the staying in the markets part.
That's hard.
That's what's hard.
It's like leaving your money on the table.
Right.
And that's where most people, that's why most people fail to capture like multi-year alpha
in the markets because they, they just get scared out every time things turn sour.
And you'll never, you'll just never build a portfolio
that way, period. You'll never, ever build a portfolio of stocks. You know, you'll look back
in 20 years and you'll be like, yeah, maybe I made a nice pile of cash trading, but like,
you'll have nothing, you'll have no stocks. You'll have no, you'll have no deep, deep in the money
assets. And that's to me, the whole value of being a market participant. Like that's where
the real money is made. So, you know made so you know you you kind of sign this
implicit contract when you join the markets to say bad shit is going to happen when it does
happen it's going to happen fast and conditions and environments are going to change quickly and
i accept that risk as a market participant you're signing that contract implicitly when you put
money in the market and the day you understand that is the day most people start managing risk better. And
that's also the day most people learn how to read a chart. And I always say this, but it's shocking
to me, really shocking that, you know, people who have been in the markets for 10, 20 years still
haven't bothered to learn the basics of reading price action when they have millions and millions of dollars in the market like that just shocks me um i guess
people are just stubborn stuck in their ways they think like oh it's silliness it's astrology it's
stupid i can promise you with all my heart that it is not and it will better inform your entries
and exits and your ability to assess breakdowns and pullbacks and you don't need to be a rocket
scientist you could literally do it in a weekend i've said this before and I'll say it again. You could do it
in a weekend. So don't be, don't sit there and be like, I don't have the time to learn to read a
chart. You do. You do have the time, whoever you are, you have the time. So yeah, it's kind of my
view on the markets. I think people just need to chill, monitor their names, monitor technical
structure, understand what is happening in front of their eyes from
the price action standpoint, and then react accordingly.
And, you know, my book right now is sitting at 17 or 18 positions.
By the end of the week, it could be 12 if the market sells into the end of the week.
You know, again, I'm not going to sit on stuff, just sit on it.
So we will see.
There may be more cuts coming from me into the end of the week,
but I would like to, in an ideal scenario, see bounces on individual names tomorrow
off these 21 and 9 EMAs where they got sold into today.
That would be an ideal scenario.
Even if the index is chop, you need the individual names to do that.
Individual names fail tomorrow on the dailies.
That's going to be an ugly look going into the end of the week. And August is already seasonally
weak. So it's a double whammy a little bit. If you get 21 EMA breakdowns headed into a seasonally
weak month, that's not a good look. So we are pretty close to that today. Some stocks did poke their heads below their 21 EMAs as well.
So those are stocks are at a little bit higher risk.
Cypher was one of those.
That's why I took full profits on that today.
But yeah, that's kind of my thoughts on everything that's going on.
Very nice.
Very nice.
We have a busy week still to come.
A lot of all the macro stuff we have coming.
Most of the earnings.
I know,
seriously, like, FOMC that's enough to watch out for, Sam. Were you going to say something there? I know. Seriously, like,
FOMC's tomorrow,
we have basically three to four trillion,
more than that,
six trillion dollars
worth of companies
reporting before the end of the week.
I feel like the week is already over.
Yeah, buckle up. I mean, you know, we we always talk sometimes we talk about this burden of proof thing in markets where like burden proofs on the bulls burden proofs on the bears i think we're in
a tricky part uh stage right now where i think it's sort of on both sides you know markets have
climbed so many walls of worry this year up up, down, sideways, big correction, big V-shaped recovery.
You know, the tariff stuff has sort of been tabled.
We got an EU deal and now China gets another 90-day extension.
So who knows if the China tariffs even end up coming.
But the EU and China tariff thing has sort of been tabled now because eu's done china's
delayed and so the the enthusiasm about that base case you you would have to imagine has been baked
into markets right because otherwise we would have seen them rip on monday and today right like if
if enthusiasm about the eu deal and the China delay wasn't in the markets,
then the markets should be on
fire this week. But they're not.
And momentum is not.
And that's concerning
because that means that
maybe the market is
saying, hey, the bulls need more juice here.
Like the tariff
good news story may not be enough anymore.
And look, on the flip side, do I think markets can actually absolutely cave with no good cause?
No, I don't think that either.
So I do think, again, like I said, I think we're in a rare scenario where burden of proof is on both sides.
scenario where burden of proof is on both sides. And I think if you go back to most periods of the
market over the last few years, it was usually on one side or the other, right? Like there was a
period where bulls had to prove that inflation really was headed down. And it took bulls five
or six months to get that proof through the data. There was a period where bears really had to come
up with a negative catalyst, you know, and then they got that tariff liberation day catalyst.
And then we really saw an unwind.
So I think you're in a situation where both sides want a catalyst right now.
I think bulls are probably hoping that that'll be a rate cut.
And I think bears are probably hoping that it'll also be a rate cut,
which is why I think we're in a very interesting situation.
You know, I think there's a lot of bears out there who think a rate cut is going to be what actually leads to the unwind here.
And I think there's a lot of bulls that think that that's what's going to lead to the additional upside.
So that's the hard part to predict.
And some people have gone back historically and looked at this mechanic in previous cycles and said,
OK, what happens after we cut rates?
And if you actually look at the data and don't just look at what the charts that people share,
they actually go back and look at like the last 10 cycles.
It's actually really hard to time because there are moments where you get a cut, you
get a big ramp, and then you get a big dump off of the next quarter.
There are other moments where we've gotten the first cut, then we get a big dump, and
then you get a V-shaped recovery to new highs.
There have been other moments where we got a cut, markets dumped, and then consolidated
at the lows for six months.
So there is not really a go-to ABC technical pattern that you can rely on post-rate cut.
you can rely on post rate cut. There's no like, you know, forecasted or blueprinted price action
post rate cut. A lot of people want to force that because, you know, it makes it easier to
reference historically and make like a viral tweet. But it's really hard to say what's going
to happen after a rate cut. And to me, the thing that dictates it the most is the context of that cut. If the Fed comes out, whenever we do get the first rate cut,
I don't think it's going to be this week, but whenever we do get the first cut,
the Fed comes out and says, hey, we're cutting rates because we've killed inflation and we don't
need rates this high above the neutral anymore.
That, I think, is bullish.
And on the flip side, if the Fed comes out and says, hey, we're cutting rates here because we are concerned about the health of the economy, I think that's bearish.
So that's really, really simply put.
Obviously, there's more nuance to it than that.
But in a nutshell, that's kind of my perspective on it.
So we'll see. We'll see when that cut comes. But, you know, it may be that everyone's sort of
sitting around looking for a macro catalyst, like bad labor data or whatever, or looking for like a
war catalyst or a tariff catalyst. And in the meanwhile, it's actually going to be the first
cut that's the catalyst the whole time.
And like I said, it could be a catalyst in either direction.
And that's not me being like, you know, trying to catch both sides or anything.
That's just historically true.
Like we don't know.
It's really hard to predict what's going to happen in the first three months following that cut.
So we'll see whose ballgame it is.
But right now, as of today's selling alone,
and we'll be back on this show tomorrow, so my opinion may be different tomorrow. I'll tell you
what I think tomorrow. But as of today's selling, a lot of market-leading stocks are
cliffhanging on their 21 EMAs. That is a precarious look for the markets
because if it fails to hold,
you will see a very, very nasty, brutal unwind.
And that kind of stuff can kill portfolios.
So that's why I'm trying to put it on people's table
because I know people don't know how to manage risk
and I don't want to see people like destroy
their whole portfolio in a moment like that.
So please be cognizant that that can happen.
You can get a day where all these stocks
break their 21 EMAs simultaneously
and sell 9, 10, 11% intraday in groups.
That has happened before.
It happened earlier this year in the DeepSeek moment.
It happened on Liberation Day.
It happened once last year. It happened in 2023. It happened on liberation day. It happened once last year.
It happened in 2023.
It happened pretty much the whole year in 2022.
So this shouldn't be a surprise to you if you've been in the markets for at least a
couple of years.
It certainly shouldn't be a surprise to you if you've been in the markets for over a decade.
But for you newer traders, investors out there, just understand, be prepared for what can
happen.
You know, you don't have to say that's going to happen.
We're going to get a pullback, but it could happen.
And it can happen quickly because a market that's riding the 9 EMA to the upside looks fantastic and has looked fantastic so far.
Once you start to lose some steam up here, one or two bad daily candles and you're below the 21 EMA and the whole market
structure changes in front of your eyes in three sessions.
So just be ready for that.
And on the contrary, if we get bounces tomorrow on the 21 EMAs and these stocks hold those
spots into the end of the week, even if you're looking at some of the weekly charts on these
things, which is where I'm flipping to when the sort of selling starts, you look at some of these weekly charts, you get some nice weekly closes into the end of this week.
Then, you know, you could kind of take a sigh of relief and say, OK, we dodged we dodged the bullet this time.
But next week, they could be up again for that test.
week they could be up again for that test so markets are a dynamic place price action changes
So markets are a dynamic place.
quickly and frankly speaking your opinion should change quickly based on the price action if you
are an active trader and investor if you're not active then ignore everything i said for the last
hour but which which stocks are you when you say that a lot of the market leading stocks are losing
the 21 which kind of which basket are you talking about?
I just think of the momentum stocks.
The market leading momentum stocks.
A lot of them today sold into their 9 and 21s.
I went over a couple names earlier, but like MP Materials sold into the 9.
Joby sold into the 9.
Kratos sold into the 9.
Nebby is sold into the 21.
I mean, there's like 25 names I can go over that sold either the 9. Nebby is sold into the 21. I mean, there's like, there's like 25 names I can
go over that's on either the nine or 21 today. And that, like I said, maybe they all find support
there concurrently, or they all fail concurrently. And the latter scenario can be very nasty.
You know, I just want people to be ready for that because that happened in February.
And the look going into deep seek was very similar to this.
Very similar.
Like a bunch of stocks, low volume pullbacks into their 21 EMAs.
Then you get deep seek and you get 10, 12% knives on all of them across the board.
Now, I don't think a deep seek moment is coming. Maybe it is. Maybe
something in the news is coming. I don't know. Sometimes charts set up
for news, as people know.
It just takes one negative catalyst
to send all those stocks off the cliff.
Then, you know, you get a ton
of juice taken out of
the market's momentum.
We'll see what happens.
I was just flipping through, but yeah, it's momentum so yeah we'll see what happens um i'm just like flipping through but yeah it's like so so many stocks even crisper therapeutics into the 21 ema um many of these like bitcoin bitcoin related stocks that sold today to their
21 emas i was just asking does like market market leading i mean those have been like the
outperformers i guess but like the market leading, I mean, those have been the outperformers, I guess.
But the market leading definition could be a little bit different for everyone.
Yeah, that might have been the wrong turn of phrase to use there.
But I just mean, yeah, the stocks have been leading the market lately,
like in the last three or four months on a performance basis.
That's what I'm referring to.
The stocks were all like, yeah yeah the excitement and momentum is
right because yeah yeah it makes sense like it like outside of your like ai play or your your
mag 7 simis like those kind of names like yes i agree with you those are the been the market
leaders the last two or three yeah exactly yeah like semis did fine today like that's a great
point right like semis did fine today and so did that's a great point. Right. Like semis did fine today. And so did Staples and so did Energy. Right. Like, so, yeah, the market isn't like caving. But when when market leading momentum stocks is the little caveat I should put at the end of that. When those stocks stall, it's OK. Right. If they stall and consolidate, that's gravy. That happened mid-23, mid-24.
They stall, consolidate and then make second legs higher in the end of the year. That's fine.
What becomes an issue or a headwind for market enthusiasm to the upside is when those stocks break down.
Right. And obviously, that's a different thing. And again, I think the technical structure as of today is still fine on most of the ones that I looked at, or at least most of the ones in my portfolio.
However, into the end of the week, it may not look that way.
So I take things day by day.
I don't want people to panic just because I'm saying this.
I don't want people to sell everything in the after hours right now saying, oh my God, stock talks bearish again.
Markets are going to go down. But yes, I am cautious again for the first time since February
for what it's worth, for what it's worth. And I have reduced my position account from like 26
positions two weeks ago to 17 or 18 now and might be 15 by the end of the week. So I'm telling you what I'm doing. I'm
telling you what I'm seeing. I'm telling you what I'm cautious about. Are the markets going to
fucking blow up? No, I don't think so. There's still plenty of green shoots and stable areas
of the market. But yes, from a technical basis, there are some stocks that are hanging on by a thread to hold structure
and that worries me uh because it doesn't take a lot to push them over the edge you don't even
need it you don't need a negative catalyst for individual stocks to get pushed over the edge
you just need boredom you just need chop right like if a stock's sitting flat on the 21 ema
let's say a whole group okay let's say all the space stocks i don't know i
think asts sold into the 21 ema today i don't know if rocket lab did as well but maybe but let's say
oh let's look at the space stocks let's say they all sold in their 21 ema today this is just for
reference i don't know both of those bought up off of the 21 exactly today i actually just checked
this oh there you go so asts and rocket and Rocket Lab both then into their 21s today. But so, yeah. Okay. So space stocks sell into the 21s today, right?
Then let's say into the end of the week, markets don't really unfold, but they just chop into the
end of the week. You get a minus one, minus 2% day tomorrow on them again. And then Thursday, you get a maybe minus 0.5% day.
And then Friday, you get a minus 0.3% day.
Okay, red week, not bad.
But then you go look at the technical structure
in the end of the week.
Now the stocks have forfeited their nine-week EMA,
21 daily EMA.
Price closes the week below both of those spots.
That's not bullish.
And that can happen, like again, I keep saying this,
but that can happen in a blink of an eye, like you won't even notice if you're not monitoring
the charts. And then all of a sudden, you're 4% below the 21 EMA. Now, what are the chances of
recovery? Well, now you need something good to happen, right? Now you need to need markets to
pick back up, or you need the stock to have a good individual catalyst.
And now it's like, now the whole picture changes, right?
So again, a lot of the names I own
because I'm a catalyst and thematic trader,
when I initiated those positions,
there was a underlying theme
or catalyst driving the stock.
Those names will be cut without abandon if they break down.
I have no like long-term thesis on those names.
I'm just long because they're strong stocks.
That's it.
If they stop being strong stocks, they're no longer interesting to me.
Period. End of story.
They may become strong stocks again a month from now. Maybe
I'll miss the recovery. Like that just doesn't matter to me. I, again, and this is something
that new traders struggle with repeatedly. I see this all the time. I get these questions
like I'll sell something for profit. The stock will go rebound and people will be like, well,
do you feel like you made a mistake there? Like the stock rebounded, it's back to where
like above where you sold it like would you have done something
differently like no that's just risk management that's it period end of story you have set of
rules you met like that's how you keep your capital that's how you keep your capital you
know people who just blindly like hold through any market environment and have no barometer of risk
they're just constantly getting money from the market environment and have no barometer of risk.
They're just constantly getting money from the market and giving it all back in a cycle,
getting money,
giving it all back,
getting money.
And I can't count the amount of people.
I even know people in real life,
like friends of mine who made,
you know,
millions of dollars in 21 and 2020 and gave it all back in 22 and early 23, like all of it.
And I know guys who made millions of dollars in 23 and gave it all back in 24 or, you know, whatever.
I mean, like that's because people don't protect their capital.
They get their portfolio goes up so much and then they just like sit and stare at it like it's house money, like it's a video game.
And it's not a video game.
The money can disappear rapidly in front of you.
And the sad part about it all is, is because of the wannabe Warren Buffett school of thought on Twitter, everyone thinks they're fucking Warren Buffett.
And they think they picked the best stocks in the world.
And they're like, oh, it's okay.
I'll just hold it for 10 years.
I'm an investor.
It'll be fine.
And, you know, they bought the stock at 100 times sales and it never recovers to the highs
and they're just scratching their head for 10 years.
Don't be that person.
That's why it's important to pay attention
to technical structure.
You know, like,
look, if you're a successful bottom fisher, and you do good at it, and you consistently make money at it, I frankly think it's very, very rare. I haven't met any consistent bottom fishers in my
life. And I've met a lot of small, smart people. But if you are somebody out there that's convinced
yourself that you're a consistent bottom fisher, and can do it well you can buy broken charts and make a living out of it congrats to you but for me the reason i never
do that is because you just don't know you don't know what market conditions are going to be like
you don't know how long it's going to take for the stock to rebuild technical structure
like i'm just not in the habit of buying stuff and waiting for months for it to look okay, technically.
Or waiting for months for the story to improve, like, just to be in before the crowd.
Capturing inflections in performance does not require you to be the first person in the door.
You know, like, the StockStockInsiders, our community, a slogan is ahead of the herd.
Because we get into a lot of these stocks, you know, before the crowd does.
But we don't get in years before the crowd does.
There's no point to that.
You know, that's not impressive to me.
Sometimes I post about a stock on Twitter and I'm like, oh, we were ahead of the herd.
You know, we bought this two weeks ago and went up 30 percent this week. I always get some idiot in the comments who's like, oh yeah, dude.
Well, I called this stock in 2021. And I'm like, cool. Like the stock didn't do shit for three
years. Like why does that matter? Opportunity costs is everything in markets. Calling something first is like a stupid crown
to wear that everyone on Twitter wants to wear. I called this first. I called this first. Look,
I'm a genius. Like it's a stupid crown. I don't know who, who thinks they're cool by wearing
that crown. That means nothing. That means nothing. The only thing that matters in markets
is did you buy lower than you sold? That's it. Whether you're holding for 10 years or 50 years or five years or three months, that's it.
And the other thing that matters is what was your opportunity cost over that period?
If you're first to a stock, quote unquote, first, I'll put that in air quotes, and you bought it five years ago and for four years it underperformed the market.
And then in Q1 of this year, it went up 30%.
Are you a genius or are you
an idiot? I think the latter, like, to be honest, like that's not impressive. And that's not a type
of mentality or protocol that's going to get you to consistent outperformance either. Like this idea
of like, yeah, you know, this stock is sold too much it'll go up
one day i'm just gonna buy it and accumulate it here because i think i'm warren buffett jr
like you're not warren buffett jr first of all none of you or none of us on this panel are
at the level of stock picking that warren buffett is or that peter Buffett is or that Peter Lynch is or that Stanley Druckenmiller is. These guys are like all time goats in stock picking. 99.9% of us will never be on their
level as stock pickers. So stop trying to emulate people that you don't have the skill to emulate.
That's point one. And point two is, is don't adapt mentalities in this umbrella approach, like concepts about
markets.
Do not adapt them in an umbrella approach because things that are true about one stock
are not universally true about all stocks.
Okay.
Just because, just because a good stock, just because Amazon is going to go up on a 10-year basis, it doesn't mean the random ticker that your friend told you about that's a data center play that makes $22 million a quarter and it's trading at six times sales, that that stock's going to be higher in 10 years.
That stock may very well not even be listed in 10 years.
listed in 10 years. You have to grasp this concept to be a long-term market participant,
Okay?
or else you guys are all just going to be doing what I said earlier, making money and giving it
all back to the market over and over again. So be smart, use as many data sets as possible,
learn how to read a chart, learn how to read a balance sheet, learn how to listen to an earnings
call attentively, learn how to assess themes and industries for relative strength and relative weakness, how to differentiate
pullbacks from breakdowns, learn these things so that you don't have to rely on other people's
opinions to manage your portfolio. And that goes from my opinions too. Like some of you sit here,
hundreds of you sit here every day and listen to my rants and other people on this panel.
And it's great. We love you guys for tuning in. We appreciate you guys for tuning in. It's
fantastic. We're going to keep running the show, but don't rely on any of us to manage your
portfolio for you. You have to learn these things so that you can open up your portfolio in the
morning, flip through the charts and be like, yeah, everything's gravy,
all orderly, technical structure intact, don't need to make any trims here. Like, I can't tell you that. You're going to have to tell yourself that. And you're going to have to build the skill
set necessary to analyze the data sets and make those decisions accordingly. So yeah, keep working.
those decisions accordingly. So yeah, keep working, keep your head down. And in markets like this,
where we start to stall, don't be afraid to sell something you're up on. Remember,
if you take profits on something, you don't have to worry about wash sale. Okay.
There's no harm in the world in saying, know what i'm up a lot on this i'm
gonna lock some profits and then i'll revisit it the stock isn't gonna disappear well depending on
depending on the stock maybe it will but most stocks aren't just gonna disappear right away
so you'll have an opportunity to look at it again maybe next quarter or maybe even a week down the
road like people get terrified to lose their equity
in something because they bought it at a cheaper
price.
Shouldn't be that terrified. If it's a matter
of risk management, you should
pull that trigger 10 times out of 10
because there's going to be moments where you
regret it and say, I sold and it went up.
But there's going to be a lot more moments
where you say, thank God I sold
because that breakdown turned into a much bigger sell off. And, you know, that's, that's how you play
the game. All those, all those small tidbits are how you play the game effectively. And at the end
of the day, you're all stock pickers. That's what you are. You're not traders or investors. You're
all just stock pickers. So unless you're a futures trader or an index trader. So that's an exception. But yeah, you're all stock pickers. So act that way and, you know, learn the things that are necessary to pick stocks. what I said earlier with why is the stock expensive? Is it expensive for a good reason?
Why is the stock cheap? Is it cheap for a good reason? Ask yourself that question constantly.
And if you struggle to come to the answer to that question, the simple reality is, is you need to
work harder. You don't know enough. If you can't make conclusions on those things and discernments
on those things, then you don't know enough.
You either don't know enough about the stock or you don't know enough about chart reading
or you don't know enough about the fundamentals of the company
or you don't know enough about the industry or the thematic or the government policy
or whatever the hell it is.
You don't know enough.
If you're unable to sit down and say, this stock is expensive,
this is why and this is why these reasons are good, or this stock is cheap and this why, and this is why these reasons are good.
Or this stock is cheap, and this is why, and this is why these reasons are bad.
If you can't, in that simple of a form and fashion, make conclusions, you don't know enough.
Period.
And so you need to solve that problem first, and then go back and make those analyses.
Anyway, I could go on and on all day about this kind of stuff but we will see you guys tomorrow and we ran way over
time here but i appreciate you guys for sticking around and listening i'm always surprised at how
many of you just stick in for these rants i appreciate you guys
yeah reminder tomorrow with fom, we will start early.
I'll open it up probably about 10 minutes before the rate decision comes out,
so around 1.50 Eastern.
That way we can get everyone in here.
We'll get that rate decision live at 2.
We'll have a little bit of discussion.
We've got some nice guests coming on.
And then we will play Powell's speech live on the space.
Then we'll have live reaction after that.
And then at some point in between there and the close,
we will rotate over
because we've got some big earnings tomorrow.
Microsoft, Meta, Hood, among many others.
So, yep, we'll see everyone tomorrow.
Appreciate you, Stock Talk.
Make sure you follow all the great speakers
that have been on here.
If you missed anything,
you want to go back and listen to something, of course, like always, these are recorded all the way through and you
can go back and listen to them at any time as soon as I close this out. Appreciate everyone.
We will see you guys tomorrow. Thank you. .
