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Prospero.ai Stock Market LIVE | Mar. 31, 2025
Recorded: March 31, 2025 Duration: 1:15:15Space Recording
Short Summary
Bitcoin has shown growth and resilience, with a notable increase in its market value despite broader market weakness. There is a trend of Bitcoin being perceived both as a growth tech stock and a digital gold, indicating diverse investor perspectives. In contrast, fintech companies like SoFi, PayPal, and Square have faced declines, reflecting challenges in the sector and reduced retail enthusiasm.
Full Transcription
Hello, everyone. Welcome back to the Prospero AI stock market live streams. We have a lot of
stories to get to today. Market opening up deep in the red this morning. The April 2nd tariff fears
are having a stronghold on the markets, but it's trying to fight back a little bit after that
very, very, very red open. So we have the Qqq now down one and a half percent on the day
the spy down seven tenths of a percent the dow jones is actually green now so
uh the markets are fighting back and the russell just down over one percent so the markets are
mixed we'll see what happens throughout the day. Probably also worth noting that Bitcoin is now up 2.67%. We're going to talk about Bitcoin later
in the stream more in detail, but it's not all red as of right now. So we'll have to get George
in here to give us his thoughts on this April 2nd date that is now only two days away.
So it's coming up on the market.
Is it going to be a clearing event?
I've seen some coverage about this date now being that investors are just excited to get it behind them
and have some certainty on what's actually going to happen.
And maybe it could give a little reprieve, just the fact that it's actually happened, occurred,
and is set in stone once this in stone once we pass this date.
We have to talk about some things we covered in the Sunday newsletter.
The lowest readings ever we've seen combined for the SPY and QQQ.
I think the SPY was at zero and the QQQ was at three at the end of last week.
So those numbers total obviously three and it was the lowest we've ever
had in the Prospero signals. We're going to cover some of the hedging strategies that
if you had been doing over the past month or so, really would have helped out your portfolio a lot.
And some of the things that George has mentioned on the stream,
things that the Prospero signals have led us to thought were good hedges.
After that, we're going to cover CoreWeave, which went public last Friday.
Do you have anybody in here in the stream already that bought the CoreWeave IPO?
It was a tough one for CoreWeave.
It was supposed to go public at around $48 per share.
I think the final price it wound up going public was $40 per share, and then it really
did nothing.
I think it ended the day just below that price, but barely moved after that.
So is this a sign of a lessening of interest in the AI growth area of the market?
CoreWeave is very linked with NVIDIA.
NVIDIA is the largest shareholder.
So a little bit of a soft spot looks like for AI, obviously tough market to IPO in. So
cover all of that good stuff. And then Apple hit with $162 million fine by French regulators for
abusing mobile advertising power. We've covered
how maybe the big tech companies can be the targets of overseas European regulators because
of the tariff impacts. Maybe that's their way to get back. So is this a sign of things to come?
162 million. I mean, Apple is a $3 trillion company, but $162 million is a lot for anybody.
So how does it look with these companies being in the target?
Also, we're going to cover another Mag7 stock, Microsoft.
Stanley Druckenmiller recently sold out of his entire Microsoft position, and he added
a different company, which is now his eighth largest holding.
You'll have to stick around until we discuss the story to see which stock he added.
Here's a hint.
It is the Amazon of another country overseas.
So that should narrow it down for you guys who know your stocks around the world.
Like I said,
we're going to cover Bitcoin and that'll lead us into fintech because we've had a lot of fintech
companies. Let's take a look how they're doing today. Pull back pretty severely, maybe even more
so than the overall markets. I see George is entering the stream. Hello, George. Welcome in
here today. I'm just getting some tea. I'll be right back. Sounds good. Let's take a look. Let's see. PayPal down 1.5% today, but down
25% year to date. SoFi down 24% year to date. Square, then Block, now XYZ, down 37% year today.
And last but not least, let's take a look at Robinhood.
Robinhood is the only green one, up 6%.
So how does FinTech look?
And all of those four companies,
is anyone our favorite in our signals versus the others?
Then we'll get into XAI acquiring X in an all stock deal. The combination of these companies is now valued at
over $110 billion. I'll let you know how the breakdown is between each of those two when we
get to it later on. We'll cover the universe of Elon Musk, which day by day, there's never a dull
moment. And then last but not least,
at the end of the stream, before we turn it over to the model portfolio update at the end of the
stream today, and obviously we're having a lot of volatility in the markets, signals are changing
quickly. You're going to want to watch that at the end to see what we do. But before we do that,
we'll get into Amazon and their latest updates with their AI.
They have one curated for shopping and one for their health side of their business.
So we'll talk about both of those AI launches for Amazon.
And then also Amazon's acquisition of One Health or One Medical, I should say, which
was for $3.9 billion in 2022, does that look like it's on the
path to becoming one of the greatest acquisitions of all time? And if not, what acquisitions are
in that place now? But without further ado, let's get into what we're seeing in the markets
overall today, George. We had a big red opening today, kind of being bought up a tad bit, nothing super strong so far.
But after the market plummeted at open, kind of finding its way early this morning, we have this April 2nd date that's been mentioned for a month now, just upon us on Wednesday of this week. I'm seeing some
people cover the April 2nd date as saying it's going to be a clearing event where they expect
that there's been so much uncertainty and so much bad news priced into the market now that no matter
what happens, investors will just be happy to have this date behind them, have a little bit of certainty. So how are you feeling about this April 2nd date? Do you think
the market will react one way or the other? Or is it all priced in now and just the overall markets
opening up today after the weekend? I mean, I'm not that confident confident in that just because there's a lot of talk of like retaliatory tariffs.
And even if all of these U.S. tariffs are baked in and some retaliatory tariffs might be baked in,
like we don't know exactly what the retaliatory tariffs would be.
So I think it's very hard to say it's all priced in like i think you can fully price in
like an earnings beat right if everybody's expecting them to beat or whatever of course
it would have to move but i don't think you can fully price in like kind of like an international
relations event around tariffs that's pretty unprecedented i don't think you can be like oh
yeah all that's in already when when you don't even know, you know, who might react to what and then what those kind of derivative reactions will be.
I don't buy that at all. It's certainly possible. It's certainly possible, especially if like these are like the tariffs are applied as expected or maybe some are even reduced. and there's no kind of retaliatory tariffs, new ones announced tomorrow,
then yeah, it could go well.
But being confident that that will go well,
I don't know about that.
And that opinion that you're giving of the markets
where it's like, I would say,
maybe slightly more bearish than even most people,
does that come from the Prospero signals
where we saw the lowest reading ever, I believe,
of QQQ and SPY combination of their net option sentiments?
Is that how you're like building your opinion based off the things you're seeing in Prospero?
Some of that. But I mean, I can see people just being defensive with that.
Like, I don't think that's I don't think QQQ and SPY and an option sentiment being so low necessarily means people are sure it'll go badly or they're
just worried, right? People could aggressively hedge into this without it necessarily meaning
they expect tomorrow to make it worse, right? It could just be defending their positions.
But yeah, the overall very low QQQ, SPY then option sentiment and that kind of like that extremely low like
lowest we've ever seen read it rating together it's not good i mean we did see qqq net option
sentiment interestingly enough hit 57 um this morning but then it went back down to zero so
um i think like seeing i don't think i've ever seen a move that big. And the only thing that really explains it is there's a lot of swing trading, a lot of bots moving prices around, trying to assess the stability in the market.
Could you give any more of the background of how the net option sentiment could move from like 57 to zero in that quick of a time. I think people are probably confused as to how like such a big swing could happen and be like reversed so quickly.
Could you provide any like insights into that?
And maybe it'll help people out in understanding the signals a little bit more.
Yeah, I mean, like we always say, either it's there's supply and demand function. So it could be, it could be that all of a sudden there's more people there's, there's
more people that want to swing trade something upwards in the QQQ.
It could mean that people are, I mean, what I would say is the most likely looking at
that is that like some big places, you know, maybe simultaneously very, very close to each
other closed out certain profitable hedges and they're looking for some different ones. You know,
a reason that, um, a reason that they might do that is let's say you're shorting the QQQ
and it's already gone, or you have puts on the two QQQ and it's already gone down a decent amount. So your puts are either
deeper in the money now. Out of the money puts are always going to be more profitable. So if
you're still really confident the market's going to go down, you actually might want to cycle out
of those in the money puts into out of the money puts, you might do that instant. You might do that
relatively quickly. You might get out and then want to see the market action before you get back
in. But I would say cycling into new positions is what I would, based on that. Oh, there you go.
Someone used it. Someone used it for a quick move up. But yeah, it's definitely something that there's no one way to look at that big of a move.
And it's probably a compilence of things.
But if I had to guess the biggest culprit for that, that would be it.
Cycling out of some new positions into other ones or just swing trading.
out of some new positions into other ones or just swing trading. But if it was swing trading,
what we'd more likely to see is something that didn't go all the way down to one, right? It
might go like 57 to 20 to 40. It would yo-yo a little bit more if I thought that was the case.
And I think we also wanted to discuss some of the hedging
strategies that we've recommended. And I think the way you're talking, he's still bearish,
kind of like how we saw the QQQ net option sentiment go right back down. I guess they're
still hedging too. But some of the strategies that people, if they had in place, probably
in place probably would have performed better with this market pullback and maybe going forward
would have performed better with this market pullback and maybe going forward even from here.
even from here. Yeah. I mean, I think that a lot of people have pretty, and right now,
especially after you have to be really opportunistic, we're trying to be opportunistic.
I'm sure that's how a lot of funds are thinking. That's really the only thing that you're doing if you're smart.
Even just look at last week.
Last week we had some really solid numbers on Monday.
And I think a bit of Tuesday, and then they just fell off the cliff.
So I wanted to bring up this CoreWeave IPO
that happened last Friday. It was being hyped up in the morning as a winner of this AI cycle that
we're going through right now. I believe their largest investor is NVIDIA, and they're very
linked to NVIDIA. They actually used to be a Bitcoin mining company that
has transformed into this AI infrastructure company, but their IPO underpriced. So they
wanted to go public in the high 40s and it finally went public at 40 per share. So one question right
there, how bad of it is a sign when a company can't even meet the demand pre-IPO or as they're trying to go IPO.
Now, today, they're trading at 36, so down 10% from when they were going public.
Overall, is this a bad sign for the AI narrative hype cycle that this is supposedly one of the
winners of the AI growth phase and industry that we're in now, now down 10% and underperforming,
having a lackluster IPO?
Or is it just like the overall market?
Obviously, it's very weak market as well.
I think there's a few things at play here.
I think the first thing that's at play is it's just a bad time for growth, right?
And that's what all of these like, the way, the way, you know, GPU
companies are, you know, a lot of AI is priced right now is obviously priced for growth, right?
So a lot of that, and how they were doing the IPO and making comps, right? When you do an IPO,
you're making comps. And the way these companies are currently valued, are going to be, you know, there's still a good
amount of growth. Like the market, you know, a lot of people, that's why Buffett's on the sidelines
kind of thought, you know, the market's overpriced, right? And a lot of what they're saying is you're
paying too much for future growth when they call it overpriced. I mean, sometimes it is about like
more mature companies on current earnings,
but frequently when people are talking about overvalued companies, they're talking about
overvaluing growth. Right. And, um, you know, looking at CoreWeave, there's, there's a lot
of like, there's a lot of future speculation in that. So I think the first thing is just like a
bad time to be a growth company and asking to people, asking for people to pay for growth,
especially if you're not like,
you know, if you're not like, say, NVIDIA, right? I feel like if people decided they had growth
appetite again or something like Applovin, those are like easier names to drift to than a new
company, less proven as a stock, less proven to have a retail market, which obviously doesn't
help you as an IPO if you don't have that excitement versus these other stocks that kind of have heavy retail followings. And, you know, the second the market starts going up,
you know, what do people start talking about buying? And they start buying Nvidia, they start
buying, you know, things like Apple and they talk about how they think Tesla's undervalued and is
going to turn around, right? So I think all that is is working against it and then you also have the fact
then you know we're talking about it a lot but it really can't be understated um how much i think
the narrative is shifting to china being more competitive with the us on innovation and i think
some of the dollars floating and flowing these growth companies,
these AI companies is the perception that, you know, China might offer, you know, cheaper products,
but in terms of quality on tech, the US is going to be the presumptive favorite. But I think China
has changed the narrative a bit on that. And that's going to hurt valuations in addition to the macro effects
of just the overall economy. You mentioned how Buffett's been sitting out of the market
or going more to cash. And I'm wondering if you think throughout this year at some point,
we'll see him make an acquisition, a buy or an investment in one company, like one Mag7 company,
or maybe even several that he's
never had before? And at what point would some of these prices look interesting? It's actually
interesting that Apple is green now when I just pulled it up, but like Amazon now down at 185,
Meta at 560 after it was just over 700, Microsoft under 370, the list goes on.
Microsoft under 370.
The list goes on.
Would you expect him to like eventually,
or would it not surprise you if this year,
eventually he made some investments in big tech?
No, I don't, I don't, I don't think he's going to,
I don't think,
I think until this macroeconomic situation is going to,
is going to work out because look at it this way, right?
I'm not sure. I mean, and I'd probably say Buffett did not see Trump winning all this tariff stuff.
I'm not sure he was going that far ahead when he went to cash, right? He went to cash because he thought the market was overvalued,
right? That's his playbook. But kind of macroeconomic problems that weren't factoring
into that current calculation that are now, you could say, make the valuations even lower for him
because he doesn't really like macroeconomic risk. I think that's why we saw him,
you know, make that investment, you know, that expanded investment in Japan, right? They're not
a very, you know, they have very conservative economic policies. Although they did, you know,
they're starting to sell more U.S. debt, which is not great for us.
A lot of people are starting to do that.
And that's that's pretty inflammatory for them.
But I also think it's just like a practical retaliation.
Anyway, I think.
He's really like I think for him, unless the market gets really beat up quickly and this macroeconomic tariff
situation, whatever, gets more settled, I don't think that he's going to be any hurry to get back
in. And the truth of the matter is, I think the more that we're looking at this, people are
starting to dig in, right? We're mentioning with debt sales, all this retaliatory tariffs.
This is not looking like the story where it did perhaps at the beginning of the tariffs,
where Trump said he was going to do tariffs and then he got some concessions from Mexico
and Canada.
And then you could say like, oh, you know, maybe this whole thing is just going to blow over.
Maybe he just wanted to get a few concessions.
A, it doesn't really look like the world is in a big concessions mood anymore.
but B
it's like when you start talking about
these retaliatory
tariffs and maybe us raising them even
more
that's the kind of thing that could make this
a pretty long
trade war which is why
I'm saying that part for Buffett
like even if the market did
lose another 20 or 30%
I think he'd probably want to see this resolved and our economy
more stabilized and in good trade relations to the people around us before he'd start putting
a lot of money into the US again. And you were talking about how maybe the world isn't ready to
bend the knee anymore. We saw a story about Apple, which is honestly why I was surprised
to see them up out of all the Mag7 stocks today, hit with $162 million fine by French regulators
for abusing advertising power on mobile from 2021 to 2023. We've kind of hinted at this before about
how big tech maybe could be in the target if, you know, overseas or European nations
want to kind of retaliate to the tariffs. Maybe they'll find the big tech companies. Maybe that's
the leverage that they have. It's interesting that Apple's not really responding at all to this.
What do you make of this story in these events? I think when we look at things like this, I think, you know, we were kind of talking about the story before Trump took office.
And I think there was there was I think I think when we talked about this story, I think it was more places like the EU getting annoyed with U.S. tech companies, more U.S. tech companies than the government, right?
Now that they might be annoyed with both U.S. tech companies and the U.S. government,
we could see like these tech companies taking a lot more of the brunt than they might have
otherwise taken if there were better relations with the EU. And I think that that's
particularly scary because, you know, whatever the EU does could potentially be copied by other
countries, especially like we're looking at right now of like other countries are kind of piling on and maybe selling us debt buying gold doing
things like that um you know might they also be wanting to punish us companies if the eu gives
them a roadmap on you know exactly exactly how to do that and how they can execute and how to use
you know international courts um to do so, I don't know what kind of
courts, if they're doing that domestically, or they're using international courts or whatever,
but especially if they're using international courts to do it, there could be, that could just
be a blueprint that other countries could follow. And yeah, I mean, I think this is why we're seeing all time low QQQ, SPY, that option sentiment, because
certainly as long as I've been alive, and longer, you know, the US has done some unpopular
international relations things, right? But overall, the US has kind of been
like there at the sense, you know, good relations with most Western nations,
at least decent relations with a lot of Asian nations, a lot of stuff like, you know, the US
does, up until this point, has not really done a lot to piss off, you know, a lot of stuff like, you know, the U.S. does up until this point, um, has not really
done a lot to piss off, you know, a lot of people at the same time around the world,
which, which looks like they are now.
Um, so it's very hard to look at the stock market and say, well, what does this mean
for the U.S. stock market?
What does this mean for U.S. companies?
Um, because you can look at it a few ways right you could look at it like oh like the
u.s has had a bit of a strained relationship with china for a bit right yet we all still buy these
little timu or whatever we still buy those products right so you can say there's things
outside of commerce and international relations that people are willing to do. But the flip side is people in the US buy that because
it's cheap, right? The things the US produces aren't necessarily cheap. I mean, they do go
more for quality, kind of like we're talking about with like Nvidia chips. But it's very hard,
even just talking about this Apple story, right? It's very hard to say like, oh, will we maybe see more, you know, regulatory actions against
other, you know, things outside of, you know, just consumer discretionary goods?
Will we see it more in tech?
Will we see it more in other places?
You know, will this, you know, trade war escalate to a lot of different kinds of areas? I don't think anybody knows the answer. And I think and I think a lot of people are wondering and a little fearful around that. So I think that that is what's causing all of this apprehension and, you know, downward pressure on the market.
So a follow-up to all of that. So it seems like the two major risks, concerns, fears, worries are global tensions, so businesses that are very international, that's going to affect them, and then obviously tariffs raising the cost of goods. are smaller cap and maybe their business is entirely like or almost entirely within the US
be almost unaffected or just the least affected by this stuff? And then also companies that are
like tech, but they're selling software or services that aren't really don't have any
reason for like the physical supply chain of international stuff. Tariffs won't really impact
them. Can those companies be the leaders out
when these tariffs are in place? And then also like the Russell, maybe it's underperformed for
so long because globalization made all these large companies be better businesses than these small
caps. Is that going to reverse because of this? Well, I think the base of what you're saying,
that businesses that are primarily or almost all domestic might have a much easier time in this.
But keep in mind, part of this is that consumer confidence is low, right? So domestic, international, you know, whatever, like maybe on the international side, you
know, there's an argument that could say that tariffs are placed, but still people want
to buy your goods, right?
It's not necessarily like people are going to stop buying your goods versus in America,
if people are just spending less money, that means kind of in a vacuum, all goods are being bought less.
So we don't know that.
And the other thing that I would say is like one of the most important things that the stock market does to businesses is it provides growth capital, right?
It provides growth capital at higher prices.
capital at higher prices. If the American economy is suppressed, even if all these foreign
countries and people in them don't really know much about the small cap stocks in the US,
if they're, say, buying the IWM, that is driving up the price of mid-sm smaller cap stocks in the IWM, right? That price is making the business
more valuable. It's making it easier to raise money, easier to expand, right? So businesses
are not just about people buying goods. It's also about how people are capitalizing their companies.
And if companies are not having as easy access to capital because their valuations are lower, if it's going on with the American stock market, the
perception around it, and how international relations is affecting demand for the US stock
market.
And it would seem as though one of the goats, Stanley Druckenmiller, is in a similar line
of thinking as Ewan Buffett.
So it came out that he recently sold his entire stake in Microsoft, which I feel like we
haven't really talked about Microsoft a lot recently. So it's good. We'll maybe get a little
update on them. But then he also added MercadoLibre, which is now his eighth largest position.
Now, I recently heard something, I forget where I heard it, but that Stanley Druckenmiller has
never had a red year as an investor in the public eye in the market. I don't know.
I haven't verified that.
I was wondering if you knew if that was true or not.
But I know he's one of the goats.
His name is thrown around all the time.
So when he makes moves, I think people listen.
Kind of like Steve Cohen, maybe.
I mean, I certainly believe it.
But I haven't verified the stat on my own.
So I can't speak to it.
But yeah, I think it is a good time to be looking internationally.
I just think it's like when you talk about all of the things that we're talking about,
and we always talk about this with tech stocks.
We say like the problem with a tech stock and why,
you know, value investors didn't use to invest in them is that you don't know how much of the growth
is built into the price, right? And here we're dealing with a different problem.
We're dealing with the fact that we don't really know how much economic and international economic stock problems,
all the things we're talking about, is already built in the price. We're like right back to where
we started about the tariffs, right? And where it is difficult to know how much
growth is built into a tech stock, at least what you're dealing with is known assumptions around it,
right? You're basically saying like, okay, like how fast is expected to grow? Do I think they're
going to grow faster? How much do I think the market is pricing this relative to other stocks
in a similar thing, right? When you're dealing with problems like we're talking about, where we're not even in control, right? Like there's
total outside factors, right? A company is going to give you their roadmap, right? And you can plan
around that. It's not going to be precise. You're not going to have access to all information,
but they're trying to do it. They're giving you a plan. In a lot of cases, they're giving you the
three, four year plan. They're having it laid out. They're laying out costs. We don't really know what that is. And part of the reason we don't
know, even if the Trump administration did happen, some of it is what we're talking about is that we
don't know how tariffs will be reacted to, retaliatory things. So that's what's making
this market so hard, right? You can't even really properly grok at
how to make the forecast. Bob just shared a stat in the comments. Approximately 50% of all
consumer spending is accounted for by the top 10% of earners in the United States. Meanwhile,
the 90% of the bottom have had their savings
systematically depleted due to inflation.
Is that a scary stat that 10% of people
account for 50% of the spending?
Yeah, I mean, and don't forget.
Don't forget about all the consumer debt, right? There's all that like savings have been depleted and
consumer credit, consumer debt is going through the roof. So yeah, I mean, if there's one thing
you can look at by the US over the decades is that there definitely has been some class warfare
um going on and when you look at this stuff you really wonder why the level of greed that it was
like why like i i get that it's just like it's nobody in particular is responsible for it but
you'd think that people like looked around throughout history and saw that like,
you know, when you kind of are systematically unfair over, you know, decades, you know, hundreds of years, it eventually catches up with you. And it's really doesn't make any sense why
we pursued these, these policies. And, you know, we could be such, we could be such a wealthy country, but not even pay for people's healthcare
like other developed countries do. It's really mind boggling.
Well, now I'm thinking about if 10% of the people do 50% of the spending and those 10%
are the people that basically have a lot of
their wealth in assets like the stock market. And now that's pulling back. If it pulls back 20,
30%, what's that going to do to their spending? As the government is cutting spending, cutting jobs,
seems like, I don't know, the recession probability is like fairly high, I would say.
is like fairly high, I would say.
There's a lot of things happening right now
that all seem to be like concerning events
mounting together.
Some of them, like we're talking about
like the stagflation thing.
It's really hard to see.
I hope there's a plan to turn all this
into some kind of long-term benefit,
but I haven't heard anyone explain
to me what it could be that really makes sense. Like right now, this all just looks like a lot of
problems that we didn't necessarily need to have.
Now, we've talked about a lot of the negatives, so I always like to kind of balance it all out.
If all of these negative scenarios actually do come true for the most part, is this setting up for maybe like a year of negativity in the stock market? And then you'll have very good numbers to
compare it against in 2026. And you could see a nice full market in 2026, even if 2025 is a pretty
tough market, because then your growth numbers are going
to be probably easy to beat next year, I would think going or going forward after you cycle
through all this stuff.
Well, it really depends, right?
It depends if like, that's what I'm saying we need, like if things keep escalating, right?
if things keep escalating, right, and there's tariffs and there's retaliatory tariffs, and
it's hard to really say where the bottom is or where the curve is, right? I think that's one
of the tough things where, you know, when we talk about Tesla now, I'm just like, yeah, like, it's probably a good value here
if we've seen the bottom of the sales boycott, right? And people are going to start buying them
again, or it's going to wear off, or there's going to be new customers or whatever, right?
If we're kind of seeing the bottom of the decline. But A, i'm not sure we've seen it um and be like part of understanding
how big that could get is also understanding like the same thing we're talking about here right
if the whole trade war escalates he continues to have a prominent position in doge people kind of
like there's a lot of people not just in the u.s that could be um affected uh by the trade war
right and like let's say you're you know you're in a country that you feel um is affected by a trade
war started in in the united states right you more inclined, like, and there's not really anything
you can do to the Trump administration on a day-to-day basis, right? What's the easiest way
to get back that people are using right now? That's why Musk is facing the brunt of it.
Because he seems to be the easiest target to get back at for people that I think just are generally unhappy with how the US is behaving.
And, you know, it's hard to know where the bottom of that is or the top or whatever analogy
you're using. It's hard to know when we don't know how much further this escalates.
So I wanted to bring up Bitcoin on the stream today, up 2.5%. Do you find that surprising as the market opened up so weak today
and we got right across the board that Bitcoin is able to be holding up
in this market so far?
And I want to spin into a little bit of fintech after this,
but hitting on crypto first.
Yeah, I mean, I have kind of been interested in the fact that it does seem like on a lot of days, like Bitcoin and the S&P 500 have been moving in the same direction.
I'm glad to see a bit of a break here because like it's not necessarily something that I would expect those assets to just go in the same way um and
i mean it's very hard to say like what is a value you know what is like like in especially when
you're dealing with bitcoin that like a lot of the value is esoteric and momentum right but i think
if you're looking at like where the s p 500 500 is compared to the all time high versus where Bitcoin is and also Bitcoin is more of like a future growth thing, you could say it's priced more attractively.
Like I don't really like to get like those valuations are very hard to do.
But just looking at on like two simple, very reductive couple points just on that basis
you can say that bitcoin is a better is a better value and then i think i think it kind of goes
back to like you know it seems like a long time ago when the whole trump administration was going
to be a bull run and there was the trump trade um but uh when you're looking at
when you're looking at it still
you could say well I know we've lost
some luster and everything and maybe this isn't going to be
a bull run again but you know maybe people
are saying that like well
in a situation
where a lot of assets can
be depressed we still think
Trump you Trump likes Bitcoin. There's talk of him
running for a third term now. Maybe he doesn't want to lose all of his Bitcoin bros. And so
he'll have to actually do something to keep it elevated, even if other assets. So I think that is to say, like,
assuming that the whole thing, all this stuff doesn't just crater, maybe that he doesn't,
you know, maybe that Trump will actually do something to support his Bitcoin bros.
It does seem a bit safer than the general market, which is not something that I would
expect it to find myself saying. I feel like Bitcoin is kind of caught between
two paths right now. It's like on one hand, it kind of trades like a growth tech stock.
But then on the other hand, there's a lot of people who think of it as like a digital gold.
And obviously, we've seen gold kind of rip recently. So maybe Bitcoin's kind of
waddling back and forth between those two paths. Like which way is it going to,
those investors are fighting over which path it's going to take.
I see Bob commented again in our chat
about the idea that we're bringing a lot of this manufacturing
back to the U.S. because of the theft of intellectual property.
Any thoughts on that?
um i don't like i don't really agree with the way it's been done if like if trump wanted to bring
manufacturing back to the u.s the right way to do all of this would have been to first subsidize the manufacturing industry, get it built up into a place where
we could take on more capacity and then do the tariffs, right?
We are, you can't just like spin up manufacturing facilities.
It takes a bit. And it doesn't make any sense to launch aggressive tariffs
when you don't even have the manufacturing capacity domestically to replace all the stuff
you're trying to tariff. That has been my biggest problem with this from the start.
That I think tariffs and a lot of use cases for tariffs are based on having better
manufacturing in your country, which we don't have very good manufacturing in the US
and are not really making any efforts.
Like even now that they're passed, I don't see any like manufacturing stimulus bills
or anything talking about that.
Like to me me that's
what should have been done at least alongside there should have at least been a plan for that
um but there isn't and that that kind of really cuts into the benefits that we can get from this
so we talked about the surprising surprising strength in bitcoin i wanted to go into fintech
after that because i feel like there's been maybe on the other end, surprising weakness. But I guess with all the problems with the
consumers, maybe it's not that surprising. So to bring up a few, SoFi down 24% this year,
PayPal down 25%, Square down 37%. And then our favorite, Robinhood, is actually the only one that's green. Robinhood's up 6% this
year. Do you have any thoughts on the fintech space as a whole? I remember in the early parts
of this year, it seemed like financials were going to do very well. But I guess the banks and the
fintech stocks are a little different. So do you separate those two and the financial space fintech as a whole?
Yeah, that seems like a long time ago now.
I think one of the things that really was affecting that
was that I think a lot of,
there was a lot of retail enthusiasm
behind these like retail interaction things.
And one of the things that we recommend to any basic value investor is like, hey,
use a product, you use SoFi as your broker, use Robinhood, you know, then it's a good stock to
own. And I think a lot of people do that connection and that solid value investing.
But I think that can really turn against you, right? I think if you start to perform poorly in your portfolio,
you could say, oh, well, all investors are going to struggle. I'm really close to this,
and these things are going to go down, right? I don't want to own Square, less people are going
to buy Bitcoin, Bitcoin's down. So it can kind of teeter both ways. And I think that's kind of a
rising tide lifts all ship things. I think when retail traders, investors are doing well, all of those things are going to do well, their valuations are going to get propped up. But it can very much go the other way when people start to struggle. And I think that's what we're looking at.
And it seemed like for so long that the complaint about these companies were that they traded at high valuations because they were like, I guess a lot of people were excited about the growth aspect of them. But now you have PayPal trading at a 16 PE. Let's see if SoFi is profitable. SoFi has a 30 PE. Square has a 12 PE. So they're kind of like relatively cheap i guess so they're priced uh a lot lower crazy
those are crazy valuations for paypal and square all right like let's see like i'm i'm just curious
like um where's robin hood
i feel like the way they're valued it's almost like the market's expecting their earnings
to drop almost like they don't trust the valuations yeah oh definitely without a doubt
which might not be far off based on what we're talking about
where is this yeah that's crazy robin hood's at at 53 and
compared to those i'm curious about going sacks.
Imagine if the big price... Yeah, that's crazy.
Like PayPal and
Square are trading at a lower
PE than Goldman.
That's shocking.
What does that mean to you
when you see that? It means what
you said. It means that
people don't think those earnings are
going to hold up. And in better economic times, you can get away with higher fees, right?
And worse economic times, not only are they going to be like less assets, people are going to do
different things with their money. Maybe they do things like start
paying down debt instead of leaving things in checking or investments or things like that.
But then you also kind of have a pressure to lower fees that hurt your margins and hurt your earnings. And I think that like, I think that yeah, if you look at like, even just
I used to pay some people at PayPal, and like they have those like pretty if you use a card,
you know, it's more or there's always these like little fees. And then meanwhile, my bank,
I can wire people for free. Right. So that's something
where I've just started to wire more people because it's like, oh, actually my bank is not
charging me a fee, but PayPal is charging me a fee. Like that's the kind of thing that I think
people get a lot more sensitive to. And yeah, when you have competitive products like banks,
like these neobanks that are offering free, you know,
free wires, it can change the economics. So I just added a link for the Prospero new Reddit
channel in our chat. So we've had over 1200 people in here today. Thank you all for tuning in. We're
posting some content in a new Reddit forum. So you can click that link and join there
if you want to go check it out.
We have one more story to get into today.
But before that, let me just tell you all,
if you have any comments,
any things you want us to cover
before we wrap up this last topic
and turn it over to the model portfolio,
just feel free to let us know.
But what we'll get to now is XAI buying X. So in an all stock deal, XAI has acquired X for
$33 billion. XAI is valued at $80 billion. So total of $113 billion. Does this valuation surprise
you at all? And how do you think about this move? You think it's a good idea combining these two companies? If I'm being honest, I didn't know they were separated to
begin with. I thought they were kind of together already. But what do you make of this move?
Yeah, I mean, I'm not entirely sure like what is in XAI. I mean, I think that's like,
I think that's pretty intentional. But like, the one thing that I think about in XAI is like all those emails exchanged between like OpenAI and Elon Musk and how he wanted like to acquire OpenAI.
And then during that, he said nobody's going to catch Google.
And now it's really funny because like Google is like lost a lot of its luster in AI.
But I mean, I don't know. These are like, and I think you always have to, I think you always
have to wonder what kind of deal is being made when someone's basically like selling a company
to themselves. But yeah, that's a lot of like investors are putting in at that valuation.
But I mean, who's to say nobody really knows yet, like, who the winner in AI is going to be.
And that's because like, we don't really, we don't really even know the real products.
Like, as far as I'm concerned, like chat GPT, all these things are just like, they're, they're kind of like, they're saving a little time.
They're kind of like parlor tricks though, at this point for people.
Like there's a lot of cool engineering.
Don't get me wrong, but like writing something that you could write anyway,
that it just writes quicker, like building a presentation or a picture, like a lot of
it doesn't like none of it yet is anything that you could be like, Oh, like a company
would like pay a lot of money for that.
There's, there's just like these efficiency benefits.
So you could XAI come out with like a major innovation that like every company needed and they would pay like $10,000 a license for?
Yeah, a lot of AI companies could do that.
So it's hard to say, you know, where the real value is.
But one thing I will say, one of the most important parts, one of the most important things for an AI is a training set,
right? And X has one of the better training sets out there, along with the other social
media companies. That's why they can build such good AIs, but in places like Amazon.
But yeah, I think that it's going to be very interesting to see. And then it's going
to be interesting to see, you know, for better or worse, maybe this is actually helpful to us
in the long run. It'd be interesting to see if the government starts to interact with XAI, you
know, in the same way that everybody says like TikTok has like institutional grade AI. And that's
why like the video or like, you know, government institutional grade AI, and that's why the video recs are so good, you know, maybe there'll start to be some interaction
between the US government and X. I don't think that's particularly fair to the other US AI
companies. But, you know, from a perspective of like, hey, the U.S. has got to compete with, you know,
other nations, however we can, especially now if everybody's going to hate us, you know,
that might be something that could be good for us in the end.
By the way, you said recently, I think maybe even last week, like, isn't the TikTok deadline
coming up soon? I've heard nothing about it. Like was all that drama now it just seems like nobody's talking about
it I feel like in the past week when I get a YouTube ad every single I wonder
if any of our viewers have had this experience every single ad is a tick tock
ad explaining like how they are good for like family businesses or small
startups like every single ad I get I swear to God is this tick-tock so they're
really hammering that point so I'm wondering if if that's going to be like the narrative and like how this all
comes out in recent days or weeks interesting yeah yeah like uh like maybe they they paid off
all the U.S. tech companies and the U.S. government. And it's like, you could stay here. You just have to like, you just have to buy our ads and share some data.
Who knows?
Wow.
And yeah, people were just trying to start to drive traffic to our Reddit page.
So we would really appreciate the follow on that page.
It's good because like we're doing a lot of different content there.
Like we're doing some video.
We're doing some, you know, longer form writing, some shorter form writing.
It's kind of a mix of all the rest
of our social media channels.
I feel like it's the blend of
everything. If you like writing, you like video,
you get a little sprinkle of each in the
Reddit. Yeah. Trump last
week said he could extend the deadline,
said Bob for TikTok.
Okay. So maybe it won't be resolved
soon. Well, yeah, whatever it is,
like my observation to you was just like,
it seemed to have gone away.
Mostly.
There's just no coverage about it.
I forgot, we do have this one Amazon story,
but I feel like we've had like a lot of great topics.
So maybe we should just can this one for Wednesday again
and save it, keep it in the bank.
Yeah, that's fine.
Okay.
So we'll do the switch over now.
Everybody stick around.
George will be tuning back in in the Prospero Lab and we'll do the model portfolio update.
Let me make myself big.
Okay.
I am the show now.
All right.
So let's take a look at the Prospero net options sentiment for
the SPY and the QQQ. It looks like the market is continuing to edge upwards throughout the day.
The QQQ is now just down 1%, and I believe it was down over 2% out of its lows. The Dow is up
a third of a percent. SPY is down a third of a percent. And the Russell is now down just under 1%.
So everything is kind of drifting on upwards today.
The VIX, after spiking this morning, almost hitting 25, now down at 22.50, only up 3% on the day.
So things are kind of calming down, it seems like.
Let's see if there's any change in the spy or QQQ in Prospero hmm my phone is telling me server error are any of you
any of you guys watching getting that in Prospero it's not letting me check the
our signals let's see if I refresh it, if it'll work.
Interesting.
I'm getting a server error in Prospero.
Let's see if QQQ works. I've only tried Spy. Oh, Jonathan, you're seeing the same
thing as well. Unable to search for stocks in Prospero. All right. We'll have to let George
know. We're getting some errors.
Trace Gatos, QQQ is at 10.
It's working for Trace.
Can you give us Spy as well, if you have a moment or a chance?
I would assume it's at zero.
QQQ is still that low, but we'll see. Spy is at 15 interesting very very interesting
see if there's been any changes in any of the mag 7 stocks
if any other have gone green in the meantime join the Apple club. Actually, we haven't looked at NVIDIA at all.
NVIDIA, wow, NVIDIA is getting close to that $100
price point at $105. NVIDIA is red. Let's see, some of the other big tech.
Apple is green and going greeter, now over 220.
Meta's on the verge of going green.
It's down 1% still, though.
Amazon fighting back higher.
Jill, you're getting the error, too.
We'll see what George has to say when he gets in here.
If you have it saved, you can see, okay, so you just can't search for it.
Google almost went green. Still in the red though very interesting day across the board the markets are mixed wonder did we retest the low in
the qqq in the spy and bounce i don't, we're actually lower than the low of March 13th now.
In the QQQ, we're lower.
And in the SPY, we retested and bounced so far.
So interesting.
Definitely wasn't good to see a rejection at the 200-day moving average for the markets.
That's kind of the signal, I guess, for this most recent drop.
10 and 15. Oh, so you're seeing it too, Jill?
All right, George. So thankfully, we have some friends that have updated me. But I don't know why. When I look up SPY and QQQ in Prospero, there's a server error.
But they're at 10 and 15, respectively, now.
Trace got us.
Let us know.
Unable to search for stocks in Prospero?
Yeah, it works for me
yeah i get it too yeah i'm searching right now it works well let's see if there's if you don't mind like taking a video of what happens and send it to me
email or whatever like that's what we kind of need to do but for now i will do the
all right so we're at i'll do that at the end because it's moving so fast actually it's happening on my phone so I just screen record it I'll text it to you so you can see it Let's see.
Let me close it and then reopen it and see.
Oh, yeah.
Now it's happening with me.
Oh, now.
Internet.
You can see me, right?
Yep, we got you.
Okay, let's do this letter.
Mario said he needs to go, but good conversation today.
Thank you, Mario. Thanks for being here.
I'm going to... We'll work
on fixing that in a second.
Okay, here we go.
We're going to get
to QQQ and SPY
at the end because it's been so
crazy. to qqq and spy at the end because it's been so crazy The dip for large cap growth is widening.
We have already divested a lot here, but we'll look for momentum score to see how much more
aggressive to be.
We may look to balance out risk by looking for bears in the small cap area, which is Which is the weakest when you combine value and growth. E aí Technology and consumer discretionary are now far and away the worst sectors one day
in three months.
Could that make for a potential rebound opportunity?
Yes.
So we don't want to get too concentrated on shorts here. Real estate, consumer defenses, and energy are all looking good places to go long as
uncertainty amounts. I don't know why this happens. Продолжение следует... Спасибо. Субтитры делал DimaTorzok Вот так. E aí All right. Продолжение следует... Damn, Liz. 3, 2, 1. Продолжение следует... Субтитры делал DimaTorzok22
222 Субтитры сделал DimaTorzok Okay. Так. Thank you. I think we added that.
Oh, did we see any real estate here?
Yeah.
I like this. Oh, I think we'll do both. Thank you. Okay. All right.
This is not our traditional ads.
A utility company to real estate and healthcare.
The times they are changing.
All right.
That looks good.
Looks good. all right that looks good looks good
all right what's our qqq and spy option sentiment I can't see it in my app, but Jill commented that QQQ is 11 and SPY is 15.
It's not.
Oh, I actually can't see SPY, not QCC, though. Oh, you searched?
No, it doesn't work.
It's in my bookmarks.
I didn't realize I had a bookmark. All right.
Oh, no, wait. All right. All right.
Any last questions?
Let's see.
Nope.
Anybody?
No new questions.
We had a great stream today, I think.
Thank you all for tuning in.
Hopefully you enjoyed.
Best of luck to you and the markets over the next 48 hours
until we're back here live
covering it all for you Wednesday, 3 p.m. See everybody there. Thank you, George. Thanks, everyone.
