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SMALL CAP INVESTING
Recorded: May 19, 2025 Duration: 1:23:18Space Recording
Short Summary
In a lively discussion, market participants analyzed the current trends in small caps and large-cap tech stocks, highlighting a potential short squeeze and the impact of macroeconomic factors on growth. Optimism around the QQQ and SPY reaching new highs contrasted with concerns over small cap underperformance, indicating a complex market landscape.
Full Transcription
Thank you. What is up, everyone? Welcome in. Happy Monday. Probably a lot happier Monday now than it was
when we woke up this morning.
What a move in this market today.
How about that?
Just resilient as all get out.
Just the dip was bought quickly.
Very, very interesting.
I'm excited to hear everyone's thoughts.
Welcome in.
Of course, it is the Small Cap Investing Show that we do every Monday at 1 p.m. Eastern here on Wolf Financial.
Excited to hear from the
crew. As always, there's been some arguments that you could just keep buying the dip on the indices,
and then there's some individual things that have been outperforming. I've heard the argument that
this is a stock picker's market, so we'll see. We'll see what everyone thinks here.
Let me make sure and get everyone up here on stage every time
i get ben on stage and try to get him a co-host he always rocks i don't know what it is wait i feel
like ben might as well just rug himself as soon as he joins because it's gonna happen either way
there he is what's up there all right all right good so but what a what an interesting day and very interesting setup in the market right now.
Obviously, we had that Moody's news.
And one of the things I was looking at this morning that I discussed with my community on the show this morning
was the possibility of a red to green move in the markets because of the strength of the weekly chart on the QQQ.
Basically, I mean, at the 200 DMA last week, everyone was offsides.
Everyone was shorting that 200 DMA.
No one expected that China deal.
So that short squeeze, we're in a short squeeze mode all of last week.
We're short squeezing.
And then this Moody's news came out, and there was a possibility that would stop it and I said hey
if we do a red to green which is possible and that's completely invalidated and I think at
this point QQQ SPY is going to short squeeze to all-time new highs in the very foreseeable future
could even be this week that's my take on the overall market now I'm a little bit disappointed
though because in this short
squeeze we're having, you know, and this is something I've been struggling with for the
last few weeks, as the godfather knows, you know, the small caps underneath have not been
going up nearly as much, have not been acting as well. You know, just a great example is
MIND, M-I-N-D, a small cap that I like, and I like the earnings
report. It's kind of like dead in the water. And there's many, many small caps that are kind of
dead in the water right now and are not going up with the major indices. That's something I'm a
little pissed off about. And also I'm concerned about maybe part of why that's happening is
because of TLT and rates and everything that happened with Moody's here.
We know there was not a, unlike 2011, where there was a mechanical reason why institutions had to sell bonds.
They weren't forced to sell bonds this time, but I'm concerned about the perception of the U.S. and the deficit they're having.
And that could keep a lid on TLT and keep rates higher.
And maybe that's why we're getting this underperformance in small caps.
So I'm not thrilled with what I'm seeing.
It's been actually a little bit tough for me in the last couple weeks.
I've been just barely beating the market.
I'm accustomed to crushing the market because these small caps are just not working
and I'm not like a big cap, mega cap trader.
I don't really trade the indices.
Like on my live stream this morning,
since QQQ was down, it went up to like minus 0.8%.
And since it was minus 0.8%,
the whole entire day I've been calling QQQ to flip from red to green.
The whole entire day.
I'm like, that's it.
Red to green is coming.
Red to green is coming on QQQ.
But I've done absolutely nothing about it because I'm not like, you know, I don't trade QQQ call options.
Every time I try, I get screwed.
But here it is.
I'm not surprised.
I think a major, major short squeeze is continuing.
It started last week. It's continuing.
I'm playing this QQQ move with NBIS right now intraday with earnings after hours.
So, you know, expecting a little bit of event anticipation run this morning helped by the QQQ tailwind.
But other than that, just not really happy with the price action underneath the small caps
and the prospect of higher rates, you know, maybe causing a longer term underperformance with mega caps.
So that's my introductory remarks on MoneyMarket.
You have your hand up. Go ahead.
Yeah, man. Sorry about that.
My stocks are ripping, bro.
I don't know.
Maybe we need to trade notes.
You've been right on point.
And it's funny because sometimes you're killing me.
And I guess sometimes I'm killing you.
Geodrill, TPCS, TSSI, Drone Shield, Gatekeeper, all up 50% over the last few weeks.
So it's been a party um what's
really funny is of course i've been advising caution here on this show um two weeks since
going from yellow to light yellow alert a lot of people were asking me are you going to orange or
red no if anything we go in the other direction than we have to light yellow.
And what does light yellow mean? It means go ahead, buy stocks, but be really picky about what you buy.
And so, you know, we've got the names out there like the drone shield in the drone defense space.
That's hot. Geo drill in the drilling, pulling gold out of the ground for the gold miners.
That's hot. Tech precision in the defense space. That's hot.
Obviously, TSSI, I mean, I'm sure you're going to talk about that, Ben.
You deserve to take more of a bow than I do on that one.
But I will talk about that on that part of the show.
It's just a matter of picking the right names at the right prices.
Now, are we going to all-time highs?
Man, I don't know about that.
But I don't see much reason aside from the mystery box that is the Trump administration.
No offense.
I'm not political.
I lean Republican, if anything.
But it is, you know, it's a magic box.
We don't know what we're
going to get from week to week. But Scott Besson seems to have toned everything down. I love what
he's doing. I love what he's doing. And as long as Trump loves what he's doing, I think we're in
great shape. And of course, AI is setting the stage for multiple years of our economy to continue
doing great, adding efficiency to the economy giving people the
ability to do things with more efficiency with less money and and that could be a real positive
if that kicks in real soon then all bets are off for years to come so um yeah man i mean look we're
we're good to go and uh i think it's time to spend more time talking about individual stocks unless something crazy happens. And Moody's
downgrading US debt is not it. Okay. For those afraid that the market might reverse itself on
this Moody's news and go red to green, back to red. Listen, if it goes back to red, it's not
because of Moody's. S&P downgraded us in 2011. Fitch downgraded us in 2023. These guys are so late to the party, it's not even funny.
The S&P move was the big one because that stopped certain institutions that had to own
AAA-rated debt.
They had to sell U.S. debt on that downgrade.
And when you sell bonds, interest rates go up.
And when interest rates go up, stocks go down,
all else being equal. That's what happened in 2011 and a little bit in 2023. Moody's, I mean,
the media spent the whole weekend treating this like a non-issue. And so I felt that the move
this morning would be faded. It has been faded and we're good to go. So I'm going to shut up
until it's time to talk about stocks
because that's what we can you know what they were right all the pundits were right and i noted that
from the community last night that hey every single pundit saying this is a nothing burger
and they were right but by the way 2023 though was not a nothing burger that was a vicious
vicious downturn the whole entire month of August. And TLT was down 17%.
And the market was down for three straight months until it came down the bottom.
So even though there was no forced selling of bonds, we did have that move down.
That's why I was cautious this morning while acknowledging the possibility that we'd have
this red to green move.
And here it is.
So anyway, as far as I'm concerned, I think where I was last week was since that China news,
new bull market above the 200 DMA.
They all can pick stocks.
We have the all clear.
But again, I don't know.
Maybe it's my stocks that suck lately, my small caps.
But I just don't see that same push in small caps as I see in the mega caps.
Caps as I see in the mega caps.
Let's see what Godfather has to say.
Let's see what Godfather has to say.
Godfather, let's go over to you and get your take around the macro side of things right now.
Hey, guys.
Can you hear me okay now?
Yeah.
Yes, sir.
Okay, great.
Yeah, look, you know, we've got, whether it's mechanical or otherwise, you know, this market, you know, last week saw a lot of what we saw the week prior, which was, you know, this pain trade taking the market higher again.
We talked last week about the positioning and both the long short guys as well as the long only guys.
And, you know, the short guys or the hedge funds had been shorting this tech basket and that basket finished up over 11% last week.
So there was a continuation of that pay-in-trade, and then there was a continuation of money flowing return into some of the cyclicals and some of that broadening out trade that we were looking for to take stocks higher.
And, you know, some rotation kind of went back into the new guard defensives, if you will, the, you know, the Netflix and the cybersecurity names and those kinds of things.
But look, we're now at multi-month lows on the VIX.
Yeah, at multi-month lows on the VIX, I mean, this switch in market sentiment's really been amazing, right?
Whether you look at it on the fear of greed index, you know, we were in that extreme fear of fear area for quite a while.
And, you know, we skipped right through neutral and now we're deep in the greed side.
Dude, I've never seen fear of greed go from so low to so high.
Yeah, it's crazy. We're almost at extreme greed.
You know, this is the first week and at least six where on the AI survey, you know, the percent of bears, you know, finally fell below 50 percent.
We're over 35% bulls. You're seeing it also in the put call skews. So, you know, I feel like
We're over 35 percent bulls. You're seeing it also in the put call skews.
unless there's, again, you know, more of this mechanical stuff to happen, right? Like,
look at today, you know, despite the Moody's downgrade, and, you know, I agree with all those
that say at the end of the day, it's a nothing burger. I mean, it is going to increase cost of capital a little bit. But I think the real focus is later this summer when we get the debt ceiling really becoming an issue.
And, you know, look, there are reasons to be cautious here, right?
You know, from a technical standpoint, we've got resistance here at 5960.
We're pretty much right there.
If we flip the 6000 level, this is another huge gamma level on the index.
If we flip this, there's really no resistance until like 6150.
And if we flip it, of course, you're going to see a burst to the upside because puts
get sold and the underlying stocks get bought.
And it's the exact same thing that we saw a week ago at the 5700 level, and it was able
to do that.
And I just look at the action today, the indices have been grinding higher all day.
VIX from the spike this morning has done nothing but go upper left to bottom right.
But I can't help but think that there's a market breather on tap here. If you look at the RSI on the NASDAQ 100,
it's getting up there at over 70. Last time we saw this, I think, was summer of last year.
And those names took a pretty healthy breather thereafter. So I just don't see positioning and rate of change on tariff headlines as being enough alone to push this rally that much higher.
I just think the bar for good news out of tariffs has gotten that much higher.
I don't know where that incremental boost of sentiment comes from.
We just had this trip to the Middle East by Trump.
We just had this trip to the Middle East by Trump.
And, you know, I think if you totaled all of them up, you got foreign governments pledging
an additional like $4.2 trillion or something in U.S. investments.
Obviously, you know, the reality is going to fall short of the headlines.
But, you know, there's been a lot to push positive sentiment, I guess, is what I'm saying
last week.
And, you know, we need something to follow on with that.
The one thing that, you know, I mentioned last week, and again, I'll reiterate this week, that in order to take this market higher, you need the big weights to participate.
And you need the MAG-7s, you need the big mega cap tech names to participate, and you need the financials to participate.
And at the end of the day, look, I'm a fundamental guy, so I'm always looking at the denominator.
I'm always looking at the denominator. I'm always looking at the earnings. And now that we've gotten through all of this, if you look at what's happened,
the MAG7 beat earnings. They showed 28% earnings growth. That beat estimates by 16%
across the board on average. So if you look at the earnings estimates, those have actually gone up,
If you look at the earnings estimates, those have actually gone up, but the estimates for the other sort of 490 have come down a little bit.
So there's still a lag there in terms of performance with the big cap tech.
And that alone could take us into that 6150 type range.
I, like everybody, am sort of a little bit a little bit surprised by, you know, the animal spirits
that we're still seeing in all these market segments. You know, you're seeing the squeezes
and the, you know, quantum names and, you know, there's no shortage of shitcos going up 500%
and, you know, all this other kind of stuff. It's a little bit shocking to me, you know,
given the background of, you know, the 10-year holding around four and a half, you've got
inflation swaps continuing to go higher, you've got term premiums that are continuing to go higher,
there's a ton of debt to be refinanced. I talked a bit about this debt ceiling.
That's going to become more and more of an issue as we get closer into the summer.
We'll see what we get out of tax receipts, whether they can push that a little bit.
And then all the other stuff, like look at look at all the economic data last week.
You know, I know it's all soft and everyone's looking for it to really show up in the hard data.
But typically that lag is sort of three to four months.
But, you know, starting with consumer sentiment, which is really the big it just keeps getting weaker.
Empire manufacturing was crap. Housing starts for crap permits Permits, NAHB, like you just keep on going. And then, you know,
on the back of that, you got names like Duolingo and Palantir and Net and CrowdStrike. And,
you know, like some of these things are back up over 20 times in an EV to sales basis. It's just,
it's crazy to me. So it feels like there's a disconnect there.
But again, I don't know what the next catalyst is going to be. There's been a lot of job owning
of the market higher. You know, a lot of these sort of headline deals that Trump's making in
the Middle East and all the rest of it. Yeah, my sense is that the bar has just gotten that much
higher. So I'm, I'm, I'm being cautious, but I'm also trying to be open to the fact that so far this market has found a way to continue to go higher.
And as much as I'm not sure where it comes from, the pain trade is still for the market to go higher until proven otherwise.
And today it seems to be doing exactly that again.
You need this fix to somehow come off the bottom here and start spiking higher again.
But we certainly haven't seen that, not yet.
So if that, or does that leave us?
Yeah, sorry, go ahead.
Sorry, go ahead.
Yeah, Mark, I'm here in just a second. If I may just respond to that a little bit.
Yeah, Mark, I'll come here in just a second.
If I may just respond to that a little bit.
Technicals and sentiment, I think, is what explaining this move here in terms of you're saying, you know, stretch fundamentally.
You're looking at the RSI daily is oversold, but on the weekly, it's not oversold at all.
And if you look at the weekly chart on QQQ, this thing's a straight shot to new all-time highs.
I mean, I've never – that's one of the strongest technical charts you're going to see,
on top of the fact that people were positioned on the wrong side and you're getting a short squeeze.
And then the other thing to explain, this disconnect, I think, that you were talking about,
is I think what's happened is there's been a sentiment shift in terms of people's attitudes towards Trump.
You know, seeing that Trump put, seeing that 90 day pause,
I think people are speculating that, you know, we're going to avoid a recession. Trump's going
to bring in that golden age. They're buying all that Kool-Aid it's talking about. And I think
that positive sentiment is what's driving that maybe fundamental disconnect you're saying from
my point of view. So let me, I agree with a lot of that let me fill in some gaps
though right we went straight down right for a few weeks nearly broke the bond market trump
steps in says okay trump put we get a v-shaped bottom and all of a sudden high VIX and the stock market both reverse sharply. The algos out there,
there's a lot of them that, you know, when you see VIX going up, they reduce positioning.
And then you saw the reverse happening. So the VIX started spiking. And so the algos and the
quants out there say, shit, the VIX isn't where it was anymore.
We need to buy back.
Right.
So now they're buying back and that's just exacerbating the move up.
It's squeezing the shorts out.
And then the institutions all of a sudden say, damn, we've been positioned cautiously, but we're going to lose positioning in terms of our performance for the year. We need
to chase. So basically it feels to me like the algos did what algos do. Then the institutions
were forced to follow and then retail, bro, when the market's going up, you know, retail investors
are going to be like, Hey, the market's going up. Let's jump on in any excuse to go to the casino.
Going up. Let's jump on in. Any excuse to go to the casino. Right. Next thing you know, boom, we're all up 50 percent.
The caution that Godfather gives, I think, is warranted.
Actually, Mark, sorry to interrupt you. Retail is actually buying that huge dip and hedge funds and institutions are selling it.
So retail is actually right. Catching that huge bottom right.
That's a good point. I think I think what I would say is that it continues. But yeah, thanks for filling in that gap. I agree. Now,
with what Godfather is saying, and this is what we have to be careful of, is that you see all that
soft data getting weak, and there's that three to four month lag before it hits the hard data.
week and there's that three to four month lag before it hits the hard data. If it does,
this is going to prove to be just part of the topic process in the market. And topping processes
are always long. Remember 2007, I went short in May of 07 thinking the jig is up. July,
the market, CNBC, everybody's like the jig is up. Real estate's crashing, right?
Well, no.
You had a major crash in July of 07, but then the market rebounded.
And I guess to you, Ben, point, we did hit all-time highs in Halloween of 2007, and then
the rest is history.
But the market knew in July that that things were over and still the
market was able to rebound off that and power at all time highs despite what everybody knew was
coming same thing with covid the market went up for three weeks after it was already well known
that covid was permeated all over asia i had contacts all over Europe showing that it was spreading.
And I was like, man, we got about two weeks before it comes to the US.
Everybody knows about this COVID thing.
And yet the market kept going higher.
Okay.
So don't underestimate the, you know, the ability for the market to put one last gasp out there.
You know, they get knocked to the canvas.
They step back up.
They take the eight count. And then boom, right right the heavyweight comes in and knocks them out um so we'll see what
happens this time we just gotta stay vigilant um dougie i haven't heard from you how's it going
guys so yeah i uh i i love this market. I enjoy it so much.
It's so much fun with this volatility.
So yeah, last night we knew it was coming down.
And this morning, immediately I said on my morning show, I said, yeah, this thing's turning
back around guys.
I even posted that out and, uh, yeah, you could just see that it was going back up.
So now to answer your question, what exactly is going to happen?
Cause I did know that the China thing was going on from the charts.
Remember, I said it a week early on this show, and I was adamant about it on my show.
But here we go.
I'll tell you exactly what's going on here.
They did reverse back up.
That Moody's was just nonsense.
It was nothing.
So the market overreacted over on a Friday.
Again, you put that out on a friday afternoon when the market basically
closes and of course it's going to pull back then you had it now down perfectly with the golden uvxy
um calls for early in the morning i'll give you that and also ben you had that tssi and snes was
a beautiful call so i don't know what you're talking about your calls are down they uh they
were really nice ones and um but, yeah, you had that.
And and of course it reversed because you could just see that it wanted to early in the morning.
You could see the chart wanted to go back up.
So now it's popping back up.
So to answer your question, yeah, it's going to run.
And I was saying before, you're probably going to see all time highs.
So I have to agree with Ben there because this thing's looking strong.
It's about to hop into the top and today's little pullback was basically that little bow and arrow action where you know
kind of dip back and it's ready to spring forward and go rocking and rolling so you it does look
like it wants to get into the top looking at apple just for example it's down a little bit
right now but that thing looks like it's going to take off tomorrow and um a lot of these look like they're going to pop up so we will see a run into the top now the
big thing is how far are they going to dip down because you're obviously going to see some sort
of correction we're getting into the top and we just had that obvious bottom to top kind of run
which is a crazy run so we're going to see that top to bottom run. But how is Trump going to
control it to keep the market stable? And I think they have this crazy, wicked plan, like I had
mentioned before. And I really think we're going to see a nice dip, but I don't think we're going
to see it come back down as far as we saw it come back down on that April 7th at them lows.
For whatever reason, I think he's just going to be pulling out all
kinds of news, nonsense. I don't know. And I'm looking at the poly market right now,
looking at the bets for the Fed decision in June and July. And I'll tell you what,
that June one looks like it's getting better and better for it to just jump off a cliff for the no
and the yes to go straight up. so i wouldn't doubt if we start to
see a uh fed decision sometime soon or mention something about rates and that's all they need
are the rates to get cut and they can keep the market stable so that's what it looks like but
yeah we're about to run up a lot more it looks like and uh but how long and how far like i said it looks like it's going to get so if we're
looking at the spy you're at 610 is uh you have really good resistance and when it pops up there
it's going to hit that 616 and then come back down so we're at 595 now you still have some
squeezing left next week's a short week they love to dip them on short weeks too so you got to
remember that.
So, I mean, just keep that in mind with the holiday season coming up and then summer coming into play.
You're going to see pullback.
But, again, I don't think it's going to be as crazy, no recessions or anything like that.
And, yeah, we now, like you said, Ben, retail now the bottoms.
And, of course, all of us nailed them things because we were looking at it and saying,
that thing looks like them charts want to pop back up for whatever reason.
And they sure did.
So that was the chart reading.
And I think it is all kind of technical right now.
You can just see it right on the chart.
I don't think any of the fundamentals really matter until Trump actually says something.
And that's the news that you get things popping off of.
But yeah, I don't think it looks bad right now.
It didn't look bad this morning and we're going to get that run.
So just watch for it to get topped out.
But we still have some little bit of momentum left in it for him to squeeze up there.
And then we're going to have some good pullback.
So and you can see the VIX also way down there.
It wasn't ready to curl up, but I think on the next one, it might
be ready. So I'm saying just be ready for it to pull back and we'll figure out how far, but that's
exactly what the market's going to do and what it looks like on the charts. So I hope that helps out
with everything. Well said, Dougie. Well, that was a good half hour getting thoughts from everyone i was
very interested to hear all that and now my favorite part of the show is when i get to hear
kind of the deep dives into different things ben we're gonna we're gonna start with you uh i know
you've had a lot of different things going on i know there was a earnings call last week that
you mentioned that you were really excited about but But tell us about what you've been trading, what's on your radar, what ideas you've got.
Yeah, well, thank you, Dougie Fresh, for noting some of those good calls I had.
But, yeah, I guess I got a very high bar for myself last week.
We just nailed it on Virgin Galactic and TSSI and a few others.
Tesla also, great calls on Tesla last week.
Not a small cap, but just really uncannily accurate calls last week.
But, man, like some of my small caps, I don't know what's going on, man.
They're just stuck in the water.
This mind is not doing well.
And Fonar on huge earnings is not doing well.
And a little bit frustrated.
Sale of media going down, even though I think it's worth at least double where it's trading at,
you know, with the Donald Trump Jr. tailwind.
And so, yeah, I got Zebra doing okay, but things should be exploding much higher.
Anyway, so what I'm going to say here is I want to hear from some of your picks.
In fact, you know, let me start with Money Mark because I want to really do a deeper – instead of giving you guys – I'm going to take – I'm not going to give you two picks. In fact, let me start with Money Mark, because I want to really do
a deeper dive. Instead of giving you guys,
I'm not going to give you two picks.
I'll spend a little bit extra time.
Money Mark, I want to start with this
GODF, because I know you've been telling
us about it forever.
I don't know, maybe a couple quarters
ago or a quarter ago, I was
in it for some time, but then I just got
really frustrated with the lack of liquidity, and it just wasn't moving. I'm like it for some time, but then I just got really frustrated with a lack
of liquidity and it just wasn't moving. I'm like, what the hell's going on here? I don't have time
for things that don't have liquidity and aren't moving when they should be. I just pulled up,
you won't believe it, Mark, just today, just like an hour ago for the first time, I pulled up the
earnings report from last week. You're going to be like, Ben, what are you doing? Yeah, I just pulled
it up. It was like six days ago.
This report is ridiculous.
Oh, my God.
So I had to buy it right after I read it.
So I guess my question for you is, why is it finally moving now?
I know that the fundamentals were good before, but now with this report, they're even astonishing.
What was the inflection point here for the market to finally recognize this?
And where do you think this stuff is going?
Well, I mean, it, it, it didn't move for the same reason it didn't move for you, right?
Like, you know, you got in, you got frustrated with it.
You're like, uh, this is a company that operates drills, uh, and, uh, why it's illiquid.
Why should I be, I don't care about all that.
See, like, um, you know, we obviously have different timeframes.
I mean, I'm not Warren Buffett on that scale, but I'm also not on the, you know, day trader
scale.
Not that you are, but, you know, we're on opposite different parts of the spectrum.
Neither one of us are on the extremes, but I'm more closer to the Buffett side.
You're closer to the other side.
Here's what happened.
All right.
So, you know, what, months I've Here's what happened. All right. So all months
I've been telling you guys, this is my number one position. Why? Because in this environment,
what you need to be looking for, and this is what institutions look for, right, is
securities where you have safety and value, but still opportunity for growth. Okay. With the safety and value,
then you don't have to worry about the market going down because you've got value on your hands,
right? But then the opportunity of growth can kick in if the market doesn't continue down.
And that's exactly what GeoDrill has been and continues to offer if you look at their balance sheet right
42 million out of their 70 something million of um property plant and equipment are their drills
but here's the problem 42 million divided by a hundred drills is only20,000. Do you know what the market price for drills is? I've told you
guys on this show multiple times. It's closer to $1.5 million. They're carrying it on their
balance sheet for $420,000 apiece. So there was huge value upside. Worst case scenario,
as a shareholder in this company, you own those drills for a fraction
of what they're actually worth. Best case scenario, these guys are pulling gold out of the
ground for gold miners in the absolute best time for gold ever. We're at all-time highs,
50% above last year's levels, and oil prices are down. There's only three other times in the last
20 years when that happened and every single time the gold miners go through the roof.
That's where I talk about GDXJ up again today. Okay. So you get the junior miners ETF, great play.
Risky though, right? Because if things things fall off those guys are exposed but not
geo drill as long as gold stays above 2 000 never mind 3 000 the gold miners are going to continue
wanting the drills to take the stuff out of the ground so fast forward to the earnings it was no
shock it was the preview i gave you the earnings when people asked how are earnings going to be
one word great they can't be anything but great i happen to know that they're in the market preview I gave you, the earnings, when people ask, how are earnings going to be? One word, great.
They can't be anything but great. I happen to know that they're in the market trying to buy more
drills. And when they're out there, they're buying them, but they're buying them at inflated prices.
They're telling the customers, the customer's like, we need more drills. And they say,
we're all out of drills. And they're like, well, are you going to get us more drills? Or are we
going to go to one of your competitors? He's like, no, no, no, we'll're all out of drills. And they're like, well, are you going to get us more drills or are we going to go to one
of your competitors?
He's like, no, no, no, we'll get you some more drills.
They go look at the drills.
The drills are more expensive.
They go back to the customer and say, the drills are expensive.
Do you still want us to buy them?
Because we're going to have to charge you more.
And they're like, get us more drills.
And they say, okay, what about that story do you not like when you're buying that company
for a fraction of the value of their drills,
nevermind the value of their business.
And Money Mark, you brought that one up.
Money Mark brought that up and I've said it on here.
I've gone over it with you guys.
I mean, I don't know.
I don't, I'm not an OTC type guy, but that chart was awesome.
And I got into that thing.
Yeah.
And it's up at least 50, 60 cents from where I got in.
I know.
I remember picking out the bottom right there.
You can see it.
It was down at $1.75 area.
Now it's $1.72.
You picked that out?
I came in right after that.
Basically, I'm right around $1.90 area.
It ran up to $2.72 right now.
Honestly, I've never heard
of the damn thing but i said it on here multiple weeks that this chart looked amazing and that's
all i look at so i have no idea what the balance sheet looks like any of that but that chart told
me that this thing was gonna rock and roll and yeah it was a beauty so props to you money mark
on that one thank you for bringing that to our attention. Mark, I think the only thing maybe not...
I got some news for you, but...
Sorry, go ahead.
Yeah, go ahead, Ben.
I said the only thing maybe not...
I'll give the news after.
What's that?
No, I said I got some news on it, but I'll let you go.
Go ahead.
The only thing not to like, put that rhetorical question out there, is the exchange.
It's OTC.
Any word or have they said anything about uplifting?
Ah, okay. You're almost burying the lead. So I had a discussion with management after the call
and they did allude to shareholder friendly initiatives. Okay. They went through a long
transition. I've talked about this before, so I won't repeat it now. But the transition was very successful.
And now they've got a problem.
The problem is we have so much freaking cash coming in.
We don't know what to do with it.
Buy more drills or buy our undervalued stock or give people a dividend.
We don't know what to do, right?
On the earnings call, if you were on there, they said, you know what?
Never mind A, B, or C.
D, all of the above.
So they introduced the idea that they bring back the dividend.
They'll bring back the buyback.
They'll consider the uplisting.
They might want to get
onto the Russell 2000, so they might move their domicile. The CEO, as I've told you many times,
owns 40% of the company. And he has told me over the years, I've known this company for years,
back when they had less than 80 drills, nevermind more than a hundred. And he said,
once I get to a hundred drills, Mark,
I think that's the point where it's going to be tough for me to double the business again.
And maybe that's when I sell the company and ride off into the sunset. Well, guess what?
Now they're at a hundred drills when you don't want to sell the company until it's fully valued.
And he's pissed off. He doesn't like the value right here because he knows what his drills are with he's like i'm not even getting book value this is insulting so here's the news
ben last week buried in a shareholder vote you see like he got he got uh you know they had the
directors getting voted every year right zero no votes 100 vote on all
the directors getting re-elected getting re-elected and and people you know like you don't you don't
even watch that stuff right but buried in there at the very bottom there was a vote for repurchase
of shares and that got a 99.5 vote so they voted in favor of a buyback, but they haven't announced it yet. They're going to announce it.
What's the size of the buyback in there?
I don't know.
Oh, it doesn't say. It just says in general?
No, it just announced. It's a vote that Right. That said we're bringing back the buyback.
So I don't I don't know what size it's going to be.
I don't know when they're going to announce it, you know, whether it's today or next week.
But they know this is something you announce.
This is something where they vote in favor.
And then some days later you get an announcement.
They haven't announced it yet.
So what I've done is let people know,
hey, this vote has taken place, but the announcement is going to come, right? So
there'll be a PR for that. And in the meantime, businesses gangbusters, they guided to Q2 being
at least as good as Q1. That's a sandbag. That's a sandbag because they went into last quarter with like eight less drills than what
they have right now. And by comparison, that's roughly 9%. Their drill count is roughly 9%
higher as we speak than it was about four and a half months ago. So yeah, they're going to have
a better quarter in Q2 than they
had in Q1. Why wouldn't you if you're adding drills? When you have the choice of buying back
stock or buying drills and you buy drills, it's because business is that good. But duh, gold's at
$3,000. Mark, real quick, because we got to wrap this up and get to other folks. In terms of
valuation, how do you look at this? It's $0.12 per share for the quarter. I mean, can you annualize that and slap a PE on it?
What kind of fair value do you have on this stuff?
Yeah, you can kind of do that.
I mean, they have variability in their results from quarter to quarter because of seasonality.
If there's a rainy season, blah, blah, blah, right?
But the growth is unmistakable.
I think it's fair to say, okay, we got $0.12.
Let's annualize that to roughly $0. 50. And you give it like a 15 PE and you get to 750, right? I'm thinking, you know, let's not jump ahead of ourselves too quickly. But Wall Street, one of the analysts raised their price target significantly at that.
My price target was five bucks and nobody was at five bucks.
And now Wall Street's moving it up to about five and a quarter at this point.
So let's get to there and then we can reevaluate whether they continue to grow the drills at that level.
But there's still more upside here.
There's a lot of meat left on this bone. And look, we're still not at that level. But there's still more upside here. There's a lot of meat
left on this bone. And look, we're still not at book value. And the company's wildly profitable.
28% EBITDA margins, and they're not even trading at book value. It's ridiculous.
Look, I just, I'm sorry we're hogging the time on this stock, but I will say I officially alerted
this to our community just about an hour
ago when i saw the press release my rule of thumb on on micro caps which i do if it's a non-seasonal
business that you can annualize and if it's a real 12 cents which it looks like it is i'll just
annualize that and just throw a 10 p.e on it uh very conservative you gotta that's my standard
discount for basically all micro caps yeah that takes you right to five, Mark.
So I like my notes here.
What's that?
I can't hear you.
What's that?
I agree.
You got my math right there.
All right, good.
So, yeah, I've been buying this today.
Even while you were talking, I added more here.
I read it to ask at $279.
I'm late to the party, but sometimes it's better late than never. All right. Let's move on. If you don't mind,
it's late. Godfather, can you just give us one stock maybe? And then if there's time,
we'll come back. Sure. Let me just recap one that I was pounding the table on last week at this time.
It was Capricorn CAPR. The stock was 688 when we talked on the show.
It hit 1060 today. Couldn't have been a worse backdrop to sentiment going into the quarter
with the changes at the FDA, Vinay Prasad, Mark McRae. People were concerned about extending of
deadlines. They were concerned about the fact that these guys are going to face an adcom meeting.
They're concerned that the PDUFA date set for August 31st could get extended.
The reason this talk has moved 50% from a week ago is that none of that is in play.
They have had zero turnover despite the FDA leadership changes to the folks that are actually handling their file.
The data continues to come in spectacular.
People need to realize that this is based on MRI data, cardiac MRI data.
Again, this is Daromycel, which is for cardiomyopathy in patients with
Duchenne musculodysctomy. It's an area where there are no existing treatment protocols.
This is a rare pediatric indication. In any event, this stock continues to grind higher,
in my opinion, as we get closer to the August 31st, Padufa date.
There is a backup plan.
Should they fail that for any reason, there's an entire package of data that they were told by the FDA they didn't even need to file.
They just said, you know, follow your BLA based on what we have and we'll review it.
They just said, you know, file your BLA based on what we have and we'll review it.
And if they, for whatever reason, don't get the results they expected, they will release that data.
And cardiomyopathy is a secondary indication based on that data.
So that's been a great success.
I've added to my position.
I will continue to add to my position on any weakness. The name that I want to highlight today is MicroVast MVST. It's a battery company. We saw results from them as well as from EOSC, which is another one of my favorite battery companies last week.
week. These guys are doing utility scale type batteries for data centers for the grid. But in
the case of MVST, it's, you know, lithium ion phosphate batteries are also used in commercial
vehicles. Think mining trucks, buses, these types of things. The valuation disconnect between these
two companies, and like I said, I like them both,
but MVSD is doing this year in revenues what EOS E will do next year. We're talking 475 million,
and they'll grow at 30% in 2026. They are focused on sustainable growth. So this is a company that saw their gross margins increase by 75% year over year. They are already posting 25% adjusted EBITDA multiples. They have a massive
expansion that's coming into place in the second half of this year. So despite the fact that they grew the top line by 43% and they grew their
Europe, Mideast and Africa business by over 100%, this thing is trading at a ridiculously low
multiple, just over two times 2026 EV to sales and just over eight times EV, EBITDA, 15 times
if you want to look at it on an earnings basis.
So it's got the things that you look for in a small cap company like this.
They've already inflected, like I said, to operating cash flow positive.
They've got excellent cost management, strategic collaborations, new product commercialization.
It's not a science experiment, but this is a name that I think that the market
is kind of overlooked. Yes, their factory is in China, and this expansion is also in China.
The company is based in Texas, but their production is in China. But it doesn't matter
because only 5% of their sales are in the US. These guys are selling into the EMEA and the APAC markets. And that's where, you know, they're basically
in a mad sprint to deal with demand. So battery companies typically get nice multiples in this
market. We certainly saw that in the frenzy, you know, around some of these thematic names,
which included the battery names in the latter half of last year.
Yeah, look at the chart. It's breaking out.
New all-time highs are all but, in my opinion, a certainty from here.
Sorry, I'm hogging the mic. There's so much stuff I'm curious about.
No, you're good. Run it, baby.
Listen, Godfather, Money Mark, stay around.
If we have time, I want to come back to see if you have other picks.
But if you can just give me a quick answer to this.
NBIS reporting tomorrow morning.
You already gave a lot of good info on our Discord.
So if you want to really get the ins and outs on NBIS,
you can hit the Godfather's profile, join the Discord through him.
But since we had that conversation this morning, I think CoreWeave is up another 10% after it was up 20% Friday on this NVIDIA.
This big move in CoreWeave, does that change your thinking at all in terms of NBIS going into tonight?
Just in terms of valuation and relative valuation of peers and how it might react after earnings.
With CoreWeave up so much, does that make you want to be in the name a little bit more for earnings,
or does it have no bearing?
Well, look, I'm not trading it into this earnings report.
I own it in my long-term account.
I added pretty aggressively in the low 20s, I think, and I've been pretty consistent with this, that the fair value is in the 40s and 50s.
And I think we do ultimately get there in the latter half of the year.
And yeah, for sure, you know, having a peer that's got premium valuation to yourself, I think, you know, helps in terms of cushioning blows.
I think the biggest thing is, you know, we kind of went through a trough and sentiment that people were, you know, concerned that the AI trade, you know, was starting to
stall. They were concerned, obviously, with DeepSeek and all the rest of this, you know,
what would the demand be for training? What would the demand be for inference? And the guys that
really took it on the chin were the neoclouds, you know, the guys outside of the mega cap data
centers that are run by the, you know, the Microsofts and the Metas and so on in the world.
And at that point, it was really just NBIS that was trading.
Now, we subsequently had the earnings from CoreWeave.
They've indicated that there's no shortage on the demand side whatsoever.
NBIS is actually better positioned in several key markets, like in Europe, for example, where they're playing catch up on all of this.
And if you look at the family of assets that exist within NBIS, most notably their autonomous driving, Avride,
several of their other investments have seen publicity of late,
Investments have seen publicity of late where values relative to previous financings could see them be monetized at much higher prices.
I think when Corweave initially reported the stock sold off over concerns about just how much money they're going to spend in terms of capex and what could that mean in terms of dilution.
What could that mean in terms of dilution?
And all that got shaken off with this uptick in the NVIDIA investment, despite bond offering that they announced, I think, just today.
So, you know, clearly the market is more constructive on these names, but we're still in a relative pre-revenue situation at NBIS.
situation at NBIS. Most of the forecast, and we need to see this confirmed from them,
are on exit run rates of 2025 that get close to 700 million to a billion. Obviously, we need that
to come in. We need to have, I think the market at this point has some expectation that management
is going to be able to monetize some of their
other investments in a way that will allow them to boost CapEx and not have a material
effect on the stock in terms of dilution.
So yes, I think we're seeing general willingness in the market to take multiples for these
names higher with being comfortable that the AI trade has not gone away
and it's going to continue to be a predominant theme.
And I think that's the right take, by the way.
But it's a game trying to buy into earnings a stock
that's gone from $22, $24 to $35, $37.
That's a hell of a move in a short period of time right into earnings.
Yeah, I was actually planning not to play this,
but because of what CoreWeave did last week,
that's why I got a position this morning.
At least I thought this thing would really pump this afternoon
after people saw CoreWeave.
I mean, I'm up on it, but just very slightly.
So good to have your take on that.
Hang in there.
If we have time, I want to come back and ask you about one more name.
Dougie Fresh, what do you got for us?
All right, real quick.
I'll just say ones that I've been looking at before and mentioned plug, P-L-U-G, plug power.
This one looks like it's starting to actually bottom out.
I've been paying attention to this.
They just had an earnings.
And it does look like it's trying to run back up over to 20 and get into that channel
between the 20 and 50 and start to move it's at like 78 79 cents right there so take a look at
plug power that one should be cruising back up and then till ray i think i mentioned this maybe
last week i don't remember but it was up on uh what friday it popped up today it's a little bit
of pullback and it looks like a little healthy pullback today.
But Tilray looks like it's setting up.
And I know it's a cannabis type company.
And it does look pretty good.
And I know the cannabis ones are starting to look pretty good.
I'm wondering if some cannabis type news is coming out.
Because MSOS is looking pretty good as well.
And that is like the ETF.
And it's really starting to set up right there.
I've been paying attention to it. And so something's going on in the cannabis industry so i'll be paying attention to
that i do a whole segment called high on wall street so i pay attention all the cannabis ones
but yeah something is going on in the cannabis industry you can just see it on the charts and
that's what i have for this week so go go ahead. I like listening to Godfather of Money Mark breakdown stocks.
It's fun to me.
That's great.
Actually, I did notice that, too.
There are some catalysts that were popping up in the last couple of weeks on cannabis,
but then some unusual price action as well late last week on MSOS.
I actually have a 5% position in my trading account now on that.
Let me come back to Mark, hang in there
because you only spoke about that one stock, G-O-D-F.
I just want to come back to the godfather one second
and ask you about WeRide.
Okay, WRD.
So this is one I'm still in, but much smaller size.
I pared it down end of last week
when we got this Moody thing
and I stepped back in this morning as smaller size. I pared it down end of last week when we got this Moody thing, and I stepped back in this morning as smaller size.
But their peer is reporting tomorrow, Pony, and then they report like the next day after that.
I generally don't do Chinese stocks, but I gave this one an exception because we got that partnership, that news with Uber.
So I'm like, OK, well, if Uber is investing them or partnering with them, I guess it's not fraud. So, you know, let me try this. So what are your thoughts
for earnings this week, Pony and or WeRide here? Do you still like it here? I know we're both in
the same. We did really well last week on those big green, beautiful candles. But I stuck around
and, you know, I've had a swing target of of about 1150 on it. It's kind of died
down here five days in a row. So if you have some thoughts on that ahead of earnings, that'd be
beautiful. Yeah. Again, it's not going to be so much about what they report as about what they
have to say about future collaborations and the like. But yes, they're getting vetted by the likes of Uber,
which is what you want to see.
Their technology is at work.
In WeRide's case, you know, primarily, again,
in commercial vehicles, transport, street sweepers,
you know, short range public transportation,
those kinds of things,
which is what you would expect initially. And then, of course, there's these ongoing rollouts of robo-taxis in places like Abu Dhabi and others.
So it's kind of nice that we get Pony tomorrow morning because WeRide is then the following morning, Wednesday the 21st.
So the reaction that we get in Pony should be somewhat reflected also in WeRide is then the following morning, Wednesday, the 21st. So the reaction that we get in Pony should be somewhat reflected also in WeRide.
When I look at the two companies, the premium in terms of market cap that Pony has over WeRide doesn't seem justified to me.
I know there was some talk about IPO or other insider lockup being one of the reasons why
we saw this relative underperformance of the two shares.
So we'll see how that plays out.
I'm not sure.
I don't actually have the specifics on that.
I haven't been able to confirm it.
I don't know what size that is relative
to the average daily volume that we've seen traded of late. But clearly the stock is telling
you that this $10 is now, I think, a pretty difficult hurdle. So yeah, I'm not sure that
you're going to get the catalyst coming out of the quarter that's going to change things. But, you know, clearly autonomous is a theme and an area that will will garner attention throughout the rest of the year.
I do not have a position any longer in either of these names.
And I'm, you know, I'm curious to see whether they're going to be able to sort of reignite the market interest that we saw.
There was a lot of short covering and other thing at work
when Pony came dramatically off of its low.
So that looks to be in the rear view mirror.
So yeah, again, I don't know.
I don't know if we're going to get it out of this quarter.
I would think that buying either of these into the quarter
would be a relatively risky proposition.
Yeah, generally speaking, I don't even like holding anything into ER.
Once in a while, I'll do a small bet.
Sometimes I have some really good conviction I'll hold into ER.
But generally speaking, like money market sell, like TSSI,
I'd rather wait for the quarter and jump on it as we did last week.
So that worked out pretty well.
These are great trading vehicles when they go.
If you get a nice trend day, clearly the volumes are there, so there's enough market focus on it.
But we just haven't had any good trend days for at least a week or so.
So I would wait for those and use it again as a trading vehicle.
There's just not enough meat on the bone yet for me from a fundamental standpoint to
consider having it in a long-term account. Yeah, definitely not long-term. I don't really
put any stocks in my long-term, but it's right at the 20 DMA support. We'll see. All right,
Moneymark, let's come back to you. I'll get a quick update. By the way, I'm extremely transparent
in my Discord. I tell people pretty much in real time when I'm buying stocks along with my allocation size.
So just before and during this show, I took GODF to 5% allocation in my trading account.
Took out that average price of $273.
So I'm satisfied with that now.
Nice 5% allocation.
So thank you for bringing that name to our attention. Was there anything else you want to talk about today, Money Mark?
another um canada you know type name um got out on uh spike in the stock on a great quarter
this is a company that if you get a nice valuation on a strong quarter you trade out because
eventually they're going to have a weak quarter it's's a lumpy business. They do security cameras for buses, which sounds
boring, but they've injected AI into them. So now these buses, you know, you get fights that
happen on school buses. You get people who fake injuries on public transportation and things like
that. They monitor for that and they have AI injected into those
cameras. So now you, you know, whereas a bus driver only has the rear view mirror and, you know,
what are you going to do? You're trying to steer a bus and you're going to stop a fight in the back.
Now this thing can notify if something's happening in a bus that doesn't look normal relative to
what's supposed to be happening. With regard to litigation, the city of Philadelphia is saving $40 million a year
by busting people who say, oh, I slipped on your bus.
And they say, no, you didn't.
Here's the camera footage.
In addition, because these buses are flying around the city all day,
they can catch motorists in doing infractions, passing the bus
when it shouldn't, going through red lights,
things like that.
And they are handing out tickets automatically.
So you have, this is a big trend that's occurring.
I know even in my city of Miami,
I happen to know that Gatekeeper is a finalist
in that city to win that award. But more importantly,
this quarter, right, so we got out of the stock, the stock pulled back, and then they announced a
bad quarter and it pulled back even further. And the other rule is when the stock gets collapsed
on a bad quarter, you want to buy in because eventually they'll have a good one again.
Well, they backed up the truck on an inventory, okay?
And at the same time, the city of Toronto is looking to do a monster deal with somebody.
This is the only company that makes sense, okay?
Canada hates the U.S. right now, number one.
Gatekeeper has as good a solution as anybody, and they're the local supplier.
These guys are probably going to win Toronto, and the fact that they've ramped up inventory is a sign that they probably have won
toronto because they already got a piece of the deal previously so i'm back into gk prf and then
other than that i'm gonna i have a brand new pick ben you're gonna love it but i'm gonna be
announcing that on my show Friday. So stay
tuned for either that or Monday's show next week. Yeah, I love those that are thematic names. That's
probably what you're referring to, some sector that's really hot. Yeah, you're going to love it.
I got to have the tailwind on my back. All right. So I guess that – did anyone else want to add anything?
Godfather, Dougie Fresh, hey, Emp, I didn't give you a chance to talk.
What's up?
What's up?
No, I'm over here just charting with you guys and making notes as I listen to all this.
Like I do every week, there's a lot to talk about.
I would like to ask yourself, money mark anybody dougie fresh uh
godfather uh first off if you're not following these guys there you're missing out just 100
there there's no doubt about that in my mind i do want to ask about the bonds a little bit about tlt
uh i mean we saw what a five handle on that 30 year we're four or five basically on the tenure
i do want to get some thoughts around that.
I mean, I don't think everything is just rose colored just yet like that. I don't know. I mean,
maybe I'm a cautionist right now based on this move. I'm not fighting it, but at the same time,
I have some questions around the bonds. I just, any thoughts that you guys have around that? And
then also like the 30 year mortgage rate just came out over 7%.
So I'm just a little bit curious about that money, Mark.
Yeah, man.
You got the right idea.
Look, I was trained by a guy that was trained by George Soros' partner.
Okay.
And one of the rules that he taught me, and these are simple rules.
One of them is when in doubt, throw it out.
Okay. TLT to me is danger with a capital T because there's a couple of things that can happen, right?
People are thinking, oh, this is a great hedge against a recession.
Yeah, maybe.
I mean, even Jeffrey Gunlock will tell you that he thinks that that would end up being potentially a head fake.
And he thinks there's a good chance it will be, right? You've got debt ceiling, you've got tax cut talk. Basically, it's the same financial
provocation that we've been dealing with for years and years and years. The problem is that it ramped
up significantly in the wake of COVID. And now the economy is just overly dependent on government
spending. And you can see what happens when Trump came in, again, apolitical comment, right? I'm not
political at all. I just observe what I see. And he says, we need to drain the swamp. We need to
cut the spending. We need to get finances in line. And what happens? The world pukes all over it, right? The whole world is
interconnected and dependent on what we're doing here. And so this is why you're seeing after the
first 100 days of Trump's administration, it starts to feel a little bit like back to normal.
Yeah, he's getting some tariffs from other countries, which is good. So we're getting a
little bit of our, you know, some of our due. He's kind of negotiating some
extra dough. But that's not going to bridge the gap with everything that needs to be done.
The Republicans need to be reelected in 18 months. And they've got constituents that won't
reelect them unless they continue to give them the pork barrel budget that they demand the problem is that we've gotten to the point where so many trillions
and trillions of trawlers that have been put into these um you know these budgets over the years
is that now with these interest rates as you mentioned right you see 30-year yield going up
it's getting to the point where the interest
payments that we pay, and especially this year, refinancing COVID debt, which was at sub 1%,
at over 4%. There's anybody in here that can't do the math on one going to four,
and what that means for our interest payments on that debt as it gets refinanced later this year, as Godfather astutely pointed out early on.
So this is a situation where a recession maybe will be good for TLT, but maybe it won't because
everybody knows that in a recession, the government has to spend more money, right?
And guess what?
There's a reason why our debt just got downgraded you know by
Johnny come lately but now everybody's on that party and we're on watch so be
careful I wouldn't play with TLT I've been I've never liked gold in the past
but I've never liked it more than I like it now and that's why I'm with GeoDrill
you can do the the junior miners GDXJ. You can do Bitcoin if you want.
I'm not a crypto guy, but in an environment where the world is absolutely addicted to
US dollar printing, US dollars have to lose value and they've lost a lot over the years.
They're going to lose more.
And that's good for assets like gold, Bitcoin, etc. Not TLT necessarily.
I agree with you, Mark. And just looking at the chart, it looks dangerous. It's trying to set up, but it just keeps wanting to keep going down. And I just don't think it's even close to getting ready to run yet. So I wouldn't mess around with TLT either.
So I think that was great advice, what you said, because, yeah, I can't disagree with anything you just said there.
And just looking at the chart alone, it doesn't look healthy.
Yeah. And the only reason, you know, the only real reason to buy TLT, if you're somebody in this room, like we're trying to make lots of money.
I made 40 percent a year for the last 30 years on average.
I don't you don't do that by
owning tlt you buy tlt as a hedge right to protect yourself against market declines well we could do
that by shorting the russell or buying gold or something well there there is one other place for
tlt which i've had i have to check uh if overall i've made money on it, but I've made huge percentage gains on TLT call options
because the volatility, it's like it's not really a volatile name. So the premiums are really low.
So if either you can get into TLT and predict the right thing before an economic data point
or right after an economic data point, all it takes typically is a 1% move in TLT,
and you're making 100% on the call options that expire that week at the money.
That's a great point.
That's a great point.
And guess what?
That's what you are all about, right?
That's where you come in, not me.
You, Dougie Fresh.
That's the great thing about this team, right,
is that I don't have that feel that you do.
But that's a great point.
So, yeah, that's why I stick around CLT.
Those premiums are super low, and it's had some violent moves
for something that's not supposed to have violent moves,
so that makes it interesting.
All right.
Did I interrupt someone?
Who was going?
Emp?
I was just going to say something about that as well.
I mean, you've heard me say this in the Discord.
We have an ongoing conversation about TLT, right?
But, you know, TLT isn't going to go up until rates go down.
And, you know, I think it's clear that inflation matters less than unemployment for this Fed.
So, and I've been, I think, fairly consistent to say that the expectations with respect to rate cuts are still too optimistic.
And, you know, if you didn't read the subtext in my comments today, you know, I do think that recession risk is underpriced, at least in the
equity market. And, you know, the debt market is essentially telling us the same thing. You can see
it in the 10-year inflation swaps that keep rising, term premiums rising, 10-year at four
and a half, dollar weakening. You know, you could get to this debt ceiling by July at current rates.
So, you know, there's a lot of reason
to expect that, you know, certainly on the long end. And, you know, remember that the TLT is a
20 year plus ETF here. So, you know, this is about the long end. What happened to long rates
when the Fed cut last time? Well, they went up. So, you know, like, I just think there are so many better vehicles.
But yeah, anyway, it's, it's, it would be a long conversation from here. But I don't know if that
answers your question a little bit, Amp, is that trying to the meat that you were trying to get at?
I just think there's way better things to do in terms of both hedges, as well as, you know,
an outright call in the market. Yeah, it's of a a twofold because one of it is just the
uh yeah is it something to look into on a hedge side type of play and the second thing is you
know just looking around i see market up i see vix up i see yields up i see gold up and uh
val d the inflows net inflows of the the S&P down on a day like today.
It's just something is very interesting with today's action.
Yeah, I agree.
I would have thought that, you know, even if the Moody's thing itself was nothing more than a nothing burger,
this market, I think, is looking for an excuse now to consolidate some of these gains. I would have thought we would have had more weakness. Again, I'm kind of at a loss to know where the next catalyst is going to be. But I really do think that the bar is getting higher and higher in terms of rate of change on the tariff side of things.
side of things. I think it's going to be more difficult to impress the market that way. And I
think it's going to take another, you know, big step up in terms of job owning from this
administration to get the equity markets to reward them more than we have, you know, so much
in the last very short period of time. So I could be wrong. It could be the mechanical effects take over once again. You know, we break through this 6,000 and you get that inflection on the gamma.
It could propel this thing up another couple hundred points very quickly.
And then it's, you know, it's a short cover market all over again.
So my bet is that we consolidate first.
And I think we're pretty much there.
The 6,000 level is obviously a key psychological level.
I think there's some gaps in the chart that need to be filled in the 5,700, 5,300 type levels.
I don't see any reason why we couldn't go back and retest some of those,
especially if there isn't the same sort of rate of change in terms of incremental good news coming out of the tariff front.
Spartan, you snuck up here.
Glad to have you.
Didn't know if you had any thoughts around the conversation we're having now or anything
you wanted to add.
We've got some extra time today.
Yeah, sure.
I mean, if we're talking about, you know, kind of the direction of the market, I think,
you know, the last, I mean, obviously we got this Moody downgrade that happened on Friday.
You can see the action today.
I kind of went both hands as far as I can get long on everything.
My opinion, technically and psychologically, what's going to happen and what I think is going to happen going forward here in the short term is, you know,
the buying obviously is, you know, still present. I think today shows you just how bullish the
market is and how mispositioned a lot of these institutions are and a lot of that money on the
sidelines is. So I think, you know, you got to watch the big caps. I think the semiconductors
have not even made a big move at all, really. And if they continue to grind higher,
it's going to continue to take the S&P higher.
And I think you're going to get shorts forced
or the market, you're going to get a blow off.
Last week was bullish consolidation,
but grinded higher.
And we didn't get a blow off move.
I'm not satisfied with this long move yet.
It needs to cause more pain
in order for us to kind of start to revert back down
i think unless we get something on the left field that you know causes a sell-off but from a
technical standpoint just what i'm watching from a price action standpoint i think we got more to go
and i think we need to kind of a little bit more of a blow-off now that can happen uh in the short
term we'll see um it's hard to say if it's going to be catalyst related or you're just going to see
the market kind of
you know continue to grind and then and then push it kind of seems like that's what's going
to be the case but um you know that's kind of what i'm overall what we're all with my thoughts
are we're all um what i'm thinking and i would not fight this trend i think if you will you know
you're looking to try to pick the top here you're gonna probably get run over it's slow moving too
which will cause a lot more pain. It's way more
difficult to trade this short than the market like it was before. We had a ton of volatility.
So I think you kind of just stick with the moving averages. Keep it simple. If the trend's intact,
then it's probably going higher, unless there's some sort of news, like I said,
that comes out of left field. Now, a lot of the different sectors look decently set up for more continuation.
And we talked about the semis there just briefly.
I think the small cap market is still quite bullish.
I think we've got to keep an eye on some of the higher beta names as well.
We've seen a lot of them get bought up in the last couple of days.
But the higher beta tech names, you're going to want to keep an eye on those. A lot of the daily charts have a lot of room off the lows. And
as, you know, if we stay, let's say, bullish on the long side here on the market,
a lot of these institutionals and funds will want more exposure to higher beta so that they can try
to outperform to the upside. So, you know, that's kind of what my thoughts are in that regard.
Small caps would be fantastic. I think you've got a lot of spec money kind of flossing around a little bit.
Robinhood CEO came on, I think it was what, maybe last week, and he was talking about the return of
the trader and how many traders are kind of back in this market. He hasn't seen that in years.
And it's obviously, you know, we can obviously see that in the small cap market.
I mean, we really haven't had sustainable, you know, kind of momentum movers in the small cap market in a long time, years.
You know, you get weeks of it usually, and then it dies off.
But this seems to be sustained.
And I think that's a really good sign.
But, yeah, I think, you know, in the short term on the SPY, you kind of just take it slow.
Or the SPY, just the market in general.
You take it slow. You watch the trends on the hourly into a day and you take it day by day because, you know, as long as they're intact, it seems like we're going higher.
And, you know, I've seen a lot of traders in the last couple of weeks or last week, I should say, try to pick tops and they kind of get slowly ran over.
The nice thing is it's moving slow enough where, you know, you can take it off,
but it is moving slow enough where you may get stuck in the position because,
you know, it's not causing that much pain that quickly, but over the time it will.
Anyways, just my thoughts in that regard, guys, maybe disagree or not,
but it's kind of just what I'm seeing from a technical standpoint, at least.
And anything to add to those thoughts?
Appreciate you joining Spartan.
Yes, yeah, a little late here today.
I don't know if we have Ben.
Oh, you're sorry.
There he is.
Yeah.
No, no, I agree with that technically as well.
I think Dougie and Spartan and I are on the same page in terms of this squeeze I think is happening and it's continuing.
But no, great show.
I got some great names from folks.
I don't have anything else to add.
I'll be on the 5 p.m. stock picking show, and that's all I got.
Two quick names to note that are reporting, small cap names that I think both represent interesting opportunities. One, TATT. I talked about this last week. This is an MRO company. Obviously, the market's had some excitement in this space with great results out of Air Lease. Airlease, these guys also have a small leasing business that's been growing at 65% year over year.
Just a solid company.
It's not a blockbuster, but it's like a 13% adjusted EBITDA margin type company that you're only paying two times for on an EBITDA sales basis, around 15 times EBITDA.
But they're growing top line at 35% a year.
They've done so for the last several years.
They're going to do it again.
This year is trading under 20 times to 2026 EPS.
That comes after the close today.
There's been no multiple expansion in the stock for like two years, despite the fact that it's up over 150% just in the last year. This has the makings of a long-term compounder.
I think this is a great buy and hold in your long-term account. Only 7 million shares in the
float. Just a fabulously run company. This is, again, aircraft reports tomorrow before open.
They've got some interesting LIDAR on the chip technology that's being integrated in a number of these sensors.
They have a joint venture with NVIDIA as well.
So in the past, that name has created a fair amount of excitement.
It has traded at sort of double where it is today.
So there might be some interesting trade opportunities.
It's a business that could scale meaningfully.
So very interesting technology in a very, very small company.
So always worth watching those.
What was the ticker symbol for tonight?
TATT. T-A-T-ATT. T-A-T-T.
T-A-T-T.
Never heard of it.
Okay.
I'll put that on my watch list.
Emp, back to you.
Yes.
I guess we can go through and get any wrap-up thoughts.
Mike, Mark, if you had any thoughts around what Spartan came in with
or just in general to leave with the audience today.
No, I mean, everybody's on point as usual.
So, hey, see you next week.
What color is the warning light now?
Like an amber or orange?
No, no, we're light yellow.
Yellow greens?
Light yellow, light yellow light yellow light yellow you know unless something
unless something significant happens now you know yellow alert is often a valuation related issue
you know when when valuations reach a point where there's little upside left and plenty of
potential downside if something goes wrong there's always something that's going to go wrong
you just never know what it's going to be so we had that we had the tariff tantrum you know and
so now it's like light yellow means hey proceed but proceed with caution um that's not going to
change unless something else you know significant happens and the debt downgrade is not it
beautiful what about you dougie fresh significant happens and the debt downgrade is not it.
Beautiful. What about you, Dougie Fresh?
Nah, just another great show, everybody.
So follow everyone.
And then also, I'll give some big news right here.
So if you want to join the Discord with Ben and the crew,
I'm actually on there as well now. So I'll be posting pics.
So I'll have all my links up and you can join Godfather and, uh, story trading Ben. I think
it's probably one of the, it is, it's one of the best discords guys. And obviously I think it's,
uh, brings value. That's why I thought I would join with them. I thought it would be
a little more valuable. And, uh, so yeah, now not only do you get me you get them guys and they've
been i mean the returns he's been crushing it guys and godfathers uh godfathers discord page
on there's great too so so many great options that you can go through and honestly i was going
to post one this morning i talked about on the show but this is what you're going to get just
check out qmco for today and it's already up like big time so that's what you're going to get. Just check out QMCO for today, and it's already up like big time.
So that's what you're going to be looking at.
And in addition to Ben's Great Calls and Godfather.
So, yeah, I'm joining the Discord.
I'll send out my link, and you guys can hop on there.
So thanks, everybody, for tuning in and following along.
And another great show, as always.
So, yeah, follow everybody.
And we'll be back next week.
Beautiful, Dougie.
I didn't know that announcement was coming just now.
I love it.
Yeah, he killed that.
Godfather, anything final?
That is exciting, by the way.
That's super exciting.
Congratulations to the whole team over there.
Godfather, anything to leave with the people today? No, that's super exciting. Congratulations to the whole team over there. Godfather, anything to leave with the people today?
No, that's just it.
I wanted to make sure that those two names that were reporting were on people's radar screens.
There's a couple of interesting Chinese fintechs that I think actually represent solid businesses.
It's a question of, you know, where's the market feeling that day when it comes to China?
But two names that are reporting also, QFin, that's a name I've long held in my long-term account.
It's just the preeminent Chinese fintech name.
They're after the close today.
And FinV, F-I-N-V, which is essentially a smaller version of QFin, reports tomorrow after the close.
So those are two other additional small cap names that are on my radar for an otherwise much lighter earnings week.
Beautiful. I appreciate the whole crew up here. Big shout out to everyone. Like Dougie said,
make sure you follow all these great speakers and definitely check out their other things
they have going on, live streams, discords, all of the above. There's so much deeper knowledge
shared in all of those and what we can pack into this
hour and a half that we had today. What a great show here. Every Monday, small cap investing
with the team up here. Big shout out to the whole team. We have a little bit of a break.
Power Hour will be live over on Stocks on Spaces. After that, of course, we do have stock picks for
the week. Ben, one quick ad. if you could go check the tracking sheet that we
have for that and check that average return by a panelist for me if you'll do that. But it looks
like we are beating the market for the most part again. So I'm excited to see what that looks like
and what people are thinking after this move in the market as we get stock picks tonight.
Thanks, everyone, for tuning in. This was recorded. Of course, if you missed anything that was shared throughout the last hour and a half, you can go
back and listen to it as soon as I close this out and we will see you guys on the next space.
Thanks everyone. Take care. Thank you.
