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Small Cap Stocks - AI, $IMVE, $WATT & War
Recorded: March 30, 2026 Duration: 1:04:19Space Recording
Full Transcription
Thank you. all right everybody how are you doing today hopefully everything is going great on your
side kicking off the week and hopefully you have had a wonderful weekend well rested maybe got to touch some grass
and so on but uh always happy to be here how's everything on your side there bent up saw you
just drop down and pop back up that's always fun is it the co-host glitch okay i think i'm good now
can you hear me yep loud and clear my friend how's everything on your side? Good, good. Got a lot of clarity in it. I feel good. I feel great about today. Can't wait to talk about it.
Is laptop travel on? It's supposed to come, yeah?
He's supposed to. Not up as yet. I see a lot of shuffling around on the screen, however.
No, he's not up as yet. I have Dougougie money mark uh and uh the two of us so
far but uh others should be coming all right i just tagged him um so you want me to get started
uh yeah i guess yeah absolutely uh one thing i will say just really quick those of you that are
just tuning in for the very first time, we'll financial and story trading.
We are having the small cap investing space.
We're talking about small cap stocks, et cetera.
So if you know any friends that would be interested in that topic,
I highly recommend that you would just invite them to the space, drop a little comment, retweet this, whatever you have to do.
And yeah, back to you, Ben.
We can kick it off.
Yeah, just a headline.
I don't know if it's true.
Jim Cramer said to be mulling a short in microphone.
So bottom might be in for microphone soon.
Nice.
So listen, this is what's happening now.
Totally not unexpected for me.
And I'm in a good spot now
because I've been positioning for this.
Let's start by talking about, we'll get to the small caps in IWM, but the SPY and QQQ,
it's much easier, much more illustrative to talk about what's going on by looking at those charts first,
and then I'll get into the IWM.
So if you look at a weekly chart on either SPY or QQQ, it doesn't matter, and you go back like years to before the COVID crash, you'll see that there's been three violations and only three violations of the 50-week moving average.
It was a COVID crash, the 2022 bear market caused by higher interest rates, and Liberation Day crash.
two bear market caused by higher interest rates and Liberation Day crash.
So I considered COVID crash and Liberation Day crash as black swans.
And I've been on the record the last few weeks as saying that I believe sustained oil over
$100 is a black swan event.
And if it's a black swan event, it goes to follow.
The price action should be similar to what we saw with the COVID crash and the Liberation Day crash. So this is what I've
been preparing for. And I think as of Friday's close, I've been validated about that. And I
think the close below the 50-week moving average on Friday is telling you that investors slash traders think that the ship has sailed, that oil has been high
long enough to cause potentially fundamental damage to the economy, and it's now starting
to be treated as a black swan. And if you look at the technicals, it's just so clean,
that 50-week moving average. It just never violates it. And this is something that
I think, I wasn't looking at X too much this weekend, but I would imagine a majority of
traders were commenting on a 50-week moving average and people coming in today, a lot of
people coming in and de-risking because of that. And, you know, I even went so far as to, in my morning note this morning,
you know, I've been at Red Alert for like three weeks in my morning note, but that's geared towards
short-term trading. You know, I do long-term investing, long-term trading in our Discord,
but I don't talk about it much. But I went out of my way to make a point on the morning note this morning that I'm basically shifting to,
I forgot the exact language I said, but I basically went out of my way to state that
it may not be too late, it may be a good time to even reduce long positions in long-term
accounts.
And I did that.
And that's a new thing for me that I contemplated over the weekend.
Money Mark knows this.
We're having a chat about it in this community on Friday where I specifically said, hey, my bearishness, my red alerts, really just for short-term accounts and I'm still in full positions in long-term accounts.
But as of this morning, I did go to about a, I don't know, 15% or 20% cash position in my long-term account.
Usually I'm 100% invested in my long-term account.
So, you know, if you look at the magnitude of the drops in the COVID crash and the Liberation
Day crash, we still could have a ways to go.
The next obvious support levels are 605 on SPY and 538 on QQQ, and I think you can get much worse than that.
We have very specific levels of where QQQ SPY could go because of the now violation of the 50-week
moving average. Now, I guess, you know, there is definitely, maybe, definitely maybe, more risk associated with,
you know, this break of the 50-week moving average than others because of the possibility
of a geopolitical headline or Trump tweet or something that can turn things all around.
But, you know, I think if you're going to take a bearish or bullish
position in this market, you have to almost have a geopolitical opinion and be a little
bit of a geopolitical analyst and have a bias towards, you know, what you think is going
to happen. And, you know, one of the things that I put in my Discord over the weekend
was that this is uncanny. won't believe it I think actually
did I post that I did probably post it this morning the screenshot but I was like I don't
think Trump has any choice left at this point I said I think his best option now may be to bomb
all of Iran's oil and exit stage right it's crazy I said that this weekend. And then this morning, that's exactly what Trump threatened. He said, if we don't make a deal with Iran soon and get
everything we want or straight up Hormuz or whatever it is that they're trying to deal,
then we're going to end our excursion in Iran by bombing everything and exiting stage right.
Not on those exact words, but pretty much the same thing that I said over the weekend.
So, you know, that's my geopolitical bias. I think Trump has
very few good options right now. It's either ground war or exiting and humiliation right now,
which would be a huge victory for the IRGC, or this, you know, bombing the oil and exiting stage
right now. I'm sure he hopes he doesn't come to that.
And right now he's pushing that leverage point to try to get some sort of regime change, probably, at this point.
You know, I think this is a very definitive moment.
The next 72 hours after Trump posted that, I think it's designed to put a lot of pressure internally on the regime to find those pressure points to see if, you know, are there people high up enough in the regime that say, hey, we're going to our economy is going to be destroyed for 10 years.
If if Trump goes through with this, you know, maybe there's going to be some sort of internal queue or something.
I think that's what Trump is hoping for.
But we don't know if that's going to happen.
Bottom line is we're below the 50-week moving average on QQQ SPY with oil still over 100.
To me, this has validated what I've been saying for the last few weeks.
This is a black swan at this point.
And I think it could just be the beginning of a further 15 to 20% drawdown in indices as long
as oil stays over $100.
So it's definitely not easy to predict, but that line has been extremely, extremely accurate.
Now the problem is, or I don't want to say the problem, but very interesting is that
IWM has been holding up much, much better than QQQ in spite.
And I could not, I could not figure out for the life of me.
Now, rates are, you know, a little lower this morning with TLT popping.
And I don't know, I heard some things about Powell's talk this morning
that maybe some people worried about rate hikes, and now that's off the table.
But even before then, you know, IWM was really outperforming.
Today it's underperforming. It's on the 200 DMA literally right this second as we're speaking. The 200 DMA is at 241.14. It'sWM, and also I'm in some IWM puts.
And I find it very, very hard to believe that the SPY and QQQ can break and close below the 50-week moving average,
but the IWM would hold the 200-day moving average. Especially when you're talking about high oil and potentially higher inflation because of the high oil in a sector that's interest rate sensitive.
I mean, it's really kind of confused me why Audit WM isn't weaker.
So in any case, look, I am not so keen on trading or investing in individual stocks right now, especially after the close below the 50-week moving average.
I did have a whole bunch of longs in my trade account as of Friday, which I fully hedged against, with a whole lot of SQQQ and TZA and JetD, which is triple short airlines.
But, you know, after contemplating the 50-week moving average on the charts, I came in this morning and I started even reducing my longs as well.
So instead of just hedging the longs, I'm now probably going to move towards, you know,
just a whole lot of cash in the trading account at the end of each
day and basically trading things down to the short side for the most part.
That's where my head's at right now.
So I hope that didn't disappoint anyone.
But we've been pretty much prepared for this, doing well.
You know, the account's still near the highs of the year, up at 53% year-to-date because
really hedged up this whole month.
I was expecting the Iran war to come.
Actually, most of the profit of the month was on the first day of the month because
I was betting on the war breaking out that weekend.
But it's been a little bit rough the last couple of weeks, but mostly treading water
because of constant hedge exposure pretty much every day.
And here we are at IWM. As I'm speaking, a big leg down, now below the 200 DMA.
I'll just close with this.
I think there's a chance IWM can have a big nasty red candle this week
that takes us down to somewhere in the 228 to 235 area.
We're at 241 now, so 228 to 235 area. We're at 241 now, so 228 to 235.
I can see a very nasty red candle tomorrow
or the next day on that.
So that's me.
Great overview of everything there.
Really appreciate that.
Just really broad, broad overview,
kind of giving us a highlight of everything
that's happening in the world and in the markets.
But Doug, you're next on the stage. So I will pass it over to you.
Any thoughts, either what Ben just said, or again, just what you're looking at. I'd love
to hear what you have to say. Well, Ben just kind of touched on everything good. So I'll just
say crypto at the moment is actually like almost Bitcoin. When it gets down to the to the 67 66 area it seems to be a pretty
good base right now so we'll see if it can run up but it seems like everybody's selling off
every kind of asset right now like ben was explaining and uh just on the iwm i agree ben i
do think that we could see a huge red candle down to like 230 area today so it's at 240 right now
you could see another ten dollar drop on it
i have not been playing individual stocks lately just because it's been so hard i got beat on
a couple swing trades that had looked good overnight and i said all right enough of this
why would i do this to myself so i've been sticking to mostly all cash at the end of the day
and playing the cues to be honest with you because they just tend to move
uh they they seem to be the most profitable obviously you can lose the most too but they
seem right now they seem to be very profitable if you're on the right side of the short and on the
puts and i already hit it for 141 this morning real quick so it moves fast and uh they've been
pretty fun lately because of the big dips.
And I don't see them stopping.
I mean, your Dally charts do not look good.
Your weekly charts don't look even worse.
And if you look at the overview, like the yearly, it looks like we're about to hit a crash.
So I'm not expecting anything big, as I'm saying.
And I'm watching the Qs just dip down and my puts go even higher.
So that's what's happening in the market not a whole lot to touch on so I'll shoot it right over to you
money mark and see what you have to say real real quick before that money mark I just added something
to the nest I posted a blog last night on our new website I'll be doing like blogs once a week so
you can check out that blog about how we predicted and navigated this
Iran market crash. But really important in there are some lessons. There's about five lessons,
especially for traders. So the difference in the lessons Morning Mark teaches on investing,
this is really like psychological lessons and tactical lessons of how to trade and how to keep your
gains, the art of the pivot, throw away your ego, historical patterns repeat, and about
shorting the market.
That's basically the only way you can make money in a market downturn.
So you can take a look at that link up in the nest.
You can read about those lessons.
Money Mark, over to you.
Yeah, great stuff, Ben.
And I can't emphasize enough the
importance of what you just said about learning about shorting, because that is one of the only
ways you can make money in a market like this. I remember back in 99 having a grand old time,
but the company I was working with, I come from an industry where we analyze technology,
The company I was working with, I come from an industry where we analyze technology, not technology stocks, technology for giant companies like GE, GM, etc. and tell them what technologies to buy.
And I remember at the end of 99, I saw a lot of internet inquiries falling off.
So it was really clear that the GMs and GEs of the world had already evaluated the internet technologies and said,
these things are not ready yet. And that told me that the bubble was about to burst.
I sold all my stocks and I put 100% of my money into a short of the NASDAQ.
I made 100% on my money over the next two years, just being 100% short.
Okay. So the average person came out of there with a fraction of their money,
and I came out with a multiple.
So please pay attention to what Ben just said with that.
And with that, let's get into the macro.
I have a new largest AI position that we'll talk about later in the show.
But just to touch on the macro side of
things, one thing that I want folks to keep in mind, and Ben framed it really well, it does seem
like it's time that Trump make a move to end this before we get to the point of no return where
there are structural issues that are going to cause energy prices to remain elevated for an extended period of time.
And if that happens, then Ben's scenario of seeing another 10 or 20 percent down in the market on top of the 10 we already have becomes a reality.
So we are now in correction territory, right? But we also know
the midterm elections are coming up. And whether you're a Republican or a Democrat, you know
that Trump and company don't want to get killed in the midterm elections. And having something like
Ben's scenario play out will cause them to lose more in the midterm election. So think about the selfishness of an individual
who has control over a situation in any situation
and say to yourself, what will that person likely do?
So he has an incentive to get out.
The administration wants out.
The question is, does Iran want out right now? Does Iran want to really kind of rub
the U.S.'s face in this? And that's where the wild card is. And I don't know what the answer
is. I would rather you listen to what Ben has to say about what he thinks is going to happen than
me. But here's what I will say. We all know about this. It's being talked about all day, every day, and has been for several weeks.
I've been in yellow alert for months and months now.
That's played out very well.
But we are now in correction territory.
The sentiment index that I watch is sitting at 10.
I get really excited when we get under 10. 25 is considered
extreme fear. 75, extreme greed. I don't pay attention to 25. I want to see 10. I want to
see blood in the streets. I want to see 7, 6, 5. And we're getting there. So we're very close to
that. The sentiment is there. Everybody's
bearish, right? The situation is scary. But listen to this. We're at the end of the month.
This is where passive money flows come into the market. We have April seasonality, where April's
one of the greatest months for performance, especially after a tough quarter. In addition,
markets don't tend to go straight down in a line.
If you look at the last drawdown in the market, after we went down about as much as we've gone
down at this point, there was a bounce before the next move down. In a good market, it's two steps
up, one step back, two steps forward, one step back. In a bad market, it's two steps down,
step back, two steps forward, one step back. In a bad market, it's two steps down, one step up,
two steps down, one step up. Don't discount the chances that we see a bounce before we see
the next downdraft. And what's great about that is that if you play that bounce, you get to see
what's going to happen next while you're doing that. So I wouldn't panic at this point. I had a lot of people this
weekend saying, Mark, what do I do? I kept my money in Google and Meta and NVIDIA and all that.
And I said, dude, I told you months ago, get out of those names. And he's, well, I can't go back
in time. What do I do now? Do it right next time. And that's my advice to you. I'm sorry,
but there's nothing you can do at this point. If you made the mistake of riding the market straight down 10% in a line,
selling now is not the right move, historically speaking. Not only that, but I have a rule.
And it says, if you hate the market, short the market. Don't sell your favorite stocks,
sell the market. So I've got my favorite stocks.
I was a buyer of my favorite stocks last week, but I was just as much a buyer of my hedges.
I am short the S&P. I am short the Russell and in big size. We're talking seven figures,
millions of dollars into these names. But at the same time, I have millions of
dollars still in my favorite names. And I've been waiting for these opportunities where you've got
several names. I won't be able to talk about all of them today. I will talk about one.
Where a large percentage of their market caps, because the market caps have come down so much,
a large percent, if not 100% of their market caps are in cash or in net assets.
And so you're sitting in a situation where people are still panicking
on a $3.40 stock that has $3 in cash. That's your opportunity. That's their mistake and your
opportunity because if and when we do come out of this, and we will at some point,
you're going to make out, not them. So stay tuned. I'll have more to talk about.
Just a quick example, by the way, back in Q4 of 28, when the market was down 28%,
my top stock at that time, I held onto and shorted the market instead, my stock went 28% while the market went down 28%.
I made 28% on both sides of the trade. Okay. So trust your research, trust your stocks. But if
you don't like the market, short the market. And I'll be back with my number one pick on the back
half of the show. Came in hot there. Yeah, Ben, a couple things what I want to agree with you on
here which is when you break a key support level you almost always test that level to the upside
as resistance before you get the real big next lockdown.
So if we are going to have like a big crash, there is a very good chance that QQQs buy,
see some sort of green candle this week, all the way up to that 50-week moving average.
So I agree with you on that.
And then the other thing I wanted to mention is that in terms of what to do,
you know, Mark, you mentioned it's like too late to sell or whatever. I don't necessarily, I think it depends on people's goals and timeframes, right? And we
talked about this too over the weekend. So, you know, if you have like a long-term account that's
focused on long-term investing, yeah, I might agree with that, even though I did actually sell
some of those long-terms today because I want to have some cash to buy some stuff lower if we do drop another 10-15%.
But like in a short-term trading account, you know, like I don't know.
I took a – Micron was the only thing I was really wrong on this week and honestly it's
like my number one loss in the last few years.
I was totally wrong on Micron after the earnings report,
but I ripped it off. I probably did it near the lows and I don't care. Actually, maybe not.
Micron's still freaking crashing. I think I sold some in the morning. Crazy. Oh my gosh,
it's 326. So look at that. I mean, I sold this thing in the 350s this morning.
So there's something to be said about timeframes here.
And if you're like managing a short-term trade account where you're trying to minimize drawdowns and you're depending on cash flow, right, which is what short-term trading accounts are about, people doing this full-time trying to generate cash flow, you really don't have the luxury to sit in something that the momentum is going against you.
sit in something that the momentum's going against you.
So yeah, I think anytime you hear from anybody, by the way, on all these spaces where there
seems to be apparent disagreement, 90% of the time, it's because they're looking at
different timeframes.
So that's something to consider as well.
Yeah, absolutely.
Look, and think about it.
If you're from a trading perspective, you should already be out. You've gotten stopped out because the big thing about trading is to have
your stops in place a little bit below where you bought the name because you're buying the name
because you think it's going up next. And if you're wrong, you want to stop out before a big
loss. And then you saw the market turn over and start to head down.
The momentum has been down for more than a few days, right?
We're down 10% at this point.
So I agree with you.
I would just wonder why anybody that's been trading hasn't been trading on the short side
of things up until this point.
But yeah, I mean, and you just nailed it. With regard to timeframes, that's key, right? on the short side of things up until this point.
But yeah, I mean, and you just nailed it.
With regard to timeframes, that's key, right?
Because I'm more of a mid-term investor.
I'm not long-term and I'm not a day trader.
I'm in there, I'm buying stocks at five that I'm waiting to get to 15, right?
And I'm hoping to get that done in 12 to 18 months,
18 months, not 12 to 18 years and not 12 to 18 hours.
not 12 to 18 years and not 12 to 18 hours.
Definitely a profile for every type of investor. So I'd love to hear the different perspectives,
excuse me there, of how you guys are looking at different things. And now let's get a little bit
more granular. I'd love to hear some thoughts about some individual ones that you're looking at
and getting a little bit more down into the nitty-gritty, if you will.
I'll start with Ben, and I know a few of you guys said you have ones that you'd mention later, so we'll pass it around.
Yeah, so look, I'm still on a couple names in my short-term trading account, And obviously, it's not working right now.
But the only reason I stayed in it
is because I hedged up really big last week
to be able to tread water,
even if those names go down.
One of them was Micron,
which I ripped the band-aid off this morning,
which actually means I need to reduce my short today
because now I have too much short.
I didn't do that yet.
I didn't reduce the short yet.
The other two names that I'm holding on to, which I just can't bring myself to sell yet in my short-term trading account,
one is Identive, which Mark knows about here. I've been talking to him about INVE.
Mark can probably speak to it more than I can, but the reason I'm in it is because they got a huge contract on March 10th,
huge contract on March 10th, which can really significantly increase their revenue and take
them towards profitability.
But even more importantly, they traded a negative EV.
They have maybe somewhere around, I don't know, if you have to get, you know, they're still burning cash, though, March 30th, maybe around $4.80 in cash, net cash, and it's $3.50.
So I saw this news as an IoT stock similar to the one that Mark talked about last week, which we'll talk about soon, I think, here, in the same kind of sector.
And when I saw that news and I saw the cash position, I'm like, this is a safe stock to
hold that's probably bottomed out and has optionality upside. I thought it was going to
re-rate more to the mid-fours to upper fours. I was in it for a trade to that. I guess maybe I
got a little greedy. I don't know. I was in it for a trade to that. I guess maybe I got a little greedy. I don't know.
I was in it for a trade to like 450 to 480 just to kind of get to a zero EV. I'm like,
what kind of stock doesn't even trade at a zero EV, especially after a big contract like this?
It's not like a phase one biotech. If you're a phase one biotech, fine. You can trade a negative EV. But a tech company with a huge contract that they just
won.
So I'm still kind of stuck in this in my short-term trading account.
So that's one.
And I might stay in it because I have plenty of hedge now to be able to withstand any kind
of pullback.
It's down 2% and my hedges are more than making up for that, down 2%.
There's another one that I'm not an expert in at all.
And I'd love to find someone to collaborate on.
It's a call company, Call Energy.
And the only reason it was on my radar
is because the Godfather Knows, who's now in sabbatical still,
had put this on our radar some months ago in terms of energy
and AI and how we need to use more calls.
So it was on my watch list, HNRG,
and they had a big deal that they just announced on March 26th,
which, again, I can't even speak to the fundamental list.
It's totally out of my area's expertise,
but I put it through AI, this contract that they won,
and every single AI, plus all the analyst upgrades, everyone's saying, hey, this adds $5 fair value to the value of this
HNRG stock, and all the analysts are up at like $30 or something.
It popped and faded.
March 26th, you need to pop and fade, but this is one that I was willing to play because
there's an energy name, and I don't't know I guess oil and coal are different maybe I
maybe I made a misjudgment there to think broadly that it's energy and oil's up so energy's okay
because it's more like AI related energy this call all their contracts are the you know their
growth is all related to AI data centers right now and call use for the AI data
centers. So I don't know. I got into it, not working, but I'm still in it and I kind of
don't want to sell it so quickly. So I have a lot of hedge against that. So those are the two,
I have one other, but these are the two bigger positions I'm holding and you know, I have hedged against the longs right now
Great stuff there that you love to hear your thoughts anything that you're looking at any specifics
I don't really have anything really particular. I was looking at IQ
I'm not sure if it's gonna get really cruising at this moment. It looks pretty good But who who knows in this market. And AMC, I was saying last week, was looking decent.
It's up actually, like almost 8% right now.
It's cruising along today.
And it doesn't look too bad, but again, this market, I don't really trust much.
So I want to hear what Money Mark has, and I'll leave a little extra time for Money Mark.
And I'll look at his chart and everybody's stuff when we're done everything.
So pass it to you, Money sure thing dougie so listen there is a major two major things that have occurred in the market in the last few months one is that AI just went into hyperdrive.
I've been out for the last two and a half years saying AI is not a bubble.
And throughout that time, you've seen all the AI names going up, NVIDIA, being a 10-bagger, all those sort of things.
And people waiting every step of the way for the bubble to burst, the bubble to burst.
Well, guess what happened instead?
Clodbot came out.
The new versions of the LLMs came out.
And all of a sudden, revenues for the AI companies
are going through the roof on a whole new level
that nobody expected, okay?
You thought AI was growing fast before it's now just
accelerated to a whole new level. The pricing for utilizing H100s just hit another high.
Demand is outstripping supply. They can't keep up. That's not a bubble. That is a demand shock. Keep that in mind.
AI just went to a whole new level. If you don't know this yourself, you have to go and find out
because a few months ago, I was using AI for free. A couple months after that, I was paying
to use AI because I wanted the better features. A couple months after that, I was paying to use AI because I wanted the better features.
A couple months after that, I was paying for two different AIs because I wanted to compare answers
against each other. So I went from paying zero to paying 20 to paying $40 per month. Oh, but wait,
there's more. Because perplexity computer, not perplexity, perplexity computer came out.
Because perplexity computer, not perplexity, perplexity computer came out.
And that is better than every AI I've ever used combined.
And it's $350 a month.
They give you 15,000 credits.
I blew through 45,000 credits in three weeks.
I'm paying $1,000 a month for AI.
I was paying zero a few months ago. Multiply that
by all the people that are seeing the same results I am, and that's what's happening to AI right now.
Okay, so that's one trend. Pay attention, right? The other is that sensors, IoT, Internet of Things,
sensors' prices have just collapsed.
They used to be dollars.
When I was in the industry advising Walmart on how they could use RFID to streamline their supply chain so they could have visibility into everything from where it's made to where
it's sold, RFID tags were dollars each.
Now you've got these sensor tags that are pennies each. The last thing
they did was take the battery out because who wants to take a 10 cent sensor and replace the
battery when it dies? That's not cost efficient. It's not effective. Plus the sensor dies and now
you lose data, right? Sensors with batteries in them, they only ping the network once every five minutes. We don't want every five minutes. We want real-time data. We want to send data 24-7 into the cloud and have AI monitoring it nonstop because AI just hit an inflection point and do all the work for us in that supply chain.
Those two things have just come together at the same time.
And when you have two major trends like that, that's when you see a real big explosion,
an inflection point in stocks.
And that's where Ben's name comes in and the name I'm going to tell you comes in.
So talking about INVE real quick, I like the name.
I own the name, Ben.
The difference between you and me on that one is that this large deal that
they won isn't going to make their company succeed forever. They need more deals. Now,
I think they're going to get them, but I'm the type to show up in the second inning instead of
getting rained out. I think it's going to work out for you. I think it's going to work out for me because I already own the shares. I mean, as soon as they win the
next deal, I'm buying more. I don't care if it gaps up. So that's a good name, INVE, and it
actually makes a lot of sense relative to what I said in the first half of the show because they
got all that cash. So if the stock goes down, who cares? If you see dollars on sale for 90 cents and you buy a bunch of them,
because that's the smart thing to do. And then the next day they're on sale for 80 cents. You
don't get mad. You buy more because you're getting dollars for less than a dollar. Let the dumb people sell that, okay? So that's INVE.
My name is a name that got that first big account like INVE,
but is now nailing more and more and more names. And that's why it is my number one AI holding,
and it is my number one holding in general.
It is Energus, W-A-T-T, okay? This used to be a great short. They were burning tons of cash,
trying to get their technology to the point where they could charge iPhones over the air. Yeah,
you heard me right. You'd be holding your iPhone in your hand in your apartment, and as long as
you had an Energus box, the iPhone would be charging while you use it. Only one problem.
an Energus box, the iPhone would be charging while you use it.
Only one problem.
The FCC would never allow it.
It's not safe to have that much electricity flowing through the air.
But the FCC did approve their box for two watts.
Not enough to charge an iPhone, but more than enough to charge what?
A sensor that doesn't have a battery in it.
So when they removed the batteries from the sensors last year, you ended up with a situation where the company Williot,
W-I-L-I-O-T, one of the hottest private companies right now, had to partner with Energous because
they need something to power those batteries in the key
environments where you have metal or gold or walls and things like that where the competing
technology doesn't work. Only Energous' technology works in those environments. You'll find a lot of
competition out there, but nobody is as strong as Energgus. So when Walmart saw that they could do this with
Williot and Energus, they said, that's what we want. We don't want the inferior solution because
the inferior solution to charging these tags will drop data. It had a 70 to 80% hit rate,
which means it had a 20 to 30% drop rate. Do you know what Energous' hit rate is?
Over 99%. So what do you think Walmart did? You think they're going to risk their supply chain
on 70 to 80%? No, they pay a little bit extra because the box only costs 200 bucks.
And they started buying these boxes. And so Energous, who never made a million dollars in a year of revenue,
went from sub $1 million in revenue to $3 million in trailing 12-month revenue
and then pre-announced Q4 to be $3 million just for the one quarter alone,
ending the year with $5 plus million in revenue.
Wall Street sees them going to 15,
tripling their revenue. I see them going to 20 plus, quadrupling their revenue. Why?
Because Walmart is set up, if you do the math, right? And they don't tell you it's Walmart.
They just describe it as a Fortune 10 retailer with 4,700 locations, guess what? There's only one fortune 10 retailer
with 4,700 locations. It's Walmart. What they made last year was only on 410 of those stores.
They have 4,700 and they want to have them all done this year. That's $15 million,
but that's just phase one. Next year, they want to do their distribution centers. That's $15 million. But that's just phase one. Next year, they want to do their distribution centers.
That's another $15 million.
The year after that, they want to do all their trucks.
That's another $15 million.
That's three years of $15 million of revenue from one customer.
Okay, cool.
What if they can't get another customer?
Well, what if they do?
And they did.
Their new investor deck describes another Fortune 10 customer. Well, what if they do? And they did. Their new investor deck describes
another Fortune 10 customer, another retailer. And the description of that retailer only meets
one description, and it's Amazon. And now you got another customer. And I spoke to the company,
and I said, I know you can't say who you're doing business with, but you've got two Fortune 10
retailers there.
Are the deployments going to be of similar size? Are they on the same level? And they said yes. So there's another 15 million. Okay. There was another customer on the investor deck slide as
well. I haven't figured out who it is yet, but now there's three there. Not only that, but if you go
to Amazon's AWS site, because you got Amazon, retail, you got Amazon the data center company, right?
Energus was listed as a partner.
And last week, a funny thing happened.
They got upgraded to an ISV Accelerate partner.
What does that mean?
It means that Amazon is now paying their own salespeople to sell Energus' solution.
It means that Amazon is paying for the proof of concepts that happen to let customers decide that they want to use the solution.
They're that confident in what Energus does that they're willing to pay for the proof of concept.
does that they're willing to pay for the proof of concept. They're willing to pay Energous for
their boxes to have the proof of concept to give Energous a win. Why? Simple. What I said earlier,
those boxes enable 24-7 data flowing like a fire hose into the AWS data centers, not
their competitors. They want all that data going through.
They want all that data being crunched by AI.
They want to send all those AI agent requests
back and forth through the supply chain
because it's not just Walmart.
It's not just Amazon.
It's not just that other company
that I haven't figured out yet.
But Amazon's AWS site says
that there are already five plus deployments.
So you can add it up. It's not just one $15 million customer. It's not just two $15 million
customers. It's all these other customers. And every single week, we're finding more and more
companies getting involved with this. Why? Because you had these two major trends of sensors becoming cheap and AI becoming
something that we never expected to become happening at the same exact time.
So the numbers, it's a $14 stock. They've got $7 in cash.
Okay, that's big cushion for you. That gives them an enterprise value of $40 million.
That's only two times my revenue estimate for this year.
And Wall Street, latest report just came out after their earnings, introduced 27 revenue
numbers of $35 million.
I'm thinking closer to $40.
They raised their price target from $13 to $26.
raised their price target from 13 to 26. Now, if they actually hit, if they do execute against
$40 million, because that's always the if. I'm not telling you the stock's going to 20 or 30 or 40.
I'm telling you what I see in the industry, right? And this is what they need to do in order to
justify something. But if they execute against the Wall Street's estimate and do what they're
supposed to, which is beat the estimate, 15.5 becomes 20, the 35 becomes 40. You're talking
about six times revenue on 40 million is 240 million plus the 40 million in cash that they
have divided by the 5.5 million shares outstanding. That's $50 a share. The stock's sitting at $14 with $7 in cash.
You're paying $7 of enterprise value for that opportunity.
If anybody has any questions, I'm open to it.
But on Friday, I gave a one-hour presentation that will give you a lot more than what I just gave you right now on that name.
That was a mouthful right there. Definitely gave us a lot to research and i really appreciate that
and i i really appreciate the energy too as well uh ben i don't know if you have any questions but
one thing i will say before i pass it over to you is as someone those of you that don't know this is
behind the wolf uh logo here but uh where i actually live is in Jamaica. And one of the things that we've been
working on with a guy that I've been in contact with is actually getting a whole bunch of sensors
for water tanks and refrigeration units and all these different things. So what you just said is
actually personally interesting to me. So hopefully you guys found that kind of interesting,
gave me a lot to research there. But as usual, none of this is financial advice. And do your own research.
Look up all these things. Go down the rabbit hole. Highly recommend that you do so.
But I'll pass it over to Ben if you have any thoughts on that. And I'd also love to hear
if you have anything to respond to, Mark. Yeah, I just
put your video in the nest, Mark, if people are interested in watching that.
Appreciate it, brother.
And let's be clear.
I do think INVE is going to win more accounts.
They built a giant factory.
They could support at least four accounts in there.
And if they get them,
they're going to be profitable for a long time.
You get the initial deployment, right,
which will take up a really,
the initial deployments are huge.
You saw what that new one is. Anybody can look it up. But then once the initial deployment is done, the total value,
let's say it's a three-year deployment, takes them three years of a big initial deployment.
Whatever the total amount is of that three-year deployment, take 10% of that number, and that's what they'll get on an ongoing basis for replacement tags and things like that. So it becomes a recurring revenue base. So what's nice is once they get, I think once you get three customers, then you've got some real good escape velocity. But of course, once you win the second one, it's kind of, you know, the first one's a data point, the second one, two points form a line, right? The third point forms a trend.
from a line, right?
The third point forms a trend.
So let me ask you this, though.
I get all that.
I appreciate your view.
But don't you think this first big contract,
especially given what you said,
that there's a likelihood of winning more,
should be enough for the stock
not to trade at a negative enterprise value?
Yeah, I mean, that's why I own the stock, right?
It's not enough for me to back up the truck yet.
But the lower the stock goes,'s not enough for me to back up the truck yet but like the lower the stock goes the more i'm gonna buy right like i there's there's a limit
to how much i'll buy until i see that second customer nailed that third customer nailed
right because i like to wait till the second inning by that time then like you might already
be up 50 and you'll be like, Mark, see, you missed out.
That's fine.
I'm never the one that hits the bottom.
A stock can bottom out at one.
I can buy it at five.
And it goes to 50.
I'm cool with it.
You got a 50 bagger.
I got a 10 bagger.
But I just like to wait until I see the whites of their eyes.
Nothing wrong with the way you're doing it.
Yeah, yeah. yeah, fair enough.
And to be clear, I have two positions in this.
One is in my long-term account, which is fine.
But the one in the short-term account, it's a different kind of play
because I am looking
for that quick move on an inflection catalyst.
I just thought this thing would quickly go towards negative EV.
It's been a little slower than I wanted.
Yeah.
You know what the thing has been?
75% of the money flowing through the market is passive and black box oriented, right?
And so it's like you got retirement account money is 53% of the new money that comes into
the market is just from coming out of people's paychecks every month, right?
And the market's going down, the indices are going down, and it just drags things down
with it automatically more than in the past, right?
What percent of institutions and retail investors know that there's a negative EV on this name and that's your advantage that's my advantage because we know that i'm not going to
broadcast it from the treetops because we're playing a game of chicken here how low can the
stock get and the lower it gets the more i want to buy so i want it to get as low as i think it can
get before i back up the truck and then i'll tell people that it's got a negative EV.
All right.
Sounds good.
What do we got left?
Doug, do you have any thoughts on any of those stocks we talked about?
Yeah, INVE, I just think has a little more pullback here, Ben, maybe to like your 340 area.
Maybe it comes back down to like the 333 320 but i think you'll
bounce and uh roll right off the macd and pop back up there back into the fours again and then
obviously the lot we've been watching mark that one was a great run up i did play it and it's just
a little pull back as well right here and you're probably going to come back down to that 50 area
and uh and then try to get
set back up and pop back up again and i'll ride it right back up with you guys because it is a good
one right there and i love that mark does all that due diligence because i have no idea what the
company does and but it was uh fascinating to listen to it and uh so yeah thanks mark for that
info and thanks for bringing that to our attention before. And, uh, and yeah, I know,
Ariel's not on today.
He had mentioned this thing a few weeks back.
It was probably,
I remember it.
Cause I,
I look at this thing and I remember it was in the top already.
So I know it was like in the middle of February,
he had mentioned this thing.
I know he said he was playing it.
I wanted to ask him if he'd still,
I think I asked him the other last week,
if he still had it and I forget what he said,
but yeah, I remember I mentioned it, but great call if he still had it, and I forget what he said.
But yeah, I remember him mentioning it, but great call on that one on Watt, and yeah, I'll be playing that one again.
So that's what I see on them too.
Yeah, I've been accumulating Watt for a while now while I was doing my due diligence.
It's kind of the Druckenmiller approach.
You buy a chunk, start doing your due diligence. If you like what you see,
you buy more. If you don't, you sell off what you started with. And so, yeah, I've been buying,
it's mid-February, yeah, probably about that, maybe a little further back. There is a small
pool of investors on the institutional side that have been doing the research here. And if you look at the SEC filings,
what you'll see is that there are new filings from people showing that they have a 4% position,
a 5% position, a 9% position.
The way I count it,
I can probably identify investors
representing maybe 50% of the shares outstanding right now. And it's largely
institutional. So there's a lot of smart money that's coming to this name. It's a really
interesting case, right? Because you've got the day traders have loved this name for the last
couple of months until the last week, of course. But it's not just a day trading name, right? It's
an institutional name now. But it's also a name that the shorts like to bang on because, just like me, I was short this stock back in the day because I'm like, this is garbage. They're never going to charge an iPhone. And it was true. I don't think they ever will charge an iPhone in somebody's house because it's not safe.
house because it's not safe. But when a use case comes and flips the whole equation around,
it's great because the shorts don't know what's going on. So they're wrong.
The institutions aren't paying attention, but if they are, then you should pay attention too,
because why would an institution pay attention to such a small company at this stage of the game?
Oh, by the way, they're going to be coming back out on the investor circuit.
So they've been quiet for years for good reason.
But I just got word that they're planning on being at Planet Microcap coming up.
Mark, I wanted to pick your brain a little bit on this AI, has it peaked or not?
One thing that happened last week that's concerning me a little bit or maybe it was
10 days ago was open ai shutting down sora and my understanding it was because memory chip memory
prices got too high so they just couldn't make it profitable at those prices um that's the sort of
event that can maybe cause at least concern that AI CapEx can suddenly collapse
and we've reached peak AI CapEx?
No, no, no, no, no.
It's the opposite, opposite, opposite, opposite.
So what you said is all true.
Here's the deal.
Sora wasn't exactly taking off.
Sora was a novelty.
If you went on Sora and you saw what was going on there,, it was a lot of jokey AI-generated posts.
Good AI-generated posts you're going to see showing up on IG and TikTok.
And you do.
Just go to either one of those and look up Tupac and Mr. Rogers.
Some hilarious, not for kids, but some hilarious posts.
Tupac and Kobe Bryant, right? You see
like amazing posts out there. So that's one thing, right? So Sora just wasn't going to work out.
But what you said about HBM, the memory, right? And this dovetails into what's going on with
Micron is that Micron is really not good at making the kind of memory the hbms that go into
ai data centers they have the worst yields samsung and hk and hynix make uh the best hbms for that
and they're struggling to keep up with the demand so it's not that CapEx is going to go down. It's just that
there's a limit to how much CapEx can be spent. Because if you need this ingredient to go into it,
then you're capped by how much of that ingredient you have. So as more HBM comes online and they
continue to make more HBM and they continue to shift lines, right? This is why if you go to the Best Buy and
you try to buy a memory card, it's going to cost you four or five times more than it would have
before Christmas. They're just not going to be making as much of that anymore because they make
a lot more on the HBM. And the important thing about that is that, like I said, AI demand is going through the roof at a faster
rate now than it was before. It's not just growing, it's accelerating and with good reason.
I mean, it's really changing my life, right? I'm making a lot more money. Yeah, go ahead.
Mark, so I get it. The demand's there, but can't the memory prices make, at least for now, until more supply comes, make their business models unprofitable and just kind of put things on hold?
Doesn't matter.
Doesn't matter. Doesn't matter. These guys are trying to take over the world right now.
right so they know that the they know that the prices are gonna be what they're gonna be um and
at the end of the day they're all perplexity with perplexity computer gemini you know that's
existential for google google has to win or be one of the big winners here right open ai has to be
one of the big winners here if they just stop, there's somebody else that won't. Right? So right
now we're figuring out who, what's the oligopoly going to be? Like one of these big names we know
is going to fail. They're going to collapse. It's not going to work out because they can't keep up
in terms of market share, but it's open AI, it's anthropic, it's Google, right right and then in terms of tapping into those models it's perplexity
right and then who else is oracle is microsoft is apple like who's meta they're they're competing
to see who's going to be the next big winners that be the monsters of ai they're not going to stop
okay i can add a little bit of context yeah i can add a little bit of context on that because
that's when i i spent like uh quite a few hours actually researching so like with the open ai and
the sora shutting down so at one point they were burning through they were losing 15 million dollars
per day on that and open ai is just burning through cash ridiculously obviously he's trying
to scale up and what they quickly learned is that throwing a bigger model,
throwing more hardware at it doesn't scale up exponentially.
And just to give you a quick analogy,
it was the way in which they were doing it.
It was like, okay, well, our baby was born yesterday
and it started crawling within a month.
Well, within three months, it started walking.
Well, at this pace, we can assume if we
throw more compute at it, it'll be flying by one year one. Well, that's not really how people work
and that this, not how their compute, their models actually scaled up. And that's a very dumb
analogy to trying to simplify it, but that's what they realized. So they burn so much money and they
actually have a cash problem. So when Google came in and they just kind of like opened up their thing
because they were just so hesitant to, they were afraid.
They had the most to lose.
So anyways, once they issued that code red and everything,
they started bleeding through money.
If you remember, Sam Altman always said the last resort for them
was to run ads in ChatGPT and like their business model didn't include that.
And like that had to be a
last resort. Well, they went to that last resort. So just looking at all these things that they're
speaking, of course, they had that partnership with Disney, which now Disney is looking for a
new partner because Sora is getting shut down, all of these different things. It's because the
way in which they're spending CapEx, you can do your own research and pull your own conclusions
from this. But the problem that OpenAI is having with competing with google which is basically who
they're going head to head with is that google microsoft and these other companies do not have
to make a profit on their ai because it's a feature within their huge suite whereas open ai
they are dependent on technically right now on subscriptions and all that stuff because they
don't have that massive we can operate this thing at a loss forever because we're making money
elsewhere so it's like very very different business models and they're not really apples
apples going head to head so it's kind of hard to like match up to say this is where they're
winning in this area in that area because they have very different uh ecosystems but that's just
like a quick overview you can do your own research on that. But yeah, that's a lot there.
Try to squeeze in.
No, no, that's phenomenal.
And you nailed it, right?
And you start to see why Meta talking about laying off 20% of their workforce.
It's not because Meta is doing poorly right now.
It's because they want to refocus that energy, refocus, redeploy that cash towards what's important, which is AI,
which is winning an AI. And what you hit on was really critical because if you look at
Microsoft or Google, they have great choke points for AI. They have applications that can tie back
into them. If you're going to have an AI agent, right, it's going to go into your spreadsheets.
It's going to go into your docs. It's going to go into your calendar. Microsoft and Google have
that. OpenAI don't, right? Meta has IG. TikTok is out there. That's on the Chinese side. And
then, so you've got the social media platforms. Meta has IG.
You've got Google with YouTube.
So you've got these platforms where the AI can be leveraged well.
What does OpenAI have?
They don't have applications.
They don't have a social platform.
And that puts them in a tough situation, except for the fact that they're the ones.
They were the first to the party with Chat with chat gpt well so is yahoo so stay tuned right they don't want
to become yahoo um they want to be what google became so it was that was brilliant what you just
said and everybody should should kind of keep that in mind as you watch what happens going forward
because the winners are are jockeying for position right now to see who gets to the finish line and ends up being one of the big winners.
Absolutely.
Some great stuff there.
And as usual, we flew through that hour.
It was really great.
We kind of covered a lot of ground.
We went small caps.
We looked at geopolitics.
We looked at the world.
We talked about all these different things. And, ai it's all connected so those of you that
are just tuning in for the very first time we'll financial we have spaces and live streams content
on our multiple pages all week check out the schedule you can see or where all these different
things are but most importantly these amazing speakers that spent some time with us and sharing
their insights follow them to check out what money Mark is up to, what story trading crews up to, Dougie.
Just really appreciate you guys spending the last hour with us.
And of course, all the listeners that tune in,
comments are always open, send us messages, connect with us.
Like we're people behind these microphones and so forth.
And we'd love to hear from you.
So any closing thoughts there, Ben, before we kind of wrap up?
I can't believe we flew through this hour, but this this was a great great one good thing it was recorded those tickers and all
that information will be there so if you missed any details you can replay it yeah um closing
thoughts uh look check out that blog in the nest it's really a wealth of wisdom um you don't have
to subscribe to our Discord or anything.
That's like some of the most important tips that you can ever learn about trading and how to keep
your gains. I'll just leave you with this. The number one way for wealth creation and outperforming
markets is limiting your
jaw downs when the market has a pullback. That's the number one thing you could do.
I actually get much, much more excited when the market pulls back because
everyone can make money when the market goes up. You're not really getting
anywhere, right? If everyone's become a millionaire, then you have inflation and
you don't have any extra buying power, right? The way you get wealthy, you got to
do better than the next person. And you got to do better than the next person.
And the time to do better than the next person is when there's a market drawdown.
You have to focus on limiting your drawdowns.
And that's when I get really excited.
I focus on going to cash, shorting, whatever it is,
so that when the market's down 10%, 20%, I'm flat.
Why?
Because then as the market starts to correct, you're already exploding to new all-time highs, and the market's just at the
beginning of its correction. And I've done that successfully during the COVID crash and the
Liberation Day crash. I did that really, really well, and I've pretty much already done it here.
So some very, very good tips in there that I encourage you to read.
Really appreciate that.
Any last thoughts, Dougie, or good to go?
No, I'm good to go.
That was some great information there from Ben and Money Mark.
So, yeah, follow everybody and appreciate everybody tuning in.
Money Mark? Yeah, I mean, what Ben said, I mean,
he really nailed that. The yellow alert that we've been talking about here on this show,
dating back to August was prescient. You could have kept on your best stocks,
but shorted the market as a hedge. And now you're up, you know, or at least down less and sitting
with a massive hedge position. I've got a huge amount of cash, a huge amount of hedge. And at
any moment when I see the opportunity, I can deploy that cash. I can get rid of the hedge,
and that creates more cash. And then you could take advantage of the bargains of the market.
If you're 100% long, how can you take advantage of bargains when the market tanks out? You've got no cash. So definitely check out what Ben had to say there and we'll see you next week.
Yep, you guys have a good one. And Ryan and Jordan and the Wolf Trading Crew are live right now. So you feel free to hop over there, see what they're up to. And later on, we'll stock picks over the week check out the schedule see you guys later
