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SPACE MARKET TALK
Recorded: April 15, 2025 Duration: 3:01:12Space Recording
Short Summary
In a recent discussion, market analysts highlighted trends of stability and growth amidst volatility, with key insights into upcoming earnings reports and strategic partnerships. The conversation emphasized the importance of monitoring retail sales data and the potential for significant movements in the tech and airline sectors, alongside ongoing developments in the cryptocurrency market.
Full Transcription
Thank you. Good afternoon, good afternoon, good afternoon, happy April 15th.
We all know what day that is, not a fun day for some.
But yeah, here we are.
We've gone a long way to go nowhere again.
Here we are break-even, essentially, across the indices,
looking at QQQ up 50 cents and Spy down 90 cents.
And half of the names that I watch in the QQQ are green or break-even, and the other half are red.
That's about the story I have for the day.
But I am interested to see what everyone's thinking, what everyone's seeing out there.
Inside day, this is our fourth day inside of that big candle last Wednesday.
So here we are getting closer and
tighter in price action. Kind of a nice change today, at least in my mind, that we didn't have
a ton of headlines for once. It was kind of a slower news day, not a whole lot. We did have
some news this morning. I know Canada had some news on tariffs this morning. But other than that,
it seemed like it was fairly quiet on the news front today.
I do believe that President Trump is supposed to be signing some executive orders here shortly.
I'll keep my eyes out for that.
And yeah, here we are, Stocks on Spaces.
Again, Evan, shot you co-host over there, and see if you have anything to kick us off with.
No, I'm excited to hear everyone talk.
Brett, I feel like if we have Brett up here, we should go to him early on.
Because yesterday, I feel like remembering, like, oh, we haven't gone to Brett.
So him, but I'm excited.
We also got Cliff coming up here.
I'm looking forward to this space.
It's a little bit of a boring day, I can't lie.
But sometimes that's actually a nice thing.
That's a good thing to have every once in a while.
But no, not too much to add from me. I'm looking forward to the talk. But sometimes that's actually a nice thing. That's a good thing to have every once in a while.
But no, not too much to add from me.
I'm looking forward to the talk.
Little stock market analysis.
Here we go.
Cool.
Let's throw it over to Options Mike to get us started here.
Hey, Evan.
How are you, man?
I'm doing good.
I'm doing good.
How are you doing, just hey, sir?
I'm doing fine, thanks. So we have a very quiet day here.
When you look what's going on, we're still an inside day inside yesterday's candle.
We're still an inside of last Wednesday's candle.
So this is four trading days in a row inside that candle.
Volume has really come in.
While we're still at 37 million shares, volume has really died off here.
Bonds are on the high, so they're million shares. Volume has really died off here.
Bonds are on the high, so they're rallying and the market is just quiet. The market's waiting.
Is the market waiting from some major announcement from the White House?
Possibly. We do have retail sales before the open tomorrow.
I would not expect anything good from there.
We have Powell speaking at one something, I think one 30 tomorrow in the
afternoon and doubt he's going to say
much that's helpful and we could just be waiting for earnings at this point you know we've had the
bank so far i thought they were okay i didn't think there was anything special or great about
them i thought they were just fine uh you know we get asml tonight we get um united airlines i think
this reports as well tonight tomorrow night we have I mean, Thursday morning before the open, we get Taiwan Semi,
and then we get Netflix on the big one on Thursday night.
For me today, I haven't done a lot.
I traded some TQQQs and SQQQs early on, and I had a nice quick trade on Tesla with some options.
And that's all I've done today.
I kind of
missed the boat on palantir which is just went highs of the day here and ended up at 98 having
a beautiful day i didn't want to grab netflix this morning should just grab shares i didn't want
options on it with the iv so high but netflix had a big beautiful day there crowd is trying to break
out above that w formation i pointed out charts when i didn't move on sunday and i pointed out
charts to everybody so there is some strength out there out charts when I did it on Sunday, and I pointed out charts to everybody.
So there is some strength out there in this market, Evan.
It's just few and far between.
Market breadth is still positive today across the board.
Not by a lot, but still positive.
And, you know, just watching.
Crypto tried, Bitcoin tried to pop today with crypto names that it couldn't hold.
And, again, it just feels like we're still waiting.
You know, I'm waiting for a break of Wednesday's candles.
Names that are above it have my radar.
So you already have Palantir with this move above it looking strong.
So, you know, we'll just see what we get here.
But overall, pretty quiet day overall here for me.
Two trading days left in the week.
I appreciate you, Mike.
Anything you're looking out for in this hour?
Or do you think it might continue on that slow day?
We're just waiting for the entire Fed line.
I just, you know, for me, when I want to trade,
I need to have an edge.
I'm looking for momentum intraday, and I'm just not seeing it.
The only thing that has it right now is a talent here,
which is breaking to the upside. So we'll see if that
can keep going. Just hit new highs of the day.
I appreciate you for getting us started here Mike.
Let's throw it over to you. Is
Brett up here or is he just a listener?
Do we have you Brett?
Yeah. What's up Brett?
I appreciate you. I want to come to you
nice and early on this one today.
How are you doing, sir?
What are you watching in this market?
We got a lot going on.
Interesting times.
What's in your eye?
For sure.
Yeah, I appreciate it.
What I look at now, we're sort of in that last week, I guess late the week before,
we sort of had that puke down into what was pretty close to the prior bull market highs of like, I think it was like January 2022.
And close to the 200-week moving average in the S&P.
We didn't get it.
I don't believe we got a test of either technically, but certainly not the 200-week, but pretty close.
That by no means, I don't think is a good gets us out of the woods necessarily.
But the bounce we've had back since I think has given, I think, I mean, just from my personal
view, I think it gives people an opportunity to adjust. I guess as you continue to watch
like the price action, we still cannot take out the prior week's high, we're still struggling
on the spy to get back into that 550 area, which was sort of that low coming into April 3rd when we had that real first flush lower of the latest down.
So technically speaking, still some issues that have then yet to be resolved, still trending below the 21 day.
But thanks to that big 9.5% day candle last Wednesday,
I think markets have held up pretty well since.
The Thursday low was gobbled up.
We pushed higher into the weekend and started this week off not the strongest,
but certainly not as bad as it could have been.
I think it just gives people a chance to adjust.
If you haven't been hedging or you haven't hedged, I think you have a chance.
We've said it a lot.
I know Stock Talk has been all over the hedging situation,
and doing it much earlier for much higher would put investors in a better spot.
But I think you get a chance to adjust here now,
whether that's you bought last week's low and you have a great cost basis
and you want to trim out
of some of it, or if that is some of the positions you held too long with, you know, lacking some
discipline that you should have cut before, the rebound gives you a chance. It gives you a chance
to engage in a lot of different ways to do it. You know, if you want to do a put spreads or some
type of, some type of collar hedge or collar spreads, you know, there's a lot of different
ways you can get creative. I personally tend to favor more simple approaches,
specifically like when volatility is this high.
But overall, I do think it gives everyone a chance to adjust.
If we go higher, great.
If we do get back above 550 in the spa,
I think that opens the door to 565, 575,
which catches a lot of key moving averages
and prior support resistance zones.
So there is a roadmap to higher, but we've got to get through step one first,
and that's getting back up through 550, and so far we're not able to do that.
So I'm just trying to keep a close eye on things,
trying not to do anything too crazy.
Again, from a trading perspective, for me,
this just is not an environment that's conducive to my style of trading. The first, I don't know, four to six weeks of the correction. So like really like that late February kind of first half of March for me was an okay time to be trading. But once the volatility picked up too much, and I'm primarily swing trading
in this type of, generally speaking, swing trading, but in this type of environment,
it's just too chaotic and the overnight risk for me is just too high. So I'm kind of waiting
patiently to get a better environment. And I know for a lot of people on this call, that may not be
sort of how they're approaching markets and that's okay. But for me, that's sort of how I'm looking at it now.
I do think from a longer-term perspective, we have a little chance to adjust here,
and there's no guarantee that we can't go higher.
But there's also nothing saying that we can't go lower from here.
There's still a ton of uncertainty, and that uncertainty we're seeing
kind of permeate through a lot of different markets.
Before, it was just U.S. equities taking on the chin, but bonds are holding up. And that uncertainty we're seeing kind of permeate through a lot of different markets.
You know, before it was just U.S. equities taking on the chin, but bonds are holding up, foreign equities are holding up.
Now we're seeing foreign equities take a hit.
Bonds were really volatile last week.
We're seeing volatility in the currency market.
So it's really just a messy environment.
You know, so I think it's like a good time for investors to just really take stock of
what they own and see if they need to adjust to anything.
I appreciate you, Brett, there.
As always on these spaces, by the way, first of all, make sure you're following the speakers.
All amazing.
Brett and Mike, we've gone so far.
Everyone else will be fantastic, too.
Unless you hate someone, then I guess you can follow them and, you know, hate comments and all their stuff.
There's a couple of you down there who might enjoy that.
But, yeah, no, definitely make sure you're following the speakers.
We appreciate everyone.
We'll keep us going around here.
Emp, whenever you want to jump in and keep us going.
But, Godfather, how are you doing today?
Yeah, pretty good, thanks. I echo my compatriots. Slower day, for sure. The talk off the
institutional desks is that the continued hedge fund covering is being met with continued long only supply. They've covered at least a third, if not more,
of what they sold going into these headlines. There's just no real buying though from the
long side. And there's certainly no long side activity out of the hedge fund community either.
So you can see that
just looking at the tape, it's a very non-committal, very fragile. I mean, it's nice to see
some lower yields today. It's nice to see, you know, slightly stronger US dollar, but
I think everybody is sort of on their heels waiting for the next potential tape bomb here.
The administration clearly knows they need to put out a trade deal
that will sort of set the temperament.
And, you know, as Bess had said,
the folks that are early will get the best deals.
So, you know, I think that there's that.
I'm looking forward to in terms of putting a little bit more positive momentum
into this tape. In addition, we've got the corporate buyback window, which reopens next week.
Obviously, we saw that big buyback announcement at Broadcom. I expect that you'll see
more of that and more folks getting active on their existing buybacks once they come out of their quiet periods.
We've got Powell speaking tomorrow night.
I don't think much is expected out of that.
The earnings, I think, have been pretty much covered.
It's a light week there and a short trading week on top of all of that.
So, yeah, there's been some, you know, interesting individual stock ideas, but not a lot of general tradable market momentum that I can see.
We've been buying the dip on ASPI.
I've been adding to my short positions on GRRR.
We made some pretty nice bank on Webull yesterday. That's gone quiet now. I see now in
the headlines with respect to the Chinese connection. But it's interesting that their
peers are all trading or announcing earnings this week. Of course, IBKR and then we've got Schwab
after or before market on Thursday.
So it's kind of interesting.
You've now got another peer to put in there along with Hood and those other two names
that you can look at on relative valuation.
All very good businesses.
Yeah, let's see.
You know, the market, in terms of indicators, I think across the board is pretty much washed out.
You know, we're set for a rebound, but I think people start getting, you know, a little bit more committed in that, you know, 5000 range.
And if you look at where we're trading on SPY here, there's just not that compelling a reason to do much in this sort of inside range. So, you know, I think I wasn't on
spaces last week when we had, you know, the thick of all the trade stuff. But the two observations
that I was making to my subscribers is that, look, this entire plan revolves around, you know,
leveraging the strength of the US consumer globally. And, you know, you can't put
the U.S. in recession and, you know, still be able to lever that. So I think the administration
knows that and will do what they can to stop short of that. And, you know, clearly we've seen two big
dial backs already. And I think you're going to see a little bit more. And the other side of it, which was made amply clear, is that, you know, the foreigners are still big participants in somewhere probably slightly higher than initial expectations
and slightly higher than I think a lot of pundits would like to see.
But nonetheless, with the balance that may come in the latter half of the year with regulation and taxes,
I think you get back to a market where fundamentals matter again.
And, you know, it's fertile ground for for individuals alpha etc but you know clearly
right now sentiment is still ruling the day so yeah I think it's a good time to keep some powder
dry and and wait for fat pitches of which I'm not seeing a great deal right now so that's really it
for me.
Appreciate those thoughts, Godfather.
I'll jump in here for a second, Evan.
I do want to keep throwing it around.
Options Mike's got a hand up.
We'll go over to him, and then we'll get some of the rest involved.
Just some interesting here to me, but I've been watching.
It just stopped about for about the first 10 minutes since three o'clock,
a ton of tomorrow's expiring 538 puts on the spy came in,
which I thought it was real interesting.
So, you know,
unusual to see that kind of flow into a one day option that expires tomorrow.
And I just saw a ton of volume hit both spy and QQQ on the buy side at the same time it's strange interesting um great great eye there monative what's up hey guys uh before before i
jump into what i wanted to say i wanted to you know agree withfather, just what he said about buybacks.
I think, you know, there's very little doubt that buybacks are going to be one of the main reasons
why the market stabilizes somewhere around here or, you know, somewhere nearby.
Remember, the cash flow is still massive and, know companies are 10 15 20 percent cheaper than
they were just a little while ago and it's a great incentive for the management to use that money
they're still continuing to generate money and also another thing he said the the trade deal
hinges on the strength of the you know our uh our uh, U S consumers and killing that is not going to, you know,
help us make any headway in deals or make any useful deal out of it.
The one risk though,
that is starting to hit is a lot of obvious U S purchases are being canceled or
held back. And that's not a great sign of of anything
that puts us in a strong position because we're just going to have to fight to recover what we
already had let alone grab new trade this is this is not helpful and we're seeing more of those
large headlines almost on a daily basis um so so just just to get those out of the way,
but in more general terms, right?
So earning so far, again, backward looking,
so not a huge point to it.
They're fine.
There's not anything huge so far.
You look at financials,
there isn't something worrisome yet about uh you know net charge-offs or uh you know
credit losses data they are providing more so and they have lots of provisions already so
so banks so far today the the the big ones and the um and and and the large regionals, super regionals are so far so good.
Nothing to worry about, but almost to a person, every CEO from banks is hedging his bets on the future, worried about, openly worrying about, you know, what tariffs are going to do,
but not being very specific just so they don't get, you know, chopped up in the press with this,
you know, with the current climate. Again, outside of that, we're starting to see companies
pull back on full-year guidance while holding out a little bit closer, meaning give guidance
for quarter out, but pulling back on whole year guidance. And I expect to see, you know,
a lot more of that. So that's, that's what it is so far. So, you know, we have a little
bit this week and then a whole bunch next week. So can't wait to get through all of that.
The data year out, I mean, if you go out quarters,
the expectations are still ridiculously high.
We are still expecting over 10% earnings growth
every quarter for the rest of the year.
So meaning Q2,3 q4 uh you know your
quarter over quarter growth is expected to be you know somewhere between 10 and 12 percent that's
that's a little rich given where we are unless things come back down uh the uh the revenue
guidance is also not or the revenue expectations is also not easy at this point.
Somewhere in the high threes to high fives for the rest of the year, again, a big reach if we can make it given the circumstances. you know the uh effect situation should help companies um compared to even q1 uh you know
that we are starting to get q2 numbers should be better on in terms of you know uh much lesser
foreign exchange loss or even you know hedging profits from that so there are a few things that
are good there are a few things that are good there are a few things that are
very worrisome and then this there's things that we don't know and changes every single day so
remains to be seen oh uh i was listening to the other call you guys were in and uh
um one thing shy mentioned about uh you know, I'll quickly go there. There are two major line
items. So defense technology budget is a separate line item from the big headline number. So while
that is increasing in very large percentages year over year, the last couple of years,
it really is not changing anything.
So as an overall percentage, it's very tiny,
somewhere in the $20 to $30 billion,
versus $830 billion defense hardware, procurement,
the rest, right, people budget.
So they're not the same line item, but it is true that defense technology budget's going up dramatically. What is changing within defense? So it's not like we are buying
software instead of missiles. That's far from it. That's not the case at all. But what is happening is uh you know this the the within within that 830 billion dollar
defense budget we are buying far more of technology driven items meaning you know um
ai enabled drones and and and uh you know and and missiles with much higher precision guidance, things like that.
So anyway, those are my thoughts.
I'll be here so I can answer any questions I will.
Beautiful, Monadav.
Great having you up here on stage.
Of course, feel free for anyone to jump in and create some dialogue.
If somebody says something interesting or thought provoking, have a question,
feel free to hop in at any time. Let's keep going around the panel a little bit. Wolfie,
haven't heard from you yet today, I don't believe. Would love to get some of your thoughts around the
market and the action today. How was trading for you? Sorry, I didn't add anything today.
Just kind of watched. I've been kind you know, kind of like the more on the
pessimist side, I guess, but I don't see it that way. I see it a little more realistic, but
I'm mostly focused on things that are just idiosyncratic and they just kind of like move
independent or they're not really big enough to be market moving in general.
It's kind of like where my head's at outside of like trying to look for whatever phases of momentum exists in the market.
That's the way I'm approaching it.
I think, you know, you have some of these earnings headlines and earnings prints coming out.
The interesting one today that I didn't take was Netflix. I was just kind of like
watching how people reacted to any whisper of positivity. And there was like an internal memo
that went around and was mentioned how they're trying to become a trillion dollar company,
which kind of like sparks an enthusiasm. But I kind of question, you know, anytime you get some sort of meat before earnings, I kind of question the motive why.
And then if we remember the last quarter that Netflix had, it really smashed.
And we were having the conversation around like how I remember to quote Stock Talk from back then.
How did how did all of the analysts, how are they so far off sides, right?
So I remember that they were very ahead of the curve on how they beat earnings.
And the stock itself rallied significantly going into it and then rallied on the back of it.
So I'm kind of curious to the timing for something like that.
So I really want to pay attention to how that plays out in terms of just like the overall market. We just were pressed up
back up to that like breakdown level from, you know, that Thursday early in April, 20 days just
above. We're making a lower high now four days, or not four days uh two days in a row but if you just draw a trend from
that that uh april level to the high that we got on april 9th to yesterday to today it's just like
slow and steady downtrend and um with the 20 day just above and then that gap just above as well so
um kind of want to see that resolve first before I get any more momentum to the upside.
VIX sold back off right to that breakout level, that 30 level, basically that kind of acts as a lid usually.
So we're right. We're kind of like flirting between the 29 or 20, 30 level on the VIX.
If you want, if we get more follow through to the upside, you want to see that compress even further, push back down to maybe 23, 22.
I think that would give you the next leg higher for some of these favorites.
And then if you just take a look at outside of things like, again, just look for idiosyncratic stuff.
So outside of things like Palantir and Netflix, a lot of those big names, a lot of those big favorites, they press up into resistance and then they kind of fade. So you guys talked about on the last space, some of these
semiconductor names that are going to report TSM, ASML, et cetera. Want to see some tailwinds on
the back of that for some of these other semi names. Take a look at like a Vago, for example, had a multi-year
uptrend rallied into, excuse me, rallied into the 200 day. One second. Excuse me, rallied into the 200
day and its prior uptrend stalling out right there. So I want to see if some of these semi
headlines and some of these earnings can kind of you know push
us further outside of that for me like I said for me I'm looking for idiosyncratic stuff I mentioned
service Titan on on this space a few weeks ago mentioned it on your earning space a few weeks
ago for those that don't know it's basically like a CRM for the trades industry.
So think like, you know, just your plumbing, your handyman, your hardware stuff, stuff like that.
They signed a deal with a company and now have access.
It's a company called Cobalt.
They now have access to commercial contractors that Cobalt has in network.
That stock made a new 52-week, an all-time high today.
Small company, right?
So $10 billion market cap, nothing huge, but really disrupting a very boring industry.
Those are the kinds of things that I look for, for earnings growth and for idiosyncratic um outperformance in in a market like this um you know i know i dm'd you uh yesterday i was telling you that
uh the only the only trades that i took yesterday were like weeble that's another one right like we
had this momentary momentum uh so i traded it and then also took Newsmax for just a reversion. You know,
I was fortunate enough to get, you know, from 24 to 30 in a day, got out of most of that. So
for me, I'm just looking for stuff like that. Once we get some resolution and some of these
megas, once we get some resolution in the market itself, if we're able to get back above that 20
day, it really opened that window for the level that 20-day, it would really open that window
for the level that options Mike's talking about,
which is that 5,700 level potentially in the S&P.
I don't want to get ahead of it.
I feel like I'd rather just catch the 80% of the move
if it were to continue than be early and lose out.
So that's kind of where I'm at.
That's kind of what i'm looking for
um the one last piece of uh uh info that i that i've flagged um just you know i i'm not i haven't
participated in it um i've been been fortunate enough to catch it but uh take a look at some of
these um cyber security games that you guys have mentioned uh CrowdStrike in particular, it's up 30% on the
month from the lows pressing into a prior all-time high level. I think for me, I feel like 30% in a
couple of weeks is pretty aggressive, but then you can make the counterpoint. It's only back to where
it was at the end of March, right? So if we continue, I'd like to see those names that,
this is an example of one of those names, those names that created, quote, unquote, new leadership, kind of follow through and continue the upside.
That would be a nice change of pace. And then I'd want to see some, you know, follow through some other peers.
So Okta, for example, was a leader before we had the sell-off, it's back below its prior all-time
high, back below that all-time high that it made prior to the sell-off. So we'd want to see some
continuation there for momentum. And then, you know, just kind of want to see a push, just push
through this level that we're all looking for. And if we can't, then these names that have
aggressively ripped, so CrowdStrike, for example, I'd want to see mean reversion back to the downside.
And then some of these boring names that have ripped, so UNH, for example, back to where it was before their CEO lost his life, want to see some mean reversion back to the downside there as well.
That's it for me for right now.
Appreciate that, Wolfie. Gary, see you down there as well. Thumbs up. Thumbs up to you,
my friend. How are you? What are you thinking? I mean, let's be honest. Who doesn't have an
alert set on Truth Social right now waiting for China to call. That was the greatest zero DTE options play.
I have never traded an option in my life. But the reality of it is I have downloaded Truth Social.
I have an alert set. When that fucker tells me to buy, I'm going to buy. It turned $1,000 into
over a million dollars on the same day last week. You heard, literally, he was in the Oval Office saying,
hey, this is Charles Schwab, not the bank, the man.
And he's bragging about how much money they made.
So I'm looking literally to be Charles Schwab next week
to try and make $2.5 billion.
I think Wolfie's right, CrowdStrike.
Crazy not to buy a stock under $400 when this stock
literally shut down the world.
If you don't remember when everything went to hell, when CrowdStrike had that little
kernel problem, and what have they done?
They've just come back, and nobody's cutting their cybersecurity budget.
I own this one, and I own Palo Alto Networks.
I'd love to own Zscaler and
a couple of others as well. Netflix, I've loved Netflix since it was down under 900.
I'm with Wolfie or whoever said it before, as it gets closer to a thousand bucks before earnings,
maybe you trim this one. I do love the fact that they have focused on $1 trillion market cap, but we don't know how
they're going to get there. We don't know if we're heading into a recession, but I do love,
and I've brought up on this space before, Netflix for many times, Bank of America and Citigroup,
they were what they were. They were great reports. I mean, let's be honest, the second half of this
year when all this tariff stuff is done,
guess what's going to happen? Deregulation of banks. They're going to be able to buy back
their stock. If you don't think the Bank of America and Citigroup are going to buy back
their stock in the second half, they may be the number one buyers going into this.
Finally, Snowflake. I'll post in my newsletter tomorrow, and I posted this many times on Twitter
and in my newsletter but there is a
weekly channel that you can go back to all the way back to 2022 on this stock that trades between 150
and 200 you can even go down to 120 it's easy money i am not a strategist i am not somebody
who's setting up things to to trade on daily basis. I consider myself an investor,
but this one has just been such easy money
where you go in and you buy as it goes down
and it eventually just pops up to 200.
It's a great company with a great CEO.
It's overpriced, but sometimes that doesn't matter
and it just keeps going.
So that's what I'm doing.
Hey, just a shout out to Gary.
He was saying that Netflix is trade war proof, basically, or tariff proof.
And I think that there could down the line be some of the retaliatory stuff on Netflix and some of these other software names.
But for the last couple of weeks, he's been spot on with it.
Broke out to a new relative high today.
Thank you for not being one of the haters who, after I go on one of those variants,
my DMs are wide open.
And holy crap, whenever I go against Tesla, whenever I bring up Apple stock talk,
your fans hate the fuck out of me.
So thank you, Wolfie.
I appreciate that one.
That's part of the reason why my DMs are closed.
I don't have time for that shit, number one.
Number two, I'm saying it as someone who I'm on the other side, right?
So I think Netflix is a great company.
Everything's great.
But I feel like if things get volatile, that will have a target on its back from a software side.
And, you know, that's what makes markets.
Listen, in the last two weeks, I'm wrong.
But it could play out that I still am wrong down the line,
or it could play out that, you know, it actually does have a target down the line.
I'm an old boomer.
I go to sleep with Seinfeld on.
I watch Seinfeld on a daily basis.
I am never disconnecting my Netflix.
Appreciate you, Gary.
I don't know who we have.
Logical, have we gotten to you yet?
Perfect.
Go ahead.
Yeah.
I mean, what's there to say the i feel like today is a pretty boring day right not not too much and i think for once boring is probably good uh but yeah i mean we've
rallied uh i mean what spy touched a little over 540 if you think about we hit 480, what's that? 60 divided by 480, that's a 12.5% rally.
To me, I mean, this is very much a bear market and it's a bear market rally until proven otherwise.
So, you know, a 12.5% counter trend rally feels like it's maybe getting to, um, the end of this particular rally, unless, you
know, we get some follow through news, but yeah, I mean, um, I think you're going to,
I don't really see resuming of the uptrend.
I don't really see all time highs until some of these anxieties around tariffs get resolved.
anxieties around tariffs get resolved I don't see yeah like we don't really know
what the impacts to these companies are gonna be moving forward and if anything
we've gotten just further escalation rather than any sort of de-escalation
and we haven't really seen any sort of trade deals come through yet so you need
one to put another you know feather in the cap of the bulls.
But for right now, it is what it is.
So I'm pretty long in this market.
So I think it's a better buying opportunity today than it was a couple months ago.
But yeah, we really don't know the fallout at this point.
So I layered in some shorts today just to hedge my portfolio. Names that have rallied a good amount off the bottom. You got to think like spies up 12.5% from the lows. Many individual names are up 20, 30, 40%. So, you know, that's quite a, that's quite a rally. And I don't think necessarily anything's changed in the backdrop so just being cautious and
you know I also added some
longs in some places where I think
they
have been destroyed more
than
is reasonable so
you know I'm not just outright adding
shorts again I'm pairing them with a lot of longs
just to give myself a bit of a hedge and
still be able to go along some things that I think are good and are going to hold up.
But yeah, I mean, at this point in the market downturn, a lot of equities have just been trending together.
So we haven't really seen any sort of decoupling.
It's just, you know, stocks up or stocks down and that's it.
just stocks up or stocks down and that's it.
But maybe if we start seeing less pressure on yields in the bond market,
that can be hopefully some relief
because clearly that's really where the risk lies at this point.
And otherwise, it's just a matter of liking what you own,
feeling comfortable in that.
Again, as I was mentioning yesterday,
I think the earnings season is going to be very important because while all equities have been
moving together, I think you're going to come into this earnings cycle. And as we've talked
about a lot of times, we're likely going to get many companies to pull their guidance.
And that makes total sense because we still have zero clarity on what the tariffs are
going to be and what those impacts are going to be.
And so, you know, how as a business leader, are you not even able to just guide in this
environment to what you expect the business to do over the next 12 months?
But how are you even supposed to invest if you don't know what the impacts to your business
are going to be?
So I still think there's a lot of risk to owning equities.
And I think that, you know, you just got to be cognizant of that.
And again, I do think that some names have gotten beaten to levels where I just don't know who's even going to sell some of these equities at these levels anymore.
But believe me, you know, there'll be someone who will come around and short these things too.
So generally, equities can still be very heavy.
And the ones that I'd be most concerned about are the ones that still are coming into these earnings
with pretty hefty multiples and valuations.
And I think that's the one thing
that a lot of people miss in when it comes to trading is that they, you know, master the
technicals, which is good, but they rarely also pair that with the fundamentals. And,
you know, when you're in a bull market, I think fundamentals take a backseat and nobody really
cares. There's no price too high to pay. But when it comes to
bear markets, people really start paying attention to cash flow, cash flow multiples,
and things of that nature. So, you know, looking back to 2021 going into 2022,
you know, we went from price to innovation multiples and price to TAM and price to sales to, you know, exorbitant valuations.
That was the norm in 2021. In 2022, we didn't even go to price to earnings. We were looking
at price to free cashflow on so many different stocks. So I think people need to remember that,
you know, that can very quickly happen.
So, yeah, on the way up, nobody cares.
Buy the stock, push it higher.
But on the way down, people start really questioning these things.
Hold on, does it make sense to pay, you know, 50 times earnings for this thing, especially
if we're going to have a potential decline in earnings over the next 12 months, potentially
further, especially if, you know, we start seeing
real impact from the tariffs that are going to hit revenues. And if it hits revenues, then you've
got to know that it's a bigger hit to the profits, which means that, you know, you could be seeing
big declines in earnings and you're coming into these prints with, you know, pretty high earnings
multiples already. And that's before the earnings get cut. So that's another thing is not only are we at high
earnings multiples, but we are also on high earning multiples on what could be potentially
peak earnings. Yeah, so there's a potential double whammy contraction that's going to happen there.
And so while I can understand that some of these other stocks are still vulnerable to equity sell-offs.
And what's cheap can definitely get cheaper.
I can still feel a little bit more comfortable holding something that I know I can justify the valuation of. And maybe I should be doing less of that in a bull market and more of that in a bear market.
And that's probably a good conclusion
appreciate you logical uh cliff i don't believe we've heard from you yet this afternoon i'd love
to bring you into the conversation see what thoughts you have around this market what's
going on guys um i'm cliff i haven't really been on this yet. Joined up, spoke with Wolf. He
said you guys were hosting a space, so I figured I'd join in. I'm not too much of a trader. I'm
actually a certified financial planner. I work at a registered investment advisory. And yeah,
the last couple of weeks have been some incredible times for the market. We broadly focus on long-term investing for clients, so retirement planning,
things like that. And it's been really interesting to see. We're blessed with working with a really
young group of people who aren't very phased by such wild swings in the market. A lot of them
have that experience from 2020. But really, from our perspective, what we need to do at this point in time,
you know, especially if we're going to continue to see any of this volatility or, you know,
maybe even the volatility dissipates on, you know, maybe we're not taking into Trump's,
we're not taking into account as much of Trump's word on truth social as much going forward,
given this snip snap, you know, whiplash that we saw in the last couple weeks
just based on his words um but we we really just you know we we preach long-term investing um and
really having a you know putting our emotions in check uh last couple weeks can really show people
what their risk tolerance truly is uh it's not a bad time to kind of take a step back, see how you reacted to that market volatility, if that made you really nervous.
Back-to-back years, 23 and 24 were pretty incredible years for the S&P 500, posting 24 and 26% returns, I believe.
Everybody loves being risk-on.
Those are great years to be risk-on.
You're instantly rewarded.
It's kind of that instant gratification.
And then when you see a market like we did over the last two weeks, people get nervous, for lack of a better word.
They get a little apprehensive.
Maybe I shouldn't be putting cash to work right here.
Maybe I should get a little bit more tactical.
But as far as from the firm standpoint or working with a financial planner, this is why a lot of people preach diversification.
You know, beginning half of the year, that's when we saw international equities start performing emerging market, you know, emerging markets were performing as well.
And, you know, we had a couple of talks with clients, I think, prior to the last two weeks where we're like, hey, look, you know, the other parts of the portfolio are working.
And, you know, one of the best lines as far as portfolio diversification goes, which I can't remember exactly who said it was.
If you truly are diversified, you're always going to be upset with one portion of your allocation.
And it's so true. You know, in previous years, international
equities were kind of forgotten, right? They were, you know, very far lagging the S&P 500.
They weren't even in the realm of returns. And people can get frustrated with that.
Going into 25, it wasn't, you know, it wasn't uncommon to see strategists saying, oh, you know,
we want to be overweight U.S. equities.
And that kind of plays into, well, do we really want to overweight now after all that time?
So we really just preach diversified investing.
We've had a lot of emotional checks over the past couple of weeks with this market volatility.
for a lot of younger people who feel secure in their jobs.
These big sell-offs can be opportunity
depending on how secure they feel in their jobs,
whether they're doing everything else
that we're recommending
through an actual financial planning engagement.
And it's been really interesting to kind of sit back.
You get to really kind of watch investor psychology
play out in 3x speed when
you see market rips and dips like this. Last week on Wednesday, seeing a 10% rise on the indices is
kind of crazy. We haven't really seen that type of volatility since COVID. And same goes for two
weeks ago, that Thursday and Friday,
where we posted back to back 5% drawdowns. That's not very fun, but it puts a lot of things in
perspective, especially over, you know, when we're looking out over, you know, multiple decades,
we have a lot of time horizon here with a lot of people that we work with. And for younger
professionals, like I said, depending on your job security
and your long-term goals and such, these types of markets can offer opportunity.
But other than that, we're encouraging people to kind of maybe take it, if you really got shaken
up there, maybe take a step back and think about your risk tolerance and where it should be relative
to where it was. And that's pretty much it from our perspective. We allocate broad basket,
lots of diversified portfolios and such. So it's been kind of fun to watch from the sidelines.
I, of course, follow the market and the earnings and all that type of stuff.
of course, follow the market and, you know, earnings and all that type of stuff. So it's
been fun from that aspect. You know, obviously not so much on the downside, but at least being
able to participate, being an advisor during this time, being able to assist clients and,
you know, help them through such uncertain times. I always think back to, you know, 2021 or 2020 and
COVID. There was a lot of uncertainty in that market.
And then you added in the fact that we were also uncertain about our health and whether
people were, you know, people were passing, like dying and things.
It's a lot of crazy things.
And the market is proved resilient in the face of uncertainty multiple times now, right?
Pretty much every point of uncertainty has been begotten by another all-time
high as long as you give it time. So we try to stray from being too tactical, but it's super
interesting to hear everybody else's take here that is trading. I really do appreciate that.
And that's what's going on on my end, guys.
That's what's going on on my end, guys.
Beautiful, Cliff.
Thanks for joining.
It was great to have your perspective on these conversations.
Hope to have you again in the future as well.
Stock talk, sort of your way.
You were quiet on the tariff talk today.
I don't know if you took a break, if you were hitting the greens today.
There wasn't much tariff talk today, so, you know, not a whole lot to...
What'd you do with your day?
I don't know.
You should see if you could stoke something.
Tweet at the China Embassy in the U.S. account.
Yeah, right?
Like, let's see if I can bring some fire back to the conversation, as if we haven't had enough.
Yeah, I mean, slow day in the markets. I think everyone kind of just reiterated that sort of a
pause day and all the volatility had some nice green, some individual names today.
We did take some catalyst trades this morning. There were actually some really interesting
reports out this morning, several of them. I tweeted out a handful of them and then went over a few
additional ones with our members this morning eosc was one uh that did really well today that
we traded uh they had a five gigawatt hour deal announced with the united kingdom which is a
big deal it was a memorandum of understanding but the stock was 30 short 32 short on the float so
you know that's pretty compelling compelling for a catalyst play.
So we did trade that one today.
It's going to close up about 17% or 18% on the day.
There were a handful of other reports, mostly obscure names.
So if you are interested in reading them, you can just go to my page and read those that I tweeted out this morning.
but outside of the boring action and kind of slow action most of the names today
the market is still failing to make that reconstruction to the upside yesterday i
talked about the declining 21 ema on the daily some people use the 20-day moving average
you can use either they tend to be pretty close in value but um you saw this morning
and some people are going to say
it was because of the headline out of the EU, which we got this morning, which said that
European Union officials believe that the tariffs will remain on because they have not received a
call from the White House. And, you know, they're concerned that negotiations have stalled or,
you know, the White House isn't interested in moving negotiations forward.
So that did lead to a little bit of a dump.
But if you noticed where that dump happened this morning, it happened basically right into the 21 EMA.
So SPY popped this morning.
It was starting to look bullish.
In fact, if we had broken through that 21 EMA this morning, I think you would have had a lot of individual stocks ripped today.
But we didn't.
We got rejected almost right there, got the headline, and then tumbled back down to sort of being red to flat on the day.
That's not the action you want to see, obviously.
You want to see bulls step up to the plate at technical areas like that and drive the indexes higher. Buyers are still
unwilling to do that. Now, it could be because we still don't have clarity on the first deal.
It could also be because we literally don't even have a first deal. You know, a lot of people who
are proponents of using this tariff strategy as leverage, which when I was criticizing the rollout of this policy,
that's what a lot of people told me. Well, you know, it is a bad rollout, but it's a show of
leverage and deals are going to be signed and everything will be okay. Well, I'm open-minded
enough to allow for that option to happen. The issue is, is that we haven't gotten any deals,
not even with Vietnam, who we said we had a deal with.
We haven't even gotten a deal with them.
Nothing's been written down.
We said we had a deal.
We said Cambodia called.
There's no deal with that either.
We said Japan called.
There's no deal.
It's like nothing has been signed.
And so now on the tariff resolution side, we're nearing a scenario where it's very much like the tariff implementation side in the first place.
Like, keep in mind, we held, what, a month worth of spaces on this show talking about tariffs leading into the tariff announcement and the week after the tariff announcement.
Nothing was signed.
I mean, outside of the reciprocal and fentanyl tariffs, nothing was signed.
We got a 90-day delay on day one of the tariffs, fentanyl tariffs, nothing was signed. We got a
90-day delay on day one of the tariffs, right? Tariffs were supposed to go into effect April 9th.
They were announced April 2nd. Afternoon of April 9th, they were delayed by 90 days.
So the only tariffs in place today as we stand are the 20% fentanyl tariffs on Canada, Mexico,
and China. That's it. And then the 145% tariff,
because China was exempted from the 90-day pause,
the 145% tariff on a bunch of random basic goods
from all in the category of semiconductors,
pharmaceuticals, auto parts, steel, and aluminum.
So anything that doesn't fall into those five categories
and is from China
specifically has 145% tariff. Anything that does fall into those four or five categories has a 20%
tariff and all other tariffs have not gone into place yet. So we're still sort of dealing with
this fluid policy where the scary tariffs, quote unquote scary tariffs, haven't gotten into place yet.
China does not seem willing to negotiate.
The European Union says the White House isn't called.
We haven't seen any deals signed.
And on top of all of that, there's still this attitude from the White House
that this policy has been successful.
I don't share that attitude.
I'd like to see results.
And I know some people are going to say,
well,
it's been six days since the tariffs were supposed to go into effect and didn't go into effect.
Let's give it time. Okay, sure, let's give it time. But you're going to need to see that first deal signed for the markets to get any sort of positive attitude about the scenario.
Markets are not going to jump on, in my view at least,
the same sort of catalyst that they jumped on two weeks ago when we saw that 11% gap up
on the 90-day delay because those sort of catalysts aren't on the table anymore.
What are we going to do, get another 90-day delay? I mean, I won't put that outside of
the realm of possibility because we've had three delays already on the implementation of tariffs.
So would I put another delay out of the realm of possibility? No.
But, you know, at that point, it's just going to become absurd, right?
You know, I used the phrase, boy, you cried wolf several times in this conversation over the last few weeks.
That would really be a boy who cried wolf moment if we get another delay at the end of this 90 day period.
So I don't expect that to happen just out of, you know, the base of absurdity.
But it could. But until then, between now and then, that 90 day period we have, you need to see deals signed.
We haven't gotten any deals signed. We've seen very little positive commentary from the international community.
That's not a good thing. So that has to change for the markets to get positive in my opinion but on the flip side you know a lot of people are
we're talking about all the put flow today and um you know concerned about the markets headed
lower could we retrace some of this bounce i think absolutely think, though, to take out those lows down at 480 on SPY and to go to make new 52-week lows, I do think we'd need another negative catalyst.
Now, that could be something as simple as there is no deal with anyone. That could be that negative catalyst that sends us to new lows.
that could be that negative catalyst that sends us to new lows.
Because even though that's not new news per se,
I think part of the reason markets have been able to hold up in the past week
has been this optimism, if you will, that there are deals on the table
and that deals will get done.
I mean, if you listen to Besant's commentary this week,
it doesn't seem like they want to play hardball with China anymore.
Bissent says this week, the tariffs on China and the United States, the mutual tariffs on China
and the United States are too high for the global economy to function. So we hope they don't remain
in place. We think both sides will come to the table. That's what Bissent said this week.
So he's acknowledging the global economic risk from a trade war between China and
the United States. But he's also acknowledging that there haven't been any conversations yet.
And so that's concerning. The only deduction I can make from that is what I said, you know,
last week when we talked about this, which is that egos are at play. You know, if these two
guys aren't willing to sit down and have a conversation for the sake of global economic health, that should concern everyone.
Because, you know, that means two guys are playing a game of chicken with the global economy when
there are not only millions of jobs at stake, but there is, you know, there are lives at stake too,
from a global economic recession. And so some people may think this is the necessary pain required to make this policy transition.
I strongly disagree with that.
I think that this is a haphazard approach.
I think Ray Dalio's comments on CNBC this weekend, or was it on Friday?
I don't know when he spoke.
I think it was on Friday this weekend, but I agree with Ray Dalio's comments where he said he agrees with the principle and theory, but disagrees with the medicine being provided.
And I think that that line of thinking is accurate.
I do agree that we need to bring manufacturing back to this country.
I do agree that we need tariffs and targeted strategic industries like semiconductors, for example.
that we need tariffs and targeted strategic industries, like semiconductors, for example.
But I do think that this has been a sloppy mess in terms of the rollout. And I hope things change.
But there's no positivity on the horizon from my standpoint, no optimism on the horizon,
whereby I can see real resolution coming anytime soon. Now, this is still a headline-driven environment.
I'll be happily surprised by the outcome if we do get that.
But we need to start seeing headlines of the U.S. and China sitting down to negotiate this
and also the European Union.
Because, you know, if we don't make a deal with China,
we certainly need to make one with the European Union.
And if we don't make a deal with China, we certainly need to make one with the European Union. And if we don't make a deal with either, then you're headed for this sort of isolationist global economic order,
which will be really, really, really bad for the global economy and will probably take a long time to dig out of.
And that's my concern, that cooler heads don't prevail and that we have this sort of childish trade war.
And really, in my view, all trade wars are childish.
You even go back to the 1900s and look at the trade wars that happened then.
I still think they're childish.
I think, largely speaking, trade wars are a product of childish ego amongst leaders.
And it's sad that, you know, we come to that point.
But, yeah, I just think this whole situation is a mess
and could have been handled much more professionally
with a lot more detail and nuance
and could have been done more effectively.
But, yeah, we're kind of in a fucked situation right now
where it seems nobody wants to talk to us,
it seems we don't want to talk to anyone,
and the 145% tariffs on China remain in place.
So that's not a great scenario to be in,
but that's where we are.
The market did just close, by the way,
so yes, it was a little bit of a boring day.
I'm going to be keeping my eye out on after hours
and seeing a formate here from United Airlines.
A couple other stuff there for the best financial performance keeping my eye out on after hours. I'm seeing a format here from United Airlines. I don't know.
A couple other stuff.
They reported best financial performance in five years.
There you go, United Airlines.
Wolfie, you got your hand up, though, and I may cut in at one point,
but I don't think so.
I don't think we have too much.
All good.
I'm curious with why a lot of people seem to do this.
Like the way we phrase it is if China wants to come make a deal or if they want to talk, like, why would they?
Right. Like we fucked up the way things are going.
We're the ones that seem like we don't have like a cogent, you know, lockstep congruent plan across the board.
And we're kind of viewed as like the social pariah internationally at the moment when it comes to this specific incident.
So why do we put the onus on China to come to the table? I'm just kind of like asking that out loud.
to come to the table.
I'm just kind of like asking that out loud.
Well, I agree.
I don't think it should be on China
to come to the table.
I think the reason the onus
is being put on China on the table
is simply from the U.S. lens, right?
Like from what we're hearing
from White House officials
is they want China to call.
Now, I agree with you that that's childish.
Like, you know, we're the ones
that executed this policy.
We're the ones that want it changing
in global order. So we should be the ones calling. So yeah, I don't disagree're the ones that executed this policy. We're the ones that want it changing in global order.
So we should be the ones calling.
So, yeah, I don't disagree with you on that at all.
The thing is, is I think, again, because egos are at play, Trump doesn't want to be the one that calls.
And because egos are at play, Xi doesn't want to be the ones that call.
Like, we're literally dealing with two grown 80-year-old men who are like, I'm not calling you.
You call me first.
No, I agree with you. I asked the question in this space just for the purpose of our communication
because I think if we frame it the way that we ourselves say it,
the way that we both agree is the way that it's actually going on.
We're like, we kind of fuck this shit up.
We have to kind of like be the cooler head.
The reason that I say that I think that's important is because I think that
some of the,
some of the flight to safety out of the U S is on the back of this,
quote unquote,
instability and ego driven mania that,
that we're seeing.
And I think it, I think we can kind of properly, or at least start to properly
view how other people are pricing things for us when we start to have that frame of reference.
And the other thing is, I think it's really important is, if you look at some of the stuff that's been put out from Chinese officials, Chinese accounts and things of that nature, they don't feel like they are in any hurry to do any of this stuff. taken offense to specifically for example um jd vance uh saying that we borrow money to buy stuff
from peasants i think that's the word that he used um in speaking about china china and so it's not
like the way that they're framing it is like not like a hey we're doing this out of ego it's kind of like the way
that they're framing it is hey you guys made this mess also you guys are publicly disrespecting us
you want something done you acquiesce and i think you know that's the reason i asked the question
because like i feel like if we frame it from that perspective we're probably going to get a more
cogent perspective on how long it could be
before something actually happens because of the point you made which is trump is you know
he doesn't want to feel like he's lost right he doesn't want to fold
Yeah, I mean, talking about, you know, weak hands, we showed our hand. And we are, you
know, if you take the structure of US exports, we export very high value added items at very
large bucket, you know, buckets, right. So you, one plane is a million, a hundred million plus,
you know, a set of them on a deal could be tens of billions. A defense order is, you know,
anywhere from billion to tens of billions. So this is where you're seeing the cancellations.
This is where you're seeing the holdbacks right ag orders could be you know
millions of tons of grain you know china and europe are are hitting back where it's an instant
big hurt while we are trying to you know uh tariff widgets you know a bag from amazon at a time
from Amazon at a time and the pain is felt slowly and, you know, and, and over time,
you know, to build into, you know, massive volumes before, you know, something breaks outside
versus, you know, us losing, you know, an aircraft delivery order for, you know, 20 aircraft is
instantly going to put a problem on problem on Boeing and the engine makers,
the component suppliers, or Lockheed Martin losing a defense order for F-35s to somebody
else is going to hurt instantly.
So we're not in a good position, and we didn't begin this with any planning of any sort.
And now the other countries know exactly where to push our buttons.
By the way, there were rumors that there was a framework agreed to with India.
Two days before that framework that was agreed to was announced,
years before that framework that was agreed to was announced, India also announced that they
went ahead and did a deal with the SO on their aircraft need for their carrier. So that's a
$7.9 billion order. So others are going and making deals already. Oh, by the way, Vietnam is in
discussions to join the BRICS bricks so others are already making deals and
we're sitting here waiting for calls i don't know why this this is this is just nuts
dark talk what do you think of the american consumer is the american consumer a good place
to sell yeah it's the best it's the best, and it's irreplaceable.
But, you know, the tricky, the tightrope walk here is how do you play with the leverage without sending the U.S. economy into recession and thereby giving up your leverage in the first place?
That's the tricky part.
And that's the part that requires, like, you know, measured policymaking.
And there seems to be a lack of that for whatever reason. And again, some of the people you talk to
say that's by design, you know, the hard line throwing around the leverage thing is supposed
to be some sort of art of the deal tactic. I don't know how that works well, but okay. I mean,
I'm giving it the benefit of the doubt,
I guess, for the next 90 days until a deal pops up. But that's the argument some people make.
Other people make the argument, hey, look, these aren't meant to be permanent. These are,
again, negotiating tools, which is what I thought they were at the outset of the administration.
I've grown disillusioned to that over time now. But the people who still think they're negotiating tactics are like, look, they're not going to stay in place. This is a
matter of just maybe a couple of months or maybe a couple of weeks and you know, then we'll strike
a deal. My issue on that point is that again, the focus seems to be on trade deficits. And we talked
about this originally as well. If the focus is on trade deficits, there are no seems to be on trade deficits. And we talked about this originally as well.
If the focus is on trade deficits, there are no deals to be made.
There's nothing that 90% of these countries can do.
So that sort of makes you shrug your shoulders.
Like, okay, what gives?
What do we want from them?
What do we want from Cambodia?
I don't fucking know.
Cambodia has nothing to offer us. They have nothing to offer us. Like, and I say this sometimes,
and then I have people in the audience or the comments will say, Oh my God, you don't understand
economics. And my retort to that would be no, you don't understand economics. And what I would tell
those people encourage those people to do is just conduct a basic thinking experiment here. Okay.
those people to do is just conduct a basic thinking experiment here. Okay. You just,
you don't need to be, you don't need to read an economics PhD textbook to do this. Okay.
Conduct a basic thought experiment here. Put yourself in the shoes of a very poor Asian or
African country where the people make, you know, three cents an hour USD and they have 70% of
their population below the poverty line. The governments are
massively corrupt and siphon aid and natural resources for the country. There's very little
wealth forward to the people. There's little to no disposable income, which is actually true for
65% of the nations in the world, including 70% plus of the countries listed on the famous
tariff Excel spreadsheet or whatever that was. Put yourself in the shoes of any of these countries,
put yourself in the shoes of a sub-Saharan African country, put yourself in the shoes of
Cambodia or even Vietnam, which is actually a much more wealthy and successful countries than
all the rest of these regions. Put yourself in the shoes of any of those countries.
And then imagine you're at the negotiating table with the United States.
What do you have to offer?
Just imagine, wrap your mind around it.
You know, go to your favorite LLM.
The answer you're going to come to is nothing.
Nothing.
They don't have the purchasing power to buy our stuff.
They don't have the natural resources. In our stuff. They don't have the natural
resources. In fact, in the cases where they do have the natural resources, they don't have the
infrastructure by which to extract those natural resources. So like, what's the play here? I mean,
is the play here, we get to take over every country that can't balance the trade deficit,
or else their economies get destroyed? Or is the play here some sort of
piggy, colonial piggybacking of international natural resources? Are we going to go into these
countries and say, hey, we get to extract all of your gold or mineral deposits because you're
unable to balance your trade deficit with us? Like, what's the end game? That's what I want to
know. I want to know what's the end game here for 90% of the countries on that list who have no hope of doing what we want them to do. You know, when it comes to the European Union, can we get them to buy an additional $250 billion worth of U.S. energy and settle the trade deficit? Probably. Is that going to be easy to do? No.
You're going to have to get Germany, France, Spain.
You're going to have to get all of them on board to do that.
To be willing to buy U.S. energy at higher prices for the sake of alliance, right?
For the sake of NATO, for the sake of this theory of the West, right?
For the sake of that, you're going to have to buy energy at a premium from the United States.
Okay, I don't think that that's something they're going
to be very willing to do, but let's be optimistic here and say, okay, let's say the European Union
does that. What about in China's case? China has no hope of settling the trade deficit of the
United States. Look at the per capita GDP of a Chinese citizen. It's like $12,000. It's like, you know, a fifth or a sixth of ours.
It's a seventh of ours, okay?
Does China have the purchasing power to buy American cars
or to buy, like, American-made electronics?
Like, genuinely ask yourself these questions,
like a reasonable, sensible person.
Take off your flag waving,
take off your jerseys, you know, take off your political, whatever you're honed into,
take that all out of the equation. Just think about this situation, A, B, C, like a sensible,
logical person, put yourself in the shoes of the countries and ask yourself, what's the end game?
And if you do that, I think you'll become extremely disappointed with the path of policy, or at least I have, because there doesn't seem to be an endgame.
And in many of these cases, even if there was an endgame, it is unachievable.
It's simply unachievable.
The math doesn't work.
You could wrap your head around it a million times, and it still wouldn't work.
So, yeah, we need to distinguish who's in who's in a position to negotiate and who isn't.
And the people who aren't in a position to negotiate, we should frankly just let them off the hook because there's nothing they can give us, you know, and holding these tariffs over their heads you know like i think jim kramer brought this up on his show but like 50 percent
tariffs on lesotho because they have a 200 million million with an m by the way trade deficit with
the united states that we think is you know some sort of uh exploitation of the united states like
lesotho is exploiting the united States like we buy diamonds and Hanes
tank tops from them that's it we've had 200 million dollars with the diamonds
and Hanes tank stops what the hell is Lesotho gonna buy
let's know those has noticed but they have like an average disposable income
per citizen of like zero dollars so I just don't understand stop stop on the back of that on the back of that not even
not even just that like it also it's also problematic that it appears that whatever
whatever that let's say these people want to agree right so vietnam was the example you gave
vietnam came to the table and said okay, we're willing to negotiate or we're willing
to meet the first set of demands, right? And that's when the goalposts got shifted, right?
They said, no, you also have to do this. So there's that problem as well. And then on the
back of it, internally, it just seems like the people that are in the room or might not be in the room
but are presenting themselves
as though they're in the room,
they're not even giving you a discourse
that's, you know, uniform.
So like those two things,
take everything you said
and that's 100% right.
But like take, let's say in this utopian world,
people want to come and make a deal
and they want to do these things and
they want to offset and they can, right? Okay. So like, is that where it's going to stop? Or is it,
is that just like a, a stopping ground for the next goalpost or the next thing that's going to
happen? Yeah. Moving the goalposts is a serious issue too. I agree. And, and I think like, you
know, Vietnam said, we'll do zero for zero. Europe said, we'll do zero for zero on all industrial goods. Okay. We've just ignored those, please. And we've
said, well, look at the non-tariff trade barriers, right? Well, that's a much bigger problem for
Europe to address the deficit. Like I said, it would involve a massive purchase of US energy
that would need to be agreed upon by multiple nations. And outside of that, it's like,
where's the resolution? Like, what are we going to do? Even if we like, again, let's, let's,
let's hypotheticalize a lot of this, right? Let's say, hypothetically, we can put up enough
factories in the United States, which this is not possible, but let's just entertain it.
Let's say hypothetically, in the next two years, we can put up enough automobile factories to make the 7 million vehicles that we imported, to make all of those 7 million vehicles
domestically. In addition to that, let's say we can put up apparel factories to service, I don't
know, 20, 30% of US apparel demand. Again, these are unrealistic expectations. I'm just throwing
out hypotheticals here. Let's say we could do that. In what scenario are these poor nations going to be able to buy
our cars or our clothes that are made with American wages? They're going to be hands down
more expensive products. In what scenario are these countries going to buy those products?
They can't. So I just don't get it. I don't get it. It feels like, you know, trying to accomplish something that should be attempted over a decade, trying to accomplish it in a month.
And it's just nonsensical. You know, I posted in the nest above Elon Musk on Joe Rogan's podcast.
This is a few months ago. This isn't recent.
But Joe asked him about his thoughts on tariffs, and he says precisely a lot of the criticisms that people on this stage have been levy, which is that you have to give businesses time to do this.
You know, if you put the incentive in front of businesses and say, look, you know, there's
going to be incentives for you to manufacture in the United States. Elon says, look, I think
you'll get a lot of businesses who, especially American businesses, say, yeah, we do want to
build more in the U.S. We're willing to do it. But guess what? We can't do it overnight.
You know, Elon says in that interview, atoms have to be moved.
Factories have to be built. Machinery has to be moved across borders.
Talent has to be trained. Workforces have to be, you know,
surveyed and hired. Like, these are not processes that occur
over a month or two months or even
i just wanted to say because you mentioned you know how could these countries you know
write the deficit with us by buying products from us uh to balance that out and especially if the
products are made here with american wages then the cost of those goods are way higher um than they would
be if they were manufactured elsewhere dude ask yourself could americans even afford the goods
that we would create here exactly yeah and that's the problem you're putting the you're putting the
american consumer on the stake here i think there's a lot of people who have an attitude
that this is america versus the world and we're like in a, you know, we're in a new age of fuck them, America first.
OK, cool.
I'm all for America first.
I'm all for, you know, the fact that in the last 70 years, we have been the piggy bank and the police force for the Western world.
and that, yeah, we've taken on a tremendous amount of debt to fulfill that role,
And that, yeah, we've taken on a tremendous amount of debt to fulfill that role.
and that things probably do need to change,
and we probably do need a little bit of reorganization in the world order.
That doesn't mean you do it with a sledgehammer,
and it doesn't mean you do it overnight either.
Well, dude, I mean, isn't it like we've been a direct beneficiary from globalization, though?
We would not be able to consume all these things, have all these things,
if we didn't have the labor that we get from other countries.
So it's very mutually beneficial.
You know, if I could jump in really quickly, I wonder if, and I want to bring Kevin in on this after I go to you, Stock Talk, because he's kind of talked a lot about this.
But NVIDIA came in yesterday, whatever it was, basically said in terms, we expect to spend $500 billion
in the US or make this amount of chip making equipment in the US.
Who knows if they were going to actually do it?
With AI, it was the same thing.
This feels like a time where a lot of companies are going to come out and just say large numbers.
Then the next day, you get a true social post that anything they want to do will be placated.
I wonder if what he's saying out into,
always looking on the other side,
at least at this point,
but is he kind of saying one thing to us for these negotiations,
but when the companies are coming to him,
is he giving them the going to give them these extensions?
Yeah, I think so.
You know, I think.
It's an interesting timeline this week.
Think about like Friday, we had the exemptions come out.
And then for the deal, he couldn't let that happen.
But then one day it comes out that NVIDIA is going to invest $500 million.
Kevin has talked about this too.
They did the same thing with AI.
That's their $500 billion.
That's just the number they love.
Throw it out there.
These are verbal commitments, right?
NVIDIA's verbal commitment taiwan's verbal commitment um the stargate whatever the hell that thing is is a verbal commitment like
are these legally binding investments no no and the idea that like nvidia can say yeah you know
what trump we agree with you willing to build more in america that's cute and like i'm not saying they will or won't but
trump is in office for four years right um i don't know how long it's going to take to build a chip
factory maybe more yeah it will maybe more but you know I don't know how long it's going to take a chip factory to be put up, for talent to be trained, for it to get, you know, production at scale.
I don't know.
That takes, what, at least a couple of years.
Maybe on a really optimistic timeline, you could put up the bones of a factory in 24 months.
But that doesn't mean you're going to get the workforce up in that time.
It certainly doesn't mean you're going to the workforce up in that time it certainly doesn't mean you're gonna get the supply chains active in that time keep in mind
even if you do reshore the actual factories and the manufacturing where are all the supply chains
they're in fucking asia they've been making chips there for decades you think they're gonna just
uproot those supply chains all of the parts that go into chips and high-tech electronics
are all in Asia.
We're going to just start building them here overnight.
Like, oh, hey, the factory's up.
Okay, wait, let us train the workforce.
Okay, the workforce is trained.
Oh, okay, well, all the supply chains are in Asia and still subject to tariffs.
Well, now we have to reshore all the supply chains.
Like, how long does that take?
That takes years, years and years and years, right?
And we're expecting it to happen in 90 days or a
month or two months or or even a quarter by the way i was looking the uh taiwan semiconductor
plan in arizona they started in april 2021 i don't know exactly when it finished but it looks like i
mean they still haven't hit full capacity yet but i know they're starting to move with it yeah and
they say they want to make two nanometer chips here. They don't have enough capacity in Arizona to make the full demand of two nanometer, obviously.
But the N plus one policy for Taiwan has been their way to maintain leverage. Right.
And for people that don't know the N plus one policy, Taiwan has a TSM, I should say, has a policy which is enforced by the Taiwanese government that when they have factories abroad, they have to make one lagging generation of chips.
So, you know, they don't want to make the cutting edge products
anywhere outside of Taiwan because they feel that that is a forfeit
of the leverage they have on the international states,
both the leverage they have with the United States
and the leverage they have with China.
So, like, TSM might make a...
I have a question.
By the time they start making it here, will two nanometer be the newest generation?
Yeah, that's another question. Right. By the time they're like, I don't know. I don't know. I mean, I don't know how quickly iteration is going to happen on a new generation of chips.
But yeah, that that's another possibility that by the time they get two nanometer up and running here, maybe it won't be, you know, maybe we'll be down to one nanometer. I don't know.
be, you know, maybe we'll be down to one nanometer. I don't know. But the primary issue here is that
verbal commitments are going to be touted by the White House as victories, but we can't interpret
them that way because they are just verbal commitments. And of course, you're going to
have companies make verbal commitments in this type of environment where you have isolationist
policy on the table and you have the president of the United States basically saying you must invest in the United States to avoid tariffs, of course you're going to have
countries say that they're going to do it. The question is, will they do it? You know, or will
they look forward to the next administration and say, you know what, a lot of this policy is going
to be reverted. We'll tough it out for four years. We'll make gestures of investment in the United
States, but won't actually commit to it. that's another possibility, possible outcome. And so all of the possible outcomes on the table don't look great to me.
And that's what's concerning me. And I really think to fix this whole thing, you're going to
need to see either China or the United States be the bigger person and say, look, for the sake of
the global economy, let's sit down and pull back these mutual tariffs and, you know, sign a trade
deal that is more mutually beneficial. But here's
the thing. If this administration remains focused on balancing the trade deficit with every individual
country, they will fail and it will not be possible. However, if this administration takes
a more logical approach and says, let's take the concessions where we can get them. And by doing that at scale, right, by doing that, by taking
incremental concessions across 50 different countries, you have inherently improved the
balance of trade globally. Maybe not on a trade deficit standpoint, but you've inherently improved
the fairness of trade globally, whether it's by 10% or 15% or 20% or whatever sort of
Whether it's by 10 percent or 15 percent or 20 percent or whatever sort of digit of improvement you want to put on that, it would be better.
Right. We'd be at a point where we get concessions from all these individual countries, whether those are natural resource concessions, whether they're trade deficit concessions, whether they're non-tariff barrier concessions, VAT concessions.
There's a million different types of concessions that can be made to appease the United States government in this scenario.
So you make a handful of those concessions where you can make them. You acknowledge to the U.S. trade representative
that there's no hope of you actually balancing the trade deficit because your nation doesn't
have the purchasing power to do so. And at the end of that process, you end up with better,
albeit maybe not the best, trade agreements with all these countries and the markets I think
respond positively to that but again that scenario would require cooler heads to prevail and would
require a logical approach to be taken here and we have not seen a logical approach be taken here so
yeah I don't know Kevin we'll go over to you I guess for your thoughts on the markets today and
I know we haven't had a ton of new news on tariffs, but any of your updated thoughts on that as well?
Well, I do kind of find it funny.
So what TSM had this, Intel had this when it came to their fabs out in Arizona.
And it kind of goes under the radar right now.
But a lot of the reason why those fabs actually took like a lot longer than what they were planning to is because
they don't actually have the skilled workers and you have to bring them from other countries to
bring them here to actually build them to build the actual equipment so that's also another problem
that we have right so you can build all you want but we still don't have the skilled workforce
here and there's no way that you're going to be able to upskill the new workforce in order to build
um in enough time to make those fabs you know cutting edge if you will right so you're slugging
up the quote unquote import people import workers in in order for those fabs to be built out so
that's one thing there um and and who knows right like plans change plans change, things change. What if I was a CEO right now and I was kind of being, I don't want to say forced or coerced to do this, but you know, you go out there, you make a land purchase, right?
You probably could delay a land purchase deal for eight months, nine months or so zoning. Like, yeah, they're going to get things pushed through from the federal side, but yeah, state and local.
Like, yeah, they're going to get things pushed through from the federal side, but yeah, state
local.
You know, once you get the land purchase, you probably go through the excavation process.
And then, you know, part of the time you get to the end of this administration, you probably
will be breaking ground, but not a substantial amount of infrastructure probably put up,
in my opinion.
So I think you probably will see some more i would
not be surprised if you actually do see stall tactics for a lot of these um companies and the
land purchases themselves you know wouldn't be like a huge deal if they took it out on that or
they had to hold the land they didn't have true intentions on building out um so that's and then
i don't know you know uh the white house came out today we're gonna announce some then I don't know you know the White House came out today you know announced
some deals I don't think they're going to be blockbuster deals I saw a report I could have
swore it was from Reuters this morning or came across my Reuters feed and Japan's asking for
the tariffs to be taken away first before really diving into dialogue, which I found very interesting.
And you might see the same type of rhetoric coming from some of these other bigger nations
as well.
That being said, I was kind of surprised.
Obviously, we might have some deals being made.
I thought the market would be pumped about that.
The China comments from the White House wasn't really that
surprising. Ball's in their court. They want to make a deal. They just don't know how.
He's on Fox right now, speaking of China. And he just said, we may want countries to choose
between us and China. That came out a minute ago. Yeah. And then Marcus, yeah, selling off here.
So, you know, at some point, I feel like we got to focus more on earnings and tariffs is going to definitely be a thing.
But if you kind of think about some of these deals, especially the EU, because he's looking at the EU as a complete block.
And not trying to cater to individual countries within the EU, which they're not, they're not a monolith, right, which is going to take some time just in itself.
So, you know, I think over time, as we continue to talk
about tariffs, yes, they're going to have an impact. His commentary is going to have an impact,
but I think the market's going to also be looking for other things. As uncertainty continues in the
market, eventually vol will actually drop until a new item comes into the market, right? That makes sense. So I feel like that's,
we might be getting close to that type of a scenario
where we do have a 20 VIX or a 25 VIX,
but maybe that becomes pseudo normalized
over the next couple of months
until we figure everything out.
That doesn't automatically mean markets go down.
So that's one thing.
I feel like we are losing steam, though, to the upside.
And the candle structure on the SPX, so you can look at the ES,
but the candle structure on the SPX, we're hitting a key resistance level to the upside here.
That resistance level is sitting at around 54, let's say 54.60, 54.70.
Every day that resistance level gets lower and lower.
But the last two candles, hanging man candle,
we got what a shooting star candle here today.
Breath was kind of mixed.
You know, I just feel like we're having some issues here.
So I know that we're kind of trending down right now,
but this is not even based on that.
It kind of feels like we're losing a little bit of steam
and maybe a pullback and a check
at some of these key levels of support might be in the cards here. So that's what I'm looking at
over the next couple of sessions. I still think the dividend plays, high yield dividend plays are
some of these companies are actually, you know, maybe attractive. Dividends are never guaranteed,
but some of them, you know, Dow company for one, right? Exposure. Yes. Chemicals,
fertilizer, right? Exposure there. But I think it's paying, I don't know what it's paying today,
but last week it was paying like a 10% dividend. Now is that going to be sustainable? Probably not,
but you know, that's one. Target was paying, trading at a 7.5% dividend yield last week.
One, Target was trading at a 7.5% dividend yield last week.
Is that sustainable for them?
I don't know.
But, I mean, you get Target at a 7.5% dividend yield and maybe something, you know, comes of it.
They're trading at a very cheap multiple, in my opinion.
So, that's another one.
Boeing, yeah.
I think the industry day action on Boeing was, like, decent.
I think going out, and I did an example of this on the network today, go out and look
at the 180 calls for December.
They're going for, they were going for about 1250, 1215, I'm sorry.
So 1,215 bucks, 285 days, give or take for expiration.
You take a shot, could it be like more of a boeing
or ababa type of situation same type of setup we talked about like two months ago when it came to
boeing you know kind of looks attractive if you look at boeing's 2026 earnings compared to the
current price right now i think they're only trading at like a nine ford multiple uh which
is below their 2019 for multiple. If you're
just looking at 2026, 2027 estimates. So you can make a case there. So I still think that there's
some opportunities out here. I just don't think that we're done yet to the downside. And I hate
saying it like this because like the level I'm looking at is only like 1.8% lower than what we hit for the lows.
So like half of me is kind of like, well, dude, it's 1.5%, 1.8% YB greedy.
But I am kind of a little bit of a stickler when it comes to the technicals.
And I just feel like we're not completely done there yet.
And I feel like we are closer to the end than the beginning when it comes to a downturn.
UAL, I don't know if you guys talked about
United's earnings. And you saw a decent little pop there, but do not get it twisted. It's not
domestic demand. Domestic demand is waning. They provided two separate types of guidance,
recessionary outlook and the stabilized outlook. And then they're aggressively
cutting back capacity for the latter half of this year,
which I feel like they're going to probably have to pay points on that because I mean,
I've never seen, I think it's very hard for an airline company to cut capacity
in what, four months, five months from now. So I feel like that might be a little bit of a thing,
but they're trying to shore it up. I think the market appreciates that.
But if you kind of look at the recessionary guide, and Moniz can kind of talk about this,
and I don't think this is going to be every company.
So I don't want to be like doomsday-ish, but they're basically cutting their EPS guidance
by 40% if we do get some type of a meaningful economic slowdown.
It's an airline company, so take it with a grain of salt
that's not really the trend that you want to see for like your recessionary guide cutting by 40
eps uh because then obviously if we start seeing that trend across the board
maybe outside of tech it'll still drag on that for multiple for the s pP 500. So I guess that I feel like from a technical standpoint,
we have a little bit more downside to go
or even come back and retest it.
I would be happy with that as well.
But I don't feel like a lot of this stuff is priced in,
but if you start looking at the numbers
and you start looking at companies
that are cutting their guidance
or potential guidance by 30%, even let's be generous, 30%.
That would completely be an outstretched multiple in the S&P 500, even if you did 15% or even 10%.
So I think there's, once again, I think we're in the eye of the storm, in my opinion.
We had a lot of selling. We're in the eye of it. People are like, well, dude,
the economy is looking good.
Hard data is looking fine.
Consumer is doing good.
Consumer is not doing good.
Check on my page.
I'll try to post it.
Consumer credit contracted again in February.
We had a contraction in November.
I brought it up in November.
It was a deep contraction in November.
It happened the same thing in February.
And that's not a good sign, right?
One blip on the radar, one blip on the screen. Yeah, you can maybe discount it. Maybe things are happening there. Maybe it was election fear. Maybe this, that, and the other, whatever. But you get two contractions in a matter of six months. That does not bode well. Going into an environment where we haven't even seen the labor market actually really crack yet, which I think is the final domino to go. So yeah, I'm not trying to be like
an uber bear here. I think that by the time we start getting the hard data that shows that we
have some problems here, I think we'll be closer to the end for bottom feeding on the equity market.
And I think that's where it provides the opportunity.
But unfortunately, I do believe that this is a,
I think this is a bull trap that's being set right now.
And you can kind of tell by some of the rhetoric that is out there.
So that's what I got for the markets.
I'll kick it back over to you all.
Kevin, I did see Jamie Dimon came out today.
He said, I'm seeing very little stress at a consumer level, which I thought was an interesting comment from him. Based on yourself and others I'm seeing that are pointing out differences in the data than what Jamie Dimon was seeing today.
you know here's the thing i discount so jamie's good because he's always going to be more cautious
than probably what we should be right um and i feel i feel like he is another like unelected
member of the fed he's the soothsayer of the market for federal for the federal reserve right
um but we also have to be mindful the jp morgan's of the world, Morgan Stanley's, Citibank's, Bank of America,
they have a wide swath of consumers, right? And they have the consumer data that shows,
yeah, there is some cracks, but it's not their wealthy clients. It's not even maybe their
upper middle class, middle tier income clients, but it's definitely the bottom half of the United
States. I don't think there's any data set that cannot refute that there's stress that is out there, but there's going to
be a little bit more lopsidedness. I think what will be key is getting the information from the
regionals, even the super regionals, PNC had some, they'll say decent earnings, decent outlook. But
even when you're looking at the outlook, they're only looking at year over year growth of like 1%,
look they're only looking at year-over-year growth of like one percent three percent right they're
not looking for anything that's boom-pastic but you know executives like a jamie diamond also have
to be a little bit uh cautious too because if they come out and say like yeah the consumers
is completely deteriorating i mean you imagine the headlines there so i think there's he's trying
to walk a fine line the political line that is there but once again i feel think there's, he's trying to walk a fine line, the political line that is there.
But once again, I feel like there's something else that's, I feel like there's still some stress out there. And maybe the top 10% can carry us, but I don't think so, right? Because that top
10% that's carrying us is usually the executives. Those are actually spending a boatload of money,
the luxury spenders and if they
have a you know if they don't know what the hell the outlook is they might be pulling back as well
uh that's where you get that full you know final flush so one thing i'm not trying to be like a
doomsday guy here because i believe once the hard data gets really bad is actually probably when you
want to start picking up stuff rather than kind of waiting in the eye of the storm right now.
But I am of the mind that I feel like the consumer is definitely stretched just based on the data points that I look at and the sentiment data that I look at. But we'll see. It takes some time.
And unfortunately, like when labor, if, if, you know, I do believe it is, but if the labor market starts to show cracks, unfortunately, that's when you know, like you're, we are too late.
Because that's usually when, that's like the last indicator to show that, yeah, we have a problem.
Stock talk, I know you got rugged there, but it was interesting.
Stock talk, I know you got rugged there, but it was interesting.
You said, and I saw the same headline that Trump was on Fox, but I was watching him live
at the White House with the Navy football team at the same time.
That was a weird, weird headline that came out.
Monadif, saw your hand go up there while Kevin was speaking.
Go over to you.
Yeah, to Kevin's point about, not just Jamie, jamie and and the other execs right on on one
hand they are you know barely optimistic if at all uh very cautious in their comments guarded
but on the other side they are also increasing their reserves not by huge numbers that might
have been a tell that they're panicked but but they are starting to increase the reserves for losses so so you know
they're they're they're trying to walk a line here not to cause a problem that they have to deal with
also but not coming out and saying there's no problem either so so they're all walking a tight
line and it's probably the the longer this goes on the, the less they can walk that line and the more they have
to turn towards actual risk that they're seeing. So you have to be cautious with reading,
you know, not being outright negative as a positive. I don't think there is a positive
in that sense there. But going back to what Stock Talk was saying, I mean, look,
there. But going back to what Stock Talk was saying, I mean, look, the one fact we're not
considering, putting up factories will by itself greatly increase our deficit because a lot of
those inputs come from abroad and there is no capacity in that supply chain either to vastly
increase the productive capacities anywhere in the world.
So they're all built for a certain, right?
The ABPs of the world are all built for a certain capacity and they can't just take
away three, four years of backlog that they've built and start putting up new factories in
putting up new factories in the US.
There's a lot more to build it and bring it here instantly.
Nonsense.
It's rhetoric, really, not reality at all in any sense,
whether it's possibility or even capability.
There just isn't any capability
to do the kind of capacity building
that Trump is implying here.
Kevin, do you have any thoughts
on the bank earnings we've had so far?
We're pretty much through the major ones.
I mean, yeah, no, I mean, like, if you're looking at the numbers,
they look decent.
Look, I have never been really concerned.
Well, I'm not really too, too concerned about their net charge-off rates
because I think they've just had better risk parameters in place, right?
Like, if I want to get a read on a consumer, I'm looking at Capital One and I'm looking at Discover and their charge off rates.
And they have been really elevated.
Now, you could say that the consumer credit side, domestic consumer credit has maybe stabilized a bit when you're looking at that charge off rate for, let's say, Capital One.
when you're looking at that charge off rate for let's say a capital one,
But they're still elevated.
but they're still elevated.
And then autos is starting to like reaccelerate pretty aggressively,
which is something that's kind of been a problem probably for the last year,
year and a half or so. I think you,
my and I were even talking about that with two years ago. So, I mean,
that's been a problem probably will reaccelerate to be a problem.
But if you're looking at the earnings estimates compared to what these banks have been able to do,
they've been doing fine,
but a lot of that's driven off equity trading
or fixed income trading, right?
So you take that away,
then maybe that's going to be a little bit of a challenge.
They need rates to really kind of stabilize
and that curve to normalize for them to,
obviously, see increased margins on that interest
income. That would be a tailwind for them. So I didn't see anything that was like, oh my God,
these banks are doing horrible. But their risk management has been, I'm not going to say
flawless, but it's been phenomenal for the larger banks since pretty much the financial crisis.
So I didn't see anything that was like, oh, my God, worrisome.
And even PNC, which is a larger regional and people call them super regionals, had some decent data.
Once you get down to the regional level, especially those smaller regionals like Missouri,
To get down to the regional level, especially those smaller regionals like Missouri,
and there's like Missouri, I forgot the name of it, and there's an Arkansas bank too,
it has more exposure to farm lending. That's when you're going to probably get more of the rhetoric
because a lot of those communities are going to be hit on both sides, right? You're having
volatility and yields, and then you're going to have an industry that's already getting impacted.
They will be subsidized, but they will be impacted.
So they'll give us a little bit more information about, you know, from the boots on the ground
as to how these smaller towns and smaller communities are faring up right now.
But I didn't see anything that's, oh, well, so what Manila was saying, as he added to
what I was talking about, is right.
But the thing is, for Jamie Dimon, which I find very funny, is as you just said, oh,
we're not seeing any material cracking with the consumer, whatever.
His loan loss provisions say otherwise.
They were actually over 3X what the street's expectations were.
I believe they increased by, what, $760 million, $700 something million.
60 million, 700 something million.
And I think the street was looking for like 235.
And I think the street was looking for like $235.
So a 3X on loan loss provisions kind of says,
hey, you actually do have a little bit of concern.
It doesn't have to all be about the consumer.
It could be about M&A activity.
It could be about commercial lending.
It'd be about a whole bunch of things.
But that was actually very interesting.
On the other side of that,
Wells Fargo didn't readjust pretty much at all.
I mean, it was a minor increase when it came to loan loss provisions.
And I think the market actually hit them because of that, right?
I think the stock was down like 3% when they reported earnings.
So do I see anything that's like, oh, man, like these banks are like flashing red signs yet?
Not from these majors.
But I even think the regionals might be all right.
I mean, there's a lot of monetization of that credit risk that we had
for the commercial real estate fiasco. A lot of those smaller regional banks
either wrote those assets down, right? Spend those things off,
bought insurance against them, right?
So like there's other things
that's kind of in the background,
but now I don't see anything
that's like materially a huge, huge negative
or anything like that.
But if you kind of just look at
some of the hard data that's out there,
in my opinion, once again,
I think that consumer is stretched
and eventually we will feel it.
Now, on the other hand of that, I got to kind of balance this out.
You will see like retail sales tomorrow is going to be very interesting.
Not tomorrow's retail sales, but the next retail sales that we're going to get is actually going to be very interesting because you will see prices at gas stations going lower but I think
there's like a little bit of a misconception you know retail gasoline
is going down but it's not going down as much as the futures are and it's
usually how it happens it's not like oh futures are down 2% we should see a 2%
adjustment and retail gasoline in two or three days it's just not how that works
in a lot of these areas like here where I'm at in Denver, outside of Denver, gas prices pretty much haven't even changed, even though
we have seen a material drop. So the drop in prices may also actually negatively impact
retail sales. I mean, if you're looking at the totality of the number, not ex-gasoline
or ex-gasoline stations, because prices dropping, let's say, 10%, 15% in the next
month or two months, or in some regions, they're seeing that right now. You spend the same amount
on volume, but just you're paying less because the per gallon amount is less, right? That'll
actually show as a net negative. So I think you'll probably have to start looking at X, some of those volatile areas. So that would be kind of interesting. But what is it? Or we might be okay. And we might
have seen the bottom. I don't know. I'm not like, I'm not like really itching to, I mean, you know,
I think there's a lot of FOMO after that's 9% day to the upside or whatever the hell that was.
But I think a lot of that was mechanical.
But in my opinion, like wait until the technicals tell you that you're all clear.
And until then, like tactically trade around it, maybe find some stocks that might already be just overblown and you're willing to take another 5%, 10% drawdown.
But, you know, it's a stock that you wouldn't mind owning for the long term.
Like take those shots here.
But I would not,
in my opinion, go full port by any stretch of the imagination until we actually get some more
concrete clarity as to what the hell the outlook is going to be moving forward. Last thing I want
to say, because I'm hogging up the mic here, somebody, Monit, if you can probably check
this out on a chart, very interesting. There's some interesting volume spikes on Raytheon and Lockheed Martin today intraday. Now, they don't trade a lot when it comes to options, but there was some options activity to the downside on Raytheon RTX as well as Lockheed.
There was some call activity on Ungarithion as well, but the majority that I saw as far as that coincided with that volume spike was on put flows here to the downside.
Now, they were going out to the maze.
They do report earnings on April 22nd, if I'm not mistaken, but that's one to kind of keep your eye out on.
I rarely see volume, you know, intraday volume spikes that hit my radar on those names unless something's about to
be announced or it's earnings. And I don't think those were earnings spikes involved. I think
there's something else that's there. So that's a radar item that I'm keeping my eye out on to the
downside. And they were picking up for RTX, they were picking up the main monthly 120 and then the 125 puts and then i believe somebody
i like to look i think somebody was buying the 135s to the upside hello i got it uh they were
picking up 135 puts 120 puts on rtx and then looking like they were going along the 150s so the 150 calls so somebody's
expecting something to happen with that name so and it might be earnings but i don't think so
on on well you know locket martin is easy they're they're starting to lose uh you know
the tail end of their f-35 uh order book is starting to be rethought even by you know, the tail end of their F-35 order book is starting to be rethought even by,
you know, the closest of the allies, right?
Canada, Portugal, bunch of countries are starting to, you know,
at least claim or threaten to walk away.
That's going to cost a lot unless it's quickly resolved.
Raytheon is a little more interesting and simpler, right?
So if you take their commercial aircraft business, right,
they're not as impacted directly by the defense side problems as Lockheed Martin is,
but they will be indirectly because they do provide the engine for the F-35s.
But if you take the commercial side, that's a more immediate problem.
The gear turbofan engine, all three factories are in the US.
It's all made here.
So whereas the LEAP-1A and the LEAP-1C engines are made by saffron in France.
So you can substitute even for airbus aircraft,
you can substitute out of Raytheon engines.
So this,
this could be a bigger problem for Raytheon than for GE.
so I can understand they're getting hit both from,
I mean, their engine business, at least Pratt & Whitney business, could be getting a pretty significant hit the longer this drags on.
So they might have to bring in estimates just because it's pretty dicey right now.
And immediate order cancellations are on the cards for, for at least the commercial side. So, so I get that Lockheed, it might be a little bit of a longer poll,
but there's going to be a lot of questions around the NGAD loss and the fact
that they're out of the FAXX competition altogether.
So there isn't a mega deal in the making for them from the Air Force or Navy
in the next half a decade at least. So it throws into question an extreme dependence on F-35
program and anything that appends that is going to be a huge problem for Lockheed Martin.
Anything that appends that is going to be a huge problem for Lockheed Martin.
Yeah, that was just, yeah.
But on RTX for today, 30% of its volume traded at, I mean, so 2.30 Eastern time, about a million share block order was put in.
And what's this one?
3.21 Eastern time another million it's actually more than a million but um i mean six million shares traded on the session two million
shares traded in just those one minute blocks alone which i found just very interesting and
there was just some options uh flows that were associated with that so i i
can't call what the direction was right like there were also some out of the money calls that were
being bought now there was some also being sold too but it looked like it was more put side heavy
at that 120 level so um i'm just something that's on my radar like stocks that usually don't show up
like a lockheed or rtx on my options flow
scanner when they do show up or just like some of these companies that are that are not like the
apples or the teslas and things like that i always kind of you know it perks my attention up and so
just wanted to bring that out there it's actually very interesting i think walmart actually showed
up on my skin today too but I won't dive into that.
But a lot of these stocks, I mean, if you kind of look at the technical setup, I don't know.
A lot of these stocks look like they're a little exhausted based on the candle structure.
Slack Talk.
What's up?
Did you see what Elon just tweeted?
What did he tweet?
He quote tweeted.
Okay, we'll let the news guy throw it out there.
Yeah, we're good.
That doesn't really matter.
We do have you in here, right?
I will say that that was a pretty good segue into the conversation we're about to be having here right absolutely absolutely um very interesting
one coming up here did you have any other things in regards yeah so here let's uh no no let's talk
about this they were talking about like the the u.s monster was talking about the u.s defense
industry there was talking about like lockheed and some of the other ones and obviously tim and
rick are are you are experts in that area.
And I'm excited to talk about Starfighters.
But I wondered if they heard what Montip was talking about there, Gob.
If you got to hear about that and have them chime in at all.
Yeah.
I don't know if they did hear.
Tim, did you hear?
No, we did not.
Yeah, sorry, guys.
We were just getting everybody set up in here, if he wants to repeat it.
It's fine.
We can move on.
Yeah, we were just coming up on stage.
Sorry about that.
Can somebody say what the Elon tweet tweet was i don't know it seems like it's quiet he just said by the end of the year you'll be able to have a tesla pick you up at your house okay cool what
he's already said yeah got it what was it i was curious sorry monotov to make you repeat it um
what was the thought there on the defense industry?
No, no. I was just saying that there's a lot of uncertainty with, you know, countries threatening to put Lockheed F-35 orders on hold
or look elsewhere.
Most of it's posturing, but it's still a risk to Lockheed Martin
and the fact that they lost the NGAT contract,
the fact that they're already outat contract the fact that they're
already out of the fax you know uh contract uh you know competition itself so there's there's a lot
of problems and and and for ray tiana i was just saying you know they have problems both on the
on the f-35 side if orders do get get canceled or postponed, they are the engine provider, so it will affect them directly.
But more currently, their commercial side, they will be impacted by tariffs placed by others because all of their GTF engines are made in the US.
And, you know, that is the second option for, you know, the single aisle Airbus.
And that's their biggest non-commercial market or their only non-commercial market at this point in time.
And if they don't sort it out, you know, CFM has factories in US with, sorry, in France with Saffron and Saffron will take that business.
That was the gist of what I said.
I think the point that I'm curious in is just the general state of the U.S. defense industry going through all these tariffs and stuff.
And just, I know there's a lot of conversation around engines and just
different parts and that that was kind of the part i wanted to touch on there but yeah good for you
and whatever well i actually would be curious there maybe tim now that you did hear the piece
before we do get into the next section if you do have thoughts there on tariffs and u.s space
and defense industry and how these are affecting things?
Well, I do have opinions, but I truly think the first part of this is I look at a different way.
I think that what I would say if I were Donald Trump is I'd say, now that I have your attention,
I think that's the part we all forget is not every attention we need to address.
And some of these are systemic problems and some of them are just, you know, equality problems.
So, you know, there is a trusted group, you know, basically NATO, Japan, Australia, that probably should be treated differently than some of the other suppliers.
So, you know, I think the big point is the now that I have your attention, these can be addressed.
And I know a lot of policy people want to be addressed at once.
And Donald Trump wants to address them one by one.
And there are definitely advantages to doing them one by one uh and by group so so um i think things are going to be
different than you know 90 days from now uh and again i think this is now that i have your
attention let's address this i want to ask you something else uh really quickly kind of adjacent
to it um like that when we're thinking about the other side of this, I feel like deregulation is going to be
talked about as something here in this industry in general as something that, hey, this area might
make it more difficult, but this other area might make it more easy. And we're going to hear a lot
more about your insights in a second here. We're going to start here at the top of the hour, but
I just want to get your thoughts on that aspect of it, the deregulation aspect of that side of it that you've seen for the last little bit. Oh, deregulation has been
wonderful. So even before the change of administration in December, the FAA sent out
13 change regulations, and we were supportive of all the 13 changes and they were definitely for Elon but everyone else in the industry
Yeah, we all come under the same rules so it helped us tremendously
But my favorite part when they sent out the 13 rule changes at the very bottom it said there'll be more coming
That that cannot made me happier
so so since December things have gotten better.
And on Friday, I have a deadline.
I have to turn in some of the regulations
that we would like to be changed.
So I'm working on those regs that we want changed.
Because some of them, if you're Lockheed or SpaceX,
they may seem trivial but to small
companies they're very impactful so so looking forward to turn in my you know
I'm sitting in at 10 or 11 on Friday the other thing we're also promoting
changes every time we have the opportunity is with the FAA and AFC is
the commercial space office is that a lot of their AFC is the Commercial Space Office,
is that a lot of their review time is, for some of the major ones,
is 120 days, then 90 days, then 60 days, then 30 days.
We have asked that all of those basically be cut in half,
so the 120 days become 60 days.
And those are the very serious regulations,
and the 60 days become 30 days and 30 days come 15.
And that's that, you know, so we've had a pretty good reception of that so far.
But it's the timeline and just Starfighters has no problem with safety regulations.
If they're truly to protect the uninvolved public, we have no problem proving what we need to prove.
It's when they're overly done, take a long time,
or have no reason for being. It doesn't affect safety, especially for someone like us, since we launch over water and we're a very small vehicle. So we've been very happy,
Rick, with the regulatory environment. It's super interesting. Obviously, you guys have a ton of experience.
Rick, we have you up here as well. Since we're on the topic here, especially with space and defense
and all these pieces, could you give us a little bit of information on your years in this industry
and kind of your perspective on everything that's happening right now? On the overall system, I think
we're making gains.
There's definitely, if you're looking at the military side or whether you're looking at the commercial side, there's some major differences.
I can speak to what we're doing, what they're doing militarily.
It's a little bit different scenario.
So if you can define exactly what you're looking for, I can probably give you a better perspective.
Yeah.
I mean, I guess what I'd love to hear is, you know, you've had a ton of experience in this space.
I think there's a lot of people that are very bullish on the space industry.
It'd be probably good to just start with, like, what's your career looked like in this area?
Because I was super excited to get you on Spaces as an expert to talk about this.
Maybe you can just give us some background first.
Sure.
Let me kind of answer what you're saying with regards to the commercial aspects versus military aspects with regards to space.
Obviously, a lot more money in the military side than there is with us.
It's just the availability of equipment for these space operations and the launches and testing.
It's really had to fall heavily to the commercial side
because the availability is just not there of military equipment.
My background, is that what you're asking for?
Yes, sir.
Yeah, my background, I'm a formal native aviator,
and I've been working with the Starfighter operations since inception.
I started the company in 1995, and we've evolved over a number of different areas.
The thing that's really impacted our operation mostly has been the fact that the development of smaller satellite capabilities from the large CubeSats, which came out in the 2008 and 2009 area, which were clearly too big for us to be able to deal with with a smaller fighter jet, to the nanoset availability.
It's changed the whole operation as to how we move forward, what we do, and our capabilities.
And one thing we'll pass on, just as a conjecture, with regards to military versus the commercial
side, we have a Mach 2 aircraft. In fact, our new Platform 2 that we are going to be
acquiring here this summer will also have the same high Mach 2 plus capability.
This is something that we can't even get out of the U.S. military anymore, even if they had had the availability of the aircraft,
primarily because of the fact that they don't make Mach 2 airplanes anymore.
When we developed smart missiles and rockets and bombs, they said, hey, we don't need Mach 2.
and rockets and bombs. They said, hey, we don't need Mach 2. And Mach 2 aircraft was a lot more
expensive to create them than the earlier, I'm sorry, than pre-Mach 2 availability.
And so after going through Vietnam and Desert Storm, they said, okay, what do we really use
in Mach 2? What need do we have it for? They couldn't find enough, so the new generation
aircraft, our F-35s are not Mach 2, they're 1.5. 1.6 max, they'd probably say 1.6, probably a 1.5
airplane. And that's what gives us a major, major step up within the commercial industry,
because we have that Mach 2 capability, which gives you the chance to put a smaller test vehicle on your aircraft and develop that as opposed
to spending a much more expensive, larger rocket.
So in a nutshell, that's what we can do.
Again, I've been with the company now since our inception in almost 30 years now. So we're very well aware of what's going on in the market,
and we think we are best poised, certainly for the next five to ten years,
of being able to do the launch capabilities for the nanosat level,
this very small sat arena, primarily because of the fact that we're in the area that
really everything is being developed at Kennedy Space Center and in the NASA realm. It gives us
an earshot over everything else. New developed vehicles that we'll eventually be able to go
mock to and do the same as what we're doing are still, most of them are on the drawing board,
or even if they get to the point where they
build it it's certification is years and years away so that's that's basically an overall concept
yeah no i hear what you're saying and i appreciate that obviously you have
a lot of experience in this industry i do want want to, you know, for those who are unfamiliar,
we talked a little bit last week about Starfighters and some of the things going on there.
I'm excited to have Evan and Stocktalk, who were on base with myself at the Kennedy Space Center
a couple of weeks ago, when we really got to dive in and get a much deeper understanding of this
industry and the possibilities that come along with it. Evan, I'm going to pull you in first here.
Just curious if you have any kind of questions, thoughts initially from the team as we dive
a little bit deeper into this segment, which is kind of booming in the private markets
when you see SpaceX and other areas.
Yeah, I think it's important.
I think it's important to level set a little bit here.
We're talking with Tim and Rick from Starfighters.
I just want to hear more about now, Tim maybe a little bit about yourself too uh and kind of your credentials and and you know
the decades of experience that got you to this point and then i would just love to hear like
like i'm a fifth grader of like what you guys are doing flying big jets really fast at a certain
point and like just the the the level and then we can dig into the actual kind of deep into it. But,
but yeah.
Sure. Sure. So, so actually,
so I was born about eight miles from our hangar.
I was probably born about 10 miles from where the,
from where the Apollo rockets were launched.
So I was born in Tiesville, Florida.
So my family has a background in space.
My uncle was the launch director for the Atlas Centaur.
So, you know, I've grown up here.
I've seen more than 5,000 launches.
And so then, you know,
participated at every phase from viewer to tourist
to participant.
After college,
I did not become an engineer.
Calculus 2 and I were not friends.
So I went into policy and finance. I went to Washington. I did three years in Washington
and I did finance, tax and trade, but they also used me for space and tech because I could translate
the space requirements to a bank or insurance company
or to Congress.
And so then when I came back
from Washington,
I wrote for the Florida legislature
the Space Transportation Act.
And what was significant about that,
Florida was the first state to do it
and other states have copied,
is that Florida made the first state to do it and other states are copied is that Florida made the space out of transportation so just like you have
roads bridges railroads ports seaports airports space is one of the intermodal
projects in Florida and that also means transportation funding is available
after that I went to work at the Florida Space Authority, which is now Space Florida,
and was chief of staff and financed the Atlas V launch pad.
Actually, the irony is I built the hangar we are in now.
So that was a huge advantage.
So I've always been in policy and the business side, but I've also done operations.
While I was at Space Florida, I ran two launch pads and I got several payloads to space,
some aboard the space shuttle.
So I've always done both the operational and the business side.
And then I've only been working for Rick directly for a couple of years,
but I've actually helped Rick formally since 2007.
I even flew twice with Rickick uh long before i ever became
an employee of the company um uh we we flew the uh uh thomas flight safety system for nasa and
the nasa employee couldn't fly in the back seat so i did um so i have a a a background in space. And I think what was said the other day, too, is that both Rick and I have, and it's an old term, we should say contacts now, but we still say Rolodexes of over 2,000 people.
And we can tap access to some great people here in Florida and across the nation.
to some great people here in Florida and across the nation.
As a matter of fact, before the end of the year,
Rick and I are going to have to pick a launch director.
And it's going to be a hell of a decision
because we have three outstanding candidates to be our launch director.
And, you know, that's a great problem to have.
So anything you want to ask me, feel free.
I love the background there, Tim.
I think that it's pretty clear that you've been around this industry for a long time
and really been able to be inside of the thick of it.
And obviously, Rick, pretty storied with this as well.
And I think it does make it like make you the right guys to be in this background.
Rick, I'm going to throw a question to you real quick and really just discuss kind of what is the issue at hand here when it comes to, you know,
everything that is happening now, people trying to get these satellites into space. What's the
problem right now that, you know, obviously you're focusing in on, but that as at largest slowing
down where we're going? I think the biggest, the biggest problem is everybody thinks they can go out and get a
vehicle if they want to do a small, if they're in our marketplace. You know, we obviously don't
compete with SpaceX or Blue Origin or the bigger rockets, you know, ULA. We are strictly a small
sat development company. And one of the things we've found that is working for us
is hypersonic development, which is gigantic right now. And a lot of people don't understand it. So
therefore, we tend to wander more towards the we're launching rockets in low Earth orbit,
which is exactly what our goal is. But for companies to go straight from ground zero to launching something in low Earth orbit without a Mach 2 plus vehicle, you're talking about almost a decade in time and probably a quarter of a billion dollars in cash to be able to get there.
And that's not the way we are.
We're in a position where we can operate much, much cheaper because we have operational aircraft that will do Mach 2.
So we're a step ahead of everybody else.
Most of the people are going to the UAVs, which makes their time for certification even longer.
And I see companies going out, getting multiple numbers of people,
hiring them to, number one, show that they're stable and looking good. They get some kind of
an endowment or grant from the government, and they seem to spend it all with multiple players,
and nothing really gets established. We've had several people come to us wanting to buy
some of our spare engines for their aircraft and think then they can launch rockets in the next year. And that's just absolutely never going to happen. Certifications
are a big deal. FAA certifications will take several years. New aircraft certifications,
a very, very long time. And I use the example of Boom Supersonic. We train their test pilots.
Good group, love their people, but you
can see just from that, it's been probably about six or seven years since they started their
program to put, and again, they're not competing with us, at least certainly not at this point.
They're trying to develop a supersonic vehicle, which is about the same size as our fighters,
and they're right now at Mach 1.55 and it's taken seven years to get there.
And we're Mach 2 and still operating daily. So for us, we have an advantage and the cost factor,
again, to get to the point where we already are and the timeframe is exhausting. And so I think
that gives, unfortunately, whenever one of these companies
goes broke, they think, oh, gee, this program, this part of the world is never going to work.
Well, good old Starfighters is still there flying Mach 2 and moving forward every day. And the DOD
portion of our business, which is hypersonic development, is the cash flow we need to get
there so we don't have to go out and beg $200 million.
So I see us having a tremendous advantage over everyone, certainly for the next multiple years,
five to 10 years. I don't think anybody can meet where we are. And our vehicles, our aircraft are
good for at least 10 more years is the way we have it projected at this point.
years is the way we have it projected at this point.
I like the way you talk about it and the confidence that you bring to it. So just for anyone that
missed it, if you came in a few minutes late, talking here with Rick Spetkoff, Tim Franta,
deep experts in this space industry and launch industry. Rick, been flying jets for a long time,
longer than I've been alive. Tim, obviously you heard it before, very tied in with everything that's happening along
with NASA and other areas.
So super excited to have them on.
They are with the Starfighters team.
I pinned a post up into the top of the space that has a lot more details.
And there's some very interesting data in there, really about this $1.8 trillion space
economy and everything that's happening in it.
I thought that this graphic, and I encourage everyone, again, if you just want to see it, really about this $1.8 trillion space economy and everything that's happening in it.
I thought that this graphic, and I encourage everyone, again, if you just want to see it,
just go right into the link I pinned up top and look at how much stuff is getting launched into space, really more than ever.
And it's going parabolic.
I think that was kind of like a click moment for me when I saw that.
You have so many more investors that are racing into this area.
You have skyrocketing
valuations. And so we're going to talk through some of these different pieces. I do encourage
everyone to take a look as well. They are running a raise right now. They're raising
$35 million. Almost 60% of that is already committed, done. They have over $20 million
already put in there. And it's a reggae. So you don't have to be a qualified investor or anything
along those lines. You don't have to have millions of dollars, anything like that. It's really just open to the
public. So I just wanted to put that out there for people as we're talking through this conversation
and we talk through different areas of space and really the space activity. So with that being
said, I want to rotate over to Stock Talk for a second because you're really someone that I look
to for direction when it comes to this industry. And I just wanted to hear kind of your thoughts around this whole side of things, right? Stuff
getting launched into space, these different pieces, perhaps any questions that you'd have
for their team. And Stock Talk also just made a really cool post as well with a picture of one
of their jets, if anyone wants to look at his page up top too. So that was pretty neat to see.
But yeah, Stock Talk, I'll turn it over to you here. Yeah, good to have you guys back. I know we all spent a lot of time with you guys at Kennedy Space Center and got to ask you some pretty detailed questions.
So without repeating any of those, I think, you know, there's probably a lot of curiosity out there, at least people who are knowledgeable on a baseline level about large satellites and,
you know, the sort of communication satellites that companies like Starlink are launching
and the difference between those and the nanosatellites that you guys are intending to launch.
Can you guys talk a little bit, I think just for the general public, on the distinction between
nanosats and those traditional sats and what sort of purposes and use cases you guys might be addressing differently.
Sure.
And I'll divide this into two sections.
So on the smaller side, and I'm looking at our customer potential and actual customer list.
So a good portion of that is for Earth observation.
Those are satellites that will look at the Earth. and some of them only look at one thing. Some of them will only look at pine
trees to see how the pine forests are doing. Others are for temperature of the ocean and inland
waters. So earth observation is another one. We have a good portion, and Rick, probably a third of our potential customers are
scientific research. And those go from almost anything. They just need to be in space for a
little bit of time to see their research, whether it's looking at something on Earth or a
micro-thruster in space. So scientific research is a huge one.
And then on the commercial side, we have a lot of technology demonstrators,
which is interesting because a lot of scientific research
and technology demonstrators are the same but just later phases.
So whether it's a battery, a solar panel, a microthruster,
so we have a lot of those.
One of the big ones that we think is going to take off is disaster response or disaster observation.
If I could tell you, we would have launched a California satellite for just the mud after the fires,
if one had been designed, because that was the fires were
devastating, but then the rains afterwards and the mud flowing was just, and the toxicity of that.
So we think a disaster response is going to be very interesting. Remote sensing, and then
on the military side, I'm just going to say reconnaissance. I'm going
to be very vague on that. But the other thing I want to say about this and the other half of that,
so those are the classic five or six categories. But the other thing I want to say about this,
I think with small satellites, we are sort of where phones were in 2006.
No one knew what smartphones were going to be like in 2010 and the possible applications.
So I think once the smaller payloads become much more affordable, and so even if people could
afford to fly once, they couldn't improve their technology and fly two or three or four times
and get it perfect to make it commercial. So we think there's going to be a lot of applications
that are sort of proprietary right now,
and there are applications that haven't been thought of yet
that could be used for low-Earth orbit.
Great question there, Stock Talk.
Stock Talk, I'm going to turn it back to you for one more second here.
I'm just curious, you know, when you look at this industry, what really stands out to you the most?
What intrigues you?
And then from the visit that we have, do you think you, like, learned anything new?
What were kind of your takeaways?
Yeah, I mean, I certainly did learn something new.
I mean, I think Starfighters right now is the only company in the world that's attempting this with Mach 2 jets
in a reiterative capacity. And I think the idea of it being done in a way that's easy to reiterate
quickly is the important part. And I think that kind of piggybacks on the trend that Elon sort of started with, you know, the Falcon program and the idea that,
look, having reusable rockets that can land back and reiterate quickly is the key to being
a spacefaring civilization. I think you can take that same concept and apply it
here with Starfighters, which is that, look, there's going to be certain use cases on Earth,
things like weather monitoring, which, you, which Tim sort of referred to there,
disaster support, use cases like that.
You don't want to, at least ideally, have to launch a rocket.
And not to mention, in many cases, it may be not suitable for the circumstances to do that.
So I do think that this is an interesting niche. And I do
think that, you know, Starfighter just sort of cornered the market on it. You know, traditionally,
you wouldn't see decades old technology like this being deployed for such a cutting edge use case.
And so that in and of itself, I think is the most fascinating part of what they're doing. But,
you know, it was awesome to see the facility. It was awesome to see those things fly.
And it was collectively just a great experience overall.
So wishing them a lot of success
and excited about the first few test launches.
Hopefully we get to go back and maybe see one of them.
Definitely.
Yeah, I have a kind of a follow-up question there for rick so i i don't think
everybody fully understands this right and this is i i love is like simple breakdown as potentially
possible uh when it comes to you know these star fighters when it comes to the jets and the
satellites what is the exact process just as simply put as possible i think evan was sitting on this that you're using to get
these satellites into space and how does it differ from what the competition is doing because when i
talk to people and they're like a rocket strapped to a jet with a satellite like how do you break
that down and simplify so everyone can understand yeah basically what we are is we're the first stage
of the rocket um the first stage of the rocket.
The standard type of a rocket, if you would ask somebody, how are you going to put your satellite in orbit?
They're going to say, OK, we're going to go to a launch pad and we're going to launch it.
Getting a first stage off the ground is a big task.
You need launch pads. You need a lot of people that are involved with the program.
In other words, just to make that first stage get into space, get off the ground, it's a huge deal. And then, of course, your next stage is what takes it to the higher speeds.
And your third stage is your orbital path.
And what we do is we're just carrying literally a two-stage rocket.
And what we do is we're just carrying literally a two-stage rocket.
The first stage to go to the hypersonic level and up to the 120-plus thousand arena.
And the next stage takes you into low Earth orbit.
So we're actually not doing anything that the aircraft wasn't designed to do, just the newer technology.
And that's what I've always said is the oxymoron with where we are.
We're flying older generation fighters, but they are faster then. And they decided they didn't need
them for the reasons I've discussed earlier. They didn't need the Mach 2 capability. Well,
now they find that they do because the higher speed you can obtain, the smaller the rocket can
be. And the smaller the rocket, the less cost. And that's how we think
we have a differing play than everybody else. And again, going back to the ground launch base,
I've talked to several of the guys, and when they talk about how much does it take to launch that
rocket, nobody ever goes into the cost factor of the ground itself, the launch pad, the personnel, the people that it takes to make
that happen. They talk about the cost of the rocket, but they don't talk about the cost of
everything else. And that's a significant cost. The first stage is a very, that's the biggest
part of the rocket, needless to say, and it burns a ton of gas and is a very costly item.
We take off, we burn whatever amount of fuel is necessary to get us to altitude,
shoot the rocket, we come back, refuel, and we're ready to go again.
It's a much more high-cadence capable vehicle than launching from the ground.
And not just the simplicity that we would provide,
Not just the simplicity that we would provide, but also it's the cost capability that we kind of tame down, if you will.
So I think you're going to see a lot more people wanting to do small SAT launches go to what we do once we've fully proven our program.
That was really helpful, yeah, because that's like the number of questions that i've gotten as i've
been talking to people about this they're just like so how does it work what's the exact details
let's get a couple other questions from the panel logical i see you joined back up here um you were
great i know you were chatting a little bit with the team and us last night you had some great
questions curious if maybe you don't know there's something you want to rehash go a little deeper
into or any other thoughts you had um focused on like the technology right now yeah um i just kind of want to think about you know
what's the the next immediate like i guess from a short-term and long-term perspective
what is the i guess next big goal um in the short term and then long term, what you could kind of see as the state?
Sure.
So right now, we internally call it steps to space.
So we have a number of milestones between now and December we have to meet.
We actually have flight hardware showing up very shortly.
We have wind tunnel tests in May, which is very significant.
And then we have underwing tests in May and June for vehicles underwing.
We are kind of hopeful that if our wind tunnel tests, our simulations,
oh, we have simulations going out.
If our simulations, our wind tunnel tests, and underwing tests all line up,
that we actually do not have to do a drop test
and that we can skip that step and go directly to a launch.
So, and that's for Star Launch 1.
And that's for Star Launch 1.
That's for our suborbital vehicle.
That's for our suborbital vehicle.
And, you know, so the good thing about Star Launch 1 is that we, it's our pathfinder.
A lot of things on Star Launch 1 will be on Star Launch 2, which is our bigger rocket.
So, you know, we have, yeah, we have milestones we'll be announcing.
And they're all pretty sequential and they're all pretty significant.
And it's the way you get to space. You do it a step at a time. Of course, we're working on some
things that we don't need to later now. But, you know, but we're, oh, and also, so you know,
we're doing things in a very businesslike way. And I love NASA, but oftentimes they don't do
things in a businesslike way. So, you know, right now it's very tempting for us to try to make the rocket 6% bigger,
but it might cost us just as much to build that rocket as it did to our current path.
So we are trying to satisfy at least 80% of our business case, and we're not going to
over-design a rocket because if 80% of your customers need one feature, you not going to over design a rocket because if if 80 percent of your
customers need one feature you're going to do it if only one customer needs one feature we we may
not we may not build it into the rocket which also takes up mass and energy so we're being very very
smart um and we're kind of following the uh spacex and rocket lab model you know uh when got started, fly once a quarter, fly once a month, fly once a week.
And that's how we're doing things.
We're also following the old Skunk Works model, build a little, test a little, fly a little.
So we are very stair-stepped, and it gives us a lot of confidence and a lot of risk reduction.
us a lot of confidence and a lot of risk reduction.
Yeah, that totally makes sense from a step-by-step milestone perspective.
And then like long-term state, I mean, how do you kind of see this story developing over
maybe the next five years?
So just as I said, we're being very businesslike.
So just as I said, we're being very businesslike.
I think the part that will truly make us operational and have a good price is that once we have the vehicle certified, both by the FAA and ourselves internally, is that we make purchases and we build in numbers.
So we either build six rockets at a time or 12 rockets at a time. So we get the economies of scale. And that's what I believe. So that is our goal is we're
designing an operational vehicle. And once we have that operational design done, you
know, that we and that's why we need investors is so that we can have economies of scale
and have that process. And the other thing, too, being very business-like,
our user guide is going to be very specific for our users.
These are your options, 28 volts to 8 volts.
In this configuration, this many kilograms.
In this configuration, this many kilograms.
We are trying to make them adapt to us as opposed to us adapting to them.
That's one nice thing about the smaller market and to give credit to CubeSats and
Nanosats and Picosats is they have always been very conscious of how small and everything
they can get into one package.
So that's kind of nice about the small end of the market. And we're even dealing with one customer that is designing circuit boards as structure to even get their spacecraft lighter.
So they will have walls that are actually circuit boards.
So there's some very impressive stuff happening out in the world today.
One thing I still want to add, this is Rick.
I wanted to also pass on, again, remember
I mentioned the hypersonics, where everybody's going out trying to get the monster amounts of
money to do what our eventual plan is. Obviously, we have the equipment already that is operational
capability, but we're also doing hypersonics. So that's part of the cost factor. We're very miserly with our money.
We don't waste great amounts of money and hire 5 million people that we don't need.
But we are raising cash through our hypersonic development.
It's probably as lucrative as what the actual launch to space will be.
So there's a lot of things that make our program much more workable.
And I think that's something that is more important than just the idea of what's it
going to take to get this rocket into orbit? It's what are the costs to get there? That's
what keeps you alive. And that's what keeps a business functional.
Yeah. So not to disagree with the boss, but in the short term, Rick is
100% correct. The defense is going to be just as lucrative as the commercial. But very shortly
after that, you'll see our commercial overtake defense. So we expect for commercial to be
two-thirds of our business with defense and academic being a third of our business.
But yeah, for the next couple of years, yeah, defense is going to be just as lucrative as commercial.
And, you know, I know that you guys focus on kind of the smaller payloads.
Just wondering, who do you see kind of as, you know, becoming frontrunners to be a big volume on the commercial side as potential customers?
We have NDA signed with people, so I'm hesitant to say, but so.
Okay, so someone.
No, no, don't feel pressured to respond if you can.
No, no, no, I'm going to tell you,
someone out there is going to have just the business model that we do,
that they're going to optimize their small satellite,
they're going to optimize their integration processing,
and they're going to optimize with someone,
whether it's us, SpaceX, Rocket Lab, whomever, their delivery system.
Whichever small satellite provider, and Matt and I were just on a call the other day with
one, it's going to be the person who has, you know, it's going to be the one with the
smartest business plan.
I hate to say it.
Everyone thinks it's the technology.
It's not.
It's going to be the one who understands their costs and understands their operations,
understands their development and the cost of the consumer.
It's going to be the one with the best business plan.
Well, that makes sense, right?
Because obviously there's a lot of interesting technology that goes into it,
but it's more about how the business is going to run and all that stuff.
Yeah.
I had a very wise boss who told me,
fall in love with your wife, not your technology.
I love that.
That's a fun saying right there.
Emp, you got any thoughts here?
Hey, yeah, I'm just, I'm like a kid here.
When I was a kid, I used to build, you know,
all those little models of all the different F-series, you know, jets and stuff.
And so hearing this and seeing these things and kind of almost the repurposing thing,
just following you guys' story has been super exciting,
knowing that there's so much experience behind this as well.
And I just wonder, as far as what's the runway here for expansion?
And I know that's kind of a funny play on the words there, but as the space industry continues to grow, I mean, is the sky the limit at this point?
It seems like everyone around is looking for ways to get more stuff into space. Is that the case? Do we see this long runway for the next five to ten years?
10 years? Like I said earlier, I think you're looking at it's going to take a while for a lot
of these companies, the new startups, to get certifications to be able to do anything. So
there's a lot of players out there, but there's not very many players that are ready
to actually go to the step of actually doing launches, as well as their operationals program on a daily basis.
And like I said, we're pretty much there.
We're going into a new field, obviously, with launching of the rockets.
So we're in the testing phase now for those rockets to determine what we need,
what size, how we're going to launch, what altitudes,
all the performance required items.
Like I said, we already have wind tunnel testing set up for this month and next month.
So we're really in a real good position.
But again, like we're saying, it's a while before many of these companies can get there
that are in the small sat basis.
Let's put put that way well so so I
think your question and this is great thing about starfighters because I so
you know ten years ago we had just 12 launches here and this year we're going
to hit 147 at some point that will be maxed out I don't know if it's 200 or
350 where the number is but launch pad launches will get capped at some point, that will be maxed out. I don't know if it's 200 or 350, where the number is, but launch pad launches will get
capped at some point.
The great thing about Starfighter is because we're air launch, even today, we can fly an
hour and 30 minutes after a Falcon 9 or an hour and 30 minutes before a Falcon 9.
So us being air launched, our technical launch pad is actually offshore, however many miles
and at whatever altitude.
So we're not taking up a launch pad.
And I'll let Rick talk, but we have other options because Starfighters is a movable
feast.
We can move, whether that's to South Florida or somewhere else or to other locations, but
we have other options that a launchpad bound company does not.
One quick follow-up there, Rick and Tim.
And once again, we appreciate your time for coming on.
If somebody, I've checked out the website,
that link that was up top a little bit earlier,
looked through some of that stuff.
I'm fascinated watching the launches and watching companies grow in general.
But for someone that maybe wants to follow along,
what's the best way to follow along
with launch schedules and developments with you guys?
So a lot of our work is proprietary.
And we've been working with our internally, Matt,
but we need to start posting stuff.
So our hypersonic work, a good portion of it is classified.
But as we're approaching our wind tunnel test, we will be releasing the good results of the wind tunnel test, the good results from simulation.
And we will also say the not quite as good as we expected pivoting, but we need to be better at that.
That's one place.
We're a small company, so we'll talk internally with Matt and make sure we do a better job of that.
And again, we're now starting to hit our major milestones.
But the website's a good spot to start
yeah love it appreciate that yeah i'll definitely be keeping an eye on
the website and of course i'm one of those guys if i can see the updates and stuff it just it
fascinates me gets me excited so would love to see you know more posting and stuff like that
from your area and that's my last question uh, I'll turn it back over to you.
Yeah, I just wanted to ask because obviously, you know, first off, a couple of things on the raise. I basically just wanted to ask how you already got $20 million put into this, because
that to me is a lot of conviction coming from people. And I was wondering if there's any,
you know, specific backers or anything like that, because I think people always like to see, you
know, others getting in on things. And then, I mean, maybe if you want to talk to it, I know I chatted a little bit with
Dave, your CFO, and he was telling me that, you know, when you started this raise, there weren't
some of these other firms, like they hadn't already like freaking gone to the goddamn moon,
you know, with their valuation so that your guys' valuation is really significantly lower than it
would have been if you had started this raise later.
And so I think that that gives people in our audience a good opportunity if they are interested in investing something like this.
I think the minimum investment is less than $1,000.
It's $718.
So it seems to be pretty low there as well.
So, yeah, the two things for me was I was just curious if there were like how you already got to over $20 million committed in this round.
You've also raised $8 million previously.
So there's specific things there.
And then on the other side, I guess, the valuation and just maybe anything people should know around that.
And if those are questions for Dave, no worries, because I know we have a space with them later in the week.
No problem.
So the big news with the $ of the 20 Million is most are individual investors.
But I will tell you our secret sauce, because it's our secret sauce, that's not secret,
it's factual, is that every time Rick or I speak or David or anyone or Justice is we
always tell them, and just like we did with all of you who came, is come kick the tires. We actually have
a workable first stage now. We are not just PowerPoint cowboys. And so while you said the
minimum amount is less than $1,000, we have several people who are in categories, I would say, Rick, what would you say?
Oil men, software engineers who are significantly larger.
And I'm surprised, too, that we raised $20 million without really institutions. It's all been individuals and substantially wealthy people have put a good deal of money
into us because we have literally
invited them to kick the tires. Well, a lot of it has to do also with the fact that we started
operations in 1995 and we're still here 30 years later. That makes a big difference to a lot of
people. It's like, okay, a lot of companies start up, especially in the space field, and they're
gone quickly. Now, we didn't start in the space field. We started as a demonstration team flying airshows all over the country and evolved into this field in 2007 when we first went to Kennedy Space Center.
But we're still looking at 18 years since we've been to Kennedy Space Center.
And as the market and the satellite regime has evolved, a lot of people have grown with us.
A lot of people know who we are.
We're a well-known entity.
And the fact that we're still here, having gone through COVID and all the different trials and tribulations, makes a big difference.
So a lot of people immediately, soon as they heard that we were looking to do the next steps with our stock plans, they immediately got
involved and said, hey, how do we get into this? So I think a lot of it has been our staying power,
if you will. And the fact that we've been able to continue operations literally for almost 30
years. And a lot of people haven't even gone off the drawing board in the first 10.
Yeah. And then one other thing that I was curious about, I guess, somewhat of a similar vein with
a staying power part of what you were hitting on there is the ability that you're working out of
the Kennedy Space Center. That seems to me really unique compared to,
I just think that that would be a huge barrier to entry
for companies that were trying to get access like that.
And you guys didn't even, it wasn't you reaching out to them,
they invited you to come there,
and you were the first that they invited.
So clearly they saw something in you guys.
I just want to hear more about that and how that came to be.
Sure.
Basically, I think the real thing that added to our program was the fact that we've been operating for several years and the type aircraft
we had. NASA operated the F-104s until nearly 2000.
And they loved the airplane. They did a lot of testing and a lot of work with that aircraft.
And because we were the only F-104s out on the
circuit at that time, they were real interested in utilizing us because it was already a known quantity.
And they wanted to develop the commercial program, was mandated that the commercial space program gets its initial steps.
And, of course, Kennedy wanted to make that happen.
And we were one of probably 100 people that they had on the list.
And they said, you guys are number one on our list if you have an interest in coming over to Kennedy.
And we jumped at the opportunity because we could see opportunity with what we were doing more than just flying air shows.
And obviously, getting into this program has been a long journey.
So we've already encountered and taken all those steps that most of these new companies
are just getting involved with.
And you're right, getting into Kennedy Space Center is kind of a stamp of approval.
Again, we've been there almost 20 years.
So if we weren't something that was desirable or successful, certainly would have
been an easy step for NASA to move us out. Yeah. And I just like to say from business operations,
it's absolutely wonderful. And for regulatory, it's wonderful because I may complain about the
over-regulation, but the one thing I truly love filling out was when it has a question on your FAA application, you know, are you at a spaceport?
And I just had to write in 18-008.
And then I get to ignore all the next questions about if you're not in a spaceport, how are you going to meet all these criteria?
So that's absolutely wonderful.
Also, being on a spaceport, we have all the contractors there, all the laboratories there.
And so I just had to pick up the phone.
Rick has to pick up the phone.
We need liquid oxygen.
We just pick up the phone.
We need a space-certified forklift.
We just pick up the phone.
We need a radio frequency test.
We just contract the person who does radio frequency at the Space Center.
I cannot tell you how huge it is.
It's one of the reasons why we're able to stay lean at this point.
We'll be expanding, but it's because we're on the Space Center.
And to be quite honest, we're also on the Space Coast.
I think we only had one item aside from aircraft parts that we cannot find within 26 miles of our hangar.
So it's wonderful being at the Space Center.
Yeah, it was a really unique experience getting to see that.
Stock Talk, I would like to bring it back over to you for a second,
and then Evan, I'm going to wrap back over to you.
Stock Talk, I just wanted to hear from you.
So basically, I reached out to you initially,
and I kind of gauged your
interest in going on a trip and seeing this company because i know you were very interested
in space and i asked you to do some research into them and i sent you that raise page and you know
you obviously were comfortable enough to come on the trip and be a part of this i'm just curious
to hear from your end like what did your research look like into this company what stood out to you
you know what intrigued you as you were going through the raise, like pieces like that? Yeah, I mean, a lot of it is really
just what we saw, you know, and in terms of when I was researching their pitch sheet,
my main question was really where the nanosatellite industry is today, and, you know,
how quickly it's going to develop. And I think Tim did a good job earlier of explaining
not only the potential use cases, but the immediate use cases.
And, you know, that was really my sort of, I guess, main point of research
was, you know, where is the nanosite industry today?
You know, how quickly are we going to be able to develop use cases at scale?
And, you know, that's really, I think, up to starfighters to lead that industry and lead
that initiative forward and to say, hey, you know, we see immediate use cases. We're the only
people that can provide them. I mean, the fact that they have, you know, the F-104 fleet cornered
and there aren't really any useful Mach 2 aircraft anywhere else in the world, you know, the F-104 fleet cornered, and there aren't really any useful Mach 2 aircraft
anywhere else in the world, at least, you know, not on fleet scale, I think it puts them in an
interesting kind of pole vault position to sort of set the rules as they go in that industry. And
I think that's a really unique place to be. And that's really where most of my interest came
when it came to their technology. But I think what they're doing today, like Tim mentioned,
they have phase one working.
They're not PowerPoint cowboys, like he said,
which I think is an important distinction.
I think when you look at a lot of companies in aerospace,
especially, but pretty much in any cutting edge industry,
they kind of remind you of the SPAC era,
which was a few years ago when when uh you know a lot of companies
were going public not only with no product to show but with really speculative road maps on how
they're going to make money and how they're going to sustain you know the fact that starfighters
yeah they're a next-gen company and they're attempting to do something new but they're in
the black and you know they have a working phase one i think is a
really really uh special place to be frankly so uh i think the team is in really capable and good
hands obviously rick has an extraordinary amount of experience and um as somebody that's really
respected in the aviation industry and obviously tim as well has a ton of background in regulation and you know
government infrastructure when it comes to aerospace as well so i think they couldn't be in
a better position and i'm personally really fascinated by this niche that they're exploring
with uh launching nanosets so yeah that's really where most of my research came. And to be honest, there's not much point of reference, as I mentioned earlier. You know, if you go through, you know, a basic search of the internet, you can use your favorite L lot of companies that had either have the technology to do this or are even considering the use cases that are
available.
So I think that's,
that's kind of where star fighters fits in.
That's perfect.
okay.
We can,
we're probably gonna move into some wrap up shortly.
Evan.
Yeah.
Yeah.
so one thing,
I don't know if we talked about on here,
Rick, you're you
were the only person to uh get a private um kind of fleet of these jets and you know I don't I don't
know the statistics on that one but um that's pretty cool just from uh just a coolness perspective
I'm just curious if I was looking to buy a jet is that something that I can do easily and kind
of what are the barriers or eventually just getting getting these vehicles well big biggest thing is barriers of entry are probably if i can put it in the simplest
terms um if it depends on who's coming in who's going to fly and you put you put together your
operations profile and the fa makes a decision whether they're going to certify you or not
and they look at who who's doing it.
I mean, if you've got a bunch of doctors that say, hey, this is really cool,
and we've got the money to buy a supersonic fighter,
they're probably not going to get certified because they're going to say,
what's your background, what's your experience?
These airplanes, they don't care if you kill yourself,
but trust me, you can hurt a lot of people on the ground.
So that's one of the barriers.
And the second barrier is obviously experience levels, knowing how to operate a supersonic aircraft.
That's a big deal. That's one of the areas that we operated in for a number of years and still do training operations,
training people to understand aerodynamics and flight operations of a supersonic aircraft.
There's no shortage of people that are capable of doing it,
but the F-104 is a unique airplane. And I think what allowed us to make this thing work
is it was towards the end of the Cold War era with regards to these aircraft. Trying to find
an aircraft of this capability now would be extremely difficult. When we got the aircraft,
we got the first aircraft in 1995,
we were able to still work
with all the NATO countries around the world
that were still operating.
They were still, at the time,
over a dozen countries
that were still operating the F-104
as their frontline fighter.
So they were real excited
to see a commercial operation
operating F-104s on the airspace circuit.
So it gave us an opportunity to get the spare parts and things that we needed for long-term operations.
And we worked closely with the Italian Air Force where we got our last group of fighters.
And the great part of what we had was the Italians,
being the last operational frontline fighter operation with the F-104,
took their last 35 airplanes, upgraded them between
99 and 2002 with the idea they were going to fly them for another at least 15 years. Instead,
they didn't. They transitioned to the F-16 briefly, which didn't work out so well for them,
actually. The F-104, as an interceptor, performed a better mission profile because of the timing and speed
and acceleration all the above and it was all a stop gap waiting for the Eurofighter to come out
so point being we were able to get all the parts pieces of a late model airplane which we were
able to get in in two in 2005 we had the, um, it took a few more years before they were able to be transitioned over, over to
the U S. Um, my story is I, I made 32 trips to Rome to finalize the deal.
And, um, they said there were 125 companies and countries as well as companies trying
to get the F1 of 4s.
And they said, um, you're the only one that's proven you could operate these things safely,
and we're going to go ahead and see that you get them.
And nobody else got an F-104, operational F-104, out of the Italian Air Force besides us.
And we were the first ever to have an operational airplane.
So without overdoing the story, basically to do what we did
might not even be able to take place today
because of the cost of the next generation aircraft,
the computers,
you might have a $150,000 board
you're going to put into it.
You know, that would have broke us in the first year.
Instead, we were doing with the lower technology,
which we've upgraded quite a bit.
But having the opportunity to utilize this higher performance aircraft without having the huge expenses of F-16, F-15 technologies, let alone F-35s and F-22s, what have you.
It gave us a tremendous start. And I think it would be difficult for
somebody to come in and do the same thing. And not to mention, try to get insurance for your pilots
if you brought in a group of doctors that they wouldn't insure you. So that's another big deal.
There's only a couple of companies in the U.S. that'll even insure these type of operations. And so it's real important to set
yourself up properly. Difficult without a background and needless to say, difficult without
having the, I should say, difficult with the higher technologies, being able to operate them,
being able to operate them unless you got a couple hundred million in your back pocket.
unless you've got a couple hundred million in your back pocket.
That was a great question there. Yeah. Clearly you guys have a lot of access and a headstart
in this industry. So can you just do some quick closing comments here? But one more time,
I encourage everybody first off, these guys were so busy focused on getting these satellites to
space that they didn't even have
Twitter accounts. So I did help them make Twitter accounts. If you're not following them yet, go
ahead and give them a follow. Tim Franta, Rick Svetkov doing some awesome things in the world
here. I encourage you to check them out. And then of course, I pinned up top that post. And it's not
just about the race. There's so much great information in that pinned tweet just about
this space economy as a whole. I mean,
scroll through it, take a look. There's tons of graphs that they've put together already for you.
There's data that's been pulled. There's a significant amount of information that I would
just encourage people to just, I mean, take a look through. It can never hurt. With that being said,
Rick, pleasure having you on here today. Any quick final comment from you as we wrap up on the topic here?
No, we appreciate the opportunity to go ahead and tell a little bit about our story.
We think we have something extremely unique that we can offer the industry.
And also the businesses, the smaller businesses, that can get a slot on the bigger rockets.
businesses that can get a slot on the bigger rockets. I think we're going to provide an
opportunity for small business to put their satellites in orbit, as opposed to waiting a
year and a half and being stuck on whatever orbit that they get, if they can even get a slot.
So I think we offer a tremendous opportunity for the marketplace, and we appreciate everybody listening to what we have to say.
I think we're going to be something that's going to be significant
as this program dials on.
I would like to say one thing because it wasn't mentioned,
but our design partner is GE Aerospace.
So I think we have the right team with Starfighters, GE Aerospace, So I think we have the right team
with Starfighters, GE Aerospace, and Fortuna
that we have the group that can make this happen.
And we cannot be happier with GE Aerospace.
Yeah, that's a huge partner to have there as well.
And yeah, Fortuna is an amazing backer.
So that's super cool.
I definitely want to get them on some spaces as well
upcoming
so yeah
clearly a lot of people
that have a lot of trust
and experience in this industry
are behind this company
and right now
you know
raising at a
pre-money valuation
of 65 million
post-money valuation
what's the post-money valuation
is it 120?
or is that a Dave question?
it wouldn't be 100 right
because 35 plus 65 okay is it going to be 100
i'll check with dave on that one but i'll just yeah that's a dave question for you i want to
make sure i give the correct numbers yeah we got we got the the tech guys um and the leadership
team on here right now so this is super cool but yeah i mean everybody you can go look through the
the raise yourself more to come this was just uh i think a great introduction to this team and appreciate you guys by the way shout out
to tim and rick who had never ever done a space before and i onboarded them onto spaces yesterday
and you guys were flawless today um sound quiet was good throughout we never lost no glitches so
i love to see it evan you got any final comments here on this one?
Well put. The biggest mess up is from me.
No, nothing much. Just follow the speakers.
Check out that link pinned up in the next above,
and I'm excited to hear more about this and follow along.
Appreciate you guys for joining in.
Alright, very cool.
We're hitting the top of the hour here, so I think
we're going to wrap this one up, but we'll be back tomorrow for those that want to check it out.
There's going to be morning trading running all day on the Wolf Trading Account and then Stocks on Spaces, 3 p.m. Eastern.
Make sure you are tuning in. Emp, I will turn it back over to you.
Thank you, guys.
Thank you, Tim. Thank you, Rick.
Thank you. Big thanks to you, Rick. Thank you.
Big thanks to Tim and Rick for coming on.
What a great conversation here on the back of our Stocks on Spaces.
Great conversation.
This will become a recording as soon as I close this space out.
So if you missed any piece of the last few hours of conversation, some great stuff in there, feel free to check out the Stocks on Spaces timeline.
You can listen right back to the space there.
And with that, we will call it a day.
We will see you guys bright and early on Wolf Trading,
as you just heard Gav said.
Hope everyone has a great rest of their Tuesday evening.
We'll see you guys tomorrow. Thank you.
