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STOCK MARKET TALK | INVESTING IN DEFENSE
Recorded: March 17, 2026 Duration: 2:05:51Space Recording
Full Transcription
Thank you. Happy Tuesday, everybody.
Welcome into Stocks on Spaces. happy tuesday everybody welcome into stocks on spaces market continues to excite as we go into
this next uh next journey a lot of tech names seeing green today tesla 0.62 percent pounds
here up 1.39 percent google up 1.3 percent robinhood up almost 3% as well. S&P 500. Ooh, I see Ryan coming in perfect.
S&P 500 is up 0.32% on the day. We are still down 2.12% on the year, something to just continue to
watch there. QQQ having a nice day here as well. 0.49%. Q queues are down to 0.7% year to date.
Let's see, anything else interesting?
So GTC, by the way, is still going on.
Stock Market News, Evan and Vishal from Stock Talk Weekly
are both over at GTC still.
There is some different speeches that are happening.
Eddie Jassy has been talking right now.
A couple of pieces of quick news as we open up here, and then I'll go over to Jennifer,
Ryan, and others.
Andy Jassy reportedly said at an internal meeting that AI to double AWS sales to $600
billion by 2036.
There was a Muddy Waters report that came out with some big claims against SoFi that
said that SoFi is a financial engineering treadmill, not a healthy organization business.
And SoFi is down several percent on that report.
That was an international move that they had.
A bunch of other stuff just continuing to happen through here.
Tim Cook said that he can't imagine life without Apple.
Squashed retirement rumors that were happening.
And of course, like I said, lots coming out from NVIDIA. NVIDIA just said that they plan to use
50% of their free cash for investor returns, which people really seem to like. So a bunch going on
there. Keep an eye out. Jim Cramer's also been shouting out a bunch of AI stocks. He's been
taking photos and pictures with them. So you've been warned, as they say.
Let's get into things here.
Jennifer, how's it going?
Hey there, I'm smiling over here.
Some fun commentary there from you.
Appreciate it.
You know, I don't host these spaces too often anymore, actually.
Evan does this a lot of them.
So whenever I get on, I just want to share my unfiltered thoughts.
And I'd like to hear some of yours.
Yeah, sure. I mean, what do you want to start with? You want to start with the Fed meeting tomorrow?
Yeah, absolutely. This is J-PAL's last Fed meeting, correct?
No, this is his second to last Fed meeting.
One more, one more, that's correct.
Let's put an asterisk on it because we also know that Kevin Warsh, the Fed chair nominee, needs to be confirmed in time by May 15th
to take over. And right now that confirmation process has been stalled because, yes, on Friday
we saw a federal judge strike down the two subpoenas that the administration, the Justice Department, had put out to the Fed,
to Fed Chair Jay Powell. However, now U.S. Attorney Jeanine Pirro has vowed to appeal that.
And so Senator Tillis, Tom Tillis, the Republican senator from North Carolina,
has vowed to block the confirmation of any nominee until this probe is resolved.
And he said that appealing that ruling from that federal judge is going to prolong things.
And so if this gets dragged out, I wonder, does Powell stay in place perhaps longer?
We'll see.
We still have some time, right?
We've got about two months.
What is it?
What is today?
March 17th.
We still have a little bit of time between now and May 15th, and Congress could pull
a Hail Mary when it gets down to the wire.
That said, tomorrow, I think pretty much a foregone conclusion.
The Fed holds our aid study at three.5% to 3.75%.
And we're going to get that quarterly dot plot tomorrow as well, the interest rate projections.
But I'm not expecting a lot of change there.
Recall back in December, they had penciled in one rate cut for this year.
And I just think with so much going on right now, this economy could turn in so many different directions right now.
So I just feel like you can't put a lot of stock in this.
These are sort of informed guesses at this point, and I don't see them nudging their projections all that much on account of that.
There's a lot of uncertainty with the war in Iran, and I think that's going to reinforce a wait-and-see approach. I am expecting headline inflation to be revised up and looking to see if
core inflation has also been revised up. If that's the case, I wonder if that one
raid cut that they had penciled in gets dropped out to no cuts this year because then that sort of pushes
off the timeline. And I will just say we've been above the Fed's target for five years now. We're
now into the sixth year. And it just seems like every time the Fed is starting to hone in on the
path towards 2%, something happens. Last year was tariffs. This year, it's the oil price spike. Of course, what will determine whether these are going to filter into core inflation is how long this war goes on and how high oil prices go and are sustained at what levels.
levels. What else can I say about tomorrow? I am also looking to see, like, remember,
let's rewind the clock back to the Fed minutes from the January policy meeting, which was before
the Iran war, of course. And those minutes noted that several Fed officials had indicated
that they would have supported a two-sided description of the Fed's future interest rate
decisions that would reflect the possibility of raising rates if inflation remained above the Fed's 2% target for a
prolonged period.
Now you've got an oil price spike.
So I'm wondering, does this get resurfaced in the meeting?
And I will be looking to see if language is changed at all in the statement to reflect
this at this policy meeting.
I don't think it will, but
something I'm looking out for. And I am also looking out for whether the Fed revises its
growth outlook lower on account of higher oil prices. I do expect Fed Governor Myron to dissent.
I am looking to see if Fed Governor Waller will also dissent because he gave a speech back in February saying, look, we had a strong jobs report in January.
If we get another strong jobs report in February, then I'm going to move my position to we can hold rates.
But we got a pretty bad jobs report and January was revised a little bit lower.
bad jobs report. And January was revised a little bit lower. So I'm curious to see whether he sticks
in the camp of, nope, we still got to keep cutting rates. A lot of great information.
Appreciate you covering it. I have heard people specifically when it comes to things like oil and
other areas discussing, does this prolong inflation? Does it not? Is it transitory,
right? All these other pieces. How do you look at some of these things that have arisen and judge them as an economist?
Yeah. So I would just say a couple of things here is the biggest question, as I said, is how long
does this conflict go on? Because at this point, I think if this is going to end in a couple of
weeks, less of an impact on core inflation, which is really what the Fed looks
at to set policy. What we're talking about now is headline inflation. And I do fully expect
headline inflation is probably going to go up three and a half, four percent this spring once
we start to get those new inflation reports. So it depends at what level oil prices stay sustained. So is it $85?
Is it $100? Is it $150? Because that's all going to matter. And that's going to matter
not just for the inflation side of the equation, but it's also going to matter for growth.
Because we have a very bifurcated consumer right now. And you have the
low income consumer that is dealing with an affordability crisis. And then you have the higher
income consumer, maybe upper middle class as well, that has the winds of the stock market
at their backs. And they're more inclined to continue spending. So it doesn't matter as much for them on the margin. So I wonder if, you know, we see gas prices go up to, say, $5 a gallon, I think that's going to clip consumer spending. And then you kind of have a little bit of a stagflationary whiff. I don't want to call it stagflation outright, and I don't think the Fed would either, but I think you get a whiff of that, if you will. Yeah, that's fair. Not the biggest thing in the world, but
certainly it's tensing some pieces into it. Can you talk a little bit more about your expectations
for this transition between Jerome Powell to whoever is next, likely Kevin Warsh, and what the
average retail investor and U.S. consumer should expect to see change?
So, I mean, really, it should be seamless. It should be nothing, right? That's typically
what would happen. In this case, though, we know that Kevin Warsh has been fervent in pounding the
table that he thinks AI is going to be driving productivity,
and that is going to give the Fed cover to cut rates. And that is not something that maybe
the rest of the Federal Reserve Open Market Committee also agree with. Unclear where Powell
himself falls on that. However, if he's no longer chair,
the question also becomes, does he stay on the board for a couple more years because his term
isn't up until 2028 or does he depart? I don't think we're going to get an answer to that
question, even though I'm sure we will ask tomorrow. So I think we could see more division potentially between Kevin Warsh, the chair,
and what other members on the committee want. Ultimately, it is a 19-member committee that
sets policy, right? It's not one person. And so Warsh is going to have to contend with that.
not one person. And so Warsh is going to have to contend with that. However, I would also like to
think and expect that, you know, Warsh doesn't operate in a vacuum. You know, he sees what's
going on in the world and takes that into account. So maybe if he was looking at cuts,
maybe he still is, but they get pushed off a little bit into the future.
Options Mike, do you have any thoughts on that same topic?
Hey, well, hey, Jennifer. Yeah, I think so. Worsh is definitely, you know, it's Trump's pick.
He's also trying to get daily removed from the Fed, right, because he's trying to stack the deck to what he wants.
And if that doesn't happen, I think Jennifer makes a great point. He's going to be facing,
well, there's seven voting members at a time, but you have 19 members on there.
You have 12 voting members at a time. Seven of them are the board and four are the regional,
but one of the regionals, the New York Fed, he's always on there.
Thank you. I think it's going to be a hard sell. And I think, you know, some of these Fed governors were being a little bit more dubbish, I think, because they thought they were going to be potentially nominated and possibly the next Fed chair. With that not happening, you know, we may see some changes here in the Fed with the message they're delivering here.
No, I was just going to say, you hit the nail on the head because I noticed that Waller dissented in the January meeting.
We all kind of turned to each other and went, he still wants that Fed chair job.
So it'll be curious to see, like I said, whether he's still going to dissent because he has legitimate concerns about the job market or whether he wants to sort of go in line with what the committee wants.
go in line with what the committee wants. And I will say, yes, I went and looked back
at all of the transcripts and speeches of Warsh while he was a Fed governor.
And he repeatedly voiced concerns about inflation and credibility, maintaining the Fed's credibility
and Fed independence. But he always voted in line
with the chair. He never dissented during the time he was a member of the Fed. So I think that that's,
I don't know, it sheds some light. Yeah, I think that's a big thing. I also think it's a big
nothing burger this meeting. I mean, I don't expect anything much. I think the most interesting
thing is going to be how many times is Powell going to get peppered with questions about the quash subpoena, about what he's going to do when he resigns.
And he's going to basically he's going to take the high road, as he always does.
I mean, he's just going to say, you know, we'll continue to let this play out.
I gave my statement on this and time will tell.
And I think, you know, it's all a big nothing.
I think this is probably one of the least traumatic Fed meetings we're going to have.
And then you have the next one and then we have a break and then in May there's no meeting.
And then the next one's to be June. And that should be worse if Congress gets their act together.
And I think that's a big if. I think you make great points there.
Yeah, I think you do as well. And I agree with a lot of your points.
um and i and i agree with a lot of your points this is the second to last if you call it
legitimate meeting for pal because the last one he's like a lame duck basically um but yeah i
agree that i don't expect to come much to come out of this i think it's just going to be hey
we got to wait and see and that's why i also say don't put so much stock in that doc plot
because a lot can change fast and it's changing i mean yeah you know we say don't put so much stock in that dock pot because a lot can change fast.
And it's changing.
I mean, you know, we really don't know.
I've been saying when this war started that we have about a month to get the straits back open before I think all hell breaks loose.
And, you know, things look bad right now, but they're not really that bad.
You know, China has about 40 million barrels of oil in tankers off their coast waiting to be refined still.
You know, most of the world still has a good amount of oil.
This is all just speculative pricing.
But a month of the straits close, then you've got a problem.
Well, let's also remember, as far as the U.S. is concerned, we're now an exporter. A lot has changed over the last, what, 20 years or so.
We used to be a net importer.
So let's also remember that from a domestic perspective, at least for now.
Yeah.
I actually would be curious to talk a little bit more about the conflict that's happening right now and how that could continue to affect things moving forward.
The market is looking for some type of clear direction.
We talked about this yesterday with a couple of our technical analysts. Jennifer, from your
perspective, I guess, different from the technicals, what are you looking for in this market in terms
of clear path forward, in terms of actually giving investors some type of confidence in a direction?
Sorry, I could not help but laugh because, I mean, it really comes down to what the president's direction is, right?
I don't think it was a coincidence that, was it last week, everyone was freaking out.
Oil went above $100 a barrel.
And Trump came out and said in an interview to CBS, the war is going to end very soon.
And so he talked down
oil prices. And then since then, we've continued to get conflicting signals, not just from the
president himself, but other members of the administration. The secretary of war, Pete
Hegseth, seems to be full steam ahead. Rubio's secretary of state somewhere in the middle.
And the president, he kind of goes back and forth between, well, we're going to be in there a little bit longer or, you know,
yeah, this is going to end soon, but we need to see this through and, you know, oil prices
in the short term or short term price to pay for making sure that Iran doesn't have a nuclear weapon, this regime is defeated.
So I think until you get clarity from this administration, and until, so sorry, I don't
remember the other speaker's name, but to his point, until the Strait of Hormuz is a safe
waterway for ships to move through, there's going to be a lot of uncertainty
that hangs over not just the U.S. economy, but the global economy.
You know, Jennifer, I think the other big problem we face here is that
you can't just say the war is over and walk away. Iran's not going to stop, right? I mean,
you know, he seems to want to say that we've won and we want to walk
away, but you can't unless Iran's willing to say we're willing to stop too. And right now,
that's not the case. And so how do you come to fruition here? And I'm sure the admirals are
telling him, you do not want to put our warships in the straits. They will be sitting ducks in that
very narrow area. It takes a missile to travel
So this will travel for 12 miles about four to six seconds
That is no time to defend that ship if they pick it up instant
So I'm sure right now their admirals are telling him, you know, it is not going to be easy
Unless we go on the ground and we take control of land to to push ships in that straight
Right. No, I don't think you're wrong um and let's
also remember that we have midterm elections this november and i don't think that that's lost on the
president i also don't think that this president wants to see any sort of downturn on his watch or any sort of major extended bear market in the stock
market. I call it the Trump put. So I think those are also considerations. Does this parallel
Liberation Day tariffs from last year? I wonder, I don't know. That's a question mark I have where Trump really took it
to the nth degree and then really pulled back. And so when you looked at the markets in April
versus a couple months later or December, it's almost like you would have never known that that
had happened, right? So I think we have to keep that in mind as well. Look, if the US stops attacking
Iran and leaves them alone, then Iran's going to go back to business as usual. Of course,
you haven't accomplished what you needed to accomplish at that point. But yeah, I'll leave
it there. So I think the other point here to make is that if the market, the market to me is holding in much better than I would have anticipated.
It's really kind of taking this mostly in stride.
I know we keep drifting down.
I think you made a great point.
If the market was to tump, and I mean just sell off, that would get his attention.
And that would make him change what he's doing.
I agree a thousand percent.
Yeah, so we have the trump put going for us yeah i'm i'm curious uh to get a little bit of your thoughts just in terms of midterms
uh as well i know we're still a little bit far out but it seems to be top of mind for people
and just curious how that could affect markets and the economy as a whole.
Well, I think if you were to see the majorities flip in the House or the Senate, and those are slim majorities at this point, so it's certainly not a question, especially for the House.
more gridlock, which is why the president was in such a rush to get that one big, beautiful
bill passed as fast as possible last year, because then it becomes increasingly unlikely
that any major legislative initiatives get through.
And we were already seeing that was, you know, we've already seen two government shutdowns,
You know, we've already seen two government shutdowns, right, in a row. So I think gridlock, though, has typically been good for markets because that means there's not a lot of change in either direction. But that also just means that the president leans, continues to lean more towards using his executive powers as he's done. And then maybe there's more court cases.
right, in a row.
Understood. Yeah, that would make sense. I'm curious how that plays out. Mike, I'm loving the questions that you're throwing in here and the thoughts in general. Anything else you'd want to pick Jennifer's brain on here?
I think something to watch if he keeps going like this.
Our allies are starting.
The world seems to be getting tired of this, what's going on with him.
And I try to avoid politics with the markets.
But I think you brought up a good point.
And the other thing I think is to start watching his cabinet.
We've seen one firing.
We had one resignation today with the intelligence officer who just couldn't stand by and watch
this.
And then to start watching the Republicans, as you point out, the midterms are coming. And if they
start getting nervous, you know, they may switch gears. And you could be sitting with
a lame duck president very shortly if they decide that. And so far, they're really pretty
much sticking to his side. But that could really change things and change how the market
works and perceives things, too. What do you think about that?
I disagree with the notion of a lame duck president halfway through. I don't think that that is what's going to happen, but there may be pressure behind the scenes from
Republicans in Congress who may turn to him and say, look, sir, this is really not working for
our districts, for our states. And if we want to get our priorities through,
you're going to need to throttle back on this. The president does listen to people.
He does take into account other people's viewpoints. And so maybe then he relents a
little bit or becomes a middle ground or something. I don't know.
But I don't see him becoming a lame duck president halfway through based on this.
Fair enough.
One thing, which is two other topics that have stood out to me a lot, and maybe this is in tandem with what Mike was saying, which is investing into just foreign
investment.
It seems like that's something that people are driving more and more towards in terms
of international exposure.
The Korean market has been doing amazing this year.
You know, there's pops in a variety of other areas.
I'm curious just how you focus on that and where that fits in everything that you're looking at. I am more domestic focused, a Yahoo Finance,
more focused on domestic markets than international markets. I mean, I'll just
give the boilerplate language that obviously, to your point, it's good to diversify. And we have
seen some great outperformance abroad. And maybe that helps
smooth out some of the volatility that we have here in our domestic markets and maybe offset
some of the valuations and pullbacks that we've seen here. Yeah, that's a good point. And then
the one other big piece that I've been paying a lot attention to is commodities. And we already
talked oil, but I'd love to hear your thoughts deeper on gold, gold mining, copper, silver, areas like that. Yeah, I mean, obviously,
those are prevalent in times of uncertainty. And that is exactly what we're experiencing right now.
So it's no surprise that you're seeing gold above a000 handle and silver has also surged as well. And I think so
long as this environment continues, and frankly, I think so long as Donald Trump is president,
you're going to see that prevail. When he's no longer president, we have somebody else.
I don't know. I don't want to say we're going to have a sell off. Right. It depends what the state of the world is at that point. But gold is still gold. And Bitcoin is no substitute for that, even though it's supposed to be called digital gold. And even though this administration is very supportive of cryptocurrency. Yeah, I'll leave it there.
Yeah, yeah.
I'm more focused on, I would say,
the non-digital gold at the moment
in terms of just a variety
of these different gold miners
and other just opportunities in that area.
Mike, is that something
that you've been looking at as well?
I mean, I haven't,
I've historically been very bad
at trading commodities, just as an FYI.
But a lot of this move in gold and silver is because it's, you know, of its usage in the tech
and the chips and everything. And I don't see that dying down anytime soon. I think, you know,
that's going to continue to be a driver of that. And it's going to keep these prices elevated.
To me, the most interesting is to see what Micron says about demand tomorrow,
and I'm expecting it to be off the hook.
And, you know, maybe then you start to see a rise again in silver and gold.
But, you know, these things don't, they never move like they moved this last, you know,
couple months, right?
We see how these parabolic moves and things that typically move at a glacial pace.
So, you know, big money here digesting.
I think they digest for a while, but I don't really think they come in at this point. I think there's a floor under them now as long as the AI trade remains strong.
That's a great point.
Yeah, I can definitely appreciate that as well. Jennifer, what's some of the latest stuff that you've been writing just in terms of the articles going out?
out. Yeah, so I've been very focused on the Fed lately ahead of the Fed meeting and just
major policy emanating from Washington. We did see, if it was last week, it all blends together.
The USTR has launched two trade investigations under Section 301 to replace the tariffs that were issued under IEPA, the emergency powers that were rendered invalid by the Supreme Court earlier this year.
Those are going to take some time through the spring, late May, early June to play out. reporters. Ambassador Jameson Greer seemed to indicate that he was confident that he was going
to find reason to slap new tariffs on countries. He did say that the deals that were consummated
last year with certain countries are going to stand and are separate from these investigations. And these investigations include
whether countries are importing goods made with forced labor and whether they are abusing
production in or overproducing in their manufacturing sectors and whether they have trade surpluses sustainably with the U.S.
And he is expecting to find fault along those lines.
And so that speaks to me that perhaps we could see some new tariffs issued this summer above and beyond what we've seen already.
The question is, does that just end up replacing what we saw and retain the
effective tariff rate that we have seen? Or do we see that effective tariff rate essentially
move higher? And then what impact does that have on inflation? Does the Fed continue to look
through that? Is that a renewed wave after the oil price spike, if you will, when it comes to
inflation and growth concerns. So that's one other thing that I've been focused on. And then just
ways the administration is trying to respond to the increase in oil prices with Treasury Secretary
Besant coming out last week and saying, look, if there's Russian oil that's already on ships that's departed on the sea, you know, we're not going to sanction that anymore as a method to try to bring down global oil prices.
Yeah.
Jennifer, what I thought was interesting today, I think it was HACCP that came out and said that, I know we're already supposed to release half of our strategic reserves, and we may even update more.
I'm like, wow, that is just a lot to backfill.
Right, well, but that just goes to the point.
They're concerned about making sure that the American consumer is happy because they know the midterm is coming up.
And if they don't win the midterms, there are going to be problems.
And let's face it, if you're a member of Congress, as some of us have said,
we'll be here a lot longer after when he's gone.
And they're right. They don't have any term limits.
So they're going to look out for themselves at the end of the day.
Of course.
That's what I keep watching for is are you going to see a split there within Congress or some of the Republicans that have been
basically holding the wall going to stop because they realize they're in danger of getting voted
out in their districts? That's going to be interesting to play out. I agree. Yeah. All
right, guys, I got to get going here. Jennifer, always a pleasure having you on. Encourage
everybody to go read your work on Yahoo Finance.
I was going to ask the next time you come on, I want to talk about that Federal Reserve criminal probe that got thrown out, but we'll keep that for the next one.
Definitely.
Let's do it.
Always a pleasure to be on.
Thank you so much for always thinking of me and having me on.
Of course.
Appreciate you.
Have a great one.
You too.
Bye, guys.
All right.
All right, Mike, hang out with me for a while.
We're going to tag team duo this. Bye, guys. All right. All right, Mike, hang out with me for a while. We're going to tag team duo this.
You got it.
All right.
Well, let me run through just some more news and pieces real quick for those that are in
the audience.
Going to go over some of the things that happened in the market today and some brief price updates.
Also, a reminder, we're not too far out from next earnings season.
You know, just something to be aware of.
You do have some minor earnings that are happening that people might be paying attention to, such as Lululemon,
Oclo, DocuSign. Those are all going to be happening today, right after the close.
And they're typically decent sized movers, to be honest. Lululemon, obviously a big mover on its
last earnings. And then when you come up to tomorrow, I think a good amount of people are
going to be looking at MU Micron, especially because Jensen Wong and the CEO of Micron or founder of Micron, you know, we're doing a bunch of stuff
yesterday and talking and there's kind of back and forth. So I think people are going to be
looking at that. Those are most of the major earnings for the week. You'll have some BABA,
a couple other things. But as you get farther into April, that's where it's going to heat back
up specifically in that second to third week of April. Second week of April, you'll start having some of the banks, I believe, reporting, Goldman Sachs,
a couple of others, and then Netflix is expected on the 16th. So just about a month out, we'll roll
back into some of the major earnings and some of the different pieces that are going on to be aware
of. I did go through some of the news stories that are happening already earlier in the show,
but a couple other things that haven't really been focused on here.
Morgan Stanley said today that its wealth management business passed $1 trillion in
individual retirement accounts, IRAs, assets under management.
So huge, a lot of money sitting in these IRAs that are continuing to happen.
Also, fun fact, March 16th, which was yesterday, but six years ago, yesterday was the third
worst day in S&P 500 history.
Pretty crazy stuff.
March 17th, not quite as bad.
And looking like your green one here on this end as we continue to move forward.
Nebius had a really big move today.
They announced a plan to offer $3.75 billion in convertible senior notes.
People did not like that. The stocks went off really hard. They've been on a big runner
throughout this year, really up until this moment. So they're up 31.5% still. They were up 50%.
Going into today, stocks fell on 12% on the day. Slight bump happening here right at the moment,
but not very big in comparison to the rest of the things that have been happening when you just continue to keep your eye
on the ball in this area. Let's see what else is happening here. Jennifer was talking about
the oil. Obviously, we had a lot of spaces on oil over the last couple of weeks. Oil prices,
that oil price spike, likely to keep rates on hold, right? But they deepen the division. That is among Fed officials this week.
So if anyone's looking, CLF, which is oil, I believe is up another 2% today.
Let's take a look.
Oil futures, crude oil futures.
Let's take a look at this for April and how they're moving.
Yeah, about 2.71%.
Still a pretty nice month.
Mike, you mentioned you're not really trading oil because you don't really trade commodities,
correct? I haven't traded them well historically, so I generally avoid them.
I do trade the energy names. So last week I was trading Oxy off of that. So I was looking for
names there. I know today the energy names are strong.
But I find commodities tough.
I just don't do well with them for whatever reason.
Got it.
Got it.
Yeah.
I mean, for me, I've been playing in there.
I think it's an interesting area.
But oil, my warning sign was that on March 8th, my mother texted me and said,
hey, do you know any good oil stocks?
I'm thinking it's going to go up for a while. And that was when I decided that I was you know any good oil stocks i'm thinking it's gonna go up
for a while and that was when i decided that i was not gonna buy oil stocks at that moment smart move
so funny parents time at the top as always um so i just thought that was interesting i told her too
i literally told her the other day i was like this is what we call a top signal she goes what's that
i go exactly um and you when you're when you're in a cab or an uber and they're asking you about the market or bitcoin
that's when i know things were getting dicey for sure what do you think about mu here going into
earnings tomorrow 56 percent year to date i've just been doing like a little swing here uh just
on comments i'm up 17 percent in uh i don't, I haven't bought this that long ago.
Started buying it a month ago, a little bit over a month ago.
I mean, it's an all-time high today.
I don't know if it's, I kind of worry a little bit about, we talked about this yesterday,
the NVIDIA phenomenon.
Remember NVIDIA had that incredible run and Micron in six months has gone from a hundred dollar stock to a four
hundred sixty dollar stock is it I there's no doubt in my mind they're
gonna be there's no doubt in my mind they're gonna big guide up the question
is is it going to move to stock or we're gonna get this kind of sideways
action or pull back into this channel here because it's just run so much you
know it can it just keep going at this point?
So if I was long stock and I had a nice buying price, I wouldn't worry about it.
I wouldn't be buying it up here at these levels going into earnings because I think it's just
set up for perfection.
And I just don't know if they can manage that here.
Yeah.
I mean, let's take a look at the expectations for a second here that are coming in for MU tomorrow.
MU, expectations, revenue, $19.17 billion, EPS, $8.61.
Revenue has really been moving nicely for MU, specifically over the last several quarters.
nicely for MU, specifically over the last several quarters. Last quarter, they had expectations of
$12.81 billion, and they reported $13.64 billion. Still, it's by far the biggest jump that they've
had in a while when you look at the growth, right? Moving from the last few quarters, right? You went
from expectations of $8.85 billion to $11.16 billion to $12.8 billion. And now you're jumping to $19.17 billion,
just by far the highest that they've ever had expected.
And the market will probably be looking for a guide up close to 30.
Yeah. Yeah. And looking for a guide of basically another 30%, 35% up from there. When we look back
at their previous quarter,
they had a double beat, really nice one.
They double beat on revenue, 6.49% beats,
EPS, 25.13% beats.
I think that, you know,
Hamid's someone that I follow very closely for this
because he's really been on MU
and following it closely and he's excited.
So this is what he said about micron earnings.
He said, the moment of truth is coming up. It's expected to release Q2 2026 earnings report. If
it comes anywhere close to the $19 billion revenue expectation, which would be a whopping 130%
year over year increase and beating its own prior quarter record revenue of 13.6 billion,
it would be insane. If it also comes anywhere close to the $8.61
cents of EPS expectations, which would put it at a $34 per share annual EPS run rate,
it would give the stock a 4p of 12, assuming zero growth. And if it reiterates that all of
2026 supply is already sold out in non-cancelable contracts, and it appears 2027 and 2028 are going to continue this trend,
then pack up and go home because this kind of performance
has only been seen by NVIDIA in 2024.
What do you think of that, Mike?
I think that's nuts.
Yeah.
I mean, I think, listen, again, I think they're going to beat me.
Look at what's going on with NVIDIA.
Look at what they said, Jensen said yesterday, yesterday right there's no way they don't have a great
report and died up i think they're going to be phenomenal i would watch for two wild cards here
one is i think they might do a big buyback kind of like a video they're getting flush with cash
which never happens with my chronic memory space and two is watch for a stock split you know the
best time to stick your spot split your stock is when you have momentum to the upside,
not when you're full.
Remember Nvidia split when they,
not Nvidia, Netflix split when they were dropping?
Never want to do that.
You want to split on the way up.
So I would watch for that here too.
I think those are two things to look out here
outside of the numbers themselves.
I think it's going to be a massive report.
I just, I can't see how it's not.
And remember, they left the commercial space, right?
They discontinued their commercial memory,
which is why memory has gotten so expensive now for us end users at home.
Yeah, memory is quite the crazy part when it comes to all of this.
And it's why some of the stocks I was talking about,
in terms of like an SK Hynix
and some of these other things, I'm very closely paying attention to because the memory is what
creates the possibility of AI expanding its intelligence, right? The more you can remember,
the more that you can parse through and parse from, the better answers you can give, right?
It's just information. What did you think of Sam Altman saying that intelligence is going to be a commodity and they're going to, you know,
bottle it up and sell it on a meter like gas and electric?
I have to admit, I'm not a big Sam Altman fan.
I think he reminds me of Mark Zuckerberg
when Zuck first got in there and he was just, you know, he thought he could do anything.
I think he needs to get smacked down.
I think open AI might get smacked down at some point when they go public.
I think he's just, I think he, he acts like he's Elon Musk, but he doesn't have the track record or the wealth or the publicly traded companies that Musk has, right?
Musk is, you know, Musk has pulled off and and you know
he may must may come across sometimes as you know think he can do whatever he wants but he keeps
pulling it off so i think he's gotten a little bit arrogant ahead himself and you know there's
a lot of competition i fully expect that at least one of these ai companies is going to fail
you know and that would be a open ai uh perplexity, anthropic, right?
One of these guys, I think one of them will fail, if not more.
And there's going to be, at the end of the day, acquisitions there.
And we'll see all these start coming together, right?
We'll see a lot of these get sucked into other companies like Amazon or Apple eventually or Microsoft.
I think he just says things at this point.
I think they need to bring that stock public soon
because his investors are getting nervous.
So he's trying to prop it up.
Yeah, yeah.
I mean, you were like,
I'm not the biggest MLM fan.
I don't know if there are a ton of those,
but hey, I use OpenAI, though, every day.
I mean, to be honest, ChatGPT is now becoming one of those things that's just so prevailing in my life.
What do you use in that area?
I tend to like Gemini and Grok.
My friend is big on Claude for programming.
So I think each one has a different little special space.
I think Gemini is really good built into Google.
I kind of enjoy it.
It just makes my life easy.
It's right there.
Perfect.
Hey, let's walk back through today.
Walk me through what you looked at today,
traded, what you're watching.
You know, today was,
today's one of those days you look at
and the market doesn't look so bad.
But, you know, as we're sitting here today with about, what, 20 minutes to go, you know, we really haven't gone that far.
The market gapped up.
And it was, remember, the market was all over the place overnight.
And it started to run after we had those comments about potentially releasing more strategic reserves.
So we had a decent little gap up, not huge.
We got up to 674 on the SPY.
We got above the 8-day, but we backed down.
And we're right back near the lows of the
day, still up on the day.
And it's kind of been a very quiet do nothing day.
Volume is only 56 million shares.
We're down quite a bit.
I got to tell you, I didn't really like the setups here today.
I kind of came into this morning thinking, well, I'm glad when I first got up anyway
at five o'clock, started looking at things.
I'm glad they didn't front run the market.
I thought we could, you know, if they really wanted to squeeze shorts we could have
been up big this morning right we had a big gap up and all be playing the chase game so that tells
me the market's really not looking to be bought here yet you know so you know that you know otherwise
they would have gapped us up they would have gotten the shorts squeezing them and start pressing them
we didn't get that here and I thought the setups today were not the best out there.
I traded Palantir this morning.
I had an okay little trade.
That's the only trade I took today
because I just really didn't like the setups.
That said, you've had nice late day moves here
by Amazon and Google, which were both looking much better.
Coin, even though crypto is not moving today,
is trying to break out.
It's trying to get above this range high here.
So, you know, that one's showing some strength. even though crypto is not moving today, it's trying to break out, it's trying to get above this range high here.
So, you know, that one's showing some strength.
You know, outside of that,
the CENIs themselves were strong with Micron, again, SanDisk,
you know, the memory spaces,
as we all talked about.
But most of the market here
has been pretty quiet today.
We had all-time highs by Chevron
and Exxon Mobil today
as energy shows some strength.
The financials, again, got rejected
at the eight
day and came back down i just kind of feel like this market here is just very very quiet um you
know there's movement under the covers we have to be looking very carefully circle had a nice move
today for what it's worth onds had a nice move today i thought i think we saw that new ipo today
from the other drone company that got onds moving you You know, Tesla's holding in, but it can't break 400 and can't break the 21 day.
And there's just a lot of that going back and forth here, Cav.
A lot of names are just bouncing into this resistance area and they can't hold the breakouts.
They try to go and they briefly push into them and they come right back down.
So it's a very tricky market.
And, you know, yesterday I had a great day that NVIDIA trade I caught just as I came on with you guys.
It's just fabulous. And so today it's a little green day and sometimes that's
okay. You know, every day doesn't have to be a huge day in the market. You kind of have to just
take what it gives you. And right now the market's trading more difficult and I'm treating a little
bit more picky about what I'm going after. I'm also continue to look at what I want to buy
when this ends. And, you know, I continue to keep a very close eye on IGV
and these software names and cloud names that have been beaten to hell.
Yeah.
Yeah, it seems like, you know, we're finally getting a couple of days
put together, at least of the green area.
What are some of the messages that you're – I actually have two questions.
One, are people coming back into the room?
I know you talked to me about that being like a, you know,
bottom indicator sometimes. And then two, what's kind of the message you're giving to people in the room?
So, you know, a lot of people are just you can see a lot of people are not trading much right now. I think most people have been really hurt this year. Talk to people. And, you know, if you don't have discipline, this is a very difficult market.
have discipline this is a very difficult market so you know people who can't find discipline you
know they tend to go back to the sidelines a time like this and cash is a great position to be in
and we talk about that my messaging to the room is to be patient it's been a non-stop you know
take it easy here you don't have to trade big size be patient wait for your setup look for what
has momentum look for what's in play that day and if you don't see it sit back you know we're we've gone into a you know if you look at the spy over the this year it went from a choppy mess which
it still is but it was a choppy mess that was generally in a sideways channel we've gotten this
slow little rounding top that's developed on the spy here we've gotten a five percent pullback now
of the highs that we put in on what uh the 29th of january and you know now we're gone
into a more headline driven market and you know chopping markets are difficult to trade but you
could always find something to trade momentum when you get into headline market you're trying to
trade like this you know especially with a president that is extremely vocal yeah he's been
you know he's done well three or four interviews today. He's been posting on Truth Social nonstop.
And the market now is finally starting to detach itself from it.
But when you have a situation like that, and when all the cabinet members are out speaking, it makes it very difficult.
Because you get caught on one wrong headline leaning the wrong way, you know, you can have a world of pain.
For me, I have been mostly avoiding shorts here.
I just think the risk is to the upside,
not to the downside.
Sentiment is so nasty at this point that,
you know, we should have been down more than we are.
As we know, Jennifer and I were talking about that.
We should have been down more than we are in this market
and we're not.
And that tells me that the market is trying not to drop.
Now, I still think the 200 day on the spot,
which is a little below here, is still in play. And that is at the 659.43. 659.43, you said? Yeah, 41. It's moving up still,
so it'll continue to come up a little bit as we go. Got it.
Just continuing. I'm just kind of looking through a couple pieces on the charts here, seeing how we're going to finish out.
How much do you pay attention to 200 SMA?
A lot.
I find that is a spot on the markets where funds will come in and defend the 200 SMA or it'll be resistance. So typically what I learned was that if you're underneath the 200 SMA five
sessions after you've been above it for a while,
typically means that the institutions aren't buying it probably has more risk to
the downside. And that means when you come back to it,
it should be resistance in theory. Uh,
when you come down and bounce off of it, it's showing you that, you know,
institutions are buying there. And I would watch that a dip to the 200 day,
probably the first time, unless there's some very bad news.
The type of stuff I don't want to think about.
I think that would get bought and you would get a fairly big bounce off of it.
And you'll see that a lot of times in stocks.
Yeah, it often does happen.
Do you also use anchored VWAP at all?
I don't use anchored VWAP.
I just use VWAP.
I like VWAP on my intraday trades. I don't use it on the daily. I use it on my intraday charts because it's the same on every chart. So for me, that works really well.
Got it. Yeah, the daily VWAP makes sense to me as well.
Okay, just kind of scrolling through a couple other pieces.
What else is standing out to to right now on the charts?
What are you looking at?
Like I said, I'm really kind of watching Google here.
You already just wrote that down as a setup for me tomorrow.
If you look at Google, it's coming up to this candle from March 11th.
The high there is 311.42.
And if we could break above that, I see a path up to the 50-day,
which is up to 318.70.
So that's on my watch list now.
And Google has been one of the better names.
Well, it definitely has a head and shoulders.
Hang on.
We've got a headline here.
Pentagon wants to mass-produce Comic-Con.
Oh, never mind.
Okay.
It has a head and shoulders pattern of the daily, but it's holding in so far.
I really like the way that one looks right now.
I mean, it's been one of the chosen ones and if the AI trade comes back, that should
have a lot of traction. Amazon is trying to perk up. It really needs to get back above that 220
level, but here it is on a day when the market's iffy, it's on the highs of the day, it's moved up
again. It has this uptrend on it that comes in, oh, somewhere around the 210, 211 area now,
and it continues to act well i think
these are two names that are trying to wake up here are trying to hold in in the mag 7 and we
haven't seen that in a while the mag 7 has been very very a week i continue to think nvidia is
just sideways it just can't get out of this channel it's been in for six plus months now
and the chart is saying you know be patient i think it's what channel started back here in august of last year so you know it just doesn't want to really wake
up at this point overall you know the market's kind of hanging in the semis remain strong i like
when the semis are stronger but it's not the names we usually trade that's one of the things that
makes micron so important tomorrow night we got a drop Micron, by the way, as I pulled it up.
So important tomorrow night because if Micron and SanDisk,
and for whatever reason, they give up the ghost,
if Semi's can come in, that's a big component of the market.
And the closest thing we have to a leader right now
in a market that really just has no leadership.
Yeah. Have you traded Sandisk much?
I have not.
I generally, you know, I look at the spreads on names like this and Sandisk on options and on stock.
I think it's more of an investment than a day trader.
The spreads are very wide.
And when you have a $700 stock, I don't want to trade it with stock.
And I look at the options and I'm like, I don't really care for the options chain on this one either.
You know, I can't find the liquidity out in time at a reasonable price.
So, you know, for me, I would go out to April here and like the best strike on April, the 750 calls have 200 options traded today.
That's just not liquid enough. And they're trading at $60.
I just have no interest in touching something like that.
It's just too expensive.
The spread on it is $4 wide. Just no interest in that at all.
Yeah, I do see that big candle down there on MU that's happening right now, but we did retrace
most of it. Yeah. So one thing I learned a long time ago is to stay away from illiquid names with options in the stock.
If they don't trade a lot of volume and they have wide spreads, that's not my cup of tea, and I just avoid them.
Plenty of other things to trade.
Sandisk moving in the other direction. This would be an all-time high close here for Sandisk as well.
Yeah. No, I see. Yeah, all-time high close.
Yeah, all-time high is $ 7.25 from back in February.
But the all-time high close, good point.
Yeah, that was right off of their last earnings.
They don't have another earnings until mid-March, or sorry, May 6th.
So it's going to be a little while until the next one ends up happening for them.
But yeah, all-time high close, not too shabby,
even with Kramer saying that they were a good name, you know?
Oh, God.
I mean, he was so good for the markets and everything for a long time.
Now he just doesn't seem to have it anymore.
Nah, yeah.
Yeah, you know, what are you going to do?
Like the guy.
Use it or use it. Yeah. You know what are you gonna do like the guy use it or lose it yeah you know what's an
interesting chart have you looked at goldman sachs at all yeah uh looking at all the financials you
know so goldman is trying to hold the 200 days a great example of a name trying to hold it there
but can't break above the eight day and you know you know which one looks best to me right now
city group is one of the stronger financials out there right now it's not down as much it's above
the eight days still uh it's holding in better the rest of them don't really look all that healthy
to be honest with you well what i'm looking at is goldman coming into that 200 s9 yep they held
it last week and they have also all that volume from when it traversed here
from September until December.
So you got a lot of people that are sitting here
right around here as a cost basis.
I'm pretty sure that we're playing around with this.
Pushed up all the way almost. It's crazy.
This was trading like $1,000.
Are you a fan of when these stocks get this big,
when they just split down to create more liquidity?
Yes, I am.
Again, look at the volume on Goldman.
It's down to like 2 million shares a day, 2.5 million shares a day.
Volumes drive up.
It's basically now an institutional name.
And sometimes they like that, right?
They like when institutions like when they have control of a name because if they keep retail out, they don't have to worry about it, right?
They can control it.
They control the options.
They can do what they want with it.
The algos don't play with it nearly as much as they play with the other names.
But from a trader perspective, I like when names are down.
You know, for me, that sweet spot is when you start getting to that $100 to $300 area,
those are great levels of names to trade, especially with options.
So I would love to see Goldman do a four for one split.
Four for one. Interesting.
I mean, there's not really much change, obviously, to the stock itself.
Why do you think some of them resist doing that?
You think they like having a big number?
Yeah, I think they like it.
And again, it keeps the algos and the retail investor away from it.
They'll own it, but they won't trade it.
It keeps the day traders out.
Interesting. Interesting. So it actually, what's beneficial to us, not always beneficial for them.
Correct. Google highs of the day here, going into the close, guys.
Nice. Nice. What are you swinging into tomorrow? Google and anything else?
I have nothing on. I'm not swinging into anything overnight. I've been looking at Google. I decided
I'm going to wait until tomorrow just because of the headline risk in this market.
But Google and Amazon right now are high.
And Coin, those are the top three names on my list tomorrow as we go into tomorrow morning.
Market on close, I don't see yet.
Oh, 200 million to buy.
Sorry.
I've got the close of room, too.
I'm trying to do double duty here.
Yeah, you're good.
You're good.
Do your thing.
I can chat for a few here.
Walk through a few more things that I'm looking at. They were you're right back with you yeah no problem they were doing a q a here today with jensen wonk not sure if too
many people were watching or listening to that maybe it wasn't streamed it was like a press q a
i thought it was funny um someone's phone rang twice jensen stopped it's like i have one pet peeve and all
nvidia employees know it we're in a meeting phone's on silent so uh apparently another lady
like took an l after that just a little funny story jensen was answering a lady's question
and then he said this young lady isn't even listening to me and he forgot to say her name
and had to like stop had him she forgot to say her name and had him like stop his question so, she forgot to say her name and had him like stop
his question so she could say it. So it was just some funny pieces here, kind of the way the back
and forth. I like how he interacts with media. I've had a chance to ask Jensen a question before
as well. Let's see. Jensen also said, company has received licenses for many Chinese customers.
Notes shift in China business situation. Well, obviously that would be huge, right? That's kind of like the main inhibitor right now for NVIDIA, especially with how AI friendly
China is.
They did a survey that said something like 15% of America believe AI is in that benefit
and 85% of people in China.
Obviously, it's like a huge disparity right there.
And NVIDIA is just, man, it's built such a nice base here at 180.
You've just been sitting here.
I mean, you got up to 180 all the way back in July of 2025. It's almost been a year. It's held a 200
day, um, multiple times, especially that 200 EMA. And so NVIDIA, if they could get an opening into
China, you've got just so much opportunity, right? So much cashflow. Everybody wants to work with
you. You're the name of the game. So I see a lot of opportunity there. Did a video with ticker symbol you talking about how NVIDIA's path to one, sorry,
to $10 trillion market cap and what that looks like. Currently sitting at roughly four and a half
is my guess. Let's see. Video market cap. Also, Kirk, I see you in the audience. If you want to
join on stage, share any thoughts. But yeah, NVIDIA right now sitting at a 4.48 trillion market cap, so basically 4.5.
And not a bad day-to-day as well.
So a couple of things there.
Other names that I'm looking at, mentioned these two ETFs, you know, POW, AIS.
Those are ones that I use to keep an eye on some of the AI names, power names.
Power names, another good day-to-day.
Some of the names inside of there, POWL was one of them that I was looking at.
That's up 2% today.
Quanta talked about this yesterday.
That's ticker PWR.
They were actually down at one point.
2% today came all the way back, basically into the green.
They're down 0.36%.
At this point now, we've got two minutes here to close.
Kirk, see you joined up.
What's going on, man?
What are you looking at?
How are you doing?
I'm good.
I'm good.
I'm not, you know, hosting spaces too often these days, but getting back in the saddle a little bit here while the squad is at NVIDIA's GTC event.
Happy, happy St. Patrick's Day.
I just uploaded an interview I did with the CEO of Ametis, which is a stock that I've mentioned here on the show before.
So that one is starting to run on a couple of positive catalysts.
I have been following along with Mag7 and all the tech that I've exited in the last couple of quarters.
I'm really looking at these charts,
and I cannot figure out if we're about to get some sort of new excitement
because of any good news that could happen,
or if we're just running out of steam on liquidity
and there has to be kind of a correction here that's broader
based. And you know, I've been looking for a liquidity problem because of the debt
for a few quarters now. So I can't see a lot of optimism in the charts, whether it's NVIDIA
or really any of the Mag7 or any of the big tech.
Not that I don't like the companies.
I just don't know that I like them at these prices.
Apple, you know, with the big run that they've had,
I think that that is probably ahead of itself.
The one thing that I really track closely and have for decades is the M2 money supply and how it interacts with
the banking system. And it seems to me that we are pulling all the levers we can
to get the banking system to lend and to get involved. And that's coming at a time when private credit is kind of falling out of bed.
So I don't see any new liquidity coming, and I think that that's a problem.
So we'll see if it gets bad and we get a significant correction.
Or, you know, back in 2014, 15, 16, things just chopped for an extended
period of time, almost two and a half years. I mean, that's potential too. So what do you do
in that environment? I've been telling the people that work with me, stick with your small and mid
cap catalyst driven companies, right? Companies where a little bit of money goes a long way
versus trying to see massive capital flows into a trillion-dollar company.
The indexers who are primarily 401k investors, even if they don't deliberately buy SPY,
they buy three large cap funds
and they think they're diversified,
they just paid more to buy the index,
they are starting to lose jobs, right?
I mean, we're starting to see an uptick in unemployment.
That could be a negative for liquidity
if it really, you know,
if AI really replaces jobs fast,
then, you know, we're going to have a transition period until we figure out what to do about that.
So I'm being very, very selective.
Some of my catalyst-driven names are finally doing well.
I think we're up like 30% this year, which is, how do you know that's going to happen?
How do you know that's going to happen?
Ametis, which I started with, they are filing their paperwork to IPO their India refinery, which is the biggest biofuels refinery in India.
Be a pretty significant liquidity event.
Clean up a lot of the debt.
They're already involved in restructuring and refinancing their debt.
And the CEO, you know, repeated himself on the earnings call the other day and then with me today.
He says, look, we're only paying 5% on the majority of our debt.
So if they drop $50 or $100 million to the balance sheet from their India IPO, you know, that's a big deal.
Also, they're waiting on some government clarity
on how much they're going to get in tax credits.
It's already up on the Treasury website.
We're waiting for confirmation from the DOE.
They were supposed to run in parallel.
You know how government is parallel.
Who knows what that really means? But that could be any day now, in which case the company might be profitable right
now. We don't know until we see the final tax credits, but if they're profitable and they drop
50 to $100 million to the balance sheet, and they're only valued at a little under 200 million right now.
I think it'll justify the move up that we're seeing right now. I have a target price,
one year target price of eight bucks, but I do think it's going to get to around 40 within the next few years. Stonegate and a couple others upgraded their coverage as well. And we seem to
be all kind of in the same boat.
Two, three billion dollar company trading for about 200 million right now.
Appreciate you sharing that. Very interesting stuff that you're watching. As you were talking,
I did see Mike's hand go up as well. Mike, did you have a comment there or something you were
looking at? No, I just want to let you know I'm back. I got the room closed down. Don't worry. Perfect. Kirk, I know it's been a while,
so I appreciate you catching me up a little bit up to speed. And Paul, I see you in the audience,
if you want to request on stage, I'll bring you up. Kirk, we were talking through a bunch of
different stuff here today, but deeper into NVIDIA, MUSE, SanDisk, the earnings coming up in a month,
the Fed meeting that's coming up tomorrow.
Do you want to go a little bit deeper into some of these thoughts?
Well, I don't know.
I think it was Mike or it might have been you.
It was talking about top-ticking the oil stocks, right?
Mom asked about oil stocks.
That was my mother.
My mother asked me about oil stocks literally the day of the top.
Okay.
I wrote an article on Seeking Alpha, I think, stocks literally the day of the top. Okay. I wrote an
article on Seeking Alpha, I think one or two days before the top. And I told people, hey, this is
going to top out quick. You should sell into the rally. You know, I got a lot of boomers who yelled
at me. But it's turned out to be right. The general thesis on energy that you can choose to believe me or not. I mean, I've been involved in energy
for 30 plus years. You know, there just is a pretty fixed market. And while we're getting a
shock and probably several hundred thousand barrels come off the global market permanently, or at least for a long time. It's just not seeing growth for oil anymore,
you know, a fraction of a percent per year, but that's rolling over quickly.
It's just not an exciting place to invest. And I say that as a guy who, you know,
it as a guy who, you know, I've made over a million bucks trading oil stocks. And, you know,
that's starting from very poor I was. So, you know, I have no hate for oil just because it's
dirty and gross. I just don't think it's a great investment opportunity. I think that the train is leaving the station already on clean energy.
If you haven't noticed, ICLN and some of the other clean energy ETFs have really outperformed since April.
I don't see that not continuing.
I think the world is tired of what's going on in the Middle East.
I think the world is tired of what's going on in the Middle East.
I think you're going to continue to see countries, for the sake of energy security,
we don't have to talk about climate change,
for the sake of energy security are going to keep moving towards clean energy.
We are seeing this happen in Europe.
We're seeing it happen in China.
It's going to happen in India at some point.
You know, eventually we'll even do it.
And really, our utilities are leading the way there pretty soon. And if TJ Rogers over at Sun Power is right, and I think he is, commercial installations of solar are going to go through
the roof. The whole battery and energy management that you get at Enphase
and some of the other companies,
you know, I think those are all
buy the dip sorts of things
until we get into a real bull market again.
So that's really what I'm pretty fired up about.
You know, I'm a Fed follower.
You know, I was just at the funeral
of somebody who worked at the Federal Reserve
for 30 plus years. I know several people who are involved and I just don't find that too
exciting either. I don't think a quarter point in either direction makes a difference. If interest
rates were a point lower, I don't think it would make a difference. That doesn't really add much to liquidity. The banks are almost tapped out again. Private credit has a problem. Big investors are withdrawing
money and trying to figure out, okay, what should I own two or three years out? The family offices
and private equity firms that I consult to and try to co-invest with, I tell you what, man, there is just, there is a lack of hot money for
sure, but even a warm money. There is a lot of people sitting on their wallets and it's not the
type of sitting on your wallet that just stores up and has to flow into assets on any type of
catalyst or any type of incentive. It's just, it's money that people are comfortable
making their four points on or five points on.
And a lot of it's boomer driven.
I don't think the Fed really matters that much.
I just truly, truly don't.
And until they decide to do QE,
which, and I think all roads lead to QE, I just don't think it's going to be the same as the last road.
I don't think it's going to be fast and hard.
I think it's going to be slow and windy and intermittent because this administration and the people involved have said they don't want to do it.
And if we've learned anything, whether you like them or not, when they tell you that they're trying to do something, they try to do it.
They might fail.
They might end up making a bigger mess or avoiding a mess.
Who knows?
But if they say that they don't want to do QE, I really think you should take them at their word that by the time they get to QE, things could be pretty bad.
And it might not even be their administration.
So, you know, I don't care too much about what the Fed says unless he comes out and says, hey, we're restarting QT.
Now, that would throw me for a loop.
But beyond that, he says we lower a quarter point.
at. He says we lower a quarter point.
I don't care.
He says we're leaving it.
I don't care.
They better not say that they're starting
QT again.
That would be
wild. Paul, can you imagine?
I can almost imagine anything.
But the thing that gets
me is that Warsh is...
And again, we'll see what happens
when he gets in, but he's been against, um, QE, right.
So I don't think that's going to happen.
Um, I think he likes to leave the balance sheet alone and I'll take him at his word
for, um, you know, what he's, uh, sort of written about in the past.
Um, and, you know, I think if we are really concerned about inflation,
you know, we just have to worry about like the money supply and how much money that we're
printing. And then the rest of it can handle itself. I agree with the last person who was
speaking. You know, I don't think a quarter of a point here or there is going to make much of a difference. But I think if Warsh comes in and is aggressive with lowering rates, I think that sends a
bullish signal to the market.
And again, if you look at what he's said in the past, he thinks lowering rates is positive
for growth.
This is a pro-growth administration.
We've got a lot of noise that's happening right now
because of uh what happened in iran what's continuing to happen in iran because of the straits of hormuz and um you know the the the shutdown of oil going uh into the asian markets
and elsewhere and and also there's some some concerns with fertilizer um because like 20
of the fertilizer comes out of the
straighter four moves too.
But as long as they can quiet that down and clean that up, you know, I think companies
are positioned really well.
And so I would love to live in a world where the Fed didn't matter as much.
And, you know, I think if they're relatively steady and consistent and, you know, quarter
point here, quarter point there, I think the markets would like that kind of move as opposed
to something, you know, bigger and faster.
So we'll just have to see what happens.
It's all going to play out.
But I think the first thing and the thing that is concerning to me is that we get this oil moving again uh out of the
straight of hormuz and we get um some clarity there and and we get people to sort of calm down with
that and if that can happen i think you you'd see a return uh in tech in the tech trade, especially in the Asian markets,
and I think that's good for everybody.
Kirk, what do you think?
Yeah, I mean, you know, I started playing with poly markets here recently,
and I made a bet that we would see five rate cuts this year.
So I'm on board that it's going to happen.
You know, I've got my 16 to 1 odds, I think, on that.
But I don't think it'll matter very much.
You know, the banking system.
So I don't know if everybody knows this, but A, we're not printing money.
M2 is not up because of that. M2 is up because the fractional banking system or fractional reserve banking system is lending a lot.
So I don't know how many people in the audience have gotten all kinds of credit card offers in the past seven, eight months.
But the amount of credit that's been pushed out there, which is basically a lot like the extend and pretend on some of the commercial
mortgages, right? Extend more credit so that people can pay off their old credit, but that
that just keeps growing. If you take a look at the credit balances, you know, that's where the
M2 is coming from. It's all borrowed. So we're not printing money. You's a little bit of the little bail that is sucking up all the fuel.
And eventually, right, you have a forest fire.
How they deal with that is going to be important.
I think they're going to do it one way.
Maybe it'll surprise me and do it another way.
But again, the interest rates won't matter.
It's not going to add to growth.
We have to rebuild a lot of the world and we should just keep doing it.
We need more skilled tradespeople to help us.
But real estate is jammed up at every level right now, commercial, industrial, residential.
It is a tough financial situation. It's not financial crisis bad,
from what I can tell. But it's just a gummed up works right now, and they just keep trying to fuel
it. I don't know, man. I would be surprised if we're not talking about recession by the end of the year.
I really would.
All right.
Well, that's a cheery note right there.
I feel like something that maybe factors into it as part of this combo that I wanted to have a little bit with Paul.
Get that man at Guinness.
I mean, we got to get him happier.
I'm going to France for three weeks.
I'm leaving this weekend, and I'm just going to drink wine until I can't see.
That's one way to do it.
Paul, you ever done that?
I've done it in Italy.
But the great thing about French wine and Italian wine
is you can drink it all day,
wake up the next morning at 5 a.m.
and go for a four-mile run.
It doesn't hit you the way that it does in the United States.
In my case, it'll be a four-block walk,
but I understand.
You know, one thing, I actually feel like this is great because the topic that I wanted to chat about with Paul and I think Kirk and Mike, I'd love your thoughts on this as we go through it.
It was on the defense side of things today.
And I'll roll us into the convoke here and outline some of the stuff we're talking about.
But before we get too deep in, I feel like, you know, the recession talk that you're kind of talking about, Kirk, maybe leans in a little bit with also the defense side of things.
And if that's the way that you think things are going, and we're going to see that, because the one area that's not going to lose spend is on defense.
I mean, they've made it very clear they're going to continue to enhance that budget.
And those stocks might end up becoming even even safe havens within all this.
Curious your thoughts on that, Paul, kind of just like an outer area that I know we'll
dive in a deeper conversation.
Yeah, look, this is a big theme of ours and mine, and I'm very much interested in this
trade, not just for now, but for the long term.
Pardon the pun, but defense is defensive. And we saw that last year
when Trump got in office in February and the temper tantrum or the tariff tantrum happened
and everybody got nervous. You still had a positive return in defense.
Look at what we're doing right now, the amount of munitions that we're expending in Iran.
We have to reload, and we are reloading, and we've quadrupled budgets and increased contracts
with some of the prime contractors in the defense space in order to replenish.
And then we still have to stay on top of the game. So we've got to stay ahead of the curve
regarding equipment, technology,
airplanes, naval ships, all of that stuff.
And this is getting more and more important
and will continue to be important.
And you could say things change with administrations,
but we still have another two and a half years,
a little bit more than that, in this administration.
And I don't think the tone is going to change at all. Also, you have the U.S. really putting it on other
nations to build their own defense capabilities. You know, we've basically stated we are not going
to be the world's police anymore. And if you want us to be, we want something in return, right? And
so there's a lot of countries out there that are on notice and spending a lot of money. So in the toughest times,
defense spending is not going to go down. It's going to maintain or it's going to continue to
increase. And I think in the world that we live in today, that's going to be an increase. It has
to be an increase for NATO member countries. They're bound by that. The United
States is making a commitment to that. There's no way that Trump's going to turn around and make us
weaker. He's going to continue to build on our armed forces and our military spend. So I agree
with you. I think it's both an offensive play and a defensive play if the worst case scenario comes
through, like we have a recession
going into the end of the year but i i would even address that i i don't see it i i i would love to
sort of see it but i don't see it like i can't see us going into recession by the end of this year
it just like when i look at what companies are doing, what the earnings profile looks like, and I know recessions start at the peak, but I don't even think we're at the peak.
You know, NVIDIA talked today about, you know, 1 trillion in bookings.
And it's kind of amazing that they could forecast that out with such high confidence.
And that's going out in the 2027.
So, you know, for me, I know that the market's not moving the way that people want
it to move. It's a little bit frustrating for me too, but, but there are some names that I see out
there and one of them and others in the, in the defense space, humanoid robotics, even some of
the large financials that I just can't see what it's good. Like, you know, we're having trouble
finding some catalysts. Sure, but I don't,
I also don't see what's going to make them roll over. Like, I mean, I think there'll be pockets
of things that'll have problems, maybe private credit and some, you know, real estate investment
trust and things like that. But I can't see the broader markets rolling over right now into a
recession by the end of the year. I just don't know what that would be.
If we could get through what we've been through so far this year, all the noise, you know,
going into Venezuela, removing a regime, going into Iran, removing a regime.
I just see so many synergies that could come out of that.
Now, could things go wrong?
Yeah.
But I don't tend to have that sort of pessimistic view to look for the things that could go wrong.
You know, when you see signs that things are going wrong, I think that's when you start to pull back a little bit.
But in my mind, I mean, look at what gold's doing. Gold's sort of been stable.
I know we had that big run up through all this, but now it's sort of stable and it's sort of backing off a little bit. You're starting to see crypto move a little bit and get, you know, a little more
stability and a little bit of a move up. And then again, when I look at the numbers, I start to see
some of these companies and I go, well, they do look attracted to me from a growth perspective.
And if you were interested in them last year at higher prices, why wouldn't you be interested in them here at lower prices?
And then the last piece of that, if we all think that the Fed is actually going to move rates down, whether that be quickly or slowly, and I do think that that's in the cards, I'd have to say that when the Fed eases, markets go up. I mean, they just do. And so whether that's a crazy bull
run like we've seen in the past or whether it just continues to grind higher, if we want to
just get a different opinion, I'm a little bit more positive on the markets. I think it's healthy
when you see markets having buyers
and sellers the way that we've had now. But if you had to ask me, the next move will be up, not down.
I like it. I like it. A little positivity in there too too. All right. I see a hand up from Options Mike.
Yeah. You know, it wasn't too long ago we were talking about a bubble in the stock market, right, as we came at the end of last year.
The AI trade and, you know, this needs to cool off. And it's really cooled itself off nicely, right?
I mean, you know, any talk of a stock market bubble has pretty much evaporated.
I find that recession talks always
come in when the market's not doing well and people are feeling bad now. There are definitely
some issues out there and inflation remains very stubbornly high and this is certainly not going
to help it the longer this goes on with Iran with oil. But I think the risk, I don't think we're in
for a major market crash here. That said, I do think we can go lower here before we go higher.
I think the market here is worried and it can't quite find its footing and there's some
problems out there that can kick in.
Also earnings weren't great.
They were some good earnings, but most earnings were okay.
And we're going to head into earnings.
I think Gab pointed out earlier, you know, earnings season is about a month away to starting
over again.
So, you know, that'll show us where we're at.
But I think recession talk always comes in
when people are feeling bad.
There's tremendous amount of negativity right now,
sentiment's about as bad as it gets.
That's when you start looking for a reversal.
But I wouldn't be surprised if you got a move down
before we got that reversal here.
Yeah, me either.
All right, I want to dive into this bigger picture conversation here together with Paul.
Mike, Kirk, would love for you guys to stay on stage
as long as you can.
We'll be talking here about...
I actually got to jump here, Wolf.
I'm happy having you back.
I got to get the dog out.
Yeah, I figured.
I figured.
Thanks for hanging out.
Appreciate you.
Catch you guys later.
Sounds good.
For those in the audience,
so we'll be having this bigger discussion here around investing
and defense, the NATO ETF.
We've obviously done a lot of conversations with Paul from Leverage Shares.
You've already heard some of his expertise on here.
Investors should carefully consider a fund's investment objectives, risk, charges, and
expenses prior to investing.
A fund's perspectives and summary perspectives could name this and other information about
the different Lever different leverage shares products. And again, this one is a specifically one from themes. So as well as the themes products
as well to obtain a funds prospectus and summary perspectives, you can visit the website. If you're
looking for the leverage shares ones, you can go right to leverage shares.com. If you're looking
for the themes ETFs, you can go to themes ETFs.com, and those should be read carefully prior to investing.
Excited to be working with Leverage Shares, Themes, and the whole team as we have these
conversations. So let's get a little bit further into this. NATO has been performing extremely
strong here, and this defense thematic has continued to be powerful for multiple reasons,
in my opinion, and obviously want to hear yours, Paul. But for me, I look at the spending, right? Nobody's in a time like this looking at it and saying, oh, you know,
we should cut our budget to defense, right? People are just spending more and more in this area
as conflict gets a little bit higher and pieces continue to accelerate. And we have bits of
instability. When we look back over the past year, NATO's up 41.65%. And since launch, just really since October of 2024, 63%.
So one of the top performing there.
The names inside of it, some of them are going to be familiar to people.
RTX Corporation, Boeing, GE, Lockheed.
But there's some stuff that's curious that's in here, like Rolls-Royce and Honeywell and pieces like that.
So we'd love to hear from you, Paul, kind of like top down,
what you're looking at when it comes to some of these defense thematics right now.
And for me, this seems to be a really, really strong thing that could continue to hold up very
nicely this year. Yeah. So I think you mentioned Rolls-Royce and a lot of people think Rolls-Royce
is like, you know, a luxury carmaker, but they're much more than that. And they have an incredible
jet engine business and they are big in defense and aerospace, especially within Europe.
And so that's the interesting thing about this.
The companies that you'll see listed in this are tilt to the large cap side, some mid caps in there.
But most importantly, they're inside of NATO member countries. And we specifically
designed the index to specify inside of NATO member countries because of the mandates that
were happening and that we saw coming into the future. So number one, the United States is part
of that. And the United States has the, you know, the greatest defense contractors
and companies in the world. They are the most advanced. They use the best technology.
They have the best capabilities, so on and so forth. And so, you know, there's a tremendous
amount of spend both in the United States and Europe, NATO member countries, that's going to come to those contractors because of their expertise, because of their specialties, and because they are far
and away the highest performers in the world. That being said, though, when you look at some
of the European holdings that are inside of the portfolio, they're within the NATO member countries that are now responsible for their own defense. And so we know that, you know, you don't want to be a part of a
supply chain where you're dependent on manufacturers from other countries only. So you want to build up
your own capabilities. And these companies are investing a lot of money and getting a lot of
investment throughout Europe, throughout the NATO nations to increase their capabilities, their manufacturing, their munitions, their
drones, all of that stuff.
And so Rolls-Royce is just one of those that you'll see.
There are other names in there, European names, Safran, Aerobus, Rheinmetall.
Again, big names that potentially people in the US don't really follow,
but they are prime contractors in Europe and they are really good at what they build and what they
design and what they deploy. And so that's kind of the strategy behind the portfolio.
We do realize that there are smaller players out there that have potential
for higher growth.
But the purpose of this is to be a play on where the massive amounts of government spent
are going to go.
And they generally go to the prime contractors.
And because of that, you know, we're really excited about the portfolio and its growth
prospects.
And again, the second piece that I would say to that is its defensive nature.
Again, we've been in a really choppy market.
And you gave the long-term stats on what the performance is.
But even in a choppy market today, it's up 8.65%, which is healthy.
Last year at this time, like I said, it was up around a little over 4%.
Last year at this time, like I said, it was up around a little over 4%.
So at the end of the year, it finished up very, very strong.
We have to see how things play out this year.
I happen to be a little bit more bullish than some of the other people that are on this call today.
I think the market does really well going into the latter half of the year.
I think we have an administration, like I said,
that is growth at all costs,
meaning they're going to put pressure
to make sure that we are growing.
And if you asked me,
I would lean more towards the bullish side of things.
I think this is an excellent way to capture that growth.
But if you're a little bit nervous,
it's more of a defensive
play on the downside. So kind of like thinking of investing with a little bit of a margin of safety
where you know there's committed spend. Yeah, committed spend seems to be the name of the
game. Do you almost see it a little bit like we were talking about MU, Micron, who is reporting
earnings tomorrow, and they've been moving. And when I look at some of the commentary about MU, Micron, who is reporting earnings tomorrow, and they've been moving. And
when I look at some of the commentary on MU, you know, the things that people really like about
them is the fact that they have committed non-cancellable contracts that basically,
you know, all of their supply is sold out for 2026, and it's probably going to be the same for
2027, 2028. Do you see a similar thing on the military side where it's like you have committed
non-cancellable contracts for years.
You'll need to unmute there, Paul.
Yeah, I'm sorry.
And yeah, and they're growing. And like I said, Lockheed Martin just announced a couple of weeks ago that they've quadrupled the existing contract with the U.S. and extended it out further.
So that's happening across the
board with a lot of these manufacturers. And I don't think it's going to stop.
Technology is a big piece of this, but it's not the only piece of this. Those technology companies
have to work with defense because when you take a look at the smaller technology companies,
if they don't have the ships to work off of, to launch the rockets, to launch the planes,
if they don't have the airplanes to fly in, the technology is just meaningless.
And so somebody has to build all that heavy equipment so that you can employ that technology
and so you can be more accurate.
And that's where these bigger players come in. That's where
these prime contractors come in. Those contracts just keep growing. And by the way, we haven't
even approved next year's military spending. And reportedly, it's going to be about $1.5 trillion.
In 2026, it was $900 billion. So when you look at the numbers, they're just increasing
by a lot. And the beneficiaries are going to be these companies. And so
for what you said, we agree. The spending is committed. It's going to continue.
we agree. The spending is committed. It's going to continue. And we don't really see an end to it.
If somebody could point me in the direction where they tell me there's been discussions on
decreasing spend on aerospace defense, munitions, so on and so forth, I would take a look at it. But
I haven't found it anywhere. So it kind of gives me that sense where you can still get in, still have high growth potential.
And again, if the market goes down, these will be hopefully more stable on the way down and mitigate some of your overall risk in your portfolio.
It's a high-quality thesis there, and I agree with you.
It's only continuing to escalate.
I do want to poke at a couple other names that are inside of this,
but before that, Kirk, I was just curious if you had thoughts in this area,
if it's something that you've invested in.
So I am very invested in the defense theme.
I thought it was fairly forecastable,
and the Iran conflict really drove the point home.
So I own a couple of the drone names,
and I've been looking at others.
I own Arrow Group, which hasn't done anything for me yet.
But I was very early in unusual machines
for some unusual reasons,
and that one has done pretty well. I think they're both buy the dip stocks. They might even be
pyramid up as they rise. The contracts that they can get relative to their market caps,
I know this is mundane and mathy, but when you take a look at their capacity,
what they can actually build and source and supply and everything else, and then you take a look at
the size of the contracts, and then especially the add-on contracts from the Department of Defense,
they have the ability to 10x their revenues and profits over about two years.
So there are certain companies into that massive TAM,
and Paul is absolutely right about how big that TAM is,
they can really make a lot of money.
So I was invested in Rolls-Royce a few years ago when it was a buck or two, and I got put onto it by a friend of money. So I was invested in Rolls Royce a few years ago when it was a buck or two,
and I got put onto it by a friend in London. And I've been in GE aerospace from almost the get-go.
Certain companies, when you take a look at them, you're like, okay, how are they going to do
relative to the rest of the market? And I probably think that they beat the market, even though I'm not particularly bullish on the market.
So for me, being a guy that only wants to invest
in about 20 names,
I'm picking out the small and the mid caps.
But as far as an industry to be in,
I was just on the themes ETFs website
because I want to take a look at what they had.
And I mean, I will tell you, Paul, it's a great lineup.
I hope that you guys get some traction enough to be able to do some option market stuff
because these little baskets of stocks, in my opinion, and I've been asking for these for years,
are awesome because, let's face it,, 60 to 80% of people have no ability
to do individual stock research.
You know, it's probably closer to 80.
So if you can identify the theme, the industry subsector, and use these to buy a basket of,
you know, a dozen or whatever stocks, man, that's a heck of a tool.
I like the gold one, by the way.
Yeah, we like it too.
Everybody's liked it.
And miners are really in a great position right now for obvious reasons.
Yeah.
I invested in gold back in 2000 because a client made me do it.
And, you know, I'm not a big gold bug.
I like to go to estate sales and rubbish sales and buy little pieces of jewelry because you get the extra value there.
At some point, the math becomes overwhelming for these gold miners, though.
If you take a look at what some of them are going to buy back in shares,
it's unbelievable. I mean, some of these companies are going to wipe out 10%, 20%, 30% of their float. I mean, I don't see how the miners don't do well. I mean, even if the price
of gold has a dip back into the $3,000 for a hot minute, and I was saying gold would go to 5,000 when it was 1,800.
Even if there's a dip,
it's not going to matter much to the miners.
And if they do fall,
it's a buying opportunity, in my opinion.
I've got an article coming out on gold and then a series on gold miners.
Every company on that list is a good company.
And, I mean, they might double or triple in the next three, four, five years.
Yeah, they're operationally efficient right now.
They are becoming more efficient even just pulling the gold out of the ground.
So it's a pretty interesting place to be. And, you know, at current prices, they are profitable with the gold price anywhere from, you know, $1,300 to $1,800.
So we're very stable above that.
I don't think that we'll see prices like that ever again.
So, again, what you said, at $3,000 an ounce, if gold were to ever get back to that, I think anything is possible,
especially when you've had a run like this. We're still pretty optimistic about the miners.
And we would also extend that to silver miners. I would even take it a step further. And I think
something that's even very attractive right now that we offer is copper miners, COPA is the ETF.
We think copper is really starting to shift from supply-demand dynamic, especially with everything that's happening with data centers and the new racks and new chips.
and the new racks and new chips.
You know, there's a lot of copper being used inside of all of these racks,
both from a cooling perspective and a conductivity perspective.
And, you know, we just think that demand is going to continue.
Copper is one of those commodities that never really took off
and never took that parabolic spike.
And so, you know, as we see this supply demand favor demand over supply we think
the miners are going to do really really well and we think that's another space that if you're
looking to tap into commodities you've been looking at gold and silver miners and
you're just unsure where to get in we think generally copper is a really interesting play
copper is a really interesting play. Yeah, I'm looking through these as well.
If you want to see what we're looking at, we're on themesetfs.com. You can see the variety of
different ETFs. I agree with you, Kirk. It's a lot of great picks within these areas. I'm very
bullish as well on the gold miners. And Paul kind of just outlined my entire thesis right there,
so I don't really have to repeat it. But they're not being valued like the gold in the ground is
at $5,000, you know, spot price. It's being valued at a lot lower than that, potentially
3,000, 3,500. So there's definitely an opportunity there, in my opinion. And, you know, these funds
have worked really well. If anyone wants to check that one out, I know we're talking a little about NATO here, but AUMI is the themes ETF gold themes gold miner one that's up also around 6% year to
date. And it's up over 116% in the past year. So it's had quite the run as well there. So I'm
a fan of the gold side. It's something that I own, gold, gold miners. People heard me talk about those
decently extensively as ones that I'm looking at. Pulling back for a second to the NATO one I was just looking through,
you know, there's a good variety of names in here. Paul, can you just walk through like
your thoughts on how this gets, you know, rebalanced? How new names make their way
into this? When you would take a name out? Pieces like that? Yeah. So another key thing is that people should know
is, you know, we are a passive strategy. So we're not picking winners. We're setting an index
criteria and then we are managing it to the index. So what I would definitely recommend for everybody
to do before they're getting into any of our names is sort of go over
and look at what the index criteria is and see if that sort of matches up with what you're kind of
looking for as far as like an investment methodology. So right now, I think there's about 75 names in the portfolio.
And it's based on the Selective Transatlantic Defense Index.
And so, you know, what we're looking to do is, you know, put in companies that have business
operations and aerospace and defense industries that
are headquartered in a country that is a member of the North Atlantic Treaty Organization.
And so we give them equal weights when they're selected, and then we rebalance them on a
quarterly basis.
So if something gets a little bit out and extended because it takes a run or there's
something in the news, we're really going to make sure that we don't get too overweight
in one name. So it's got to be part of the GBS index universe. It has to have a minimum
average daily value traded of at least $1 million U.S. over one month and over six months prior to and including the selection day.
And each company must have the following fact-set industry classification of aerospace and defense. And we think that's critically important too,
because what we find from a lot of our competitor funds is that they add in a lot of tech names
to try and juice performance. And one of the things that you'll know about us is,
besides the fact that we try to select high growth areas of the market that have long
term growth prospects, we also want to be the purest play. So when you
pick a basket to try and get exposure to a certain sector or a certain theme,
you want to make sure that you're actually getting exposure to that theme or that sector.
And with us, you will get that because it has to be declared an aerospace and defense company.
aerospace, and defense company. And so those are the components. And that's how we select the
criteria. And like I said, I believe at the moment, there are 75 to 79 names in the portfolio.
But what that actually just means is that they met the criteria of the index.
Understood.
That makes sense.
Yeah.
So concentrated enough to give you that high exposure.
Actually, there are 81 holdings.
I just looked online.
There are 81 holdings in the portfolio today.
That's up from about 79 names prior.
What were the latest ones added?
I don't know.
I'd have to take a look look at the holdings
to see but i actually don't know exactly what was that just recently added but i can get that
information for and follow up yeah yeah that'd be great i was kind of just like poking around
through kirk you mentioned that you like some of these names inside of here anything else
specifically standing out to you i see some of the classics obviously with you know Smith and Wesson being inside of here and Lockheed I saw that Joby made
it in as well which I thought was interesting because that's Evie toll and that's uh you know
it's it's cool like it's cool to see what can fit into defense bucket you know I I like to all the
jet engine companies I think ge aerospace and Rolls-Royce are just going to make a killing over the next 10 years.
You know, Saab, you know, in the U.S., everybody knows Saab is a car manufacturer and they don't even make the cars anymore.
But if you remember the ads, Saab's tagline, does anybody remember what it was?
Born from jets. They've, they've always been an aerospace company that, you know, um, was, uh,
was a jet maker. Like that, that's what they did. And they created the cars, uh, outside of their
core business. And so Saab's also included in this, but what they're really known for is, uh,
really known for is, uh, is manufacturing jets, uh, and jet engines. And so, um, like I said,
it's for somebody who really hasn't had a lot of exposure to European companies, you can look
at this portfolio and you could start to see, you know, some, some really interesting companies
that you may not have known what their history was again,-Royce, everybody thinks of the great cars. Saab, same thing.
But those companies were jet manufacturers,
jet engine manufacturers before they were car manufacturers.
A little history lesson to go along with it here.
Pretty interesting.
Paul, let's talk some catalysts here for a second.
Cuba right now seems to be a potential impending catalyst for the military side collapse of Cuba.
You know, the U.S. is playing Venezuela in the World Baseball Classic. You know,
it's like round two going on over there. Obviously, things happening with straight
or four moves like I'm thinking that this is
a great long-term play, but I'm curious for the short-term, some of those opportunities and things
you're looking at. Yeah, I mean, like I said, from the perspective of the Stradivore Hormuz,
look at Asian technology, because it got hit pretty hard, we have two funds that are ETFs that have high exposure to Chinese technology.
One is obviously Dragon, which is all revenues and profits are generated from Chinese mainland
companies that are generating those revenues from across you know, across the stack of AI.
There's about 30 names in that portfolio.
And from a market perspective, market value perspective, it got hit a little bit on performance just simply because we haven't had outflows,
but we've had the market didn't like, you know, the fact that they get a lot of their energy from the straight-forward moves.
Same thing with BOTT, B-O-T-T,
which has been a really great performing fun for us as well.
And the performance has been great,
even though it's had a little bit of a downturn
because of the exposure to the Strait of Hormuz.
But that said, we see that as a really great opportunity
to get in at a little bit of a better price point.
I mean, at one point, BOT was up like 30%, 33%, 35% year-to-date.
I think that has been muted a little bit because of what's happened.
And I think it's somewhere, I can get you the exact number if you give me one second.
Year-to-date, it's up 19%, 19 19.8 so still a juicy return but again once the energy
gets turned back on and those concerns go away we see an acceleration uh in in those companies
um and we think we'll get back to a little bit more normalcy and people will reinvest. And I could tell you, I'm going to be traveling to
Thailand at the end of the month for business. And we have a lot of Thai asset managers that
are looking to invest in BOT. In fact, we've got a lineup of about six large asset managers in Thailand that are specifically interested in bot.
Like that's their initial place where they want to have discussions.
So I'm going to be busy while I'm over there.
But if you want to know how they're thinking about the world, they see what's going on.
going on. It's in their backyard. They're very excited about humanoid robotics. They understand
It's in their backyard.
They're very excited about humanoid robotics.
right now that there's been a little bit of a dip in the marketplace just based on all of these
concerns. And you just have to make up your mind for this catalyst is whether you think we're going
to solve it or whether you think it's going to get worse. And if you ask me, I think there's too
much on the line for it to get worse. I think, you know, we're focused on
getting that the Strait of Hormuz open. I think we've diminished the Iran, you know, capabilities,
military capabilities enough where we're going to be able to handle a safe reopening of the
Strait of Hormuz. And I think you're going to see both Chinese tech and South Korean names sort of return.
And I think that's a great spot.
We talk about value at a growth price.
I mean, these are growth names, but I think you've gotten a little bit of hit in the valuation.
I think you're starting to see people dip their toe in that.
Once that gets opened up, I think you could see a nice little pop there.
So that would be the first thing I'd say.
Regarding Cuba, I think Cuba's a non-event.
I mean, I think it's going to be cool to be able to go to Havana.
I'm a Hemingway fan and old man in the sea.
I'd like to be able to travel there freely and sort of experience some of that stuff.
But I don't really know that that's a major catalyst.
I do think what that could potentially
open up is some energy um and i think venezuela uh could be a good answer if we can have relations
with cuba we can settle some of those issues sort of there'll be a revitalization of cuba
and i i think what we've done in uh venezuela we've shipped a lot of that oil that we pulled out of the ground over to Houston.
They're refining it.
I think that's going to be another big boom for the energy markets.
And, I mean, I think you'll see oil prices come down.
But I think the industries that are so dependent on, you know, low fuel prices will benefit from that. And I think you could see that
from the events that will happen there. What was the other one that you mentioned?
I think I mentioned mainly the Cuba side and the Schrader-Formuz. The other one was a joke. I was
joking about the Venezuela thing because we play u.s versus venezuela tonight in the world baseball classic which i thought was a i played college baseball uh and i'm a little bit nervous i'm a
yankee fan and we're i'm a little bit nervous because we are starting for u usa nola mclean
who's a new york met and that always makes me nervous but uh for you met fans out there i'm
rooting for this guy tonight uh and i would love to see the U.S. get a win,
but it's going to be really competitive.
Venezuela's got a great team,
and I don't think it'll have any impact on the market,
although I might wake up tomorrow a little salty
when I start to look at my screen if the U.S. doesn't win.
Yeah, me too. Me too. Fair game within that.
Kirk, do you see any catalysts here? I know that you mentioned that you're having invested here.
It's the drone companies, the clean energy companies, a handful of cybersecurity stocks.
Beyond that, I'm pretty limited in my scope.
I don't own a single ETF at the moment.
However, I have been looking for dips to buy.
And, you know, when we get them, now that I'm exposed to these ETFs, I'll probably have to take a look at these because I really like these small baskets.
If you like clean energy, we have a uranium ETF as well, Uran, which is all about uranium mining and nuclear microsites.
So it's a really interesting strategy and play on clean energy.
Gab, I would say the one thing that we didn't discuss, which got pushed to the back burner a
little bit, is the meetings with China. I think that could be another catalyst. I think,
especially with what's happened in Iran, you know, there's a role for the U.S. to play with China now.
I think it creates a little bit more leverage for us. And so I think those meetings are kind
of critical and I'd love to see, you know, some positive news come out of there. And everybody's talking about like the megatech and semiconductors
and what's the catalyst for NVIDIA, so on and so forth.
And we've talked about this on the show prior.
If we can walk away from those China meetings
with NVIDIA having another place to sell chips,
and AMD and some others,
I think that would be a really great place for a catalyst to see
Nvidia make its next move and some of these semiconductor companies make their next move.
So all in, I think I'm looking forward to that meeting.
I wish it wasn't being delayed,
but I think if we can get something
accomplished there, that's also another catalyst for some of these big tech names, especially in
the semiconductor space. One last question for me here, then we can move into final thoughts.
How does AI play a bigger role into all of this? I think AI is just critical, right? So I think it adds a little bit
of nerves from an employment standpoint. You just saw Meta come out and say that they're going to
reduce their workforce. You saw Square do that. And I've seen commentary from people like smart
people, McDermott from ServiceNow say that he thinks over the next three years, the unemployment rate
for recent graduates could go as high as like 30 percent because a lot of those entry level jobs
will be eliminated because of AI. Right. So so I think like there's that gives me a little bit
of concern just because, you know, we don't want the unemployment rate to spike.
We want people to be able to come out of universities and get jobs and, you know, start investing and spending money and doing all that stuff.
So I think on that side, AI is always in the back of people's minds.
Like, how is this going to affect the overall economy?
How is it going to affect employment?
But on the other side, it's going to make everything much more efficient.
And I think down the line, a little bit longer term, it's going to create, you know, more
opportunity, more jobs, more efficiencies, more profits for companies.
And so the people that can implement that and, you know, implement it well and use it to their advantage,
I think that's going to make companies much more efficient
from a revenue and earnings perspective.
And so it plays a role in every single thing that we talked about,
whether that's energy, whether it's defense,
whether it's mining, whether it's healthcare, e-commerce, like AI is just going
to be a part of all of that. And so I think it's critically important. I think we've got to get it
right. And I think, you know, from my perspective, that's why I've never really gotten bearish
on the major players, especially like a name like NVIDIA, because I believe that it's going to be able to grow and grow and grow
and just surpass even these astronomical numbers that they're guiding for now
because there's so much and so many different layers that still need development.
And I think that they're going to be the major player.
So that's just my take on AI.
I've said it before.
I sound like a broken record,
but I just think we're in the early stages of it all.
Kirk, any follow-up thoughts on that same question?
I'm sorry.
I was distracted.
What's the question?
Yeah, just how you think AI is going to further deepen this investment narrative and continue to just blow up this defense investment?
So, AI, you know, I was around Drain.com, and AI is, you know, some huge multiple of that.
So it's going to change everything.
I think that the drones, because of the way they operate,
and then some of the new weaponry, the GPS blocking,
and just all the different things that come with small smart computing
All the different things that come with small smart computing is going to cause massive spend in that area.
And it's going to be more global than domestic, from what I can tell.
So what does AI do?
Man, that's just such a big question.
On the defense side, I think it enables the smarter machines, and that's where you can
get some juice.
More broadly though, let's always remember AI is probably a disinflationary force, and
that is on top of the aging demographics in most of the world, which is a deflationary
force.
So what ends up happening
is you get inflationary policy, which we've seen both monetarily and fiscally. Well, on the fiscal
side, they'll spend more on defense, right? So, you know, I just think it changes maybe the nature
of the defense investments a little bit. But if you take a look at Lockheed Martin, which is a big holding in that fund,
and some of the others,
you take a look at some of these companies,
I mean, they're right there, right?
They're all over AI.
So I just think it's going to become
a piece of everything.
I don't know that it necessarily,
from a theme standpoint,
changes very much.
Now, on an individual name, right, if you're stock picking, it's different, right?
You find your anomalies, you know, Simon style, you know, Renaissance investing and
Millennium investing, and you try to figure it out that way.
But from a theme-based perspective, I think AI just drives smarter.
And in the short run, that's a lot of money getting spent on smarter, right?
So who are your winners from that?
It's your giant companies because they can afford it.
And then it's your very, very innovative companies because they have an edge somehow.
Well put. Well put. We're going to move to wrap this up here, kind of hit the top of the hour.
Perk, I'll come to you first. Any final thoughts in terms of the market, defense, any other pieces?
I have been early on clean energy investing. I've been in it for 15, 16 years. I've seen massive upswings and massive drawdowns. I would draw the analogy between clean energy and semiconductors.
were very cyclical for a long time, and now they're just in a long-term secular bull market
that you buy all the dips on. I think clean energy is entering that. I think that clean energy is
probably from an energy security standpoint and from the standpoint of climate change,
which most of the world has policy on, I just think you're going to see a lot of things
just keep rising as they take more and more of the traditional energy share. Plus, they're already
taking most of the new energy share. So the increase in electricity is almost all clean energy globally. You know, very little gas.
You got coal in China, but not much coal either.
So when you take a look at what this means,
you know, I think, you know, I'm not a gigantic Musk fan.
He confuses me, which I guess maybe he's just that much smarter
that he confuses me.
I think he's 100% right when he says solar can be 80% of the grid at some point.
You know, I just, I see the day coming.
Now, it's a long, long period of time before it happens,
probably 10 to 20 years if we get to 80%.
But the ride to 50%, we're already halfway through it, right?
The easy stuff is already going up.
And now it's going to be how do you decentralize the grid the same way that we talk about decentralizing finance, right?
So I think that clean energy is maybe the easiest long-term investment.
easiest long-term investment, but man, is it volatile. So you should get your chances to buy
But man, is it volatile.
cheap as well as your chances during bullish periods to pyramid up. So I would just tell
people that AI is impacting that too. The cost of batteries are coming down tremendously. The cost of solar electrical generation and conversion is, what, 97% better than it was a decade ago.
You know, the cost of solar during the day is already by far the cheapest energy.
And it's almost on par with coal and gas for overnight when you have to throw in a battery.
and gas for overnight when you have to throw in a battery, that generational shift as fossil fuels
remain range bound probably and clean energy, solar plus batteries gets cheaper and cheaper and
cheaper. It's just a box, right? The lines are going to cross. One's going to be parabolic to
the upside and one's going to drift down, you know, to the bottom right.
So that's what I'm most involved in right now. I love tech too, but, you know, that's harder for me. I don't always understand what I'm reading about. The energy I understand because I was an
oil and gas guy for 30 years. And the transition is clear. The private equity guys are transitioning.
The private equity guys are usually the smartest guys in the room. And that's private credit guys. They have underwriting issues. But the private equity guys pivoting to clean energy, which is what they talked about two, three years ago with me at the Heart Energy Conference, and really, I think, probably drove some of that rally that we've seen recently,
is the big money moving.
And if the big money is moving, you ought to pay attention.
I definitely can concur with the big money side.
That is something that I follow very religiously as well.
Really enjoyed having you on here, Kirk.
It's been a little while since we chatted.
I'll talk to you again after France. Sounds good.
Have some wine for me and Paul. Paul, great conversation as always. Glad we got to see each other in person recently. Any follow-up thoughts?
Anything else you want to share as we move to close this one out?
No. Like I said, I always like to end these discussions with a big thank you
to you and your audience.
It was great to meet you guys in person and sort of put, you know, real faces to names.
I know I see you guys on video all the time, but it was nice to shake your hands and have a meal with you guys.
So that was awesome.
I look forward to doing that again soon.
And just to the audience, we really appreciate the thoughtfulness, the conversations, the
questions, the feedback, all of that stuff.
So happy St. Patrick's Day to everybody.
Don't hit it too hard tonight if that's what you're doing.
And go USA.
Go USA.
Happy St. Patrick's Day.
Yeah, huge thank you to Leverage Shares and Themes ETFs for being a sponsor of Wolf Financial and Stocks on Spaces. We always love having you on. Everyone can go? Other ETFs. You could see the variety,
super strong performance, great team, great analysts over there putting these together.
That's going to do it for Stocks on Spaces today. Tomorrow, Evan and Stock Talk Weekly,
I think might be back for the show and hosting, and we'll be starting probably a little bit early
for FOMC so we can live analyze that
on here. So thank you again to everyone for tuning in. We appreciate you all and we are
looking forward to the next show. Have a great rest of your Tuesday. We'll talk to you soon. Thank you.
