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STOCK MARKET TALK
Recorded: Dec. 4, 2025 Duration: 3:53:15Space Recording
Short Summary
In a dynamic discussion, participants highlighted significant partnerships and growth opportunities in the crypto and tech sectors, including Meta's strategic shift towards wearable AI, UiPath's impressive earnings, and Nebius's substantial contracts with Microsoft and Google, signaling a robust future for these companies.
Full Transcription
Music all right all right what is up everybody? How are we doing, team?
For some reason, the other space did not work super well.
So, unfortunately, Mike put out the tweet.
Evan, what did you do?
I just put this out there, and everybody's saying, like, I can't get into it.
What is wrong with you?
Yeah, I think it's X, honestly.
But I tried to open the stream, and this time, it just didn't do anything. Like, it sat me in the waiting room where it was i think it's x honestly but i tried to open the screen and this time it just
didn't do anything like it sat me in the waiting room where it was just me for a while so it is
what it is uh we did have a nice oh we're back to nice and green at least in my portfolio here
uh we were going red there for a little bit but it looks like it recovered obviously there was a
good meta headline this morning well it depends on what your definition of good is says they're
going to be pulling back on Metaverse spend
maybe next year by as much as 30%.
To me, it made me feel like
it could bring back vibes of that year of efficiency.
2022, maybe that was.
MetaStock
did like that this morning.
Hey, we got some MetaNews here. Meta
talking about shifting money from Metaverse
to wearable AIs.
I like that. Did that just come out right now?
Just now.
Fox Business News.
Stocks Business.
Is this actually or is this like a Stock Charts Weekly and it's actually Stock Talk?
It's from Fox Business News.
Fox Business News.
Gotcha.
Okay.
I think you said something else.
Okay.
I will try and find that story but
i don't hate the move i think that is a smart idea i think that the metaverse was a slight
was a little bit of a branding problem more than anything else i don't know if we're going into
full immersion but that does feel like the direction stuff is going in so to me this is
like a little it's if they're just shifting over to wearable,
it's the same exact theme,
just slightly different branding on it.
But market will take what it wants.
I got vibes of a year efficiency,
like I was saying there.
Obviously, UiPath, Stock Talk Weekly
was taking the earnings gamble
into the UiPath earnings,
and it worked out.
It did work out.
Path is up 24% today.
What a move on that one up to $18.47 of $3.60.
So that one definitely did work out.
Definitely did work out.
I had my two path calls, which I ended up rolling out.
And now I am in the $18 calls at expired Jan 2nd.
And I took in a premium of about two and a half of what I ended
up paying out. Now this was like, when you say earnings gamble, I'm never going to put a lot
behind this. I'll actually say the numbers. I bought two contracts for a dollar each. So I
spent $200 on them. I rolled them and took in $520. And then I am in those $18 calls, which are Jan
second dollar 54 right now.
So maybe we could see how I'm someone who doesn't know that much in this area.
Maybe coming out of this, how when a play goes in your path,
how you can maximize it.
Maybe I should have just sold and not even rolled.
Lunch on Evan.
What'd you say?
Lunch on Evan.
Lunch on Evan.
Well, yeah, sure.
If anyone's in Miami, we're here at at art basel so now is the time to say
it but i am also a bm and r holder so maybe not lunch on me just yet i'm a bm and r community
mod member some could say uh walmart stock less than a hundred billion dollars away from that
one trillion dollar market market cap milestone there was five four five six names in that like
500 to trillion basket.
And a couple of them are starting to move up.
It's good.
BM&R is up 5% today.
Those are some of the interesting moves that are standing out for me.
Snowflake had earnings yesterday.
That one is down about 12%.
CRM was another one that had earnings yesterday.
That stock is up 3%.
When I look towards the earnings that we had after the close today,
yesterday had a couple bigger names,
but there are one or two that people care about.
I believe RBRK is Rubrik.
Yeah.
Rubrik, DocuSign, SentinelOne, Ulta, Samsara, HPE,
a Hewlett Packard Enterprises, and a few others.
So, yeah.
And we also, Stock Talk makes it.
I know he wasn't feeling great.
We have a little Stock Talk pick that he entered into.
So got another little Stock Talk play that he might want to come in and talk about.
That stock is up 4% today.
So we will see there.
Brian Lund.
I go to Mike every single day because that guy is honestly here before me sometimes.
Brian, why don't you start us off with the speakers?
What are you noticing in this market? What's standing out for you? Validation. I finally get to go ahead of
Mike. Thank God. Screw you guys. I'm going home. Go get him, Brian. I want to take everyone back to the halcyon days of 2022, specifically November 3rd, 2022. I was on a
Spaces, I think it was here. I don't know if it was here, if you guys were doing it yet, or if it
was still on Clubhouse, if anyone remembers Clubhouse. But I was on a Spaces live. I know
Steve Straza was on it some other people and the
Narrative that was going around from everyone was big tech big cap tech is dead, right?
That was what everyone was saying
I think that was when meta was trading at 88 bucks go back to that day, right? Go back to November
3rd 4th 5th of 2022 look at Netflix look at Amazon look at Microsoft
Look at Nvidia look at Tesla look at meta look at all the Mag 7s or the Mag whatever you want to do.
And it was big cap tech is dead.
And I remember arguing on these spaces.
I said, OK, again, because this was peak metaverse, right?
I mean, metaverse, they spent money on it.
So it's a joke.
Zuckerberg was putting out these just, I mean, horrific looking NFT-like things where he
looked like he was like some zombie apocalyptic character. It was horrible. But the argument I
made back then was these companies, these MAG7 companies, they don't have to get back to their
highs the way they originally got there. These companies are so big. They've got the talent. They've got the scale. They've got the market share. They've got the money that they can
reinvent themselves. It can be something as simple as Netflix going from a mail order
DVD company to a streaming company to a production company. And this is exactly what we've seen from
all of these big cap tech names.
And I think this is also the story that's happening right now with Tesla.
There's so many people that are like, oh, Tesla, look at BYD and this company and that company,
they're going to have better cars and they're going to be cheaper.
Tesla ain't a car company.
It's just not, right?
It's got too many things.
It's got too much scale, too much money, too many experts, too much brand value
to go away. And if Tesla breaks out above 500, which I've been saying they're going to for a
long time, and it looks like that's going to happen at some point, it's not going to be on
expectations of what they did. It's going to be expectations on what they're going to do, just like we saw meta go from 88 to 788. So I guess the takeaway here is I never want to predict what I think the
market will do, and I never want to predict what I think a stock will do. And it's not because
I might be right or I might be wrong. I mean, that's part of it. But when you think you know
what something is going to do, you're often blinded. You often have a blind spot to what it
could do. We saw this in the end of 2022 when interest rates were going through the roof,
mortgage rates were going through the roof. We had inflation out the wazoo and nobody thought
that housing stocks could rally. No one was looking at housing stocks because they were predicting what the next downfall would be.
And sure enough, housing stocks ripped for like a year straight.
So the point I'm trying to make is never get too down on something.
Never get too high on something.
Just look at what price is telling you.
Look at what technicals are telling you.
And if you do that, maybe in the short term, you may not catch every turn,
but over time, like you had so much time to get into meta. I mean, literally between, you know,
you had a three-year window to get in there. So I just, I just would encourage everyone to kind of
keep your, your opinions, uh, flexible, you know, and try not to have any opinions. Just, just let
the market tell you what it's doing. Don't try to predict it. There's no money in being gurus unless you're Michael Burry.
Michael Burry has been active. These guys have gone full all in on his new job as a finfluencer, we'll call it.
Because he's found it's easier to make money as a
publisher than it is as a hedge fund manager just is yeah okay makes sense options mike downgraded
to second what do you think of that how you on what brian was talking about there what are you
watching you know i uh i continue to say this market to me remains constructive.
We're in a box. If you take from last Friday's candle and you just draw a box, you have a very
clear box on the S&P 500 and 685 is the breakout level. But the action intraday is kind of just
nasty, right? And, you know, it's just kind of going to frustrate you, but names are paying.
And it's really about focusing on the names here. Meta today, Brian, I mean, that news today was huge. I caught it pre-market for a
little bit of a trade. I didn't stay nearly long enough because you never know on those things.
And I really didn't know the news right away. But it never gave a trade during the day today.
That thing has been basically just flatlining here at a 10 buck range or so and just can't get going but i do like that
report i like that news i think you know tomorrow we're supposed to get pce at 10 o'clock i think
we'll get it and then we have the fed next week and that should give us an indication that pce
is a fed favorite so if those numbers come in cool and good i think you know that will greenlight the
market to 100 expected fed rate cut on wednesday
if not um the market's going to throw a temper tantrum and we'll see
to me today was just they rotated back into these little guys these i don't want to call
them crap names but some of them are or just pre-revenue or just unclear you know names like uh oh oh clow running i'm just kidding
go ahead i mean i mean like oh like oklo right and then these guys won't have may never have
revenue right they're they're pre-revenue but they're them onds having a nice day that's above
nine trying to hold here i think that's a better company than the others um then they saw some big
coming hood had another nice day tesla tried to give a day to
not doing a great job of it give a nice pop early but couldn't hold it
we saw nvidia run back we saw you know that one come back up palantir holding up uh crm pushed up
and there's that just off highs of the day paths having a nice day by the way again a nice stock
out to stock stock talk and i just think the market is just in this rotation mode right now.
The banks, which look good early, have completely dumped.
The IWM having a nice big day, too.
And I think they're just trying to find ways to trade things
and keep the market moving.
For me today, I'm being a little bit more cautious.
I find this intraday action to be very whippy,
very, very, very hard to figure out why we're getting these moves like this last little dump we had in the SPY about a half an hour ago.
And we take it right back within 10 minutes.
It's just frustrating.
So I traded meta pre-market.
That was nice.
I took a nice trade on Tesla and stock and some options.
I traded hood with stock.
And then I'm sitting in some hood, very small hood calls, the January 150 calls because I like it.
And I'm usually more aggressive than this.
And I'm just finding it not a time to be aggressive into this market besides which way it's going to break.
I still think it's up and I'm not shorting this market.
But I'm also smart enough to realize that the intraday action is just wicked and nasty and not someplace I want to be hanging my hat. Interesting, interesting, Mike. I'm sure you guys have heard enough of me
today because I've been on with you guys for two plus hours. It's been a good day. It's been a
great day. Wonderful day. Yep. Beautiful day wonderful day yep beautiful bill yeah so let's
just keep running around here and obviously guys it's thursday we'll maybe go on for a little bit
longer feel free to jump in on any part of the conversation and i love these things when we're
having a good back and forth i like to get everyone to kind of get their their takes in so
feel free to jump in especially i know mike and brian you guys tend to go in that first hour
so uh yeah that's good but logical see you hanging us, you guys tend to go in that first hour. So, yeah, that's good. But logical.
See you hanging us out here.
Third person to join in.
Appreciate your promise.
3.30 meeting?
3.30 p.m. Eastern meeting coming up?
No, I'm good today.
So I'm chilling.
I'm a little tired, too, but it's all good.
I will say, dude, the only reason why I wasn't here sooner, I don't know about everyone else,
but I had a reminder set for the spaces, but I didn't get any notifications when it started.
Yeah, the wrong one opens.
I went to open the first one, and it just kind of put me in a space where it was just me, and it just didn't open it.
Did anyone have to put a pin in when they went to the right?
By now, you guys know when it starts anyway.
What do you mean put a pin in?
So when I went to click my…
Oh, for your DMms yeah yeah yeah yeah
i don't know i don't know they're trying to do new stuff there i have had to take a couple
conversations out of the dms yeah my fault on the space yeah logical what we're seeing
no worries yeah no uh obviously pretty good day we've been saying it like there's two scenarios
in this market either you know the breath was deteriorating under the surface a couple of weeks ago.
Either the S&P market cap weighted index catches up to the downside or the breadth, you know, recovers and leads this market to new highs.
And so far, it's been the latter.
I mean, we haven't seen new highs yet on SPY, but we've definitely been seeing new highs.
Like what, Iwm is at
all-time high right now i think or it's did it touch all-time i think it might just be
a touch below it but like it looks like it's headed for its all-time closing high today um
if we keep holding these levels so it's hard to get bearish when that's the case when you have this level of
recovery so quickly zero dips uh no pullbacks basically a lockout rally that's what it feels like um so you know when you're in a choppy market like this you definitely got to have i think the
the phrase i've always been using this entire year uh because it's been extremely volatile
in trump's first year is uh strong opinions
loosely held which means that you should have high conviction when you make moves but you know if the
price action changes because it's so volatile then you should be able to change those opinions
and remain strong in your new opinion so i think that that's pretty key um let's talk talk i saw
you mute there you want to say something i don't know hopefully
he lost somewhere he's probably going to walk leo it's prime leo walking hours my guess is this
guy's in elevator right now understood okay cool yeah so um let me pull up the chart of rsp so iwm
yeah all-time daily closing high um rsp right back towards the highs i mean everything's basically
back towards the highs a lot of the individual names i think you know you're seeing a big time i don't know if you
want to call it a short squeeze because a lot of the most shorted names in the market the more
speculative stocks are very very green uh options like i just looked and aqua's up like 17 i think
asts up 17 you know not today ascs for example is example, is a bad business or something like that, but it's more
just like, these are the names that are pre-revenue. Yeah. They're playing with stuff that is
very speculative today. How's that answer? Poets had a two-day run, right? That's got no revenue,
right? Yeah, exactly. Like, you know, Serv Robotics, RR rr you know and we did see you know and a lot of
that was probably fueled with um you know uh like the statements around robotics from the
administration so it made sense to kind of see a bid there like uh my favorite robotics name which
i don't own because i'm a tax-law selling period and it's up 20% in the last two days, of course. Procept, BioRobotics, PRCT in the med device space just up again today on big volume.
So the robotics theme definitely picking up.
So that's interesting.
Speaking of robotics, I still think that Amazon's probably going to be one of the biggest beneficiaries of that.
And so for my portfolio specifically, I've been moving up the quality chain because
whenever I look at a lot of these charts on the speculative names that basically had 50% drawdowns
from the highs back in October in a month's time, that's just not a healthy stock that I care to
own. I don't want to own a stock that can go down 50% in a month, whatever. I understand that those
are the stocks that also go up like 200% in a short period of time, like you know I understand that they those are the stocks that
also go up like 200 in a short period of time but I don't like the idea that it can be so volatile
that it can destroy your account in a near-term situation so yeah I see a lot of like screenshots
on you know on a day like today for um some people who have like some of these names that
are extremely volatile uh high beta and they're you, they're up like 10% on the day, but you know, if you're up 10% on a day, like today, uh, you know, you're probably also, um,
you know, able to drop your account 10% in a day.
And I don't know about you, but I don't like what, if my network is, my net worth is able to drop 10% in a single day.
Like, I just don't like that.
So, you know, I personally am staying away, um, from some stuff like that. I know i personally am staying away um from some stuff
like that i know it feels hard because um you know there's probably a ton of fomo right now
because you're seeing all these names up 10 15 20 in a day or you know two days in a row i think the
worst thing i would i don't want to be the person who's chasing these kinds of moves because they'll
whiplash you um so you'll get punished for for chasing things i mean i think um you know you pick the ones that are higher
quality that are able to sustain a move longer term but i think that's exactly where fundamentals
come into play like the technicals will look great but if there is no fundamental story then the
the bid won't be sustained and i think that's kind of a key differentiator. Like, people just felt a ton of pain in this last month and a half. I don't know
if like a lot of that serious money that dumped a lot of these names basically rode these up from
April, May, all the way up to October to this, you know, blow off top kind of in those names,
like, I don't know if they're going to be rushing back to buy those things. If anything, I feel like, and I think we can all
see that there's been quite a bit of rotation to more quality names. And so, you know, I personally
at this point in the bull run, I think there's still a lot of upside in this bull run, but do
you want to make it the way you made it the last three months?
Or do you want to look forward to what the market is able to do moving forward? And for me, I think I just feel a lot more comfortable sizing up positions that are in less speculative names and more high quality names.
Fundamentals, business is strong, valuation is there to support it.
It's a strong valuation is there to support it.
That way, I feel like if we get some sort of pullbacks, you should probably see one,
some relative strength in those types of names, as well as less volatility.
So I'm still levered long.
I just want to say I'm not I hope I don't come off bearish.
I'm 125% long.
I'm extremely long.
I am very, you know, but I'm just trying to reduce the volatility by owning higher quality companies like Meta, Amazon, which I've been talking about.
And, you know, Amazon a little bit red today or whatever I added today.
I think that's a great name to add.
Not financial advice, of course, but, you know, like that seems like, you know, the kinds of names that I'd like to own for the remainder of this bull market
you know because as i said before i don't know if those high beta names i you know if you told me
that october 22 or 29 or whatever was the the peak of those names we look back three years from now
and then you know like oh it's never going to get back to those 2025 highs like just like we talk about oh it's never going to get back to those 2021 highs like it just it wouldn't
be out of this it wouldn't be out of the ordinary if that turned out to be the case so you're going
to see these pops but the question then becomes like again if a bunch of these speculative names
continue their you know to to trend down over the next
year, would any of us be surprised? Um, because they're already super overvalued. So there's no
valuation floor on them. And like, can the bull market continue, uh, led by high quality names,
like the mega caps, um, which have real business fundamentals that push the SMP higher. Like,
there's a lot of quality names in the S&P 500 that can continue
sending this market higher, while these speculative higher beta names
actually don't participate.
And so, yeah, you're going to get these kind of crazy bounces,
but it doesn't mean that they're going to be like the leaders moving forward
like they were the last few months.
So I don't want to belabor the point.
I think that's just generally the idea.
If you recall 2021, February 2021 is when all of the speculative growth peaked and then the market
peaked 10 months later in December. So, you know, could you have a situation where, you know,
market goes higher, but, you know, the risk appetite for owning these speculative names
goes down. I mean, that could happen,
right? And so it's tough to know. I personally just, we talked about crypto a lot on here the
other day. I'd like to see a few consecutive closes above the 21 EMA on the daily before I
want to get constructive there. Because every time I try to think, oh, we reclaimed this level,
let me take it. And then it'll gap down 5%, 6%, 7%. And it's just like, okay, dude, I try to think, oh, we reclaimed this level, let me take it, and then it'll gap down 5%, 6%, 7%.
And it's just like, okay, dude, I got to stop getting whipped around here.
It's just not worth it.
So I think one final point I'll make before passing it is another great thing that you
can do for yourself is treat your portfolio as a portfolio.
Not like, you know, don't overthink about every specific individual stock in your portfolio as a portfolio, not like, you know, don't overthink about every specific
individual stock in your portfolio. It doesn't matter if you're like, you know, stock three,
five, and seven do well, but your overall portfolio is down. Like nobody, like that doesn't matter.
All that matters is that your portfolio goes up over time. So ever since I've been, you know,
carrying less and being less married to any
individual position i have in my portfolio and i've just been prioritizing and optimizing the
portfolio i've just seen much better results so yeah that's it thank you logical i know you'll
be hanging out with us for a good part of this. So, yeah. Stock talk.
I think we got you.
Trumble.
Yeah.
Nice.
We got a nice stock talk weekly play coming up.
So I'm excited for it.
New position today.
Really good day for me with Spy.
Slightly red today.
13 out of 15 positions.
Green.
Portfolio just like leapfrogged today.
Jumped to new highs. I'm at 565 percent actually 567 now 565 as of the time i posted over 567 now um but yeah it's just been a hell
of a year dude i mean at this point i'm not even trying to be aggressive for performance and
i'm still capturing a lot of it um i don't, I mean, I guess luck, but also just really, really high quality stock picking.
I mean, today path obviously was a big winner.
It wasn't a big position for me, but it leapfrogged into almost 3% weighting today.
Stock's up 25%.
It was just about a half a percent weighting in purely calls going into this earnings.
I talked about it all this week on the show, actually yesterday and Monday.
Shout out to Scott. I know he's not in the crowd, but he gave me a shout out on Twitter today, which was nice. Pretty simple thesis. I just thought the company was
earnings sort of proved that. And you can see that today with the stock up 25%.
And so those calls, I have the 14 calls I bought for like a buck 38.
Those calls expire in January, 2026.
There's a good shot.
I'll be exercising half of those to get the stock in the low 15s.
And that'll be my way of upsizing the position.
I wanted to upsize this position just through share ads,
but I'm not going to chase a 25% gap up.
So the backup that I have here is that I can
sell half of those calls, which are up like 260% as we speak. I can sell half of those going into
that January expiration, exercise the other half, which is what I'll be doing. So that means I don't
have to chase or find a spot here to buy the shares. I'll be able to get the shares at a
discount in January as a result of
positioning myself in those contracts ahead of the earnings. So once I exercise those,
that'll bring path up from a two or 3% weighting currently to a five or 6% weighting upon exercise.
So that's an easy way to get the weighting up without having to be like, I don't want to buy
it here up 25% because I don't have to. So that's nice.
Great to see.
Obviously, pretty much everything else in the portfolio up today as well
outside of Amcor and Amazon.
Amcor's taking a rest after a 22% move in two weeks.
I have no problem with that.
Amazon's just traded like shit.
It's part of the game.
But the other 13 positions are green.
Kratos up seven.
OSS, which is my only small cap up another seven uh
centris energy which is one of my larger positions up 5.5 um and then the new position we opened
today which is thurman group uh ticker thr now thurman group is an industrial um been a pretty
boring company for a long time um but earlier this year, they launched a data center project.
They launched thermal solutions product for data centers. There's two of them. One of them is
called Poseidon. The other one's called Pontus. What they are is they're liquid load banks.
And they're used for both commissioning and testing high performance data centers
and other broader heating and distribution offerings.
It's not just data centers, but this product was developed specifically for the data center demand.
Now, in their last earnings, it was a negligible contributor.
The company even said that they're like, hey, look, we just introduced these products.
They're not a meaningful contributor yet.
But I believe that that segment, even though they're not singling it out, is growing
extremely fast. The reason why I believe this is based on the breakdown of what I've looked at in
their financial data over the last three quarters. So I talked about this yesterday, how when I look at mid caps, I'm trying to look for an inflection.
I'm trying to look for something happening in the numbers that reflects a bigger thesis that I have in the actual product base or whatever. And with this company, I've been seeing two things.
First of all, margins are growing up, not only year over year, but quarter over quarter sequentially.
So for three consecutive fiscal years, margins have gone up.
Not only gross margins, gross margins, net margins, and operating margins have all gone up three consecutive years.
And now they're starting to see bigger inflections in the quarterly numbers as well.
So the last three quarters, all of those figures have gone up, revenue, net income, EBITDA, and gross and net and operating
margins. So to me, it looks like a business that is rapidly improving. And I think that's largely
due to the introduction of these new products. Now, when you look at thermal management,
industrial scale thermal management, heat tracing, There's not many peers. It's actually
a pretty tight industry. And I was surprised to find this out. I thought there would be a lot more
competition. It's a very tight industry. And during my research, I found that one of their
closest peers actually in the offerings that they're currently putting out is Invent, ticker
NVT, which a lot of people are familiar with. I think it's been a popular stock at times on Twitter, but you can look that one up,
ticker NVT. It's had a great year. I mean, off the April lows, it was 40 bucks. The stock's
108 bucks now. But they're a much bigger company doing a very similar thing. And they're classified
more as a technology company, NVT, even though I think that they have a lot of similarities to THR, which is classified as an industrial company in the heat tracing space, specifically in the industrial thermal load management space.
Specifically, they have a lot of overlapping products.
There's a little bit more of a focus from Invent on enclosures, but I don't think that that's enough of a differentiator for them to not trade higher based on the difference in valuations here, right?
Like if you look at advanced trailing PE, it's trading at something like a 40 trailing PE, five times sales.
Thurman Group, THR, is trading at an 18 PE, two times sales.
And both their revenue and EPS are at 10-year highs.
And to me, that shows more than just a cyclical
effect. To me, it's the inflection of the overall business that I think is about to happen.
And so, yeah, I like this name. I think it's kind of a safer play because it's a pretty
reasonable valuation. And I also think that it gives you
a little bit of data center exposure if that segment continues to grow. Now, again, it is
a negligible segment right now, but the liquid load bank market overall is going to be a big market.
And the company talked about that as well with their Pontus and Decidin launches. They mentioned
that's exactly why they launched it. And it's projected to be a $400 million market with a
very, very, very small
handful of potential suppliers. And so Thurman came out and they were like, look, we're targeting,
they said this directly on the earnings call, we're targeting 25% market share in the entire
liquid load bank market. And they said, we believe that that's a conservative targeting based on our
product offerings. And I looked at the other liquid load bank competitors. I looked through kind of the field and all of their valuations are pretty inflated.
Like they're all trading at pretty high multiples.
And I feel Thurman is being kind of left out of that opportunity set.
So thermal management, specifically these new products that are being used for data centers, I think are very interesting.
And if you get, you know, four, five, six percent of top line that gets attached to this, which I think is conservative.
But, you know, even if you think it's generous, the applications that they're in for thermal management in other industries are also cutting edge industries.
Like the cross-theme exposure they have for thermal management
in aerospace and defense, in space and satellites,
you know, these types of applications are also growing very, very fast.
So I think they're kind of in a unique position.
And I think the stock is cheap. I think it's cheap versus peers, which is perhaps even more important. Very cheap versus peers. So, yeah, I'm not sure it's, you know, it's not like an Amcor or like ENS level conviction position. I mean, it's a four and a half percent weighting that I took today in this.
half percent weighting that I took today in this. But I do like the story and I do think the stock
is reasonably priced. And their debt load is about 100 million. Their TTM EBITDA, both adjusted and
unadjusted, their unadjusted is 108 million. Their adjusted EBITDA is 114. It's roughly 1x EBITDA
anyway you look at it for their net debt. So that's manageable debt load. And the company
is solid free cash flow, right? You're looking at 11% free cash flow. So especially for an industrial
supplier of these guys running mid forties gross margin and 11% of sales is free cash flow is
really good numbers. If you look at these types of industrial peers. So it's a good business.
It's just a good business, you know? And I know it's like my picks have gotten a little bit more
boring lately, like quote unquote, like, you know, I'm more focused on these sort of niche
picks and shovels. But it's by design. I've participated a lot in the speculation this
year. I've made a lot of money on names like Nebius and Kratos and Centris Energy and the speculative names.
I've made a killing on those names.
So I own those names still.
I'm just pivoting my new exposures away from them to a little bit higher quality companies that I think have potential to go up without stress.
You know, like Inersis has done for us, which has just been an absolute soldier
for the portfolio, just goes up every day and never has a bad day. So those are the kind of
names I'm looking for where I can just benefit from a slow grind to the upside, not have to
panic about insane amounts of volatility. And yeah, I think considering the lack of peer landscape,
the upside from data center applications, the cross theme exposure from electric heat
tracing systems and thermal management solutions across aerospace and defense and other hot
sectors. I think you get a lot here for the price. So yeah, I took a little position in that today.
This is a name I will look to upsize, maybe to a 6% or 7% weighting. If it were to come back down
to this 36 area, retest the highs of this little cup 35.93 really would be ideal i will allow myself
to go underwater on shares on this by a little bit because i understand my entry is not ideal
um so i wouldn't this is not a name i'm gonna panic out of if i go underwater on chairs obviously
if it really breaks down then you know i'll manage risk but it comes back down to this 36 area i'd
probably just increase the weighting a little bit on this.
I mean, if you really look and zoom out on this thing for the last 20 years, it's been public since 2011.
You go out and zoom out on this thing, it's really been in this huge consolidation pattern for most of its life as a stock.
And this $29 level was basically the ceiling up until 2024, where the business got a little bit more interesting,
ran to 36 and then tapered all the way back down to the 23s. And now I spent the last few months climbing back up to the highs of this
cup. And, you know,
would the best entry have been down there at 32 on that 21 EMA float?
Yeah. But I mean,
I don't care about paying three or $4 higher for a stock
if I think it's a stock that gets above me.
I don't want to give away too much
inside baseball, but I know you maybe picked this one
over another one because that one was maybe
getting... Do not give too much ground on that, Evan.
I'm not, but it was getting a little bit away
ahead of itself. Isn't that kind of what you just said here?
Why is this one that you chose
to pull the trigger on as opposed to be patient
and wait for it to come down to that level is what I'm asking yeah so i mean this stock opened the year at 30 right
it's yeah i bought it this morning at 36 it's 37 now or whatever it's not up much from where i
entered it's up a couple percent where i entered but yeah okay so what is that what's the percentage
change on that 30 61 i don't know i'm find out. Let's find out the exact percentage change.
30, 61 to 36.
Okay.
So I'm buying it basically 19%.
It's up 19% this year.
On the year.
That's nothing.
That's nothing.
If I'd held it the entire year, I'd be up 19%.
I'm buying it at the end of the year
i don't care that's not chasing it to me and if you zoom out if you zoom out 20 years on this
thing i mean what it's done nothing it spent it spent 2011 through 2023 doing nothing
right so no i contextually i don't see it as chasing whatever i'm thinking about chasing
there's a couple things first of all i never chase gap. I'm not ever chasing a stock that's up 10 or 12% on a
day. I don't care how good the news is, period. End of story. Never do it. I also don't chase
big weekly moves where the stock is going parabolic, 40, 50, 60% on some game-changing
news for the week. I don't chase that either. What I am willing to quote
unquote chase, yeah, this stock's up a couple of days in a row, but not explosively. And I know
it's not the type of name that is going to move that way. So I'm willing to position myself in it
and give myself some wiggle room on the cost basis and be like, look, I may have to pick up
some more shares at 36 rather than 36.60. But it's just the way I operate as a trader.
I don't chase intraday, but when I'm looking at things in context, it doesn't necessarily
matter to me how much the stock is up if it's still cheap. There's another name, the name that
you were referring to that I was talking to you about, that is up a lot, but it's very cheap still. So I don't think about, I think about
valuation as valuation, not about how much the stock is up. Sometimes things happen to a company
that make the company way better and force the stock to re-rate. If you miss the first 100% move,
you may be like, well, I missed the stock. There's a difference between buying a stock
that's up 200% in the last two years that's expensive,
which most of them are, versus a stock that's up 200% in the years and is still cheap because the
business inflected and it's a brand new business. That's a very different thing. And I'm willing to
buy the latter. So yeah, stocks up 19% this year. No, I don't think it's chasing. Do I think the
entry is ideal? No, I would have liked a kiss of the 21 ema i'm generally
not a enter on the 9 ema guy so the entry is a bit aggressive but i like the stock um and i think
it's cheap like you get a lot for what you're paying for that's the kind of names i'm looking
for right now like when i bought amcore that was exactly what i saw i'm like you're getting a lot
of opportunity for what you're paying for same thing, you're getting a lot of opportunity for what you're paying for. Same thing with EMS, getting a lot of opportunity we're paying for.
VIAV, same thing.
VIAV is a stock I think can go absolutely bonkers.
And so, you know, I'm willing to pay for it at this price.
And so there is every stock in my portfolio, I think, has an opportunity set.
And the opportunity sets will not all be fulfilled. I will be wrong
on a handful of positions, but I don't need to be right on too many of them in terms of the ones
that are sized appropriately to do really well. And I mean, this year is proof of that, right?
Like I've cycled through 40 stocks this year, maybe more. I don't know exactly how many,
but 30 to 40 names this year. I have 14 in the portfolio currently, and the portfolio
is up 565%. That's big returns for such concentrated stock picking. And it's because
I tend to stick with my name. I tend to. There are names that I have a short leash on, but I tend to
stick with my names, build into them as a demonstration of conviction. Because I usually
do my work before I open anything. Not usually. I do my work before i open anything not usually i do my work before i open anything so um yeah i like this name we'll see what happens
price action maybe will force me out but i don't think this is going to move as that aggressively
to do so but we'll see um yeah that is the new position for today looking at the baskets
this one feels a little bit like it's in the data center AI and cloud basket.
Feels like it's a little bit of its own one a little bit.
It is. It is. It is.
It's like that on-shoring team.
Just a nod to the data center exposure that they have, but it's not a data center play.
I mean, it's in that basket more so because it doesn't fit really in the other baskets.
I don't really have an industrials basket in my portfolio, although maybe I should.
Maybe VIAV and this could sort of go in that
where there's sort of these legacy economy plays
that are pivoting.
But yeah, I mean,
maybe it shouldn't go in the data center basket.
Maybe it'll have to make it its own basket.
Thermal management or something.
You guys could see this.
What I find interesting,
you guys could see Stocktalk,
he posts his portfolio and everything in the group,
which is Lincoln's bio.
What I find interesting is the other categories
seem to have like one name in there
or one or two or whatever it is dominating at the start.
And the data center AI and cloud one
has like four or five, six names.
And it's kind of making up like the similar amounts
as the power grid and semiconductor one.
Yeah, it's more distributed.
Yeah.
Is there a reasoning for that?
Is it the sector or is that just?
Yeah, I mean, it's, I want as much AI exposure as I can get,
but I want it in smart ways, right?
Like if you look at my data center basket,
VIAV, Nebius, OSS, THR, DigitalOcean, PATH,
like, and by the way the name of the basket is data center ai and cloud so it's not just data center but um if you look at that basket it's like
okay you have popular names in their path and nebius but then you have names that people
generally don't associate with the theme and i think that that's good like that's how i want it
and so yeah that bat my data
center slash ai slash cloud exposure is a little bit more diverse but that's also because it's a
bigger theme that's like it's not really one theme you know i've kind of cheated by the way i've named
that theme because it's like touching a lot of different themes right i mean uh those i mean
the digital ocean path aren't really quote-unquote ai plays but you know you could interpret them
that way so yeah the other baskets are more concentrated like nuclear and my semiconductors
combine most of the the portfolio just to be u.s onshoring yeah yeah yes i said that earlier too
yeah basically the whole theme of the portfolio is just like america um but yeah i i
really am i'm like i've never been a big em guy i've never held china for any significant period
of time even during regime changes i've just always stuck to u.s stocks and never had an issue
i don't think you need to buy non-american ever in my opinion to do well and i mean again my performance is proof of that but i don't i will touch non-american ever, in my opinion, to do well. And I mean, again, my performance is proof of that.
But I don't... I will touch
non-american stocks sometimes. Embraer I owned
for a while. Embraer Jets,
which I don't own anymore, but I owned that for a while.
I've used... I used to own
Mercado Libre in size. Used to be one of my
biggest positions, actually. I don't own
that anymore, either.
What other Ford stocks have I been in? I've been in a handful in and out there are more than that i've traded jumia in the
past like i i don't want to say i've never touched foreign stocks i just don't they're never core
positions in my portfolio like i'm a bet on america guy so you know I just I prefer to buy American I always have and it works
well for me so I don't have a reason to change it but I just don't like buying I mean maybe people
say we're banana republic but I don't agree with that characterization but I don't like buying
stock in companies that are banana republics in countries that are banana republics where
you know the G can come out and be like
we're banning this or doing this and just unilaterally take action i don't like owning
stocks in an environment like that so i just buy american what kind of car do you drive
okay now you're gonna point out the german okay except for cars i guess all right all right okay
fair enough sam buy american except for your vehicles.
Tesla, dude.
I'm going to test this and send it to Elon.
No, I'm kidding.
Why do I feel like Stock Talk hates Tesla cars, though?
No, no, no.
I own a Tesla, but it's not my main car.
Oh, okay, buddy.
I don't want to... I always hell yeah you're armenian bro come to glendale i think that was uh that was an interesting uh run through there stock talk though i appreciate
it i'm sure we'll we'll jump around uh and jump back into that did anyone have any thoughts or
questions well i could keep jumping no i mean i think look uh stock talk says the things that you know he's very good at picking
themes but he's been saying on these spaces for the last couple months that the new position that
he's been opening have been very reasonable valuations they still fit the themes he's been
pretty sticking pretty core to that so like you know you know, he's buying stocks that have, you know, 10 to 20 PE, which in this
kind of market are very cheap.
Those kinds of multiples in this market basically means that the market isn't pricing much optimism.
I think what people need to know about like valuations is that stocks trade every single
day, which means that the price is going to
determine the market cap, which is determining the valuation. If a stock's price is high
and its valuation is high, that means that the sentiment around that stock is very high.
There's a lot of positive sentiment. All you need in terms of like, so it's just such a simple concept.
But if you buy something when it has, I wouldn't necessarily say a depressed multiple, because
maybe the multiple is fair.
But if there isn't a lot of optimism priced into that multiple, into that business, and
you're able to find an inflection in the business, then all of a sudden, if investors become,
you know, incrementally positive on that
stock then you're likely going to get um not just the earnings growth that comes with that business
inflection but the multiple expansion that comes with it too and you know that's the twin engines
basically you get earnings growth and multiple expansion and that leads you to a pretty good place
i mean look at metaa had really bad sentiment,
was trading very cheap compared to the other Max 7s,
so the Ford PE.
I think it was like 19 Ford PE.
Companies doing $50 billion in buybacks.
They have a dividend, and their margins are just amazing.
And Mark Zuckerberg comes out this morning
and basically says he's going to cut 30% of the spending
on one of the most CapEx heavy
and lowest revenue generating segments in his business.
I'm not saying that Meta is going to go back to it that well.
Okay, I hope Meta goes to $1,000.
No, but I got to pause you there
just because Meta doesn't fit in the bucket.
You know, like that's not like because Meta is the most studied business in the world.
It's not something that is like overlooked by investors.
Everybody knows what Meta does.
People know that they've been spending a lot of money.
I think perhaps the cutting of the CapEx today was the like sign that some investors got that like okay you know mark zuckerberg at the helm
isn't going to let this go to a 2022 minus 70 i'm going to die on this capex hill situation
and so i think that is probably the incremental shift today but it's not a situation where like
the business is all of a sudden you know going to go from kind of this underperformer to like
this little growth engine inside of it can end up growing a lot faster. Like what do we see with DigitalOcean?
We saw like the machine learning related revenues basically doubled year over year and became a
more meaningful size of the overall revenue. That ends up allowing for multiple expansion
more so that's the multiple expansion for that stock is more impactful than the actual earnings
growth that they're going to see from that incremental revenue raise.
So I think the difference here is that you're trying to pick a stock that has yet to be
found by the market in terms of the multiple is just kind of like, it's been where it was,
but there's something happening under the hood that requires that the stock be re-rated.
I mean, I think Amcor is a pretty great example of that because it's basically been a stagnant business, but the future and all
these partnerships are going to, obviously, if you look forward two years, it's going to be very
meaningful to this business. So all of a sudden it goes from a sleepy one-time sales business to now,
you know, heading up towards two times, basically. Yeah, I mean, I just don't think Meta fits the bucket
because everyone in the world is watching Meta.
There's no surprises there.
I thought you were saying you're totally right.
I mean, one of the stocks that...
I mean, we're still yet to see,
but one of the stocks that has been known...
I was going to say Path is maybe a good example of that, actually.
No, Path is a good example,
and StockTalk is the one who brought it on the radar.
And I've already known about this company.
In fact, I owned it prior in the past, and it was like a 1% position.
And then I actually held it through that last earnings that it had the other year,
where it was like 50% down.
And I mean, when it comes to this company, it had a great theme,
but the previous CEO just did not make
that shift from licensing model to subscription model fast enough. And he was not innovative
enough and he didn't really catch on to the churn of Agentic AI. Now, Agentic AI is probably more of
a hot term that's thrown around left and right, but actually you're starting to see a lot of
companies shift toward modeling using Agentic AI as far as a proxy to reach out to other LLMs, especially popular ones that are out there like Gemini, OpenAI, Cloud, and all that.
And using the Agentic platform or basically your own LLM to be able to pick the most optimal model to run your algorithms on, to run your applications on, or whatever queries you want.
Putting all the hot topics aside, let's look at the fundamentals of this company right the last 30s that they had
were better than expected but also if you look at the chart too the company's coming from like a very
terrible sentiment i mean it went it went from like 35 bucks plus all the way down like 10 even
when it's up 10 bucks for a minute the The moving averages met up, the chart looked good,
but even from a fundamental basis,
once you got rid of the old CEO,
it took a couple of quarters
to shift the ship around
back to what the co-founder
and the former CEO is doing now,
Daniel Danes.
And now they're executing pretty well.
Plus, after looking at it a bit more, you even have the FX tailwinds giving it a bit
of a boost that the US dollar can depreciate.
But also on top of that, this is a total AI stock right now.
It is going from being a laggard and a loser to being an AI common favorite theme.
theme. And I think this is going to go to 30 bucks. I mean, it's just when you when you go
And I think this is going to go to 30 bucks.
from that very shitty sentiment to what you're seeing today in the stock, 25% today on basically
the market being flat kind of tells you that, well, maybe things are a little bit changing here.
And as Stockton was saying, like the PE, not even the PE, because they just did have their third profitable quarter.
They are forecasting a full year of profitability and more profitability moving forward.
You're getting that profitability inflection, which is very good to see in terms of software
stocks, considering also the boost in ARR and the remaining performance obligations.
and the remaining performance obligations.
This is a software stock.
Like, this is a software stock.
Software stocks aren't usually as profitable
or aren't this close to profitability
in such an early streak in the game.
I mean, UiPath is not a new company.
They've been around for quite some time.
But they're shifting into the subscription model
that you really need to do when it comes to software stocks.
Microsoft did it in 2018 before Seat and Indela.
Michael Balmer was all about the licensing model,
thinking that, hey, no one's going to touch
the Microsoft Office.
We're going to be good to go.
We could release the Microsoft Surface.
We could release a phone, you know,
whatever, we're going to be good.
And more of that pompous attitude where it's like,
hey, we're Microsoft.
You can't touch us.
And then Siata Nandela saw that and he shifted it
before looking, being one of the first companies,
one of the biggest software companies to shift into a subscription model.
And the problem with Path was that they took forever to do that.
They should have done that a long time ago.
Just a couple of years ago,
they were still talking about shifting from the licensing models to
subscription models,
which is pretty much the issue you're seeing with Workday today and even Atlassian.
They're late to the game.
But the thing is that PATH is pretty early in the game
when you think of the transition from small business
into enterprise business,
that they actually do have that RAM to bring up there.
But also on top of that,
even though the space is somewhat commoditized,
they are partnering with larger enterprises out there, including Microsoft, which is probably one of their
biggest competitors when it comes to robotics automation on a digital scale.
They're able to transition into that and also offer that hot, agentic AI platform that a
lot of CIOs want, right?
So I do think that this,
it doesn't have to be an undiscovered name,
but a name that has gotten very crappy sentiment.
And even though Meta has not gotten like crappy sentiment
for the longest time ever,
I think it went from $80 all the way to $700.
But when Mark Zuckerberg had that reveal
of the Meta Ray-Bans and everything,
and the Wi-Fi was out, whatever it was,
I don't care what it is,
and then you had the nail in the coffin
with the last quarter,
I think that that negative sentiment
is really what's going to bring it back.
I think it's a much more sentiment than anything.
Path might be a different story with meta.
It is, we have not seen the quarter.
Next quarter will be like the big reveal
to see whether that transition,
because I think he's only getting maybe like a month of the quarter left before he can actually report on
showing the numbers decrease. But so it's going to be more commentary than anything on the next
earnings call. But he's going to have to show up next quarter. Path already showed that this quarter.
What I'm expecting though for on Semiconductor, which is another name that I've been talking about
for probably like a couple of months now, is in that very little talked about sector right everyone
knows about semiconductors a lot of people whenever they think about power chips they think about
navitas and think about side time and a lot of those other companies that are already doing well
on semiconductor has been left in the dust but i don't think people really understand that's
look if you have evs come back this is's going to be made beneficiary of it, especially with the OEMs bringing more EVs
into the US, especially Toyota, Kia, and so on. Doesn't have to be Chinese vehicles, but
even in Europe, EVs from China are just skyrocketing over there. So I think that there's a lot of
positioning here when it comes to certain companies that don't necessarily have to be undiscovered companies, but shifting from a very crappy
sentiment per se and companies that are already doing good in the top and bottom line and
have been for some time.
But it wasn't that hot pre-revenue stock that everyone wanted to dive into.
People are starting to look at these other names, which is good to see. Yeah, I don't think you're going to see a willingness to relinquish
the thematics in this market. I think as long as the market stands, you need the themes because
that's where all the enthusiasm is and liquidity and usually at market
inflections one of the big best signs of a market inflection the upside is when the themes are hot
i don't like anecdotes you guys know how much i hate on anecdotes if you're going to use any
anecdote seeing thematic activity is one of the best anecdotes for market strength in my opinion
um in my time that i've been in the markets, which is pretty much in my entire adult life,
looking at screens every single day for the last decade plus, I've noticed that consistently.
That when the themes are working, the market is working.
And in this market, there's only one theme that matters, and that's AI.
And when the AI theme stops working, the markets will correct.
There'll be blips of
regime change and rotation that will be short lived. And the markets will only turn back up
again when the AI theme gets hot again. This is the rule. Just the rule. And I caution people
against believing that it can transpire otherwise because it cannot. There's not enough liquidity anywhere else.
You know, there's something like I saw a crazy stat two weeks ago from Bloomberg Intelligence.
I don't remember the exact number was, but it was something like 32 percent of all of the market capitalization in the entire U.S. equity market is AI related.
Thirty two percent.
That means one third of every dollar. That's over $20 trillion.
Right? I mean, I don't know what the total US equity is at now, $60 trillion or something.
Whatever a third of that is, or 32% of that is, is related to the AI trade. So where's it? Like,
that money has nowhere to go. You know, it either gets trapped, locked out and flushed out of the market, which would be very painful for everyone, or it continues to participate.
And so what you will see is in every five or 10 percent correction, you will see a sell off in the items.
And what will happen? You will see blips of rotation to areas like health care, to areas like biotech, to areas like home builders, to areas like financials, transportation.
And those blips will be short-lived.
And when the next catalyst is on the table, all of the money will go back into the trade that is supporting the entire market.
This has been the exact cadence of every pullback for the last three years.
It's exactly what's happened.
You can go look. You don't need to take my word for it. Go look at every pullback last year. Go years. It's exactly what's happened. You can go look.
You don't need to take my word for it.
Go look at every pullback last year.
Go look at the pullbacks this year.
That's exactly what happened.
Starts off with a sell-off in the AI names,
leads to a bigger sell-off in the indexes.
Then you see blips of rotation.
Then you see a recovery in the AI names.
Then you see a recovery in the indexes.
That's the pattern every single
time so you shouldn't ignore it don't fix it until it's broke like that's what
the market is doing so in my view the best way to play that is to keep
rotating exposures on the outside of your portfolio to the themes that are
hot and keep core exposure to the AI thing that's what I'm doing and it's
working well so if you want to be to be a theme participant and also see enough
upside,
I think that that's probably the best way to play this until the music
stops.
And who knows when that's going to be with this kind of aggression that
we're seeing.
But,
yeah,
I don't know who's buying BM and R right now,
but that thing is just ripping into the clothes.
no, no, no. Evan is, uh uh too close to where i want to be remember what you're back on our tesla hi
a day we good lord i would say i have not maxed out but i was closer than i was when it was
at a point when i should have been uh so i just sat down for a little bit that was a nice close though ethereum didn't really have a crazy move there into the the end uh we should have a but
that's what yeah that was a weird move we should have earnings coming up sorry sam
no i was gonna say that that was an interesting dispersion i mentioned on the stream today with
you that it's crazy how bmr is such a massive move and ethereum is just basically flat
crazy how BMNR is such a massive
move and Ethereum is just basically flat.
Don't we have Rubrik
today, Sam?
Yeah, Rubrik, IoT's reporting.
Rubrik should be out
in a minute. It should be out right away.
I still have position
in there, but not leverage.
Are they closing into their
20-day moving average?
That was a pretty interesting
backtest they had.
No, close below it.
That sucks.
Rubric might be out.
Actually, no, close.
Is it moving?
Close right on it.
Close right on the 20-day moving average.
It's at 1%.
I don't know if that's...
It's a low float after hours,
but I got to double check here. I haven't seen the numbers just yet. Yeah, float after hours but I gotta double check here I'm seeing
the numbers just yet um yeah so there are like I said a little bit earlier earnings coming up here
we have rubric DocuSign Sentinel one Ulta samsara HPE and a few others I'm actually interested to
see what Sentinel one does dude stock talk that was gonna get me to say uh cody reporting earnings so i don't know um
yeah it's i don't even know hpe is could be an interesting one i know you looked at that
at one point don't bully evan guys hpe or hpq hpe oh maybe it was hpq i don't know
uh let's see here hpe does report today but i don't know. Let's see here.
HPE does report today, but I don't know if we were talking about HPQ or not.
HPE.
That's weird.
I thought they'd re-burn.
No, there's two tickers.
Cool, though.
I still haven't seen any of those numbers crossed just there.
Let me check what the market ended up closing today at.
Dow Jones closed red.
The other, S&P, QQQ, and IWMR closed green.
IWMR performing 0.9 compared to the others, which were up like 0.1, 0.2.
Nice small cap day.
Service Titan reported, or is reporting. That's another IPO name that everyone should have waited on. Don't really know it. It's a they build a software platform for small business
contractors and stuff. Small business focused. I'm not really I want to say this out loud
because I will probably forget it. Stock talk. I want to ask about this the thr gave me off some vibes of gxo i know it's not the exact same thing
but it felt like a similar basket i'm gonna ask about that when i get it not similar at all no
very different company oh bit mine with a four meat so the transportation logistics this is
thermal industrial thermal management so very different businesses. So it looks like BitMine did...
I don't own GXO anymore.
I know, I know.
But it felt like a similar theme of the building out of the factories and stuff.
Obviously, GXO was the one doing it, where maybe this was more of a component was where I was going there.
But I don't need you to stretch the thoughts to make me feel good about it.
No, I mean, no, no, no.
No, I mean, no, no, no.
I'm not stretching the thoughts.
What I will say is, like, yeah, the electrification and heat management
for factories is one of the things that Thurman does.
But that's – it's not really an overlap with GXO.
Would be a reach to say that.
It's fair.
We should be getting a lot of these earnings here in one minute.
4.05 p.m. Eastern is that prime time, especially on days like today.
Especially on days like today.
in 15 seconds fast stock market news we got DocuSign ultra sentinel one rubric
In 15 seconds.
Shout out Fast Stock Market News.
HPE charge point and stitch fix sportsmen's warehouse essentially like
90 something percent here they are we're books up seven percent I think to
be the most talked I one HPE had an
initial move higher up about one and a half yeah that is a nice little move on
rubric DocuSign Sentinel one let me just look around at the moves if anyone like
just in general when Ernest come out it's just madness there's so much
happening at once sometimes sometimes it does take a second DocuSign is up about
two percent you can just post themsign is up about two percent you can just post them sent on the one is up about two percent as well and you can take your time uh we will look
around samsara let's see if that one is out yet i'm sorry not really moving that one should be out
in a little bit actually so most of the moves that i'm seeing so far were small ticks upwards
one two three ish percent the sP 500 closed today less than 1%
from all-time highs. Fear and greed
index still in fear for anyone wondering.
I know we didn't talk about it that much.
By the way, CNBC also changed their
logo.
Doesn't matter at all. That one flew under the radar.
Also, that Caliche partnership
you talked about? Yep, Caliche partnering
with CNBC.
Hewlett-lett Packard looks like
a missed on revenue. Small miss
on revenue for HPE.
He'd on EPS.
Generally, if you see a miss on anything,
it's not going to be great.
Oh, Troy, was I supposed to get the earnings out?
I'm sending
them to you. It's just taking
me a second. Okay, that is no
worries.
DocuSign ended up beating EPS.
$1.00 would be an expectation
to make two cents.
Doctor, I don't think you've looked
into DocuSign at all, right?
Obviously ever at some point.
How much revenue do you think DocuSign
brings in in a quarter?
I don't know.
I thought it could be an interesting one.
$813 million, more than I would have thought.
$806 million is what I expected.
Is DocuSign up right now?
DocuSign.
Let me look at the forward guidance for DocuSign.
They raised it up from 3.
Yeah, they raised up their forward guidance a tiny bit.
They also said that they expect sales to be basically within the range yeah it's
down one percent but honestly it might be gross margin something in there but
the headline numbers look pretty solid for I'm happy I'm selfishly happy
because I you know I follow some options flow people and whatnot.
I just saw a bunch of big calls come in today for DocuSign,
and I feel validated that I don't chase all of these things because they don't always hit.
Sentinel One getting hit.
I'm seeing that stock is down about 7% right now.
It looks like they did double beat on their EPS in revenue,
but there's a little bit more there under the hood on Ticker S, Sentinel One.
I actually don't even see the numbers there.
I'm getting them out right now.
Yeah, ticker S down 8% in after hours.
I did also see some things on Ulta Beauty.
Wow.
Ulta Beauty raised their full year 2025 GAAP EPS guidance from, let's say, $24 up to $25.30.
Hey, Ulta stock, is this off 10%?
Did you hear that in the background? That is the loudest motorcycle I have ever heard in my life.
Nope.
Ulta stock is up 4.5% right now in after hours.
The forward guidance move is pretty aggressive.
Is Ulta up a lot already?
I don't know.
I guess I don't have to super in-depth into that industry.
Ruber triple beat $320 million, $ 321 million beat 308 million good uh
bdp estimates still not profitable but they raised estimates of four cents rubric raised their forward
guidance um so for the full year they now expect to lose 18 cents per share they'd previously
expected to lose 47 cents per share while she was expecting 49 cent loss.
They also raised their revenue guidance for the year.
Was Rubik moving higher?
Again, this feels like, I don't know how it's moving left.
That's what these numbers feel like.
There's just some good numbers from Rubik.
Yeah, it is right below the 20-day moving average after hours.
I would love to see that.
You guys long rubric?
I have rubric.
I have not added it to it.
You long what's on it?
No, I'm not.
I was hoping for a dump today because I'd like to get long,
but I guess I didn't get it.
That's a nice beat.
Yeah, I've been long this thing since like 30 bucks.
It's a very nice beat and raise. Where's it at? Okay. Interesting. I've been long this thing since like $30 Very nice
Beat and raise
Where's it at?
Interesting
Is that a one time driver on EPS?
Is that a real beat?
They raised their forward guidance pretty aggressively
So it might be real
But I don't know for sure
Well the EPS
That's big beat that's definitely a
one-time thing they're not a profitable company oh yeah you're probably looking at non-gap
yeah i don't have full rubric numbers there now samsara is up
jeez center one yeah that's not a real number non-gap EPS stock talk was
negative 21 cents that's actually
what should have been reported with what you saw
honestly EPS might have been a miss
what am I saying here that's wrong
a lot of times they just may not compare
to estimates
wait wait wait
okay no sorry negative 21 cents is what they reported
in the same quarter last year
it was 10 cents
okay
fake news from Evan
for there for a second
it was 10 cents
without any one time accelerants
I keep freaking hitting a button
to get me away from this
this is so frustrating
includes loss 82.5 billion dollars in stock based compensation compared to82.5 billion in stock-based compensation expect compared to 95 2.5
i haven't seen a one-time expense yet it wouldn't be a one-time expense i mean a one-time gain
that's driving that is there no is there anything because if not that's a monster report
i haven't seen it yet. Are you talking? Yes.
I mean, I'm seeing like negative 35,
anywhere from depending on the analyst estimates,
I'm seeing anywhere from negative 28 to negative 35 cents expected on the EPS and a positive 10 print.
No, that's non-GAAPap they're not a profitable company yet they don't forecast to be profitable until like 2028 but those expectations are not this
just a gap and non-gap numbers getting muddled between the people that are reporting yeah
yeah i see minus so what's the actual comp so i see minus 36 cents, minus 39 cents, and then they came in at minus 35.
That's what I see on StockTitan or basically Bloomberg.
They have – here, Evan, I'll send you the – and Sam.
The actual –
I'm already looking at it.
Non-gap is 10.
Non-gap is 10.
What's the non-gap expectation?
Again, 90% of the times when you see EPS expectations, that is non-gap.
So I default to non-gap.
Yeah, I know.
That's what I'm saying.
I am on the same page as you here.
I am trying to dig into this and I don't see anything.
Okay, yeah.
Okay, yeah, so that's why I'm confused.
So that's why I'm confused.
I've been looking for filing.
I've been looking at the finals.
But, I mean, I think it is actually a real beat.
Because look at their free cash flow margin.
They are free cash flow positive.
The estimate was supposed to be 9%.
They posted a 22% free cash flow margin.
And their gross margin was four points higher, too.
They're expected to post a 79% gross margin. They posted an 83 cash flow margin. And their gross margin was four points higher too.
They're expected to post a 79% gross margin.
They posted an 83% gross margin.
Okay.
From the press release, net loss per share. ARR is 3% higher too.
Revenue growth is 10% higher than expected.
Yeah, this is a real beat.
From there, the gap net loss is $0.32 from the press release compared to minus $0.71 a quarter of last year.
Well, I'm in the stock-based compensation software companies, so that's always going to take a hit.
It's actually pretty interesting because their subscription ARR is actually decelerating, but the stock is still up, which is good to see.
I mean, mine will have large numbers um let's see here
yeah i mean how big is the decel and subscription they are it would it shouldn't matter with these
kind of numbers a lot of large numbers so it's it's not like at 48% where it was the other quarter, but still. Cash flow and free cash flow from operations are both massive beats.
They posted $77 million in free cash flow.
They're expected to post $30 million.
That's a huge beat.
How are you seeing those analyst estimates?
Where are you looking?
I'm just looking at the Street Insider release.
They have all the analyst estimates beside it.
Well, they're up 12% now, so let's go.
Damn, dude.
But honestly, I'm not going to be mad
because I wouldn't have bought this stock
before the earnings anyway because it's so expensive.
But I see why it's expensive.
That's a hell of a report.
Stock-based compensation went down too.
Yeah, they're actually guiding for flat share growth. That's a great of a report. Stock-based compensation went down too. Yeah, they're actually
guiding for flat share growth
next year.
It's a great company.
They don't really
have a competitor in the data security space.
And they're already
talking about
security for a 10-day.
They have ARR
of $1.4 billion. Let's say it's 10% up in the after hours. It's $14? Hold on. They have ARR of 1.4 billion.
They have, like, let's say it's 10% up in the after hours.
It's 14 billion.
That's 10 times ARR.
But they have 1.4 billion of cash.
Note that.
So, I mean, it's really trading at, like, nine times ARR, which is really good for 48% growth, no matter how you slice it.
especially if their free cash flow margins are headed up years and and the free cash flow too
Especially if their free cash flow margins are headed up.
And the free cash flow, too.
if you annualize the quarters you annualize this quarter's free cash flow
but but stock talk i don't know if you should annualize this quarter's free cash why is this
the way that is this a strong seasonally strong quarter for them or what it could be is what i'm
trying to say so like i think you'd want to just basically go off the guide which is like but is
there hold on though we we don't have to assume that though. Is there evidence of EPS fluctuations of that size? Let's
see. This same quarter last year was actually not good for them. They've only been public for a very
short period of time. Just remember though, like look like just remember though like cash flow is
recognized when the money comes in versus revenue is booked when the you know the revenue is booked
so that's what i'm saying like no yeah i know that i'm just saying that like it looks actually
revenue wise based on their eps chart of they haven't been public for that long but what there's
how many quarters of data here one two three this is a seasonally strong quarter for free cash flow.
Actually, I'm looking at it.
For free cash flow, it did not look seasonally strong,
but on revenue, it does look like a nice pickup from last year.
I'm looking at fiscal AI, and I can't believe they got these things.
I'm looking at it as well.
Yeah, they got this stuff reported fast.
Usually on these income statements, cash flow statements,
they don't report until like a few hours later.
But the free cash flow does not. I don't see anything cyclical in this free cash flow if anything it was the
next quarter that was really the big bump so i'm not seeing that there but in revenue it was there
oh i see what you're looking at my bad my bad you're right um yeah next quarter's supposed to
be short maybe that's a reason why it's up rbrk up 12 in hours, one we will be keeping an eye on
a little bit here.
It's only half the price.
It's only half the market cap.
I'm just saying, you want to look at a business like this
on an annual basis, not a quarter basis,
if you're looking at free cash flow.
And they're just guiding for $200 million in free cash flow this year.
So, you know, it's something to consider.
You're telling me they did like $80 million
in free cash flow this quarter,
but they're guiding for $ 200 mil for the entire year.
Oh, okay.
I didn't know that.
I didn't see that.
Okay.
Okay.
That makes sense.
Yeah.
Okay.
So it's going to be lumpy then.
Yeah.
I'm assuming the money just comes in when it comes in.
Um, I got to read the 50 X free cash flow.
Exactly.
I will say they, it looks like they have brought in 140140, $180 million of revenue so far this year.
Slightly under that.
And they said $200 million.
Oh, this is free cash flow?
$180 million free cash flow?
So they either just said that free cash flow.
It deserves to be expensive, but it is expensive.
It deserves to be expensive, but it is expensive.
I wouldn't buy it.
I wouldn't buy it.
You got to just think, what are the free cash flow margins?
You put $200 million divided by $1.4 billion, right?
So that's 1 over 7.
So what is that?
I don't know, 15% or what is it?
Yeah, it's like 15%?
Yeah, I mean, that's not bad, but it's low for the industry, right?
No, that's what I'm saying.
So you have to wonder, what's going to be the terminal rate for cash flow margins.
If this is a 35% free cash flow margin business as they scale the business, then all of a sudden this is trading at, like, this is trading at a very cheap multiple.
You know what I mean?
Yeah.
It's trading at, like, 20 times.
If they can hold that at scale, yeah.
Sam, you know this business better than us.
What do you think free cash flow margins will be uh eventually on this business they usually end up around 37 percent for software
you think this business specifically if this business you tell me will be at 35 free cash
flow margins like let's say by the end you know exiting 2026 calendar year whoa no no no not
not that soon not that soon. Not that soon. Okay.
But if I'm looking at free cash flow for some more mature software company, more mature
cybersecurity company, I'm going to look at Palo Alto.
If I look at those free cash for margins.
Hold on.
One thing I will say, by the way, they, like I'm saying, they brought in already 160,
170 million dollars of free cash flow this fiscal year. They just told you 200 million.
So they either just told you either they are expecting free cash flow to be the lowest of
the year next quarter and come in around 30, 32 million, or they just sandbag that pretty
aggressively and they're going to be able to beat it. It's an interesting spot, too, on the chart
because in the post right now, it's right above the 200-day.
It's such an interesting...
Yeah, that's what I was looking for.
It's not going to sell off on this print.
I don't think so.
That's a really good print.
This thing has already pulled back 30%.
It's not.
They beat six for the last...
SoFi?
Yeah.
Oh, jeez.
$1.5 billion worth of shares.
That's why you got to own conservative valuation
name SoFi.
Offering.
I will say, last time this happened,
it was directly
EPS accreted for SoFi.
Just own
Lending Club, brother.
It could happen for SoFi. Literally the lastending Club, brother. It could happen to SoFi.
Literally the last time this happened, it went up.
Did you see JP Morgan's report on that today, Logical?
No, I didn't, but it was up today.
I saw it nicely.
Yeah, JP Morgan called it a top pick this morning.
Let's go.
I increased my size the other day when I saw calls come in.
Yeah, they raised their price target from 22 to 25.
I'll just read read the top part they
said lending club is our top pick despite the macro uncertainty we believe performance across
our fintech coverage universe was mixed in 2025 with just three out of nine fintechs in our
universe outperforming the s&p 500 despite positive earnings revisions across most of the universe
looking ahead we see a soft landing grind with
with slowing real growth driven by a weakening labor market and the lag tariff effects partially
offset by tax cuts in this environment we see lending clubs growth stabilizing and proving as
more resilient versus peers and so that's there dude i mean it's the it's the most conservative
management team they didn't post they posted a gap profitable quarter through the entire 2022 drawdown.
They're like, anytime they feel like a recession or consumer sold out is going to come, they
raise their provisions for losses.
I mean, they're just really conservative, really smart.
And if you look at the recent quarter, they grew revenue by 30%.
And you're trading at just barely, at the time you're trading at just above book value,
tangible book value.
And for a lender that's going to just speed through, if lending is going to pick up, the
marketplace is going to pick up, interest rates come down, whatever, risk appetite for
those loans in the marketplace comes up, you're getting exactly the low valuation starting point plus the revenue and
earnings expansion so it's exactly what i look for uh vanda pharmaceuticals fda lifting partial
clinical hold on a study which what's the ticker vnda okay victor november delta alpha
Victor, November, Delta Alpha.
It's up like 8%, 12%.
It's moving.
Okay, so the direct comp for Rubrik in terms of its data security space
is probably Commvault, which is much more mature.
They're at 21% free cash flow margins.
For cloud native cybersecurity would be Palo Alto.
They're at 31%.
So I would assume that...
They think it's at 30%. Yeah, they're at 31 so i i would assume i think it's a 30 percent yeah they're
gonna head to 30 so let's let's put 30 on 1.4 billion 0.3 times 1.4 stock trade that what 14
billion 14 billion divided by 320 million those are 40 times if you were to expand those margins
those are 40 times if you were to expand those margins it's pretty high
it's pretty high
oh wait wait wait i might have messed that up a little
sorry yeah 33 times free cash flow assuming that they are at those terminal margins now
um 33 times though for a business growing 50 top line is very is very yeah so i, that's kind of how I think about these things is like, you need to skate where
the puck is going.
If this is going to 30% free cash flow margins, just put in your brain that it's already there.
Well, I've never s I keep this stock in the port for a reason for the long term.
I mean, they're freaking their SISO is the ex SISO of the CIA, for one thing.
They got the Microsoft backing.
The former chair of Microsoft is part of the board for this company.
I don't think this company is going to lose,
but it's going to have trough periods just like any software stock.
So I think that is a trough period, and it might be coming back.
We'll see.
Which company were you talking about?
Rubrik. Even Vipolo Seha, who's the CEO, he's like a motivational guy in Twitter. I love reading
his tweets. It's just so freaking motivational. I had to close some tabs there.
My computer is malfunctioning.
I see Chris down there.
Let's get Chris up here.
Chris, come on.
Every time I switch a window, my computer freezes for like 20 seconds.
Dude, freaking 7-01 just wouldn't be thinking
can't go down lower.
It just keeps going down lower.
Yeah.
It's trading on multi-year lows
after hours.
This is why in the software space,
you really have to buy
the highest quality
and you have to pay up for it.
You have to pay up.
If you want to own software,
you can't own like the cheap ones
because the cheap ones
keep getting cheaper.
You can own DigitalOcean. I own DigitalOcean digital ocean brother but that's a leader in its space like that that's a
leader in the space and gardener quadrant satin online is like always second there are some cheap
ass growth stocks out there dude there's a lot of garb out there in good themes man and maybe it's
not crazy garb where it's like double digit top and bottom line 20 plus percent GARP.
But there's some high single digit organic growers that are maybe growing 14, 15 percent through acquisition, maybe even 20 percent through acquisition who are priced like sub 20 P.
You know, sub 15 forward P.
In really, really obvious themes.
Just go grab them like they're just sitting there.
And I don't know.
I really hesitate to believe that there's not an enormous amount of opportunity.
I kind of even don't even care where the indexes are.
I know we keep talking about the indexes, and it matters.
It does matter because it plays into, like, enthusiasm and liquidity
and all these things.
But just so many great stocks out there,
especially in the mid-cap universe where I focus.
Like, just, you know, in that that $2 to $10 billion range, if I had unlimited money, there's probably another 10 stocks that I'd put 5% positions on.
Like right now, even after this recovery in a lot of individual names that's happened over the last week. Uh,
so I think if you look hard enough,
you said if you have unlimited money, but you own the whole strike and Amcor,
I own a lot of it. I am core. Yeah. It's my biggest position.
It's 17% of my portfolio. So yeah, I own a lot of it. Strikes,
shares and everything. Smith and Wesson
guiding up
Q3 sales
2025
8-10% over
that doesn't make sense.
Guiding up 8-10%
year over year
for Q3.
They're up 7%
after hours.
I was looking at some
of those guns and ammo
stocks a few days ago
some of the charts look real nice on them yes sportsman just reported earlier to they have a
good report I didn't look at it to be honest let me go look I have a watch list somewhere here for
guns where is it it feels like one of the teams though that falls into that basket if I had any
limited money yeah I'd maybe go into it.
But I feel like there's stuff you're more excited about.
Yeah, there's stuff I'm more excited about.
I mean, like, I really the big things I want to be in is the power grid.
I want to be in batteries.
I want to be in semiconductors.
I want to be in data center.
I want to be in nuclear.
I want to be in data center. I want to be in nuclear. I want to be in aerospace and defense.
Those are like the areas that I really, really want to be in.
Because I think they're secular, not cyclical.
And even semiconductors, which is a crazy thing to say,
because semiconductors have always been cyclical.
And even to a degree, aerospace and defense is,
I'd call it more lumpy than cyclical.
I wouldn't really describe aerospace and defense as a cyclical industry,
although it depends on the companies you're looking at, but I would describe it more as
lumpy. I think it's a better and more fair description for aerospace and defense, but
I'm okay with that because one thing I'm really good at.
No, it's probably cyclical on a longer timeframe though.
Yeah. I mean, around, around like conflict horizons, but that's, it's, that's not traditionally cyclical. It's not predictable.
The cycles in defense are not predictable. So yeah. Okay. Fair on a longer time horizon,
it is cyclical, but it's unpredictably cyclical. And in a shorter time horizon,
it's more lumpy than it is cyclical. Um, and it also really depends on the company. I mean,
there are some aerospace and defense providers that aren't cyclical at all. Um, and you know,
like look at Leonardo DRS and look at that stock. That's a great example of a non-cyclical defense stock
that just goes up every year. Ticker DRS, you can just look at it and see, but it depends.
And then there's other defense stocks that enter bigger TAMs with new products that just see
immediate multiple expansion. Mercury Systems,
one of the stocks that was one of my biggest airspace and defense positions at the start of
the year. I don't own it anymore. But if you look at Mercury, that's what happened to Mercury this
year. Mercury hit an inflection where the multiple had to expand. The stock opened the year at 30 or
40 bucks, and now it's a $70 stock. I mean, it was as high as an $85 stock. There was a forced
re-rating because Mercury's precision systems are being used in autonomous systems now and especially drones.
And so the market gives them a little juicier multiple for that because those are big, big growth industries.
So in defense, in my view, to make money in mid-cap defense, and it's one of the areas that I excel at, a lot of my big winners have been in mid-cap defense.
excel at. A lot of my big winners have been in mid-cap defense. If you want to make money,
you look for the companies that are about to enter a highly attractive new industry in the defense
realm. And the big ones, the obvious ones that people should be looking at are autonomous weapon
systems and drones and precision munitions. Those are the big three. And all the inflections that
have happened in aerospace and defense stocks, I mean, Mercury, you can look at Astronix, ATRO.
Go look at ATRO.
That stock opened the year at $15.
It's a $50 stock now.
You know, Kratos, that's one that I own, obviously.
Huntington Ingalls, the only commercial shipbuilder in the United States.
That opened the year at $180.
It's a $315 stock now.
I mean, I can go on and on.
I've got 20 examples this year of defense stocks that are up 100- plus percent on the year that are hitting inflection points and seeing multiple expansion purely as a consequence of one or two programs.
You know, some of these names, the programs that they initiated this year that are in cutting edge defense, whether they touch drones or precision munitions or autonomous systems, whichever of those categories they touch, in many cases in some of these stocks, there may be a 5% or 10% segment in the business. But that 5% or 10% segment of the business is
growing 80% year over year. The market's going to give you juice for that. They're going to give
you some juice on the multiple for that. They're going to be like, look, this 5% or 10% segment
keeps growing at 80% year over year before you know it's going to be half the business.
Right? So these are the inflections you want to look for,
not just in aerospace and defense, in stocks in general, like all the mid caps that I've covered
this year that have done well, most of them that I've covered have, were all inflection stories
of some kind or another. Amcor was an inflection story, ENS inflection story, VAB inflection story,
all the aerospace and defense picks, Kratos, Huntington, inflection stories, right? The
Huntington story was why.
It was a very simple thesis. Trump was talking about shipbuilding left, right, and center. And I was like, look, it's the only shipbuilder in the United States. Even the biggest companies in
the country, the biggest legacy primes in the country, like General Dynamics, have to go to
Huntington to build any meaningful amount of ships. So it was an obvious play. That stock's
done amazingly. And in fact, has held up very, very well during the corrections. It's been a very stress-free hold to old Huntington all year. It's climbed up the 21 EMA from, you know, 150 bucks to 300 bucks, basically, without ever giving you any sign to worry. I mean, it barely touched the 50 day all year, even in the corrections, even in the corrections. Like right now you spend a lot of money on a huge carrier and this huge,
like really expensive plane and everything like that.
But obviously as drones become very cheap and maybe those can get through
stuff.
Basically I'm asking you,
does the future of this look like really huge ships and really expensive
planes or a lot,
a lot of small ones?
I wonder what Huntington and Galas,
I mean, or Galus or whatever it is,
obviously they maybe pivot,
but I do wonder what that future is right now
in this defense area.
It seems like it's more of a lot of the cheaper drone stuff
than it is the smaller amounts of the giant ships
and stuff like that.
and stuff like that.
But that might just be anecdotal.
But that might just be anecdotal.
I don't really understand what you're saying.
I'm saying Huntington and Gales,
a major shipbuilder in the future.
I don't, as drones and other stuff becomes bigger,
I don't know what the future of...
Of ships is?
The future of ships is...
I think it's going to be a lot more smaller ones than expensive.
I mean, I don't know, but Huntington is an irreplaceable...
Like, look, there's about eight subcontractors in the country,
Huntington being one of eight,
that is considered an indispensable subcontractor.
Okay?
General Dynamics is a $70 billion company, for example.
When I bought Huntington earlier this year, it was like a $6 billion company.
I think now it's like a $10 billion company.
It's gone up a lot this year.
But I still own it.
It's not a huge size of my portfolio, but I'll be exercising some of my calls in December that expire,
and I'll be taking some shares, the 240 calls I have.
I'll be taking some additional shares at 256.
My current cost base is 219
bring my cost up a bit but I want to hold this
but Huntington is indisposable
like you cannot build
any kind of major ship project in the country
without them
you follow the defense contracts Evan
so you'll be able to look at this easily
go look at General Dynamics last 10 shipbuilding awards
who is the subcontractor on
every single solitary
award? It's Huntington, a much, much smaller company. So pricing power inflects at certain
points. I mean, keep in mind, Huntington trades at 1x sales. If they inflect into a period of
growth, if the United States really wants to rebuild its fleet and Huntington inflects into
a period of growth, that stock is not going to trade at 1x sales anymore. It trades at a 22
trailing PE 1x sales, being the only commercial shipper in the country.
I mean, it's still cheap.
It doubled this year, but it's still cheap.
You know?
I mean, the stock was trading at 0.6 sales at the start of the year when I bought it.
And I thought it was a very, very compelling opportunity.
I still think it's compelling.
I mean, my weighting will go up when I exercise those calls.
So it'll go from a 3% weighting or whatever it is right now to probably a 6% weighting when that exercise happens.
So it'll become a significant position in my portfolio. But people should go look at what Huntington does and see the level of deep expertise they have in shipbuilding that not a
single company in the country possesses. Not even General Dynamics, who is considered the king of
shipbuilding. General Dynamics gets all the shipbuilding awards because they have the scale
and the size or $70 billion company or whatever the market cap is now. But that's why they get the attention.
But when you understand the industry, you know what Huntington's role is and you're like,
okay, they're indisposable. If you want to build a nuclear aircraft carrier, which is the most
powerful weapon that this country possesses, who builds it? Huntington. Huntington is a subcontractor in every nuclear aircraft carrier that's ever been built in the
United States. It's a $10 billion company turning at 1X sales. You have to find these things where,
in my opinion, the best way to find hyper, super performing mid-caps is you find the companies
that don't have peers. Literally all the big performers for me this year,
Amcor, no peers.
Centris Energy, LEU, no peers.
You know, all the big stocks, Kratos, no peers.
Huntington, no peers.
When you're a mid-cap company that has no domestic peers,
you deserve a multiple premium, in my opinion.
And sometimes it takes a while for it to come, but it almost always does. And I like to position myself in those names before
the multiple expansion. And with all those names I mentioned this year, that's what I did in the
front half of the year, I put myself in those names. And what happened? They all doubled or
tripled or quadrupled. And that's how you do it in mid-cap stock picking. You find inflection
stories and you say, look, the market doesn't see it yet, but I think
for X, Y, and Z reasons, this company is going to get noticed.
And sometimes it's something as simple as, hey, shipbuilding has been neglected for a
decade, and now all of a sudden the president is talking about it for the first time in
three or four presidencies.
That's probably a reason to bring some attention to it.
And guess what?
That's all you needed for Huntington.
Huntington didn't have any individual stock catalysts this year.
Just Trump talking about shipbuilding constantly
and a handful of executive orders where it was mentioned.
And the stock doubled on that.
It went from trading at 0.6x sales
to trading at 1x sales in a matter of months
for no reason, for no good reason. I mean, their last
rapport was good, but that's not the reason the stock doubled. The stock had gone up 80% prior
to that. So it wasn't earnings driven. It's just a calibration of expectation for the market.
Stocks are tickers with narratives and multiple expansion is entirely subjective.
And very often it's just a matter of attention. Really? That sounds unbelievable to people like,
well, it can't be that easy. It's not easy. It's hard to find the inflections. I'm not saying
finding these stocks was easy. No, it was not easy. It took a lot of research and work to
settle on the names that I settled on. But it is sometimes as simple as saying, I'm putting myself in a name where the story might not have been that interesting in the trailing 12 months.
But I think in the NTM, it will be.
And these are the reasons why.
And I did the research to justify that.
That's like all the stock picks I do is that's what I do.
Try to justify a reason why the NTM is going to be different than the TTM.
And I explain it to myself. And I'm sometimes wrong but usually right and that's all that matters you know you can miss you can miss four out of ten and make a lot of
money if your conviction is in the right place if your sizing is appropriate if you're willing to
cut losers quickly you don't need to be right on everything but you know that's uh that's how i think about stocks i
don't even know how we got it this deep into the conversation i invited chris up like 20 minutes
ago i'm sorry chris i kind of steamrolled you but i wanted to hear from you thoughts on the market
you whispered a little i saw meta today we talked about meta a little bit we tried to do a space
yesterday but the spaces wasn't working. So Twitter was not working yesterday.
Freaking Twitter.
Dude, I love that approach to mid cap investing.
I mean, people forget mid cap companies turn into large caps, right?
So usually the small caps are where most of the risk is.
Mid cap is like they've already kind of proven profitability for the most part.
And that now they're most of them are on auto-glide
paths towards becoming large caps.
It's just a matter of figuring out who those companies are.
And I think right now everyone focuses on the S&P 500 and they're like, okay, well,
who's going to be the next entrant into the S&P 500?
I think if people kind of thought about that for a second and utilize the investing approaches
that you have with regards to just how unique the businesses are.
They'll do exceptionally well.
One position that I took on as a speculative vet post-October 7th was Elbit Systems.
Elbit Systems makes the helmets for the F-35, but also one of the largest Israeli defense contractors over there.
If you look at their stocks, it's done exceptional.
So I also did well on Reimantall.
I didn't really speak about it much because it's an international company.
But the minute that Trump was talking about, hey, listen, the Europeans need to arm themselves,
and Europeans were like, yeah, we need to arm themselves automatically.
The first thing was like, wait a second, who's the main defense contractor over in Germany? Well, it's Riementhal. Look at Riementhal
stock. Look at what it's done. So I think sometimes there's some unique, unique names
that come up and, you know, they can do exceptionally well just based on the narrative
shift. Like you said, same thing with the multiple expansion. I think a lot of times people are too
backward looking in their approach to valuations where they're like, well, this company's
traded at a 10 multiple for the last X amount of years. And then they kind of just base their
investment decision off of that without realizing that, hey, wait a second, the multiple could be
re-rated much higher depending on the story. And I've made that mistake as well. So it's not like
everyone is dumb and I'm smart. No, trust me, it's hard for me to sometimes look at a company and be like, OK, yeah, this deserves this multiple expansion for whatever reason.
Like, I think one of the thesis that I have right now with regards to meta is that their multiples will expand once people realize that they're not going to be just endlessly spending money on CapEx, on things that go nowhere with regards to Reality Lab.
spending money on capex on things that go nowhere with regards to reality lab and then at the same
time if you see their profitability starting to rise more shareholder capital return initiatives
the the market will say to themselves like wait a second from a ev to ebitda perspective this
thing shouldn't be at around 15 on a forward basis maybe it should be at a 20 and that's when the
stock just shoots higher you know once people realize so sometimes you you have these narrative
shifts and i think that's one of the key things.
I mean, we saw that with Google this year.
I took a lot of crap for being long on Google, and then the minute Gemini 3 hit, I tried Gemini 3, and I was like, oh, crap, here we go.
This thing's going to run.
Because the narrative shifted from Google is on the back foot of AI to Google is a leader in AI and the entire
markets like wait a second I'm under under I'm under invested in Google and
it just ran up so it's a combination of just rereading on the multiples I think
if people took that approach more I think they would do much better in the
markets than sometimes they do and which a lot of times like is that they're very
backward-looking where I think one of the things that people do need to start doing a little bit more
if you really want to make some really great gains is start to look forward.
And I think those are quotes from Stanley Druckenmiller.
Like if you're trying to look for the story that's happening right now,
you're already behind the ball, eight ball.
You got to look two years ahead and then base your estimates on that.
So you can see a little bit ahead of time and say, look, this catalyst is on the horizon.
And in two years, this company is going to be materially different and the multiple is going to be re-rated much higher.
You're going to buy in. And now it's just a waiting game, you know, until the market recognizes what you recognize.
And boom, you're going to do well.
Rubric is up 16%.
Yeah, no.
I knew it was good.
Dude, I knew this is $100 stock, man.
When I see that, those numbers, it makes sense.
Yeah, that was a crazy good report.
Sam has been catching a lot,
a lot of
these
five Xers, man.
I saw Nebius. Nebius was one of them.
I was like, I really
wish I'd follow Sam a lot more
into these tech trades instead of trying
to do my traditional mean reversion
plays. I think if I...
I think I'm going to have to just like...
No matter what happens, I'll just take like 10 G's
and be like, Sam, what's the next one?
And just dump it in there. I don't even care anymore.
Just 10 G's?
I'm like, no faith in you.
I'm only going to give you like 0.0001%
of my portfolio.
I have faith,
but you know, I have faith in myself
a little bit more. You know what?
I'll dial it up
to 11,000.
I got you, bro.
All right.
All right.
Now we're talking.
Now we're talking.
Let's go.
I got to tell you,
I think all of us,
we share ideas with each other.
And,
you know,
it's not just about like blindly following people,
but like that reaffirmation,
just building conviction that you need.
I mean,
like,
you know,
you guys have had some really good picks
and I've taken some advice from you guys, which is really good, helped me in my trading and investing.
And, you know, that the real conviction is really just bad when you do the DD. Like if you don't,
I feel like if you don't do the DD, then you're not going to be able to hold to the drawdown.
You know, and I know you guys, I know you preach that a lot, but it's true. It's true. I mean,
like, holy crap, you're just talking about Google.
Everyone, well, everyone, there was a lot of talk on Twitter.
A lot of people on Google, but like that, it doubled.
Like a mega cap doubled in just a few months.
And I have to admit, I sold Google for Meta when Google was $165.
And I bought Meta when it was $620.
And I totally screwed myself over 3% position but
I didn't have the conviction I did not and you did and you capitalize off of that the same with
the cruise lines like you got you got dunked on with the cruise lines so hard when Palantir was
like above 100 was like near 100 bucks or something and like look look what happened
right but the difference was that like you you levered up when the conviction was strong and stock talk logical and all you guys do that too
like when you concentrate the position when the conviction is strong and then you come out on the
other side way higher than you would have been with regular shares because you levered up
and there you go that's just that's the name of the game yeah conviction and sizing is like the whole game
for super performance like you know i've talked to a lot of like there's some of the some vets
that i know that have been doing this for over a decade and some friends of mine that have been
doing it with me and they're just like you know they're like dude i'm buying a lot of the same
stocks as you and like my performance isn't close to yours. Like, what am I doing differently? And I was like,
the difference is conviction and sizing and holding through the volatility. That's the
difference. Like, you know, I have a lot of like technical trader friends who are big,
like everything is in the chart guys, which I always laugh at anyone who says that because
it's like hilariously untrue. But it's also just like a sign of ignorance because it's like people who don't want to learn the other
things just assume that they only need to learn one side of the market. In my view, to be a truly
successful investor, like look at all the greats, look at Lynch and Druckenmiller. Like do they
only look at charts or only look at balance sheets or only look at thematics? No, they look at all
three. It's not just me who's sitting up here and saying that like, it's my style. Like I invented that. No, the greatest investors of all time do
it that way of all time. Like Druckenmiller gets 270 charts sent to his email every Sunday.
And he never takes a fundamental idea if the chart isn't good. Like it's the best,
like it's the best arguably the best trader of all time arguably i think he is um and like you're
gonna doubt that process like go for it if you think you know better but no everything is not
in the chart no everything is not in the balance sheet and everything is not in any one place to
develop true conviction true sizing and like sit through, you know, like when
Amcor was consolidating between like 25 and 30 and bouncing around and having minus 7% days,
I had so much leverage on the position. My portfolio was getting tugged up and down like
a tightrope. People were like, oh dude, why does Amcor keep fading the pops? They're like tagging
me. It's really easy to doubt your thesis in times like that.
You have thousands of people in my Discord, right?
Tagging me, what's going on, StockDoc?
Why did it pop 7%?
Fade the whole move, go red.
Like, are you sure your thesis is right?
What's going on?
Whole time I was like, yep, holding, holding, holding, not selling anything.
Now the stock's like 44 bucks.
And a month later, you know, it had a massive breakout.
It just kept going.
And it's like the conviction paid because I had an enormous amount of leverage on that position. And I wouldn't have been able
to hold through the volatility if I didn't really know the story down pat, know every peer, know the
industry, know the typical margins of the industry, know why the volume is going to expand, know the
Peoria lineup, know the likelihood of it getting built early, know about the Apple investment.
Like I knew every part of the story so well. I was like, there's no way I'm selling. I don't
care that's going up or down, whipsawing 7%. You're never going to be able to do that. Never
without having true conviction. And reading about the stock somewhere is never enough to do that.
It's just not enough. And that's the difference. Like even some people who followed me in my
discord this year have done very well. Like I had, but I had somebody tagged me in the discord two days ago and he's like, dude, I'm up plus two 80
this year, but I'm not up plus five 60. Like, why are you up so much more than me? And I was like,
Hey, did you buy everything I bought? And he's like, well, not all your stocks, but I bought,
you know, your main ones. And I was like, okay, cool. Like, do you still own the ones that I have?
And he's like, Oh no, I sold Amcor at 32. I sold ENS at one 34. And I'm like, well, there you still own the ones that I have? And he's like, oh, no, I sold Amcor at 32.
I sold ENS at 134.
And I'm like, well, there you go.
That's the difference is that you're not holding for the follow through on these high conviction trades because you don't understand them.
You're just buying them because I bought them.
So the second there's volatility, you're selling them.
Of course, you're not going to have the performance I have if that's how you manage the positions I have.
So, yeah, it's about conviction sizing
the ability to hold through volatility and all of those things are related to each other
including the research because the research gives birth to the conviction and the conviction gives
birth to the your ability to hold and that's the whole game you know unless you're a day trader or
a scalper or whatever in which case you ignore everything i'm saying and you keep doing whatever
doing doing that game but i've never met anyone who's made real wealth being a day trader or a scalper or whatever, in which case you ignore everything I'm saying and you keep doing that game.
But I've never met anyone who's made real wealth being a day trader or a scalper.
It's very rare.
Like, you have to be somebody who can sit at the screen all day.
Like, maybe 1% of people have time to do that or even want to do that.
I mean, I'm at my desk all day.
I do this full time.
I could be a day trader if I wanted to.
But it seems like an awfully stressful life to me to be always looking for the next setup constantly. What I'd much
prefer to do is do real research, find a basket of 10 or 15 stocks, buy them in size and watch
them work. That's a much, much like, you know, I don't have to get as many gray hairs.
I've got a couple this year from volatility management, but it's a much, much less stressful process. And pretty much every trader I've seen,
the new traders graduate through this. They start as a meme trader, day trader,
and their account gets a little bigger. And then maybe they do some scalping.
Their account gets a little bigger. Then they become like a setup trader, which is what 99% of people on X are. They just share like setups. People think it's like game changing stuff. Like
anyone can learn to read a chart in one weekend. It's hilarious how it's treated as this privileged
knowledge on X. Don't ever let anyone convince you that it's hard to read a chart. But people
get into the setup trading and they'll do that for a few years. The account get a little bigger. And then they'll realize, dude, what am I doing? Like, what am I doing? Just
constantly hunting for a new stock over and over again, like a, like a great madman. Like,
why don't I just do the research and buy things in size, scale into them, build positions,
trim to pay myself when I need to, it's a much, much better way to operate. And I think everyone
gets there eventually after enough years of doing this. And I think everyone gets there eventually after
enough years of doing this. And I started being that guy that was like trading setups and day
trading and scalping when I first started trading when I was 19, 20, 21, 22. It's over a decade ago
now. But when I started, I did that, too. And, you know, I thought that was the way to do it.
And then over time, I realized, like, it silly. And it's frankly, a waste of time.
Like, my returns are higher than the people that do that. And the amount of money I make on each
trade is probably much higher. So, I mean, you don't need to do four or 500% on your account
in a year, which seems insane. And it's my best year ever. I'm not saying it's normal.
You think you would think you need to do these things. You would think you need to buy meme stocks and day trade and scalp and buy lottos and buy earnings lottos. Like that's
something people love to do. It's funny because I just did one on path, but you know, that's very
rare for me. But, um, that's how you build your account. You build your account through conviction,
sizing, research, uh management. The funniest thing.
So I have a Discord.
And sometimes when new people join, they're like, Chris, what's the next play?
What's the next play?
And I'm like, the next play is you invent a time machine and go back a year or two and buy the stocks we were talking about then.
I think what it is is a lot of times people really like the next big thing because they've seen past performance.
I'm like, sometimes the answer is just hold what you have and just relax.
It's not always a matter of, oh, what's the next big thing?
And sometimes the next big thing does does come along.
I'm not saying not. But a lot of times doing a lot of fundamental research in DD is where like I pride myself.
And sometimes I'll be honest,
I get caught up in the momentum of things and I have to really dial myself back and being like,
look, stop searching for the next big thing and just let your, let your original thesis play out.
You know, and it's, conviction is a lot harder win for me than, than um than most people so for me right now like on my patreon
page and all this other stuff sometimes i go like a month without posting anything because now i'm
like you know what quality is way better than quantity and sometimes i'll lose subs i'll lose
and people be like oh well i didn't get valley because he doesn't talk about stocks every day
and i'm like well see yourself out it's all good doesn't talk about stocks every day. And I'm like, well, see yourself out. It's all good. It doesn't matter.
Yeah, picking the wrong thing
is probably way more detrimental
than just letting your winners do their thing.
So yeah, and cutting losers early.
That's super important too.
Sometimes it's okay to be like,
look, I bought the stock at the wrong time
and I can buy it back later.
Sometimes it's really, really okay to say that. And I think new traders feel like,
if I let it go, it's just going to be gone and I'm never going to get it again. It's like,
dude, if you sell a stock and 30 days later, it's 10% higher or 15% higher, so be it. Okay.
You missed out on 15% gains. If you're really planning on holding the stock or you really want to compound that name, that's meaningless. So you just cannot
think in this FOMO, chasey way. That's the biggest lesson. That's the biggest changer.
If you were to ask me the difference between the years where I was doing 20% or 30% between the
years, the last couple of years where I've been doing 200 to 500 percent the difference is is a conviction
but b not being flippant like not constantly looking for the new thing like like a rabid dog
like sometimes I said this yesterday sometimes the best thing is the thing you already own.
It's the stock you already own.
And you're looking for a new opportunity.
In some cases, this is really where it gets bad, is people will sell that stock, that high conviction stock, or even trim that stock to buy something else that is flippant, right?
That they just saw and they're seeing it go up and they're like, I have to get in.
That's how you don't make money in markets in the long run that's how you lose money in markets in the long run like man almost every position that i have borrowed conviction on in my life
not just this year and i do it rarely now i used to do it more i used to borrow my friends plays
a lot now i do it rarely maybe i've done borrow my friend's plays a lot. Now I do it rarely. Maybe
I've done it maybe two or three times this year. And almost every time I just don't have the
conviction to manage it in volatility. And I'm like, dude, I don't even know why I own this
thing. And then like, I see it be volatile and I just cut it. And it's, it's a constant reminder
to me that like the stuff that I do really well on is my original ideas that no one told me about like Amcor and ENS and VIAV where no one not even a soul on Twitter was talking
about them and I was like dude this is truly an original idea those are the ideas where I do the
best and I have the most conviction and because I'm like it's just me that's seeing this at least
on Twitter and okay that doesn't mean I'm the only one in the world seeing it I'm sure there
were people that bought Amcor this year before I mentioned it, but not a soul on Twitter was talking about it. No small accounts, no big accounts. And I was like, that means this is truly an original idea. I didn't get it from an analyst report. And that made me extremely confident in it.
of doing that sometimes we're like hey this is a stock that no one is talking about i i get with
thousands of people in our community and i get tagged by people every week who are like dude
i never even hear of these stock these mid-cap stocks that you're mentioning to us and they're
doing so well they have never even heard of these companies and that's the beauty in it is like
yeah sometimes a consensus trade is good i have some consensus names in my portfolio.
I own Robinhood.
You know, I own Nebius.
These are now consensus trades.
When I bought Nebius, it wasn't.
At 23 bucks, it was not a consensus trade.
Now it's sort of a consensus retail stock.
So is Robinhood.
I'm okay with that because I own them so low.
I'm fine with the retail resultant volatility
that's going to come with those names now.
But the new names I open,
when I'm
opening the stock, they are not popular. Like Kratos and Nebius were not popular when I opened
them in the 20s. They are now. Right. And these names that I'm opening now, like Amcor is now
kind of popular. You search Amcor these days, there's a lot of tweets. You scroll back to
September, when I put my thesis out, there's no tweets. Right. So my names are going to get
popular. I get it.
Now I am, of course, sort of popular.
A bunch of people own it, whatever.
I'm fine with that.
I'm not saying I don't want anyone to ever own my names.
I want to keep them in a corner by myself.
Of course not.
I want the stocks to go up.
But when I initiate a position, I don't want it to be something that everyone's chattering about.
And that, I think, is a big thing I hang my hat on.
And I owe my performance to that, I think, is a big thing I hang my hat on. And I owe my performance to that, too.
Because it allows me to position myself not even ahead of the herd, but way before the crowd comes in.
Like, I still don't think people understand the ENS story.
Right?
And I bought that stock at $112.
It's $148 now.
I still don't think people understand it.
I think that stock will be like $ bucks next year before people get it. And the beauty is, is I own it so low that I will just never have to
worry about the volatility in it. You know, like, I think there's a good chance by the end of next,
by the end of next year, that thing is more than double where it is today. Same thing with VIAV.
Same thing with Amcor, even though Amcor has already doubled from where we bought it. But I'm still holding Amcor for that reason, too.
So when you're really early, truly early, you get the tailwind of the initial discovery from the real early buyers, the institutional buyers.
And then you get the tailwind of discovery from Wall Street and the general public, which is when the stock really goes parabolic. And by then your position has
already doubled. You've already paid for your contract. You've already sold. You've already
covered the cost on your shares. You're just sitting on a freebie position that the crowd
is just starting to find. That's where real portfolio compounding comes from, super performance
comes from. If you look at my performance chart, you can look at the one i posted today that's for
for the prior year but if you look at the one i posted yesterday i posted the two-year chart
you can see that most of my performance on the chart comes from these jolts that happen which is
price discovery right where four or five of my stocks get found at once, you know,
and I position myself in them and I have options on all of them. And then they all explode and
you get these huge parabolic moves up in the portfolio. You get period of consolidation,
you know, up and down. The most recent one was pretty brutal, as you can see on the chart,
but I held through it. And you can see that effect of like conviction and holding through it.
Um, and you can see that effect of like conviction and holding through it.
In fact, if you look at the one from yesterday and see for a huge period of 24, I was flat
for like three months of 24, I was flat and I ended the year up plus two 60.
Also, don't forget when you find a name that's not spoken about, and that's basically been
relatively flat, the options pricing especially
on leaps is super cheap what tends to happen is you get because the the stock when i bought the
ens contracts the ivy was 28 yeah that's crazy right and then now what's the ivy like 100 200
yes and now they're like now they're i mean i don't know it's like 60 or 70 or 80 but like
those contracts are up 550 percent in two months.
Yeah. So that's what happens. I think a lot of times that's one of the keys. Right.
If you find this, if you find a name, it's been kind of languishing for a little bit.
Ivy is down. Dude, the options play is super cheap relative to your total return.
And that's the thing, too. Like one of the things that I changed about my mindset when it came to options is when i want to buy something it's like i will i want to lose a little but gain a lot and most of
my portfolio has like my options side of things always have that kind of like feature in there
where i see companies i'm like ah this is actually kind of trading flat but if this catalyst hits the
iv is going to jump in which case the leaps are going to get re-rated much much higher regardless
of whatever the stock price is you know
yeah those leaps leaps are a great way they even have to be leaps like sometimes on some of these
flatter or like less active stocks there is um you can like
the chains don't go out that far but amcor when i bought the contracts in september the iv was like
sub 40 percent ens was sub 30 percent vav before the earnings it gapped up 20 percent on earnings
i bought the contracts before the earnings yeah iv was like 33%. Like when you buy contracts in size at that, dude, it can change your life, literally.
Like the amount of money I just made on those three stocks was life-changing.
I mean, those three stocks alone drove like 100% of my return this year out of the 565.
this year out of the 565, just those three stocks. So yeah, if you position yourself in,
Just those three stocks.
in calls on really low IV things that, that you think are about to move big,
oh my God, it can just pay huge, huge.
And with Leafs, you get a nice long timeframe that you can actually just weather and, you know,
let it, let it do its thing. And you're not going to
see the data decay nearly as much as if you were by a high flyer that has a ton of volatility. And
as the volatility comes down, you're going to start to get screwed over. I mean, if you look
at the whole BMNR thing, one of the things I did was I sold calls against my position because the
IV was insane on BMNR. So I was like, all right, screw it. I'll sell some calls on it. And because of the recent downturn,
those calls have basically gone worthless
and IV has dropped.
So I think when it comes to options,
people really should learn about IV, man.
So I know you do stock talk,
but anyone in the chat right now,
learn about IV and how options are actually priced.
It's not based on some guy
on the other side of the screen nearly as much
as it's based on Black Shoals.
I mean,
yeah.
How much do you pay attention to the other Greeks and stuff?
You don't need to.
It's sort of this.
I was setting him up before it, but
I do your answer.
I only pay attention to Delta just so i know how many shares i control like kind of equivalent yeah that's fair
you can look at delta i mean look you should understand the greeks you should know what they
mean if you're a new trader you should go look you can look up a youtube video type it greeks
explained on youtube there's like i think the first one is really good um like you definitely don't need to know the actual numbers like you don't know you don't need
to know what you don't need to stress out over the differences in the yeah because it's just like
look obviously less time on the contract means that the time decay is worse it further out
means the time decay what would be Yeah. Okay. So what you should
know, okay. And I'm going to, I'm speaking of this from my perspective. So people trade options
differently. I trade options as control vehicles. And what I mean by that is I want to control
shares over a period of time without allocating the capital. Right. So for example, you know, okay, let's say on ENS, right?
So, on ENS, I paid for the March 1-15 calls, okay?
So, they expire next March.
I paid back on October 13th when we opened this position.
I paid an average of $8.70 for those, okay?
So, back then, the IV was like sub like sub 30%. So the IV was obviously favorable, but the break even on those eight 70, you know, was like one 23 for ENF for March. Right. And the
stock back then was one 12 and about the one 15 calls. So what did those allow me to do? Well,
for those contracts, right. For, for every 10 contracts or for let's just say for every contract, right, you're being able to hold for 800 bucks, right, a much, much bigger position.
What is that?
100 times whatever the stock was back then.
So 100 times.
So for 800 bucks, you get control of $11,000 of stock.
Right. Through March. For 800 bucks, you get control of $11,000 of stock. Right?
Through March.
So that's how I think about options.
I think about options as control vehicles.
So what I said with E&S was, look, I'm going to buy a bunch of shares.
I did buy a bunch of shares at 112.
And I was like, but I want more exposure.
Right?
So I bought 50 of those March contracts.
And I bought almost 200 of the December contracts, which I've trimmed out a bunch of them now.
But I should be exercising a portion of those in December.
And so what that did for me was it gave me exposure to an extra two million dollars of stock on top of the one point three million dollars of stock that I had already had.
So it tripled my position exposure while contributing a couple hundred K extra.
That's the difference is that that gate that made ENS moving from 115 to 142 make a very, very big dollar gain for the portfolio.
And the same thing with Amcor, right?
The Amcor position, I was looking at the IV then.
I was like very low IV and I was looking at the IV then, I was like very low
IV and I was looking at the break even and I was like, look, I'm going to get some, at that time,
I bought Amcor in the 24s, right? The shares and I bought the 25 calls for March, right? And now
those 25 calls for March are up 500%. By the time March rolls around next year, we'll see,
I'll probably sell 70% of them, exercise 30% of them, you know, and pay for the trade over
many, many times. So that's the way I like to think about it is, is I like to think of these,
of options as the vehicles to control shares. And then when you get to the expiration date,
figure it out. You want to take some of the shares home at that preferable cost basis. Cool.
Maybe you get to the expiration date and the stock's not as high as you thought it was. And you're like,
you know what? I'm not going to exercise. I'm just going to sell them, take the profit and just buy
shares at this price. Cool. Now the profits from that option sale funded your shares purchase.
Right. So there's many ways to skin the cat. But the idea, in my view, the way people use options
incorrectly is when they use it as
lottery tickets. They're like, oh, this could go up a thousand percent. When you start thinking
about options that way, you're not going to get the thousand percent gainers. And people will see
me post these 500 percent option gainers all the time. I have like 12 contracts in my portfolio
that are up over 500 percent currently. People see me post those and they go, oh, StockDuck,
you must be gambling. You must be buying. Right? You must be buying weekly calls.
You must be buying far out of the money calls.
You can ask any of the thousands of people in our community.
I buy very conservative options.
I'm buying less than 10% out of the money with three plus months on the clock.
That's about as conservative as it gets.
And those contracts are still going up 400 or 500%. Why? Because of conviction,
because I know these stocks are going to move. I know the IV is going to expand and I'm right
on those moves. And that's why. And you don't need to get big gains. You don't need to be
a big far out of the money risk taker or take bats on weekly calls or zero dt you don't need to do that sorry to interrupt
you dude i'm surprised it's not down more oklo 1.5 billion dollar at the market stock offering
what 10 percent of the mic cap uh luxago put out a thing that's more than revenue than they have
but the stock's not down that much i don't know if i'm missing something more revenue than they have. But the stock's not down that much. I don't know if I'm missing something in here. Dude, more revenue than they have.
They have no revenue.
It's not even more revenue than they have.
You're saying it like they have like 1.1 billion,
and that's more than that.
They have zero revenue.
But I don't know why the stock's not down more.
I don't know if I'm missing something in here.
Jensen spoke about it yesterday where he said –
Yeah, Jensen talked about SMRs yesterday.
Yeah, so Jensen probably is causing some of it.
Sorry for interrupting you there, Stock Talk.
That's a big at-the-money offering.
It's so funny at this point.
Wait, what happened? Who offered?
Aqua just did 1.5 billion at-the-market offering.
Oh, yeah. Send it down, brother.
Are you short that?
There's 17 billion dollar market.
No, but I looked at the chart today, and it looked like a short, man.
A lot of these high speculative names look like shorts, to be honest.
I'm not shorting anything.
I'm not shorting anything.
Yeah, sorry.
It's okay.
I know, I know.
It gets grouped up with those names.
It's part of the game.
I own it at 23, so I don't really give a shit what happens to it from here.
No, yeah, dude.
I mean, even if it goes down to 60, you'll just probably add more.
I'll probably buy more in the 50s or 60s
if it did turn out.
I'd actually load with you.
I mean, I'm not against that name.
I actually would like it to decouple
from the rest of these things,
but until it does,
it's just going to be the same password.
Yeah, it's trading with the shit code
data center names, unfortunately.
Which name?
Yeah, exactly.
Nebius.
Oh, yeah.
But I mean, dude,
I just wish on their earnings calls they would
provide updates for all of their peripheral investments i wish they did that they haven't
done that i don't know why they don't do that because because people listen to the earnings
calls and they're going what the hell dude you're doing 100 billion in revenue and you're 22 billion
mark cap because they don't understand the subsidiary no they don't so like i wish they
talked about like i hope they talk on the next earnings call about AVRide. I just saw
the, I was just outside walking Leo, Sam,
or I was going to tell you earlier today,
I was walking Leo, I saw the AVRide
robo taxis in downtown.
There you go. They just
launched. Yeah, you saw
that, right? Yes, it was like two days ago when they launched
that. Yeah, it literally drove right past
walking Leo earlier.
Don't say too much because
that is quite the small area that they are in right now no i know dude but it's a robo taxi
program how many how many public robo taxi programs are in the united states the answer is like barely
any besides waymo and tesla they launched in a major american city it's it's a good thing yeah
you know it's not i'm not saying that av ride is the leader in autonomy. No, but they have an operating autonomous program.
And their food delivery autonomy program is operating in Dallas for over a year now.
I think I've seen their bots.
I see those little robots.
They have smiley faces on their phone.
It's pretty cool.
They drive past me on the street all the time.
Also, the ClickHouse valuation was last taken last May may 6.35 billion the old 28 that's that's
15 plus billion now dude yeah easily easily think about what's happened to anthropics valuation
and databricks valuation since then i mean anthropic just being a gauge for private ai
sentiment in general but then databricks being a more direct comp. Look what's happened to those valuations since then.
I mean, ClickHouse is probably worth,
I think, $15 billion.
It's pretty reasonable, right?
So 28% of that Nebius owns.
Toloka, at least a billion and a half at this point
after the Bezos investment.
They own that entirely um av ride
i don't know they just launched an autonomy service yeah i mean five billion triple i don't
know i mean what what are the other operating autonomy services trading at pretty huge market
capitalizations i mean the the only two are with google and tesla which are multi-trillion market
caps i don't know what they are singled out.
I don't know what Waymo's standalone valuation is.
But let's say AVRide is 1 20th of Waymo's standalone valuation.
It's still worth a couple billion bucks.
They own that outright.
And then you have a $17 billion Microsoft contract.
You add all that up, forget about whatever revenue they're doing.
The existing business doesn't matter.
I mean, it's a $20 billion company, I think, minimum. You add all that up. forget about whatever revenue they're doing. The existing business doesn't matter.
I mean, it's a $20 billion company, I think, minimum if you add all that up.
Yeah, also with the core business too,
they're not just building data centers.
They also have a full stack cloud offering,
which is already making money.
Now, I know there's Iron as well.
They haven't started capitalizing off of Iron Cloud yet to a significant degree. But Iron is focused mostly in the US and they still are building out
their infrastructure. Now, I'm not going to discount Iron. I own Iron too. But Navius is
already in that game. And they're already leasing out Compute for their software business. So,
I mean, it gets a lot better. It a lot better and they might they might not be a
pure play full stack player when it comes to building out data centers but they have a
presence across the entire world so you know a lot of people focus on other names but like nebius i
there's a reason why this one is probably the my highest conviction out of all the data center
plays because they already have their foot in the door with a lot of this stuff and i thought it was
pretty funny too described like grouped as a data center play.
Because it's an AI play.
It's a full stack AI play.
It's not even a data center play.
I also thought it was pretty funny too
how on an earnings call,
Arkady, the CEO,
his general tone was like,
can we just finish this so I can get back to work?
He is not there. Yeah, he's not promotional at all.'s not not at all not at all i love yeah i honestly love it i mean i i like my ceo to sell stock but i love that he doesn't
care about like because he has he knows he has something to prove he has to
roll out this microsoft contract right and like leverage it properly and, you know, succeed in
the data center build out. But that's one part of the business. Yeah. People miss this. It's one
part of the business. That's a full stack AI company that owns an autonomous company, a AI
data company and a data observability company. That's about as full stack as you get. I mean,
observability company. That's about as full stack as you get. I mean, they could just as easily as
anyone else spawn a frontier model business. In fact, I would argue, I would genuinely argue this,
that Nebius is the only sub $50 billion company on planet earth that could spawn a frontier model
business. I genuinely believe that. All of the other companies that are in the business of doing
that, Anthropic, OpenAI, Google, they are much bigger companies. Nebius is the only one that
has the infrastructure, if they wanted to, to say, you know what, we're going to build our own
frontier model. So, I mean, I'm not saying they will do that or they need to do that, but like
that, I think, better describes how unique their positioning is like people just don't really understand the level of talent at that company
um and the level of experience at that company it's just like it's very impressive if you actually
go and look at their full c-suite and look at the history of their c-suite you'll understand why
they're in a different position but yeah i would love for it to come back in a market correction the 50s or 60s i would
love to buy more um but i'm so i don't know i don't know i think it's kind of a hard time
falling below 65 that that microsoft deal price high i'm surprised that you guys have a hard time
falling below that but we'll see you didn't guys you guys didn't mention that um because they're headquarters in um europe that they're more likely to get a lot more european
business as the europeans kind of say you know what we want to invest in ai we don't want to be
left behind well who's their only real dominant ai player out there well a lot of these european
firms are probably going to end up contracting with nebius. So right now. Israel, UK, France.
Yeah.
Right now, everyone's looking at Google and Microsoft.
And they're like, oh, these are American companies.
We kind of want to get in this piece of pie, too.
So, you know, it probably makes a lot of sense to go with Nebius.
Yep.
The European angle is a great angle too and recently google said they want to
they want to go to microsoft and google both said they want to go to europe and help
europe catch up in ai nebius is a great partner to do that with and the deal that microsoft signed
with nebius 17 billion dollar deal if you go look at the terms of that deal versus the terms of the
deals with these other data center companies like Iron and Cypher, it is not even comparable.
It's not even comparable.
It's not even the same realm or universe of a deal.
The Microsoft deal to Nebius is a real $17 billion inflow deal.
The other ones are, the ones signed with these BTC companies are all optional contracts, optional exercises, warrants included upon exercise.
Very, very complicated, dirty contracts that are in huge favoritism of the hyperscalers.
Just basically seeking optionality.
The contract that Microsoft has with Nebius is a deferred contract.
They are deferring to Nebius' talent and infrastructure.
That's a big thing for Microsoft to say,
a company that basically has enough money to do anything on their own,
to say, no, we want to give you $17 billion to do this.
It's a much different contract than the other contracts
that have been signed this year.
Fundamentally different, something comparable.
So, yeah, they have the best data center deal in the industry.
They have four other businesses that are driving anywhere from $10 to $15 billion of incremental value.
There is a valuation floor here, unlike with the other spec data center place.
That's the difference.
And I think maybe the broader market doesn't understand that.
But the institutional holders of the stock definitely
understand that. And I think it's going to be tough to get it below 65 for that reason. But we'll see.
We'll see. I think, you know, in a market correction, you probably can bring it down
there. But I don't know. I think they'll defend that spot. Because as much confidence as a lot
of people had to get the Microsoft deal, people didn't know for sure, right? There's still risk
factor there. And so you have to price that in now.
You have to price the Microsoft deal in now,
along with the ClickHouse valuation
and all the other stuff, so.
And NVIDIA is also equity partner, right?
People forget about that.
NVIDIA invested in them.
So, you know, if you have a partnership
with Big Daddy Jensen,
you get a lot of priorities.
I will say at the N GTC events an AV ride robo taxi was in the big and video Nvidia booth
area and their booth was in a pretty solid location so you could tell
again and his friends with all of them and it purely that but they had a good they were like right next to all like the um the cloud computings like dhps
dells of the world there have been there have been many clips of jensen and nebbia ceo chatting
with each other many times um but i mean that's not has nothing to do with the thesis it is just
it's a valuable full stack ai player that is a lot smaller than most of its its peers like if you
were to separate their businesses in data observability in data analysis which is to
local data observability click house in autonomy AV ride and then in data center with the nebbia
central group you separate all those businesses and look at the peers the actually competitive like state tier one peers in all those spaces it is a huge amount of difference right it's like
all of those other companies are much much more valuable in some cases a magnitude more
valuable so that's where the runway is
where the runway is.
Yeah, Nebius is an interesting one.
Apparently M's Wi-Fi on international plane will not allow him to be a speaker.
Too much bandwidth, I guess.
I have tried it before.
They don't let you do video.
Like, I think they have a way to also learn this.
Did you know that the reason you go on airplane mode
is not for the plane itself,
but it's for the people on the ground
and connecting to the sensors?
Unless I was lied to this thing,
but I always thought it was
because it messed with the airplane stuff.
Apparently that was not true.
Oh, yeah.
I don't know.
I've never really thought about that.
I definitely have.
Why am I doing this?
Why am I doing this?
What am I doing?
All right.
Interesting, Nebius.
I haven't looked at it as much recently.
Yeah, I know people haven't looked at it as much recently
because it came off so much from the highs.
When something comes off 40% from the highs,
people are always like,
eh, it's not good anymore.
But they don't understand.
No, it's not even that.
For me, it was the opposite.
I know you weren't saying that.
By the time I was getting serious about it, it was already up like 100%, 200%.
I'm like, all right, I'm not going to jump balls in here.
Yeah, it's probably a good idea.
Maybe we'll see.
Maybe as it gets less interesting, I get into it.
I think this one for me is probably a dollar cost average.
And just buy it for the next five years.
Just do an allocation every other week. And that's it. Don't even look at it. You know where it's going to go. You don't
really need to work on price action or anything with a company like this. Yeah, it's the type of
company where it could become, it could go from a 20 to a $50 billion company really quickly and
pretty easily. Like two or three more deals of the size of Microsoft's and you'll get there.
The only thing is I just hope they manage
their investments well.
That's the only risk I see.
Selling ClickHouse too early,
I do not want them to sell their stake in ClickHouse,
but they might have to if they go public.
But I don't know.
That's the risk I would see,
is how they manage the other investments that they have
and the other subsidiaries.
Why do you think they'd have to sell
if they went public?
Sorry, wait.
Why do you think they would have to sell
if they went public?
I don't think they would have to.
I just think they probably would.
Gotcha.
The CEO said that
if they have to capitalize
their core business, they will.
He said everything is funneled into the core business.
Yeah, he is
data center focused.
He is data center focused.
That, I think, is a risk.
I think you keep
Toloka, ClickHouse,
and AVRide as valuation grounders
if I was the CEOo but obviously i'm not
so uh yeah he may he may be willing to monetize those investments to capitalize the core business
and he like like sam said he said that on the earnings call so i mean they're already trimming
some of their some of their other businesses and they did it with to loco bezos and the cto of
shopify um i mean if they do a click house I don't think they're going to be like,
Well, I thought that Bezos' investment is more of a strategic investment
as opposed to them trimming.
You know?
They just invited them in.
Oh, is it net new?
Oh, okay.
Yeah, it's net new.
I thought they were selling part of the stake.
Yeah, they gave up some of their stake because there was a wholly owned subsidiary.
But, like, you're bringing in Bezos Ventures as a strategic investor.
I don't think that that's a bad reason to give up 10% stake.
Yeah, for sure.
So yeah, they've sold some equity interests in some of their subsidiaries,
but they've been mostly strategic investments.
So I don't mind that.
But sorry, Logical, what were you asking me?
Yeah, dude, I was was gonna ask you real quick just um
what's your thought on like ramping up sales and profits and whatnot from like the data center
deals like what is that end the 26 type i mean like because they have to like stand these up
you have to build the infrastructure first right i mean that's what i'm thinking you know
yeah so it just depends i mean they could start compounding revenue from data center as soon as second half 26.
If they are really quick, maybe in an ideal case, Q2 26, but no sooner than that. I mean, dude dude i'm just thinking because like some of these places
are just now starting to break ground right and like you know that's the case for amcor too um
so you know those revenues aren't going to come for a little bit too so you know
right so yeah exactly but like the question is, with Ampore, though, you have a real business here.
In terms of real revenues today, to justify the market cap today easily.
I don't even think that's far-fetched because it's not that high of a valuation.
We can get into semantics about, oh, well, it's a little bit high on today's value.
Okay, fine, but you discount tomorrow's value. But when it comes to Nebius, majority of their revenues and profits are not in the works today no that's not true actually with meta the contract they signed
with meta is working off existing compute or i think about 90 of it and that's going to be fully
completed and serviceable by the end of the year so they are leveraging the existing compute as
opposed to the other data the other data center companies where they have to build it at its scale.
I mean, all I'm saying is that...
Wait, hold on, wait.
Before we get to Iron, like real quick, Sam, just I appreciate that.
That makes sense.
But what do you think the revenue run rate is based on their existing compute and assets?
Well, next year they have 7-9...
How big is the meta deal?
What?
How big is the meta deal?
That'll answer his question.
I'm trying to look that one up.
I see.
Well, I'm Gemini's going to 3 billion.
I forget.
I got to look it up.
So you have 4.
Maybe it's 3.
So Nebius has a 3 or 4 billion dollar deal with meta.
That's on an annual basis?
No, I think it's over 3 years.
I have to go back and check.
That's a whole contract. annual basis no i think it's over three years i have to go back and check that's right so guys
like it's it's seven and nine billion air by the end by the end of next year so then that's
assuming that by the end of the year multiply by 12 because annualized that's what they're going
to be at 79 billion and they expect a microsoft uh the microsoft deal is for 17 and a half billion
up to 20 billion dollars within the next five years. And they expect to
have that online, I believe, by 2028. So...
Okay, but do you guys hear... I'm sorry, but do you guys hear this? Are you guys hearing
yourselves when you say this? It just seems kind of ridiculous, no? Like, how is it possible that
they haven't even really begun building the data centers, and that's going to be live in 2028?
really begun building the data centers and that's going to be live in 2028 and then you're telling
me that like portions of that three four billion dollar contract is serviceable by the end of the
year i mean yeah i mean i'm just thinking about doing the math it's not there no it's not there
yet that that's a that's a reason for the criticism yeah so the thing is is these don't scale the
logical the reason is it doesn't doesn't compute is not computing to you is because it's,
these don't scale like traditional businesses.
When these go online, the revenue starts immediately.
Yeah, that's fair.
I agree.
Like it's lumpy revenue that starts immediately
when the facility goes online.
So that's why the numbers seem weird
because you're like,
how are they going to go from 110 million to 3 billion like in a blink?
When the facility goes online, they will because then the meta contract will start rolling out.
Right.
And then when the compute necessary for the Microsoft contract comes online, that'll start rolling out.
And that's 17 billion over five years.
Microsoft, 17 billion over five years.
Meta is three or four billion over, I don't know, three or four years.
So meta contracts much smaller smaller like a magnitude smaller but if you combine those two contracts
and then you combine revenue from av ride which is now generating real revenue
right they did they just signed an uber deal to launch a robotaxi service here so they're going
to generate real revenue from that i don't know to the tune of what but they generate real revenue
from that along with their from their autonomous food delivery on that side to locus generating real revenue
now, you know, um, again, I don't know the significance of that, but those are all revenue
sources as well.
So I would, I would just like pause real quick.
Just thinking about like the data center portion of this, because it is the meat on the ball.
Yeah.
That's the main business.
Yeah.
Yeah.
So, okay.
So let's think about this.
Just the data business and make that leap.
So let's just say right now, right?
Like they have 15 billion from Microsoft, three, four billion.
Let's just call it four billion from meta.
You know, these things will go live.
Oh, so it's 18 billion, right?
Over like a, let's say five year window.
Okay.
So it's like 3.5 billion a year in revenue right 20 billion over a five-year window
yeah 20 let's just say 20 billion that's fine um 20 billion over 17 plus three yep so 4 billion
so this thing trades at like eight times sales which will not be growing unless they land new
contracts which will require new capacity so it's, you know, eight times sales ish,
seven to eight times sales.
I don't know what the profit margins on that business is.
What do you think they are?
I don't know.
We'll have to see when this data center goes online.
It'll depend a lot on how efficient the data center is.
I'm just saying like, I don't know if like,
I don't know if like 22 billion today makes sense.
I don't know if that, billion today makes sense. I don't know if that answer makes sense.
Yeah, I mean, you can't value the business raw on just the data center
because, again, there's about $10 billion in equity investments underneath it.
So you take those $10 billion in equity and subsidiary investments,
really I think it's more like $15 billion,
but let's just be super conservative and say 10 billion dollar
in equity and subsidiaries then the real valuation is 12 billion in which case it's trading at 3x
sales for a company that can immediately double its revenue with one lumpy contract so yeah it's
a hard business to value you can't you can't look at it as a business and say like oh there's 30%
CAGR here because yeah it's lumpy it's going be lumpy. This is going to be one of the industries that across the board is going to be lumpy. It's going to depend on hyperscaler contracts.
Because there's not just because the revenues are out in the future, but the fact that their partners, I mean, like this is all just still dependent on the build out.
And there is revenue concentration risk.
Definitely so.
Right.
Like it's part of the reason why a lot of these small caps, for example, you can't even invest in some of them because they have extreme concentration risk with one of the hyperscalers or a large cap.
So, yeah, I mean, I don't know, man. It's obviously an interesting story. have extreme concentration risk with some one of the hyperscalers or a large cap so yeah i mean i
don't know man it's uh it's obviously an interesting story it could be extremely like big upside but it
also has it's not like a free lunch definitely yeah it's not a free lunch i agree with you on
that there is risk there's execution risk there's lumpiness of contract risk there's
a subsidiary management risk and execution on that
you know they sell too early or sell too much or give up too much control on one of their
subsidiaries those are all risks here's the thing this is all good i think chris mentioned this
earlier that it's a good stock to dca into i think if anything that's that's probably a really good
comment for this name because the the difficulty with this name is going to be timing and you don't know
when those hyperscaler contracts are going to come, right? Like let's say next month they sign
another $15 billion contract with a different hyperscaler. Then what happens? Then the math
changes in a snap, right? And that's the difficulty here is like, it's going to be hard to predict
those things. Like when I bought the stock at 23 in May, one key part of my thesis was I said, hey,
I think they're best positioned to secure a hyperscaler contract.
That was one of the key parts of my thesis in May.
I didn't know of what size or with who or when, but I felt based on my research that
they were best positioned to secure a contract.
They did.
They secured the biggest contract with Microsoft, the $17 billion contract.
Now, what about my thesis has changed about their preparedness to field these contracts?
Nothing. In fact, it's been strengthened. Not only was that contract signed, but then Meta signed a $3 billion contract.
So at a certain point, you just have to be like, okay, I believe in the fact that this company can develop a somewhat regular cadence for securing hyperscaler contracts. And if that is true, then it's going to be really hard
to track valuation because
one contract could just change
the numbers overnight.
And that's what happened
in whenever the Microsoft deal
was. When was that?
September, beginning
of September, when the stock went from 63
to 100 in one day.
In one day, on the highest volume ever, right? Because they signed a contract. And so that's
the hard part about this stock. That's why I like owning it low and holding it, because I don't have
to worry. But yeah, for the people who don't own it low, it's a really hard name to get into. I'm
not going to disagree with you on that, because it's really hard to value. It's a really hard name to get into. I'm not going to disagree with you on that because it's really hard to value.
And it's really hard to say when that next contract is going to come.
But they're one contract away from another 30% cap up.
And that's the thing about this stuff.
Yeah, I agree.
This is why these stocks got sold off hard when the market was only down 6%.
Because if you have any fear in terms of reduced spending for AI,
these stocks could possibly get cut in half.
And this is the reason why I never really lever up with these companies.
Because you could see it go up.
I have no calls on it either, just shares.
Yeah, same here.
I mean, it's just...
You can't play these with calls.
It's like a nightmare.
It is. Not only that, but IV is insane.
You need to move fast.
Unless you buy deep-in-the-money calls or something.
Unless you're day trading it or whatever.
But yeah, if you're swinging it like we are,
you can't play with calls.
I like that post on Mark Zuckerberg.
He's basically shifting it from,
he's shifting the 30% reduction in spending for reality labs
into artificial intelligence AI wearables.
So maybe that's the reason why the stock didn't stay at 680.
Yeah, maybe the market was like,
hey, they're going to reduce the spend year efficiency,
but more it's a shift of the spend.
That would make sense. I happen to believe that the metaverse and wearables It was like, hey, they're going to reduce the spend year efficiency, but more it's a shift of the spend.
That would make sense.
I happen to believe that the metaverse and wearables are give or take the exact same thing, just advertised in a different way.
Clearly, we like the advertising now. Yeah, wearables better than the metaverse.
Last thing I'll say on Nebius is it is perhaps one of the cleanest high volume stocks in terms of volume patterns this whole
year if you pull up nebbius's chart pull up your volume pattern pull up the daily
pull it up a year to date pull up your volume shelf underneath it look at the accumulation
this stock has been nothing but accumulated all year zero signs of distribution anywhere
even on no it's a big it's a big story this year for sure yeah but i mean this is institutional signs of distribution anywhere. Yeah, no.
It's a big story this year, for sure.
Yeah, but I mean, this is institutional.
This isn't retail.
This is institutional accumulation, because look at the opportunities to distribute.
If you look at the fall from 135 down to 78, right, this brutal drop that happened this last month, look at the volume of the distribution.
The first dip buy off the 100-day was higher volume than any of the distribution candles.
Not a single one of the sell candles on the way down was bigger than the single buy candle when it bounced off the 100-day.
You know, and you go back, Microsoft candle HBE, prior to Microsoft candle, the move from 50 to 70, massive volume.
The move earlier in the year from 34 to 55 massive volume. And you look at all the red bars the whole year, no distribution. So
it keeps me encouraged. It keeps me encouraged. You know what I will say? I agree with you,
stock talk. I think in the buying patterns of the stock, I totally get you. I would say in the near,
in the recent, um, like price action action and volume though i would probably say that
institutions have already loaded up where they wanted to just like you have at much lower prices
and now yeah and now they're probably just like look i'm not gonna add to my position here
yeah exactly they're not like i'm gonna buy this now like if anything they may have like
pared back some when it went to 140 or
whatever and then you know now they're like okay that was crazy and you know they'll probably wait
and then eventually the stock will get supported again i bet you that 60 gap fill uh would probably
be seeing a lot of support i'd imagine i'd be about there i think i think too i think that'll
be the floor if it does pull back i think around 60 bucks 60 65 bucks more i'd be the floor if it does pull back i think around 60 bucks 60 65 bucks would probably be the floor um but yeah i it's a very very interesting story it's probably the most dynamic story in my
portfolio in terms of like unpredictability there's a lot of speculation involved in it for
sure i would never disagree with that but what i will say is is that having one or two of these
kind of names in the portfolio is kind of fun you You know, it's nice. It's nice to have like a little, you know, potential skyrocket item in the portfolio.
So, I don't know.
I like the name.
I think the valuation is a little bit more grounded than it appears based on the potential for another hyperscaler contract.
But to your point, if they don't sign another hyperscaler contract within the next six months,
I think the stock will suffer for it.
And it's not even so much about, like,
them signing another hyperscaler contract
as much as it is about...
I think, like,
people aren't going to see these numbers pop up
for eight quarters.
Or, you know,
or, like, whatever it is.
Four quarters, six quarters.
So, like, you know, no one's going to be looking at these quarters.
If you are an institution holding this stock, you're not concerned
because you know that the money's coming.
But if you're retail and you're still trying to justify it to yourself.
Yeah, the earnings reports don't look good, like on paper.
Yeah, exactly.
And there's going to be people whose weak hands are going to get shaken out of this stock, I'd bet. Especially if there's gonna be people who weak hands are gonna get shaken out
of the stock i'd bet especially if there's any sense of volatility i remember the last report
people were like tagging me they're like what they only did like 100 million in revenue like
i thought the billions in revenue and i'm like yeah you just don't understand what's going on
to you like people just don't get it you know so yeah i mean makes sense. What's up, Chris? I think for me with this, if there is, quote unquote, like an AI bubble that ends up popping, and I think some people are really waiting on that, this name could probably get sold off a lot.
But guess what?
I think this one would be the perfect, perfect one because it's pretty much like the year 2000 where everyone was selling off tech stocks irrationally because they're like, oh, the tech bubble, blah, blah, blah.
These guys, if you were asking me among all the data center companies, which one is going to survive, I think it's these guys.
I'm not even confident on CoreWeave, even though CoreWeave will probably do okay.
I would say Nebius, because of just how much they have diversified in like other businesses, they'll survive.
The other guys, maybe the dead will kill them.
Maybe something they'll get acquired by somebody.
But in terms of like total survival, I think these guys are it.
And if you just look 10 years out, these guys have a lot of ability to expand out.
There's other businesses, which you guys politely mentioned.
So I think you're right.
If we do get sort of an AI attachment
and if the AI attachment leads to an oversold condition, this is probably one of the best
ones to buy on a recovery. Very similar to Amazon when Amazon crashed alongside the rest of the tech
companies. And it was like, yeah, well, Amazon was the greatest buy at the time. You know,
same thing with Google. You know, Google had, I think google had ipo'd or no google didn't i when did google ipo was it 99 no i think it's out there after
yeah but i don't remember oh we know you're right after i remember amazon 2002 amazon was sold off
irrationally at the time and bezos was just like whatever i don't care you know and like i said
yeah no bezos was like we're gonna spend so much money guys like
if you're not if you're not in this long haul just sell your stock now like and that's when
just got sold off ridiculously i mean even with like uh nebius i mean people forget like this
was the google of russia so they have decades and decades of experience in building data center
infrastructure and scaling out you know these other I'm not trying to discount the other data center names
or BTC mining names,
but they've only been doing it for 10 years max.
Like Iron's been doing it since 2013.
A lot of the other companies are shorter.
If I have to rate this in terms of competence,
it's going to be Nebius.
Core Reave, 90% of NVIDIA's portfolio,
I don't think they're going to fail.
I don't think Jensen Monson will let them fail.
Especially, they got customer concentration risk, though, with OpenAI, Microsoft.
Still, I don't think these companies will let Corrieve fail.
But you saw that scare in terms of the debt cost rising and the debt risk rising with the, I forget the exact name of the insurance spreads.
I forget what it was called.
But if you really think about it in terms of companies that are going to be very successful,
you're right.
It's going to be nebulous.
They have the most experience with it and the most diversified.
They're already making tangible revenue off of their existing software business.
This is probably the best setup. Now, I think that is traded in terms of the premium for the company. I think
it does have that excess premium for a reason. But I do think that other companies, you know,
maybe like Iron, I think the upside is much more vast in the near term if they are successful in
what they're doing. However, you're already seeing discrepancies
in terms of what Dan Robs, the CEO of Iron, is saying.
It's already $3 or $4 billion
above what he originally estimated
the cost of building these data centers to be.
And it's probably going to go higher.
You see a lot of these companies with offering,
they're probably going to continue offering stock.
The only thing is that Nibis does have that existing collateral and existing ownership
to offer in terms of capitalizing their core business.
These other companies, not necessarily.
They have to continue with the BTC mining operations.
They're going to start transitioning over into NVIDIA GPUs versus ASIC specifically
catered for mining.
But that's cost intensive,
right? So it's just something you have to put in there in terms of the risk. Like if I were to size Nebius versus another company, I would definitely size Nebius larger, but I don't think I would
ever go like 20% of my portfolio in any of these companies' names because of that risk. But that
doesn't go for everyone.
Everyone's risk profile is different.
I mean, I think eventually there will be some news that a hyperscaler is
cutting back on their CapEx growth levels, in which case the entire sector
has sold off.
If you were telling me, okay, if you're a dip buyer, which one are you going to dip into?
Easily it's going to be an obvious.
Have you guys had any thoughts or concerns about it not being u.s
no i mean no i mean they're not u.s based but they are effectively an american company look
if you do most of your business in america you're an american company in my view
that's my view because. Because you're held
hostage by the American business landscape
and you're attached to the business landscape.
Quick question
on that. Do they actually report
like
do they have, are they
Israel based or where are they?
That's their HQ, yeah.
It's like Netherlands.
Is it Netherlands now?
Originally in Tel Aviv. I don't know, maybe they No, it's like Netherlands. Is it Netherlands now? I thought it was originally in Tel Aviv.
I don't know, maybe they moved. They have filings.
Sorry, go on.
No, I was just saying.
They're on the NASDAQ.
Yeah, I was just.
They're on the NASDAQ.
They have to report in the US.
Okay, yeah.
You know, you got logical.
Yeah.
No, I was just going to say,
because I used to follow a company called InMode,
I-N-M-D,
and it was like this beauty play.
They have like medical devices and whatnot.
They like 90% gross margins, incredible business,
never returned cash to shareholders.
They had extremely OPEC filings.
It was an Israeli based company,
but it operated like basically entirely in the U S and it took me so much
digging to find out that like the management team had dumped 80,
90% of their equity at the high 2021
they this they they file the the c-suite files on the nasdaq with the sec like when their ceo
sold shares um it's funny he sold shares right before the microsoft deal which is like hilarious
um everyone used that as fun yeah and they use it as fun it's so funny it was like wasn't it like four days before I think it was something crazy. It was like literally like right before
so anyway, he sold like 200 million of stock for the Microsoft deal and
It was on the regular filings so the regular filing services was like hit
Well, like here's here's my thing
Like no man, I mean, it's different.
If you go to Edgar, if you go to SEC Edgar website,
and you look up Nebius, they have a bunch of, like, 6Ks.
They don't do 8Ks.
They have 144 filings.
They don't have 10Ks and 10Qs.
So they do have foreign filings.
Yeah, I mean, they might have foreign filings,
but I'm saying it's not, like, hidden, like what you were saying.
Like, I'm saying it's not, like, hard to were saying. I'm saying it's not hard to find.
No, it's not hidden.
It's just harder.
Yeah, I mean, I just feel like it is a little bit more opaque.
Because if you go to sec4and4.com, which is what I use always to look up insider sales, I actually do.
No, I mean, the sales I see here are actually 13 Gs.
They're not even management sales.
These are like 5% holders and whatnot so actually
i i don't see that i don't think they actually file form fours i don't think they have form fours
dude ceo filed something before the sale i'm trying to find out what it was yeah because i
have a decent amount of experience with international companies and it's such a pain in the ass dude
like i remember like looking up despicars oh, dude, that stock was the bait of my
existence. So good on paper. And they buried deep in their filings, like that they include like the
current, like remove the currency, like headwind or whatever FX into like their adjusted EBITDA
calculation. It was such a scam.
Like, I mean, the stock ended up like doubling,
but like, and getting sold,
but it was just like,
these companies are not held to the same standard.
I will say I'm digging a little deeper.
If this isn't right, blame AI.
Even when a 6K is for,
it's so basically this is for foreign people.
The only real difference is it's furnished not filed who knows what that means but um the general anti-fraud rules still apply
including exchange act section 10b the rule 10b-5 plans so they do have to announce it and
apply to material misstatements or omissions so it is still covered it is saying it's different
but it's not i'm trying to get the AI to tell me it's not as good.
And it hasn't said that.
Yeah, I mean, I'm not going to say that it's not as good or that they don't need to have
like, yeah, I'm not saying that at all.
I'm just saying that the filings are far different.
They don't have to do the same form 4s, 10Ks, 10Qs, 8Ks.
They don't have the same process.
Like, they have different forms.
And like, the way those things get alerted through other systems, they don't have the same process like they have different forms and like the way those
things get alerted through other systems they don't come through the same way okay well i still
get all their filings on like pretty seamlessly on on on street insider so i don't know maybe
i don't know maybe it's like the service that you're using that makes it an issue but
for me i've seen all of their filings like seamlessly um so yeah
yeah i mean it could be totally fine yeah i mean yeah i don't i don't think there there's anything
i run all the filings that ever come out for any of my companies i run them all through llms and
like so i don't ever like read them anymore i used to but yeah i mean yeah i guess i haven't
really had to deal with this since llms came out but um what's your like how do you track the insider sales because i don't
see a way so crazy how llms have made all of our lives easier like i don't even read filings anymore
anyway sorry what were you gonna say oh yeah like where do you where are you going to see
the insider transactions i don't ever like check them as a group there's no like i use ortex sometimes
i use ortex for short interest insider stuff i use scc form 4 for everything or i use open
insider to see like who sold in a given company any day but like yeah i mean scc form 4.com is
like a good way and that like basically takes the form 4s from the scc edwards website i'll be honest
i stopped looking at insider sales a long time ago.
I mean,
it just,
it's not necessarily a signal.
You know what it did more often than not is it shook me out of stocks.
I mean,
I think most insider transactions are pointless.
I'm just talking about trying to find just to be like,
you know,
I mean,
I will pay attention to insider buys,
but usually those are pretty bad.
I think insider buys are actually a horrible signal they actually are no signal at all i think most insiders
have zero clue what they're talking about or doing no i don't think it's a signal but i mean
insider buys when they happen on stocks that i already own you know i don't use it as like oh
i'm gonna go buy the stock because the insider bought it but i pay more attention to buys and
sells but i don't i don't pay attention
to sells at all because you know people i was on my phrase i'll tell you for all sorts of reasons
after after like doing this for many years and i and i actually have like a alert i have a daily
calendar reminder to go look at open insider every single day at 3 p.m so i i like to look at insiders
what they're doing i've had some crazy trades from
those, but over the years of looking at like some of these things, what I've realized there's only
two real signals in, uh, in markets. And it's what happens when the stock's at lows, if the company,
if the management team stops selling shares at the lows, I don't need them to buy as long as they
stop selling. Cause when they buy, I don't actually believe in their like financial prowess to be able to
determine the value of their stock. I actually don't think they're good at that, but if they
stop selling, then they think that it's gone too low. Um, so if they stop selling at the lows,
I think that's a good sign. If you go back to 2022, a lot of these big companies stop selling
their stock at those prices. Um, and then if you, so that's somewhat, I would say,
not necessarily bullish, but at least it's getting like, okay, it's getting to a point
where this might be bottoming. If a company sells stocks while the stock continues to make new lows,
that is a big red sign. And I would never, I would never invest in a stock like that.
So I think those are the only two signals, but like insider buying, not a good signal.
Insider selling on its own, not a good
signal. But if it's coupled with the stock making new lows, it's a horrible signal.
I mean, for me, I look at independent board directors, right? If the independent guys are
buying, that's usually a pretty good sign, you know, cause they're, they're tied more to the
stock price than they are really on the company's performance. So, I mean, well, they have insights
into company's performance and degree.
And so, especially if you see, like, an independent board member
that has a significant holdings shoot up, it's like, okay, you know what?
That's not a bad sign.
Yeah, no, it's all contextual.
Like, I don't, to the logical point, I don't use any of it as signal
to enter or exit a stock.
But I do like when insiders are buying a stock
that i own obviously can i tell you one time okay this is when okay this is like obviously during
the peak mania of 2021 it was literally january 2021 and i saw a guy buy five million dollars of
this small cap um biotech stock and it was called brits oncology
grts i feel like that stock is like delisted now okay but this guy thomas wywood i won't forget his
name i look up his past like two other buys where he was a director on the board and he was like on
crisper therapeutic crsp and like the other two times where he bought
in big size like this i mean this guy bought like five million dollars out of nowhere of like this
you know really small cap bio within like two weeks the uh they announced like some bill gates
foundation uh like um some sort of i don't know what it was, like funding for COVID vaccines.
Like, and this is peak COVID.
And the stock went from like $3 to like 27 in like three days.
And I did follow that buy.
But obviously that was peak mania, but you never know.
But like, I think maybe after looking at this for so long, I think what you'll notice is
that like anything under like a five million dollar buy
is like basically noise but like anytime it gets to a really big buy and especially if it's in a
smaller company i might take a position on that just out of speculation the one thing logical do
you ever look at the exec comp um because i look at exec comp yeah rpo because i think that right
there is the thing that matters to me.
It's like, OK, let's see what their performance obligations are to get those substantial rewards.
And if you have like that alignment, typically works out well, because that means that the CEO, CFO and the executives, they're incentivized to get the stock price higher.
Now, does that mean that they want to generate long term shareholder value?
I don't know.
You know, sometimes a lot of people have to be Jeff Emelting the business, which is not good either.
But from an investing standpoint, under short to medium term, it could be a great, great thing to look at.
So, of course, I like that.
I like when the, you know, it's PRSUs, performance, RSUs.
And, you know, it's based on, you know, they get these restricted stock units if they hit certain goals. What I can say most of the time, it doesn't amount to anything. It's nice
to have them aligned. And it's like, oh, like this, you know, CEO will become a multi, you know,
a hundred millionaire if he gets to these objectives and I'll be rich with them. It's like,
yeah, I would say like eight or nine out of ten times it does not happen nothing
comes of it so you know it's cool on paper but it never really means anything if anything i look at
the annual proxy statements um for companies that have a lot of stock-based comp and then i look at
because when you look at the stock-based comp you'll notice that a lot of it goes to gna and
that usually just means it's literally going to the, you know, the management team.
And then you'll find
in that proxy statement,
it's like, oh, you know,
this, you know, this CEO
is getting paid only a million dollars.
And then you go look and it's like,
oh no, they're getting paid
like $6 million and $5 million
in shares.
And so, you know, unless that's like,
I remember seeing this
on Pubmatic all the time
and I kept making excuses
and saying like, oh, you know,
like this company is so profitable,
but it's like, yeah, but like that stock-based comp
is just going straight to the management team.
And they're like, they're not even, you know, outperforming.
They're not really meeting these performance objectives.
So it's just, yeah, I mean,
I definitely scrutinize stock-based comp.
Obviously it's nice to have PRSUs.
I think PRSUs are much better
than any other form of stock-based comp,
but I don't think they necessarily amount to anything. um I think PRSUs are much better than any other form of stock-based comp but
I don't think they necessarily amount to anything
did something happen on the Russia side because I just keep seeing things about Russia. Did we get some sort of de-escalation?
I haven't seen anything today.
I mean, it's been trending that there...
Well, there has been stuff happening.
But I haven't seen anything today.
I haven't heard anything about Venezuela in 48 hours, which is a long time.
I think it's better to just stick to individual names
and be a micro investor
rather than trying to do macro stuff.
Right now, yeah.
But that macro really matters in certain times.
Last April, macro, you did not have to care
about any micro last April.
Yeah, yeah. Unless it's like oh yeah i mean that's like for the full backdrop of the economy the u.s economy specifically but like when it's like a one-off like when people are like oh like
geopolitical tensions are rising and it's like you know like that the iran israel stuff and
obviously it's sad when things like that happen but it's like how much do they truly you know i mean like they're far away and like we have very minimal involvement there and it's
not really gonna like it's not gonna spark a draft over here to go there you know like
what is it really gonna affect and also when we were having those kinds of i don't know if you
guys have seen the tel aviv stock exchange this year but it's up like 37 it's like doubling i know that was that that when that uh attack happened yeah it
made all-time highs it made all-time highs during that attack so it's like you know i think take a
lot of those geopolitical stuff yeah i know there's like a lot of guys on here who like
focus so much on that and it's like i get it maybe you have like a macro trade on like oil or
something but how many people were wrong about like that?
What was it called?
That, uh,
the straight that was going to get closed about,
you know,
that it's going to affect all the oil.
Yeah.
How many people were like,
you got a long oil and then like oil went down 7% that day or something like
that.
It's like,
okay,
dude,
you're cooked.
Oil has been a fade for a long time.
And I don't think that has to do,
I mean, well, obviously it has to do a lot with Mac,
but like the short-term events,
and I'm not an oil trader, I'm not.
But when you have inflation coming down,
it's just, it's very hard to see oil catching a massive bid.
That's a stable, with inflation coming down.
It has a huge track of going up
when inflation trends up
and going down when inflation trends up and going down inflation trends.
And you saw the 1970s and you saw the whole thing fall off a cliff after 2008, after that massive injection.
It's just wait.
I guess we got to wait till the rate hike cycle.
And then that's when you buy oil.
I don't know about all that.
Maybe.
I don't know.
It's separate from oil stocks.
Separate from oil stocks. But the thing though is
it's logical. This AI data
center theme, the amount of energy that is taken
from it, that energy's got to come from somewhere.
I agree with you. That's actually
why... No, no. I was pushing back on
what Sam was saying because he was saying
it's time to get long oil when rates go
up. I actually think that's wrong because
if you think about what happened when the economy reopened during COVID,
you know, oil went from like $0 to like, what, $100 a barrel or whatever it was.
And I mean, every energy stock from the bottom of 2020, energy was actually probably the best long out of the COVID bear market.
Straight up.
I'm talking completely different from oil stocks.
Completely different. Wait, so what are you talking about so i was i was basically talking my crew like i guess what
you're referring to initially so that made a lot of sense you know i mean you went from very crappy
oil sentiment where they were basically paying people to take barrels of oil and the thing just
like non-stop went up to 110 they get people But I think the top for that was when people were saying it's going to go to $200 a barrel.
Like I feel like, I mean, I'm not an oil trader.
So maybe it's just a bunch of farcey I'm speaking out of my mouth.
But sorry, I didn't mean to say farcey.
I meant to say something else.
Anyways, yeah, no, that was a Freudian slip.
I apologize for anyone out there.
But I don't know.
The way that I see it is I'm looking at the oil chart.
You're having random spikes and stuff.
But is any of this a really sustainable move?
I don't know.
That's what I was saying.
There's no point in being a macro trader.
And unfortunately, macro is like – that's what a lot of these commodities trade off of.
I think everyone can see that the commodities charts have been basically breaking out. Like,
I don't know what it was out of like a three year basing pattern, essentially since 22,
when they went into a bear market. And now like, those things are heating up, like I've been seeing
charts of like copper and whatever else. And, you know, obviously, silver had a big breakout.
But it's funny enough, I think it was today or yesterday i saw big time like huge 10 million plus dollar worth of puts going into silver so it's like okay
dude am i gonna be the guy who's like buying the breakout on these things after that crazy year
and like i totally get like the run it hot inflation i've noticed though on like things
like silver and gold and like mac acid oil bro you can't read too much into the yeah exactly because there's
so much hedging that goes on like in those markets in any commodity market like the the
single stock options flow is really unreliable because you can sometimes see 20 like i've seen
sometimes 20 million dollar put orders on gold and i'm like what the fuck like what are people
betting on and then nothing
happens and it's like oh dude these guys are just max long levered long that makes sense yeah and
they're buying puts you know because when these institutions some of them are taking like commodity
trades in size that's like sometimes the cheapest way to hedge even if it's like an off-market
position sometimes it's the cheapest way to hedge just like go to the public markets and buy just outright buy naked puts on some kind of vehicle that reflects the
commodity price like you know whether that's like gld or slv or whatever like buying puts on that
kind of vehicle then sometimes like i've heard of institutions that'll do it on higher buy puts on
higher beta vehicles so if they're wrong they get like even more of a cushion um but yeah uh it's i would hesitate to read it
into like put flow on like silver gold or like any kind of commodity etf i would always hesitate
on that oh i mean i i don't bother trading these things long.
We're sure I actually had a post about this yesterday
where it's like, dude, there are like so many things
that make sense to me.
Like, for example, like, you know,
Evan brings up the energy trade.
So what should I be long natural gas?
I mean, it makes sense.
Or, you know, we're about to run it hot.
Inflation is going to go up.
Commodities going up.
You don't own enough hard assets
and you got to own gold and silver.
But it's like, dude dude i have no idea what
i'm doing there so i i just stay in my lane and buy things that i understand like and that's what
i was saying but like micro versus macro no one can predict what the weather gods are gonna do
and that's why natural gas is the damn widow maker of all investors i mean if you haven't been burned
at least once by a natural gas play i don't think think you're a real investor. I've had my fair share of dances with the damn devil
that is natural gas, and I won't do it again.
Not again.
Nope.
Chris, I saw that you were talking about VG.
That looked interesting, but the debt was insane,
so I didn't get involved.
But what's your thoughts there?
I mean, the things have just been bleeding.
Yeah, the problem is the weather gods are not on our side.
So it's cold here and it's not as cold in Europe right now.
And so the spread prices between the two are compressing significantly.
And so Venture Global has exposure to the spot market right now.
So the challenge is usually with these giant LNG facilities is that they have these long-term fixed contracts that they can reliably rely on for their toll bridge-like revenue.
Venture Global's business model is a little bit different in that early part of their
commissioning when they're first coming online, they do produce a significant amount of natural
gas and they've been able to sell that into the open market at a pretty significant premium. So if you guys look over the last five years,
the price of natural gas has been significantly higher in Europe and significantly lower here in
the U.S. Now, all of a sudden, we're drawing on a lot more natural gas here in the U.S.
via the data centers and also from a lot of export facilities coming online all at the same time.
And so because of that, people have been kind of like buying up to contracts here in the U.S.
And so natural gas prices are at five dollars per MMBTU, which is like a four year high,
while the price of natural gas in Europe is actually going down.
And any talk of resolving the issue in Russia means that a lot of the people who have contracts in Europe, they're probably going to be unloading them.
And so the prices are kind of kind of like not working in venture global's favor right now.
In the short term, this is one of those things that you're going to deal with with natural gas.
Long term, they do have fixed contracts, which means that they'll be you be you know they'll do okay the other thing that you mentioned also is very important
which is debt they do have a lot of debt on their balance sheet which means over time they're gonna
have to work on you know paying that debt off now if you have an uncooperative natural gas market
and you're exposed to the spot prices at the level that they're exposed at that means that
the payoff of that natural gas is going to take much longer.
And so a lot of people are looking at it and saying,
you know what, I don't want to be in the equity right now.
And so everyone is selling it off.
I haven't really sold off on it.
I think that natural gas has this way of correcting.
And that's like anyone here who's been in commodities.
The cure for high prices is high prices.
The cure for low prices is high prices. The cure for low prices is low prices. The minute that you get a lot more high prices here in the U.S. when it comes to natural gas, you see the drillers that are in the break-evens that are at a higher pace.
They all start coming online, and when they start coming online, the volume picks up and demand moderates and supply is beyond what the market can handle. And then the price comes down.
And it's the same thing with the Europeans.
They do the exact same dance.
So eventually, Venture Global is going to be okay, except in the short to medium term,
they're going to feel a lot of the pain from this commodity compression.
And that's not just them by the way they've got they've got a whole bunch of problems
when it comes to a lot of other facilities coming all online at the same time now the thing is that
LNG volumes are going to take time to digest by the market but but in the meantime that means that
you know in terms of like spot pricing you're not going to see that crazy premium that we got in during the whole Russia invasion thing where spot prices were like the US.
Our price was like three, four dollars per MMBTU.
And if you use the equivalent in Europe, they were paying like 50, 60 dollars per MMBTU.
So it's a pretty insane spread.
So, yeah. And then Venture Global's also got some lawsuits behind them from their suppliers.
So that's another thing.
So in terms of where the company is, they're not in the greatest of places in terms of
valuation.
They really have to get a lot of things resolved for the market to recognize what the real
value is.
So I'm not accumulating as much right now until some news improves.
Yeah, but I think the sector itself is going to do fine eventually.
Because like I said, the business model is a toll-based business model, which does have nice reoccurring revenues.
The only challenge is if you have a lot of debt and most of that revenue, I mean, most of that profitability is going towards debt holders. Until you get the debt under control, your equity valuations are not going to
necessarily like catch up. So I think eventually they will, but it's going to be a much longer
play than what some people are expecting, which is like a 5x in like a couple of years, like
you might want to take a break on that thesis so yeah yeah no i
appreciate that rundown thanks for that chris does a lot but i'll probably wait on it um yo guys i
gotta head out uh my wife is making me watch gossip girl with her so duty calls i'll talk to you guys
later cheers have a nice uh day weekend let's talk to you guys one day xoxo yeah there we go
we got a real fan in the audience love it all talk to you guys one day. XOXO. There we go. We got a real fan in the audience.
Love it.
See you guys. Cheers.
I respect it.
I respect the grind.
I think we're at
a decent place on this one.
I don't have much to do else here, so I'm
good to hang out around here.
Chris,
you make any BMNR moves over the last little bit?
I know it's obviously... No, man.
I'm just waiting to tax loss harvest.
So I'm like, okay, come on, man.
Because I do have a lot of...
I'm sorry, Chris.
That's so hilarious because all BM&R holders are probably tax loss harvesting.
I'm like...
Because the thing is, I've got so many other gains.
I need some offsets.
So I'm just like, come on. The thing is like part of me is like just recognize the loss now
and just buy in like in february or something everything will be okay and then at the same
time it's like well fusaka they just upgraded the fusaka thing yesterday like you know eventually
the market will wake up and then tom lee comes on every other day on cnbc i still think bmr i mean
for the record for the record Tom
Lee said today at the finance conference or whatever he thinks crypto
has likely bottomed he thinks that the next eight weeks will break the Bitcoin
four-year cycle people and blah blah blah so he did say every time I'm like
man is this the day that I taxed false harvest and then this dude comes out and
just says something I'm like no no turn no. Turn the sell button off. No, no.
So, yeah.
Just tell him to give up.
The day that he says that,
all right, well, it looks like we're going to be,
then that's when the thing rides up.
Yeah.
I'm curious on the premiums.
I imagine the IV is starting to pick up pretty aggressively
over the last week or so versus where it was before
on the BM&R stuff.
I still got some BM&R calls that I buy when it broke out.
Low-key, I'm still holding a $50 BM&R call.
I need to figure out where it is.
$50 BM&R call expiring January 16th.
Oh, you still got time.
We don't need to say what I bought it for when it's at now, but not pretty.
So the Detroit Lions and Cowboys tonight.
Stock talk, what do we think?
Cowboys, baby.
They're three-point dogs.
Yeah, give me the Cowboys.
We're playing good right now.
What do you mean?
Oh, they're on a three-game winning streak.
I think they might win this one.
I think they might.
They need it.
I mean, I live in Dallas, so I'm just being a Cowboys fan.
But, I mean, I'm more of a basketball guy, to be honest.
I'd honestly take the Lions with the spread.
I did.
I took the plus 3.5 in the Cowboys, and I took the Lions money line.
So, I basically took an iron condor.
I like doing the option spread in these things.
You can see how that turns out.
So FanDuel just made some money?
You got to get those fees?
No, Robinhood just made some money.
Heavy fees.
I mean, yeah, it's just way easier.
I can't lie to you. I have stopped using
Robinhood prediction markets just because the fees
are double. Would I do it
on if I used the other platform?
I know, it's pretty
insane. It's pretty insane. Calci, yeah,
Calci would get half the fees. I'm sure
Polymarket is something. I have no idea.
But yeah, that's
Robinhood's fees for the prediction markets are not
super low.
No, they're pretty bad. You're basically
paying a 4% fee every time.
They are raking in the money.
Yeah.
I like to think that I'm helping myself out,
but who am I kidding?
Hood did a really good job, Stock Talk.
Like, once the crypto kind of got out of favor,
that theme over the last couple weeks,
Robin Hood was right there with another hot theme
that people are excited about.
I know the stock move and stuff,
but it was able to kind of do it.
And it's good to have those
different levers especially when they're tied to like different themes so when one everyone gets
super concerned about it the other one especially because they are both volatile like there could be
a day tomorrow there was a story this morning that connecticut sent them a cease and desist
because they're saying it breaks rules now this isn't the first state and doesn't really change
anything but there is a big legal battle shaping up to happen here.
Well, I mean, the prediction is federal.
And they don't touch the state betting.
So can the state even do anything about it?
I don't know if they could, right?
Calci and them say no.
I don't know.
Yeah.
I'm not going to lie.
I couldn't do any betting when I was in Spain.
It wouldn't let me.
You can use Calci in Texas where you can't sports bet.
California.
Yeah, you can.
Puerto Rico.
You can use the future markets.
You're sorry.
What were you asking me?
I wasn't really asking too much.
I just heard you.
You know what I was talking about?
I was talking about with Robinhood how crypto um crypto obviously out of favor over the last couple weeks and be able to have
this prediction market thing this different vertical that people are excited about which
are markets are going to take over dude it but like it it's good to have these different areas
that you are able to win in that people are excited about especially because they are kind
of risky and then we were talking about how
there is a legal battle shaping up here
for these prediction markets.
Yeah, they're going to fight it.
I think they're going to lose.
You think?
By they're going to lose, I mean,
I think the casinos are going to lose.
Gotcha.
Honestly, the sportsbooks are in a pretty
not great position.
Yeah, they're not.
They're not.
They're not. Dude, i had a sport remember middle
of the year i had a bunch of sports betting names on my port jenny pan all them i sold them four or
five months ago or four whatever it was three four months ago uh for that reason that's genuinely why
i had like four sports betting stocks no three three i forgot i think it was pen fubo and jenny if i
remember correctly i think that's what it was um but i had them as a basket in my portfolio and i
was bullish on it and like there was a lot of confluences that were happening with the nfl and
disney etc and then this prediction market thing took off and i sat down for a couple weeks like
i didn't just immediately sell them i sat down for a couple of weeks. Like I didn't just immediately sell them. I sat down for a couple of weeks, did my research, tried to wrap my mind around like league data and the value of league data.
And the conclusion I came to was this is not as compelling of a trade as I thought it was.
And this is a real threat.
And so I got out of it.
And it is a real threat. It's a real threat to sports betting. It's a real threat and so i got out of it and it is a real threat it's a real threat to
sports betting it's a real threat to gambling physical on location gambling in general
you know las vegas foot traffic this year is down eight percent which is the biggest decline ever
in foot traffic and i mean I'm not surprised
It's down to levels
Not seen
Since 2007
Yeah
When we went to Vegas
For the Robin Hood event it was a
Little low T is what we can call it
Yeah and like
I mean I'm coming to see you guys in January, but I'm sure, I mean, that might
be a little bit more popping because it's so close to New Year's.
Dude, the flights were so expensive.
I think it's going to be, I think it's going to be going off.
The flights were crazy.
Yeah.
Because it's so close to New Year's.
That's why.
But anyway, the thing is with Vegasgas is like vegas was predicated upon like cheap luxury
for a long time that was like the call to vegas you go there and like i remember when i first
went to vegas like a decade ago um for my 21st birthday i me and my friends went i remember we used to go every
morning before the casino and get a 7.99 16 ounce ribeye breakfast special and then we'd like go
across the street and gamble and you could find like ten dollar tables and it's like you're going
to be the golden nugget yeah no we weren't at the golden nugget we were on the
strip we were on the strip at that time holy cow yeah and and i mean this is a decade ago but like
you get a 7.99 ribeye steak breakfast special in the casino and then go play ten dollar hands in
like a major strip casino you can't even do that anymore like i remember last i went to vegas like
last year i was staying at the fontaine blue the new casino over there and like i just like walked down to the lobby there was nobody
playing there was like two blackjack tables and both of them were 100 a hand and i was like oh
that's why you guys don't have people playing so the tables are empty because you like everything
is 50 100 a hand minimum and then on top of that everything is super expensive now it's not cheap
luxury anymore like the restaurants are just as expensive as they are in like really premier restaurants
in like big American cities in New York.
And they're just as expensive.
It's not like you're going to like a steakhouse in Vegas and getting like a deal anymore.
So that's a huge problem for Vegas.
Not to mention the amount of debt that all these casinos have.
The other thing is Canadians and Asians have stopped really coming that much.
Yes, because of the tariffs.
Yeah.
And Canadians are a huge
portion of the visitors too.
Yeah, I don't know. I'm not saying Vegas is dead.
I still like Vegas.
I like to go a couple times a year.
Maybe people who don't like to get home.
What you're saying though is the fact.
It is no longer cheap luxury.
It is, honestly, slightly above market value for luxury.
You're paying more than you would go to other places.
And that's before you gamble.
That is before you go and lose your money.
When I used to go to Vegas in my, like, early 20s,
one thing me and my friends would always say was,
we'd be like, dude, we could always get rooms for super cheap.
That was the thing.
We were like, dude, we can get rooms at like, you know,
the MGM Grand back then was nicer than it is now.
Now I don't sit there.
But, you know, you could even get rooms back then on off weekends
at the Wynn for like a couple hundred bucks.
Now at the Wynn, like $5.50 minimum for a decent room.
And like that's not cheap at all.
I mean, there's resorts you can get for that price.
They even cut back on the comps they used to give people
who used to go there a lot.
They switched to those reward programs.
You don't get shit.
I mean, I get good comps.
I gamble a lot.
But the crazy part is that it gets me
is now there's like resort fees,
which are like 5x what they used to be.
So not even am I paying for this hotel room?
Then you have to use the pool.
You're going to charge me about it.
Vegas is a wild place.
Yeah, they don't give...
They don't give...
Stock Talk.
Did your guy get you the room if you guys want to know
how stock talk gambles busy week he did get a room comps see yeah shout out
yeah i mean i i get i get um rooms comp just because i've done a lot of gambling unfortunately
but i'm more than paid for them paid for the rooms in advance but um yeah for right for yeah, for the ordinary visitor who doesn't spend a lot of money gambling,
yeah, they do not comp anything anymore.
And that's a problem too because they used to be so generous.
You could go play – again, this is a decade plus ago,
so I don't know if it's like this anymore.
I mean, no. Sorry, I don't not know if it's like this anymore but um i mean not no i'm sorry i don't not know if it's like this anymore i know it's not like this anymore but you know decade plus
ago uh they were super generous you could play like a couple hundred bucks worth of blackjack
and then be like hey can i get a hose and they'd send a host over there and you'd be like hey like
i don't have a room here tonight but i love playing here i'm actually already you know 300
deep if you have a card and they can check it, they'll give you a room. They won't even think about it. They'll be like, yeah, man,
we'll get you a room. And you just come back and give it. Now, like, dude, you got to play probably
1500 bucks worth of gambling before they'll even think about it. Like, it's a totally different
thing. So yeah, it's just a, it's a, the only promise of it now is like, you want to go get lost in like
the city of sin and like go through a strip where there's, you know, 12 casinos in a row and kind of,
it is its own thing. And like, it has its own energy, which, you know, I like personally,
but some people like some don't, but that's all there is now you're paying for the energy and
that's it. And you're not, it's not cheap. And now you have prediction markets, not only prediction
markets, dude, but like the market
itself is a gambling vehicle for millions of kids now because keep in mind a decade ago when vegas
was popping and cheap there was no robin hood either you were to trade stocks back then i mean
it wasn't hard to set up an account i mean there was e-trade and all sorts of retail facing things
before robin hood you know people remember the e-Trade and all sorts of retail facing things before Robinhood.
You know, people remember the E-Trade commercials long before Robinhood came out. And like, even in
the dot-com bubble, like, you know, I've talked to some of my dad's friends who traded during the
dot-com bubble and they're like, yeah, like, you know, it was, it wasn't hard to open up an account.
We were all trading. So it's not that it was hard to open an account, but now it's seamless.
Yeah. And the thing is you've got a mobile casino in your pocket.
Yeah. Yeah, exactly. Now it's in your pocket and it's on. Yeah. And the thing is, you've got a mobile casino in your pocket. Yeah.
Yeah, exactly.
Now it's in your pocket and it's on the app store.
Like from, I remember there was like this party I was at like two or three weekends
ago and it was like a friend's house party.
There was somebody I didn't know there and like he had never invested before, but he
was like a younger guy and he was like talking to me about it and he's like, oh, like he
was asking me what I do and talking to me and he's like yeah like should i make an investment
account he's like tell me how much he makes i was like dude what yes and i was like we were all a
little drunk but i was like dude you need to do it right now and he made it made the robinette
account got approved like it was like an instant approval. And I've never even seen that before.
I don't know if Robinhood's doing it faster now,
but like within two hours of like,
remember you applied at the start of the party,
like two hours later,
they came to me,
got approved,
put money in all in the same night.
That has never been possible before ever.
not even close.
It used to take like three business days minimum just to get approved for
the account.
They would check a bunch of stuff.
Then they would come back to you.
And then you might be able to get the account that you'd be able to access on your desktop, not on your phone.
That's how it was like a decade plus ago.
And 15 years ago, that wasn't even possible.
And so, yeah, that's the gambling now.
They can just download the app on their phone by call options.
Like the need to go to Vegas to feel the thrill of gambling, that is no longer a need.
And I don't know how
vegas resolves that you need something more compelling i think it's part of the reason why
vegas is getting more into sports and trying to bring like all three major sports to the city
because you know they need more attractions you know there's also one nfl nhl you know these are
all pretty recent developments for vegas and i think they'll probably try to bring in an NBA team there too.
And then they'll be like, hey, maybe you'll come here just to watch sports
and gamble at physical casinos, and maybe we can make it like a wonderland.
And I'm sure eventually Vegas will probably make drugs legal too
in a desperate attempt to drive traffic.
I don't think that's too far off either.
I mean, they basically are at this point yeah i mean yeah basically but i'm saying like
i wouldn't be surprised if vegas is like okay we're gonna make cocaine legal like i genuinely
would not be surprised um there's also indian casinos because they i remember the casino they
need casinos where wherever i used to live they they used to have only slots. And then they start having poker.
And then I can have table games in these casinos.
It's like, because I went to Arizona the other month,
and it was just a full casino.
The talking stick over there in Phoenix,
it was a full-on casino.
It was like, why do you need to go to Vegas now?
You have poker, which is probably the most important one.
You have blackjack, you have craps, you have everything.
You have the actual dealer there.
And also,
the drinks are more comparable
over there.
Compable,
not comparable.
New York just approved three casinos
near the city as well.
By the way,
I think one bull case for me, and I'm glad you brought it up, Stock Talk, when it comes to Webull and to Believe It Are You and Robinhood, is what we're seeing here in the U.S. is probably going to be translated around the world with the number of retail investors around the world growing at an exponential pace. The question is,
is Webull going to move fast enough to capture a good portion of their market share around the
world? And the thing that I think a lot of people don't know is that they have a lot of broker
dealers out there. So I think Webull definitely is worth looking at in that respect. I think
Robinhood is executing really well, but there could be some meaningful
upside for Webull if they really do expand considerably outside the U.S. and do gain
traction with that. I'd love to hear your thoughts on that because I know,
I know, Stock Talk, you post on Webull all the time.
I mean, yeah, I use Webull, yeah. And I use Webull and own Robinhood. Isn't that funny?
Use Weeble, yeah.
And I use Weeble and own Robinhood.
Isn't that funny?
Dude, it's the same thing with me.
I have Weeble.
Like, I use Weeble all day.
My Weeble screen is always up.
But I have Robinhood, too.
It's weird.
Yeah, it's just, I don't know.
It's odd.
But I think Weeble is a better trading platform, front to back.
Their tools are better.
The layout of the portfolio is better.
Their watch list tool is the best I have ever seen.
I've used every broker.
I've used IBKR.
I've used TDE.
I've used everything.
And it's the best.
Like, I cannot live without my Webull watch list.
Like, I can't even go anywhere without it.
Like, sometimes I have to have it.
And because I have every industry, like over a decade, I've built this watch list, you know, like I have every industry, all the stocks I like to watch in the industry, all separated, categorized nicely, sparklines, you know, market caps, next earnings date.
It's like all the information is there.
It's just like it's indispensable for me.
Like I can't even switch brokers because of that one tool.
It's like gluing me to the platform.
I'm astonished that Robinhood has not copied it.
I don't know.
I've tagged Vlad 150 times, but he's going to follow me.
So he doesn't.
Maybe Evan, you can tell him one day.
But I just want them to photocopy that feature and I would move my money to Robin
hood. But anyway, yeah, I think we've was an opportunity to expand internationally.
The problem with them is, is like, they are not as focused on the financial ecosystem side of
things as Robin hood is. And I think that's where the difference in valuation premium comes from,
just because like Robin hood, so much more focused on people doing everything on the platform and weeble has been like a little bit slower to market and execute
on that they have put prediction markets on there they have opened more crypto access which is good
but they need to i think make it more obvious to people that they can do more things on the
platform and market it better but yeah i think it's interesting i don't own the stock but i like the chart oh the chart's amazing i like the chart looks like it's bottoming
out so like do i think it has a high likelihood of going 40 higher from here yeah i think this
thing's probably going to 13 bucks if the market terms back up, but I think you flushed out pretty much everyone you need to.
That's just purely my technical opinion. I think the chart chart is bottomed out, but
I don't own the stock. So, you know, maybe I will own it at some point though.
Um, what was I going to say though? I wanted to say something else on that topic. Uh,
uh, Vegas. Hold on. I'm going to, it's going to come to me. Oh, so one of the evidences to me
that I'm right about this is this new trend that's developing. So I don't know if people know
the Adelson's, the Adelson family, their big casino family bought the Dallas Mavericks control
from Mark Cuban. They are now lobbying the city of Dallas aggressively to legalize gambling
through the Texas state legislature. It's been like all over the Dallas news lately.
That's obvious. Everyone knew that
that was going to happen. Their goal is to build a casino stadium complex in downtown Dallas,
luxury casino and stadium complex that would kill in downtown Dallas. There's so many wealthy people
in Dallas. It would be full at all times. People would be spending an ungodly amount of money
there. And that's the new play for casinos.
It's part of what I said earlier about Vegas bringing the sports teams to Vegas.
The way to make in-person gambling compelling again is to pair it with the event.
Did you see what happened?
Did you see the Steve Cohen one?
Yes, Steve Cohen's doing it too.
Yeah, that's what I'm saying.
This is a theme that's developing.
So Steve Cohen's doing it too. Who's he doing it with again,. This is a theme that's developing. So Steve Cohen's doing it too.
Who's he doing it with again, Evan?
He's doing it with...
The best team in the MLB, the New York Mets.
Here we go.
Yeah, the Mets, and he's building a casino right attached to it, right?
Yeah, right next to it.
And also there's going to be a soccer stadium there too.
Yep, the Adelsons want to do that in Dallas.
The Raptors in Toronto are talking about doing it.
Raptors in Toronto are talking about doing it.
The Mets are talking about doing it.
This will become a theme where casinos are attached to sports stadiums.
So you can go watch the game and bet live in the casino there.
That's how you make in-person betting compelling again.
And I actually think that's the only way is pairing the events with the betting.
Because other than that, it's just better in
every way to do it online but if you can tell somebody especially the wealthier clientele
hey you can get a suite at the game and bet in person at the built-in casino at the stadium
go get your ticket from the booth walk into the game walk in your suite wealthy bettors will love
that they'll be all over that.
It's already happening in Vegas in huge numbers.
I think the Golden Knights Vegas' team had the highest percentage
of in-person betting of any NHL team the first year they debuted the team.
They had no fans. It was the first year.
In the first year, they had the highest percentage of in-person betting
out of any team.
That's proof right there in the data that you need to draw in order to reawaken the traffic to in-person betting.
You need to put the events in the person's face and let them bet right there.
And then that's how you make it compelling.
Again, it's the only way, in my opinion.
So if I was the CEO of any of these companies, I'd be like, find sports teams to partner with immediately.
Do it at scale.
you know, then Vegas will become this
complex of three professional teams in one
place, a bunch of casinos built around them,
and then every other team in the country
will have a casino attached to it. At least
gambling is legal. That's what's going to happen
in the future.
That's my Nostradamus prediction.
It's already happening, but
it'll accelerate.
I wonder what other popular events
there are that like it. Sports are perfect
because not only is it a lot
of people, it's also a lot of guys
which I don't have the numbers on gambling
but my assumption would be is it's used
towards males.
They'll build casinos on the F1 tracks too.
I'm surprised they don't have that already.
Yeah.
I mean, they'll build casinos right attached to the Grand Paddock.
In fact, they'll probably take the Grand Paddocks at each of the F1 tracks
and turn half of them into a casino.
There's enough room.
I mean, I just went to the Paddock for this last F1 race with Public.
Shout out to them.
They brought me with the Aspen Martin team.
But that was sick.
And there's so much room there.
I got to a watch party.
I got to a watch party in a cool place, cool bar,
but I didn't quite get to the event.
Perks being in Dallas, I guess.
Yeah, I mean, it was sick.
And they could easily build a casino there.
And like, that's how you, that's how you get in-person gambling numbers up, get well,
extremely wealthy clientele who are betting what 10 people would bet.
And you give them a really compelling place to bet.
Then you're going to drive up bet volume from wealthy clients who are already betting in size.
And that's how you save in-person casinos in my opinion um and it will happen texas will legalize gambling probably in the next three years i think three to five years the lobbying efforts are
picking up in texas once texas turns the corner um it'll be i think a, a wave because Texas is a very conservative state.
And Oklahoma right now...
There is a chance these prediction markets
do screw you over a little bit
because they have infiltrated in.
And it could be one of those things...
It's human nature that when you get something
that's more in your face,
you push it further away and get more mad about it.
If you get what I'm saying,
I wonder if it gets people entrenched, the fact that
betting not under that name is kind of there.
Predicting is.
Yeah, I mean...
You don't need to give a thought on that.
I'm just giving a devil's advocate.
There's a chance
it can entrench people in their plans but i mean we are going the way of betting being legal i feel
like we're probably closer though to the states like some states are just not going to approve it
so louisiana right now is the state of louisiana is lobbying in the Texas state legislature.
This is hilarious.
They're lobbying in the Texas legislature for Texas to not legalize gambling.
Louisiana.
And if you're in the audience and you don't understand why,
Texans, wealthy Texans go to Louisiana to gamble because it's legal.
You go to New Orleans gamble because it's legal.
You go to New Orleans or Lake Charles Casinos, Golden Nugget in Lake Charles, to gamble.
And there's a lot of wealthy Texans who live on ranches and, you know, or even the ones in the city who are like, hey, I want to go to a casino. And they go to gamble there.
And so billions of dollars in gaming and entertainment revenue comes from Texas to the much smaller economy of Louisiana every year.
And they don't want to lose that.
And they know they'll lose it if Texas legalized gambling.
So they are fighting tooth and nail to convince Texas legislators to not approve gambling.
So it's kind of funny because they approve gambling in their own state and they're fighting for Texans to not do it.
It's the same thing with Alabama, too.
Alabama has Mobile.
Mobile has legal casinos there, too.
Now, one little paradox here also is that net-net,
these people probably lose money gambling on this stuff.
Yeah, that's why it's good for the companies.
I know, but that's why it also makes me think, like,
is this something that will continue on forever but human nature gambling has been around since we had two shekels together brother that's never going anywhere never gambling gambling is a beast
of human nature the second people had more than they needed they were ready to gamble that's fast i'll tell you
guys the first guy who had an extra piece of bread was like let's fucking bet on this you know
it's like that meme i'll tell you guys a funny story maybe stock talk can chime in but
most of these gas stations that have those video poker machines that is their real source of income
all right they don't make money as much as on the gas they don't make
that much money on the inside sales but they had these poker machines that not
just poker but like the video gambling machines and they clean house especially
here in Georgia dude so I don't know if they have those in some of the other
states but I know like cousins of mine they rake it in like they're like, oh, I'm buying this store.
I'm like, how much are inside sales? How much are the gas station? Like how much how many gallons?
And like, I don't really care. I'm buying it because they have this, you know, these machines and they're just printing money.
We do not have that in New Yorkork so i haven't really seen it yeah blue states don't have that
that's fair you're doing some you're just some horrible rules but we'll move on from that
i don't know
betting will be it is a fair statement betting is only going to probably continue to
to go on and increase and now that there's just more ways to do it
i think that in person though probably there there is a way to save it
there are certain things that are on kind of terminal decline it feels like in person
events and stuff i do not think are
so what do you what do you guys think of
autonomous autonomous driving like markets because I see Google and Waymo
just expanding everywhere now it's like not even like it feels like every other
day that I'm looking at like Twitter or whatever and it's like oh we've launched
a new service here we launched a new service there and it's moving at a much faster you're not having your city chris uh i'm in atlanta we have them here yeah you use them uh i haven't used it here
i used it in vegas i mean the thing is like i live in the suburbs so there's not really a lot of
a lot of they're not over there yeah yeah they're not over there but like in the city they definitely
have them i mean if you've ever been in atl, it's, it's pretty nightmarish. So, uh, so yeah, I mean, I think autonomous cars are going to be
much, I think the number of autonomous cars that are going to be coming out, like the autonomous
taxi services, that's one of the most like exponential growth, um, verticals because of
just the NPS scores that I'm seeing right now. Like people will pay a premium to not be in an Uber right now.
I don't know if you guys have been seeing that.
Yeah, people are willing to pay a premium for the autonomous vehicles.
I saw that too.
That's crazy that the data is showing that.
But yeah, I saw that as well.
Because a lot of people thought like you would lose pricing power, right?
And the opposite is being shown in the data it's
like people think it's cool you know and that's really interesting so yeah you're right i'm very
bullish on autonomous vehicles the air is here though like a lot of people were like oh when
are autonomous vehicles coming they're here it's just about scale now.
Also,
cold weather cities will be one that is probably
a little bit further away,
but it is here.
Amazon also entering
the market a little bit
with their Zoox.
We'll see if they can get in.
But I think the thing
that excites me about
the self-driving car market
more than others is that it really feels like this huge tech changing thing that is here now, as we were
just saying there, and not some things that we have to still wait for the tech to be here.
The question is how do we make money and how do we make a play on it?
You buy either Google or Tesla, in my opinion. Or Nebius.
Or Nebius, yeah.
Nebius has got a self-driving program.
But if you really want to buy the leaders, I mean,
Google and Tesla are the global leaders in autonomous driving.
Yep.
Technically, if you buy Uber, you're also getting some avarad love.
I do think.
Stocks, are you taking the stairs or something?
Elevator.
There's a long way down.
Flex.
All right, see you in an hour.
Yeah, I get excited about the autonomous cars.
A little bit more than the robotics at this point honestly although it's just based on where I
think stuff is out and what will become the same industry I mean you remember
Vegas just how many of those things were all over the place it felt like yeah
there was so many of those cars and honestly San Francisco is more it felt
like one in four cars was like self-driving capable if you included the
tussle and stuff yeah something growing quick i mean when i mean when you consider the total cost
of ownership over a car right these days i mean bro you got you're paying some of the highest
prices for the car and then you've got you know you got to do the gas and then you got to do
parking and then you've got to do you know insurance then you got to worry about someone
breaking in i think a lot of people especially if you live in a do, you know, insurance, then you got to worry about someone breaking in.
I think a lot of people, especially if you live in a big city, you're just like, well, you know what,
I could just, instead of paying $1,500, $2,000 a month for a car payment with everything included,
I could just, you know, go get Uber rides all over the place. And I think with autonomous
vehicles, I think eventually pricing will come down if they scale up enough of it to the point where I think car ownership might be a challenge.
Maybe not in the suburbs, but at least in the cities.
None of you psychopaths better have a $2,000 car payment.
I hope that.
My wife has a RAV4 that we bought last year, right?
RAV4 hybrid.
And the payment comes out to be about with insurance.
Remember, our normal payment is...
With insurance?
With insurance comes out to be like $1,400.
And then you add gas into that,
it ends up getting to like that $1,800 amount.
I've seen some ridiculous of these car payments, though.
I haven't seen 2K, though.
I like watching Caleb Hammer on YouTube,
and he tends to yell at people for that.
Yeah, I mean, we don't, by the way,
we don't have like an 84 month thing.
Dude, I mean, it's circumstances
and where people are in life,
things that matter and things.
I've seen some of the Chris W's.
I've seen some of the Chris W's.
It's insane to see some of the dealerships, how they finagle people.
They'll get them a 13%, 14% APR with 74 months.
And I'm like, wait a second, 74 months?
What is that?
84-month car loan, 50-year mortgage.
That's how you do it.
That's the American way.
And it's usually a beaterater used car that they're buying.
I'm like, what the hell?
Like, it's not even a brand new car with like all the bells and whistles.
It's like a used car.
I'm like, man, people are really desperate for a vehicle.
And I mean, they prey on people like that.
And that's why that whole thing happened with Tricolor.
And what's the other company that used car loan financing company that went under?
SoFi?
No, no, no.
I honestly have no idea.
Yeah.
Anyone in healthcare?
Managed healthcare, insurance?
Come on, UNH, guys.
I was meaning to ask you about UNH.
I don't know much.
I'm not in it.
I have, I admittedly don't have much knowledge in the healthcare space.
And when that's the case, I tend to play stuff that I know are important through ETFs.
I'll give you a really quick rundown on the play on health, like managed healthcare.
give you a really quick rundown on the play on managed healthcare. Managed healthcare,
one of the reasons why all these super investors kind of got in the last quarter, well, two quarters
ago, was that these things were trading at a very deep valuation relative to historical levels,
mainly because they had some challenges with costs rising in healthcare.
The thesis and the reason why all of these guys bought in, especially Buffett,
is because when it comes to health insurance, you re-rate the premiums every year.
So right now, this year, these guys are all struggling at the same exact time.
But that also means they're all going to be raising their premiums at the same time.
That's why if you go on Twitter or you go on any of the social media, they're like, oh, my premiums jumped up by X.
So a lot of people are seeing premium hikes.
Well, that just means that their margins are going to get restored rather quickly in the next couple of years.
So if they go back to original margins, that means that there's a real re-rating of the industry and the re-rating of the industry is going to be much higher.
So I think that's basically it.
And so that's one thing.
The other thing is there are some steps that like some of these companies are taking, which, by the way, I'm not going to question the unethical or
ethical portion of it, but basically they're working on creating a system where they're more
likely to insure people who are in better health than people who are not, which are going to be
net negatives to them. And the way that they've basically been able to do that is because ACA
subsidies covered a lot of those people. And when it comes to like something like Medicare,
you can't necessarily like pick and choose who you want in Medicare, you know, well,
Medicare Advantage, quote unquote, but what you can do is make it difficult for people to select
you that are exceptionally sick. And so one of the things that you do is you basically create this like premium tier, like
a premium schedule where the only people that are going to sign up for that insurance in that
specific area are going to be people who aren't necessarily that sick. So these guys have internal
data saying, look, this zip code has a lot of sick people. We're not going to sell in that area. And so this way they narrow their
focus and they use that data and that analytics to basically up their margins rather quickly.
So the best names in this space, one of them, of course, is United mainly because of the sheer
scale that these guys have. Another one is Elevance, which is also doing really well in terms of their earnings, but I think the market's not recognizing it.
There's a whole lot of challenges that are going on in the sector, but eventually the sector will recover, in which case you'll see a nice little rise back to its mean again in terms of profitability and margins.
If that happens, then earnings will jump up, in which case everyone will be like, oh my God, I should have bought.
Dude, how about that Elevance play from a couple of months ago?
Oh my goodness, that was wild. I know. That was wild.
I know.
Same thing with CNC.
Sarah London came out and said,
bro, we're not playing this game.
Let's go.
And these guys, they're prolific share buyback programs.
They generate a lot of free cash flow
and a lot of that free cash flow
ends up not going towards dividends,
but actually going towards share buybacks.
And so if you look at how the capital allocations are for some of these names, 80% of the cash flow in some of these names go directly to share repurchases.
So you're talking about historically low valuations with cash flows that are getting sort of restored in the next couple of years.
that are getting sort of restored in the next couple of years.
And in which case now, all of a sudden, you're going to see a meaningful uptrend in earnings.
So like I said, a lot of the problems that the health insurance sector is dealing with
are cost rationalizations that they underpriced.
So basically what happened was they were thinking that they were going to have to spend X amount of dollars. And so they sold insurance plans based on that figure. But then the cost of health insurance went up significantly this year, in which case now they cut into their profitability.
I'm being a little bit too, like, I'm doing a bird's eye view of it.
There are other changes that kind of happen, something called V28 with Medicare Advantage
that challenged some of the business model.
But a lot of these companies, they got a lot of levers they can pull to get their profitability back.
So when that happens, you'll see a re-rating of this industry to a higher level.
And I'm not saying they're going to go back to all-time highs in the next two weeks,
but they're a good place to be
if you're looking for a good return.
And the other thing is,
from a recessionary standpoint,
if we do get a recession,
there's going to be a lot of people
that go into the safety sectors.
At the end of the day,
people are going to get sick
whether there's a recession or not, right?
People are going to need health insurance,
and these guys are going to command margins from that. So, you know, just that's one thing. They've got another catalyst in these GLP-1
medications coming down, which has been a loss leader for them because they've had to cover
people with GLP-1s. And so if the price of GLP-1s start coming down significantly, that only adds to
their margins in the future. And a lot of people are starting to lose weight and the obesity rate's starting to come down,
which means that, you know,
that's another healthcare savings
that these guys are going to be able to get.
But you have to really have like a long-term broad view on this.
The industry itself, you know,
there are practices that they do
that are quote-unquote unethical,
but at the end of the day, it's a business, right?
So, yeah.
As sad as that is to say out loud.
No, I get it. It's obviously a little tough when it's like directly people's health and
stuff like that. But these are businesses and, you know, you look around the world at
some of the healthcare systems ours definitely
could be cheaper but it could be worse not expense wise uh quality wise could be a lot worse
quality wise so yeah our quality is great our healthcare system is fucked by middlemen yeah
oh great that's the problem that need to be. There's like four different tiers of middlemen, including PBMs, that need to be paid in between the patient getting the medicine and the actual producer of the medicine.
That's why I actually – this sounds very corporate, pro-corporation, but I'm in favor of programs like Lilly Direct, which is one of Eli Lilly's direct to patient programs.
I'm in favor of that because that is going to reduce the cost of medicine.
In fact, GLP-1s through Lilly's Lilly Direct program are the cheapest in the country right now.
That means that, you know, you don't have to worry about going through PBMs or going through a pharmacy distributor and then through a PBM and, you know, having to see an enormous raise in prices as a consequence of that.
Instead, what you can do is take a, you know, an actually competitive approach where the manufacturers of the medicine have to compete for the patients.
And that's how it should be.
That's how it is globally. And that's how it should be. That's how it is globally.
And that's why people pay less.
I mean, we also subsidize everything.
That's the thing.
Like everyone, all of these pharma...
Yeah, we have a very fucked up system in general.
Our pharma companies,
what they charge us is not what they charge around the world
because they know that other people can't afford it.
But they're like, oh, these Americans, they can afford it.
Let's jack up our prices here. I think
that's the one thing I have to give the Trump administration a lot of credit for and say,
calling that out and saying, listen, y'all, y'all can't do this. You can't like, we get that America
is a very wealthy country, but at the same time, our national debt is blowing up. And one of the
main reasons why our national debt is blowing up is the healthcare costs. When you look at the, when you look line item by line item, Medicare, Medicaid,
and VA benefits are one of the highest, highest percentages in terms of like total growth every
year. And like I said, our deficits are just constantly keep growing up. So we can't sustain
the current system the way it is, you know.
So if we can get, you know, health care costs to come down, I'm all for it.
Both sides want it now.
It used to be a political thing, but both sides want it now.
So hopefully that makes it happen.
Yeah, I'm going to go to the gym.
Yeah, I think this is a good conversation.
Chris, we appreciate you for hanging us out here.
I saw a lot of people coming up, hanging out.
This was a good conversation.
This week we've been having some good ones going over.
It's obviously 7 p.m. Eastern here. We've been going live since 3 p.m eastern if you guys enjoy these type of live
free conversations make sure you're following the hosts up here make sure sorry all the speakers
make sure you're following the hosts as well as getting ahead of myself a little bit there
all these guys do awesome stuff following people uh from spaces is a really great way to find new
people um the truth is you can great way to find new people.
The truth is you can easily unfollow them later.
But if you guys are enjoying what people said on this conversation,
give them a follow.
If you've been following these people for a long time and you love what they're doing,
maybe throw notifications on for their posts
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or some of those things they'd talk about.
But we appreciate people for hanging out with us on this one today it is thursday which means the next time we will
be back on stocks on spaces is monday although if you're following that a wolf account stock talk
i'm sure he'll maybe do something or whatever there'll be a lot of more live content coming on
throughout uh the next couple days stock talk what we we hit in the gym today? Chest.
Chest day.
Very nice.
All right.
Gov's next to me.
He said he just did chest day.
What'd you lift?
Yeah.
No, no.
Wait.
He did two plates, so you got to beat that.
Just saying.
All right.
Have a good one, team.
Appreciate you all
