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STOCK MARKET TALK WITH DAN NILES
Recorded: July 8, 2025 Duration: 3:00:42Space Recording
Full Transcription
Thank you. Thank you. you yo yo yo what's up everyone happy tuesday july the 8th uh hopefully everyone's awake out there if you've been watching
the market all day like me you're probably uh been distracting yourself with other things uh
something's going on i guess in the market some little news stories pockets of things
here and there a quick little market update before we dive into it and uh if you were on the space
yesterday we uh we're in the same place as we were when we were on the space yesterday.
Literally the exact same place.
We didn't even go a long way to go nowhere.
We just basically went nowhere at this point today.
So a little bit of a consolidation, if you want to call it that.
Slight pullback, maybe if you want to call it that.
Yesterday, kind of just an inside day when you look across the market.
QQQ up less than a tenth of a percent, SPY down 20 cents.
I mean, basically break even on both of those.
IWM had a decent day today, moving up a little bit.
VIX came down pretty hard back into the 16s here, down about 6%.
the 16s here, down about 6%. And across the market itself, some things doing some things,
but not much. Honestly, when I look at this Tesla, back over 300, up 2.5% today. NVIDIA had
a decent day, got up into the 160 before rejecting, but still up about 0.85, 8.86% here.
Still up about 0.85, 8.86% here.
Google hit its 200-day moving average today.
It's down almost 2% down here.
Basically sitting right at that level right now if you pull up your daily chart on that one.
Some other names have been kind of all over the place.
There was an Amazon story out a little bit earlier.
I'll let maybe someone else touch on those pieces just a little bit as I continue to get some of our speakers and panelists up here on stage. Outside of that, not a whole lot of other things that really made
outsized moves. I know AMD might be talked about on this space if you haven't checked in on that
one today. But yeah, that's where we're at across the market. We had some Trump commentary earlier
today. The only big mover that I saw that hit my radar was copper. Copper futures went pretty crazy when I saw something about a 50% tariff being put on
copper, possibly quote unquote tariff, 50%, quote, quote, whatever. All the caveats there
on that piece. So that's where we're at. We get Evan up here on stage. There's Evan. Evan,
anything from you before we kind of dive in today?
How's your day, sir?
I'm excited to see from the chat.
We should have Dan Niles joining us after the close for 4.05.
I don't know.
AMC is what I got on that direction.
But Dan Niles joined the spaces today.
I'm excited for that in the second half of this one, too.
All right, perfect. Just shot you that co-host over there.
And yeah, big guest coming up later this afternoon. Definitely stick around for that. But we're
going to get some of our great panelists up here's thoughts. What are you trading? What are your
takes on anything? Any news sticking out to you? How are you avoiding? If you're not doing anything,
how are you avoiding not over trading in
this slow price action that might be helpful for the audience as well uh options mike what's up my
friend how are you i am i'm good how you doing well i'm good i mean uh we're still hanging out
consolidating at all-time highs portfolios happy but i guess i can't really complain
yeah i mean it's uh you know, welcome to summer trading.
If you've never traded in the summer before, you know, it's slow, it's quiet.
We talked about it already this week, especially quiet.
There's no data this week.
There's no earnings this week.
There's almost no Fed speak this week.
El Presidente has been in, you know, giving everybody a tariff and the market's been basically yawning it off.
So, you know, that's a good thing uh i use today to start trimming in some positions um so for me today i i trimmed my
spy that i bought back in april into the hole and my cues and snow and apple uh and i killed my amazon
calls because it just wasn't working it took them off the remainder of them off flat but took off
some long-term
trades here today starting to lighten up as we go into summer and you know anticipating some type of
pullback eventually in the next couple weeks probably maybe not we'll see and did my best to
avoid the mess today i caught a real nice trade on oracle out of the gate that thing popped to a
new all-time high and like you i caught a little bit of non-copper. I didn't touch Intel. I just couldn't do it. But Intel's had a huge day. NVIDIA up. Micron
up nicely today. AMD. I mean, the semis showed a lot of strength early on. The SMHs are, you know,
sitting up here at, you know, an all-time high. So the market shows some resiliency. It just
missed the all-time high we put in there last week by a little bit like 50 cents here.
the all-time high we put in there last week by a little bit like 50 cents here.
And the market's just kind of holding it fine.
It just lacks any kind of real momentum into it.
Amazon, the early reports were that, and again, they're very early,
is that sales were off by 14% year-over-year on Prime Day
through the early morning hours, which is significant
or just means people just don't have the
mind to spend or they're just not offering stuff that people wants and I
often find a lot of stuff on there I might look enough I spent some money
today but not a ton and just a lot of stuff I had on my watch list it's not on
sale there's nothing special going on with it so I'm not gonna spend well I'll
wait yeah I don't have much to say energy had a nice day big big bouncing energy names like chevron and
oxxon exxon mobile uh we saw a lot of pharmaceuticals were up early and they've
round tripped off of uh tom trump talking tariffs on them so it's just kind of one of those days
not much going on and we're going to be in this for the next couple days i mean luck nick's been
making the round everybody talking we're going to put more tariffs on you're going to be in this for the next couple of days. I mean, Lutnick's been making the round. Everybody talking, we're going to put more tariffs on.
You're going to get another dozen or so letters sent out in the next day or two.
And some people may get a 70% tariff.
I mean, it's just numbers.
You're just throwing stuff out there and seeing what sticks.
Tesla dropping here.
I don't know if you saw SpaceX being being worth 400 billion through a secondary share offer and
they're doing so there i just heard you you broke out you hear me
i got you all right let me let me come back because i'm having problems anyway
all right yeah evan was uh gonna mention a tweet that he put out not too long ago that uh
spacex being valued like 400 billion on a secondary share offering a while ago i know
that was very interesting we'll get him right back up here before we continue around obviously
like i see that tesla is rolling over just a little bit i mean it consolidated up here
all day did the typical double top and you know trying to break back
through view off in the 300 i just i don't see trading tesla right now usually give that three
day rule right i mean what's your approach on that i just i am you know scott and i were having a
discussion about it's just not trading the same you know early this year i was trading it almost
every day and now i very rarely touch it he got big volume on this down candle here for whatever reason and you know it just it's it's
up today for what reason there's no particularly good reason for it to be up other than they decided
to bounce it retail came running into it so i'm of the opinion just leave it alone right now until it figures out what it wants to do.
I don't know if it's me, but I'm hearing a lot of quiet.
Yeah, it's, I don't know, it's been a little glitchy today.
It took me twice to try to unmute right there.
True social post just came out that Powell should cut rates, of course.
So what else is new on that? I mean, he basically said Powell should resign immediately.
He didn't basically, he said that.
So, yeah.
I mean, he's just trying to get him to leave,
and Powell's not going to help him out.
Yeah, it doesn't seem like it.
There was another story coming out there that I was trying to hear for a second, too.
But either way, Options Mike options Mike appreciate you kicking us off
here feel free as always
anyone on the stage if you hear something
that you want to comment on open
dialogue always love to have that Evan
did you want to finish your thought before we continue
nope let's throw it around
Wolfie we'll go to you
what's up guys
I didn't do anything today so I don't really
have much to add I just sold some stuff.
Sold some of that SBET we talked about when we talked about your NICs, Evan.
Stock's up like 60%, but the underlying options are up like 400. So I booked most of it.
The Ethereum treasury plays. Ethereum not moving.
Yeah, when you bought the i didn't i didn't
it didn't do as well as your bmnr or whatever that well i just doubled or tripled and i sold it
now it's up 10x i'll take credit for it yeah i thought you held it but um no i thought it was a
nice little derivative play on that and it turned out okay but you know i'm trying to just kind of
not really do much on quiet days it's kind of like a
quiet day yesterday i caught a trade on circle i still have some some of that but i didn't add
anything i didn't i didn't um i didn't long anything uh myself i've just been kind of trimming
stuff whenever i i'm sick of having it or stopping out if I get stopped out.
Like I stopped out on Qualcomm, I think, yesterday.
So, oh, there's a couple of names, actually, I can mention that I own,
but they look like they're starting to break out.
Digital Ocean, D-O-C-N, starting to break out of a wedge.
It's got a double bottom of recent lows.
And I like the setup.
It looks like the GitLab setup that I went long against 40 and mentioned here.
The options on the GitLab August calls that I got are up over 100%. But the setup, they're pretty much very similar um there's there's like a double
bottom setup uh there's a wedge forming with you know moving averages below and then just like a
wide gap between um the the longer dated moving averages so pretty pretty similar setups um airbnb
i mentioned they still have uh still have some options at airbnb again same kind of
thing uh there's like a wedge you can pull out to friday february 14th uh june 6th and then today
there's like a downtrend that it's in so if they can they can get some sort of follow-through it'd
be be nice um i think i think there there might be some numbers on the back of this uh this fifa stuff um
that could benefit some of these travel names potentially but that's just me kind of being
optimistic um you know talked about the oil names yesterday and thursday so they came back into
support i want to see some some follow-through to upside, possibly. I own Valero. It's mine. That's my oil exposure. It's doing well. They're doing well. It's kind of like a little bit of an inflationary precursor, maybe. Or they're just operationally better. I don't know. We'll see.
I don't know. We'll see. And then, you know, just not trying to try not to get cute for the most part.
The one other story that I thought was interesting was the Wendy's CEO leaving to go take the Hershey's job.
The input costs on Hershey are down pretty significantly.
So not really sure. You know, I think I think maybe he's not getting the benefit of the doubt because he's supposed to be in a Wendy's turnaround story
and it didn't really turn around yet.
So Hershey went down actually on the back of it.
But I kind of want to see how that plays out in the next couple of days.
If he can kind of hold on to this level, maybe a little bit lower,
I think he could possibly turn back around.
We'll see.
But, yeah, I don't really have much more to add.
You guys kind of talked about the only things
I really want to talk about.
I would just say that in summer, don't get cute.
And also, don't short adult tape would be my two cents.
So if you've got a catalyst for a reason
to sell something off, great, have fun, do whatever.
But outside of that, just, I'm not trying to get cute.
I'm not trying to do too much.
Yeah, it makes perfect sense.
Tesla did roll over here pretty hard.
Also core weave making new lows of data down about 5%.
The CEO is supposed to be on Fox business here shortly.
So a little programming note for you guys.
Was there a Tesla headline in the last 10 minutes?
I've actually looked around.
I haven't seen anything.
Did you check Musk's Twitter?
I did, actually.
It's actually the first place I checked.
I was like, okay, what are you tweeting now?
I don't see anything on it.
Sam Solid saw your hand up either way.
I'd love to throw it over your direction next.
Yeah, I wanted to provide some fundamental analysis as far as Wulsh Trade for Dockin as well as GitLab.
I mean, generally speaking, we've seen a lot of the mid-cap, large-cap software players already have that run lately leaving pretty much the smaller cap.
You know, this is the thing.
What's a small cap anymore now that we have so much money being thrown around in the market? I mean,
we thought maybe, you know, like $5 billion less or even $4 billion was a small cap. Now it's like,
dude, you can move like a $10 billion market cap pretty heavily considering how much money a lot
of these fund managers have, especially the short term ones. So we'll see, especially retail too.
But anyways, GitLab, about a $10 billion mark.
No, I think that's like a $7 billion mark cap.
Dockin, I haven't checked.
Confluent as well, a small data stream player
when it comes to having a large client base.
Also Sentinel-1, a small cybersecurity play,
probably the third in
line when it comes to endpoint client management for cybersecurity. So when we think about these
ones, they haven't really gotten a lot of love lately. And we think about the catch up play,
these tend to move in tandem. Obviously, confluent down almost 2% today is a little bit of a bunch,
but they kind of get a little bit of a bid toward the end because when you think about the budgeting for IT, they generally put it more toward the, not necessarily the higher conviction, but like the solid names across the board.
And then whatever budget there is left, they tend to allocate toward these smaller companies, if anything.
But when we think about DigitalOcean, that's more towards small businesses and so do the other companies across the board.
So they're probably going to all move together.
So that's why you're seeing GitLab play pretty well.
GitLab is more of a DevOps platform, growing about 27% year over year, the brink of profitability on a gap basis.
DigitalOcean has a little bit of ways to go, but they're also doing really well for the small businesses that are looking for a cheaper cost in terms of compute.
However, you know, there might be favorable terms that there could possibly be an acquisition on board.
I think there was a little bit of speculation that Cloudflare might be acquiring DigitalOcean just to get a bit more into that cloud compute section.
Cloudflare is already on the edge computing section when it comes to inference queries running at a closer location.
But, you know, like these small players tend to get quite a bid when it comes to comeback or catch up trade.
As far as the market goes, I mean, I agree with Wolf.
I wouldn't. It's so difficult to argue a short position here.
Market is generally consolidating, but a lot of the short-term money is being rotated very quickly into different sectors.
What was a good play before when it comes to CoreWeave, when it comes to a lot of the Bitcoin mining companies,
is now being spilled over into the Ethereum staking companies.
And that's why I saw SBED kind of rallying a bit.
I haven't checked BNMR, Tom Lee tom lee's uh ethereum company but uh you know
like the money's just moving fast it's being passed around while the entire entire market
is just trading sideways and it's kind of what you're going to see probably for the next leg up
i would even argue yeah i'd argue that we're probably at the next leg up more than anything
since that's a 90 win rate over the course of 100 years but you know we'll see yeah, when it comes to those smaller players, I am bullish on the smaller cap plays.
I still think that a lot of these smaller cap, smaller cap, not small cap per se, software stocks have pretty good valuations considering where the market's at today.
And I think there's a bit of a catch up play there in terms of raising guidance, heading toward profitability, starting to see that phase two
for AI come around the corner where a lot of the money put toward data centers now being put toward
enterprise software. Even though they have more smaller business client per se, they could still
get quite a bit up leading toward much more promising valuations as their growth continues
to reaccelerate.
So I can definitely see that turning out in more of a medium term, short term.
I mean, you know, best guess is mine.
We are seeing Snowflake around a new 52-week highs area, seeing a little bit of a pullback here.
But there's other software companies as well that aren't necessarily small cap, more of a mid cap.
However, the leaders in software, you know, when you think about CrowdStrike, when you have Rubrik, when you think about Cloudflare, especially, these are all
trading at valuations that are pretty up there. So, you know, when you think about it, the trading
perspective, where the money's going, some people don't want to chase the leaders because the
valuations and multiples have expanded quite a bit. So they put it more toward the smaller cap
stuff, which are doing just well, to be honest honest i don't know why some of these companies are trading at these compressed multiples even at the market trading at what is it 23 times
uh price to uh earnings so i mean we'll see earning season is coming around the corner
that being said these smaller cap software companies uh they tend to report probably in
the latter portion of um earning season you tend to get like more the latter portion of earning season.
You tend to get like more than mid larger cap software companies reporting
earlier. That'll be service now Salesforce and so on.
And then later on in the earning season,
that's when you get like GitLab Confluent reporting as well,
maybe rubric,
even though it's not necessarily a smaller kind of digital ocean and so on.
So definitely supportive of that from a technical perspective
as well as a fundamental perspective.
That's an interesting point, Tom.
Go ahead, Walsh.
Sorry.
I was just going to say that
for those that aren't familiar,
if you're a software engineer,
you use GitLab.
That's the easiest thing i can say
to anybody who like they use it so um it's either get hub or gitlab yeah there's no there's yeah you
use it like there's no there's no in between there right so um just based off of that it makes it
attractive um from a product perspective but more importantly from a from an product perspective, but more importantly from an acquisition perspective.
The lower that this thing goes,
it's not like people are going to stop using it.
So there's a lot of different ways to do it,
a lot of different ways to view it.
I looked at it from a trade perspective.
The setup was good for a trade.
I still think that it's good for a trade.
I still think that this is something that,
this is a name that could possibly get to the 60s.
It's trading at 46 right now basically um you know it doesn't mean you go out and buy right the second but these these types of names like when i we talk about the ai and and
themes like that you have to start thinking and i say you have to start thinking second third order
stuff this is kind of like the sweet spot for something like that. And he mentioned another name, Cloudflare.
And that same kind of thing.
Like, you know, a lot of times people think of the data center stuff.
They think of the agentic stuff.
They think of all that stuff.
But all that stuff is going to need, you know, support.
And Cloudflare is one avenue for that as well.
Just throwing that out there because he mentioned it.
So, yeah i i agree and
then the last thing he said he wasn't sure where the bmnr is it's 115. yo sam can you explain why
someone might use gitlab over github i've only ever used github uh there are certain features that
well each application generally has different features, but most of them do overlap.
But GitLab does support the on-premises solution that a lot of companies are looking for when it comes to hosting the entire infrastructure on-prem.
When I say on-prem, I mean like, sorry, not on-prem.
When I say self-hosted, that's what I meant to say.
I mean like hosting AWS and not using their cloud solution.
But usually it's for cost purposes.
I mean, GitHub is, it becomes a bit more expensive when you think about non-bundling power with Microsoft products.
But in addition to that, you know, unless you have like a fleet of maybe like a thousand, two thousand, or even tens of thousands of users, that's when something like GitHub might be more favorable
for a lot of companies. But GitLab is becoming a bit more competitive in that space. However,
I think they got a bit of scrutiny in the last earnings call when their 5,000 ARR customers
didn't grow as meaningfully as the larger customers within their belts. So they do offer
competitive solutions,
likely at a cheaper amount.
But again, it's more focused on small to medium-sized businesses versus enterprises.
Enterprises is really where GitHub's
going to take the cake in that.
So that's something that I would keep note of.
From a technical perspective,
you can see that GitLab,
I believe it just crossed the,
I'm not looking at a chart right now, but I believe it did close above the 50-day just yesterday.
Also, if you're looking at the 200-day, which is around $54, once it gets back up there, it might start building a bit of momentum.
software play you can get when you're thinking about dev dev dev devops as well as co-repository
or dev sec ops per se when it comes to uh automating security for and scanning for all
your software code uh it is the only pure play you can get on the market that is competitive
with github uh obviously you can't buy github in the public markets you have to own microsoft and
it's just clearly not even close to what you'd be getting if you did buy Microsoft. You were looking to get exposure in that sector.
I did see a bullish call flow come in for August.
I mean, it wasn't like huge size.
So, you know.
Oh, well, that was more.
I did actually go long.
So, well, I re-entered anyway because I've been trading around it.
But I think that gave me a little more confidence.
And it's trading just like another software name, Braze.
I think GitLab obviously looks a little better
because it's above the 50-day and Braze is not yet.
But from a cheapness standpoint, from a growing software business,
I think Braze offers a similar risk-reward from here.
And I'm just a little bit more familiar with that business.
That's BRZ.
Yeah, where the conviction is, of course.
I mean, like I said before, a lot of these smaller cap software plays,
they tend to move in tandem.
Not exactly one correlation where they're all moving exactly with each other,
but they start to get a little bit of a bid up more in the,
I would say, after a lot of the love goes toward the
mid-larger cap software companies.
And that's mostly attributed to, like I said before, where the budget kind of gets spread
around to other players, but also where the smaller companies start to see a lot of benefit
and start to see a lot more funding when it comes to rates coming down.
So more on like a rates play, because they're a bit more sensitive to that, since a lot
of their clients are smaller businesses, which tend to get a lot more liquidity, of course, as those borrow rates do come down.
But, you know, it's pretty much like you're going to see that catch up trade with a lot of the small cap companies as I don't know.
You see Trump tweeting left and right about about Powell decreasing the rates.
So who knows? Maybe if we get those three rate cuts this year, you'll see a big bid in a lot of these companies.
I don't know if I should say fingers crossed after that or what I should do, but we'll see.
Obviously, we'll see what happens. Great back and forth there at Logical. Did you have any
other thoughts, names that you wanted to cover? Yeah, you know, go to one more person before me, just in the middle of something, and then
I'll come to me right after.
Yeah, perfect.
We'll go over to The Godfather.
Hey, guys.
Yeah, I just wanted to add to this conversation about, you know, where the money's moving.
And, you know, one of my mantras is, you know, try to do more of what's working and less
of what isn't.
And as was highlighted by a number of the speakers here, there's not really a lot going on right now. We're kind of in this low period before we
get the start of earnings again, sort of mid to late July. And then, of course,
aside from the trade headlines, there really isn't much on the economic calendar. So,
yeah, I'm looking and watching this core weave deal spread in real time, and we've just widened to 25.7%.
This is the highest discount that we've seen since this deal was announced.
I used to run a risk arb desk.
There's not a lot of deal uncertainty here. I understand the concerns about the lockup expiry on core weave,
which will happen prior to the close of this transaction and so on.
And I understand what's contributing to that spread
and the inability to short or hedge on the core weave side of things.
But it's interesting nonetheless.
There's a read-through, of course, through a number of these other smaller names.
If you take out the actual contracted megawatts that were part of this existing deal with CoreWeave that Core's had,
and you just look at the pipeline, you can get multiples that are upwards of 3x in the case of Cypher,
sort of 2x in the case of Galaxy or IREN, you know, on their
pipelines, considering, of course, that these pipelines aren't all equal, where these megawatts
sit, what the power contracts look like, you know, how close they are to urban areas, what sort of
infrastructure is there, you know, what kind of latency can be achieved in terms of inference once
these HPC chips are properly hosted, etc.
All those things come into play, but the market's not concerning itself with those details so much.
Our number one play is Cypher, CIPR, as a sort of where the money will move next.
The trading certainly seems anomalous, like there's some kind of a deal transaction there,
both in terms of what we're seeing. I think you mean CIFR, right?
Oh, sorry. Yes, I absolutely meant CIFR. So yeah, you can see it in the trading. You can see it
in the options activity. This is one of the two groups I would put along with IRAN that sort of fit in that first tier along with cores in terms of expertise, guys that have actually stood up these AI data centers in the past.
So they have the internal talent.
You know, they're all grasping for the trap line of business for clients to rent those things out.
But yeah, that's one of the few areas of focus in the market.
The other one that was highlighted here, of course, is what I consider to be
a complete bullshit kind of bull market phenomenon,
and that is these crypto treasury names.
I'm keeping a running list of it.
Godfather, can I just ask you a quick question?
So talking about iron, because I keep seeing so much chatter about it on retail.
And again, I've traded the name too.
Didn't hold on as long as I should have.
Given all the retail hype, I probably should have.
But, you know, I keep seeing this narrative that they're much more efficient than other Bitcoin miners.
And I don't know, I just don't buy it.
Like, I understand there's like a renewable energy angle there, but like, it's a commodity business. So I just don't see why their competitors
can't replicate it and reach the same level of efficiency. Yeah, look, they've always been
sort of, you know, top quartile. But, you know, if you look at where the valuations are, and what's
been performing and what hasn't, the Bitcoin miners, the pure Bitcoin miners haven't been performing for a reason.
It's a shitty business, right? It's getting harder and harder. It's capital intensive. You always got to swap out your machines.
So, you know, the real valuation creation is happening on those those names that are showing that they are actually in this HPC space.
showing that they are actually in this HPC space.
They actually do have contracted megawatts that are suitable to be put online and purposed for HPC compute
and potentially getting these long-term lease arrangements that represent high margin recurring revenue business
as opposed to Bitcoin mining, which we all know where that's going in terms of difficulty, etc.
So, look, I don't focus too much on that side of their business at all.
And, you know, in fact, if you're not involved in HPC as a Bitcoin miner, you know, I couldn't care less about you.
You know, IREN, of course, has the Sweetwater asset in West Texas, Sweetwater 1 and 2, 2 gigawatts worth of power.
It's a Sweetwater asset in West Texas, Sweetwater 1 and 2, 2 gigawatts worth of power.
So, yeah, for the reasons I mentioned, they're kind of at the top of that list in terms of focus for HPC.
And I think that's really what the market is focused on.
But just getting back to this other theme that's working, and this is what I spent most of my day on today because it's really the only thing of interest.
I don't know how many people saw this, but there was another name that got added to my crypto treasury list this morning.
It's actually a SPAC. The ticker is M-B-A-V, Mother Bravo Alpha Victor.
There's warrants that are listed on this as well.
This looks a lot like the SBET. It's really a lookalike here.
You know, these guys, it's a SPAC.
There's 200-some- some on million in the current
treasury, assuming they don't get any redemptions. They announced that they've got 750 million in
capital through 500 million on a pipe, as well as another 250 on converts. They've got a super
high profile board that includes the likes of Wilbur Ross, the head of strategy at Coinbase, one of the co-founders of Tether, et cetera, et cetera.
So, look, we saw SBAT go from, you know, basically their issue price of $455 all the way up to $120 because of a structural thing.
You know, it's pure mechanics.
You do these pipes, the stock doesn't get qualified, you get an
imbalance in supply and demand. And the stock goes absolutely nuts because they announced they've
raised money. They announced that they purchased ETH for their treasury or what have you.
Just to clarify, this one, MBAV, they're looking to be on all the themes. So they're going to be a Bitcoin Solana and Ethereum.
But just going back to my bullshit comment, like none of this stuff actually makes any sense.
Right. If you've got a stakeable asset like Sol or ETH, you know, these guys at best are getting kind of five to seven percent yields.
You know, that doesn't justify, you know, 30 percent in a single day increase to your stock price.
And unless you're Michael Saylor and you're so massive that you can actually increase the crypto asset per share by issuing 0% converts,
there's no reason really to own one of these instruments versus owning a levered ETF.
You'll get better exposure.
So, yeah, I'm
not sure. These are stock games. It's wealth creation through financial engineering, as far
as I'm concerned. But you do have... It's just FOMO. Yeah, it's a FOMO trade. That's all.
So you take it for what it is. There's money to be made. And I'm certainly looking at it that way
and playing it that way. And there's nothing else going on. So I might as well scalp and make some good money, which we did
in our community on SBED and BTBT. BTBT is kind of interesting because, you know, they've got this
Ethereum strategy. As I said, in our community, it's like they're chasing all the shiny bubbles
at once. They're doing an HPC conversion. They've got Bitcoin mining. You know, they got a $500
million ATM out there
that they're active on just like sbed and all these other guys so you know enjoy it while it
lasts as i like to say enjoy the party but stand close to the door so um godfather i was gonna say
i'm also long i'm long as but um and i i did just trim a little bit recently today because it just popped to 16, which is nuts, up 30% today.
So I trimmed a little, but just in this last week, I saw a bunch of $10 puts for January being sold.
And they're using that to buy the $10 calls, sell the $25 calls.
So it's like a bullish risk reversal with debit call spreads.
And those things are up a
lot today. You know, there's a gap to fill at 30. I think, you know, you're generally right when you
say you're better off buying, you know, a levered asset of like ETH, for example. But the thing is,
what we, you know, study in the books of finance and what actually happens in reality are so far apart.
And yeah, I've just found that some of these vehicles end up trading a lot better than the underlying asset.
Yeah, look, it works when you're trading, you know, in the case of BT, for example, 120 million shares.
You can get a lot done on your ATM at, you know, 20% or whatever it is,
the limit you are has a percent of the volume
and your stock is up.
In the case of BTCS, for example, 92% today.
So yeah, it works when it works,
but eventually this will stop working.
Fundamentals always rule at the end of the day,
in my opinion.
And that's kind of what we've seen.
But just a few other comments.
Most of the speakers talked about, you know, wanting to get a little bit more defensive in here.
And, you know, I do think that there are a lot of signs here.
This two week now in July to August in terms of market seasonality, it's usually the peak.
And then we get the summer swoon that you guys have heard me talk about for the last five years.
We've seen somewhere in the order of 40 days or so that leads to close to a double digit downtick in both the S&P and Qs.
So, you know, when is that going to come exactly?
Who knows? that going to come exactly who knows but yeah look uh you know the na a i m um which uh you know
tracks the exposure of institutions to the market or is now pretty much at 100. uh you got retail
you just look at margin debt is close to all-time highs um you've got uh you know sentiment now in extreme bullish category, extreme greed.
You've got AAII flipping to more bulls than bears for the first time in a while.
So all these things suggest that we are close to the seventh inning stretch or perhaps later for at least a correction down to the 20-day moving averages, I would think.
I don't see anything in the headlines.
I think the market has told us quite clearly that it doesn't care about the tariffs and trade situation.
With that being the only thing going on in the market, if the market was really concerned about it,
you'd see it on days like today and you're really not.
So I think that story has kind of run its course,
but the markets aren't cheap.
And near term, we are looking over a bot.
So yeah, I think it's right
to trim your more speculative exposure.
And again, you're seeing things like these treasury plays,
which are really are,
their signs are froth in the market, these treasury plays, which really are. Their signs are frothed in the market.
Take them for what they really are.
So I'll leave it there.
I just asked if that's a – oh, you go ahead.
No, you go for it, then I'll go one after.
I just want to know if that was a Caterpillar machine in the background.
Nothing like a Caterpillar. Yeah the background. Nothing like Caterpillar.
Yeah, they're tearing down the building next to me,
so hopefully they're sensitive to the wall.
There we go.
Long cat.
Okay.
All right.
You know what they say, though?
You know, to bring in the new, the Phoenix will rise again.
Break it out with the old, ugly building.
It's a big, beautiful new building.
Going to be nice.
A lot of infrastructure.
A lot of jobs.
I think we should go to Stock Talk early on this one. I know we have others, but we're going to have Dan on. Beautiful new building. Gonna be nice. A lot of infrastructure. A lot of jobs.
I think we should go to Stock Talk early on this one.
I know we have others, but we're gonna have Dan on.
I don't know how much, you know, in the second hour, we're gonna be able to hear your thoughts.
So, Stock Talk, if there was anything you were like, I need to talk about today, I would.
I mean, I'll touch on stuff briefly.
Stock Talk, weren't you the one that brought up Warby Parker?
Yes, I was gonna touch on that as well. Did it move?
I was having a nice day.
But, yeah, I didn't expect the port to be so green today.
I kind of, like, based on the index action and based on the action this morning,
I did not expect so many of my names to end up running, but they did.
I'm in a lot of short interest names right now.
You know, last week I think I went over my short interest basket,
which I had about nine names at that time. Um, uh, I think I still have all nine. Yeah.
I still have all my short interest exposures. Um, I think Godfather brought this up earlier
cypher. I'll just touch on that real quickly since he already touched on it. That's also
the horse that we are in as a sympathy for cores um i think the volume has been overwhelming these past five
sessions and even today with cores down and most of the sympathies down iron was up big this morning
that flushed red as well cypher's held up all day still up five percent after six monster sessions
in a row so that is the horse that we're rocking with too i also have some riot exposure also have
some iron exposure we got into those 13 calls a couple of weeks ago and they're up like 500%. So I'll call that a win. Um, but yeah,
those have been working well, even with the cores deal, not turning out for cores shareholders,
the way that they thought it would, um, pretty simple dynamic going on there. Inability to hedge,
uh, core weave, which Godfather brought up,
and also an uncertainty from the market of whether or not core weave post-lockout expiration will be
able to hold its stock price. And I think that's a pretty legitimate concern for the market. A lot
of people were confused because the implied buyout price was at 2040, but that's obviously at the
current price of core weave. If by Q4,
it's trading lower than that buyout price will be lower. So that's what's going on there with
those, but I remain pretty happy with the action on Cypher. Indy Semiconductor, which I talked to
about a week ago, had a really nice day today. It was up about 10%. It looks like it's going to
close up about 8%. That thing's building structure or continues to build structure really nicely above the 200-day.
Action's been a bit annoying on the daily.
You've had these sort of fake-outs below the 90 in May, which for newbie traders I know can be frustrating.
But if you focus on the bigger picture here, I do think it's building nicely and likely setting up for some news.
You look at the weekly as well, emerge above the 50-week moving average.
You have room overhead, in my view,
to the 100-week moving average, which is at $5.
That would be my initial target for this trade.
But nice day for that today.
And that stock remains 28% short.
No specific catalyst I could see for it today,
but I had a really nice session.
Joby, which we opened literally a week and a half ago
at $9.50
is now $11.50. It's been relentless to the upside. I swapped out my Archer Aviation exposure for Joby
and it ended up being a great decision. I mean, this thing has gone pretty wild here
since we opened the position around 9.50. now all the moving averages beneath it uh sort of reorganize
themselves and price is trading at new highs so big volume two on this side supports this move
as it breaks out of this 12 spot you know it's going to be entering new price territory and uh
will be a very interesting one to watch obviously above, above, you have the sort of SPAC-era trading
where it hits 17, 14.
I tend to not count that when I'm looking at these.
I sort of look at the post-SPAC IPO price and focus on that.
But yeah, you're going to see resistance up there at 14
if it can get there, 1450-ish.
But yeah, that was great to see Joby moving higher.
CRISPR, which I remain long, CRSP, I know it hasn see Joe be moving higher crisper, which our main long CRSP.
I know it hasn't moved like some of the other small caps in the space, but I do think
it is probably a higher quality asset and it performed really nicely again today.
As did most of those gene editing names, you know, I was in sauna briefly as a day trade
when that deal first went through and wish I would have kept it. Cause things up like a hundred
percent since that Vve deal went through
um and a lot of people like were pointing out there wasn't really appear but
it turns out that you know they had a lot of overlap in the cardio space and a lot of those catalysts got a lot more um acceptance recently because of that verve deal so
crspr main long was up about seven percent today. I own a variety of options on this one and shares.
The August 45s I have are up like 130%.
The CRISPR 50s for October I have are about 70%.
But I plan on holding those.
I like the way that it's acting.
These last five or six sessions acting very strong.
Genius Sports, nice move to the upside as well, 3.5% up.
Warby Parker is another one of our positions, which Em just mentioned.
Also up about 3% today on that news of Meta acquiring a stake in Essilor Luxottica,
which is the maker of Ray-Ban for $3.5 billion.
And it's a minority stake.
I imagine it's valuing Luxor.
I didn't read the whole article, but I imagine it's valuing them at roughly $200 plus billion
because I think the last valuation I saw from them was like $185.
So this is probably much higher than that.
And I think it's bullish for Warby.
You know, for those that don't know, Warby Parker is the partner for Google on their smart glasses initiative.
And I just think from a valuation, relative valuation standpoint, this is good for Warby.
Stock popped on that news that came out from Meta.
But, I mean, I'm not selling into a 3% pop here.
I do this thing.
Think this thing can move higher and um the good thing about warby is it's had really beautiful consolidation
on the daily for i don't know the last
while here i mean it's been consolidating for a good while since
really the start of june end of may when it pushed into this 22-23 area and has just been
like straight line consolidation above the 21 EMA. A couple of wicks below to fake people out, but
has held the 21 EMA throughout it. So I like the consolidation there. I like the story there.
I like the product as well. So, you know, that's an easy hold for me and is having a nice day today.
Exometry also up for us. Mercury Systems also up. Riot also green. Sphere, which is another one of our short interest plays, also green.
So pretty green day for the portfolio on a day where I was not expecting it to be green, to be frank.
So, yeah, I can't complain about that.
Some of my core positions down today, Centrist having a little bit of a pullback, but just building structure here and consolidating.
Nebby is down a little bit, down 1.4%.
I'm not worried about that.
Embraer, relatively flat.
ASDS, relatively flat.
So most of my wrestling position is not too noisy, but a lot of outperformers today, which is good to see.
um a lot of outperformers today which is good to see so yeah i mean i talked about this yesterday
but i think if you remain in focused on if you're stock picker which some people are some people
aren't but if you're stock pickering your main focus on your stocks and the breakdowns and
breakouts on your individual stocks as opposed to broader fear in the market i think you'll do
better in this market and you know i think i've been a testament to that so far this year,
not only because of my performance,
but my ability to sort of just block out the noise
and focus on the individual names that I'm along
has been probably the best thing for my performance this year.
I think if I'd gotten scared of a lot of the narratives
that were floating around,
I would have gotten shaken out of a lot of names.
So good to see stuff performing.
But yeah, I didn't do a whole lot today outside
of smlr which was a new ad that i discussed this morning um i thought the timing of the price
target change this morning from benchmark was interesting for those that don't know smlr's
bitcoin treasury play i agree with godfather on his earlier commentary that these are all
generally just garbage and the music will stop at some point and a bunch of these will come back to earth.
I completely agree with that.
But, you know, I dance while the music is playing.
And this note for Benchmark this morning had a $101 price target on SMLR for a stock that's 30% short in a hot theme.
I'm taking that nine times out of ten so
got along that this morning have a nice cushion after this you know eight ish percent move it
was actually up more this morning about 12 so i had a bigger cushion but i'm fine with holding
some of that um overnight and seeing how it acts tomorrow obviously if it acts badly tomorrow
comes back into the 40 spot or lower then i'll cut it. But I like throwing darts at times like this. And
then if you get the cushion that you want, and the position keeps working to the upside, then you have
a very easily manageable position, psychologically speaking. And that's what I like to do. Like,
I very rarely am holding stuff. And I'm holding a lot of stuff right now. But I very rarely hold
stuff that I'm right on. Like, unless it's. Unless it's something that I'm very high conviction on and I'm letting it build on me, I very rarely do.
I like to time my positions with entries.
And that doesn't always work.
There are plenty of times where I'm like, okay, I think this is the right entry and I get buried the next session.
That's part of the game.
I take losses like anyone else but when i do find those plays that have technical
confluence fundamental confluence a nice catalyst a hot theme and i get in at the right time those
are my portfolio drivers those are the names like centrist energy which we got in right on the
nuclear catalyst and wrote it for a double nebius which we got in right on the click house catalyst
that stock doubled like Like Robinhood,
which got it at the start of last year, you know, when it was trading under 10 bucks,
about the 10 and 15 leaps. All those trades were timing the entry with a catalyst. And all those
stocks were the biggest portfolio performers for me over the last two years. So I see no reason to deviate from that plan. It works for me. I, my timing tends to be pretty good. Um, again, I'm, there are times where I'm
wrong like everyone else, but that's kind of the, the, the playbook I'm following and continuing to
follow. And, um, yeah, it's working well. So no complaints from me. Good day. Um, we'll see what
happens in the rest of the week. You know, a lot of people are worried about like index action.
I said this yesterday. I continue to not see any reason for concern on index action.
I mean, we're not even giving up the 90 in May.
You know, if you look at the spy daily, can't even come down and touch it.
We can't even touch it. Yeah.
like there's not even wicks into it let alone giving it up i mean for the last what one two
Like there's not even wicks into it, let alone giving it up.
three four five six seven eight nine ten eleven sessions for the last 11 sessions we've been above
the 9 ema have not seen a single wick in any of the sessions even touch the 9 ema and we've only
had three red sessions and all of that i mean is that bearish i mean you know maybe it's not bullish
if you put the context of what's going on with tariffs and the environment.
Sure.
I hear the people that are out there talking about that.
That's a risk.
Yeah.
But I mean, is it bearish?
I don't think so.
I mean, I don't know what like school of technical analysis other people out there read, but that's not bearish in my book.
So, you know, we'll see when markets are breaking down.
Then we'll start seeing why they're breaking down.
We'll assess if that's a risk to the individual stocks we own, and then we'll accommodate that way.
But this continues to, in my view, from a narrative standpoint, be a very hyperbolic market, just like it was last year, just like it was the year before.
But what I will say is I do think there is an apocalyptic risk to this market.
And maybe apocalyptic is a little bit of is an apocalyptic risk to this market.
And maybe apocalyptic is a little bit of a hyperbolic way to put it.
But I do think there is a very big risk to this market, which is that China and EU tariffs do not land where we think they're going to land.
Now, what's the probability risk of that?
I don't know.
I think all parties involved want that not to happen, including Trump, despite what people may think. I do not think I think he realizes what the impact would be on the market
and the economy. So I don't think all parties involved, any parties involved want it. But I do
think Trump has an ego. And I do think the EU leaders also have egos. And I do think Xi Jinping
also has an ego. And so as a product of that, do I think that it's a possibility that we end up higher on
tariffs than we thought? Yeah, I do think it's a possibility. And that will lead to a disconnect
in the market, in my opinion, because it will probably lead to a significant slowdown in global
trade, slowdown economic activity, and will increase the likelihood of a recession. And you may not be able to stick save that with like a 50 basis point rate cut.
So I'm hoping and remaining in the base camp that we end up with sensible tariff policy.
But that remains a risk.
Outside of that, technically speaking, structurally speaking, everything looks super gravy.
This has been a market to be long in it you know continues to be a market to be long and for now structural
breakdowns can happen quickly they can happen in a week's time so you have to be cognizant of that
but until that happens i just don't see any reason to change my tune but at the same time for all
those people out there who love calling hypocrite i will change my tune if we break down that's part of the game you're supposed to do that and you're supposed
to change your opinion with the data and so if we do break down technically i will change my tune
but we're not even remotely there yet like not even close we're not even at the first line in
the sand so yeah good day in the markets hoping for more good days i like all the stocks i own
don't feel in a panic about anything.
I don't see any daily breakdowns on the individual stocks I own,
let alone weekly breakdowns, which is where I'm focused.
Monthly charts look terrific across the board.
To be honest, there's names.
We have a community of thousands of members,
and so people tag me in names all day that they want me to look at.
I can't even count how many charts members have
asked me to go look at that look amazing. I don't own them, but like random stocks and industries
I might not even be looking at, you know, I have members sending me weekly and monthly charts.
I'm like, dude, that looks gorgeous. I always want to buy it. Like the last five stocks I've
been asked about. So that to me, that is not bearish. You know, if there are
amazing setups in like multiple industries, that it's hard for me to get negative on that. Like
sometimes is that a setup for like a rug pull in the markets? Yeah, it is sometimes. In fact,
like at the beginning of 2022, for those that remember, individual stock pickers will
remember this, those that look at a lot of charts, beginning of 2022, a lot of daily setups looked
fantastic, like a lot of them across multiple industries. And then, you know, they all broke
down pretty much at once, headed into February and March of that year. And then we had just
nonstop volatility for the rest of the year and like a 27% peak to drop decline in the indexes.
So, you know, that's also a scenario that can happen where, you know, the market sets up this
beautiful, you know, picture perfect technical environment and then just rug pulls it all.
Happened before, can't happen again. But outside of that risk, I mean, it's not a market where I'm
looking at individual stocks thinking, oh, I have an urge to short that. You know, like in February,
late February, I did feel that way, which is why I caught a ton of exposure in late February and
sort of like ran out of some positions, which I'm glad I did because they went 30, 40, 50%
lower into the into the tariff sell-off lows but that did make
me panic because post deep seek sell-off charts were breaking down there were
really really nasty candles on that deep seek sell-off that just destroyed
beautiful looking charts that that does make me panic when that happens to
hundreds of stocks at once that doesn't make me panic but that makes me cautious
and so I adjusted accordingly then.
And if we get a scenario like that, either because of tariffs, or because of something in the
employment data, or because of some some sort of credit event, or some sort of crazy move in yields,
I mean, all those factors remain risks. If any of those things cause the markets start breaking down,
then we get defensive.
You know, we put on some index puts, we take off short-term exposure, you know, cut the
weekly and monthly options, yada, yada, yada, cut the low conviction positions, all that
good stuff, basic position management 101.
And then you batten the hatches and wait for the market environment to get promising again.
You know, even when we had like the lows lows a lot of people like look back at the
April lows and they say well if you didn't buy the tip at the April lows
you're an idiot there's no way you made money I didn't buy the dip at the April
lows and I've done great this year I've doubled my portfolio this year I don't
go 102 percent year to date if if I bought the dip of the lows would I have
done better if I bought the bottom on some of my favorite socks yeah I
probably would have done better than that. But am I happy with that
performance? Of course I am. And I didn't buy anything until about three weeks into the recovery
off the lows. Because why? Because the charts had started looking better again.
Right? The charts had finally started setting up again, recovered their daily levels. They'd
started building again. That's where I feel comfortable throwing darts. I don't look at a
stock that's down 90% and go, this is probably the bottom and just jump in. That's just not my style.
And there are some people that are great at that. You know, there are some amazing bottom snipers
that make a living doing that. If you're good at it, great, but you don't need to do that.
You don't have to nail bottoms and nail tops to make a living in the markets.
And you don't even have to nail bottoms and tops to really outperform the
markets at all. Like at all. You don't need to nail a single bottom.
I haven't nailed a, like an actual literal bottom on a stock in,
I don't know, years. And I've done very, very well versus the market.
Hey, you know,
I outperform market basically every year
and I still have not caught bottoms. And I don't even catch tops either, to be honest.
Like, I don't sell at the absolute optimal price on all of my positions. In fact, I rarely do.
I rarely do. You know, I'll sell a stock and you'll proceed to go 50% higher that happens very very often so
There's I think this sort of illusion amongst new traders that you have like nail bottoms and nail tops to be like a masterful trader
It's not true at all
You just need to nail high probability setups. That's it. It's the whole game and
That probability can be based on any sets of data that you so choose to use. If you're a technical trader, that probabilities can be based on the probabilities of those technical setups.
If you're a fundamental trader, it can be based on the probabilities of, you know, peer valuation closing or arbitrages closing or whatever.
I mean, it doesn't matter what your lens is.
There's always some level of probabilistic analysis that goes into it.
And if you take high probability opportunities, you'll probably make more money than you lose that's the whole name
of the game you'd be right more than you're wrong and you have to be right in bigger size than you're
wrong and that's it so yeah I think people will continue to find if you focus on your individual
stocks not get too caught up in what's going on in the background of the markets pay attention
to when the technical breakdowns happen.
And when they do happen, ask yourself why they're happening.
And if they're happening for a good reason, yeah, you get cautious.
If they're happening for a dumb reason, you know, that's what makes a market.
So that's it for me for today.
Not too much.
15 minutes later, though.
Hey, you know, gotta get something.
Sometimes you gotta get the flow in.
Gotta get something.
I don't want people to think I'm scared
hiding in a corner or something, you know?
I do see Dan Niles down in the crowd
with Dan Jordan that's up here.
Hey, Dan, how you doing?
Good. How are you, Evan?
You gotta move the mic a little bit away from your mouth
and then we'll be good.
Perfect.
I'm doing fantastic.
Yeah, it's a little better.
I'm doing fantastic.
How are you a little post July 4th?
The market feels like maybe a little slow.
How's it been for you?
Yeah, no, it's been nice to have a nice long weekend,
especially with Thursday being half a day.
So yeah, I really enjoyed that. No, we appreciate you being back on the spaces down we
know a lot of people are a fan of you actually what sparked me messaging you to
get back on here is we were having a natural conversation and it was about
some of these new ETFs coming out there the Dan Ives and Tom Lee and he was
for these analysts coming out there and the first and only
name he brought up was a Dan Niles ETF
so hey maybe it's coming soon
yeah I don't think so
but anyway
yeah it's
it's an interesting time right
so lots of
lots of money being
thrown around and lots of different ideas.
And it reminds me of the late 90s.
But we'll see.
We'll see how long it goes on for.
Because right now, I mean, I think you never had as much retail participation.
It's never been as levered in the sense that you have zero data expiration options being used.
levered in that sense that you have zero data expiration options being used and then on the
other side of it you have passive investments continuing to increase as well and so you know
that drives if you buy the s p 500 for example it'll buy every stock in there regardless of
whether it's a good company undervalued overvalued it doesn't matter it buys everything and so
undervalued overvalued it doesn't matter it buys everything and so markets are probably going to
continue to get even more uh i don't know overvalued is the right word but get more
rational if you want to call it when you have that type of stuff going on where you have a price
insensitive buyer or doesn't care about valuations and that and that's kind of what you saw in the late 90s. And
it ended poorly, but it was a fantastic ride for as long as it went on. And that's kind of
what I'm thinking right now is that it'll be a pretty good ride. And I think by the time you
get to Thanksgiving, you got a humongous problem brewing due to fundamentals, which I'm sure we'll
get into. But that's kind of how I'm thinking about things near term. Okay. So a little bit more constructive over the next little bit. I'm curious on the
timeframe there. What around Thanksgiving kind of keeps you that there? And do you think a lot
of stuff of this, you know, the positives from the bill? We're talking about every single baby
being born buying $1,000 of basically the S&P 500. It might be something different.
But was a lot of that priced in from that initial Trump thing?
And, you know, there's this tariffs versus, you know, this increase in deficit spending,
which a lot of people have their own opinions on.
But there are certain facts that are going to come out of this, and it's probably good
for the stock market.
Yeah, I'm curious about the timeline and just how you frame everything that's going on right now.
Well, so if I kind of just walk you through the quick timeline, right?
I came into the year bearish.
Cash was a top pick.
Obviously, Q1 ended up being pretty ugly.
And then on like April 7th, I did an interview and said, you know, I think I see a short-term bounce just because it's market so technically oversold and looked ugly on the 8th.
And then on the 9th, obviously, the tariffs got rolled back and the market was up 9.5%
in a day.
And then we were bullish going into earnings season for one simple reason.
And this gets back to why I think we have a problem come Thanksgiving, which is consumers
aren't stupid.
If you tell them there's tariffs, they know that prices are going up.
And so I think my view was between that and also you had the dollar, don't forget, go down pretty drastically from about 110 at its peak.
It went down below 100. And so you throw that into the equation and you're talking about a huge benefit to demand at that point.
Right. So, you know, so those were my thoughts kind of going into that q1 earning season and that's
still the case today right people know that tariff driven inflation is coming through the pipeline
come the holidays and the best way to think about that pull forward is you can look at Q1 GDP that was released. Now, the United States is 25% of global GDP.
And imports were up 38% year over year.
38%.
So if that's not pulled forward, I don't know what is.
And so if you've gone out and bought a car or a PC or a smartphone because you're worried that these high-priced goods, you know, a 10%, 15% increase in that would be meaningful, then when you get to Thanksgiving or November through December, if you look at that, for electronics retailers, for example, 35% of annual demand is just in those two months.
And 15% of that demand is just in the five days between Thanksgiving and Cyber Monday.
that Amazon Prime Day, the sales were down 14% in the first four hours of Prime Day this year
versus Prime Day last year. So, you know, now you could say, well, yeah, but that's because
Prime Day is four days this year and only two days last year. So maybe people aren't as anxious to buy stuff.
But that's a pretty big drop.
And so you look at that, you look at car sales, which surged,
and then came right back down again recently.
Some of the commentary kind of coming out of the people who track Apple pretty closely that June wasn't the greatest month.
I mean, I think the whole quarter, they're going to beat the quarter because people, again, pulled forward demand in the prior two months before June.
You know, I think that's why when we get to Thanksgiving and you actually have to face down earnings and maybe you get more headlines like what you saw today on amazon except over thanksgiving
i think that's when the problem hits because multiples are very very high i mean the s p
is trading at 24 times uh calendar 25 which when you normally have cpi between 22 and a half to
three percent which is where i think it'll end up by the time we get to the back half of the year
which is where I think it'll end up by the time we get to the back half of the year,
the trailing multiple is normally 19 times, not 24.
So there's very little room for error.
But I think people want to believe right now.
You can see it in the markets.
They ignore tariffs.
They ignore most things.
And the market keeps going up.
And you have these new ETFs like you brought up.
And you joked about me having an ETF.
And that's what bubbles are made of.
But they can go on for longer than you ever imagined possible.
Hey, but listen, your ETF can be more longshore.
We can have more realism.
Nobody wants realism.
They want to feel good.
They want to know how to make 10x in a day.
Have you seen Tom Lee's ETFs, though?
I don't think it's quite as much
uh as maybe some of the other ones i know you can have some different thoughts
i don't know i mean it's gone from four bucks to 100 bucks and there you go oh no no i'm sorry
bm and r though let's not talk about the treasury one the gr and the grny one is oh more interesting
but uh i want to what i did want to ask you I pinned up in the nest above your mid-year update,
which everyone should go in and read.
If you guys are not following Dan,
he's putting out a lot of awesome posts
once a week or something,
but we're getting really long ones.
They're really great.
Cisco was one of the names that stood out for me in there.
And there's a theme that's going on
of these kind of older tech names, the IBMs, the world, the Cisco's that are getting pretty hot recently.
Oracle, I don't know if it counts in there necessarily, but I wanted to get your thoughts on Cisco and that theme in general.
If it's a play on that, if there's other names you kind of like in those established tech names.
I've been kind of playing in Honeywell a little personally.
I don't know if that's when you looked at it all. But, yeah, Cisco and then some of these other kind of names that are similar to
that. Sure. I mean, if you step back big picture, the last two calendar years, it's all been about
investing in AI infrastructure. But if you're investing in AI infrastructure, you can't spend
on other things, such as upgrading your corporate networks.
AI spending, capex spending has been gradually coming down
because for one simple reason, right?
If you're training up all these models,
but now you've trained all these models
and you've trained them on all the data available
on the internet, it's hard to make them a whole lot smarter,
right?
Because the only models, you know,
the only thing to train on is whatever happened the next day versus all the aggregated data on the internet so training training capex has fallen
dramatically uh inference capex is picking up but in general if you look at the capex spending for
all the companies combined it has dropped dramatically coming into 2025, especially if you look at it on a sequential basis,
versus what it had been running in 2024. So that leaves money left over to spend on other stuff,
because if you're creating all this data, well, it's pretty much useless unless you can get
access to that data that you're getting from AI, and you can move it around. And so that's where
Cisco comes in, where my belief was you were going to see some of that money that you were saving on
training costs, et cetera, and experimenting with AI going into upgrading the network so you get
access to all that data being created. And that's kind of what you're seeing. And then much like Oracle,
which I actually recommended as a top five pick back in 2021 on the thesis that, you know,
I think they could enter the conversation as the fourth hyperscaler behind, you know, Amazon Web
Services, Google Cloud and Azure. And obviously, you know, you fast forward four years from there and, you know, Oracle's
clearly in that conversation and doing quite well.
And so I think with Cisco, it's been sort of given up for dead because it's sort of
a low single digit grow or has been.
But I think with some of the acquisitions they've done, some of the improvements they
made to their silicon and the environment improving, and it trades at 17 times.
The market trades at 24 times.
A lot of these AI companies trade at 30 times, and you've got Arista sitting up at 40.
So much like with Oracle four years ago, like I look at Cisco, I don't think it's going
to do what Oracle did, but you never know. Right.
And I think they've made a lot of improvements that you combine that with them getting to their hyperscaler bookings numbers a quarter earlier than what they'd originally told people in terms of getting to a billion.
It shows they have some momentum.
And those are the types of names I like, right?
Get a real change in how people think about the company.
Low valuation.
It's attractive to the value investor.
It's attractive to the momentum investor
because they go, hey, I could get a little bit of an AI play out of this.
And they have a dividend to boot.
So 2.4%. So it's not so bad um from that
either so an income investor can get involved so that and it's big it's liquid it's it's the type
of name like an oracle maybe four years ago and that's why i think the stock has done so well this I see Sam, you have your hand up.
Yeah, so when I'm thinking with Cisco and also with HPE as well, especially the Juniper acquisition,
when we think about cybersecurity and maybe just security in general when it comes to networking hardware,
I think that might be where the market's seeing its upside from.
I mean, still, you know,
single-digit growth offering dividend and so on.
But maybe possibly a security comeback
with something that wasn't perceived
from a lot of analysts in the past.
I believe, I haven't looked in the model recently,
but I think it was growing at like about 70%,
around 70% for just the security segment alone, which might drive a little bit of growth.
But you already know, once the market starts running with AI security and everything, the
valuations start getting expanded.
What are your thoughts on that?
Yeah.
No, I mean, and that's a nice thing, right?
You buy a Cisco and you get the security stuff thrown in with there.
You don't have to worry about integrating separate security into it.
And all of those things make it exciting and very interesting.
And so, yeah, that's why Cisco was one of my top five picks entering the year,
because I felt like it gave you a little bit of defense in that low valuation,
low expectations, but it gave you some offense
and that the multiple could expand a lot.
And if they were able to get some traction,
like it's not clear, right?
They've been underperforming for the last several years.
But if what I suspected was true,
that maybe some of the silicon innovations they'd done
would help them close the gap,
you integrate that with the security that they have, offerings that they have,
and corporations, you know, they trust
Cisco. So I think
it's kind of all coming together. It's still
early, which is what I like, and so I
feel like, yeah, this thing could
should continue to benefit through
year-end.
Very nice. I kind of want to ask you you do you have any thoughts on bitcoin or gold
well i mean i think bitcoin is clearly an asset class um that's for sure and so i've said before
like investors putting some small percentage of their net worth into a bitcoin as well as gold
i don't see anything wrong with it um but with bitcoin in particular as you probably remember
when the market was getting absolutely killed i mean bitcoin was not behaving well so now gold
meanwhile you kind of look at gold through early April, gold was doing quite well.
So I think it's kind of, it's hard.
I think anybody who thought that Bitcoin was a good hedge in terms of market volatility got a big wake-up call during that sell-off in April. But much like all the other risk assets, when the market surged off the bottom on April 9th,
Bitcoin went with it. So I think it kind of just depends on what you're looking for
with those assets. Either kind of what you hope would be a replacement for gold, I guess,
which is what the Bitcoin bulls will tell you,
or it's just another risk asset that's kind of supercharged,
which is kind of the way I think about it.
Because it's not like I'm walking into a Walmart and using Bitcoin anytime soon
to buy my toys for the kids during the holidays.
I was just curious.
I'm not super...
I don't know a little bit of Bitcoin, but I'm not super into it.
I want more Bitcoin than gold, though.
Yeah.
Yeah, I mean, at the end of the day, I like
owning assets
that produce
income.
And that's what you get when you buy a company
that's profitable and that's growing.
You're buying an asset that's making money for you when you sleep. And I like that. And gold's,
you know, gold's a store of wealth, but it's not income producing per se. And Bitcoin isn't either.
So like for me, that's why I like, you know, I did a presentation recently and I said, look, investing is basically faith in humanity, right?
Because if you believe people are going to have kids, that's 2% to 3% growth a year.
If you believe there's going to be new inventions always coming, right, whether it was harnessing fire, steam, electricity, the automobile, the internet, and now this new thing called AI.
And if you believe there'll be something beyond that, then you get another 2% to 3% growth per year. fire, steam, electricity, the automobile, the internet, and now this new thing called AI.
And if you believe there'll be something beyond that, then you get another 2% to 3% growth per year. And if you believe that the price of your rent and your eggs and your car and your smartphone
will be more every year, that's another 2% to 3% growth per year. And guess what? The stock market
has returned about 9.5% compounded since the early 1920s, which that's what it basically comes down to.
So for me, that's the great thing about owning stocks is you're betting on basically humanity's resilience over the longer term.
And particularly, you know, if you're in the U.S., you're betting on the U.S.'s creativity.
If you're in the U.S., you're betting on the U.S.'s creativity.
We have the best environment, I believe, in the world for the most innovative companies,
and you're kind of seeing that with the Magnificent Seven.
Monativ, I got you up here.
You got any thoughts?
You got any questions you want to throw in here?
Yeah, so a couple of quick comments.
I think, you know, Oracle, obviously, I like that pick.
I got in, you know, roughly around the time you talked about it.
So I have one question on Oracle. They did tease a mega client coming in that was going to bill, you know,
high 20 billions a year.
So, you know, any thoughts on that? And the second,
the expectations for this coming quarter are low, pretty low, six and a half percent,
you know, year over year growth, given that the economy has not really pulled back all that much.
So since they are still looking back, how well do you think we are going to perform against that expectation?
I mean, Oracle is really about the longer term view. If you believe that every country is going
to have their own sovereign AI, etc., and every company is going to learn how to harness it,
it's hard to bet against Oracle, especially for the next three and a half years, because
obviously the Oracle has been a big supporter of Donald Trump. And so just like under every
president, you know, if you are on the right side of whatever the political climate is, you're going
to get some benefits from that. And so I think Oracle was already doing well for the prior
four years, like we talked about, under a different administration. And then this one's even more
helpful to them. And so it just helps them that much more. We all saw when President Trump was
traveling the Middle East, Oracle participated in some of those Middle Eastern deals that got struck. So for me, they've moved from an afterthought relative to AWS, Azure, and Google Cloud.
And now you could argue they're the leading cloud vendor out there, at least in terms of growth.
And so I agree with you that the numbers don't seem that challenging, especially given
some, I think there was some confusion around some of the press releases that came out early,
or sorry, came out lately. But if a company's filing an 8K, that means that
what they're putting out there is material in their opinion.
And so that's in addition to what happened a couple of weeks before that when they raised the forward forecast substantially.
And so that's on top of that.
And some people thought, oh, no, that was included in that.
But I firmly, I mean, just knowing what an AK is,
I go like that was on top of that.
And they continue to announce all their deals.
So I feel really good about Oracle.
And yes, I mean, the valuation is high, but it's high for everything, relatively speaking.
But there's very few companies that you can look at in the AI space that you go, wow, they have a really good pole position for AI growth into the future.
And we can talk about some of the potential negatives in AI, which I'm thinking about,
which is the cost to produce a token of output is dropping dramatically.
of output is dropping dramatically.
And so if you're sitting back and thinking about it,
some of you who know their history
or lived through it on this call will go,
well, gee, I remember people saying,
wow, you needed all this capacity
because we were going to be watching movies
on this thing called the internet
and doing all these amazing things and buying stuff e-commerce and all the
rest of it and all that turned out to be true but then you spent a decade having to work through
that dark fiber capacity because as it turned out costs were dropping really fast and even though internet traffic was doubling every year, it wasn't tripling every year.
And so if you're trying to kind of stay grounded, you can look at some of these innovations coming out, like DeepSeek, and some of the software innovations that they came up with, like mixture of experts, right?
Which in plain English is if you're, you know,
why would you ask an entire A model, an AI model,
a question about your health?
When if you could just ask the health portion of that model,
that's going to save a ton in costs.
Like that seems obvious now,
but like that was a big innovation that DeepSeek threw out, which everybody else has started to adopt. And there's other stuff on top of it. But that shows you like how something that seems just blatantly obvious, some of the things that they're doing is just dropping the cost by a ton. the mag seven right now but i i do sit there and like i'm always trying to think ahead because i've
i've been you know i lived through the tech bubble break right and as that going down 78 percent is
not something and the good news is i was on the right side of that and that i thought things would
get bad it got way worse than i ever imagined but um it did come about because there was an
overbuild and so that's that is something you have to think about
so we can all kind of keep our heads level.
So just on that, right,
that call, that management commentary
after their earnings
was easily the most bullish we've seen
since the early days of NVIDIA OpenAI run-up, right?
So it was incredibly bullish.
And the fact that they are leveraging, you know, the other three hyperscalers to have their virtual private cloud there to,
you know, they've taken away some of the investments they have to make while giving up a little margin, but they've also
completely removed any pushback from customers having to come to Oracle Cloud to stay within
the Oracle ecosystem. Now they can do that virtually in other clouds that they already
have massive presence. And so I think it's, I mean, so clearly triple digit growth rate in their virtual cloud at
other hyperscalers, I think that's certainly achievable.
And like I said, I called it out here in this space here after their earnings.
It was insanely bullish commentary.
Yeah, no, and it's only gotten better since then so yeah i think oracle is i mean i like it i've liked it for a while and they you know i
would have never thought we'd be here with oracle back in 2021 when i first said hey yeah i think
this could actually work and And it's obviously very
helpful to your point that most large corporations is like over 60% of them, their database is Oracle.
And as you rightly said, they want to be able to run it anywhere. They want to be able to run it
on AWS or Azure or Google Cloud. And so the fact that Oracle works with all of them makes it really easy. And what do you train an AI model on?
Data.
Well, if you have all your data in an Oracle database, it makes it pretty easy to, if you
put all of that stuff together, to make it pretty seamless.
And so I think Oracle, you know, this has been a long, hard slog over many years to
get to this point.
But yeah, they're sitting kind of in the catbird seat to some degree.
Moniz, definitely feel free to jump back in.
But Stock Talk, I know you also want to ask a question.
Yeah, Dan, good to have you back.
Always love hearing your commentary.
I'm curious what your thoughts are.
And I know that, you know, buyback announcements aren't binding,
but I'm curious what your thoughts are on record buyback announcements
through the first half of the year here.
I think we're, what, a little over $700 billion now.
Previous record for the front half of the year was like $480 billion or something.
So we're materially higher.
Does that give you any incremental confidence
or do you think that, you know,
you don't really see executives as traders,
et cetera, et cetera?
You take that side of it.
Yeah, I don't see executives as traders.
And quite honestly, it depends on the company, right?
Because, I mean, you look at Apple
and you go, buy back $100 billion of stock.
They've, I think, cut their share count
by one third over the last decade.
But they're like several years behind on AI.
So should you really be buying back stock when you'd be better off taking $15 billion of the $100 billion you're going to spend on a buyback and just going and buying perplexity or doing something so that you've gotten caught up
in the ai race so to some degree it depends on the company why they're doing it and all the rest of
it but yeah i'm not i don't look at the buybacks i i obviously pay attention to them but it's not
a main reason why i buy a stock because like in the case of apple like
that tells you they have they're not doing a particularly good job allocating their capital
i agree with that completely yeah on a micro basis i agree with you that you know it wouldn't make me
buy a stock individually but i mean broadly speaking because we have set such a you know
massive record relative to history in the front half of the year for buybacks.
Does that give you, I mean, broader confidence in the market or no?
No, no.
I mean, it doesn't.
I don't pay much attention to that. I mean, now, having said that, I do pay huge attention to money flows.
I'm a big believer in that the combination of the Federal Reserve and the U.S. government
drives markets.
And I put up a lot of charts before talking about that.
So am I very focused on the fact that I think the odds are increasing that the Fed's going
to cut, whether we can argue whether it's right or not.
I don't think it is.
But I think they're going to cut one or two, three times maybe before now and the end of the year.
That's going to give people reason to buy stocks.
If you look at money market funds, they're at record highs.
Believe it or not, retail is actually up more than institutional by a little bit, both year over year and I think month over month, which is interesting.
So that gives you dry powder. For professional investors,
they're not that bullish. You look at the data. And when the market, the S&P is up 6% year to date,
and it doesn't seem to want to go down, right? You look at the last week in june the last full week in june right you had a bombing
of iran on saturday market goes up on monday anyway then you end the week with
data which you could easily call stagflationary where pce comes in higher than you thought
but personal income comes in lower than you thought and the market goes up again anyway. And the entire week, the S&P is up like 3.4%. So if that's not resilience, I don't know what is. And I think you put that with,
yeah, get some Fed rate cuts. Maybe you get a shadow Fed president coming in that President
Trump picks, which it increasingly seems like he's going to. And so then investors will be front running those rate cuts. It's hard. And I think maybe that's where you're going with the
buyback question. But from a broader perspective, yeah, the more money that's chasing stocks,
whether it's through buybacks, money market funds that are up at $7.1 trillion now,
all-time record highs, which can be also used to buy stocks, the Fed as well.
I mean, this big, beautiful bill.
Every baby getting $1,000.
Exactly.
Which I think is good.
But then you also have GDP, the deficit's going to be running six to seven percent a year.
And at some point, that's going to blow up in our face.
But in the near in the near term, that's great for the stock market, too.
You're spending more money than you have coming in by a wide margin of what you should be.
And so all of those things are fantastic for the stock market.
Awesome. Yeah, no, I agree. I mean, I think, you know, that when I saw the thousand dollar accounts for babies, I sort of chuckled at it.
But I mean, net net, when you think about it, I mean, the house, U.S. household ownership of stocks has gone up pretty much hitting record highs every three years or so.
And now you have that as an accelerant as well, right? I mean,
that's just going to increase households exposed to U.S. stocks. And the more households that are
exposed to U.S. stocks, the more important the stock market becomes from a policymaking standpoint,
right? Yep, absolutely. The less tolerable dips become. So yeah, I'm in agreement with you that
all of this is just kind of pointing towards more liquidity. And, you know, it's hard to phrase that in a bearish way.
So Jaguars, you joined us up here.
Your hands up.
I'm sure you have a question for Dan.
So we'll go to Jag next.
Good afternoon, everybody.
Hi, Dan.
How's it going?
Good afternoon.
You're good.
Excellent.
It's been a while since I spoke with you right here in Spaces.
So I have a couple questions. The first one is, I bought Intel today for $23.64 per share. I'd like to hear, I want to see if you can talk some common sense to me as to why I'm making such a dumb decision.
Would love to hear it.
That's the first question.
I mean, yeah, I mean, sometimes you just get so far behind in technology that it's really hard to catch up.
And Intel stuck itself in a very, very, very bad position.
And then Pat Gelsinger came.
And he, you know, the way I always kind of joke about it is
Intel was already having problems competing with AMD
on processor design.
And then with TSMC on manufacturing.
And you could argue this was before AI came up,
surged to the forefront, but, you know,
it wasn't like NVIDIA was a bad competitor either,
even before the AI stuff and graphics.
And then they decided to pick a fight with TSMC in Foundry.
decided to pick a fight with TSMC in Foundry.
So you had a series of very big missteps.
I like the new CEO that came in.
I think he's terrific.
But Warren Buffett has a saying of when a great manager meets a horrible business,
the business will keep its reputation intact.
And, you know,
that's kind of the problem you've got with Intel right now.
And I do worry about
there's going to have to be some rationalization
on the spending front on AI at some point.
Because I believe there's 100% of pull forward
in chip demand for AI systems, by the way.
Let's not kid ourselves, right?
What's the first thing a country is doing
if they're worried about tariffs
driving up the cost of AI chips,
which are already hugely expensive?
And then secondarily,
if they're worried about export controls, they're going to rush out and buy as much of this AI chips as you
can. So if you believe there's an overabundance of semiconductor chips already being produced
relative to end demand, and then you look at the problems that Intel already has.
And by the way, I'm very bearish on the fourth quarter, as Evan and I started
this discussion with. I think the S&P could be down 10% to 20% sometime between Thanksgiving
and end of the year. So that obviously is coloring my view. And it's hard to say other
than the fact that Intel is so unloved. There's a really great reason to rush out and buy it other than if they can get something right.
It would be great.
And don't get me wrong.
I've looked at this multiple times over the last few years.
And I have owned it.
But it's just, you're asking for a lot.
I guess, let me put it this way.
The stock no longer responds to any bad news anymore.
Well, neither does the entire stock market.
It's true.
That's true.
But in this case specifically, right um they could throw a really bad quarter
or or pre-announce and the stock will probably just shrug it off right once it got down to the
low 20s and this happened in um late 2022 as well it just stopped responding and then the reason why
i bought it was not because it stopped responding to bad news. I bought it because my research is showing that the feedback on the 18A program continues to be favorable with the yields progressing to 55%, which is putting Intel on track to ramp the CPU unit called Panther Lake in late 2025.
Now, if they are able to do that, I think that there is a potential case to be made
that perhaps, perhaps some acceleration in late 2025.
And there you go.
We could get some multiple expansion along the way.
But anyway, we'll see.
Can I get to 30?
We'll see.
It's a start.
Maybe, maybe not. Yeah. I mean, we'll see. Can I get to 30? We'll see. It's a start. Maybe, maybe not.
Yeah, I mean, anything is possible.
I mean, I think the thing is, if you're a company in the U.S. and you say, well, TSMC, which is way ahead in manufacturing, has got fabs sitting in Arizona, why don't I use them?
That's the only tough part. Now, having said that, would I prefer
to have an Intel that can compete with TSMC? 100%. But you're asking companies to make decisions that
are against their best interest to some degree in the short term. And at the end of the day,
every company wants to see their stock go up. And so if you go to a subpar manufacturer for stuff, it makes it difficult.
But is there a massive tailwind behind a company like Intel in that ideally would everyone like
to use them as an alternative source of supply, a U.S. company instead of a Taiwanese company
in TSMC? Absolutely. The problem is that you've gotten so many false starts
of Intel fixing their manufacturing issues over the last three, four years.
They just seem to keep falling further and further behind. And so for me,
you might be 100% right. It's just for me, I've been following, I mean,
I don't, I've been following, I mean, I've been dealing with this stock since, you know, the mid 90s.
And it's, and I did actually a couple, I think a year or two ago, it became somewhat interesting when I thought, hey, they're going to get NVIDIA.
And they're going to get some of the big US guys to commit.
They're using, you know, they got amazon committing to using their packaging technology
and i'm like okay if they can get them for packaging maybe they can get them for foundry
and then it turns out they were still having manufacturing problems and then things fell
apart and i got off that horse thankfully um when i realized the margins were going to get
absolutely crushed and i posted that stuff on twitter i know know that's out there. And so that's why for me,
there's easier stocks for me to deal with.
And so you have a lot of stocks
sitting at 52-week highs
off this recent rebound.
Obviously, Intel's not one of them.
So you can either view that as an opportunity
or that tells you something.
I guess we'll find out.
Fair enough.
And one question.
Do you believe in quantum space?
And if no, then please, I would love to hear why not. And if you do, again, love to hear why.
So just any general thoughts on the space
because it's one of those areas in the market where there's a lot of momentum, but not a lot of believers.
I'd like to see, I'd like to hear what you think.
Yeah, no, I mean, I believe in quantum computing, but it's like a lot of things, right?
You know, the Bill Gates quote of technology is often overhyped near-term, but underhyped long-term.
And I feel like quantum's kind of in that category.
So I've looked at a lot of the companies in that space, but I'm a big believer that that's really expensive stuff to pull off.
right? Who made AI work? Well, this guy with a pretty big balance sheet, NVIDIA. Well,
Who made AI work?
Well, this guy with a pretty big balance sheet, NVIDIA.
you know, which guys have done well in terms of leveraging AI into the cloud? Well, it's Microsoft,
Google, Amazon. Those guys have pretty big balance sheets too. So I look at the quantum space and I
look at some of the things that have come out from some of the bigger players like Microsoft and
Google, and they have the balance sheets to make this work.
It doesn't mean that these smaller quantum-related companies that get all this press,
yes, they are 100% pure plays on it.
Yes, they're going to rebound like everything else when the market rips.
But we also, just to put it in perspective,
I think a lot of people remember the so-called innovation funds and how well they did in 2021 and all these speculative type stocks.
And then you go to 2022 or you look at where these innovation funds are today relative to where they were their peak in 2021.
And I feel like to some degree, like this is a repeat of what we saw in 2021.
And I feel like to some degree, like this is a repeat of what we saw in 2021.
I mean, this goes back to Evan's first thing of, you know, have you looked at, you know, these new ETFs coming out or Bitmine Immersion, you know, all of this stuff.
And I feel like you can throw quantum kind of into that where it's a, that eventually somebody is going to make that breakthrough because I've read enough papers that have come out that i go okay you know it looks like they're getting closer and
closer um but like it's still not here yet and i would bet on the bigger guys being the ones that
make it work just because it's so darn expensive
i appreciate you Jaguar
I see a Godfather hand up
I got a Montef hand up
I got a couple more questions
I want to slip this in there one more time
we're not following Dan
puts out a lot of great posts
he's pretty active on there
so if you're interested in anything that he's saying here
and you're not following him
you don't have notifications on for what he's doing
you are completely missing out
we appreciate Dan for coming on here.
And, you know, being a return guest on these spaces, we always love these hours.
Obviously, we got a bunch of hands up and people join in.
They're excited to ask questions, join to the conversations,
a lot of great stuff coming.
We appreciate you, Dan.
But Godfather, I see you're the next hand up.
Yeah, my question just goes back to the macro conversation quickly.
I'm sure you're like me in terms of a fundamental look at the indices.
You know, levels are effectively a function of earnings and multiples.
And there's been a lot more talk lately about, you know, we're seeing ROICs inflecting, you know, into the 20s.
And, you know, a lot of the efficiencies are being attributed to AI and
starting to see that pull through. Obviously, to the extent that margins inflect higher,
it should imply higher multiples. And I look at Goldman and some of these other houses,
other houses and, you know, aside from this coming quarter, which is thought to be the
and aside from this coming quarter, which is thought to be the trough,
trough, you know, you're seeing forward earnings accelerating, expectations accelerating basically
to all-time highs.
And that's, you know, against the backdrop where, you know, we've consistently seen surprises
to the upside, you know, even when the expectations were fairly low.
So, you know, I look at that, you know know i hear what you're saying about the consumer pull
forward but i'm also looking at uh it's not just consumer pull forward it's corporate pull forward
the entire u.s economy had a 38 increase in imports in q1 38 so and now apple like air shipped
600 tons of iPhones in advance.
I talked to companies, I mean, even Amazon, Andy Jassy was on an interview recently, and
he said, yeah, you know, there was a lot of pull forward of buying to get in front of
the tariffs.
So it's not just consumers.
It's corporations.
It's everybody.
And that's a massive distortion in whatever you think the health of the economy is, because
people are spending more than they normally would otherwise, for reasons that have nothing
to do with how the economy is doing.
And so that's the one caution I would have, which is why when I get data like this, and
I'll bring up another point and i i didn't
mention this earlier i don't think but you look at something like in you look at han high right
they produce all of the iphones pretty much for apple they produce all of the systems for nvidia
and revenues for the march quarter from Hanhai, and by the way,
Hanhai puts out monthly numbers, but revenues for Q1 were up 24% in the first quarter.
Hanhai released the month of June because they'd given you April and May already over the July
4th weekend, so nobody's really paying any attention. But you add all the numbers
together, that's gone to up 16%, from 24% in Q1 to 16% in Q2. If you look at the monthly numbers,
they have gone from up 26% in the month of April to up 12% in the month of May to up 10%
in the month of June. If you look at the press release that came out with that result,
they mentioned pull-in 11 times in their quarterly release.
In the March quarter, pull-in was mentioned eight times.
And in the December quarter, it was only mentioned five times.
So there's been a massive pull-in across everything.
And therefore, it's defensible to both see a rise in earnings expectations, as we're seeing in the bigger numbers, as well as to expect that, you know, structurally higher multiples are here to stay.
Yeah, no, from that, yeah, if that's the question, sorry, I mistook that.
But yes, that is 100% true. I'll tell you personally, I was thinking about hiring somebody, and now I'm using Gemini I don't even know how many times a day, 10 to 20 times a day.
And obviously, you have to check it like you would anybody who works for you.
But it's fantastic.
I wasn't doing that a year ago where the end.
We can maybe get you an intern, intern too if you guys want to comment
hello is thin you never know entering good AI good opportunity no I like I tried guys I like I like I
mean I mean because that's the great thing right you can put in exactly what questions you want
answered my son is launching a startup it uses AI technology and he uses Gemini all, I think he's using Gemini now because he keeps switching.
He's a computer science wiz who majored in AI before AI was cool when he graduated and, or before ChatGPT, I should say.
But, you know, and he uses, he's using that to help get code, as he says.
It's a, it's like a, you know, a brand new college graduate maybe that doesn't know much,
and so the code kind of sucks. But he goes in there, and then he cleans it up just like he
would if he hired a college graduate. And then the hope is that that at some point gets better.
And so I think to your question, you're 100% right. Margins are going up across the board because people are going to substitute
entry-level white-collar workers with a seasoned person that's using AI. Like, I'm a big believer
that AI is not going to take your job. A person who knows how to use AI is going to take your job.
And it's going to happen in the white collar area.
And I mean, I'm in the process
for our firm,
for Niles Invest, sorry.
I'm in the process for my firm
of getting a Blackwell server
because of their stuff I'm running
because I've got different ways
I look at the market.
Obviously, fundamentals, the big one,
but because there are certain algorithms and things that I use that, um, to some of the excellent questions before, like,
you know, what do you think about corporate buybacks or, you know, money flows, et cetera.
Like, those are all things that you stick an AI on, which are things that I look at all the time
and it can aggregate all this stuff for you so i think absolutely to your point are margins
going to go up yes now the multiple i think is a obviously that'll help multiples to some degree
but the bigger thing is if you kind of think about it you go well did the internet help
with companies efficiently able to sell 100 did the nasdaq go down 78 percent over two and a half years 100 percent why did
that happen because it was overbuilt or pull forward in demand however you want to look at
it right and people forget the fed stimulated because they were worried about this thing called
the y2k bug and so they actually stuffed money into the market to kind of offset in case there
was a problem turned out there wasn't then they pulled the money out into the market to kind of offset in case there was a problem.
Turned out there wasn't.
Then they pulled the money out of the market and the stock market.
Obviously, that didn't help either.
So I think you have to look at both sides of it.
Are the corporate margins going to improve?
Absolutely.
But could you have a problem on the revenue side?
Absolutely. And so those are the two things I try to balance. But in the near term, like,
I don't want to mislead people. I think, you know, things are going to look pretty good until we get
to Thanksgiving, at which point I'm going to be incredibly bearish because I'm already seeing
things that I didn't expect to see this early on. And I'm going to be very curious to see how,
because Amazon will give you some data. I
mean, they don't give you anything consistent, but they'll give you something probably after
Prime Day, this Prime Day event for the next four days is over. So you'll get something early next
week. And a lot of times it's very hard to compare it versus the year ago. And obviously they're
going to put it in the best light they can, but there may be one or two hard numbers and more companies coming out with
data.
I will say the,
the first four hours is never,
I would never put my whole life on the first four hours or something,
but I've never seen an Amazon prime day headline less than the last year.
You know,
I've never seen that one where they have to try and maybe pull an apple
where if you take out the call, this expense is the same as last year, you know? I've never seen that one where they have to try and maybe pull an apple where if you take out
the, this expense, it's the same
as last year. Right, right.
And they've moved it from one day
to two days before, and I don't remember seeing
this headline when they did that.
So that's why, like, you know,
I mean,
that's why for me,
am trying to be very level-headed because the multiples give you
very little room to maneuver.
But the stocks are telling you every dip's a buying opportunity.
And for right now, I mean, if you can bomb Iran and have the market go up 3.4% the following
week, it pretty much tells you positioning.
And I think most rational institutional investors
have huge problems because you go,
well, this looks bad with tariffs coming in
and inflation in the back portion of the year
and all the, you know, the tariffs are on,
the tariffs are off, the tariffs are back on.
No, now they're getting delayed to August 1st. Oh, no, no, we're back in, you know, the tariffs are on, the tariffs are off, the tariffs are back on. No, now they're getting delayed to August 1st.
Oh, no, no, we're back in, you know, like all of this stuff, like how can that be possibly
good?
And the market keeps going higher.
And so I think institutional investors are, the last data I saw is they've gone from being
under exposed to being average exposed.
But I know how guys in my profession work.
And, you know, mutual fund side, hedge fund side, doesn't matter.
You're underperforming you start to get antsy and we're getting you know as the year kind of ticks by
you're going oh my god like I'm going to get judged and I kind of missed the rally and so now
you get into chasing well what can give me that performance and you know so you're you're always
buying the dip because the market just won't go down. So this is going to be a really fun year, I think.
It's going to be volatile as heck, is my belief.
But lots of
interesting things between now and
trend.
I want to ask you, I got one or two questions here
as we're coming toward the end. What do you do
between now and that
Thanksgiving area?
You pulled out cash at the start of the year.
Maybe there's a way of a treasure.
I don't know.
Are you looking for these different instruments?
What do you do between now and that kind of Thanksgiving thing?
Obviously, it might change a little bit closer.
Well, I think the, you know, one of the prior questions was like, well, Intel doesn't seem to go down on bad news.
And I've said before, it's never the news that matters. It's how the market reacts
to that news that matters. And so that's what I'm going to be really watching during earnings season
because I think companies are going to have blowout numbers for one simple reason, right?
to $107 in Q1.
40% of S&P revenues
is from international.
The U.S. dollar is at $97 right now.
So if you have 10% benefit
to 40% of your revenues,
how are you going to have bad quarters?
how are you going to have bad quarters?
They should all be great.
They should all be great.
But when does the first company that puts up a huge number,
the stock get hit?
And so that might be telling you,
because I've seen this with Apple, right?
You're seeing this recently where guys are coming out,
they're raising Apple forecasts,
but they're cutting the forward numbers and saying,
yeah, this is pull forward. This isn't, you know, we're going to pay for this later.
I think you've got three sell ratings on Apple now, which is highly unusual.
The stock hasn't really responded to that, right? It's gone up.
But like Apple puts up a great number. I think they're going to put up a great number.
They may guide really well just because of the dollar,
because Apple gets 60% of their revenues internationally.
And so how's that not going to be good for them?
But does the stock maybe go down anyway,
because people start to discount the fact that, yeah, this isn't real demand, right?
Or like what you said right how does
amazon react early next week if data comes out and to your point right like they never make the press
release sound bad you've never heard about down year over year it's been maybe less positive than
people expected but it's never been down as far as i can remember and how do people start to react
to that right because Amazon wasn't
really down that much today right like it's noise you wouldn't even know that there's anything going
on with it right Google's down like 1.4% today Amazon's down 1.8 like you know I mean you got
some some of them up some of them down like it's all over the place but it's not like it's so
dramatically getting hit that you go oh my god like people are really starting to discount it.
And I'm sure you'll have guys come out and defend it tomorrow.
So that's really what I'm watching, Evan.
I mean, I know it's not the greatest answer, but it's I look at the actual raw data, what I think should be a rational reaction.
And then what does the market actually do to that?
And then that's my guess will be that that's when you maybe have an issue but
right now you're just not seeing it at all so i think you look at the glass is half full and you
go from there i want to ask you the next question is we're talking about this getting into the
thanksgiving in q4 what are you looking to do like if that scenario is playing out if how you think this happens
you know are you looking you think for uh i guess my kind of question here is what are your
expectations in this model for 2026 but is it a sideways year is it is it yeah i don't
i don't think about out to a year.
I look at two things.
I go, what's right in front of me?
And then I go, is there some big change?
Is there some big problem that I think is different than the trend I'm currently in?
And the unfortunate answer is yes, I think there is.
And so what I'll do is what I always do, which is all this stuff I own will be either sold or shorted as we get closer to Thanksgiving.
And if you sell physical goods in particular, think smartphones or, you know, whatever, electric vehicles, you pick it.
Like those are the things that are most likely to happen. Now, is, you know, a company that's selling services-based stuff, will that
be impacted? No. I mean, you know, Meta doesn't sell physical goods. I mean, I guess they sell
Ray-Bans, but you know what I mean, or Google. It doesn't really impact them.
For companies like Amazon or Apple or Tesla, as you get close to that Thanksgiving to Christmas period, when there's usually a big surge in demand for the holidays, that's the time period
you get aggressive. Because I think people forget, right?
In 2021, the Magnificent Seven were up 50%, their stocks, on average during 2021.
But they went down 46% in 2022.
So, you know, and if you do the math and you say, oh, well, if a stock's up 50 percent and it's down 50 percent, well, you know, like you must be at even.
No, you're not even. You're down 25 percent.
Like, that's just the way the math works, which is why protecting against the downside for me has always been what I'm really focused on.
I think versus some, you know, and there's no right way, right? A lot of people have gotten very, were saying, hey, you know, 10 years from now, like this
thing's going to be worth $10 trillion or whatever.
But like, I've also lived through a 102.
And I am telling you, there is a massive amount of pull forward, whether it's an AI or anything
else.
But we're going to have to see some of those cracks starting to show up.
That's why I look at Han Hai and I go, well,
I know who two of their big customers are. It's Apple and NVIDIA.
Like why are the monthly numbers doing this and where's the problem?
And so that's like,
I'm not thinking of 2026 right now.
I'm just trying to think about what happens between now and to Thanksgiving
and then Thanksgiving through year end.
And those are the two chunks I'm thinking about.
And then this whole thing about tariffs being transitory,
which the Fed has brought up again in terms of how it impacts inflation,
that word gives me the hives.
Because if you look at any of my interviews during 2021, I was like, there's no way this inflation is transitory.
And as it turned out, it wasn't.
I actually think this one might be.
But if the Fed's cutting, I think that's just juice for the market.
so anyway
So anyway.
we've played a little game on the spaces over the last week or two
of how many rate cuts we think we're going to get in 2025
now obviously no one actually knows we've had a pretty decent distribution
I think it was like three or four at three three or four at two
and like two or three at one is where we're at I don't think anyone said zero yet
I don't know if you have anything you want to throw out there.
Obviously nothing's getting held to you.
And then just in general,
we're towards the top of the hour.
If there's,
you know,
we always appreciate you joining in.
If there's anything you want to leave people with any kind of extra words,
anything like that.
We appreciate you joining.
Yeah.
I think the federal probably cut too.
I think they honestly should cut zero,
but you know,
but I think the pressure is on for them to cut
two.
And Jerome Powell knows he's not going to be there as Fed chairman next year.
And so I think if he can go out on a high note, the economy didn't go into a recession
under his watch.
He managed through his recession.
People will forget about the fact that he missed the worst inflation in 40 years and
said it was transitory to boot.
Right. It's not like he missed by a little. He missed by a gargantuan amount.
And so I think the way to say that is you cut. And I think that's what he's going to do.
I think the words I would leave people with is I think Charles Darwin had the best advice for investors of all time.
for investors of all time.
He said, it's not the fastest,
it's not the smartest of the species that survives
nor the strongest.
It's the one most adaptable to change.
And that I think is the key,
is that like the data is coming in,
it's changing pretty quickly
and you shouldn't have any preset thoughts
on any stock that you own.
Because as we saw in the transition from inflation is transitory in 21,
MAG7 is up 50% to 2022. It's not. MAG7, you know, Magnificent 7 is down 46%.
You need to be adaptable to change because these multiples are even higher
than they were back then and so if things change for the worse it could be really ugly so you know
put the charles darwin quote up on your on your screens and and live by that that's what i try to
do and i think that's the one thought i would leave you with is don't have any preset thoughts be adaptable to change.
We appreciate you, Dan.
Always great having you on the spaces and definitely will be exciting to have you back on again soon.
Listen, it won't be exciting if we have you on around Thanksgiving and we're down like 30%, but it will definitely be a good I told you so moment.
And we'll have some good conversations yeah well you know and as i said i'm going to be adaptable to
change so you know maybe to that uh earlier question maybe the roi is so amazing maybe there
wasn't as much full forward somehow i don't know how that's possible like who knows right like
you just watch it we see all what these companies sound like. And I always appreciate, it's always amazing, Evan,
how fast an hour goes when I'm getting smart questions from people like you
and the other people on the spaces.
So I appreciate you having me on.
We appreciate you, Dan.
If everyone is not following Dan, any other speakers,
you guys are completely missing out.
A lot of great content coming.
All right, take care. Bye-bye.
Have a great one thank you sir
i know m told me earlier he was like listen i got some chores i gotta do today so we don't
have a hard stop but i will let the man go in and do some um some chores at some point
i see you got a hand up i don't know if that was for um for dan before he left and I missed it. No, no, no.
I was actually going to make a comment on the Intel conversation when Dan was here, but it didn't matter, which is why I put my hand down and raised it again.
But I'll make that comment here.
Look, Jaguar, I also think that it is close enough to a turn where, you know,
a long-term position is makes sense so i have
a starter position too but i will say this you know to to dan's point it didn't uh intel's
problems didn't begin four or five years ago it began 13 years 13 years ago now 10 nanometer launch
13 years ago now, 10 nanometer launch was botched.
And that was 2000.
It was supposed to be launched 2012.
It launched 2016.
Well, 2013, 14 would have probably been more likely.
2012, 13 was too aggressive.
Anyway, it was launched 2016.
They had tons of problems.
And then they announced that they were just going to go
ahead you know just stabilize it and concentrate on seven which didn't launch you know again in
three years as they planned but it took seven years to launch so this problem has been going
on for a dozen years you know that that leaves a lot of you know really terrible uh you know history and uh you know
backlash with customers potential customers so uh while i agree with you i think it is
close enough to a point where it could be exciting i mean it is still Intel. It's like, you know, you need that, that Boeing like change in outlook all together,
all at once for things to, you know,
things to really turn around.
And I think it's going to,
it might be here soon enough,
but my best guess is it's going to take a little bit of time before,
you know, before we,
we know that Intel has stabilized their production.
They're starting to line up customers.
Yeah, I understand.
I've studied this company in extensive amount of detail.
And I think you give a good reference to Boeing.
And yeah, I think you give a good reference to Boeing.
And just talking about Boeing, there came a time when the stock got down to about $1.20, $1.25,
that it just simply stopped responding to any bad news.
The company could put out a quarter with a $5 billion loss in a single quarter.
The stock would not move.
You know, Intel has 31 analysts following the stock. Only one has buy rating. 26 have hold rating and 4 have a sell rating on the stock.
the street for intel is nine percent below where the stock is trading right now the one loan
analyst out of 31 that have a buy rating on the stock does not see this stock going above 28.
my point is nobody wants to own this thing at all and so and by the way i didn't i didn't i didn't
talk about this because i don't want to take a lot of air time, and I know everybody had questions for Dan Niles.
But since September last year, there have been tremendous number of reporting on Wall Street Journal, Bloomberg,
and a couple other spots about potential M&A scenario or maybe even an activist positioning unfolding for Intel.
positioning unfolding for Intel. Remember, there was one point in September last year when Qualcomm
officially was engaging in discussions with Intel. But then Qualcomm put out a press release
just before elections in which they specifically stated that we will revisit again after elections.
revisit again after elections. And the whole deal just basically died. So we don't know. But today,
I saw extremely high amount of leap call buying in Intel today. I mean, take a look at the action
that was perking in March 25, I think it was March 24, no, March 24 strike call options.
I think it was March 24 strike call options.
18,000 contracts went off today, bought to open approximately $8 million in bullish bet.
And it wasn't just in March next year.
They were buying January, they were buying August, September, October 28 calls.
Somebody put $1.2 million on the line on October 28 calls today in intel as well so uh there is a little
bit of a hope here that uh that uh the you know the panther lake chip for cpu is going to reignite
growth by the end of this year and the stock is so de-risked that nobody wants to own this, everybody is on the sideline, who knows?
Maybe a small and multiple expansion,
maybe a sequential improvement in revenues,
even just a little bit,
could just be good enough to send this thing 30% higher
and nobody would have noticed.
And by the way, Boeing still has all of the,
going back to Boeing example as an analogy,
it has still all of the same problems, right?
But that stock stopped responding when it got down to 120 multiple times to any bad news.
Today, it's at 218.
So in scheme of things, nobody cares about Boeing, but Boeing from the very bottomed is up almost 100%.
It's up 90 90 off that bottom you know
some some context is necessary where you are getting in what price you're getting in and how
much reference points you have there to just keep hard stops and just let it ride and see if it
you know turns into something big jaguar can i ask you though I want I want your thoughts on you know what Dan
was talking about about the the second half you know really Q4 being an area of concern for you
too? Yeah I'm actually you know I I have high respect for Dan Niles. And that's why when you, you know, when you asked me to join, I immediately saw Dan Niles is on.
So I joined.
I have high respect for the person, especially his tech views.
And that's why I always like to ask him all these tech questions and everything like quantum.
everything like quantum but I'll say this I was a little bit surprised by his
negative views on the broader economy now I do agree there's a significant
amount to pull forward in demand because everybody knew before elections that
tariff will come into the picture right I mean Trump was coming to power
tariff that means was bound to happen. So everybody
started to front run all of that. And I think that has juiced a lot of the economic data points as
well. But I'm also reading the tape here in the market, and I'm trying to figure out why are stocks
behaving the way they are, and how many of them are actually could be coming out of a multiple years of recessionary period, in fact, where they're actually not in the consensus view.
I'll give you a couple examples. If you go back to last week, first time in many, many months, we actually saw the global manufacturing output turn positive again.
First time. I mean, July 1st is when that data came out. The global manufacturing PMI
from JP Morgan went from contraction to expansion. And then take a look at what happened that day in
the stock market. There was a big boost of the cyclical book just sharply, violently
shifting higher while everything was moving lower. You saw transportation got bit up.
You saw retail sector got bit up. You saw industrial, XLI is making a new 52 week high.
You know, these are the very economically sensitive areas of the
market that can sniff out if there was going to be a major dislocation well in advance and they
start responding with multiple expansion. You don't see these stocks actually go make new 52-week
high. I'll give you another specific example over here.ing sector in the united states has been in a freight
recession for two and a half years and now you pull up the charts five years six years seven
year charts of names like jb hunt odfl night transportation knx and you know what i'm seeing
i'm seeing these stocks actually starting to run from here. They're
actually sitting at their four-year lows. They have already been in freight recession for two,
two and a half years. And so I expect next week, J.B. Hunt will report earnings, J.B. H.T. I expect
to see actually a sequentially better quarter and better commentary from the company as well.
And I would not be surprised. These stocks easily put up 20% gain from here
and nobody would even notice.
So my point is this.
I think a lot of the times what happens in this discussion,
this is something in the making of the ever-changing
composition of the index.
Long gone the days.
You know, if you go back...
You were cutting out a little there.
Might have been just for me.
Sorry.
We lost him right now.
No, we got...
Yeah, I think we got you back now.
That was a little better.
Let me know that I can trouble
and come back to that.
But I was just going to say
at the end of this,
long gone the days
when NASDAQ represented
or tech sector broadly represented
a much smaller piece of total pie.
Right? Not represent 35 percent if you include it's a very large
and i think that
yeah jaguar it's not just not being nice to you we'll hopefully get you back up here uh we don't
we don't need to make our days more stressful but uh godfather i see you got your hand up
and i want to there was one point that he was talking about as well and i wanted to ask about
stock talk and then we'll see where yeah i just uh if he's gonna come off and come back on i would
i just wanted to to say that i i agree with him with respect to the consumer. While I appreciate
Dan's comments with respect to pull forward, and I do think that that's real, on the flip side,
look at the most recent jobs report. It all goes back to how does the consumer feel? And as long
as they're employed, as long as they have capital that will spend, we know that. The job reports
was strong. We actually saw a material inflection higher in consumer confidence at the last number. So it
went from 52.2 to 60.5. I mean, that's absolutely massive. When we see that consumer sentiment
inflect higher, right at the same time when you've got some of the other big cost items falling,
like oil prices, for example, and then, you know,
inflation that, you know, may or may not be benign. I mean, we may see a bit of a tariff uptick here
in the summer. But again, I think that that's more than offset by, you know, stock market wealth
effect. And, you know, Stock Talk made some comments about how that's broadening out, you know,
beyond just the high wealth consumers or high wealth households as well.
So, yeah, I think that you wrap that into the tailwinds to the U.S. dollar that Dan
Nell's brought up.
And I actually think it's a relatively positive picture for consumer stocks.
And you could throw in what Besson's talking about doing to the supplement or leverage ratio for the regional banks as well. And, you know, if all of that
means, along with a potential rate cut, that access to capital and lower interest rates are
going to, you know, add some further fuel to that fire. Yeah, I think the setup is actually quite
good. And, you know, that could very much offset what would be seen by the market as kind of a
one-time effect uh as a pull through so that was just a comment i wanted to make on the other side
of that we do have jaguar back up here in godfather i will come back to you again if you
if you had more you want to say to that but jaguar we uh hopefully yeah i don't know how much uh
how much i said there how much you guys heard but um on the macro side, I'll just keep it brief.
I was simply saying that maybe it is pulled forward and we'll find out how much of it in three, six months from now.
But the data is accelerating.
I mean, the PMI manufacturing output data that came out last week was actually highly encouraging.
And I saw, you know, the output in terms of new orders also accelerated, right?
And so these are leading metrics within the manufacturing data.
And I think if you look closely at XLI, the industrial sector or transportation sector, I think they're all starting to respond to that.
The cyclical groups are starting to respond very, very strongly.
You know, I was going to ask him one simple question, but I knew that it would have taken much longer, which is that, you know, we're going gonna have potentially a sin
which we're gonna see interest rate lower bound now whether it comes with continued
cracks in the labor market or not is yet to be seen that's the wild card we saw one bad
print on ADP which didn't really turn into anything in NFP.
That was left. In a scenario in which you have interest rates southbound, right?
And do we see the cyclical groups actually wake up, such as housing, which has been in a recession for the past two, two and a half years?
like such as housing, which has been in a recession for the past two, two and a half years?
Do we see? Because these are the leadership groups that are waiting to just wake up and run.
Transportation is another one. Freight recession that I just spoke about. Many people focus on
only the large tech areas of the market, but then why is XLI sitting at all-time record high
and continues to grind higher. Why is transportation sector
waking up? Let's see what JB Hunt, JBHT reports next week when they post earnings. And that's one
of the leading companies in the trucking sector and whether they report sequential improvement
and how they post guidance. These are the questions that are in my mind, because I guess to boil all this down, the question really is, can the P and PE surprise to the upside?
I understand valuations are very high, but can the P and the PE surprise to the upside with potential green shoots that I'm seeing in the manufacturing output in the country?
That's all I wanted to say. So I'll
just take a break here, but I'll stick around here. So come back to me in a minute. Later
on, we can discuss some stocks. I appreciate you, Jaguar. Godfather, I know you had your
hand up there. We got something in. Was there anything else you wanted to talk about? No,
I'm good. Thank you. Appreciate you. Actually, I i'm gonna come right back over to you monstead
stock talk one thing that dan said towards the end was you know about being nimble and you know
he made this he thinks that this is going to happen but he's not putting his entire thing
on it that if if what he thinks you know the what he would expect to see for this scenario to be
right isn't happening.
He's willing to change his thing, which is definitely something you talked a lot about on here as well.
And when he was saying that, it made me think I've heard that on these spaces a little bit.
Yeah, I mean.
Are you going to post the Darwin quote?
Yeah, I mean, look, market opinions aren't meant to be static.
You know, there's like a lot of, this is a very common thing on Twitter. And I don't don't know why i guess because there's a lot of market noobs on twitter but there's this propensity to like
you know somebody likes a stock they trade the stock three years later the stock is lower
and somebody's like didn't you like this stock back in 2021 or you know somebody's bullish and
the market's going up and up trending and then
the market breaks down and that person flips bearish and people are like weren't you a bull
three weeks ago like that kind of stuff is super common on twitter and it makes me laugh because
your opinions on the market are not supposed to be static like that they're supposed to
are not supposed to be static.
Like they're supposed to be influenced
by the data in front of you,
the charts, the earnings,
the, you know, thematic opportunities,
all of these things that we talk about
in these spaces every day.
So yeah, you have to be nimble
and you have to be willing to change your mind.
And, you know, Dan was talking about
how he's bearish on Q4.
I'm sure if Q4 rolls around
and earnings are strong
and liquidity is strong and the charts look great
and the capital flows are good,
I'm sure he will change his team.
And on the contrary, if that isn't the case
and markets are weak going into Q4,
then he'll be like, okay, my thinking was right.
And he'll position himself for it.
But that's really all that markets are.
And it varies depending on how.
If he was if he was a discord influencer, he would come on and tell everyone, fuck off all my haters.
You thought.
Yeah.
If you'd come on, he'd be like, whoa, what did I tell you?
No, you're right.
But yeah, I mean, it just depends on your lens.
Like it depends on if you are some people out there are index traders.
Some people out there, you traders, some people out there,
you know, only buy and sell ETFs. Some people out there only trade and invest in individual stocks
like I do and like Jaguar mostly does and Godfather and a lot of other people on the panel.
So it just depends on the lens you have in the market. Some people have a more micro lens,
some people have a more macro lens. And based on that, you have to, you know, intake data accordingly. If, you know, if you are taking a
very broad based approach to markets, you do have to worry a little bit more about the narratives
that are at play, the happenings in the macro, because the market broadly can be impacted by
those things. But on the other hand, if you're a micro person
like I am, where most of your portfolio is in individual stocks and you pick and choose those
stocks and get in and out of them, if you're in that sort of boat, then you need to be a little
bit less concerned with it. And you need to be more focused on the individual performance of
those stocks, the individual charts of those stocks, the individual earnings of those stocks
that you own. So that's, to me, the simplest way to put it. And yeah, flexibility, like Dan noted,
and the ability to change your mind is very important, especially on a year like this,
where we have tons of volatility. Even if you go back to years like 2022, that was important to
be on your toes and not stay in stuff for too long. There were some insane market rebounds in 2022
that were tradable, but they weren't holdable.
And so you had to know how to differentiate that.
And you had to be a very good trader
to keep your head above water in 2022.
And in my view, in the front half of the year,
to be outperforming the market significantly,
you had to be a very good trader on this year
because we had a very, very brutal sell off from February to April and then a very, very magnificent
rebound off the lows.
And in order to have captured alpha over that four to five month period, you have to know
how to navigate markets and you have to know how to pick the right stocks and you have
to know how to when to sell stocks and when to to get out of them as well.
So, yeah, it's been a
a little bit more difficult market than last year and the year before but you know if you
pick the right spots um there's still plenty of alpha to be generated so i love dan's commentary
i mostly agreed with everything he said except for i guess my only place i pushed back on him
was the idea that um you know i do think that these sort of thematics
in the market quantum nuclear um have this sustained multi-year relevancy for a reason
you know the reason that they've been held holding up so well for multiple years so yeah that that to
me that's the only kind of i don't push back but that's the only um i guess slight difference of
opinion i had from him,
which is that I think, you know, there's a reason
there's so much concentration on these themes.
I know Monitiv has his hand up, but imagine a scenario, Stock Talk,
where tomorrow you get a news that Microsoft or Amazon
is buying a 5% or 10% stake in IonQ.
There you go.
You just got the validation of the industry,
and now they have the cash cow behind it.
This is what he was speaking about, right?
Dan was speaking about they have the balance sheet power, right?
NVIDIA had a big U-turn.
In January, Jensen Huang came out telling everybody
he's 15 to 30 years away, something like this.
And then suddenly in April, he had a complete shift all of a sudden.
What if he buys one of these companies or if he takes a stake in one of them?
By the way, NVIDIA is a very aggressive acquirer in case people haven't noticed.
NVIDIA is always acquiring small players around it all the time, making these acquisitions, tucking acquisitions. So just putting it out there. I believe in this space for a very long time. I'm on record for saying it.
I just think eventually everybody will come around it.
Sorry for interjecting those thoughts.
Manitiv, go ahead.
No, no. I mean, I could have waited. It's not a problem.
So, I think that's a good question.
I think that's a good question.
I think that's a good question. So, Manitiv, go ahead.
No, no.
I mean, I could have waited.
It's not a problem.
So, what I heard Dan say on that, right?
A few things.
I'll start with this.
So, what I heard Dan say, maybe I heard it incorrectly, was that it's going to take a lot of resources to solve this problem.
And I don't see anything wrong with that claim.
This is not going to come cheap. It's certainly not going to come from companies with a few dozen or even 100, 200 researchers
trying to engineer a complete breakthrough in something that doesn't exist today.
So it's going to take
a lot of resources will there be industry consolidation and something very interesting
in a small company that gets picked up by a larger company yeah but but it doesn't change
the point that this is going to take tens of hundreds of if not hundreds of billions over many years to get to, you know, a working commercially viable quantum computer
that's, you know, that can be scaled and manufactured, you know, at a price.
The other point, Jaguar, I'll push back a little bit.
a little bit you talked about xli uh you know going to all-time highs going to all-time highs
You talked about XLI, you know, going to all-time highs.
just means that the you know the current and the immediate future is positive it doesn't mean
anything beyond you know three four five month horizon i think that's still something that needs
to be clarified in the sense that you know we're going to get
earnings earnings should look very good and i i brought that up you know at the beginning of this
call with uh with dan the economy is not broken yet you know problems as much as they are are
being managed and handled well enough by most companies, if not all.
So looking back, earnings should be fine.
Guidance is a different story.
We don't know that yet.
Guidance was okay last quarter, but they added a lot of notes under caution, much more so
than normal.
We have to see whether that changes again.
Again, if we get one more quarter of good guidance, then your point is more valid, but it is valid for another quarter or maybe two quarters.
It still doesn't tell us anything about the period Dan is talking about, which is why he said he's going to just stay in his positions until things change.
And then he's going to flip either sell them or go short if if if
the data supports it right and and i don't see i don't see where you know that's contestable i i
think that makes complete sense the if you look at the numbers for what is being projected right
roughly four percent just under four percent earnings i mean revenue growth 3.7
percent to be accurate for now for for for this uh you know for for q2 and uh six point uh six
percent roughly six point something percent earnings growth tells you compared to where we have been that we are struggling either
margins are not going to grow as much as before or the companies are going to give up a little
bit of margin and take some of the hit from tariffs and only pass on part of it or they are not going to see growth in many facets or
multiple facets or all facets as much as they've seen before we're still growing but at a slower
rate that's what the you know the consensus numbers indicate whether we beat them or not
that remains to be seen if you look at the same thing out quarters, again, early days, but it's the same thing.
We're looking at mid to slightly higher single digit earnings growth and on a 3% to 4% revenue growth.
three to four percent revenue growth that just tells me that there's going to be a struggle to
keep up earnings momentum more so than the last three years and that's not a good sign whether
it changes yeah we'll see we'll wait and see but i still think that that note of caution into the
out quarters whatever the reason be right whether it's uh you know pull forward on on goods or you
know broken trade policies or whatever else abc anything new that we've not had so far it is still
a risk worth considering and the consensus among analysts seems to be the case because you can see that in the numbers
the only thing i will add to that and i understand all this but what my point about xli was
not just a movement we have seen in the past three months or so pull up the chart of 10-year in XLI. It still has not taken out its 2021 high.
Companies like Honeywell, it's been flat for five years, since 2021. Companies like, you can just
go down the list. A lot of these industrials in this. UNP, Union Pacific, the largest publicly traded railroad company,
the stock has been flat for five years.
Along with it, you can pull any railroad,
any trucking company flat.
The entire healthcare sector, XLV,
it still has not broken out,
has not taken out its 2021 high.
Flat.
And we talk about multiples multiples the deals in these
large-cap pharmaceutical companies are at obscene levels single-digit pe's across the board right
i mean from bristol myers to amgen and you name it flat for five years xlb materials chemicals
still has not broken out, flat for five years.
From Dow Chemical to anything that we look at, all of these cyclical baskets.
Housing has been in a recession for two and a half years with permits negative.
No breakout there at all.
Freight has been in recession for two straight years with erosion of pricing power and all of that.
XME, metals and miners, flat for four, four and a half years.
No breakout, nothing above 2021 yet.
The entire thing in the past two years has been driven by AI, which has gone basically
to the large cap stocks.
And I think that has confounded people's view as to how big of a market it really is behind all of this that actually has yet to participate in any sort of strong momentum and breakouts.
You know, perhaps these are all signs that coming out of the Liberation Day crash in April, we have seen broadening of the market, something that we were missing terribly in 2023 and 2024.
And by the way, back in 2017 also, and 2018 as well, in Trump's first presidency, first term,
we saw a significant broadening of the market, where the participation from all these cyclical
groups was widespread. I don't know, maybe people are noticing this or not, but Russell has been
performing far, far better. The mid-caps have been performing far, far better than the large-cap
tech stocks in the past several months, especially since coming out of the Liberation Day.
But many people don't trade the industrials, the Honeywells, and many of the other things because
everybody is just, you know, stuck to the screen looking at Amazon or Apple or Google or NVIDIA charts all day, every day, because they have become so heavyweight in the market. PMI finally inflected positively with new orders and the manufacturing output and all of those
accelerating sequentially and going back into expansion, right? Maybe this is a precursor to
all of these baskets that I just talked about finally to play catch up and break out with
continued broadening in all of this. Maybe that's what XLI is saying. Maybe that's what, I mean, we'll find out if all
these trucking stocks that I just named, right, IYT components from railroads to trucking companies,
if they all start to post earnings to start to break out next week, starting with JBHT next week,
right, there's another clue. So look, there's far bigger market of stocks than just tech, tech, tech all the time.
And that's what I'm trying to say over here, where there's a little bit of an observation of green shoots in the economy coming out from the Liberation Day market crash in April.
in April, and perhaps, perhaps, I could be wrong, it is a precursor to much broader market setup
than just tech basket all the time. And maybe this is where, by the way, this is where the
difficulty among investors also come in, because if everybody is only focused on tech, you're
missing out many other puzzles inside this market that are far more sensitive
to the economy that are actually performing very, very well.
Even today, when the broader index was actually down, flat to slightly down, you had all these
trucking companies up 2-3%.
You had railroad companies performing.
You have Honeywell gunning for a big breakout here on a multi-year chart.
And the list
just goes on and on and on um can i ask you dude uh honeywell has been a name that i've been in for
a little bit i've been watching if you mentioned it once or twice yeah look up the five year six
year chart of honeywell you see what i'm talking about right what do you think of the breakup
i mean why can't this break out through right from here, 240, and go to 300?
Let's say by the end of the year or by early next year.
And this is a big component of Dow.
This is a big component, even the industrial complex within the S&P.
You'll find examples like these that have been left dead and flat for a very long period of time.
Why do you like...
One of the things Honeywell is doing is they're splitting their company into three parts.
I think they're planning to do a lot of it in the second half of the next year.
It was one of the reasons I was kind of coming around it.
Obviously, with GE, it's gone pretty well.
Some of these other companies, it's gone okay, maybe not as good.
But that's kind of one of the things that made me start to dig into Honeywell.
Home Depot peaked around $425 per share in 2021.
2021, today the stock trades at $367.
It's still about 15% below where it was at its peak in 2021.
Now imagine if these rates start to come down.
This has a market capitalization of only $367 billion.
Imagine if this wakes up and along with it, you start to see permit activity in the U.S. starts to pick up.
The building permit activity.
And along with that, which has been in a recession for two and a half years,
imagine if the mortgage rates come down to 5% or less or 4% or less with federal, you know,
Powell basically being forced out and somebody else replacing him who's going to be most likely a big dove. Again, there's sections in this market that have not done anything for years but i think where this discussion gets lost is because
the heavyweight tech that has basically masked all of this underneath so something just to be
mindful of green shoots in the economy and you have a very large section of the basket of the
market that is ready to wake up and run.
Like Warby Parker.
No, I'm just kidding.
But I do like Warby Parker here a lot.
You looked at Warby, Jay War?
We covered this a long time ago.
I honestly have not looked at it in a long time.
We traded this a little bit.
I'm talking more than a year ago. So know i i at this point i don't know anything
about it because i haven't even studied it i don't know if you know but they're doing the google ai
glasses oh that's interesting i don't know if you heard didn't hear about that but yeah it's a 2.7
billion market cap and then today i'm sure you saw the news that met is making a 3.5 billion
dollar investment in deluxotica um i mean you're a chart guy i know
but if you look up pull up the daily chart on it pretty beautiful daily chart popped over the 200
day back at end of may that's when i got long around 20 bucks so about 10 on the position
not as sexy as my other stocks but it does have a real nice daily consolidation pretty much spent all of june um consolidating
in this 21 to 22 range and you got a decent candle today pushing off the 21 ema i don't
look sexy to me and uh yeah i mean today's news i think probably leads to a little bit of a
needed re-rate in this thing i mean look luxotica obviously is a much much
bigger company but i mean i don't know what today's meta investment implies for their valuation but i
imagine it's over 200 billion um so yeah i don't know warby's interesting to me here i remain long
on that one i haven't sold any um but i do think it's setting up pretty nicely here pretty beautiful
consolidation the last like two weeks or so.
Yeah, I'll tell you what.
The one thing that has completely surprised me, it's a little bit off topic coming out of that Liberation Day crash,
is this massive run in large banks.
That came out of nowhere.
I mean, some of these charts, and I know today was a bad day for many of these banks, but Goldman Sachs, Citigroup, J.P. Morgan, just go down the list.
And this is what I'm talking about. markets are forward looking, we say this, we talk about this all the time, and if the markets were sniffing something out of calamity, you wouldn't be seeing some of the most sensitive
parts of the market performing the way it has.
Large banks going to valuation and the way they have been running.
I don't even know when I saw a price section like this last time in any of these.
You may have to go back to 2007, 2006 to see banks run like this.
Banks have done well.
A lot of the fintech names, too, in that same vein,
have been setting up kind of in the background behind them.
I've actually been looking. I might open some positions and some fintech names in the next couple of weeks some
of these charts are nice some of them had pullbacks today with the banks but um the only real i guess
indirect fintech exposure i have is robin hood but i do think a couple of these other charts look
interesting as well so we'll see but yeah the bank strength has been interesting kre strength has been uh interesting too it's happened in blips more so but um i think it was relatively strong today
versus the indexes yeah i was up about a percent today as well so uh iwm i mean i know it's been
a shit index i'm not an iwm index trader but i mean that's starting to consolidate above the 200
day rk kathy woods etf which is pretty good barometer for speculation in these mid-caps.
That thing's pushing into what looks like it's heading for a breakout.
I mean, obviously, these things can get faked out,
but RK is setting up as well.
So I don't know.
A lot of stuff looks good in this market.
I remain focused in the mid-cap area,
but a lot of things Jag brought up are look great.
Jaguar, I also want to get Monitim on this.
I actually don't know if LaFella is on this as well.
We were playing that game with rate cuts in 2024, 2025.
Jesus.
How many rate cuts do you think we're going to get this year?
I don't think it matters, to be honest. I'll give you the answer. I think we're going to get two cuts this year.
But I honestly don't think it matters. Ultimately, what matters is what the bond market is going to do.
The long duration will decide on its own
irrespective whatever happening to the fed funds right i mean so
look we got there was a danger in the beginning of the year we were gonna we were gonna gradually crawling all the way up to 4.7, 4.8 on the 10-year, right?
It seems to have stabilized in the 4.3, 4.4 here.
But I continue to think that inflation is southbound.
That was my call, you know, for buying the dip after the Liberation Day crash too, because
everybody was fearful that these tariffs was going to cause a massive spike in inflation.
And I took the opposite side of that.
There's no spike in inflation.
There's nowhere in consensus.
Even if now, if you look at the Cleveland Nowcast, it's not there.
2.6% headline is what we are looking at.
And that is very manageable.
So I think the long duration will come
down still, right? Maybe not a lot, but it will, but it may be just enough, you know, to ignite
some sort of a green shoot even in the housing market. Imagine for a second if the mortgage
rates are down to 5%, right? I think that's it. These are the sort of elements that, you know,
right i think that's that's it that's these are the sort of elements that you know i often say
when i go to these spaces i talk about or i ask the audience and i go around the room and i ask
the audience in fact we could play this game right now if you guys like what is the pain trade what
is the pain trade now i define pain trade as one that has two characteristics. One, it is high probability of playing out.
Like it's so obvious, right? And number two, yet nobody is positioned for it. You ask around,
you look for people, you look for positioning in the market, whether in the option market or
caught data or anything else, you just don't see the positioning for it
right so that's the pain trade your high probability it's common sense straight forward
looking at you staring at you and yet nobody wants to bet on it that's the pain trade and those are
some of the best trades that are out there in the market all the time like recently it was platinum
right before that it was just buying Nasdaq after the
Liberation Day crash so here what is the pain trade from this point on what is
the pain trade from here that nobody's positioned for it I'll go back to the
cyclical value crushing Nasdaq from here on a relative basis where you see all
of these stocks right transportation, transportation, industrials, chemicals,
and the names that nobody likes to own or buy or hold just start breaking out from multi-year ranges
while NASDAQ continues to go sideways for a while. And the composition of the index changes
as a result in the months and quarters ahead. This is exactly what happened during Donald
Trump's first presidency as well. If anybody was around trading the market, you saw significant
amount of broadening of the market at that time as well. And reminder, for the last two and a half
years, all we have seen is narrowing of the market because of just how much AI, the flows went to the
AI and the composition changed so much. The tech became
so heavy. That's the pain trade. And I think at this point, still nobody's seeing it. Nobody's
seeing it. But eventually, maybe a year from now, everybody will see it. So you tell me,
Stock Talk, what is the pain trade? I think the pain trade right now is just under exposure,
honestly. I mean, I think institutions didn't pick now is just under exposure, honestly.
I mean, I think institutions didn't pick up enough exposure on the recovery.
I think CTA positioning shows you that.
Broader hedge fund positioning shows you that.
So, yeah, I do think the rally probably broadens from here.
I certainly have more diverse non-tech exposure than I've ever had. I mean, I have a mid-cap aerospace and defense basket, Kratos,
which we both love, Mercury Systems, Huntington Ingalls. I have that basket. I have a short
interest basket that's reaching into various industries. So yeah, I would say my bias,
I kind of let my portfolio speak for myself. Based on what I own right now, I would agree
with you that there's probably, we're headed for a broadening here. I don't know if it's going to knock tech leadership position out of the way or
anything. But I do think that, you know, we probably see more stocks start to participate.
And, you know, I have a lot of non-tech exposure for that reason. So, yeah, I don't disagree with
you. I think in the immediate term, though, headed into the late summer, it's just net positioning.
Media term, though, headed into the late summer.
It's just net positioning.
And, you know, I think there's a shot that we see precisely what we saw in 23 and 24
headed into the back half where, you know, you had guys had to make that split-second decision,
maybe who were underperforming in the front half of the year,
whether or not to chase in the back half.
So right now, I think, frankly, under-exposure from the institutional side
is the pain trade,
and that probably biases for the markets going higher.
In the longer term, headed into Q4,
yeah, I do agree with you that there's probably...
The thing is, if we get this broadening
in the pain trade, you're going to see,
and I think you're going to observe this
in the discussion points, too,
in many spaces and whatnot. You're going to see, and I think you're going to observe this in the discussion points too in many spaces
and whatnot, you're going to see just how much people will be left out of it, at least for a
while until they all see it. Because again, what steals the thunder, right, the sexiness part of
it and all is these highest momentum chasing names, which happen to be all tech basket or related to it, whether it be, I don't know, air taxis or it could be any AI related, infrastructure related spending for connected to data center or chips and whatnot. things just go sideways or consolidate for a while while you get the rest of the basket after two and a half years of underperformance to start to play catch up.
That's how it becomes painful. And people do not see that coming because nobody who cares about buying some retailer out of, you know, a shopping mall retailer.
Right. Or who cares about buying some a chemical company. Right.
about buying a chemical company, right, as they respond to the cyclicality of the market.
You know, one of my favorite industrial, for example, which I believe is at the forefront
of the beneficiary of reshoring, onshoring, and nearshoring thematic ideas, which all
were pretty dominant back in the first term as well after tariffs
were imposed in 2018, is Rockwell Automation, ROK.
I've done several podcasts about this.
You know, it's one of my favorite.
It's a difficult name to trade, ROK, just because options are not very liquid in this
one.
But this thing, after four years, is finally starting to break out.
Or gunning for it.
We'll see if it will go or not.
And this is the kind of stuff I'm talking about.
This thing is another name that has not taken out since 2021 highs yet.
It's seeing improving order growth because of a lot of the factory automation and things that it provides,
which are precisely what is going to
happen as time passes with all of tariffs being imposed that will force the manufacturing to come
back home. Right? And then how does that filter into many other pockets of the market as well?
So a pain trade is the broadening is what I see. Whether people will be positioned for it or not
or will eventually see it or not,
only time will tell.
Godfather, I see you got your hand up.
Before you go, I need the question of
how many rate cuts you think we're going to have this year.
Is that for me, or is that for...
Yeah. Oh, I'm on the one and done program. Is that for me or is that for?
Yeah.
Oh, I'm on the one and done program.
That said, I agree with what Jaguar is saying and I wanted to play his game in terms of pain trade and two groups that I think are staring us right in the face.
Number one, I think, is a catch up by the by KRE to what we've seen in the money center
banks.
I don't think enough attention is being paid to this relaxing
of supplementary leverage ratio we're going to see in the second half of the year.
And I also agree that we're on a southbound path for rates.
And that's a bull steepener, which we know is good for financials.
I think that's one of the reasons you've seen the financials move
as much as they have in anticipation of that coming.
But the other group also, and by the way,
pull up the three-year chart of KRE
and we're knocking on the door of the 65 level.
And that's a big, big level that sort of
was kind of the top going back to 2022, 2023.
So I think that's kind of a no-brainer.
I'm with Stock Talk in terms of having exposure
to the fintechs because, yeah, having a tech tailwind to a group that otherwise is going to benefit from an increase in interest margin is certainly an attractive proposition to me.
But the other one that I think is lagging and is not being paid attention to is the housing, which, of course, has obvious benefits to a southbound rate cycle. But there's
all these things that people aren't really paying attention to that were either part of the one big
beautiful bill, like the increased funding for Section 8 vouchers, the streamlining of application
processes, and these other things that Trump campaigned? Like they want to do what they can to improve affordability.
And that's, you know, that's including opening up federal land for large scale housing
construction, et cetera. You know, we know that there's a structural deficit there.
There's, you know, low income housing tax credits. There's all sorts of other federal grants that
have escaped, you know, cutting. So again, I don't think the market's really paying
attention to that. And I look at that on a nail chart, just as an example, the 3x ETF really
shows you the moves. And this is a big rounding bottom here. And I just think that this is another
group that could surprise to the upside in that sort of second half of the year on that cyclical catch up theme.
Basically, there's all of these parts of the market have been sleeping for multiple years, right?
Many years, they've all been sleeping, resting.
And while AI thematic idea just took over, it's time for the rest of it to wake up.
And that's what will feel like a real bull market.
It's not about some giant tech just adding up 5%, 10% every day.
We'll seal it in the broadening.
And I think Russell is also giving us, by the way, I love your play on KRE, especially about the margin expansion that the banks will enjoy with the rate structure changing.
That's exactly why the large banks have moved.
XRT is another one.
The retail sector, XRT, hasn't done nothing for four years now, except Costco, naturally, which is not even part of it. if I could slip in here and get
monitored I still haven't asked you as well
how many rate cuts do you think we're going to have this year
well that's simple
I think it's going to be two rate cuts
okay we've had no one
say zero or four everyone's been one two or
three
we can continue the conversation anyone
has but yeah sorry for coming in there so i mean
manufacturing you know reshoring you know building america whatever you want to call it
the manufacturing thematic has been you know playing right? If you look at a smaller portion of it,
specifically around next-gen tractive flow,
there's a lot that's played out.
But sometimes it's in related thematics to others that are playing.
Most times the thematic plays, you know, in phases, right?
So to all this AI thematic, a quiet runner has been, you know, contract manufacturers
in the electronic space.
They've also benefited from, you know, manufacturing increases in healthcare tech in defense tech
all of which they play into right companies like celestica sanmina flexronics you know a whole bunch
of them they've been quietly outperforming many many many other industries dramatically even so so it has been working
right control systems uh you know uh internet of things you there's a lot within the thematic
that's been playing manufacturing itself is sort of late in the theme game because you know it takes time to you know design the capacity
build the engineer the capacity create the capacity you know while the uh while the market
itself changes and the demand picks up and then you get to the you know the the tail end where
you know manufacturing gets the benefit of it but they
get it for a much longer period of time so i don't think it's not playing it's a question of you know
where in the thematic are we in and and and i think you know you you've seen that from the you
know the earliest of this is like companies like autodesk, which benefit from, you know, planning for, you know, a factory floor to engineering companies that build these out to, you know, to competent suppliers and then finally manufacture.
Anyway, it's not that it's not playing.
It's just playing, but in different phases.
Talking about Autodesk, that too has yet to take out since 2021 highs see that
chart monitor five-year chart i mean if you go back to the five-year prior to that steady uptrend
for a long period of time and then flat for the last five years there's a very good reason for
that jaguar it's company specific and and and i've done this exact thing in adobe they went from perpetual
licensing to a subscription model and that that universally will take a dip in revenue and a slow
climb back which keeps accelerating once they hit a certain point in time that has finally happened
a quarter or two ago so it's going to take some time that entire dip period of the last three years three and a half years or so has been the period
when the company decided to retool its its licensing program to take that into account
and i think it's finally getting out of on the spaces we've been going live for three
hours here dan niles that was an awesome conversation do you guys have any like extra
you know points you guys want to talk about i know you guys aren't on here every day so if
there's anything you want to leave the people with hbo max is returning tomorrow they're changing the name
from max back to hbo max tomorrow so here's my little breaking news at the end i know it's going
to impact all our lives dramatically but you know we appreciate jag we appreciate your motive and
obviously stock talk as well so you definitely should make sure you're following um all of them
and once we close down the space whenever we do um we'll turn into a
recording so you can listen to the whole part with dan niles this whole part entirely fantastic
conversation if there is anything you guys want yeah yeah last thought uh i'll leave with that
uh tsm manufacturing monthly manufacturing numbers are out tonight so that's going to be a big deal.
Interesting.
Dan was talking about the Foxconn numbers
a little bit,
so I wonder what
the TSM ones
are going to say.
Jack,
are you on anything
you want to leave
the people with?
We appreciate you
for joining in.
And,
you know,
next time,
I'll definitely let you
know every time
we have Dan on here.
Yeah,
I'll just randomly
show up every now
and then,
too.
I was traveling for a long time to Europe and then I saw and then
Yeah, it was fun. It was a lot of fun. Rome was very hot this time around 102 degrees
I know it probably doesn't matter to Stocktalk who lives in Texas, but I live in Michigan
So my blood is very thin I go to 100 degrees you know i i'm burning big time anyway
so it was fun fun uh paris was awesome and particularly the the alps um you guys you
guys have to go to the alps as far as the market is concerned look we go into heavy calendar
of earnings next week um i'm gonna be focused on what I just said. I'm going to be focused on these cyclical
areas of the market to see what they're guiding, and particularly whether the growth rate that
they're guiding for sequentially from Q2 to Q3 guidance, is it staying stable, or is it,
or they're guiding acceleration? That's the key. Cyclical parts of the market are the guiding acceleration from Q2 to Q3.
If they are guiding acceleration and on top of it, you're seeing stronger price action emerge in a reaction to these stock prices after the report.
Pay attention to this kind of stuff because you're going to read through.
You're going to get a lot of read through from one peer to another.
And that means there's a lot of plays to be made during this earnings season i'm not worried about earnings
season at all i think it's going to be a fantastic season and i think market still has more upside
ahead particularly led by cyclicals thank you very much for having me see you all next time
i appreciate you jaguar thank you for coming sir
everyone should make sure you're following him
the others
stock talk
you have anything you want to leave the people with?
nope
we'll see you guys tomorrow
just stay frosty
it's a pretty chill market for now
I think
last couple sessions
have been pretty chill
there's going to be pullbacks
stuff's all normal
you know markets don't go up in a straight line
neither do your individual stocks
but yeah there's a lot of thematics that are hot
that are catalyst rich
there's a lot of great charts out there
so there's tons and tons of opportunity
no matter what your style is
so go get it but yeah we'll see you guys tomorrow
alright appreciate your stock talk
appreciate the squad
see you guys next time Thank you.
