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STOCK MARKET TALK
Recorded: June 3, 2025 Duration: 3:26:06Space Recording
Short Summary
In a dynamic discussion, key players in the crypto and tech sectors explored significant partnerships, growth trajectories, and strategic maneuvers, including CrowdStrike's $1 billion share repurchase and Robinhood's potential S&P 500 inclusion, highlighting the evolving landscape of investment opportunities.
Full Transcription
We got some, we had some big breaking news that, that made us distracted.
We'll address it right here at the start.
Nick's firing coach Tom Thibodeau.
I, you know what?
I want Stock Talk up here too
because I want him to talk a little bit.
I personally think we'll look back on this as a solid year.
Win-win for both people.
Thibs will go down as one of the great Knicks coach
and Knicks will do better next year.
And Knicks will do better next year.
I think a change needed to happen.
That's actually why I was a couple minutes late opening this up.
We were literally having this debate.
Yeah, I was literally...
Bad timing.
Who was writing a tweet to shit on the Knicks is why this space was three minutes late.
So, for everyone...
But no, I typed that up and then I got into the argument.
I had it typed up for like five minutes.
I just got stuck in the middle.
Stock talk, what's your reaction to the Knicks firing the coach
that gave them their best season in 25 years?
I think that was pretty silly, but I mean, that's what happens in the NBA, you know.
What do you think of the team that made it to the finals the year before
trading their best player?
Yeah, both dumb decisions.
But in this case, I mean, it's pretty standard procedure.
I mean, you have...
It happens all the time.
You know, you have star players,
you have a team that the management thinks is good,
and you blame the coach when you don't make it.
Part of the game.
They also have no cap space.
Don't really have any other decisions to make, so
you got to change something.
He was also bad at his fucking job.
Or just pleased the mob.
I don't know.
We don't have to argue this.
All right.
We had a Palantir little pop here in the last little bit.
I didn't know exactly what that was.
A very interesting tweet from Elon today
that I honestly thought was going to send Tesla stock into the red territory.
And it got it down, maybe up just 0.8%, 0.9%, 0.5% a day, somewhere around there.
But that's rebounded a little bit.
I'm sure that will be part of the conversation today.
We have an earnings after the close.
CrowdStrike, maybe a few others.
But CrowdStrike is one that I think a good amount of people on here are watching.
Hymns, the space.
This crew loved their boner pills.
Oh, damn, it's now right on the day.
But they had an interesting news thing this morning.
That's quite the mover there.
So I'm looking forward to this conversation.
My portfolio is up 0.9% today.
Actually, outperforming both of them.
So there you go.
Good day.
I'm looking forward to what everyone has to say.
CrowdStrike earnings.
So it'll be coming out a little bit later around 4.05 p.m. Eastern.
One hour from right now.
Buy less than $20 away from all-time highs, or at least it was a little bit ago.
Yep, Spy is less than $20 away from all-time highs.
Yeah, hot start here, Evan.
All right, yeah, looking around the market.
Tesla had a little sell-off.
Holt Market had a little bit of sell-off. Chips have been strong today. Broadcom, Nvidia, both up pretty much stronger
than anything. Tesla is still up 2% here, even after that little pullback. We did see Elon take
a big shot at the big, beautiful bill earlier as well. I thought that was interesting. But
let's go ahead and start kicking it around and see what everyone's watching, thinking.
Kind of a follow-through trend day to the upside with that little blip there late, but
very interesting. We took out some previous week highs as well, kind of testing out the
upper side of this range, trying to get out of it. And we're not back in it, but arguably right
back on the top side of it again. Options Mike, let's go over to you first.
Appreciate you always on these spaces.
What's your take around all this going on?
What was on your radar today?
Hey, Amp.
Quite an interesting day here.
Yesterday we had that big reversal, right?
Opened red, went green, closed on the highs.
And today we got a follow-through a follow through day and we're markets breaking
out, but the spy and the Q's are breaking out of this consolidation phase and we're
doing it on very low volume. It's kind of interesting here. You know, we got that little
pullback. We came back, we retested the breakout area and then we pushed right back up.
The market wants to go higher. And I think I said, I said this before, it helps when
Trump is quiet and, you know, he has been quiet the last couple of days. and I think I said I said this before it helps when Trump is quiet and you know the he has been quiet the last couple days and I think that kind of helps you know without that presence
of stuff the market wants to go uh what have I been doing today um I closed my meta out on the
open um I'm in some trading NVIDIA today I'm still in a couple calls I'm gonna hold them
overnight some June calls and videos looking really the amd had a nice move today the semis look really good hood is a new
multi-year high and not far from the all-time high i've been sitting in that most of the day
trimmed half of my shares here and holding the rest there's a big rumor on social media that
it's going to join the s p 500 after the close on Friday. And while it might, I would say the odds of that are not as good as you would normally think
because they just put coin in a couple of weeks, a month ago.
And those are two very similar companies.
I'm not sure that they would do that.
They might, but I think they would think twice about that.
Nobody's paying attention to Boeing, which broke out today,
and it's had a nice little day. And Palantir just spiked for no reason, put an all-time high in.
I mean, you look around this market, market breadth is strong. You know, the market's strong.
It wants to go higher. We have a little bit of data tomorrow, but not much. You had a crowd
strike tonight. You have bigger earnings on Thursday night.
Nonfarm payroll on Friday is probably the biggest thing we have going on this week.
I'm not sure the market really cares all that much.
Tusk must tweet about the bill.
It was pretty nasty towards it, but we knew this already. He's already said in the comments that he's not happy with that bill.
That kind of counterproductive to what he was doing.
And while he took, you know, three or four months off from Tesla or longer,
if you count his time on the campaign trail,
and he's not happy that it's just going to be undone.
It'd be interesting to see how their relationship holds up if this continues.
I have nothing really bad to say here.
You know, it's just kind of sticking to the,
sticking to what's working here right now.
And, you know, the markets today, you know, it's a slow grind.
There's not a lot of, you know, a lot of power behind this for the most part.
Hood did earlier.
But for the most part, it's just kind of a slow grindy type melt up.
And nothing wrong with days like that.
Those are pretty easy.
You know, you just have to buy time.
You have to sit in stock.
That's why I grabbed hood.
I just felt hood was going to go.
So I'm going to hold that overnight.
I sold half of it and just try to see what works here.
You know, Palantir, everybody keeps saying how overvalued it is.
And Palantir keeps saying, I don't care.
Market wants more.
Oh, by the way, CoreWeave almost said 150.
I still can't figure that one out.
That one's still, I look at that and I just, I don't, I don't get their business model.
I don't think it's a good business model, but market disagrees and that's all that matters.
Terrible business model, but I mean, options might keep it around long enough that this
is just like a momentum thing, right?
Yep.
Someone wants to be a part of it and they just like a momentum thing, right? Yep.
Someone wants to be a part of it, and they just want to squeeze it, and they squeeze it.
They tried selling it off.
They tried selling it off a few days ago. Sorry, just real quick.
They tried selling it off a few days ago.
Got to 105.
Couldn't sell it off.
And, you know, at that point, if it makes a new high, it's just fresh blood.
I just don't see how they're ever going to be making money given the investment they're going to have to constantly making and getting return on that investment because there's a renewal cycle so quick.
Yeah, it's going to flip at some point.
That will flip and it'll just be underwater, especially if you get to that cyclicality of the chip cycle, right?
Once these things start to be ubiquitous and they're underwater because they bought at a higher price.
But, you know, just trade it. i bought it today just off of a breakout um was fortunate
caught the breakout sold most of it the the crazy part here though is options are starting to get
to the point where i don't know how many of you were around back then but back when um the weed
stocks went public just like like two weeds, THC
and I don't remember the other one,
but there were like two weed tickers you could trade.
Tilray. Canopy and Tilray,
I think. Tilray. Tilray is the other one.
Tilray. Tilray got to like three
something, I remember.
The options premiums
are starting to get to a point where it's kind of
resembling that kind of
bubbling that starts.
I don't know where it ends, but, you know,
usually you'll get a gap up and then it'll fatigue,
then suck people in, gap up again, and then just crap the bed.
That's usually how those things blow.
But trade it till it dies.
I'm going to wish you guys a good one.
I have to head out a little early today,
but I always love jumping on and getting a chance to talk to everybody here.
Bleeding kid in the back of the car or what?
Nah, catching up with dad, but it's a long drive.
So got to get out of here early today.
Okay.
Yeah.
Well, I hope your dad's not bleeding.
He's fine.
I appreciate your options, Mike.
Safe travels to you.
Talk to you soon.
Wolfie, since you jumped in a little bit there,
what other thoughts did you have to share with the crew today?
Everyone's going to cover the thoughts, but I think...
Or we can start talking about CrowdStrike, too, at some point.
Yeah, we can talk about CrowdStrike.
I'm curious on CrowdStrike.
Sorry?
I'm very curious on CrowdStrike.
So I want to preface this and go right over to you.
Because my question is, I've owned it for a little.
What are we kind of thinking here?
I have no direct cybersecurity exposure except this.
I bought it when it had that whole kind of crash.
And yeah, I'm up a lot.
Maybe like, I would love to, I don't know if this is the name,
but I want to keep the exposure to the sector.
But I'm curious your take on it. So they already basically pre-announced on May 7th when they announced a restructuring plan.
They said that the results are basically going to be in line or better than its prior EPS on rev guidance.
But I think, I don't think that, I mean, I could be way off base, right?
But I don't think they're going to say anything that's going to be too crazy,
given that they've put out that statement.
I think a lot of these guys covered CrowdStrike in the previous earnings,
but they've had discounts,
which kind of have created a little bit of a headwind for their AR annually.
But outside of that, like when you have AI, you have to have cybersecurity products and they have like the best product for enterprise.
So I don't think that it's going to I would be shocked if they said anything materially that would that would crush the stock.
The problem is stocks were in 30 percent. they already told you what's going to happen.
They're basically going to be in line.
So I don't really think that the setup is there to try to game it one way or the other.
I think that it's just going to be kind of like a health test,
fitness test for the rest of the industry.
I know that Zscaler, they basically specialize in a little bit different, but they
reported strong results like a couple weeks ago or a week ago. So I don't think that you're
going to get anything that's materially too different there. But outside of that, I just
think that the more and more of these names that don't, because if we go back to the beginning of this earnings cycle, remember when we were going into the earnings cycle, we had the expectation that a lot of companies and a lot of people were going to punt on this earnings season because of the tariff thing and you can kind of get a mulligan.
I think a lot of companies didn't, now in hindsight, a lot of companies didn't have to.
And some of the companies that didn't report things that were too much better than people expected,
or didn't even meet expectations, but it wasn't that bad,
kind of got the benefit of the doubt for the messiness that kind of happened.
For me, from CrowdStrike, if they're going to give any clarity on guidance,
I'd say just specifically if they're giving clarity on guidance
or if they give any sort of input around how sticky the cycles are
for some of these customers or what their upgrade cycles look like or whatever,
click or whatever, I think that'd be interesting. But outside of that, just from a market perspective,
I think that'd be interesting.
But outside of that, just from a market perspective,
I still tend to lean towards finding these companies that have already been beaten up
or just have a lot of stuff, a lot of the narrative that is kind of already baked into the numbers.
Go back to the beginning of the year. One of the names I kept talking about was two of the names
I kept talking about, DollarGen, Dollar Tree. it felt like it was like a rotationary year for
them and those stocks have performed really well dollar gen just kind of had a quarter that people
viewed way better than they expected and the stocks up like 16 both those stocks are up like
50 year to date or more depending on your entry. So I, I'm now again,
shifting my thought process towards the next wave of those companies.
Snowflake earlier in the year was one of those companies.
Obviously it's no longer,
it's kind of like taken off from that one 38, one 40 level.
But for me,
I now I'm kind of like trying to think like what other companies could be
beneficiaries of just kind of being beaten up to a point of you know how most things baked in
some names that i'm just kind of kicking the can or kicking the tires on
mongo which reports tomorrow i think um and then datadog which is is a derivative of Mongo and of Snow as a competitor.
So I just kind of want to see for the more names like that,
that can kind of pick up and take off,
the more broad that the entire indexes will be from a tech perspective,
the better I think it's going to be for the market itself um at least through the summer or through the middle of the summer um then outside of that
just like similar concept got lululemon reporting earnings uh the middle of the week um looking at
like nike as a derivative possibly if the lululemon comes in not as bad as feared um and then
and comes in not as bad as feared um and then you know i i say continue to trade the the winners
until they no longer win so like i as i mentioned earlier i took core weave just for a trade
that worked out um you know took a small trade on and mentioned its subscribers on coinbase uh this
morning that worked out um and then the other
interesting one other interesting piece of information news was that um hymns bought out
a european um company that's pretty popular this morning and the stock was really benefit it was
a beneficiary for the first like 10 minutes the It was going to go to all time highs and then people ran,
rang the register.
And then the last one for me,
you have,
there was a headline too,
right?
Something about those like kidney cancer from those weight loss drugs or
something.
I didn't see that.
Yeah.
I think it hit a bunch of those.
Okay,
cool.
I didn't,
I didn't see that one.
I saw that they were going to acquire Zava,
which is basically the lever they're going to pull,
part of the lever they're going to pull
to get European customers
to just acquire a popular European company,
which is kind of a solid way to use your growth
and your stock.
But it looked like at
some point earlier this morning, first 10 minutes, I think it started straight in like 68 bucks.
It looked like it was going to go test that all time high and then it just kind of fell apart.
Um, the, the last point I was going to make, and I said this on the previous space that I was on
with you guys, I don't know if Evan, you caught it but i'm paying what i want to pay attention to in the next couple days i want i'm wondering the only stock that hasn't really materially moved
close to its breakdown point of the mag 7 uh has been apple uh so i want to see if you know any
point in the next couple days people kind of use some of these names these other mega cap names
kind of use some of these names, these other MediCap names as cash registers or ATMs.
And then Apple kind of outperforms them to kind of hold the indexes up into the event.
That's the one I'm kind of paying attention to the next couple of days.
I think you could see a situation where that thing kind of runs, you know, like 2.12, 2.15,
and then has the event and people are like, oh, it was just another skew.
Goody.
So I just, that's kind of like my overall thoughts.
I think grind mode is the best way I could describe the market and the indexes overall.
So I'm just trying to piece together how I would get there.
Appreciate those thoughts, Wolfie.
Godfather, saw you reacting a little bit not too long ago, but would love to bring you
into the conversation next.
Yeah, I just wanted to pipe in on the conversation about CoreWeave.
So I agree, you know, up three, actually close to 4x now from the IPO. And the other names really haven't moved a lot. I think it's worth remembering that CoreWeave tried to buy Core Scientific almost exactly a year ago. In fact, I think it was June 3rd of last year that they made a 575 all cash bid, which was rejected.
which was rejected. What's happened since then, of course, is that they've exercised five
options, taking an initial 16 megawatts of power, hosted power, from Core Scientific all the way
up to 590 megawatts. That represents 66% of Core Scientific's business. The balance,
the other 270 megawatts that they have is currently utilized
in Bitcoin mining, which we all know has a much lower return on capital than HPC or high
performance compute. So I just see this really expensive piece of paper that they have now
trading. They are effectively funding those megawatts through Core Scientific, you know, the case could be made,
okay, well, the dilution then happens in Core Scientific. But, you know, with this
really expensive paper, with the market cap, or an enterprise value that's burgeoning on 70 billion
versus Core Scientific, you know, still sub four,
I got to think that their funding costs are even lower. So, you know, this is a rush for
megawatts. It's a rush for hosting capacity. I just, it would not surprise me, let me just put
it that way, that they come back to the table here and something gets done. One way or another, I think that 270 megawatts that's
currently dedicated to Bitcoin mining ends up being part of NHBC. And I think it belongs in
CoreWeave. So I think that's going to happen. We saw a nice breakout in Core Scientific today. In
fact, the stock's ticking highs of the day as we speak. So just to backtrack a little bit, a couple of macro comments.
The name that wasn't mentioned yet, but of course, I'm sure everyone is focused on is the fact that Broadcom reports on Thursday after the close.
And, you know, all of the indices are sort of at these key levels, right?
You know, 59.70 on the S&P is kind of what people are looking for in terms of breakout high. We got
right to that point today and then failed. There's some gaps down at 5660 that I know a lot of
technical guys are looking at. What's more interesting to me is I look at the SMH and,
of course, as a leadership sector, you know, this is widely followed. And we're a lot closer to that 200-day moving
average. So it could make or break on what Broadcom has to say. So I think that that's
more important than ever. I'm focused on those things, obviously. I'm also looking at the IWM.
I see we're getting very close to this 210 level, which if you pull up a chart,
is also an important level.
And the market really needs this, right?
To go from here with multiples where they are, with Q1 earnings in the bag, the market needs breadth.
It needs to broaden out here.
And it needs these leadership groups to continue to contribute.
And so that means the semis have to continue to go higher.
Big cap tech needs to go higher.
The financials have to really start participating for us to take these to new heights.
I thought it was interesting hearing Jeff DeGraff of Renaissance Macro talk about the fact that
this next six-week period is typically the best
for the market aside from what we typically see in later Q4. So this old mantra of sell and may
and go away is now really a fade in late July sort of thing. So I think that's interesting.
I know the other technical indicator that guys like that are looking at are the advanced decline line, which sort of gets back to this breadth widening concept
that I'm talking about. And 70% of stocks are in uptrends. So that's positive. 10 of 11 S&P
sectors were in the green for the month of May, despite the fact that the last sort of
half of the month, kind of 13 trading sessions, we basically flatlined.
So we're at that level.
We've got ultimatums out to, you know, all the big trading partners to get their best foot in the door here very shortly.
pushing back on all these taco headlines by exercising his right to double down on his
narrative of protecting the U.S. at all costs with respect to trade as opposed to short-term
growth. And I know that's the trade-off people are saying, know, he really is concerned about the market.
And every time things weaken, he does taco.
And, you know, it points to his focus on short term growth.
But I think that that's vulnerable here.
I think that in the near term, the whole market could be vulnerable to him toughening that stance once again as we get closer to this sort of July 9th
date. So I'm concerned about where we're trading. I'm looking for where the catalyst is going to be
now that we're post these first quarter earnings. It's still in terms of ranking,
you know, trade first in the market. That's what people care about, number one. And I think that's going to be
the biggest driver of direction from here. The other observations in the market outside of the
core weave course thing that I mentioned, I think others have pointed this out as well,
but we're seeing some strength in these RFK-friendly psychedelic stocks. We had a nice move by MNMD today.
Nice move by CMPS.
I know these guys are reporting or due to have a big readout on their treatment-resistant depression using psychedelics in the second quarter.
And, of course, last time I checked, there's only 27 days left before the quarter ends.
left before the quarter ends.
CYBN, another company in that field, launched a phase three, and they had some decent data
recently, 71% remission rates and depression as well.
So that's a little subsector that I'm keeping an eye on.
Nuclear, I thought it was interesting, despite the headline today.
All of that was faded throughout the day from CEG
and the rest of the names, frankly. A little bit better response than the UECs of the world, but
nonetheless, I thought that was an interesting response. I guess most of that was front-loaded
by Trump's previous comments and the big move in that group. But needless to say, power contracting, grid upgrades,
all of that will be a major theme going forward.
And the other name that hasn't been spoken about much,
but they're the leader in terms of natural gas power plants,
is AGX, and they report after the close on Wednesday.
I challenge you to find a better looking chart anywhere in the market, frankly. There's not a lot of players left in that market
anymore. These guys are the leaders. Most of their business is in Texas, where most of the data
centers are going up. Yeah, we'll be watching that earnings very closely on Thursday as well.
And Dollar Tree, Dollar General were mentioned.
Dollar Tree, of course, reports tomorrow morning
before market open.
We played in our community sort of anticipation run
post the Dollar General numbers,
holding a little bit of lotto
in case we get a similar response.
But yeah, I like the positioning in those names.
So I'll leave it there.
Godfather, I was looking at those June stats the other day.
Last three years, it's 0.2 average gain.
And last five years, the average month's return is 0.8%.
But the 2022 June was a rough one.
So those statistics are a little bit skewed because of that one year,
but a 3% gain last year, 6% gain 2023.
Most comparable one, maybe coming out of COVID crash,
1.45% June return.
Just to throw those data pieces in there.
Appreciate your thoughts across the board there, Godfather.
Always enjoy having you on these spaces. Wolfie saw a hand
go up from you. See what comment you have
around what he was saying.
The first one is
unrelated.
Eric Trump just tweeted,
there was a post this morning
about how Trump's launching
a Bitcoin and crypto wallet.
And Eric Trump tweets,
I run at Trump and I know nothing about this project.
So I wanted to share that because that's kind of crazy.
But outside of that,
you guys were just talking about seasonality
and about things of that nature.
But the one stock that I'm interested in
as earnings next week, I mentioned it either on this space or one of the other ones you guys post, but I take a look at Adobe been in a downtrend, pretty aggressive downtrend since 2021.
And then kind of got dislocated once the AI stuff took off, uh, pressing up against that downtrend right now and has earnings next week there's about 12 from
here to the 200 day and there's like a nice little earnings gap that it could fill to 430 ahead of
earnings if they show so choose so that's one name to watch especially given that seasonally speaking
the best historical period for the stock is this next,
I think five week period or next three to five week period.
So I just wanted to add to that color on the back of your guys comment about
seasonality.
Appreciate that Wolfie. Godfather, go ahead.
Yeah. One other thought that I forgot to mention.
We're seeing a little bit of life in the drone stocks, specifically the smaller drone stocks.
And if you go to the charts, you'll see that the real levity started just as Levitt was giving her daily press.
And she said, if you missed it, that you can expect an executive order on drones in relatively short order.
And so you saw an immediate leg up in Red Cat, R-C-A-T, saw an immediate leg up in UMAC.
And of course, UMAC has Donald Trump Jr. as an advisor.
What I thought was interesting is if you go to the chart earlier before Levitt's press conference, there was a big spike on volume.
So, yeah, I don't know what to make of this, but I'm certainly watching it.
And, yeah, I got I got a few lottos there just in case we get something something further, you know, in that space.
I play it with a barbell. Kratos is really the play for me on that.
And, of course, you get extra exposure to Golden Dome expenditures there.
So, yeah, just worth mentioning.
Keep an eye on these smaller drone stocks.
There may be something to her comments.
Appreciate that, Godfather.
Gary, how are you sir good and now i want an edible since wolfie and
uh options mike brought up the pot stocks but uh i'll bring it tariffs dollar general mentioned
tariffs i don't know if anybody saw that in there the market didn't care they gave great guidance
market ignored the tariffs completely i will tell you from a long-term standpoint, and that's the way I invest,
SPY is 3%. I think it's 3%, maybe even less, depending on what time you look at it,
but it's 3% from highs. I am literally getting 4.1% in my Fidelity account from FCDXX. I think
that's the symbol of the bond fund that I have
that just uses my cash. Why am I going to risk all-time highs? The way I play all-time highs,
traditionally, I tend to take profits and buy back lower. Remember, an all-time high means that
you have to find a buyer. You're selling at an all-time high, but if you expect it to go past all-time highs,
you're telling somebody who's going to buy that, that, hey, I know no one has ever paid this price
in the history of this stocker ETF, but you're going to pay more than anybody in history.
And so I'm traditionally scared off of all-time highs. CrowdStrike today, it's 5% of my dad's
portfolio. I called him up earlier today. I said, today, it's 5% of my dad's portfolio. I called him up
earlier today. I said, dad, it's 5% of your portfolio. Let's knock it down by 1% and just
take some profits. He said, no, I like the stock. So he's keeping it through that.
I just finished going through my- Your dad's one of us.
Trust me, 83 years old. Your dad's right.
83 years old and the guy is just like hey you know i don't want
to sell that one he's up 400 500 i mean he is up significantly he was in early added to it as it
started going up uh listen the only reason i'm retired at 54 is because that man taught me what
to do i am also in crowd strike i also sold at 440 as it started to get up there. So I'm not one of you
guys, but I did take some profits hoping to buy back in at a lower price. Maybe I'll get that,
maybe not. Other stocks that are all the all-time highs in my portfolio, Microsoft, QQQ,
NVIDIA, I sold at 150 because again, I think it goes to 160, but I bought back in the 130s.
I'm perfectly happy with that.
Netflix, all time highs.
I've trimmed that one at about a thousand.
I'm looking to buy back.
I'm not buying it at 1200.
I think it'll come back.
And XLK, which is an ETF.
I'll finish with Microsoft.
Microsoft was a contrarian trade.
It grew into my, as one of the largest positions last year, as I started
to add, because it was just kind of sitting there. And I said, you know, this is probably, it was the
worst performer of the Mag 7. It caught up and it's at all time highs. I think you can correlate
that to Apple. So I'm going to do a little contrarian to Wolfie's play where it gets up to like the
220 and stuff. Don't count them out. I saw that they're looking to put perplexity in their AI
stack. And perplexity is my favorite AI. If WWDC goes as well as it did last year, which I don't
know that it will. Last year was just that Apple intelligence lie that they told us.
If it goes well with developers, I think you want to buy that at the support level at 200.
So far, it has shown extreme support at that 200.
Could it fall out with, what, 4% revenue growth year over year?
I think it absolutely could fall out.
I'll leave you with two stocks. Boeing was an absolute duh trade at 160 when Trump started touting that foreign
countries were going to buy planes. Now you see it up over 200. The other one that I will tell you
is LNG, Chenier Energy, with liquid natural gas. I think he's going to use that against Europe. I
think he's going to use that with Japan. I think he's going to use that with Japan. I think he's going to use that with the Asia countries. I think liquid natural gas
could go up from here because we're going to export it at low cost and then sell it at high
cost over there. He's pissed off at Russia and he doesn't want Russia to be the leading natural
gas supplier to the rest of the world. So I think he's going to use that. And the one company that I think has access to that is LNG. I don't own it personally. I like
it. I want to see it drop a little bit before I get into it. I sold it in the 200s, I think,
the low 200s when I bought it 120. So I'm perfectly willing to do that. I do own,
and I brought this up on Spaces before, MPLX.
And MPLX just has a 7% dividend.
I just sit and hold that one.
It has beaten SPY in the long term, so I'm perfectly happy with the energy sector exposure there.
So that's just my rant.
And yes, my 83-year-old dad is one of you guys.
You guys got to get Gary a worn out leaving hat or t-shirt.
Listen, I just saw Sam Solid posting that he's in a double leverage DTF on Robinhood and it got me FOMO. So I have plenty of FOMO for you guys that are making these great gains.
My portfolio is not up this year. I'm still down because it's so heavily positioned in Apple.
I'm stuck in a
position that if I sold out, I'd have to pay millions in taxes because my average purchase
price is like $4.75. So I am jealous of you guys being able to go into these names with no fear.
But at 54 years old, I've learned my lesson on a lot of those and some people yell at me, hey, hit a single instead
of a home run.
I'm team
your dad as far as
all-time eyes are concerned.
Pause.
Hey, yo.
I just want to know if we can get
Gary Sr. on tomorrow.
Yeah, I know. I want Gary Sr. in here.
I will see. I am tomorrow. Yeah, I know. I want Gary Sr. in here. I will see.
I am actually next week.
I will be at home.
He's going through a procedure.
So I may actually get him on there.
Trust me.
It's quite a ride.
I imagine he'll say something along the lines of,
if you look at the data, selling at all time is a bad idea.
And he's right about that.
Yeah.
Well, he taught me everything that I need to tell you.
I'm just throwing you.
I'm just throwing you.
But I will tell you, he has told me many times that, and in fact, he sold Microsoft.
My brother works for Microsoft, so it wasn't insider trading.
But my brother said, hey, I'm a little bit nervous about these earnings.
And I think they sold half their Microsoft at at like 410. And I said,
no, no, no, no. This isn't a $410 stock. It's a higher stock. So I'm the one in the family that
held. So you got to mix when you throw in the Vaughn family into this, but I'll see what I can
do about getting the 83-year-old on the spaces.
What's up Monitiv?
Well, I didn't mean to unmute. I can wait my turn. No, your turn is now. Your time is now.
No, I mean, I, I, I, I mostly agree with what Godfather said, but
you know, all times highs are funny things right it literally means
that people are willing to buy and you know at a price that nobody has ever paid before so
that's sort of self-fulfilling it just keeps going sometimes and it keeps going for a long time
sometimes but but i do think caution is warranted and taking some profits off is a good thing i did sell some nvidia after earnings um
i did some ratio calls that i will collect the premium on i'll continue to do that i did uh
whenever it dips below 140 i you know i buy a trading position around my long position
so i do that and i trade in and out of that so I still like Nvidia here all of the news that we're
getting on on AI stocks it's really only still Nvidia making all the profits so you know I'm
more than comfortable taking that risk than something that's far far more expensive I mean
look at the peg ratio we're close to Google and meta peg ratios for NVIDIA.
So I will live with that.
I have no problem adding to that position if it pulls back enough.
So that's that.
I did do a few other things.
Some of the defense majors, I think the valuation delta between the majors and the smaller defense players has never been as high as today ever in history.
So I added a trading position in Lockheed Martin last, when was it, two days ago.
And I'm not very happy.
It's up, but it's not up as I expected.
But I will keep adding to that position if it falls.
That's a couple of months out trade, so I have some time on that.
Booz Allen, another big sell-off.
This one is a technology gatekeeper stock for defense.
They had a miss, they had a big layoff, and this, you know, a lot of negative narrative around all of the three major, four major gatekeeper stocks.
They had a miss. They had a big layoff.
But I think it's fallen enough, so I took a position on that.
on that air sale, which is MRO.
Air sale, which is MRO.
I've talked many times about the MRO industry here,
maintenance, repair overhaul in the aerospace services sector.
So I added that position again,
it's a smaller company in the MRO space,
but they fell off the cliff last quarter after earnings.
That was two months ago now.
The problem was they had a huge revenue miss,
but because of difficulty in comparison,
it's really not a fair hit on the stock.
So the revenue missed because they did not sell any engines during the quarter.
And that's not, it's a very lumpy trade, that one.
So I started a position today.
I will probably continue to add all the way till about mid-sevenths.
I will add that stock.
So that's one I did.
What else?
In it, I added a swing position last week.
I took more than half of it off today.
I'll probably sell the rest today or tomorrow.
MDB, I sold a couple of contracts of 160 puts for this Friday.
A couple of bucks.
It's not going to do anything much.
I tried to buy calls.
It didn't fill this morning, so I didn't chase it.
What else?
Oh, Google.
I did add a Google swing position on that news.
I mean, it's...
Look, I talked about this enough, so I'm not going to add much. If Apple
does actually want to replace Google as a search provider, it's worse for Apple than it is for
Google. So I'm willing to take that shot. So I do have a very large position in Google anyways,
but I'm not touching that. I will sell high 180s. I think
it gets back there not too far from now, maybe a quarter or two. So I'm holding that position.
I don't think it's going to go below past 200 or anything, but get back near its highs, I will
sell a significant chunk of it. I think it is cheap here relative to where the
rest of the mag 7s are so that's that's in essence what i what i have um i i i can i if somebody has
specific i was going to ask you about what what are your thoughts around crowd strike because
reporting this afternoon well it's it's uh you know, it's a valuation issue for me.
But then again, they're growing so fast, you know, it's probably not relevant.
So for me personally, you know, it's not a comfortable place.
But, you know, the industry is going to do very well.
No questions I asked.
CrowdStrike probably need to build out a wider portfolio of products
offerings within CyberSec.
So they'll probably do some acquisitions and continue to grow.
And clearly they are a narrative leader and a great performer.
So I would never bet against them, but I'm not comfortable adding here.
One follow-up question real fast, and we'll go over to Kirk.
Monit, when it comes to these high valuations but high growth,
is there a scenario where you're okay overpaying for some valuation,
knowing that the growth projections are,
I guess the upside of those growth projections are vast?
I don't know what term I'm trying to look for there.
Well, so that's a great question.
And I have to keep asking my that myself that
question all the time most of the time i chicken out but but but really you know if if you want to
pay a premium for an already high valuation then then a few things have to line up right one there
has to be at the minimum industry strength right so So if they're the only one, you know, going anywhere,
but the industry itself is overall weak,
that means it's probably borrowed time.
That might be, you know, problematic.
Second, you know, economic outlook,
certainly for the industry has to be solid,
probably for the sector.
So I start looking wider when it's a situation like that,
which is probably why I chicken out,
which is probably not the answer in a situation,
at least last few months of history.
It's just blown past some of these things.
But look, leaders will tend to lead and probably draw down much less,
which is probably worth the risk for many people.
It's just not for me.
So it's a place to put your bets, but it's just uncomfortably expensive for me.
Yeah, makes sense.
Appreciate that rundown, Monitive.
And we will get those CrowdStrike numbers after the close here shortly.
I believe the expected release time is 4.05 on that.
I'm sure we'll be attentive to those.
Kirk.
Oh, go ahead.
One other thing.
One other thing before you go there.
I think MongoDB reports tomorrow.
That's one.
You know, it's one of these days they're going to do a snowflake and change their narrative.
I don't know if it's this quarter, but yeah if you're gonna throw some darts that's
probably where i would throw and and and hope for a you know a turnaround story there i think
they've been sorely lacking one in the last few quarters and it's about darn time they either you
know show it or or break down for for good for a long time to come and just get forgotten. So that's one I like, actually.
Appreciate that, Monitiv.
I'm sure we'll have even more discussion around that.
Tesla is stopping a little bit. Yeah.
Several things pulling back a little bit,
but definitely was noticing Tesla there,
Google as well, pushing down towards the lows here.
Elon's still tweeting.
He's still tweeting things like,
November of next year, we'll fire all politicians, et cetera, et cetera.
Who betrayed the American people?
So there was a little bit more to that one.
We'll see.
But yeah, that's an interesting headline we've got coming
here to close.
Rand Paul and him trying to
get buddy-buddy. Alright, Kurt,
good afternoon.
Good afternoon. Is Elon trying
to start a third party?
Might be the only guy that can do it.
There you go. Maybe.
What's on your mind today, Kurt?
Well, you know, I'm a secular trend guy. I've been big in technology since the 90s.
And I think that that continues to be the big trade. It just takes different forms.
You know, you guys cover the fourth industrial revolution and AI real well.
I think that there's other winners attached to that that are kind of second derivative plays.
I talked at the start of the year about energy being one of those plays.
It has not played out so far.
Although today, the solar stocks and really most energy stocks really were humming today.
You take a look at some of the Permian Basin companies. I've talked about Permian Resources up 4% today. You take a look at some of the Permian Basin companies. I've talked about Permian
Resources up 4% today. Take a look at Matador. That was up 5%. A bunch of the other ones up 1,
2, 3%. But the solar stocks are really the ones that went nuts. And I can't help but wonder if there is some word or some rumor out of Washington, D.C.
that some of the things that will happen when the Senate revises the tax and spend bill,
will they leave a lot more of the clean energy tax credits in there. It's been my thesis that they will.
I think that you have a half a dozen senators
that are on that side of the equation.
I do think the EV tax credit's pretty much gone.
I think a lot of the wind is gone,
but I think they keep most of the solar batteries
and biofuels and other things
that benefit the fossil fuel industry.
So I do think that those remain pretty good plays.
Lower risk, maybe not the upside of, say, a crowd strike if it breaks out from here.
But I think the energy stocks have good risk to reward
because there just really isn't a lot of downside at this point.
On the macro level, I forget who started today,
but they talked about how low the volume has been.
That doesn't make for breakout likelihood
unless the money managers start to pile in late here.
And they might.
They might.
I mean, they're not good at their jobs for the most part.
So maybe they pile in late.
They're also offsides, yeah.
Yeah.
So maybe we do get another 5% to 10% rally here before liquidity and tariffs and debt issues,
before the next significant correction, which I do think is coming.
I'm not good enough at short-term trading to tell you exactly when,
but I've got a small hedge on the S&P 500. One of the warning signs that I always look for
is when the utilities are the market leaders. And this year, do you know what the top sector in the S&P 500 is, it is in fact utilities. That's not a good sign. So we'll
see how that plays out. I suspect that the year continues to be volatile. I got a little bit of
pushback when I said I was coming into the year neutral to negative. S&P 500 is up 1% so far.
neutral to negative, S&P 500 is up 1% so far. And I think it's more likely to continue to chop.
If you take a look at all the charts out there in the S&P 500 and the Russell 1000,
right, your bigger companies, but really the S&P 500, there's a lot of formations out there,
a lot of head and shoulder looking stuff, A lot of head and shoulder looking stuff,
a lot of cup and handle looking stuff.
A lot of stuff where if there's not a breakout,
then the breakdowns are really pretty big.
And it's not hard to see,
especially because of the market cap weighting of the S&P 500.
I don't think it's hard to see the potential for a 20% to 30% bear market.
So we'll see if we're going to get an ABC down, right?
We've had the A down and the B up.
Do we get a C down that sets new lows for the year?
I think so.
I don't know.
I just think that the liquidity equation out there is tight enough,
especially when you take a look at what's happening in Japan,
that the odds of any sustainable breakout,
not that there can't be a small one for a while,
I think the odds of a sustainable breakout are pretty low
over the rest of this year.
And the more I look at the charts,
the more this really, really reminds me of 2018.
Here, let me throw in one last thing.
SunPower used to be Complete Solaria.
It's one of those TJ Rogers stocks that I mentioned.
I encourage everybody to listen to the presentation on Thursday,
the 5th, I believe it is, where he's going to talk about policy outcomes for his company.
Take a look at what SunPower did. Again, it was complete Solaria. Now it's SunPower because
they bought SunPower out of bankruptcy for like a couple of beads.
Their revenues just went up 14x.
And they have almost no debt.
This is a really fast-growing company. So if you believe like Elon that solar is more the future than nuclear, and I agree with him on that,
and I agree with him on that,
then some of these solar stocks,
you should really be looking at SunPower, SunRun, Enphase, SolarEdge.
You know, you go right down the list.
Appreciate that, Kirk.
And let's go over to StockSniper,
get some of those numbers here before CrowdStrike
comes out. What's up you hear me all right? Gotcha. Yeah I got some pretty cool numbers for you guys
yeah we're expecting CrowdStrike earnings at 4.05 p.m today and Asana is the other one that people
are looking at that one is also coming out at 4.05 p.m today as well. When we take a look over at
CrowdStrike I think CrowdStrike is going to be
pretty interesting today. We can tell from the last couple of reports we've had some very interesting
ones. I'm just noticing I left that one field blank accidentally. But when I take a look at
CrowdStrike, you can see a $30.22 implied move or 6.17%. When we look at our last four reactions, we see a minus 6.34%, a minus 4.59%,
a plus 2.83% reaction and a plus 11.98% reaction. Coming into this earnings report, we are seeing
401,947 open interest on CrowdStrike and we can see a 25.46% positive reaction since the last time
that CrowdStrike reported.
Really excited to see this one.
And then when we take a look over at Asana, the second most anticipated one for the day, I would say,
we're expecting a $2.47 move or 13.05%. When we take a look over at the previous reactions on Asana, we could see some wild moves,
minus 24.22%, plus 43.53%, minus 5.15%, and minus 0.61%.
We got some mean point price action after Asana earnings on some of the last reports.
But since the last report, Asana is up 13.4%, and we're coming into this report with 68,414 open interest.
With CrowdStrike, I think that's definitely the one that most people are going to be looking to see.
But hypothetically, it is possible that they could miss earnings.
I think if they do miss earnings, they might give shareholders a $15 Uber Eats gift card.
That's all I got for today.
Appreciate that rundown on the numbers.
4.05, once again, the expected time.
Checking on earnings hub based on the previous releases from CrowdStrike.
Sock Talk, do you want to go now?
Do you want to wait until after the numbers?
What are the numbers coming out?
What's up?
Like seven minutes.
4.05. We can just stick to CrowdStrike.
I can chat later.
We have another hour to kill anyway.
I'll jump in.
An hour to kill?
This is premium.
Who the hell is this guy?
Boo this man.
We can get Sam in here.
I know Sam has comments earlier.
I just meant I could run for a long time.
Hey, I've been waiting on a good met Dr. Ryan for a long time is what I meant.
Hey, I've been waiting on a good 15-minute rant for a little while.
You're just waiting to shoot some fire at people right now.
I don't know if I want to stand in front of that crosshair right now.
I've been in that crosshair before.
I don't want to be in that crosshair again.
Go for it, Sam.
You probably have more useful commentary on crowdstrike than i do anyway yeah i mean i did give the commentary earlier with shy shy gives some really good input but
this is the cyber security leader when it comes to endpoint platform management okay like they're
not like a palo alto where they're basically security across the entire board across all
the verticals this is crowdstrike it's only endpoint security platform. They are getting into CM, which is basically a log management.
But at the same time, CrowdStrike has almost, I think it's actually over 40% of all the
cybersecurity clients under its helm. And it has almost every single Fortune 500 company out there.
They're landing the biggest contracts you could possibly think of with the biggest enterprises in the entire world. When companies decide if I want the best cybersecurity
platform or not, they're going to choose either between CrowdStrike, they're going to bundle with
Microsoft Defender, or they're going to get set into one. But for large businesses that want the
best security ever, it's going to be CrowdStrike. And the premium is expensive. It's a very expensive
company coming into earnings. I think it's like 25 to 30 times EVNTM revenue. We're going to see
what they come in today. Likely, it's not going to shift that much, but the market continues to
think that CrowdStrike is going to get hit. Well, actually, maybe not anymore, but the idea was that
CrowdStrike is going to go to zero because of the outage that they had, but they knocked out
almost every single window system across the entire
planet. And look at how resilient they are.
They're actually trading above where they were before the outage.
That's how much the market likes it.
If they continue to show their resilient from the outage,
they're probably going to continue going up as long as the market goes up.
But you know, if they start, once they show that hit from it,
which it might come at any point, that's when it's going to go down.
Until then, market goes up, so does Crash Rack.
We did get the market closed there. Appreciate that, Sam.
We'll get some additional thoughts here shortly.
A mixed day for the MAG7, but a fully
green day for the indexes, a fully green day for the uh for the indexes which doesn't
typically happen as much sometimes it does like it's not that crazy but uh i think we were talking
about this earlier it was an interesting day where you're not seeing the mag seven coming in
and leading so aggressively at least all of them um tesla obviously would that fall off amazon not
looking too great meta didn't really perform that well today nvidia was the leader though there so
just an interesting
day on the index level versus the Mag7,
which doesn't always happen.
The era of pure plays. That's why.
NVIDIA
did close the day as the largest company in the world again.
And Chip's worth leading today
with the SMH.
I have a cyclical question for Kirk.
Yes, sir.
Why?
Is the question cyclical or is it about cycles?
I'm just kidding.
Both.
Well, I'll recycle it here in a couple weeks.
My question is, if you're looking at like valuations and just setups for some kind of cyclicality,
why not the tires on some of these steel names
that are gonna be beneficiaries,
though not the domestic ones per se,
some of these like, you know, international steel names
that could be beneficiaries
if we actually start signing aluminum tariff things here.
So we actually traded a while back when it was in the trough
because it always made sense to me that some sort of deal would get done.
I just never really knew what it would be,
and I figured Trump would come up with something.
So we're out of U.S. Steel and some of the other ones, Steel Dynamics, right now,
because I think that ultimately the reflexivity goes back the other way.
They're capital-intensive businesses, so like the miners or anything else that's super capital-intensive
where you've got to put in x amount
of dollars to get a widget out or to get you know something out of the ground or whatever
i i've always just traded those cyclically or where i think there can be a pop
so i don't know that there's a whole lot of run left in those. I just don't think the range of outcomes is skewed positively enough to make those exciting.
I just think that they're trading stocks and they're choppy.
So I'm not really looking at any of them right now.
But we sold some puts on US Steel. They're just going to expire in a
couple of weeks. STLD, you take a look at that one. You take a look at its five-year range,
and it's just a choppy stock. So I don't know. I'm sure there's probably something out there that has something specific to it that should do real well.
But I don't look at the sector as particularly exciting.
You know, it's kind of like consumer staples to me.
You know, a lot of capital intensity, intensivity and not a lot of upside.
Right. They're just going to chop along. intensivity, and not a lot of upside, right?
They're just going to chop along.
It doesn't mean that they're not neat stocks for, you know,
doing buy rights on or something, but, you know,
I'm not really looking for that level of gain. And in a recession, they get crushed, right?
So I typically buy companies like, say, Freeport-McMoran during recessions, right, because Freeport-McMoran during recessions right because
Freeport-McMoran and some of the other metals companies just get destroyed during recessions
absolutely the best time to buy them right before stimulus or a rebound so yeah I understand what
you're saying on some of these companies. CrowdStrike, by the way. I'm seeing CrowdStrike total revenue is $1.10 billion,
which would be a miss in the expectations that I have of $1.11 billion,
but really small miss.
Sorry for cutting you off there, Kirk, by the way.
EPS would be, looks like negative 44 cents,
which also would be a big miss unless there's a one-time charge in there.
I want to wait a little bit more on what CrowdStrike ends up saying.
I mean, what's the stock doing?
It's down 3.5%.
Yeah.
Normally, when you miss revenue like that,
there's a one-time kind of expectation or like a charge
or like a charge or something like that
or something like that that was taken.
that was taken.
I want to see.
I want to see.
Announced a share repurchase,
$1 billion.
Wow, they're doing buybacks now?
Crazy.
At these levels?
Jeez.
In this economy?
A billion dollars too?
What's the market cap?
$120 billion?
Yeah, something like that.
It's pretty decent.
When you think about just the software
security, they've got to offset all the SBC.
Yeah, they offset
the SBC, but throwing a billion
dollars at a growth stock like that
at the highs
is just silly.
Hey, we got a sauna number
Expected number revenue was expected at 185.4 million actual was 187.26 million
Expected EPS was two cents actual EPS was five cents
Just a quick comment on a modernize your hand up So i'll go to you and then i'll get into my
full comments but just a quick comment on stock-based compensation and like buybacks
people have really like mentally diluted the value of stock in their head in the last 20 years
because of both buybacks and um and stock-based compensation.
I don't think people understand that even with a company,
and Sam, I'm not targeting you when I'm saying this, by the way,
I'm just talking about buybacks in general.
Even a company that's like a $100 billion company,
people really don't understand what a billion dollars
in operational or strategic or infrastructural investments can do.
Like you can materially boost margins in a company even of that size with that kind of
investment into the business. So do I think stock buybacks are good? Yeah, I think for companies
that have really mature businesses that, you know, can't always find avenues of growth,
I think that they make sense like i think apple has done you
know as much as i dislike the company and at this juncture has done a really good job at financially
engineering the stock with buybacks there are other companies that have done a really good job
with that as well but um yeah people just i don't think understand how much a billion dollars can do
for a company if it's spent internally uh what's up martin i was gonna comment about steel but um i don't know if you guys want to go there but but uh
yeah i agree with you for a company that is counting on continued growth for its valuation
multiple to say that they're gonna buy back a billion dollars worth of stock
and they have no better use for it that is insanely negative in my opinion that's just
giving up the ghost it's it's really a stupid thing to do at this point in time
one billion is not a small number it's not that large a company. I mean, anyway, I don't want to go on.
I think it's a shockingly bad idea, at least in terms of a narrative, if not in real terms,
to be buying back at this kind of a multiple. Maybe it's just an approved position and they
don't buy back for a while.
Who knows?
But it just doesn't look good.
If I can take just a minute.
Interestingly enough, I was listening to CNBC India last night and Wellspun Pali, which is a big maker of steel pipes,
big maker of steel pipes, is investing about $180 million in their plant in the U.S. to
expand.
And he made some side comments about how the margins on the U.S. facility is going to be
larger than anywhere else that they have facilities because of tariff protection and the local demand.
I think if you take that along with a few other comments that I've seen
and the fact that almost all of the steel majors are non-US companies
across the world, probably the top 10 are all non-US.
And given that we just approved the US steel takeover,
it's likely that you're going to see more deals happen.
It's likely that there will be an interest in buying into the beaten up steel names.
So to go back to that original question yeah i really like steel here i'm not sure
um you know i want to take an immediate position but uh after that uh discussion yesterday uh last
night i started uh you know uh looking through the list of them and see you know where there's
interesting um you know opportunities for a long
so i i think there's some unique opportunities there i think we are just beginning the mna wave
within uh within the u.s industry and i think there's going to be a lot more external buyouts
coming
by the way also now that we're a second or two away from this crowd strike numbers being released
i want to go back to them because the eps number was 73 cents uh there's different variations of
what was expected but i see that as a beat on mine revenue is a small miss. When you look over at forward guidance, they raised their full year guidance for EPS
and for revenue as well.
But they're basically in line with expectations
in the forward guidance.
Their Q2 guidance is actually lower,
but their full year they've slightly raised.
Gotcha, yeah, I was looking at the full year.
Yep, that is correct.
I'm seeing that as well. So not the not the worst from from crowd strike you know signaling
a strong q4 is what they just signal there well i guess what's their fiscal year
yep a strong q4 is what they just said what's up sam no i mean at these levels of evaluation
you need to be uh you need to be top bottom, and you raise guidance in order to maintain that valuation.
I mean, I agree with Moditive.
I would not buy this stock back if I was crouched over the billion dollars.
I would certainly put it to use.
And with that kind of capital, a billion could make a pretty big difference for CapEx, even operating expenses.
Doing this, it just shows, yeah, we're just going to buy back our stock.
We think we can return shareholder value through that rather than reinvesting into the business.
But I think it also goes to show that CrowdStrike is becoming much more mature as a company.
And being that they're $100 billion plus company, maybe it is that time where it's like, well, we just want to return the value this way.
I mean, if the market stays bullish, it'll probably recover these losses in the next few
months. But at the same time, the valuation is pretty up there. There has to be something said
in the conference call that would bring it back, if anything. But the numbers, I would not necessarily
say blow out of the park. but at the same time, if
people continue to expect the worst, it's just going to bounce back if they release anything
good news.
But I mean, this is where I was trading at a week ago.
This isn't really a big move.
Can I quickly add something there, Sam?
The guidance variation is not such a big deal because that's probably more the timing of the renewals than anything else.
A few large renewals falling in one quarter versus another does change it dramatically for CrowdStrike because they have such large accounts.
So I don't see that as a problem.
But again, 100% agree with everything else
he said.
For the kind of multiple you're selling at, you've got to easily surpass anything that
is expected by the street and then some, you know.
Just meeting doesn't give you, you know, 25 times sales.
That's a much smaller number if you want to meet
analyst estimates and again the the the focals of trying to buy back a stock at
at that kind of nose over some of my stocks and I did today.
Today was one of those interesting days, like Evan said, where not a lot of action in the
mag seven.
You sort of had a shuffling in that trade today with the perplexity rumor this morning.
We haven't gotten any confirmation from Apple or Google or perplexity.
So it's just a story until it isn't.
But I do think Google search business is a threat.
I've said this for a long time on this show.
I mean, I've said this for over a year now,
and obviously it's been pretty resilient over the past year.
I do think you will see at least a 10% decline
in Google's dominance of the search market.
You know, they've held a 90% plus market share for a long time.
I just think it's the era where that is going to end.
I think LLMs are a better search tool in general.
To be completely frank, I don't know why people are using search engines anymore.
I think it's probably just a creature of habit, largely stickiness of going to google.com,
the fact that every major browser has as its featured standard homepage a search engine.
I mean, this is obviously a very, very speculative claim that it'll take a decade
plus for this to play out. But I think in the long run, your AI agents and the integrated
AI softwares will effectively be your search tools in and of themselves. You know, I mean,
that feature exists internally within most LLMs already. So, yeah, I do think that, you know, the era is sort of the ball is starting to roll, whether or not this perplexity news is true or not.
I mean, I don't know. It could just be another story.
But that's besides the point.
I do think that that's a story to keep an eye on.
And, you know, we'll see by the end of next year if the needle is moved. I mean, it's been very, their search market share has been very resilient so far,
but we'll see. We'll see. I think the needle will start moving. And, you know, Google,
thankfully, is a very diversified business in terms of not their core business. Their core
business search obviously makes up the most of the revenue now. So not from a revenue standpoint, but they have optionality.
You know, they have their fingers in a lot of these different themes.
They have, you know, their quantum exposures.
They have, you know, their AI team, DeepMind.
And so they have the ability, obviously Waymo as well.
They have the ability to participate in these next-gen thematics
and very quickly and accelerate those businesses so i do think that gives google some optionality to maybe
stave off a decline in their in their search business but that was just quick comments on
the google thing um a lot of our positions did well today centrist energy again was up another
five and a half percent today uh on the constellation energy news this morning again they're the only enricher in the u.s that is using u.s based technology and so you know they're in a really
pole vault position with everything that's happened around nuclear policy and especially
the current administration stance on domestic technology so you know stocks up again today. I mean, we picked it up 96 on.
There's my entry here on the 22nd of May at 9680 average.
And now the stock's trading 131.
So their shares are up 35% in just a couple of weeks.
Obviously, we got that big two day move, which was most of that gain.
But good to see that one up today again. And it faded a lot less than the pre-revenue names. You noticed a lot of the pre-revenue
SMR names, which we actually got out of SMR last week. We were in it from 17 to 34. It was like a
double in two weeks. It was a wild trade. But those faded today. Those SMR plays sort of faded
off the top. I am still exposed to one
but it's via spack i've talked about that before on here which is gsrt um your max risk on that
right now nav is somewhere around 10 20 22 stocks trading 10 66 so max risk on that's around four
percent for people that don't understand max risk on SPAC sounds too good to be true.
Prior to SPAC merger, there is a redemption date.
At that redemption date, you can redeem your shares for net asset value on the SPAC.
And so when you buy a SPAC close to net asset value, it's essentially a controlled risk trade,
where however much higher you buy it from
NAV is your risk. If you buy below NAV, you have negative risk effectively. And arbitrage traders
do that frequently. They buy a SPAC below NAV, sell it at NAV, free money, as close to it as you
can ever get. But anyway, this one's trading above NAV. So there is risk. But like I said, there's
about 4% risk. It's one of those plays where I think, you know, look, if the nuclear stocks get
hot again, there's obviously a lot of risk with these pre-revenue names, SMR trading at a 10
billion market cap, right? With no revenue. Yeah, they got design approval last week. That's a good
thing. But they're years away from a commercial product. So there's a lot of speculative risk
in those names, right? If you buy them at the wrong time, you can get buried.
You can get buried on minus 15, minus 20% moves.
So that's kind of why I've pivoted
some of my more speculative exposure.
Still have a full-size position in Center's Energy
because that is a revenue producing company.
And like I said, I think they're in a unique thematic position
by being the only enricher in the United States
that's using US-based technology.
But I think GSRT is a safer play.
So I've kept full size on that one as well.
If the nuclear stocks get hot again, I think once you eat through the arbitrage traders,
that is a very good risk-reward trade.
So I stay involved in that one.
That one was flat today.
It got actually a nice pop off the open, started to get going,
but the arbitraders stepped in midday and brought it back down, but it closed up around a percent.
remember the era where we were trading a lot of these. But the thing with these pre-merger specs
is, is I kind of view that $11 level as sort of the ARB cherry level where once you can break and
close above 11 on a pre-merger spec, it generally means the ARBs are out of the way because these
guys are picking up big size, you know, in the 1030s, 1040s, they're dumping it in the 1080s,
1090s. And that's what prevents these things
from breaking out. Once you clear through that volume, once they cycle enough shares over and
you get rid of those ARBs, then that's when these things break out. And a lot of these have broken
out recently. Some examples are CLBR, which has been on a crazy run. I think it's like trading 16
now from its 10 nav nav so it's up 60
dmyy which is another one we own their quantum software company that they're emerging with
that one's trading like 14 60 so that's up like 40 30 40 45 percent from nav um so there's been
a lot of these um this year that have worked well and you know the closer you get it to nav the
lower your risk is really uh the game with pre-merger the closer you get it to NAV, the lower your risk is really the game
with pre-merger SPACs.
But you also have to make sure
that you do redeem your shares prior to the merger
because once the merger happens,
there is no risk floor.
Once the merger happens,
the SPAC can go to a dollar.
You can lose all your money.
So that's very important to keep in mind with SPACs.
You have to redeem your shares prior to merger
if you do want to redeem them
or obviously sell them at a higher
price if they're trading above now. But that's enough of a crash course on SPACs. But we do own,
like I said, I do own two. I own GSRT and I own DMYY. DMYY, I have a pretty comfortable cushion
on. GSRT, I'm not up much on it, but I have a pretty sizable position. It's almost 9% of my
portfolio now, which is a very big position for me uh because i generally run about 15 positions so um yeah
there's a couple couple tidbits on specs there um exometry xmtr i've talked about this one in the
past uh you know they are i think one of the most interesting companies on the market right now in terms of what they're doing. It's very unique.
They're pairing manufacturers with people up and down the supply chain, which is so uniquely relevant to what's going on right now.
It's been a great tariff trade, but it's also just been a very strong stock.
But it's also just been a very strong stock.
When the tariff trade is on in the markets and the markets are slightly red, it's been holding up well or going up.
When the markets are ripping and everything's up, it also goes up.
So it's been a really nice trade so far.
My cost on it is 25.37.
Stock's trading 33 as of today.
So we're up like 35-ish. Sorry, stocks trading 34 as of today so we're up like 35 ish or sorry it's actually 34 as of today
so up 35 ish percent um and so it's a good enough cushion to where i would probably buy it if it
came back into that 200 day moving average i don't know if we're gonna get a pullback like
that on it we bounced off the 21 ema uh yesterday but if we do, I would actually just buy more. I've been doing
more and more research on the company and I like it. It's probably going to become a core position
for me. The other name that is probably from this year that has become sort of a core position for
me is Nebius Group too. I know Sam's talked about that. But they did a billion dollar convertible debt offering uh two days ago stock
was down dip got bought pretty much instantly when the market opened recovered from being down like
six percent to being down two percent and then today same thing happened started red and then
closed well in the green closed up about three and a half percent um the exercise on on that debt is at 51 a share and you know i think
all things being equal if the market doesn't crash i think this thing is probably headed back there
um we actually got on the got into this one on really good timing got in at 23.92 on the 6th of
may and now the stock's trading 37.
So I'm up like 56% on shares.
And it's not a position I really want to sell because I just think Nebius is uniquely positioned
when you look at a lot of the other data center stocks
because of their AV ride exposure,
because of Toloka, which is their AI data business
that Jeff Bezos led the last round of investment into.
So I think they're just really uniquely positioned.
The market cap's in a position right now where there's a lot of room for speculation.
You look a lot of these data center exposed names, there's just a ton of speculative premium
sitting on top of those stocks.
And so I think there's room, not to mention the chart is just gorgeous.
You know, coming out of this massive cup.
So yeah, Nebby is going to be another core position for me uh to you know three those basically three stocks centrist energy nebby
is and exometry uh those three stocks are stocks that started as trades for me earlier in the year
and as i've done more research i've obviously taken some profits around all the positions but as i I've done more research, I've been, you know, Hey, maybe I can make these core
positions.
Now I have the cushion and the flexibility to do that.
So, uh, those three stocks, I probably will end up sticking with and adding to my longer
term holds, you know, with names like Robin hood and Tesla and Amazon, uh, you know, so
yeah, I, I really like, uh uh how both of those have been acting i like how nebius
recovered off the convertible debt and i liked how xmtr has been sort of winning either way whether
the tariff trade is on or off in the markets that stock's holding up beautifully uh sam i know you
wanted to jump in on nebius so you jump in i do want to go over a couple more stocks though
yeah i mean just real quick to comment on the Nebbius convertible debt.
I mean, there were two different convertible debts.
I mean, without that set aside, they've interviewed the CEO, Arkady, I don't know how to pronounce his last name,
but he's said many times it is a very capital intensive industry for building up data centers.
And it's not a matter of if they'll raise capital.
It's a matter of when.
When I saw the stock down 6%, I was like, wow, really? I mean, I guess this is a buy the dip
for people who are short term on this. And then it just recovered slowly but surely. I mean,
I think a lot of us doing NVIDIA doing pretty well today and yesterday. So probably a little
bit attributed to that, but also CoreWeave is up like 20% or 40% since the lows yesterday.
So that goes to tell you something with data center.
It's still pretty strong.
Markets are risk on.
Yeah, go for it, man.
Yeah, yeah.
No, I agree.
So, yeah, I touched on the SPACs that we have.
I touched on Exometry.
I touched on Nebius Group.
I opened up MindMed last week too at 7.15.
That's been working nicely.
I mean, not as explosive as I thought it would be.
The setup was really, really clean coming over that 200-day with the 9 and 21 stacked.
I thought it'd be a little bit more explosive.
It sort of faded these big pops, which maybe is concerning,
but it's riding the 9 EMA, so I'm not worried.
Don't feel like I need to get out of it or Um, so we're up about 10% on that now,
um, in a couple of sessions, which is nice. Uh, but I do think the daily looks really pretty.
Like the volume bars are super clean on this. Um, it has been choppy granted, like the intraday
candles have not been something that like you know would have been
very fun if you're trying to scalp this but um i think over the 770 780 spot it probably makes
another run at the eights and you know if you get enough volume to come back into this thing i think
we can get back up to the 10 so that's more of a speculative trade but we still have that one on
and that works today obviously a lot of stuff works today. So, um, but that kept, you know,
going to the upside Huntington Ingalls, which, uh, we opened a position on recently. I mean,
this thing has now been consolidating above the 200 day moving average for a couple of weeks.
And we got the golden cross, the 50 over the 200 on Huntingtonles tigger hii about four sessions ago i recently upsized on this
one uh back around 218 219 220 um and we've pushed up a little higher uh but i'm not expecting this
thing to be super high beta you know this isn't the type of stock that's gonna give me like
10 intraday moves like some of my more higher beta stuff. But I do really like how this thing is building above the 200 day here. And I
just think they're a major beneficiary of the shipbuilding initiative. A lot of the new dollars
allocated in the defense budget are to shipbuilding. You know, there's $27 billion in incremental
contracts. They will be a subcontractor on at the very least 15
billion dollars worth of that so um yeah i just think they're in a good position for contract
growth for backlog expansion they're thematically probably an attractive stock to own um so i'm
going to stick with that one as well and it's building nicely to the upside mercury systems
i talked a little bit about that yesterday.
I just really like this name.
And I don't think there's anything to dislike about the chart either.
It's been very constructive pretty much the whole year.
And I would like volume to be a little higher.
But I don't mind while the stock's building up into this big $52 spot, which will be a major level for it.
I don't mind some sort of consolidation volume on
that. But that one, you know, continues to slowly take to the upside again with my aerospace and
defense basket names like Kratos, HII, MRCY, Embraer Jets, these names, I don't expect them to
move as much. Like the purpose of these trades is not for me to squeeze out some juice
and get out of them.
I just think there's a thematic opportunity.
And Monitav brought this up earlier, and I thought it was a good point,
about how the valuation gap between large defense companies
and small defense companies has never been bigger.
I think there's a reason for that.
And I think the reason is you're going to see over the
next five or six years that incrementally more defense dollars will go to more specialized
providers of technology. And a lot of the specialized providers of technology, especially
the American ones, are sub $10 billion companies that are essential subcontractors on a lot of these big ticket contracts. And so
maybe I'm wrong, but I don't need to be right in a big way for that to pan out in the stocks.
You know, if 10% of global defense spend over the next five years, not 10% per year, 10% over the next five years,
incrementally goes to these sub $10 billion aerospace and defense companies.
That's massive upside.
So it's one of those things where I just need to be right small to be right big on the stocks.
And it's worked really, really, really well so far for most of the names.
The mid-cap aerospace and defense over the last like 12 months is one of
the only sectors of my portfolio where like every trade has worked in the other
sectors. I'll try stuff. It doesn't work. I'll pick something else up,
replace it with something else. Like it stopped out of something.
The defense trade,
the mid cap aerospace and defense is just all constantly worked even when the
market was correcting. And so it feels like an it feels
like an area where price is telling me something and so yeah i just keep hanging on to those stocks
and and most of them have been working really well you know again they don't move as much but
they've been working really well uh overall when you zoom out on those names so yeah that a lot of
names work today um that's kind of an overview i haven't really done that
in a while i think just overview of a lot of the names i own but um yeah it was a good day in the
markets i think i think the market's proven to be really resilient i mean if you're looking at it
just technically um just that spy 9 ema hold has been pretty impressive right like you have expected
maybe a little bit of gravity down to the 21 we We had like one day down there and, you know, we've just been pinching
and holding above the 9 EMA and curling back up. Um, and it seems like we're getting incrementally
good news. I mean, Trump talking with G on Friday, hopefully that call goes well. Obviously that's
a little bit of an overhead risk that Trump posts something on truth social after that call and says, you know, me and G couldn't come to an agreement or whatever.
Markets would probably dump off that.
But technically speaking, there's not a lot to not like.
You have golden crosses popping up on a bunch of individual names in a bunch of different sectors.
You have news incrementally improving.
I mean, I keep it simple.
I dance while the music's playing, right?
Like if something pops up, we knife back through the 200-day, I'll be on here preaching caution.
Like, I'm happy to change my mind, but markets have been acting well.
So, you know, right now I can't just, you know, flag concern that isn't there.
When it's there, then I'll cross that bridge when I come to it.
I appreciate it. I just want to add some little bit of context to what you said. So about 17% of the annual defense budget is spent on equipment and another 16 17 percent or 15 percent is spent
on r d so so let's say about 280 billion in total is spent or 300 billion is spent on
on equipment or r d i think um you know the the getting an additional 10% from being spent on large companies
to smaller companies
is going to make an entire year's revenue
for all of them put together.
These are small revenue companies.
It can make a massive difference
Marniv I want to ask you to if I saw Kevin jumped up here so we'll go to Kevin
right after this but I want to ask you quick because I know we talked about
this earlier in the year when I was trading mercury but did you end up
looking into them because what you brought up about the equipment spend I
was looking at the avionics spend across the board and it's just ballooning everywhere so so
i i sort of look at it like like uh you know technology in in automotive right it's the same
narrative it's the same idea everything that we make from here on out and what we've been making
from the last five years has more circuits, more intelligence,
more control systems, more, you know, compute in it than we've ever had, you know, anywhere in the history of defense production, and it's going to keep increasing. Mercury designs a lot
of those control systems, those boards, you know, those secure, you know, puts together those open source secure compute platforms for the defense.
They're one of the largest providers of that, right?
So you don't, you know, go and buy these things off the shelf from hardware manufacturers.
Mercury designs and builds those.
Probably some contract manufacturer puts it together for them.
contract manufacturer puts it together for them. So, you know, a larger percentage of every, you
know, personal carrier, every tank, every ship, every aircraft, every drone that we build will
have more of these systems on board, which basically means that, you know, all of those
projects, Mercury is going to either be you know solidly participating in
it or somehow contributing to it so their market uh their their total addressable market is going
to continue to you know increase incrementally by a large number every year for you know the
foreseeable future yeah the more and more i read about them they're just like so well positioned i mean avionics for
me is a huge one where there's a ton of incremental spend going into it i mean they do the precision
guided munitions platforms they do radar detection all those industries are booming. And I mean, like you said, yeah, as as military
technology becomes more and more tech enabled, you'll see more tech hardware in that technology
too. And yeah, I just think it's a mega trend. And like, one thing we've learned is no matter
who talks about the budget, no matter who talks about fiscal spending, like nothing can stop the
fiscal train. And the part of the fiscal train in the United States that certainly will never be stopped,
even when we do start cutting spending is the defense side, because the Chinese won't stop,
and the Russians won't stop. So we won't either. And, you know, it's just like a perpetual arms
race. And I feel like betting on the expansion of the U S military budget and betting on the allocation of that budget to more specialized technologies is,
is a pretty good bet.
So yeah,
I'm,
that's,
that's the one part stuck.
The other part is,
you know,
what always happens is the primes are going to go out and start buying if
they're not successful themselves.
So there is a takeout price for almost every single one of these guys.
It's just not something that the primes can, you know, greenfield it out and expect to, you know, produce results.
So if these guys are starting to get deals, they're just going to bring them in-house.
And you're going to see under at least this administration those deals getting approved
so so that's the other part of it yeah i mean i think i agree with you and i think you'll see
more mna too because one thing that kratos it's funny that because we talk about kratos a lot but
one thing that kratos did that uh an attitude that anduril uh which is probably the most, at least verbally popular defense company now that everyone knows about.
But the thing that they have in common that Anderil sort of adopted is this idea of, hey, we're not going to use the budget in the contracts that we receive to develop the technology.
to develop the technology.
We're going to spend our own money
and develop and deploy and test technologies
and then use those technologies
to win these contracts.
And that approach,
which Kratos took many years ago
and was sort of a maverick
when they first started doing it,
and now Anderil is doing it,
more and more smaller companies will do that.
It'll give them the ability to,
or I won't say it's not going to guarantee them the ability to, but it'll give them the ability to potentially leapfrog some of these legacy guys in some new key technologies when it comes to capability.
And then, yeah, they'll make very, very attractive buyout candidates.
But Kevin, I see you jumped up here. What are your thoughts on the market?
I'd love to get your thoughts on what what's going on what you're looking at yeah i mean you can't deny uh the participation that's
taking place right it's broadening out uh it seems like there's a theme every single day
um obviously it continues to move higher energy caught a little bit of a bid here today prices
and energy are moving up so um you know it's a tough market to be a bear in um but i will say
that i think this is if you're going to short this is the area to do so uh that 59 70 um resistance
level a couple of gaps to the downside um and even if you kind of look at the four hour chart on the
e-mini s p futures uh starting to look like we had a little bit of a shooting star pattern there.
So potential short, I'm not saying like a massive short, but a scout short could be
could be had here. But this is a tough spot because the pain trade still to the upside.
So we're pretty much at a breakout neckline here, potentially back to the upside and to
all time highs here. So if you look at individual names and sectors, I think there
probably was some better value plays out there to still catch a bid. But this market has definitely
been resilient. It's been able to shake off some of the bearish news. And once again,
we have some optimism about this call coming out on Friday. Hopefully it does go well and we'll continue to
kind of maneuver through it. What I'm looking at is diesel prices making a higher low if you're
looking at the daily chart, even if you're looking at the weekly chart, still relatively on a
historical basis, relatively low inventory levels. So any type of meaningful pop when it comes to economic
activity, especially on the freight side, when we talk about shipping, I think that could also
push prices for diesel a little bit higher. So I'm keeping my eye out on that. $64 on crude,
it's going to be a tough area to try to break through, but it seems like some buyers have been trying to step in.
So we'll see how that actually plays out here.
A couple of names, though, Venture Global.
I bring this one up every once in a while.
This thing just popped today up 21% in today's session.
This is a relatively new IPO that's hit.
I mean, it's been trading for a little bit, but started getting weekly options last week. And ever since then, we started seeing a lot more activity taking place
here. So that one is a stock that, and this is not a recommendation by any stretch, but sometimes
people reach out and they're like, hey, I want to learn how to trade options or what have you.
You find yourself a high beta stock that's low priced that you can
still get some activity in. Just got to make sure that you have some liquidity. I wouldn't say that
there's still a little bit of a liquidity problem with these options if you kind of go out, but
that one moved up pretty nicely. It has the LNG exposure. They just got approved,
officially approved for an expansion
project. I want to say late last week. So you see some buyers really step in, large volume candle
here today. You can see the price action since the IPO pretty much trying to fill one gap here.
It looks like it's doing it right now. The next level of resistance sitting at around $17.90,
of resistance sitting at around $17.90, let's say 18 bucks. So that one's a decent one.
One that people don't talk about a lot, but check out the chart, Pepsi, basing out,
not a sexy name by any stretch of the imagination, pretty much range bound,
had a decent day to day options are pretty cheap relatively cheap you go out uh in a little bit of
time and you could make the case at 142 on pepsi could be in the cards uh here and that's another
one that i'm keeping my eye out on uh looks like the markets are pumping so i don't know if there's
any news so cut me off if there is uh and then dollar general they had their earnings. So a nice little pop. You know, this kind of reminds me of advanced auto parts, right?
It got just so beaten up that, you know, any type of bright sign is pushing the stock higher.
Now, it's up 15% today.
But if you go back on the chart, you still got a gap to about 122.
Not a recommendation once again.
But if you go out to the June, I'm sorry, if you go out to
the July monthlies, you know, relatively cheap to get some upside exposure there. You could also do
a spread trade. So that's another one that's kind of like basing out. And then from a sector
standpoint, I've talked about industrials in the past. Obviously, there's been a huge move,
excuse me, huge move,
especially when you look at some of the defense stocks,
the Boeing stocks, things of that nature here.
A little bit stretched on the valuation standpoint,
in my opinion,
but I think if you look under the hood,
there still might be some value plays there,
especially when you're looking at rail.
So that's another one that I'm focusing on.
And I hate saying it, but communication services as a sector looks like setting up for a little bit of a sell signal.
So once again, I think this is an area if you were going to take short, you can take a stab at it.
Premiums are relatively cheap. Volatility is really cheap, given the environment that we're in.
I don't think that means like we make new lows
or anything like that in this cycle,
but a small pullback, come back, retest,
maybe some of those gaps to the downside could be the play.
You could also ratio.
I think ratio spreads right now
are actually fairly attractive.
So you could, you know, two by one, three by one,
three by two, however you want to do it.
Pick a direction,
get some upside exposure.
And if not, you see any type of meaningful pullback
in the market.
If you have some, let's say three to two put,
three to two, three calls, two puts,
depends on the strike, whatever.
If you think that we're gonna have a meaningful pullback,
that's where that ratio really kind of pays out here. So overall, once again, it's been a resilient market. I think
we're pricing ourselves, we're pricing a lot here personally, but I'm also looking at the
technical trends and the trend is saying that the move is still to the upside and until proven otherwise, you, you gotta be nimble. So, uh, but I,
I do feel like there's a, there's a short to be had here, but it,
it's very tough in the summer. I don't know if anybody's talked about this.
Very tough in the summer. You usually get low volume, um, as well.
So usually whatever the prevailing trend is,
it'll continue in that manner, um, summertime so shorts i wouldn't say like go
all in short like if you're going to do it very measured something that you can definitely lose
um but i think that there is a potential for a a pullback here i'm not trying to be
doom and gloom but and just kind of calling it how it is especially when i look at the chart
anytime i get close to a neckline,
and actually you could say for ES, the neckline's literally probably 6,000. So you got another 20 points to the upside. Once you kind of get to that level, it seems like something that
may have some downside potential. But the market has been shrugging off a lot of negative news.
ADP could be a very big wild card what i love about adp for tomorrow is that
depending on whatever your market narrative is you probably will discount the that print but if you
take anything from it i think you look at what the prevailing trend is for adp and then looking at the
wage data i think is very important but uh let's say it comes in very strong. People are going to say, yep, no problem.
Tariffs are on a big issue.
Shrug it off, move forward.
Let's say that we have a very weak print for whatever reason, or if we print negative,
I don't think we will, but let's just say it comes in at $50,000 for whatever reason.
Right?
Marker might shrug that off as well.
So I think it'll be a report that we definitely will focus on, but we probably will shrug it off.
I also think that probably the biggest economic data risk that we have tomorrow, I believe ISM services is coming up tomorrow.
Manufacturing has been, for the most part, bearish. It's been pretty bad, but services has been holding up.
But that's the one that could that could fall here. And I ain't going to lie.
Look, if you look at the E-mini S&P 500 on the 15,
it's setting up for a potential cup.
I mean, several cups here, right?
But the bigger cup sitting at that 6,000 level,
even if you have that small little pullback to make that handle,
say that comes down to around 59.75,
that probably would be enough for that short. I probably
wouldn't press anything more than that. But that's what I got. So I'll kick it back.
I just wanted to comment on Venture Global. The reason why it's up so much today, as you were saying, they basically they're going to be the second largest LNG or liquefied natural
gas exporter in the entire world. And if we're starting to see some transit or some exports
starting to kick up again from EU trades, EU trade deals and tariffs and so on, and even when Russia
starts coming back from the picture, I don't know what's going to come from that one, or I don't
know if it's going to be bearish or bullish, but it honestly just seems like this is going to be a beneficiary for whatever trade deals these other countries are going to do.
If there's some sort of agreement in there that they're going to be able to take more exports of LNG or liquefied natural gas, that is going to be wholly bullish for Venture Global.
They did IPO recently.
I think it was like six, seven months ago. And they went down all the way down like
seven bucks. So coming back from that negative sentiment, especially seeing that natural gas
is probably going to come back, that's going to be a big tailwind for Frederick Louisville. However,
I'm only saying that because I got in pretty early. I'm near the lows on this one.
But I'm going to hold throughout it at being strategic with selling some puts on it.
I did sell some $10 puts on it for June 20 the other week, and those are doing pretty well.
Maybe I'll start selling cover calls in my position.
We'll see.
But the momentum is pretty good to the upside.
I'm not sure if I want to do that right now.
Maybe once we cross that IPO gap that Kevin was mentioning.
But I could see this coming back pretty considerably if we do get some more good news as far as trade deals goes, especially the EU.
Yeah. Yeah. Covered calls on this thing is hard, man. So I got in at like the 680, 690-ish
level and I had the $10 calls I was selling against it. That's okay. I mean, I got right
back in. It took 10 what, 10, 15.
And then I bought some today, literally at the open.
And I'm already like 5%. I'm probably going to scalp that tomorrow too.
Look, I'll trade the whole thing up.
One thing to note, though, there is some legal issues with the company, which is why it's
also trading at a little bit of a discount with some of the major integrators out there.
I believe Shell and BP are both in litigation.
Shell is definitely in litigation with Venture Global.
So there's some force for jurors that happened in the past and things of that nature.
So we got to keep that in mind.
But yeah, there's only at more than what Oxy is valued at as far as just raw infrastructure.
So it's been trading at a pretty steep discount for a very long time, but it's a high beta play.
Once again, they just rolled options out
on it. Spreads are really wide. You got to work orders. But yeah, if this trend is going to
continue, I think that there's still maybe a momentum play within this name. I do want to
kind of highlight though, at some point, and some people are thinking this is going to be 2028, 2029, and I kind of believe them.
At some point, we will have overcapacity of LNG.
So what will eventually happen is we'll have overcapacity here in the United States.
Henry Hub, natural gas futures will continue to rise, but you'll also see Dutch prices fall, right?
Until we have like an equilibrium. So this is a first mover advantage type of play,
but I would expect that you would have others actually getting into the space and we'll probably
build out. I mean, EIA has got some really good reports on this as well, but we'll probably
build up over capacity. So, term play, maybe, right?
Like once again, it's been trading at a discount, pretty deep discount.
But you also have to be mindful that the LNG story at some point over the next
three years or so probably will tap out.
And then that's when you'll start seeing consolidation within this
space so very high beta name though so yeah i cannot stress that enough i mean like yeah it's
had a 20 day today um this is a stock that it's nothing for it to drop six percent eight percent
in the session next day go up five percent next day down four so this one actually does have a lot of
volatility but something to play i mean there's another uh you know chenere um something that's
a little bit less uh volatile but another major player within this space it's just holding up
right now uh so that's another area of uh of focus so uh know, I think that there's still opportunity.
I like looking at value plays, something that's basing out on the technicals.
Harder for me to play breakouts.
They're a lot more fun when they go your way.
But I like, you know, trades at a basic low IV on decent risk reward structures to them.
decent risk reward structures to them. So not very sexy names, you know, the DG trade or the
So not very sexy names.
Dollar Tree might be a little bit different. So just be mindful of that. But even like I brought
it up a couple of weeks ago, I believe it was on this space. Like it's not a recommendation,
but like a basing of like Humana is one of those things. that's like you could scalp if you go longer term.
I always say longer term.
I mean two months, a month and a half, two months out when you're looking at the options
expiry and try to scalp.
So that's what I'm looking at here.
I think when I look at the broader market, I think you've got to play the trend.
I do believe the market is pricing in a lot right now, and that's fine.
If everything goes according to plan, the market will continue to truck higher here.
I just feel like we might be getting ahead of ourselves in some respects, but what is it?
The market can stay in one direction more than you can stay solvent.
and stay in one direction more than you can stay solvent.
So still have upside exposure,
but I think there's some tactical positioning here
that you could have to the downside
to try to capitalize on maybe a pullback.
Oh, Hershey's another one. I'm sorry.
I know Wolfie will love that one.
Wolfie, look at that Hershey chart.
That's another play I was looking at last week.
Not a sexy name, but once again, can be a mover.
So that one's up, what, 1% today.
Fairly cheap options on that one. It's been trying to
base.
Big chocolate guy.
Are there any data points this week that you are actually interested
in? I know you were saying a couple that you don't think the market
will be paying attention to.
Are there any jobs for it on Friday?
Are we in a Trump tariff market?
Although he has been speaking a little less
the last couple of days, it feels like.
Yeah, no, I think the market's...
I think they're done with the tariff talk, honestly.
I think the market's looking for action,
and I think they're giving the White House
the benefit of the doubt until we see otherwise.
I think the market's just going to be okay to digest it, which I think is wild.
But that is what it is like the steel.
So, for instance, if you look at the steel tariffs, now this is going to exclude the UK.
It appears it seems like that was just actually signed a couple of minutes ago or 30 minutes ago.
actually signed a couple of minutes ago or 30 minutes ago.
But, you know, that LNG story, you know, another reason why venture is moving up is because it already has the infrastructure in place.
There's other LNG companies that want to be able to build out export facilities, but you raise the price of steel and aluminum.
I mean, 25 percent was already aggressive, 50%, you're going to price out
a lot of those projects. So, you know, I think that will have longer term ramifications, but
they do stay in place. So those companies that already have infrastructure built out are going
to be the prevailing winners there. So, you know, I think the market's kind of discounting it uh for now when it comes to
the the trade the trade deals and i think i mean if you look at it on the horizon
i think stock talk you posted this the other day like they're i mean we continue to increase the
amount of accept exemptions for these tariffs and then extending the pauses. So I think the market's going to still price that in.
I think they're calling President Trump's bluff that they're not going to really like
re-implement a lot of these tariffs.
I think I have some services.
If you're going to look for a risk for tomorrow, I think that's going to be the bigger one.
If we do see any form of a contraction there.
Now you're saying, hey, that's services,
but services still has an impact when it comes to supply chain. And then I'm looking at the
jobs report, average hourly earnings, I think is still going to be the key thing there.
I think Mark is looking at what, 132,000 jobs to be added, if I'm not mistaken.
We've been lowballing the non-farm payrolls.
I would expect that to come in hotter.
And if it doesn't and it comes in light, I think Mark will kind of look into that.
And then you have to look at – this is what makes it very difficult.
If it does come in light, does the market say, okay, Fed put is in place?
There's a lot that's really backstopping the bullish activity, which is what
I'm trying to say here. So there's not a lot of bearish news wires yet to really kind of shock
this market. I think everything's going to be discounted for now. So you got to play the long
side and scalp shorts as much as you possibly can, if that's something that you're interested in.
And then go back and look at your weekly charts.
I mean, the weekly charts on the S&P 500
says that this thing's gonna continue to roll higher.
So I think that's gonna be how you have to play it,
but those are the data points that I'm looking at.
I have some services for tomorrow,
average hourly earnings on Friday
are gonna be key ones that I'm looking at.
Kevin, first question.
Yields, 30 years still at basically five,
the 10 years at 475.
I mean, we don't care about that anymore either.
Not we, like you.
You know what I'm asking.
You're saying in general, market.
You're right.
No, no, you're right, man.
I think it was, I mean, I haven't been in spaces in a minute.
But look, we have a yield freak out at least once every year, at least once every two years for sure.
And this is kind of that time.
It's always going to be around the budget.
And we're going to have a conversation about it. And then we're going to kind of that time. It's always going to be around the budget, and we're going to have a conversation about it,
and then we're going to kind of move forward.
What you are seeing with the 10-year yield
is that consolidation is taking place,
and that's all the equity markets, in my opinion,
really care about.
It's not so much the level.
And here's what for us is.
Equity markets, if you're a trader,
all you care about is stability and yields.
The market can digest that.
If you're looking at it from an economic standpoint, the higher the yield, especially if you're looking at sevens, tens, twenties, thirties, that could have an impact when it comes to financing costs.
Over time, that can impact earnings.
So the market doesn't care about that right now, but that's the potential risk that you have.
The market doesn't care about that right now, but that's the potential risk that you have.
I think the market is trying to consolidate when it comes to the yield space.
30 is still a little bit out there, still hitting that 5%.
But if you're looking at the curve, not really too concerned about it for right now.
Now, if the Senate comes back with some major adjustments to the budget proposal,
that might spark the conversation again.
But once again, it's something that, you know, people keep on the radar,
and then it kind of falls by the wayside.
And I think you still get more concerned about yields in Japan
and, you know, high-yield credit default swaps rather than the U.S. Treasury.
So I don't think that they're So I don't think the market's
really stunned this move. If we get up to and we break about four or six and a half,
I think you get concerned on the 10-year and you get involved to come back in a bit into the market
bit. But without that, I think if we had the stabilization, I think we're going to be
fine for now. Unfortunately, you're seeing it in the stabilization, I think we're going to be fine for now.
Unfortunately, you're seeing it in the housing market.
And I don't know if Kurt has already talked about this.
I know he's got exposure.
I know you got exposure into this.
But the housing market, in my opinion, is like damn there crumbling right now in the background.
Seems like no one's caring about that.
But you need to have those prices coming down.
And it's unfortunate that it's either two things that are going to happen. Either you try to revive the housing market by lowering interest rates and make it affordable for those to be able to finance.
Or you hold rates where they're at right now and you need to have prices fall.
Prices falling is also going to impact people's equities.
Those are actually equity that people actually own homes and that have a little bit of a domino effect.
But the housing data is not looking too great right now,
but you are seeing prices decelerate if you're looking at Redbook.
And then eventually, hopefully, knock on wood, that's going to be reflected in CPI data.
I think another one of the bigger risks, though, that you have in the summer season is, once again,
activity kind of picking up, energy consumption ramping back up. you're going to already see this when it comes to utilities you're seeing it right now in the
utility space but if you get that back into let's say gasoline diesel things of that nature um some
of those volatile products having that still being a price and pressure to the upside while
housing and shelter component is still trying to resolve itself is going to be
a problem. And then if you look at larger durable goods, those prices, because tariffs will have an
impact on those prices, as those prices do go up, people consume, buy those bigger goods,
insurance prices will also lead higher eventually as well. So I think those are still some inflationary pressures to be mindful of. But I think if you have a stabilization in yields,
it's going to be just enough for the markets. You don't want to see yields higher, dollar lower,
and equities lower. You need to have one of those three components holding up,
and the market's going to be okay with that.
You see all three of those components moving in the same direction.
That's where we got a problem.
And when I say in the same direction, yields and prices for treasuries are inverted.
So prices going lower, that would be a problem.
Yeah, I saw a note from Redfin that i think they put it out today so there's like 30 something
percent more sellers in the market than buyers right now which is by far the biggest skew that
they've seen in i think it was early teens that i'll have to find that full report but
yeah 2008 2008 i think is the last time that we've had this aggressive or this aggressive imbalance. It actually is kind of eerie.
Don't say that.
Well, it's a different. Yeah. But you know what? Like you call out years. You got to also provide context.
That was also not only just a housing bubble, but that was mismanagement of mortgage backedbacked securities, right? Like that's really what kind of created more of a
catalyst. We don't have that happening right now. We just have the fact that inventory is now
starting to build up. Financing costs are still relatively high. And the only way that you're
going to entice people to buy homes is if you move prices lower. I can tell you right now, like in my neighborhood, I've been in my house for what, three years, four years now.
We're still building houses and houses are going up for sale left and right, like every single day.
And they're staying on the market for six months, even eight months.
We've had one that was actually on the market for like 12 months, which is kind of unheard of, especially in the Denver metro area where we had one of the hottest housing markets.
We've had one that was actually on the market for like 12 months, which is kind of unheard of,
Now it's starting to cool off. And we are actually, I believe Denver itself is about to be in a contractionary position here when it comes to home sales on a year over year basis.
So you are starting to see some slowing in certain pockets.
And it's just a part of the, unfortunately, it's a part of the cycle.
And I think CNBC had a report today too, and I know Kirk, you had your hand up.
But home equity lines of credit and loans, people are starting to grab that more, right?
They're trying to get that equity while you still have it before those prices go down because the prices go down and the equity at the home goes down, right? They're trying to get that equity while you still have it before those prices go down,
because the prices go down and the equity of the home
goes down, right?
So like you're having this,
you're having a correction within the housing market,
which needs to happen.
But hopefully the prices come down,
hopefully financing costs goes lower,
and then hopefully you have several different generations.
I would say every generation post millennial, millennial being one that's included, having the ability to at least own a home or own property in one way, shape or form to be able to backfill. years you're gonna have an abundance of supply as the boomers kind of transition to you know longer
term living facilities or moving into their kids house for support and things of that nature so
kurt i'll kick it over you man yeah i i think you pointing to the housing market is the number one thing that can break.
I've been looking at real estate all over the country.
I focus on the Midwest and Wisconsin, but the inventory that you're talking about is
very, very concentrated, in particular in a handful of big cities and in Florida. So if you're in the Midwest,
there's no housing glut. And the simple fact is that houses that were selling for
$200,000 to $300,000 or $400,000 in 2017, 18, 19 are all double now. So there's a problem with the income to debt ratio for people
trying to buy a house. And the biggest thing that I've seen in the last seven, eight years
is that the institutional buyers are just so aggressive. So you've got hedge funds and private equity firms and REITs.
You know, one of my best friends, my fiance, my son, all in real estate.
And on every single decent house, there is two or three or four or five floor bids by institutions or, you know, companies that want to buy the house and then
rent it out. So it's a really convoluted market. I've actually tried to tweet and contact people.
The depreciation for single family house structures is a rule that really gives institutional buyers a huge advantage
over people who want to just be owner-occupants.
And that has kind of really gummed up the whole system because we can't build the houses fast enough.
is fast enough. And even though the boomers are going to start to die someday, you know,
And even though the boomers are going to start to die someday,
that's a decade, 15, 20 years off before I think it leaves the mark. And by then,
we might allow another wave of immigration if we want to keep the economy from shrinking. So
I don't think it's a problem that has a short-term solution, maybe not even an intermediate-term solution, if they don't do
something to dissuade or make it less profitable for institutions to buy single-family homes.
I have a post on my X page telling people you ought to like it and repost it because if you're younger, you've seen how tough it is to buy a house.
If you're not a top 10%, maybe top 20% income, it's just really tough.
So I don't think it's going to get fixed.
I think Florida is skewing the numbers a bit because that market's just absolutely collapsing.
I know Austin has some problems. I know Austin has some problems.
San Francisco Proper has some problems.
Denver, I know my nephew just moved there, is softening up.
He's actually renting for a year and just waiting for an opportunity.
But I don't think certain cities are going to see big corrections.
I think Florida's in trouble.
I talked about that with Brad Thomas. I said that
about a year and a half ago, I could see it coming with Florida. He said it was on my mind. Well,
now that market's collapsing. I think people really ought to also consider all the debt
that is tied to real estate. Not only individual, and there's over 6 million people who are behind on their
mortgages right now, which is equivalent to right before the financial crisis, even though
that's an absolute number. It's not as big a percentage. But what if we do actually get a
housing correction just in several of the big cities and in Florida? What happens to the debt
those funds own or the private
equity firms in the hedge funds own, right? They just go bankrupt and everybody gets paid on the
way out or has already got paid on the front end. And then we're sitting here with this huge
pile of mortgage debt that the banks and us have to absorb, which means bailouts, which means
inflation. It's that whole horrible cycle. And it is the thing that I'm afraid of the most
playing out is if this economy slows down, there's just a series of dominoes that really
can make it rough for a while. I hope that doesn't happen, but
the housing market's not healthy in maybe 10 or 12 places, and there can be residual knock-on
effects in the debt structures, which would really impact regional banks and some of the bigger
banks, but mainly the regional banks, because they have the double whammy of the commercial real estate problem.
So if I was going to look anywhere, it would be the debt problems,
not only the mortgages, but also who's going to buy U.S. Treasuries
if we blow out the deficit again, which seems like we're going to do.
The international markets, I don't think we're going to do. You know, the international markets,
I don't think are going to bail us out. I really don't think it's going to happen unless
Saudi Arabia, you know, puts a whole bunch of their wealth fund into us. But I don't know
where else we'd get a fix. So I do think it's important to pay attention.
Yeah, I agree with you. Look, and I don't think we're trying to be gloom and doom here.
This is a problem that's been existing for the last 10 years, 10, 15 years easily.
So this is not like an overnight, oh, my God, this is going to be the reason for a crash.
It's just it's something that's definitely under the hood.
And I think even kind of bringing in the demographics aspect of it, I think even makes it a stronger case.
You know, the last thing I want to kind of highlight here and then I'm going to jet is, you know, looking at this.
If you think that the market, if you think the economy is going to be an economic slowdown, you made that comment.
And unfortunately, I feel like the data itself is going to be very hard to convince somebody that it is slowing.
And I think the GDP number, especially when you're looking at the Atlanta Fed GDP Now forecast, is going to be is going to be a very highly debated,
hotly debated topic if it does come to fruition. I mean, it's looking at what, 4.6 percent for Q2.
But if you kind of look under the hood there, it's looking at what 4.6% for Q2.
But if you kind of look under the hood there,
it's because of the massive drop off in imports.
And then also we had a drop off in exports.
I think the drop off in exports, correct me if I were on what,
4%, something like that.
Well, month over month, if we had the data from Friday.
But when you look at the imports,
we had a drop off of 11%.
And I don't, I
don't think, I believe that that was the largest drop that we've ever seen. But I might be
wrong there. But I'm pretty sure it's the largest drop that we it's got to be it's easily
top two large drops that we've ever seen. But the effects from that actually is artificially
pushing up our GDP significantly. And so it's hard
to have that type of conversation, Kurt, knowing the fact that the data itself is going to look a
lot better than what is actually truly under the hood, if that makes sense. I mean, I know that
you understand that, but that's where I feel like it makes it really hard for the Fed as well.
Yeah, I agree. i'm hoping that we just
grinded everything out but you know our propensity to run so hard in one direction or the other
messes us up quite a bit so you know i mean i listen to you know to schwab network all time and
you know my my concern is that animal spirits get out of hand at some point and we stop grinding and we just
jump over the ledge. So, you know, I'm not, I'm not predicting it will happen. You know,
I'm always in the grind it out camp because I am long-term bullish, but there's a lot of things,
you know, and, and, and I think that you've talked about this over and over again.
There's just a lot of things that if they're not, if we don't grind them out and see the acceleration over time to fix everything that's broken,
that that 10 or 15 year period where everything kind of built up, it could break.
And I don't know what's this year, next year, five years from now, but I'm worried about
debt for the first time in my career.
I really am.
I mean, I was on the right side of the financial crisis trade from the standpoint that I got
I got out of the way. I didn't make any money, but I got out of the way.
all the way.
I didn't make any money, but I got all the way.
This time, I think it's much more complex, especially because of the private equity and the private credit taking such a gigantic role now.
I think that the information is a bit opaque.
And when I can't see the information and try to understand it, that scares me.
And I think that's one of the reasons people are a bit on the sidelines, and money managers in particular, is we don't know.
We don't know with the tariffs what was pulled forward, what was pushed back.
GDP now is up at over 4%, but was that just a one-time adjustment, right?
Does it come smashing back down to 1% again like it did earlier in the year?
I don't know.
But those are risks to keep an eye on, I think.
I mean, those are COVID-19 numbers, dude.
You have a contraction of negative 2% or whatever for Q1 and then a positive 4.6%.
I mean, obviously, it's's not gonna probably land there,
but it just makes it very hard for anybody
who's trying to map this out,
especially when you're looking at monetary policy.
But at the end of the day, you go over time.
We've had crisis before, we've had issues before
and equities tend to generally rise.
So even though we have concerns,
what is it, Stock Talk part, dance while the music's playing or whatever.
That's how you play it.
That's what I like to do.
I mean, look, you guys are right.
There's always these concerns, man.
Like we talked about two years ago, we were talking about commercial real estate.
And look, I'm not saying it's not a problem.
I agree with you guys.
Look, there's a problem with commercial in commercial real estate. There's a problem. And if you want to look at unrealized
treasury losses in the banks, how that could potentially be a problem in some, you know,
crazy bank run scenario, all of these things that could happen and there could be a breaking point.
So yeah, I agree with you. It will eventually, maybe this year, maybe next year,
maybe five years from now, maybe 10 years from now. But it's like, I mean, there's been life
changing money to be made in forget the last 20 years, just the last five years. You know, and
I personally and I get that everyone thinks about this differently. I never want people to think
that like my measure of risk tolerance should be how you're doing it. If you're older and you plan for retirement or you're younger
and more conservative about your like, whatever, everyone's style of the way they manage their
money is differently. But for me as a relatively young guy who's been trading most of my adult
life, I haven't known anything outside of markets markets outside of when I went to medical school for three years.
I, I feel like I can take the risk and I feel like I have the knowledge and the constant
attention to the markets by now to do it in a risk appropriate way.
And so, yeah, like I do dance when the music is playing and when, when problems start coming
up that concern me or markets really start breaking down, then I get cautious.
In February, once we had that big deep seek sell off, a lot of the names that I was in sold off big.
I caught a lot of exposure and I got defensive.
I didn't buy the dips at the bottom of a lot of those names.
That's not the way I operate as a trader.
I'm not like a catch the knife kind of guy.
You know, I wait for markets to build back up for technical setups to set up again in individual stocks for, you know, volume to come back in, catalyst to come back in.
And that's when I start deploying capital again.
And then when the music stops, then I get cautious all over again.
That's worked for me.
And it's allowed me, like, look, do I take drawdowns when the markets go down?
Yeah.
I post my performance charts.
I posted mine from earlier this year.
If you look at the huge drawdown I took in February from the deep seek sell-off, that
was a massive drawdown from my portfolio.
But after that deep seek sell-off, I hedged.
And that was convenient timing because we got much more selling following that with
the tariffs. That helped me float performance. So I get cautious once things start breaking down.
Sometimes it works out. Sometimes it's me getting cautious at the bottom. I'm okay with that. I can
live with that because when the markets are rolling to the upside, I'm throwing a lot of darts,
you know, at a lot of good setups, high momentum setups. And so,
you know, if, if the markets, if something happens, something breaks and everything goes
to shit, okay, I'll get out of all my short term stuff and I'll batten the hatches down and I'll
buy some index hedges and I'll ride it out. You know, like in 2022, that's what I did.
I bought a bunch of puts on RK, sold a bunch of short-term calls, and just let myself take drawdowns on my core positions, right?
Like a lot of the core stocks I own, my long-term stocks were down that year.
That's okay with me.
It's okay to have to go through a year or two-year period where I have to be much less active, take far less trades, hedge constantly against my long-term positions, that's okay.
But those periods generally don't last long. Have there been exceptions? Yeah, there was the lost
decade. There have been three or four-year bear markets here and there. There have been years
where equities were flat on a 15-year basis. All of those things are true, and those have happened before.
And if they happen, we'll cross that bridge when we come to it.
But I do think there's been an undercurrent in the last 20 or 25 years or so
where technology stocks have really kept equity valuations very resilient.
Yeah, we've had our crashes, but we've generally recovered to highs
pretty quickly, at least again in that past 25-year time frame. And I think the spirit of
technology, if you will, is a huge reason for that. I think the efficiencies that technology
offers us, the ability for businesses to improve margins, to, you know, increase efficiency across all
metrics of the business.
I think those things are powerful trends and they've led to the United States having 23
of the 25 most valuable companies in the world, having several multi-trillion dollar technology
companies.
And even now you look at this AI trade, which is making, like, it's not really making a
lot of people a lot of money.
There's people that are using it well in ads, like Meta, who are using it to incrementally
boost their margins.
Microsoft is deploying it arguably pretty well in their existing enterprise software
offerings.
You have some of these companies like Salesforce and ServiceNow that are deploying it well
and driving incremental profit and margins.
So yeah, you're seeing it in this sort of muted in the background
way but when you look at the ai centric products they're not making a lot of money yet the
investment flows keep coming in data centers keep getting built out money keeps getting poured into
it because people see the light at the end of the tunnel you know and um i think that technology
has been the light at the end of the tunnel for a long time. Yeah. If you have a fiscal deficit problem, I think it's the solution to that too, but that's a whole separate conversation.
What?
Oh, okay.
Outgrowing the spending is the only way.
I don't think the fiscal train is going to stop.
Oh, no.
Look, let's talk about this real quick.
That's going to be a whole other story.
Look, if you want equity markets to really rise, you want defensive spending. That's it, right? There's people that are going to be pissed off about that and you got to have your fiscal house in order. But if you go and look back at the trends on equity performance and see exactly what's happening in fiscal spending, there's a reason why there's a direct correlation between the two. So take that as you will. You could be, you could try to cut as much as you
want and you want to have a lean government, but you know, you like your equities, you probably
want fiscal spend. You like your equities. You also kind of want a little bit of inflation
that's in there as well. Cause equities actually do really well when it comes to
inflationary markets because of growth and not supply chain. There's two different types of inflation that's there.
Unpopular thought though, Stock Talk is, I think on a risk adjusted basis,
tech is probably not going to, in my opinion, in this cycle,
tech's probably not going to outperform.
You're actually kind of seeing that right now.
And I don't know if that trend is going to continue, right?
But you have industrials actually making new all time.
I think it's the only sector that's made new all-time highs right now.
I don't mind that because I have more energy and infrastructure exposure than I've ever had.
So I don't mind that.
Yeah.
No, no.
I'm making a point.
Yeah, I'm making a point not because of you, right?
I'm making a point for those listening.
I happen to have a lot of non-tech exposure right now.
So I like that.
But making a point that for those that exposure right now. So I like that.
But making a point that for those that are listening, you don't have to, like there's a lot more to this trade than just tech right now.
And I was kind of talking about a couple of them earlier, where they're still actually relatively cheap compared to S&P valuations just in general.
And if you're an options trader, I think there's a way to capitalize on that. So on a risk, I still feel like there's actually
some really decent value out there
that could be picked up on a pretty cheap basis as well.
So look, oh, the last thing I wanted to kind of highlight here.
If you think you're behind the curve right now, you're listening, you're like, damn,
I didn't get in, or I wish I would have put more money in at the lows or what have you.
Go back, look at your charts, check your breakout lines from high to low, especially for new
all-time highs, and see the performance after.
If we are going to have a 2022 style market,
which is still possible,
it's still possible.
If we are going to have that,
I feel like you're going to need to have that pullback
by like September or October.
If not, it's long gone.
We're going to be talking about something else.
That's just my two cents on it.
Does this look eerily similar from a technical setup?
Yes, it does.
But guess what?
They all do. All the pullbacks look like 2022 style once you get closer to the all-time highs.
You're going to need to have some catalysts in order to do so. But take that for what you will. Look at those necklines and those breakouts, and you still have opportunity to really profit in
this market. So don't think that you're completely behind the curve.
Now, the best time to buy is when there's blood in the streets,
but you can still profit even if we do break out to new all-time highs
and continue to run higher from there.
There's been some really good years after drawdowns like the ones that we've had.
And you're right, Stock Talk, they're getting a lot quicker.
There's more participants in the market, right?
More gamified, maybe a lot more liquidity.
And way more short-term options exposure, way more.
Yeah, and then people think of it as a negative,
but actually if you kind of look at the ZRDTE options,
they're of all dampener rather than of all steepener.
And so actually since those things have been rolled out
and really has gotten the attention of a lot of traders, it's not just retail.
The majority of the zero DTE options that are being traded, if you're looking at the totality
of it, a lot of that stuff's also being traded by institutions and the majority of it's being
traded by institutions for collars, protection strategies, things of that issue.
So it's a ball dampener, in my opinion.
So you are seeing these quicker recoveries.
If it is going to be 2022 style, in my opinion, you're going to need to have that pullback
in the next three months or so.
If not, people are going to look past it and continue to move higher unless something new comes up and something will always come up.
There's always going to be a problem.
There's never a time in the market where you're not concerned about something or something's not happening, but you do have a secular trend.
So I think, once again, if you're going to trade the pullback, if you were going to short this market, this would be the time to short it.
if you were going to short this market, this would be the time to short it.
And if it doesn't come to fruition, I think you've still got to play that long,
the long angle, the long side for a fairly long time here.
But I still think, I still like the value plays.
I like the picks and shovels to get AI data centers up and running
are a little bit more attractive to me than a software company that's implementing it.
Because it seems like the software companies that are implementing it are just trying to stay above board.
They're not really, and this is my opinion, I don't feel like you're going to see a massive margin expansion outside of a couple of companies.
Meta, because they already have the base.
If they already have a customer base that's using the software, yeah,
you're going to see incremental improvements.
But if you're a Zoom, right, you're trying to implement AI just so you can stay relevant,
not that you're going to bring something that's new and breaking new edge technology to the market.
You're just trying to survive at that point.
I think there's more companies that are in that boat than it is on the ones that already have that moat and finding those efficiencies and driving top line growth.
So that's what I got on that long rant. I'm going to, Chad, I hope you all have a good rest of your
day. I'll see you guys tomorrow. Take it easy. Appreciate you, Kevin.
take it easy
appreciate you Kevin
um but yeah on the on the physical spending thing I actually put a tweet in the nest of my thoughts on it
um I've had this opinion for a long time I've argued with a lot of people about it but I
really still do believe this I just think Elon just came to the realization of it just now
uh but of it just now. But democracy is obviously out of all the, I mean, most of us I imagine here are
live in democratic nations, maybe not. I don't want to make an assumption for anybody. I know
we do have a lot of international audience, but, and I'm speaking in general terms here. Don't,
don't nitpick me on the government structure points, but the idea of
electing your politicians and politicians having term limits and them cycling through, that's
generally the best system of governance we know. Certainly better than dictatorships, certainly
better than authoritarian or communist or fascist regimes or any of these other forms of government
that we've known in the modern era. But there is a big problem with it. And probably the biggest problem with it is that
politicians win elections by doing favors, either favors for their constituents,
or favors for the people that fund the election, or favors for the people that have held them in
office, or whoever the favors are for, right? And for the people that say, well, is lobbying
the problem? Yeah, lobbying is a huge problem. But even if lobbying weren't part of the equation,
you would still need to do favors for your constituents, you know, put yourself in the
shoes of, I don't know, a local congressman from Georgia or whatever, and the people that put
him into office in his local jurisdiction, to get reelected, he has to do favors for those people.
Right? He has to offer them a new road in the town or, you know, a new post office or whatever, right? Those things cost money. And so inherently,
it is really challenging to expect our politicians to be fiscally responsible. And I'm not saying I
don't think we should be. I do think we should be. But the reason many of us in the audience
and many people on Twitter find it easy to say that is because we run households of our
own, right? And we think about it in terms of fiscal responsibility. You don't go and buy the
new shiny thing just because you think it's going to win you a favor with somebody. Well,
some people do that. And people do that, maybe do that with a new car they're buying or whatever.
But you don't drive yourself to the point of being severely indebted and then spending on luxuries because you realize, OK, I have to be fiscally responsible.
Right. But but it's difficult for governments to think that way because the government is not one person.
It is a pool of a bunch of legislators. And those legislators were put into their seats by someone.
And whoever they're put into their seats by
requires spending, whether you're on the left, the right, the middle, all sides require spending
to appease. And so I don't like I think people who expect the fiscal train to stop are being
naive, frankly, like the fiscal train will not stop. Think about what it would take.
Like the fiscal train will not stop. Think about what it would take. What it would take would be for all of these politicians or all of these Congress people to get together and say, we are going to forsake the people that put us in office and the promises we made to them and the favors we offered them.
For however long a period it takes to get the fiscal situation under control.
Like, does anyone believe that that would happen?
Like, maybe for a few of them, maybe a few of them have, you know, and there are some politicians speaking out against it, who are willing to say, you know what, no, my constituents want me to be fiscally responsible, right? But the balance of constituents that want them to be fiscally responsible versus the balance of constituents that want favors and a new road and a new post office and more defense spending and, you know, more state subsidies and more whatever.
All of that stuff, right It requires money. And so the only way out of this situation, which is also what Elon, I think has recently realized is, uh, growing our way out of it.
Like in order to making society that much more productive that we can just grow our way out of
it, uh, grow our way out of the interest payments on our debt that are going to become
a crazy amount of fiscal burden in the next 10 years if the path of spending doesn't change,
which it doesn't seem like it's going to change.
So yeah, it's like, you know, and I think earlier we were talking about this and I think
Kevin clarified that like tech is not the only sector that's going to win.
I agree with that.
I have investments in a lot of other sectors, but I didn't mean tech as in the tech sector. I meant
technology in general, right? Technology in general, that can be everything from nuclear,
you know, small modular reactor technologies to data center technologies to semiconductor
technologies to, you know, real world AI technologies like self-driving cars and humanoid robots. All of that is, I classify all of that as technology.
And what I mean to say by that is, is that's our way out of this, is in the next 10 years,
with the help of AI, with the help of new software and new hardware, cutting edge software
and hardware that is coming to the market in the next five years, that we become a magnitude more productive as a society. And some people think that's
ambitious. I think it probably is. But there's a shot. There's a shot that we can do it.
And obviously, you bet on humanity figuring these things out.
You know, in that way, I'm an optimist.
And, you know, we tend to figure things out.
We tend to figure our way out of impossible scenarios like this time and time again.
So, yeah, I do think the fiscal debt and deficit is a huge problem.
I know we don't talk about that a lot on the show because we talk more about the markets and individual stocks.
But, yeah, it is a huge problem. And I'm glad Elon spoke up about it.
I know that's going to cost him probably some political capital. It's also probably going to
cost the White House some political capital. But I think it was the right thing to do.
And hopefully more Americans like care about it, because the reason it's so hard to get
constituents to care about it is because
it's not going to affect them immediately or most of them immediately and they prefer to get their
fiscal favors instead but if you care about like future americans you should care about it
you should care about like getting this country's financial future in control so that we can continue to be
in leadership position as a nation. Every American should care about that. You know,
frankly, even the Canadians should care about that because, you know, you guys need us. But
yeah, I think it's important.
important.
I thought the timing of the Elon comments is interesting.
I don't know if it's like just based on what he thought like, hey, maybe he can make a
change in the Senate or whatever.
But I thought the Jared Isaacman thing getting blocked over the weekend, it seemed to be
like, hey, this is because he's close with Elon.
I don't know. Maybe I'm just putting two things together i think the truth is is that
it started with that interview he did on abc what was it like last week or the week before i don't
even know what network it was on actually but um and they asked him about it and he was like look
i support the administration but i don't support everything the administration does and by virtue
of supporting the administration i don't want people to associate me with all of their decisions.
That's what he said on the interview.
And that, I think, was the first breaking point where, look, it's crazy to me that that is an unpopular stance to take.
Because broadly speaking, I feel like American politics is very broad brush.
Like most people I talk to, even in real life, this isn't just an online phenomenon.
Most people I talk to even in real life have a very rudimentary knowledge of their party platform and have probably two or three key issues that they believe wholeheartedly in and they rally to
their you know party because of that and that's a problem because it means that like our politics
is like leeching nuance cycle after cycle after cycle it gets less and less nuance i think people
have probably noticed that you know like if you've been, if you're if you're older than like 25 and you've seen, you know, a handful of American elections, you've probably noticed the nuance leeching out from from the political environment.
And that's because people are becoming more encamped on like key issues.
And I think the issue with that is, is that you then just support everything your party does.
And people broadly do this.
They justify or backwards justify everything their party does on both sides.
I hate thinking about politics in that way.
I supported the Trump administration going into this election.
I still broadly support a lot of the things that they're doing.
I thought the tariff stuff was a joke and terribly handled. And I voiced my
criticisms of that pretty extensively. I just thought it was a fumbled attempt at accomplishing
something that could have been done much more surgically. But we've talked about that plenty.
My point is, is that I just feel like people are hesitant to criticize people they support.
And that's part of the problem, too. People are
unwilling to take a nuanced view. Everyone wants to be on one side or on the other side. I'm on
this side, so I have to defend this side. That is such a stupid way to think about policy.
And I think it's part of the reason why we have this sort of stuck gear in the political system
in the last decade, really, where a lot of obvious
things that should be being addressed are just not there. We're just whistling past the graveyard
because both sides are encamped, you know, and we've lost a lot of the spirit of compromise
that makes this country amazing, really, that founded this country, you know. And so I don't know,
we just need to like get to some common sense middle ground on some of these issues, just
calls dumb stuff out when it's dumb, like simple things like, hey, we probably shouldn't expand
the deficit when we're $36 trillion in debt. Like, these are common sense, no brainer things that no
one should be debating. But we are. And it's just hilarious to me.
But anyway, I'm just ranting now.
What's up, Kirk?
First of all, thanks for having breakfast with me the other day.
Yeah, that was great.
It was good meeting you.
Yeah, no, we agree on so much stuff.
Did y'all go to Windstar?
Which casino did y'all go to?
No, no.
We were at the Adolphus Hotel in Dallas
I was in town for a wedding
so I had about four hours
free for the whole weekend
if you bring back
Steak Talk
I will vote for you
yeah
I mean look
this is a problem, you know?
Like, I see people that are like, oh, you know, just solve lobbying and the problem's solved.
Like, that doesn't solve the problem, you know?
Like, just running for elections inherently is, it's like a poison because you have to, you have to, like, take, you have to take the burden of responsibility, whether it's the burden of responsibility from your constituents or it's the burden of responsibility from your campaign funders.
Both of those burdens require you to write checks or at least vote for the writing of checks.
And it's just a fucked system.
Like, it's fucked.
Because people are selfish.
They want to get reelected. Like, i don't know how people expect to solve that that's the point i was gonna throw in
it's the re-election that's the problem right because a couple you know right even right now
i mean we're what a little bit into this term but we're not too far away from all these sitting
congressmen going wait a second i've got re-election coming up real soon
here. Yeah, and like, it's not a problem to want to spend more when like the economy is outgrowing,
the deficit, you're just like, you know, your economy is rip roaring to the upside and politicians
want to spend more and develop more infrastructure. Like when we're in a booming, amazing economy and
everything's working well, no one talks about this. And we didn't talk about this for many decades because of that. It only became a problem once, you know, our deficit
and debt started ballooning and skyrocketing exponentially. Then it became a problem. And now
it's a problem. And so, you know, some people are like, oh, well, this has been a problem forever.
It's been a problem for a long time. Yeah. but now it's really a problem. And the next 10 years doesn't look like it's going to offer us any relief, right?
Like if the big, beautiful bill passes, I imagine whoever's in office next time isn't going to be magically, physically responsible, right?
Are we going to get just some for the first time ever next time somebody comes in office and they're like, you know what, guys, we're not going to do anything.
I'm not going to build, I'm not going to build anything. We're not going to build any new
infrastructure. We're just going to, we're actually going to cut spending across the board.
Like from a top down level, is that ever going to happen? I don't know. Maybe one day we'll be forced to do it, but what's up, Perk?
So over the last 20, 25, 30 years, I have heard that we will eventually just get to the point
where we inflate away our debts. And I think we've been there since the financial crisis
because every bailout gets bigger. So everything you've said, I think,
is pretty much spot on. And from a trader's standpoint, I think that we just have to take
a look at the charts and understand that things go up for years. And then there's a sharp correction,
bailouts, and then things go up for years, sharp correction, bailouts. I think maybe we get a sharp correction before we get bailouts.
You know, I've said QE next year. I think that's what's going to happen. And I think for people
who are newer traders or newer investors, if you take a look at what happened with COVID,
and I don't think it'll be identical, but it should rhyme a bit.
I think we're going to get something similar. I think we're going to get a correction triggered by something. I think they'll come in and do QE because that's the only way that we can
term out our debt, which is what Scott Pescent is calling it. And then we'll go on a rally.
And then we'll go on a rally.
And then we'll have to deal with it again years down the road when probably the last baby boomer is on Social Security and Medicare in 2030.
You know, you're right that the cycles work pretty similarly.
And we're not going to change the system much.
You know, I mean, a little bit to the right, a little bit to the left.
It's just a pendulum.
And unless it all breaks somehow, which I don't think it can,
as an investor, just understand that from time to time, hedge your bets a little bit.
You know, I've got a 5% or 6% hedge.
I mean, I'm not betting on the world to end.
I'm just saying, hey, you know, I want to stabilize the stair that I'm on until it's time to go up to the next stair.
And I think your catalyst trading, honestly, that's what I've been drawn to over the years, is probably the right way to do things.
You hold on to the ones that you think have the best long-term,
but the ability to get in front of a crowd,
the ability to understand how the indexes have an impact on pricing,
especially of the mid caps and large caps.
You know, I don't know that there's a whole lot of wheels that need to be
reinvented. We just have to understand. we chug along, we chug along, we chug along, we break something, we fix it.
We chug along, we chug along, we chug along, we break something, we fix it.
Next year, Evan, was it you that asked me how much QE I thought we needed by the end of the decade?
I think it might have been you. I said thought we needed by the end of the decade? I think it might have been you.
I said $15 trillion by the end of the decade.
And people look at me like I'm out of my mind.
But you know, we were, what, $8 or $9 trillion for COVID.
And now we have a whole bunch more debt that we have to somehow finance out.
So, you know, we'll see.
And that causes inflation. And for people who that scares
the hell out of, remember what it causes the most inflation is good assets, good assets go up the
most. Yep, I agree. Yeah, I mean, yeah, we're just never gonna stop spending so we have to figure
some other way out of it and um i don't look i don't think this is around the corner problem
that you need to hedge for necessarily i mean you can hedge for other reasons but i i don't think
the fiscal debt problem isn't around the corner problem at all um i think someday it'll come to
bear in some way or another but look the reality is if
the u.s had some sort of fiscal or debt blow up at any point in the future it would blow up the
global economy so it's not like a u.s problem it's a global economy problem um the global economy
in its state today cannot survive in the United States. If the United States just, let's say, halted all spending and trading,
like just would implode the global economy instantly.
So yeah, that's not even, we can't even entertain that scenario
because it would be a lot worse than anyone thinks it would be.
So yeah, I don't think that's a near-term concern or anything.
It's just that the
debt is and deficit are a problem and they need to be addressed and someone has to start addressing
it we can't just keep whistling past the graveyard that's really the point at least that i'm trying
to make and um i i don't know when that's gonna happen maybe 10 administrations from now somebody
will wake up and be like look we gotta just stop spending like drunken sailors. I mean,
I don't know. One day it'll happen. But for now, you dance, all the music's playing. I mean,
there's a lot of great opportunities out there. I think so many things are happening right now in, and again, when I say technology, I don't mean just tech stocks. I mean,
technology broadly. So many things are happening right now. Amazing things like,
you know, quantum computing the the early era
of quantum complete computing humanoid robots are around the corner you have ai you have really the
first couple of years of ai we don't even know what ai is going to be capable of in five years
right now we just have llms which to be honest if you use them right are amazing tools a lot of
people don't use them correctly and think they're just glorified search engines but if you use them right are amazing tools. A lot of people don't use them correctly and think they're just glorified search engines. But if you use them correctly, they're amazing tools already.
Who knows how good they'll be in five years? Who knows where robotics will be in five years?
Amazon, there was a note out. What was it like yesterday? Yeah, yesterday from Bank of America
on Amazon saying that they're using 75% of customer orders, they're using robots.
They have 750,000 robots deployed across the business.
Like, where will that number be in five years?
You know, will it be 90% of packages with 2 million robots deployed?
Will it be, you know, 10 million robots deployed in five years?
Who knows?
You know, these things can accelerate very quickly.
So there's a big, there's so much technology, small modular reactors, robots, AI, chips.
Like these are generational new technologies, next gen technologies that are emerging.
I mean, chips aren't.
Sports betting in Texas.
Sports betting in Texas.
Sports betting in Texas. Yeah, that's, I mean, let aren't. Sports betting in Texas. Sports betting in Texas.
Sports betting in Texas.
Yeah, that's easy.
I mean, let's go.
Sports betting.
But like, I mean, there's so many things.
Like right now, I feel like I can't own enough stocks, to be honest.
And I felt like that for years.
Like I felt for the better part of the last 10 years, which is most of the time I've been trading.
I've only been trading for 12 years, but you know, for the better part of the last 10 years, I've been like, dude,
there's so many cool things out there. Like even before I knew what I was doing, when I was like
in my early twenties and I had no idea about any of those industries now, after doing this every
day for so many years, I feel like I have a pretty good understanding of a lot of industries. But back then I knew nothing. But I still felt like, oh, my God, there's these cool technologies.
Like, you know, when I first bought Tesla, like, you know, that was 10 years ago. I'm 31 now. I was
21. I knew nothing. And I was just like, oh, electric vehicles, like that could be like,
that could be a big theme.
Like I could see that being a thing.
Like that's all it was.
It wasn't a genius analysis.
It was just like it was a hunch.
Right.
Now I do more thorough analysis and I think about things more and I have a better process now.
But like sometimes it's that simple.
Sometimes you're like there's this amazing new technology and it might make a difference.
It might penetrate this dinosaur market that's been around for decades.
And sometimes just the shot at doing that. It can make some of these stocks go crazy, you know,
I mean, obviously, I'm speaking from my specialization because I operate generally in that mid-cap category, small and mid-cap category.
But I mean, there are mid-cap stocks I've bought before at 2 billion market capitalizations,
which three years later, we're at 6, 7, 8 billion market capitalizations. That's a 3X
in three years. That's pretty good. So if you find the rest, the right opportunities, the right thematics, and you see like it takes a little bit of vision, it takes a little bit of analysis, it takes a little bit of a hunch, a little bit of instinct.
Sometimes it takes a willingness to pay more than you're comfortable paying for P ratio.
Sometimes it takes buying a company maybe before it's profitable.
Sometimes it takes elements of risk. right? But there are insane opportunities
out there. And even if you don't want to speculate on the smaller companies, the sub $10 billion
companies, there are amazing opportunities out there in 40, 50, $60 billion market caps and
leadership position in new industries that will make fantastic investments over the next 10 years.
You don't need to be a genius to see technology is gonna win technology always wins always there are like very
few exceptions almost all exceptions that you can think of in your brain
right now to like a failed technology it's not that the technology failed it's
that it was replaced by a better. Right? And that's been the case forever.
Like, if you're ever sitting around...
I was going to say Blu-ray players.
Yeah, if you're ever sitting around thinking,
hmm, is cybersecurity going to be a bigger industry
in 10 years than it is today?
The answer is yes.
If you're ever sitting around thinking,
hmm, is social media going to be a bigger industry
in 10 years than it is today?
The answer is yes.
If you're ever sitting around thinking,
hmm, are autonomous vehicles going to be a bigger industry in 10 years than it is today? The answer is yes. If you're ever sitting around thinking, hmm, are autonomous vehicles going to be a bigger industry in 10 years than they are today?
The answer is yes.
Like the answer is almost always yes when it comes to will technology proliferate.
It always does because it's about efficiency.
And what stops technology from proliferating is not like the failure of the technology.
It's almost always cost.
Almost always.
And when the cost becomes low enough, it's game over.
Like, think about cell phones.
There are people in India that can't even afford meals on certain days that have cell phones.
There are people in Africa that can't afford meals on certain days that have cell phones.
There are people in parts of Southeast Asia that can't afford meals on certain days that have cell phones. There are people in Africa that can't afford meals on certain days that have cell phones. There are people in parts of Southeast Asia that can't afford meals on certain days that have cell
phones. Like, would you have imagined that when cell phones came out? When they were $3,000 with
a huge antenna, like when people on Wall Street had them, like when they first came out, like,
would you ever have imagined that? No. But literally 15, 20 years later, everyone has a fucking phone. Everyone. Why did, why did
that happen? Did it happen because phones became better? No. The phones that they have are not,
they don't have iPhone 15s. Okay. They have basic cell phones. Okay. Phones didn't get better.
They got cheaper, a lot cheaper. Right. And that this happens repeatedly. This happened with the automobile.
OK. At first, the automobile was very expensive. Then Ford invented the production line,
started making the Model T, and it proliferated quickly, not slowly, quickly. And within five
years, there were gas stations in all the major cities in the country. There were highways being
built. Within 15 years, every middle-class family had a car.
Within 20 years, there was the interstate system.
Within 25, 30 years, like, it's crazy how quickly stuff moves.
And technology always wins.
It always wins.
I challenge anyone to tell me an example where it didn't win
because there's not one.
Because it offers efficiency and efficiency wins because the winners are decided by capital spend.
That's who decides the winners thematically.
That's who decides the winners in terms of investment opportunity, capital spend.
That is the only metric that matters.
And capital spend goes where it is offered efficiency.
Businesses spend where they are offered efficiency, period, end of story.
If you can tell a business like, hey, you can fire half of your staff and replace them
with humanoid robots with a fixed cost, who will never go to the bathroom, will never
need a lunch break, who will never sue you, who don't need health insurance, would you
do it today?
The answer is yes, unequivocally.
And that's why the humanoid robots will win.
That's why robots will win.
Like, people who say, like, oh, robots are a good investment,
that's not an opinion.
It shouldn't be an opinion.
It shouldn't, no one should doubt that in 10 years there will be robots
in way more places than you expected them to be.
You know, drone delivery started becoming a thing this year, right?
And last year, they started testing it, right?
In five years, there'll be a shitload of drone delivery.
Okay, there will be way more drones used on the battlefield, right?
Drones on the battlefield, that's a thing of the last decade, okay?
Where did that get
proven just got proven in the war of Russia and Ukraine now all the fights you see will have
drones you're already seeing it the Houthis are using them everyone's using them now Europe's
investing in in drones now they're allocating 15% of their budget to drones the US is shifting
budget series it happens like that snap your finger two or three years
boom one thing happens everyone's spending money on it now so it doesn't take a genius to to to
win investing in great technology it you just have to see it coming and it's not hard to see coming
time and time again these things just you plow through cloud is another great example people are like
oh really cloud like okay
how useful is this going to be
that's what people were saying in the early days of cloud
when it was just a couple of billion dollar industry
people were like ah really
and you know boom
it's the fastest growing industries
in the world will be for a long time
what's up Kirk sorry I'm just ranting
I think his because hands been up and i'm just bad i put my hand down i just walk around like that
put your hand down why are you smiling name that movie uh fun fact of the day stock talk
build a bear stock has outperformed nVIDIA, Tesla, and Meta over the last five years.
Dude, I traded that thing last year, too.
And I was like, oh, my God, I traded it on Catalyst.
I had, like, an analyst report.
I traded it, and then, like, I looked at it, like, a couple months later, and I was like,
what the hell?
It hit 55.
That thing just will not stop, dude.
I don't understand what they're doing.
It was a dollar during COVID.
I want to go see if I can find that post.
Hold on.
I think I posted it in Discord.
I want to see what it was.
What's the ticker?
It's BBW.
BBW, yeah.
Yeah, dude.
Okay, it was October.
Okay, adding. Yeah yeah this is okay this is september no this is this is the 12th 2024 from my journal in our discord adding bbw shares 100 million
dollar buyback announced this am looking continuation. Expect some resistance at 32. What'd you
say it is now?
It's 50 at this current moment. It hit 55
a couple days ago. That thing should have been
that thing. Wow.
That thing ripped, dude. Holy moly.
Wow.
This is like weird action. It's like these
huge bases it comes out of
and then like bases for super long
and like climbs out of these little bases.
Yeah, fun fact of the day right there.
Damn.
I guess a lot of people like Build-A-Bear Workshop.
It's a $600 million market.
Who is buying Build-A-Bears?
I guess it's like a cool thing though right to like buy it
consumers doing well kids apparently I guess kids probably think that's cool
right yeah parents buy it for their kids more
or buy it for themselves for their kids if you know what I mean
you can put like the little heartbeat in it and yeah like voices in it and stuff
yeah yeah yeah
they also yeah some of them are keepsakes I know like people have gotten
like a grandparents voice but in their stuff like that are they still most of
malls I feel like I haven't seen one in a mall in a long time when's the last
time you went to a mall to be honest like I don't go that often, but I did go
to North Park in Dallas
three or four months ago.
I don't go to malls often.
Are malls dying?
Damn, I haven't really looked at...
Speaking of malls, I haven't really looked at
the mall business recently.
Malls in the U.S. are...
They are?
Welcome to 2010 information.
What's that read?
Simon?
Yeah, SPG.
SPG.
Yeah, Simon.
Nice technical setup.
I remember the 200 there.
Actually, nice.
One of the malls close to where I grew up in New York,
Roosevelt Field, I believe, is SPG.
And it's actually still pretty popular.
That is a wild chart.
I mean, I do actually think there will probably always be a demand
for brick-and-mortar retail when it comes to, like, apparel and furniture.
Like, certain categories like that, you know?
Like, I think there's certain categories where people do want to see it.
But maybe AI will change that.
What was that company
that used to do 3D modeling
that they would offer?
Matterport?
Is that what it was called?
I think that's what it was called.
That wasn't it.
That was one of those stocks.
Yeah, they got delisted or whatever did they go private
i don't know let's be real delisted yeah but but that could be a thing like you know maybe like
holograms like where people are like oh they want to buy furniture so they can like project
the size of the furniture that should already be like close to being a thing right well ai goes
that for i mean you go on yeah where you do it from depot or amazon and see it in your see it
in your room yeah but you should be able to just like i don't know i don't know like project uh
like project a hologram yeah why aren't projected holograms a thing like what's the technology
limiter there i wonder monitor do you know that well
augmented reality i mean the the vision pro and you know the oculus we can do this already
there's probably real world projected holograms commercial technology yet i don't imagine it
would be expensive right monitor will probably know this monitor either that's probably it's probably
compute it's probably optics right you you need a optics yeah optics that makes sense
but i i don't even know what the limiting factor i don't know enough about
projection optics to know that i'm curious about that though i wonder why because i feel like
that'd be super popular technology i mean even even last mile network is still an issue, right?
You need massive amounts of data flowing through.
So that's another one, right?
We still have, I mean, US is terrible at last mile even now.
It's better, but we're just getting around the problem by, you know, throwing new things at it.
But really, we haven't solved it. We've you know throwing new things at it but but really we
even solved it we've not removed the copper and replaced it all it's still patchy all over the
you know in major cities so so it could be any one of those you know or a combination of that
right but certainly optics compute and and network are the ones that come to my mind.
Yeah, probably in the size of a portable device is the issue.
You're probably right.
Why can't my Apple phone just do it? To me, this seems similar to the thing.
I guess we aren't talking like holograms, but I said it.
I think that Meta and Apple, this is kind of what they're going after.
Yeah, they are.
But like, I don't know.
It has to be done in a way where it's not done for,
it's not done in like a contained way.
Like meta wanted to do this whole,
like we build the metaverse thing.
I don't think, in my opinion,
that's not the way to do it.
I think people want more of like a blended AR VR experience. At least that's what the way to do it i think people want more of like a blended ar vr experience
at least that's what i want like i want the ability to seamlessly interact with the environment as
well like that's when i think the technology becomes revolutionary when you can like
you know when it's the size of a regular pair of glasses and you just walk outside and uh you know
you can augment your reality to your to to the extent that you choose to,
if you want to heavily augment your reality, you can, if you want to like just moderately
augment your reality habit, like as a heads up display where it displays like maybe the temperature
in the top right corner, your messages in the top left corner, in the bottom left corner,
it has your music and the bottom right corner it has you know whatever
else you want like that's where i think it can replace compute because the reality is is like
people right now you see people walking around like on the street or in a movie theater before
the the credits or you know wherever uh sitting on the couch when they're watching TV,
they're all on their phones, like staring at their phones. And so I think there's a habit,
a consumer habit that has been built, fortunately or unfortunately, where people want to be
constantly engaged with their personal compute device. I don't think you can shake that now.
Like, I don't think the next generation of
compute can say, okay, you know, it's going to be a different format where it's harder to access
than it is to play your phone. The only way you replace the phone or replace any significant
percentage of attention given to the phone, that's the real commodity, right? The commodity here is percentage attention given to the phone.
And how much of that can you take away?
In a dream ideal, you know, ace scenario, you completely replace the phone as a personal
compute device.
I don't think you'll get there in stroke one.
I don't even think you'll get close in stroke one.
But that's the goal.
And so the idea is is how
can you make it more convenient than a phone that should be the only design factor that they're
addressing because if if it's more did you hear did you hear about the open ai with the rumors of
that one it's not seem more convenient yeah from the just the small rumors exactly the fun it's
funny that you mentioned that, the necklace.
I don't know if people remember. Do you guys remember that AI pin company? What was it called?
Yeah, Humane. You guys remember that? The reason that failed is because it's less convenient than just pulling out your phone, right? And if that's what you're purporting to do with the next gen of
compute, which Apple and Met are both battling to do right now, if that's what you're going to do where it's less convenient than the phone, it will fail.
Unequivocally, it will fail. Like, even if the, let's say the Vision Pro in its last rendition
was lighter, okay? The idea that people would walk around with it outside of, like, for illustrative
purposes or, like, I'm cool as, like, an accessory, when they can just pull out their phone and do 99% of the things they could do on it
is unrealistic, right?
That you need to actually exploit the app ecosystem
because there are things the Vision Pro can do
that the iPhone cannot do.
But you need to exploit the ecosystem
in a way that's regularly useful.
If there's a super immersive video game on there,
that's not gonna report personal compute
because yeah, if they wanna go play the video game,
they'll put on their vision pro but it has to do what the phone already does in a more
convenient way that's how you get mass market you can't do it in any other way people are too
addicted to their phones can i ask you something my question is what do you think is going to be
next do you think i think what meta is going the right the way i think and my question is, what do you think is going to be next? Do you think what Meta is going the right way?
I think it will be good.
And my question is also timeframe.
I'm getting at the Apple question here.
Like, listen, if you give Apple a decade more of this,
they're buying back more than a trillion dollars of their stock.
Like, that's what they're telling you so far.
So I don't know.
I think the question is, how quickly do you think this is going to happen
and what companies?
And I think the answer is maybe actually quicker than I think,
and it's Apple versus Meta.
Yeah, it's Apple versus Meta.
I think one of them will win.
I actually think I like Meta's positioning here a little bit better.
You know, I think Meta is probably a little bit further advanced
when it comes to the naked style of this hardware which is what i think
matters by naked style i mean like as close to regular glasses as possible because like look
people don't look dumb like that's a hugely underrated factor here like people do not want
to wear something clunky and like in like obstructive around if they're going to use it like their phone,
right? If this is an attention economy thing, which it is, and you're saying, okay, I want to
take attention away from the phone as much as possible. You have to do it in a way where it's
lightweight. It can be worn all day. It may even not be glasses. It may even be just like a one
glass lens, but maybe that's less aesthetically appealing. I don't know. But it'll be something like that, in my opinion, where it has a heads up display.
You can customize the heads up display.
You can seamlessly engage with it with your voice or by touch if you choose to.
But the voice has to be on point because people are going to want to take their glasses off
and like put fingerprints all over it.
And so maybe it comes with a remote control.
I don't know. You know, maybe that's the thing, maybe like a little pocket remote.
I don't know. I'm not a technology designer, but I do like the thing that I am a hundred percent
like convicted on is the idea that it has to be more convenient than the phone.
And that's really hard to do.
Because the phone's like a pocket computer,
and you just pull it out,
and everyone's super used to using it.
That's a really, really hard trend to break.
Yeah, how do you get rid of a keyboard, like the typing?
Because otherwise people are going to have to just speak out loud all the time.
I don't think that's going to really take off.
You're absolutely right.
The voice recognition and software probably has to be improved
dramatically. And it has to be to the point where like, it's not going to fuck up, you know,
or at least it like pre lets you preview the message and very easily edit it. I don't know.
You're very right. The idea of taking the finger out of the equation is a huge problem to solve that's what all these guys are
trying to solve like the humane pin guys right like how long do you think those guys thought of
that design they probably thought about it hard and billions of dollars in funding and they flop
because they were trying to take as much input out of it as possible right like pin it to your shirt
you can engage with it with your voice you can can just tap it with a finger, but like taking out the screen, this like large format screen, even if you have
a smaller iPhone, it's still a relatively large format screen. Taking that out is a hard ass
problem to solve. Like, and you have to do it perfectly in a way where somebody doesn't even
think about taking out their phone like it
doesn't even occur to them and that's really hard to do really hard what's up
uh I was gonna make a comment uh you know starting with the comments a little bit earlier but but I'll
try to combine all of that right so interestingly, a lot of things that you've talked about
in the last 15 minutes or so,
the changes that you talk about,
the getting over the current way of doing things,
doing it in a new way and forcing that through,
you can't look at the consumer side of it.
It's not going to come there.
It's going to come from defense.
That is where a habit change can be forced.
That is where an unlimited money can be made available going after an idea to solve a
problem and, you know, working on it for a long time without any, you know, expectation of a commercial return
till they get to a working prototype, integrate into a larger, you know, market, right?
Whether it's humanoid robots, self-driving, you know, HoloLens, any of these things,
or compute for that matter, right?
All of those started with defense because there isn't a cost-benefit analysis there.
There's just a problem that needs to be solved irrespective of cost.
So that is where you have to look to the problem. And interestingly enough, the way I look at Palmer Luckey going back and working with Meta now is one of two things.
Either there's some IP left behind with that previous company he sold that he needs to work on,
or there's a combination of that and people that he left behind who now have a golden handshake with Meta
that they don't want to leave because they have, you know, really had a big run-up in their options
or a combination of, you know, a few other things
and the ability to, you know, forget the now and spend for, you know,
a few quarters without thinking and then, you know, looking for a bigger future,
you know, with the need to, the need to lock in an ecosystem which
Meta needs to do, which makes them a better ally than a Microsoft for Endural to go there
with them.
But the genetic point I was making is you look for these completely off the wall technologies to become something that's proven and workable and even used in at least a limited you look at what is being done in the defense side, right?
Even heads-up display, it was built for defense.
Built for commercial use, and now it's ubiquitous in almost all autos.
So that's where I would look.
Yeah, that's definitely an interesting point i will say i wonder as you were saying that i wonder how you know these really large companies multi-trillion dollar organizations if that starts
to change where they can maybe like an amazon feels like they could if they feel like they're
in the right direction they're not willing they're not afraid to invest in something for 20 30 years
and not see a return if they see the huge upside so you're definitely not wrong and
my other thought was there is i've been seeing a lot of these in ukraine i've been seeing a lot
of these like autonomous vehicles now being used uh in that aspect that was also where my mind went
to what you're saying i'm gonna say we didn't we didn't mention like samsung and google which this
is a recent news story that kind of came out that they're trying to get back into it a little bit here with working with Samsung.
And we know Samsung's a player here.
Yeah.
I was just going to make a quick point.
I was just going to make a quick point. Sorry, I didn't mean to interrupt.
Sorry, I didn't mean to interrupt.
That's a problem of, you know, having to report quarter by quarter, right?
Which is why founder-led companies can actually end up doing better, right?
And it was true of Amazon until very recently and still true of Meta, right?
You don't have to worry about missing a quarter here, a quarter there because the founders have made so much
money it's it's pride it's it's it's uh you know it is futuristic thinking it's it's the need to
do something bigger lever you know a larger uh than life uh you know a memory of what they can
and uh you know they they've achieved all of those things.
It's very difficult for a mature company to continue to do this with professional management
because the incentives are not lined up correctly, right?
The street wants you to report quarter after quarter, you know, increasing better numbers,
you know, lower costs, higher profits, all of those things get in the way of you thinking,
you know, more than a few years at way of you thinking you know more than a few
years at a time forget years more than a few quarters at a time they there's barely even a
you know execution at a at a multi-year level let alone you know multi-decade thinking of
okay we'll invest this it's going to take time and we'll when it works we'll be rich nobody
nobody cares about that
first question that comes up is okay what can we show next quarter what can we what can we demo
next quarter what can we do demo to our customers some of these things there's nothing you can do
for years on end right which is why i also think that quantum compute is not going to be solved by
these tiny companies with you know 30 people as brilliant as they can be because it is not going to be solved by these tiny companies with, you know, 30 people as brilliant as they can be, because it's not going to take, you know, tens of millions or hundreds of millions.
It's going to take tens of billions in capital to pull it off.
you know, approaches that these companies come up with.
The real breakthrough is going to come from mechanically churning out,
you know, idea after idea after idea for tens and tens and tens of billions
of dollars over decades, finally coming up with a viable solution.
Anyway, I've taken up too much time already.
I've got to drop off but uh as always thanks
for letting me talk appreciate you as always and definitely make sure you're following monta
the other speakers up here fantastic chat we're live every single monday through thursday 3 to
5 p.m eastern at least you know when there's a good conversation a lot going on or you know
like today it's just we want to talk uh we will go extra but uh but yeah make sure you're following the host of this space make sure you're following the other speakers up here
this definitely has been an interesting conversation going on um stock talk i want to ask you about one
or two more names we can see where we're at coming out of it um we we didn't talk too much tesla
today and i'm curious around this Elon commentary.
And I know we talked about these kind of breaks happening a little bit,
but I'm just really curious on what the next couple of weeks look like.
And I don't know.
I'm just curious your thoughts on it and what it means for Tesla stock.
My initial thought was on that move.
We were going down around 145, which the market itself was going down.
That Tesla was going to go red. Do you think that this
is actually something that's going to
move the stalkers watching it in that perspective?
I don't know.
Maybe. People are going to
spin whatever narrative they want out of it.
I think it's pretty straightforward. I just think he
thinks it's fiscally
irresponsible.
To be honest, I'm pretty sure he's probably communicated that with Trump.
Right.
But the thing is, is that.
I mean, if they're going to be if they're both going to be mature about it, it's okay to disagree about things.
Look, Congress has to agree on a spending bill, and most of Congress wants to spend more.
It's just the truth.
The vast majority of Congress has spending obligations that they need to meet to their constituents.
And this is true on both sides overwhelmingly.
This is not a one-sided
problem. Both sides overwhelmingly have obligations to donors and constituents that they need to meet.
In order to meet those obligations, they have to spend something that doesn't grow on trees,
and that's money. And this is the problem in the first place. This is what I was referring to with
the inherent problem in democracy.
Not that I'm anti-democracy. It's the best system out there.
But it's just one of the problems that's there with it,
which is that people need to get re-elected.
And to get re-elected, they have to do favors.
And so we're trapped, and Elon knows that.
And he probably communicated that to Trump.
And Trump's response, I imagine, was probably like,
dude, I have to get a bill passed.
The government has to function and I can't solve this problem because Congress won't vote on a bill where spending is slashed.
And that's the truth.
The Congress will not approve a bill where we magically decide to be fiscally responsible.
That would involve cutting entitlements. That would involve cutting entitlements.
It would involve cutting defense spending.
The Democrats won't vote for entitlement cuts.
The Republicans won't vote for defense cuts.
Boom.
That's the only two places where you're going to make a material difference in the budget.
So it's one or the other.
And we won't, like the Republicans will never vote for a defense cut cut and the
republic uh democrats will never vote for an entitlement cut end of story so yeah
that's it that's like literally the whole game and trump trump probably knows that and elon
probably knows that and it's an unfortunate reality. But that's where those are the two areas where you can decide to save money or move to save money.
And they're both unacceptable to cut.
And to be honest, the justifications for both, there are good arguments, right?
Like if the U.S. starts cutting defense spending and
China and Russia pick it up, that's a problem, right? Or if, you know, we cut entitlements and,
you know, more Americans fall into economic distress, that's a problem, you know? Or if we
cut government jobs and unemployment goes up, like that's a problem. So there are arguments to be made
but there's also a big boogeyman in the background which is
The physical situation that needs to be addressed. So I don't I don't know what it means for Tesla stock
people are gonna spin it probably negatively because they're gonna view it as like a you know
schism between Trump and Elon but you know Tesla isn't a bet on Trump Tesla is a bet on
the idea that humanoid robots and autonomous vehicles will become commonplace in society and that Tesla will win one or both
of those opportunities. That's what Tesla is a bet on. It's a call option on that outcome. That's
why it trades at the market cap that it does. It's not a car business.
It's a call option on future technology. And that's why people pay the price they pay for
the stock. So yeah, it might go up or down 10% on whatever happens around the politics,
maybe 20% on whatever happens around the politics. But I think broadly, it will trade in line with what they do technologically.
And if that launch goes well in Austin and they start expanding the scale of their Austin program,
and on top of that, Optimist gets a commercial partner at the end of this year,
which, again, so I'm speculating as usual, but I think either by the end of this year or the start of next year,
they'll get a test partner.
Probably will be Pepsi, I would imagine, because they did the semi-test with Pepsi.
But I think they'll get a commercial test partner pretty soon, the next 12 months.
And I think that'll be a major catalyst for the stock.
I also wanted to talk about Robinhood.
Stock just keeps running.
It was up another 5% today or so.
Maybe this includes the after hours move.
I find it interesting.
Stock price doesn't really mean that much.
It's a function of shares outstanding or whatever.
But it has a larger stock price than PayPal now.
And I believe that is the first time that has ever happened.
Do you have any thoughts on Robinhood here
in the context of the highest closing price of all time and how to print at $85?
Market caps around $66 billion.
There's a lot of excitement around the possibility of joining the S&P 500, which would get announced on Friday.
Yeah, I hope so. That would be the right decision.
that'd be the right decision.
I hope they do it.
I hope they do it.
Someone made the comment that them adding Coinbase in last time could maybe
hinder them a little bit because it's a similar business.
Yeah, maybe.
But I think they'll get added eventually.
I think they're firing on all cylinders.
They're really turning the business into more than just a brokerage.
You know, when I first took a big position in it at the start of last year,
my thesis was that they were going for the financial ecosystem play,
and I think they've done a hell of a job of it.
I think Vlad is – he's really won my approval.
I think he's one of the best CEOs out there. He's acting on all cylinders.
And so, yeah, I've been long the stock.
I haven't sold my shares.
My cost base is on that. It is 1974. So as of today, I'm up like 260% on the shares, but it's not a trade for me. I'm in it for the long haul. So I think it'll be $100 stock sooner than later.
richly yes but i think it should i think they've captured sort of the new generation of investors
i think one of the biggest overlooked tailwinds for robin hood is going to be this wealth effect
that's coming with the inheritance that's going to come from um baby boomers to millennials and
and so on in the next 10 years i think a lot of that money is going to be moved to Robinhood.
And I think that's an underrated tailwind for the company. So yeah, for me, it's an investment.
It's one of my core positions. It's one of my top three positions in my portfolio. So yeah, I like them a lot. I think they're doing well. I hope they get S&P 500 inclusion. I know
people are trading around that, but it's not really a trading stock for me just to hold.
So we'll see what happens.
But, you know, in any case, if there is a big dip, you know,
I will just be patient because...
Are you selling any upside calls or anything?
Or like, is there a price to get too high?
Are you just waiting on it?
No, I'm just holding the stock.
I have a really comfortable cost basis. I'm happy to hold it hold it you know if it ever were in a market crash to come
back down to 19 or 20 bucks where i bought it i'd probably buy more down there um but i don't think
it will ever come back to those prices maybe i mean again in a market crash probably but outside
of a market crash i don't think it's going to naturally come down back to 20 bucks. So I'm happy to hold it.
You know,
I may trade it here and there if I think there's a good catalyst on the
table,
but it's one of my core positions.
So no plans.
I think we're at a good place on this basis.
I'm going to jump off in a couple of minutes anyway.
I do appreciate your stock talk. You definitely should make in a couple minutes anyway. I do appreciate you, Stock Talk.
You definitely should make sure you're following him.
Like you said earlier, make sure you're following the host of this
so you enjoy these live free conversations every single Monday through Thursday,
3 to 5 p.m. Eastern.
Stock Talk, you got any famous last words?
Anything you're excited about tomorrow?
No, nothing big for me tomorrow.
I'm really comfortable with where my portfolio
is at. You know, I talked, I kind of, for those that tuned in late, I kind of went over
a lot of my portfolio earlier, just one by one. But, you know, I have some high beta stocks
like Nebius, you know, Robinhood, which has been a very high beta stock. I don't expect
it to be so high beta, but it has been, uh it has been. I have my nuclear exposures, centrist energy and talent energy.
I have my aerospace and defense name.
So I'm comfortable with where my portfolio is.
And so I don't really feel the need to make a ton of changes.
But as market conditions change, I will accordingly.
But I'm comfortable with where my book is.
If I do see some opportunities, I'll address them as
they come to me.
I like my exposures right now.
I'm sitting pretty as far as I'm concerned.
Very nice. I appreciate you. I don't got too much
from myself.
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