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THE SPACE ECONOMY | DEEP DIVE
Recorded: April 23, 2025 Duration: 3:03:24Space Recording
Full Transcription
Thank you. Good afternoon, everyone. Happy, what is today? Wednesday. Goodness gracious, all the days
running together in my head. It is power hour. It is April the 23rd, Wednesday, and market
is green. We had some good news in the after hours yesterday, kind of right around the
time that that Tesla earnings call was getting going. Basically, Trump said he wasn't going to
fire Powell maybe after all. I guess that's the Zu Long didn't read version of that. There's a lot
more intricacies to it, obviously. There was some positive comments on China. We've had all kinds of
comments today. I'm, boy, trying to navigate all these news
headlines. Things come out, things get retracted, things get debunked. I don't know. It's wild
times in the market for sure. Right now, looking around, we do have a green market for the most
part. QQQ up 2.5% after pulling back a little bit here in the back half of the session.
back a little bit here in the back half of the session. Spy up 1.7. IWM also 1.7. And the Dow
Jones just over 1%. VIX crushed down a little bit today. Got under the 30 mark down to just under
29 right now. 6% down. We also have Bitcoin absolutely flying. Bitcoin at 93.6 right now.
I believe it hit a high of almost 95. I think it was like 94.600 earlier
today. So that's up. There's several tech names that are up. Tesla, of course, earnings yesterday.
We knew the numbers were going to be bad. They were bad. Musk had some comments about
basically coming back a little bit. Overall, I think that was the message given. There was obviously some intricacies there as well.
And yeah, we'll see.
Tesla up 7.5%.
Broadcom, the other kind of top gainer that I watch in that top 10 of QQQ and the tech holdings, 5% up there.
NVIDIA up 4.4%.
Meta over 4% as well as Amazon.
Apple, 2.5% up.
Microsoft, 2.3%.
And yeah, that rounds out most things around the market.
There are a couple things that are up bigger than that.
There's a couple things that kind of break even or red.
So we'll see what all of our great panelists think about this move up,
what the news is.
Are we getting news fatigue yet?
And maybe any thoughts around
the test learnings yesterday? We'll probably cover all of it today. Spartan, I saw your hand go up.
And, you know, I always look for a different person to kick us off. Options Mike does a great
job. But Spartan, your hands up. Let's go over to you and have you kick us off today.
If Options Mike wants to start it off, I have no problem. Options Mike, go for it.
No, hey, I love mixing it up. I love mixing it up. Options Mike is my go-to just because he's always one of the first ones in here but i like mixing it up spartan
what's what's on your mind today which what you got for yeah so you know one of the first things
we always want to look for guys in um you know during earnings season we want to try to find
the patterns now you know we came into earnings season i think everyone's expecting you know
they're either going to hold that guidance or they're going to be lowering guidance going forward
just based off of all the uncertainty and what we saw with tesla was we saw and this is before all
the news came out but it's notable obviously with the earnings they were bad um you know if you look
at the estimates the nothing looked good on the earnings but you had great price action so is some
of the uh movement built into the earnings already? Potentially. But what I looked for was, you know, how is this going to act based off of the earnings?
Bad news, good action.
That looks great because, you know, caused a little bit of a squeeze, obviously, when
the news came out after.
So I'm going to be watching that again today.
We got IBM earnings.
Of course, we got Google tomorrow.
And, you know, Netflix reported last week on thursday and that did quite uh decent as well
so you know i'm going to be watching that type of action those types of patterns going forward
um you know we've seen a couple companies come out and cut guidance before earnings we may see
more of that i think uh that may be probably you know that probably would happen i i would think
in some of the more like cyclical things I think tech are probably going to hold back.
They're probably going to do what Tesla did, hold back guidance.
But I think it's extremely notable.
Now, going back to the market, yesterday, interestingly enough, on actually Monday,
I came in, we had a nice extension to the downside on very low volume.
So I had a preconceived notion that we were going to bounce in the short term based off
the technicals. Then yesterday, what we saw was some really nice price
action. I was watching some of the option sweeps kind of off the lows. There was some
China being bought up. So we decided to swing some FXI, BABA overnight alongside some crypto
and some of the semiconductor names, which we ended up getting a nice little bounce today.
Now, today's action, I think what we saw was obviously a big move to the upside. There's
profit-taking that's going on. I'm going to be looking for consolidative action tomorrow.
I think this range low intraday today should hold. And the action, in my opinion, is quite bullish.
Typically, we would taper off a little bit after this type of news, just based
off of the recent volatility. But I think going forward, we're going to see much more positive
macro outcomes. In my opinion, I think what happened with China was quite constructive.
And I would think that most of the other deals coming through later on will follow suit.
Now, I'm not a macro guy. I'm a technical trader, momentum-based.
But, you know, just you can't ignore these factors.
And what I'm seeing from a technical standpoint is that volatility where we get that whip back has died down.
We saw the premium getting sucked out of the SPX and the SPY today.
The last couple hours, you know, it's fairly flat.
Going forward, obviously, we've got to watch Google for tomorrow.
Going to be watching the semiconductors.
I did take a long on SOXL yesterday, long-term.
We'll see if it holds up, but $9.24 is my average.
So sitting pretty on that right now.
Going to keep an eye on that right now.
Going to keep an eye on the SMH.
Most of the semiconductors have reclaimed EMA support on the daily.
The one that's lagging behind right now is NVIDIA, obviously a big one.
So we're going to keep an eye on that.
We don't really have confirmation yet on, you know,
this move to the upside and this little bounce.
It is just a bounce for now, but it is constructive and it's a little bit different from what I've seen in the past.
So kind of what my thoughts are there. And yeah, I'll pass it over to, I guess, the options, Mike.
I've got those thoughts, Spartan. Yeah. Options, Mike, go ahead and jump in. Yeah. We,
to one quick point there, we are, this is a ninth trading day that we've been inside of that one big
bar. And I know options, like you've mentioned that Spartan was just mentioning that. So I just want to highlight that real fast. Nine
days now inside of that big bar back from two Wednesdays ago. Yeah. I mean, that's it. We just
cannot break it in either direction. You know, two days ago, we were talking that we had an H cell
pattern forming and it turns out to be at this point, a higher low on the, on the indexes, right?
As we, we we tapped up yesterday
morning trapping shorts we gapped up again today pushed for a bit and then came in a very noisy
day out of the out of the white house a lot of contradictory information coming out of them
you know uh you know wall street journal reports these that and then the white house comes out and
denies it that they're ready they're ready to cut tariffs with China.
They're ready to start talking to them, you know, mutual stuff.
You know, the Wall Street Journal is not making this stuff up.
This is coming from somewhere in the administration.
And it sounds to me like there's some infighting there going on, which is why we're getting these conflicting type of reports constantly coming out.
Bottom line is, you know, we're holding up.
We're below the 21 day though and if you watch the es specifically the 21 day has been the point of failure for this since we sold
off um from the all-time highs early this year and as of right now if we're going to close here
we're going to close back underneath it tesla earnings i mean $2 billion miss huge didn't wouldn't issue guidance said, Well, maybe next
quarter. Yeah, I get it. You know, we kind of saw that coming. And then it was a sales job by Musk
trying to hype up stuff that the market, you know, and even he said it was, you know, wouldn't start
moving the needle till sometime in the later half of this of 2026.
And then the markets, you know, that's not going to excite the market because he's always he's always early on his estimates.
So that probably means it's 2027, to be honest with you.
That said, you know, the name was up today.
It came down. It gave a short and gave the whole move back and then bounced up out of V bounce, which nobody saw coming.
gave a short and gave the whole move back and then bounced up out of the bounce which nobody saw
coming and you know now we're sitting here with the market kind of on the week tesla holding up
it really needs to clear that 260 level to me uh we have earnings tonight from ibm we have
chipotle out there tonight service now tomorrow morning you have a whole bunch of pharmaceuticals
like merck and bristol myers i think you have, who else is in there tomorrow?
Procter & Gamble, then Google and Intel tomorrow night will be interesting.
I think it's just, you know, it would have been nice if we had a hold today and a follow-through.
And the fact that we can't hold these levels, to me, is concerning.
It looks like we want to come down and fill the gap.
I would not be surprised if we came all the way back down to fill the gap up we made from today
before we turned and went back up.
But overall, you know, a little bit more constructive action but until we clear the top of that candle from last wednesday we're still in the trap zone yeah it looks like a big a big
old box big old trappy box right now evan do do you have some? Oh, Evan just got rugged. Boy,
everyone's getting rugged. Don't get Evan and Sok Talk back up here. Gary, I think I saw your hand
first. We'll go over to you next and then we'll go to logic. My hand was up because I got mocked
on Monday when I said buy as the long-term kind of trader on here. I think we're in a market.
It's pretty obvious. It's a news-driven market. When you feel like it's bad, just buy.
I mean, I think that's the best thing.
And Mike has it right.
I don't think we've even touched.
If I'm right today, we might have touched the March low, if I remember correctly.
But I'm not a technical trader.
Number one rule of my podcast is don't listen to a douche on the internet.
And I am that douche.
But I will tell you, I think Google, I think we're in for a good Google report, but I don't know that it's great.
Netflix said it on their earnings call.
I think it was their earnings call.
But YouTube is an untapped resource.
If you guys have YouTube TV, you'll see these interstitial breaks where
it's just this meditation kind of music and stuff. YouTube hasn't started monetizing with
ad placement services. They're YouTube TV. I think that's an untapped resource. I think there are
tons of levers for YouTube to start pulling some revenue and to start doing it.
We talk about Amazon all the time where the consumer business is basically given to you for free because AWS has grown so much that the stock price just is AWS.
And if anybody ever breaks it out, then the consumer portion is useless.
I think that's similar to what Google is with Waymo.
If you believe that Tesla is the story that they have, then I don't know why you wouldn't buy
Google with Waymo. And I just don't think that it's priced in. So again, as a long-term investor,
as a guy who retired at 48, just based on some investments,
Google to me is a screaming buy. I think Amazon's a screaming buy as well. And to that point,
there was, if you look at the TEM as the symbol, that was the one that Pelosi bought. I think it
was back in January, January 17th, if I remember correctly, because I looked at it and I posted it
on my Twitter with Pelosi through TrendSpider. I can get all the political buys in Trendspider. But I looked at it. It's
almost at that price. And today they get news and they're up 17%. If you miss that move,
which was like a 20% gap move when it came out that Pelosi bought it. If you miss that move,
you had the chance to buy it again. But I just don't think that people remember these types of things and have these types of things on their card that, hey, remember that time when Pelosi bought it?
And boy, it's at the stock price and maybe it could go up because maybe she knows something.
I think the key to this market is A, watching the news because you know when it gets too bad, something's going to come out of the White House.
Watching the news because you know when it gets too bad, something's going to come – goods are going to come out of the White House.
And B, having your watch list ready so that you're able to identify the buys quickly.
And I think that's for me what I'm learning about this market.
It's just like Trump 1.0.
There's no difference.
It's just he doesn't care as much about the stock market.
But as you get closer to November and you get closer to the midterms, he's going to care about the stock market. But as you get closer to November and you get closer to the midterms, he's going to care about the stock market. Yeah, great thoughts there, Gary. And that tip of say,
I was looking at that on stream. It's up 14.5% now. It was up like 17% or 18% earlier at the high.
Good call on that big mover that I saw today logical your hands up next we'll go over to you
and see what thoughts you have sorry actually uh you can go to someone else real quick i'm trying
to place a trade can we talk about evan's uh tslq yesterday yes evan you do need to speak up before your
inverse play.
I did tell
you all, literally, I said it on the
spaces yesterday. For anyone who doesn't know,
I bought some of
$100 of TSL, I think it was
TSLZ, right?
It was TSLZ, which is a 2X
inverse ETF, and I was down
about 50% today.
I bought $100.
I sold $84.65.
You're welcome, Tesla Vols.
Adam, what's this headline real fast before I go around the panel?
Elon Musk was shouting at Bessette the other day.
It's a story from Axios.
I don't know what's true and what isn't.
Apparently, it's about the IRS, that conversation. I don't know. Apparently, it's a story from axios i don't know what's true and what isn't apparently it's about the irs that conversation i don't know and apparently it's a couple days old uh i don't know i don't
know what's happening what's not happening like someone's saying earlier there's just a lot of
back and forth one headline is telling us one way then we're getting the complete opposite it's like
when we have a good headline and they all seem to happen at night for some reason right now
and then it's uh it's like open the markets because we're going to fade this at some point with another comment.
That's why you have Robinhood.
24 hours.
There we go.
All right.
So long Robinhood.
Yeah.
Well, let's keep going around the panel here.
I do want to get everyone's thoughts.
Urkel, you always join us on these Wednesday afternoons.
Want to see what's on your radar, what you always join us on these Wednesday afternoons.
Want to see what's on your radar, what you've been trading, and what you're seeing out there in the market.
Yeah, thanks for having me on again.
Last week when I was on, I was quite adamant about Bitcoin, if you recall.
Kind of drove the point home just in terms of relative strength there.
I talked about MSTR at $300.
I talked about the Bitcoin miners, Mara at $12.
I took a swing there and those have had some significant upside moves, 20, 25% in some cases. So it's been a good week for crypto. However, I did post for my members this morning too,
that the markets gapped up right into resistance which in weakness and in downtrends
generally that's just not a buy point that's you know either a sell point take shorts or just wait
my issue with the market pump this week is that on monday we were actually dumping like markets
were dropping off spy qqq landed into some support And then on Tuesday, in my opinion, anyway, we kind of picked up a little bit of a rally when rumors of that closed door meeting with Besant and some private investors kind of came to light and some news about, you know, lightening the tariffs on China, that this wasn't sustainable. So you kind of saw markets pick up a little bit of juice.
And then, of course, Trump came on after hours yesterday and kind of pushed that same line.
So we got the gap ups today.
But fundamentally, and in terms of trade and tariffs, nothing's changed.
So for me, that was just a relief bounce off support based on the headlines in this market, which we have seen frequently.
And today, a lot of that's getting refuted.
Like Options Mike said, it's been extremely noisy.
There's really no coherent message from the White House on the tariffs.
So, you know, in weakness and in downtrends, when you gap up into resistance, generally speaking, the easiest path is to the downside.
So not surprised to see things dropping off late.
I wouldn't be surprised if we get a decent dump into close, close some of those gaps and then see where we're at tomorrow.
But yeah, SPY for me, like it kind of topped out in that 545 area, which I have as resistance.
The Qs right around that 462, 463 area.
And Bitcoin, when I was on last week, we were talking about it at that 80, 82K support area.
And 95K is the big resistance level there.
So Bitcoin is also starting to get a little bit extended.
So I wouldn't be surprised if we had a decent pullback into close and maybe even a red day tomorrow, just given how extended things are.
So this certainly is not a buy point for me on any names.
Given the rallies today, I'll look and wait for some dips to see where we might land before potentially looking at buys, this has been a profit-taking day, trimming day,
selling day for me as a short-term technical trader, waiting to see kind of where things
land. And of course, to other people's points, we still have some big earnings coming this week,
and that really picks up steam next week with some more Mag7s. We've got Trump speaking after
hours again. Who knows what he's got to say so
yeah for me as a technical trader the Monday drops were concerning the bounce
I think was really catalyst news hope driven even with Tesla like I talked on
my timeline about how much of the recent news might be priced into Tesla however
I do think some of the rally likely had to do with the news of Elon returning
to take a more prominent role with Tesla again. And a few years ago when the stock was taking
a nasty hit, he was also criticized. I think it was during the X purchase time. He was criticized
for taking too much time away from Tesla as the stock creator too. And when he mentioned he was returning to a bigger workload
or more involvement, the stock also rallied back then too.
So I do wonder how much of today's rally evolves around his return
to the stock or to the company, sorry.
However, yeah, for me today, big gap up into resistance day.
That's a profit-taking day for me on short-term trades and swings.
Shorting, hedging, if you want to play downside.
And I'm just going to wait to see where things land before I look at some more buys.
So that's kind of where my head's at right now.
Yeah, Erkel, great call on that Bitcoin. I was watching that same chart as well. It was consolidating. It came off the lows nicely. It was consolidating right into the 50-day.
One of the few things that you look around the chart, there's a few right spots that are above
most of their moving averages right now. Bitcoin, definitely one of those. And I remember vividly
you calling that out, pounding the table on it last week. Great job on that.
Let's keep going around.
Logical, if you are done with your trade, let me know and you can jump in.
If not, we'll continue around.
I just made a...
What trade is it first?
Oh, it's too liquid.
It's too liquid.
Sorry.
Got to tell the Discord eats first.
Sorry.
Sorry.
But yeah, I think interesting day for sure.
But honestly, look, I've heard different comments on here already, but I agree with Urkel.
I don't like gaps up in this market.
Every single time we get a gap up and I look at the chart, I'm like, I don't like that gap.
Because either you're going to fill it now or you're probably going to fill it later.
And yes, not all gaps have to fill.
But does this really feel like the time where we just resume to an uptrend?
I mean, we just got news today that China deals can take two to three years.
I mean, that will be devastating.
The rest of this year is cooked. Um, look,
I'm not, uh, I'm just getting more into technicals for the last 12 months or so.
I was a fundamental investor first. I will tell you that if like, you know, yesterday you have
this pump after hours because Trump says he's not going to play hardball. And then dude comes out
today and says, yeah, we're going to be real lenient and give him 50% tariffs. I mean, dude, that is insane. That will
destroy so many businesses. 50% is unsustainable. So from a fundamental perspective, earnings are
going to deteriorate. Yeah, I just see marketing spend pulling back. I see a weaker, weakening consumer due to layoffs. I see
unemployment ticking up. If any of these, so that's what you have right now on the table.
Nothing is bullish about what happened today from a macro and fundamental perspective.
I think today, you know, I'm still very, I have, I'm about like 85% long in this market. So,
I'm about like 85% long in this market.
So, you know, I'm still hopeful about some things,
but I think you have to be very selectively long.
And for those that don't know,
I regularly post my portfolio updates on my Twitter and my pinned tweet.
So you can see what I'm long and short, et cetera, pretty often.
I don't know how much longer I'm going to continue doing that,
but, you know, I do it half of the time is for myself to review my own holdings.
But if you'll, if you see my holdings, you'll know I have about 70% exposure in biotechs.
It's something that I've been talking about for some time.
Um, I mean, let's just look at biotechs right now.
Um, so if you pull up like a chart of XBI, I mean, look, a lot of things
gapped up and whatnot today. But before that, I mean, XBI was holding the nine EMA yesterday,
just below that 20 day SMA, just below the 21 EMA now above all three of those.
If you look at BBC, which is the clinical biotech ETF, it was actually above the 21 EMA
yesterday. The nine EMA is about to cross over to the upside. They're all curling up. It's above
the 20 SMA. I mean, so the BBC is basically the risk on version of XBI because it's the clinical
biotechs that have been sold off the most. I've been talking about how these are trading at
extremely low valuations. And look, at the end of the day, I understand people want to
own the best of breed and all that stuff. And there is best of breed in biotech. People just
don't want to think about it because it's been basically in the left for dead bear market for
the last four years. But there are true bargains in this area. Whereas if I look at the rest of
tech, they're still trading at 20, 30 times
earnings. And that's before we see the earnings guide downs, which are definitely coming at this
point. A lot of these businesses are reliant on their end businesses that they work with,
their B2B. Like for example, think about Meta. If the economy is slowing and tariffs are going to affect the cost of goods of companies, let's say small businesses that sell some sort of clothing or whatever it is, right?
So their cost of goods are going up.
They're going to have lower sales if they raise those prices.
They're going to have less money in their pocket because their cogs went up.
They're not going to have as much money to be marketing who gets hurt first. It's meta it's Google and
They're not going to have as much money to be marketing.
Who gets hurt first?
On Amazon the sellers who are doing sponsored ads
so and then yeah, obviously there's just a lot of
You know second-order effects that we're not really taking into account and ultimately
50% tariffs from China are absolutely unsustainable Two to three years to reach a trade deal,
absolutely unsustainable. And remember, as far as I know, we're sitting at 145% tariffs right now.
Shipments are down like 50% month over month. So those are still in effect until a trade deal
is struck. And now they're talking about it might take two to three years to get a deal done.
Yeah, I don't know. I looked at today as I, you know, some of the
things that I've been running a lot, I trimmed a little bit and it's really a, it's a bear market
and you got to play bear market rallies as it, you know, as they are right now. Like we're no,
we're not ready to be in a resuming of the uptrend. i trimmed a little bit today but i did less so trimming and i did
more so shorting um you know after we saw some news yesterday or the headlines i should say not
even news uh about you know playing softball with china you know i thought okay i should probably
cover some shorts this could be a big rally tomorrow so i covered probably half my shorts but
you know seeing the gap up today looking at the volume and basically right at resistance and i'm
looking at that gap and i'm like every time I see a gap in this market, it
gets filled pretty quickly.
So, you know, we just have a weak market.
Nobody's stepping in to buy it.
There's really no reason to.
Again, we're priced for perfection headed into earnings season.
I think there's going to be like, you know, a lot more uncertainty coming up.
So, you know, have we priced it all in?
I don't know.
The S&P is only down 8% year to date and people are losing their minds. It's not as big as people think. And I think one thing to consider is that, like, if we didn't have this tariff situation,
we'd probably be more or less okay. But this is an exogenous shock to the system that is going to
have real impacts to these businesses. And we still have
no clarity, no certainty. And so, you know, as we head into, you know, earnings, I think people
were kind of relieved yesterday to hear Trump mention, you know, we're going to play softball,
but then, you know, because we're headed into earnings. And so it's like, oh, okay, cool. Like,
maybe we can take a deep breath now. And then he comes out and says, yeah, but I mean, we're going to lower them substantially,
but you know, still probably like 50 to 60%.
It's like, dude, that is not a de-escalation by any means.
It is very tough for many businesses to operate in that environment.
So yeah, I mean, I think the only reason that the market is holding up the weight as well
as it has is because truly nobody
believes that he really means this. If he does really mean this, then there's, I mean, there's
probably, and I think we were talking about this with Monitiv the other day, but there's probably
not a number low enough on the S&P 500. And so, you know, I think people should just take every
green day with a grain of salt right now. I would love for us to
continue to the uptrend. I would love to, you know, cover my hedges and go lever long and have a party.
I do still have a lot of long exposures I've mentioned, but they're not in US tech. They're
not in US consumer. And yeah, I just don't see how coming into these earnings with these high
valuations priced for more or less perfection.
I know you keep seeing these charts on Twitter of people telling you that these businesses
have never traded this cheap before. But if these tariffs remain in effect and at these levels,
those earnings are not holding up at all, not even close. So, you know, you might see 25 times
earnings for some business you love. But in reality, you know, revenues get hits, cogs goes up, earnings come way down, and you could be looking at a double that multiple.
So I think that's what people are not really fully pricing, and they're still looking at trailing 12-month earnings as if they can extrapolate it out after what we just, you know, are seeing in front of us. So just keep playing what you like,
own what you like,
but be able to sleep at night
because don't let one, two, three green days really...
And I bet you we get another positive headline,
an India deal, a Japan deal,
or whatever it is,
but it's not a China deal.
Then maybe we rip to 5,800,
and on those headlines, I'll be managing my short deal, then maybe we rip to 5,800. And on those headlines,
I'll be managing my short exposure. And again, I'm not net short. I'm very net long. I have 85%
net long. So I'm very happy if this market goes up. But I think it's kind of a market where you
have to play both sides in the sense that if you have long exposure, you need to have a little bit
of hedges in place because we really don't know if the what's the
next shoe to drop you know or you know because i think again if we're taking these this tariff
news and headlines at face value uh the market is not pricing in those risks right now not at
these prices anyways let me let me jump in here logical you're on a kind of a tangent here keep
going think something keep this in mind these administration
these officials of ours will not be around in two or three years if deals aren't done if china's not
done they won't be dealing with them things will change so i i get where you're coming from but you
know this they don't have two to three years uh if they don't get a deal done in the near future
they're not going to have they're going to be fired they're going to be gone they're going to
be scapegoats so i i kind of i guess I just don't have quite as a view of that things
will go that far, but I appreciate what you're saying. I get it. You know, there's a lot of
worries here. I'm not saying there's not, but you know, Vesonant, Navarro, whatever,
they'll all be fired. We see the first administration, he fired guys like this left
and right. Yeah. I mean, again, you're going to need more than an incremental, you know, truth social post.
Because clearly, while they might drive sentiment, they're not going to actually fix the fundamentals underlying these policies.
So you need to either see him completely cave or you need to see, I mean, what he said today is detrimental to the S&P 500 full stop.
So it went from the most recent number we saw up to 245% back down to 50%.
And 50% is detrimental still, right?
Even though it's an improvement in the market.
It's like, okay, well, it's not as big of a scare,
but there's still people like you
and several others are going through this
going 50% is not going to work.
It's going to cripple the earnings of all these businesses.
So no longer can they expect that level of revenue growth,
that level of profit growth.
So the issue then becomes,
what's the right risk premium to pay for,
like what's the right risk premium to pay for, like, what's the right
multiple to pay for these stocks if they're going to have dampened profit margins because they can
only raise prices so much where they don't see a hit to revenues. So it's just kind of like thinking
through like the multiple, like, again, if we've been kind of in this globalization period and,
you know, we can definitely keep cogs down, relying on these other countries, and you know we can definitely keep uh cogs down relying on these
other countries and you no longer can do that at those costs i mean think about if most of your
goods come in from china now your cogs went up 50 i mean it's it just changes the math and you have
to change the prices and maybe you can have pricing power to an extent but I think you're
going to see less sales and yeah if not you're going to have to lower those prices and you're
just going to eat the hit in the increased cost yourself. Monit if your name was mentioned there
so you jumped up on stage and saw your hand go up would love to bring you into the conversation
always great having you on these spaces.
What are your thoughts around that conversation?
Look, forget 50%.
Even 15% tariff across the board is not priced into earnings.
This is silly.
We're talking about 50% across the board from hundreds of billions in imports,
about 50% across the board from hundreds of billions in imports,
and just from China, and God knows what percentage,
let's even say 15% from much of the rest of the world.
And the way he's going at EU today,
it doesn't look like we're going to have a zero-tariff situation with EU
if he has his way.
So we're talking pretty much everything that we know of going to have a level of tariff.
Market is still pricing tariffs going away and this getting resolved in short order.
It is not pricing a reminder tariff.
And the ability, just to close it where logical left off,
the consumer is already weak and on the edge, the ability to pass on tariffs,
the pass on increased costs is lower and lower every day.
And the longer we drag this out,
the longer that we destroy consumer confidence,
the greater the difficulty to pass anything on.
So if the companies take it on, then that's, that's an immediate reduction in profitability.
And they're not going to, you know, they're not priced that in yet.
Right.
So, so estimates, I still don't understand even the companies that have come out with
estimates.
Yeah.
They've hedged it yeah they've
said that you know we all bets are off if if if if if tariff stay in place but but why are they
even providing estimates it it doesn't make sense that they're able to calculate with an unknown
regime of trade what their business is going to be, unless they are, you know, using AI
to predict the future. This is completely silly. I mean, look at look at I'll stick to my you
know, the ones that I talk about a lot. Raytheon said that their hit is going to be 850 million. Boeing said their hit is going to be 500 million.
And most of that is not China.
Almost all of that is from our other partners,
EU and Japan and Korea and Australia,
which is where the most of non-US supply chain
for our aerospace and defenses.
And we've not even started to start thinking about reciprocal tariffs and tariffs on services.
So you start penning that and you start, you know, adjusting the multiples for that, your tech stocks are nowhere,
you know, as valuable as they are today, whether in you know, in
in backward looking multiples or in forward looking multiples,
even with the discount they have today, if you start taking, you
know, if you start hacking 20 let's say 15 or let's
say even 10 on services that's immediately off the bottom line right it's it's it's an instant
tax rate increase and and and look at how market has reacted to tax rate increases for you know
software companies anywhere.
The sell-off will be much, much larger.
Again, we are only pricing in this uncertain
to be resolved by either back to where we were before this
started or with a negligible small tariff regime that's that's manageable.
We're not pricing anything more than that.
And we're not even pricing that staying in place for a long time.
We're just we're just assuming that everything just goes back to where it was.
And I have seen no rhetoric to date that that says that, you know, that's even on the cards.
Yeah, I just want to say, I think, overreacted this morning when that Wall Street Journal report came out saying that there's reports that Trump might walk the tariffs back to 50 to 65 percent on China.
But 50 to 65 percent on China, if that was true, which right now it seems the White House is kind of walking that back, that would still eliminate probably 60 to 75 percent of all imports coming from China.
And that doesn't factor in, obviously, the price increase of 50 to 65 percent on the goods that do still come over.
So it would still almost cut off most trade with China, and it wouldn't have that much better an impact on the U.S. economy than, say, 145 percent tariff.
I mean, there's a huge gap there, but in the whole scheme of things, the impact on the U.S. economy from 50 to 65 percent is not too much better than 100 to 145 percent
we have talk up here oh talk talk there you go we can we have something up here
you should be up here for me can you hear me perfect Yeah, we got you. Okay, perfect. Sorry. I don't know what's going on with my space.
Every time I reset my app and get back up here,
it just kicks me back down.
Resetting my app.
Well, it knows where you belong as a listener.
But since you're up here as a speaker, I want to...
We'll let you go today.
I know we normally come to you at the end,
but I'm curious.
There's a lot of different headlines.
I know a bunch of people have been talking there.
Anything you want to end to the conversation here?
Was this a walkback?
Was it a walkback?
That's going to be a question of the day,
I guess, which makes sense why it's the title of space.
Look, yesterday, when
those comments came out,
I actually put a note out for our members, and I tweeted to this effect as well, but I got kind of trade between China and the United States.
Right. That's the single most important issue.
More important than anything, anything else that we're discussing, any of the other peripheral effects that we're discussing, because if you freeze or stall or dramatically slow any of those three,
the volume and balance of trade between the United States and China, you effectively
halt the global economy and you create a deep global recession like almost certainly guaranteed
so as of yesterday my main upside catalyst to watch for was potential resolution of this issue
with china and the fact that trump's sort of olive branch yesterday,
or at least that's the way I interpreted it,
you know, it's not technically an olive branch, historically speaking, but, you know, when somebody has a hardline stance on an issue
and then they see the consequences of negotiation
and then soften their hardline stance, that's a walk back, okay?
There's going to be people that are going to, like, say and try to recharacterize it as something else. I think it's pretty hardline stance that's a walk back okay there's gonna be people that are gonna like say
and try to re-characterize it as something else i think it's pretty hard to do that um
but so nonetheless he walked by we bought he walked back his commentary yesterday and then
we got to obviously rally in the markets a rally that expanded um into a much bigger rally as of
this morning uh we were up about like a percent after Trump's comments
yesterday. And then, you know, we were up as high as 3% this morning. And then we get to percent to
talk and everything seems to be going really well. And I was like, okay, you know, maybe I'll,
I'll start buying some stuff today. This is around 11. And then we get that comment from percent,
which not only led to the rally fading pretty significantly, but in my view, it was a very concerning comment,
which was when he said,
and everyone was focused on his comment that said
Trump did not approve a unilateral lowering of tariffs on China.
But I thought that was already obvious from the initial commentary.
I thought what was much more important news
was when he said a China trade deal might
take two or three years.
That's crazy.
Two or three years is, yeah, like, it's just not, that's not a tenable economic scenario
for the global economy. So, um, it's difficult sometimes to, to dissect these issues
because there are things that on the table right now that don't seem practical or realistic.
And so, you know, again, the reasonable person within me is like, Oh, well, those things won't
stand because they're not sustainable and they're not practical. But I mean, I don't know. It's been months of us
just playing this game. So, you know, the other part of me is like, well, maybe impractical things
want to be accomplished here. So I don't know. I'm very much confused by the situation and the
execution. I think it's been very, very poorly executed. I've said that several times. Um,
and I stand by that. Uh, I don't think this has been a quote unquote effective negotiation at all.
I think we've just sort of lollygagged around with our leverage and not really placed and
used it effectively. And now we're in a position where we're having to, you know, put our cards back away because, um, we realized that there are,
you know, far greater consequences here than we might've imagined. And
yeah, I just don't know how this gets resolved. I don't know how this gets resolved. And I tweeted
this, you know, um, later after the, the send comments came
out, but I think one of the bigger issues here to, to relief of any kind is anytime we get a
positive story about the white house, walking things back. And I actually do think that story
was true because Bissette was asked about it today and he said, no comment. He didn't deny
the story. He said, no comment. And he said,
yeah, I, you know, I'm going to comment on that, but I do think tariffs come down for China.
So I think that gives validity to the reporting that came out yesterday, actually.
But, you know, when Bissendt said that, my thought was, okay, you know, maybe there's
been an acknowledgement from the administration that this is the wrong thing to do. But at the same time, you know,
any sort of concession is going to be painted by the media as a loss, right?
Any sort of concession or trade deal
is going to be painted by the media as,
you know, Trump got folded by Zigi,
Trump backed down, Trump caved.
You know, and when you use that terminology for us as readers,
it's whatever, but for Trump, it's probably not, you know, if president Trump sees that commentary
and sees that people are effectively painting him as, you know, weak, which is, which, which is,
uh, I'm not saying what he is weak. I'm saying the media
is effectively painting it that way when these concessions are made. Um, he's not going to like
that. And I think that increases the probability that he walk backs, walks back any walk backs,
right. Uh, in light of the way that the media is portraying them. So I think this issue has
become incredibly
complicated not only from a political standpoint but from a political ego standpoint and i mentioned
that being an issue at the outset when we talked about this weeks ago but i think that issue is now
even more so rearing its head so long story short i thought the comments were really bullish
yesterday and i was ready to get bulled up and then I heard the sense comments this year about the
deal taking two to three years and I'm back to being right where I was before
everything else so almost there close but no cigar I was ready to start
deploying cash and then I heard that comment and didn't so yeah I was
watching that I was potentially gonna add didn't end up yeah, there were a few stocks I was watching that I was potentially going to add,
didn't end up adding any of them in light of that opinion. So.
Yeah. So like, like, and then there's the other dimension to it though, right? Like,
like the first dimension is that Trump doesn't want to be seen as weak. Like everybody understands
stands at. Like, no matter what happens, he's going to try and spin it as a positive. If he
that. Like, like no matter what happens, he's going to try and spin it as, as a positive.
doesn't have much ammunition to do that, like it would, like he wouldn't if he just walked back
the tariffs, then that's going to be a problem from his standpoint. But the other dimension of
it all is what it signals to China. If China sees him as being weak, which they would if he
starts walking things back, then not only is China going to
try and squeeze out a better deal in the long run, but the other nations that we're currently
negotiating with will be doing the same thing. So he has a, it's kind of like a double negative,
right? Like he can't walk these back because of his own reputation and his own ego, but he also
can't walk them back because it's going to show weakness on the international stage when he's trying to create these trade deals with both China and the
rest of the world. Yeah, I think one of the other issues too is the idea of like
the market's perception of what a trade deal is versus the sustainability of the tariffs in the meantime.
Like, if it is true that it's going to take three years to negotiate a deal with China,
which I think is an absurd timeline and absolutely not practical for the global economy, but
let's operate under the assumption that Secretary Besant's comments on that are accurate and that it's going to take three years.
Okay.
What are tariffs going to be at in the meantime?
If the answer is 50%, that's still not acceptable.
Like this morning, you got that Wall Street Journal report that's like, oh, the White House might walk down tariffs to 50% in order to curtail the trade war?
What are we talking about here?
Do we think Xi is going to say, yeah, that works.
50%, we'll roll with that.
Of course not. I mean, 145% is effectively an embargo.
50% isn't much better.
50% still makes the trade dramatically more expensive.
It will free up. It will freeze up trading volume. You know, it will freeze up freight.
50% is not a reasonable number either. So like, again, this is another case where the headlines
don't reflect the accurate, accurate story. When people are tweeting about that story,
they're like, China tariffs coming down, China tariffs coming down China tariffs coming down nobody actually read the article you read
the article it says they're coming down to 50 to 65 percent like that's that that doesn't work
either so I don't know I don't know like I don't know where the resolution is here and I also am starting to lose track of like what the objective is. You know, there was a court of people that were saying like, oh, the objective is to, you know, pressure China into making a deal.
seems to have backfired. China is pressuring us now and American companies, frankly, can't survive
without China. I mean, I don't know if anyone heard Elon's commentary on the Tesla earnings
call yesterday, but they mentioned tariffs a whole bunch and not once in a positive light,
including the CFO of Tesla, who was like, look, this is going to fuck up the operating environment
for everyone, including us, even though we manufacture the majority of our domestically sold cars here.
So, I mean, the CEOs of Home Depot and Walmart have made this argument at Target when they went to the White House.
The GMs of Ford and GM, the CEOs of Ford and GM is what I meant to say, have made that argument as
well. Um, I'm making that argument and have made that argument, um, as well. This was a failed
attempt at trade negotiation is the way I think it should be characterized. And whether it needs
to be walked back by Trump himself or whether it needs to be walked back by a member of the administration, I'm fine with either.
But it needs to be walked back.
And hopefully ego doesn't get in the way of that.
I thought yesterday might have been the beginning of that walk back, but I'm not so sure now.
Yeah, one of the one of the possible solutions that I read about earlier, I think it might have been in the Wall Street Journal article, was the possibility of him
implementing a gradual tariff, right?
Like starting it at 10%
and saying within 12 months,
it's going to move up to 20%
and so on,
which would give China
more time to negotiate
and also not destroy
both economies in the process.
Do you think something like that
could be possible?
Or would that be also, you know, something that would tarnish his ego too much? You mean just like lowering tariffs
while they negotiate? Lower tariffs with a promise to increase them gradually over the course of the
next two or three years. Yeah. I mean, I think that, again, I try to speak in the lens of a practical person. So I'm going to give an opinion in that lens, but it doesn't mean that's what's going to happen, right? Because you've seen a lot of impractical things happen. But yes, I think that would be the most practical approach would be to go to China and say, hey, let's either completely remove the tariffs or drop them to 10% while we negotiate.
or drop them to 10% while we negotiate.
Dropping them to 50% is hilarious and won't work as a negotiating tool,
and China's not going to come to the table with tariffs of 50%.
So that shouldn't even be under consideration.
But yes, if everyone's heads are cool and people are approaching this in a practical way,
that would be the best outcome here.
It would be to either pause or dramatically lower tariffs and then sit down and have a three year trade
negotiation. The markets wouldn't give a shit about that. If that's if that's where this ends
up. Great. You know, markets will probably resume going up and everyone can be happy again. But
yeah, I just the probabilities of that just seem lower and lower every day because
China has made it very clear that they don't want to negotiate under maximum pressure campaign.
They've said it like in 25 different ways. The foreign minister came out this morning,
people said the Chinese didn't respond to Trump's comments. That's not true.
The foreign ministry came out this morning and said, hey, look, we're open to talks with the U.S., but we can't, you know,
the two ideas are not compatible. The idea of them wanting to talk and the idea of them exerting a
maximum pressure campaign, those two, you know, perspectives are incompatible. And so they're
like, you either drop the maximum pressure campaign and then come to the table, or we do a trade war and we're prepared for that.
That was effectively their comment. So they don't want to play hardball. They don't think the idea
of playing hardball is conducive to negotiation. And to me, that means hardball has failed here.
You could have made an argument three months ago that this was the right means of negotiation and that this would pressure China into a concession. It did not. Okay.
We haven't seen any concessions from China. In fact, we've seen the opposite of concessions.
China has exerted pressure reciprocally. And that's the opposite of what you would have wanted
to see if you thought this was effective negotiation. So in my view, this has been ineffective negotiation.
And, you know, I see sometimes I check the comments of people while I'm talking on our space, but I see somebody said, hey, the objective is to limit globalization.
That's the objective of these.
OK, well, I've addressed this before, but I'll address this again.
address this again. If your view on tariff policy is that America has been treated unfairly,
and this is the first step to reversing that world order and de-globalizing and making the
American workers stronger again, if that's really your position, which I think is a position that's devoid of a lot of
analysis, but if that really is the position you're going to take, the question you should ask
yourself is what is the trade-off? Okay. And how many millions of Americans will lose their jobs
in the trade-off? How many people will lose their lives, frankly, during that sort of economic downturn?
That's what you have to ask yourself.
And if you feel that the calculus of detonating the global economy for the sake of hopefully, at the other end of it, reorganizing the trade balance in a way that's favorable to the United States. If you truly believe that is the most
effective path to achieve that, then I won't argue with you. If you've really analyzed the
balance of the consequences and said, you know what, detonating the global economy,
millions of Americans losing their jobs, the balance of trade being destroyed,
a global recession that could last years, That's what I think is necessary to
achieve more fairness in trade. Go for it. Have at it. I just can't take that position.
I think it is an unnecessary sacrifice to achieve the objective. Sometimes you have an objective and
it feels really hard to achieve and you think that like fire and flash is the way to do it.
Sort of human nature to think that right
when you have like a goalpost that's really far away and you think you know a hard line stance
a lot of you know bombastic attempts to achieve it is the way to get there um i i just don't fall
in that camp i think this could have been done with far more grace you know this could have been done with the United States at the beginning of the year,
forming a trade committee with a head of the trade committee, whether that involved the members of the Treasury Department and the Commerce Department or not,
formed a trade committee, announced to the world that we feel that our trade imbalance is unfair, as they undid.
announced to the world that we feel that our trade imbalance is unfair, as they undid.
And rather than just blanket imposing tariffs and then asking people to call us, we could have said,
hey, look, we're organizing trade negotiations with these countries from the outset.
No one would have not come to the table in that sort of scenario.
Like the idea that we needed to exert pressure on these people for them to come to the table is crazy.
No country is sitting around wondering about the importance of the United States.
None of these countries are like, yeah, dude, we don't know if you have leverage.
You better show us so we can find out.
Like no one ever thought that.
OK, the United States economic leverage is not in need of demonstration it's
being actively demonstrated year after year after year when the american consumer buys everyone's
shit um and the world doesn't need to be reminded of that for us to negotiate effectively from that
position of strength so um i think that's been another pointless exercise frankly
but i mean i could go on and on about this, but bottom line, I just, I don't know.
I just hope some practicality prevails here
in the medium term.
But for now, I mean, I remain pretty cautious
and negative on the market until that happens.
And I'm in a scenario where I have enough cash
and I want to get bulled up
and I want to deploy cash in this market.
Like, I'm itching to do so.
You know, there's names that I'm watching like a hawk that I want to own and that I want to get back into.
But I don't feel comfortable doing that until I think the macroeconomic conditions are stable.
And I think with this lingering in the backdrop, they won't be.
As good as it sounds for Trump to soften his stance, China needs to do the same. And until China comes to the table, literally comes to
the table, not like all this talk that we've heard, I think it's going to be difficult to
see a sustainable rally until that happens. Today, we were about to retake the 21 EMA on SPY for the first time in like a month,
and we failed that retake intraday.
So technically speaking, that was going to be your sort of line in the sand
to say, wow, Bulls have attempted some reconstruction here,
but that failed with this fade intraday.
So yeah, there's just not a whole lot of positivity on the table
as we stand right now, but hopefully things change.
Stock talk, the QQQ just defended the 20-day at the low
for the second time today.
Does that sway you at all?
I mean, yeah, maybe the Qs have a little bit more of a chance.
I mean, keep in mind, even the last time the SPY retook it on,
what was it, March or March 25th, 26th?
Whenever it was, end of March, we only retook it for a day.
So, you know, I don't know.
You're going to have to see more consistency, I think.
I think it's going to be tricky in this market to be like, oh, we retook the 21 EMA, like time to just go gig along everything.
We actually closed below the 21 EMA just FY.
Yeah, on SPY or on Qs too?
On both, yeah.
Above the 20, below the 20 day, 21 EMA below.
Above the 20 SMA, below the 21 EMA, yes.
And I think something to remember in technical trends like this,
like it seems normal that you would get at times a peak above and then a fail below, just like you would get undercut in rallies and bull markets.
Yeah, exactly. And you don't want to get tugged back and forth by the action in a market like this to where you're just like a chicken with your head cut off. So you got to be careful and just wait for things to play out yeah i looked at a handful of names this morning some names that i like that were up and i thought about buying them and you know i just
hesitant was looking at some of the charts and i was like you know i'd like to see this chart
improve a little bit like there's a couple names that i like but they're still below their 200 days
and i don't really like buying stuff below the 200 days so there's there was some points of
hesitation this morning i was planning on buying stuff. I didn't, um, I shared those notes with our members as well, but, um, yeah, I mean, I,
I, again, I want to deploy cash. I just have to wait till this nonsense is over because that's
really the only way to phrase it at this point is this is just complete nonsense. And, you know,
everyone knows it in the scenario, but Sam knows that he said it today.
He said these tariffs aren't sustainable.
They have to come down.
So it's like everyone's acknowledged that this is ridiculous.
And it's just like the egos are too big to do something about it on both sides.
I'm not blaming Trump here for having a big ego, but I don't think anyone would dispute that he does.
Xi has an enormous ego as well.
You know, I'm not I'm not I'm not pinning this just on Trump.
Xi also understands the cost of the global economy.
By the way, quickly, market did close.
There's a couple earnings coming up.
Chipotle, ServiceNow, IBM, etc.
That's why I was getting here.
Texas Instruments earnings is out.
Beat EPS, beat revenue.
Stocks up about 5% in after hours.
Welcome to the Stock Talk.
Yeah, those chip
stocks have been brutalized. But yeah, I mean,
I just, yeah, I just hope
things change at some point here because
I think the acknowledgements have been made
and, I mean, I don't know if anyone watched that
clip of Trump yesterday with all the
where all the comments came out of, but
he was awfully soft in that clip.
He sounded like he wanted to be
best buddies with G in that clip.
So, I don't know.
I don't know where it goes from here.
I wish I had a fucking course of speculation to tell you guys this, this, and this is going to happen.
But I don't think anyone on this panel is capable of doing that.
This is an extremely unpredictable market environment. And, you know, I think people who are out there who are saying, you know, they know for sure one way or another what is or isn't going to happen are just lying to you. I mean, there's no way, you know, to know for certain. And the worst, that's the worst part about this is the unpredictability. I mean, even Elon said this yesterday when he said, look, the worst part about tariffs is the fact they're not on a predictable schedule.
This is an extremely unpredictable market environment.
You know, if everyone knew what tariffs were going to be and everyone knew how long they were going to be in place, then companies can adapt.
Right. And that's another issue with this whole argument that, well, he's just playing hardball.
This is just negotiation. You don't understand.
You're criticizing it because you're an idiot. That's what a lot of people are telling me in my comments. But what I would say to those people is that, you know, if if this is a point of negotiation and the unpredictability is part of that negotiation, are of markets or the economy knows that being unpredictable in a vacuum, regardless of what it is, it could be tariffs or any other economic issue, is a massive concern for markets.
Because it complicates the ability for businesses to price in risk.
It also complicates the abilities for businesses to plan CapEx. And this applies to
American businesses too, right? If I'm going to put myself in the shoes of an American business,
pretend I'm an American business. I don't know. I make cars, let's say. I'll say I'm an American
car manufacturer and I have a bunch of production abroad and I'm an American patriot. And I'm like,
hey, you know what i want the
best for america too i want to bring my menu back factoring back here okay so let's say let's put
myself in the shoes of somebody who's in that position what do you do okay well first you got
to close the factories abroad and move or build new factories in the united states that takes
years no matter any way you slice it.
Then you have to make sure there's enough compatible and well-trained workforce to supply those factories.
We don't have that in the United States right now from a manufacturing standpoint,
so that will also take years to produce.
So the workforce and the infrastructure will take years to produce.
Then you need to move equipment across the water or across a large landmass, tons and tons of equipment, especially if you're in any of these industrial sectors. And there may be costs to moving that equipment. And it may also take
months and months to move that equipment. So all of these things have to be factored in.
So even if you're an American company that's gung ho with the agenda
that supports everything Trump is saying, even if you're one of those companies, how are you going
to do this in a matter of months? You can't is the answer. And that's that's the point of nuance
that's important here, is that like regardless of what side you stand on the tariff issue,
the implementation is impractical.
Whether you're completely in favor of them, completely against them, somewhere in between,
it doesn't fucking matter what your political opinion is on tariffs.
That is unimportant to the weight of this conversation.
What is important is the practicality of the implementation of those tariffs and the consequences
of that on a micro and macro basis. That's what matters. Not like, oh, I'm pro-tariff, you don't get it, or I'm anti-tariff,
you don't get it. That's what all the conversation has been about. That's unintelligent conversation.
Okay, that's just like political back and forth that doesn't serve a purpose, and you're not
going to change anyone's minds. What may change people's minds and what will provide people insights
is explaining and analyzing the consequences of the path that we choose to take. So anyway,
that's enough for rent. We got a couple earnings. You're good. We got a couple earnings out there.
Lamb Research, one of them, beat EPS, beat revenue. That stock initial move was higher.
Texas Instruments did give a guidance and it
was below expectations but actually wasn't too far out of their kind of
previous essence that one so Texas Instruments did give a forward guide I'm
kind of waiting through a little bit more information here but names like New
Lot and a couple others just reported earnings to most of the names have been
moving higher initially Las Vegas Sands had some earnings too. I can get you the numbers
out. I don't want to word dump you, but
a lot of names coming out. The initial move
on most of them is higher.
ServiceNow announced a partnership.
Their earnings probably need to be coming out any second here.
Chipotle should be out
in three minutes, by the way.
CMG. That one's coming out at
410 p.m. Eastern.
A lot of earnings coming through right now.
Kirk, what's up?
Sorry, real quick, before we go to Kirk,
what were the stocks with the higher reactions so far?
I saw Lamb Research and Texas Instruments
were moving a couple of percentage points off of theirs.
Like Lamb is up five.
What's Newmont doing?
They're up like two and a half, so not as big
of a move. LRCXTXN.
Thanks, yes, go ahead, Kirk.
It's up five.
We should get Chipotle and IBM here
shortly.
What's up, Kirk?
Gentlemen, how are you doing?
Fantastic, Kirk, how are you doing fantastic kirk how are you pretty good uh just a couple thoughts on macro i i generally agree with stock talk on a lot of stuff but i think that there is one macro thing that a lot of people
just aren't wrapping their head around maybe because they think it's a good thing. But the dollar going down more than a little bit, because it can always be range-bound,
and that's not a big deal.
But the dollar going down is clearly, to me, a goal of President Trump.
I say that because he has said it dozens and dozens of times.
So I think that the tariff policy is part of driving the dollar down,
because that's what he wants. And, you know, Grandpa told me, follow the money.
So if I follow the money to its logical conclusion, then beating up the dollar for a while is probably good for Bitcoin, and that's probably why Bitcoin has held up.
motivations. And you can believe what you want to believe about whether you will see a big
increase in exports if the dollar comes down. I categorically reject that because there's no
empirical evidence of it. But you can believe it if you want because of something from 100 years
ago. So I think that it's important to understand that at the crux of a lot of what President Trump
is doing is about driving the dollar down, whether that's nefarious because he's trying to
help his family's crypto holdings or because he thinks that it'll actually drive an increase in exports.
Whatever.
Doesn't matter.
He's trying to push the dollar down.
Tariffs are part of that.
I think it's important to take a look at the Treasury auctions.
There was a five-year auction today.
And international demand for the five-year note was down six points.
So normally international investors are 64% of that auction,
excuse me, 70% of that auction, they were down to 64%. That's a pretty gigantic drop.
The primary dealers were down a shade and the direct bidders, which are your mutual funds,
who just have wonderful track records, were the ones that were bidding on
the five-year treasury. So if we're losing international bidders on treasuries, and it
was a rather large reduction today, I think that that tells you that the dollar is probably going to continue to weaken for a while. And I don't know, you know,
if they're talking about two or three years to cut trade deals, I don't know what would convince
anybody that that's not really one of the key motivations here is driving down the dollar.
one of the key motivations here is driving down the dollar.
Today, we reversed some trades.
We had been, and I've been trading a lot lately, which is not my MO.
I only do it when I feel like I have to.
You know, I'd rather just ride a three-year trend up or a two-year trend up.
But we were short Tesla in the Monday. I sent a message yesterday. I didn't get on air yesterday,
but I did send a message. We closed our short on Monday because we figured that anything that
Musk said would make the bulls bullish. We still have a target of 160 on Tesla,
We still have a target of 160 on Tesla, and I think it might go below that.
I wrote an article on Seeking Alpha that's pinned to my profile if you want to read why.
It's nothing hateful.
I just think that Tesla is fully valued for executing a lot of the things that Musk says he wants to execute in.
Basically, they've priced in success already.
So if there's any disappointments, I think Tesla's got problems. I think you're certainly
going to see delays. That's not uncommon. And ultimately, I think that competition
is vastly underappreciated by Tesla bulls. So we'll see if I'm right that Tesla is range bound, you know, a wide
range with a lot of volatility, but I think it'll be range bound maybe through the end of the decade.
And we'll see if the brand repairs itself with all the people that have been alienated from it.
The short that we're looking for, and I have a call with
an executive from one of the biggest life insurance companies in America in 15 minutes,
is in regional banks. I don't know which regional bank is going to blow up. We have about a list of
20 that we think are at risk, and we're trying to figure out who's really on that endangered list that the Fed keeps.
They don't make that public, but you can try to figure things out.
You can short KRE or buy puts on KRE if you want to. I think it's best to just buy five or six or short five or six banks
because what I'm seeing in the commercial real estate market is the culmination
of five years of them getting beat up. And those notes that they have have already been extended
for up to a year or two already. There's already commercial buildings going bankrupt, two just sold in Milwaukee.
And if you look around to not just San Francisco, but even in Austin, right?
You got buildings going under in Austin.
I am able to get some of the best square footage because I'm looking to open an office
and I'm just thinking I'm going to buy a building, I can get Class A square footage for 40% to 50% off what it was just a couple years ago.
And 2019, because it moved as a wave, kind of 2018-19 prices, then it crashed and it rebounded almost back to 2018-19 prices.
And now it's crashing again.
So some of these regional banks, and like I said, I don't know which one.
Maybe it's a whole bunch of them have to take haircuts and go to the window and ask for a lifeline.
and ask for a lifeline.
Don't call it QE, though, just a special facility.
Don't call it QE, though, just a special facility.
And that'll actually be good for the market,
except that you'll have the impact of the Fed expanding its balance sheet.
So I am on the macro side on the thesis that the dollar's going to keep getting weaker.
And I say that as a guy who went on MarketWatch very unpopularly in 2012, saying that the
dollar was going to go on a long-term bull market, which it did for 13 years.
And now we have, I think, probably a cyclical bear market in the dollar.
I don't know if it lasts a year or two years or four years,
but I think certainly a cyclical bear market in the dollar and all the things that come with that.
I like Bitcoin. I will tell you, I like Bitcoin, not from the standpoint that I think fundamentally
it's what the maximalists think it is, but I think that from a FOMO meme to the moon,
let's pump this thing up sort of rally, I think we're probably going to get it here.
Then I probably think it shits the bed spectacularly in a few years. But it's kind of hard not to
find ways into Bitcoin at this point, out of US.S. banks, regionals, and be very, very careful about all the companies whose margins are going to get crushed because they're not going to get the cheap goods from overseas that they have been largely running their businesses on for decades.
So this is going to be a difficult transition.
I don't think it's going to be fast. I hope it's not two or three years,
but I don't think that's an unreasonable thing for a percent to have said. It is clear to me,
and what Stock Talk said, I think there's clearly different opinions in this administration.
I think there's clearly
different opinions in this administration.
I think
Navarro...
Apparently there was a yelling match a couple days ago
between Elon
and Bessent.
That's what Axios
was reporting.
It was over the IRS, allegedly.
They've talked about weaponizing
the IRS, so that would be pretty horrible
for First Amendment rights, I would imagine.
I don't know. I'm not a big Lutnick fan. I've always thought that he was borderline white-collar criminal.
Navarro, I think, is just a knucklehead.
Besant, you know, I think Besant's the smartest of the group, but I do think that he's, you know, probably on his own side, too.
But I do think if you take a look at all their histories, Bessent is clearly the smartest dude.
You just got to hope that he's the best dude.
And Trump will listen to who convinces him.
But I do think that Trump has his own interests too
and maybe his own beliefs
I still can't figure it out
I've met the guy twice
I went to those real estate college things
back in the early 2000s
a story right now
from the Financial Times reportedly
that Trump is maybe make some US cars
exempt from tariffs
yeah well that would be good
the car parts is what's important.
Was it a walkback?
We don't ask those questions.
Oh, somebody titled The Space Set.
There was a bunch of earnings that came out, Evan, if you want to hit those.
I know CMG, Chipotle is down 6% right now.
IBM completely reversed.
It's down 2% at this point.
ServiceNow is up 8% if you've got those numbers or if you want to go over those.
Listen, I'm going to find this thing first.
So give me a minute.
You're all good.
Didn't mean to cut you off there either, Kurt.
For what it's worth, we had sold a whole bunch of cash-secured puts on the RIP,
and we bought them all back today, and we wrote some cover calls.
Oh, by the way, have you guys seen SunPower is back.
I see Discover Financial Earnings just came out too.
This article from the Financial Times, I want to dig in and see if it names.
The exemptions would leave in place a 25% tariff imposed on all imports of foreign made separate.
I don't have access to the full article, but that is just the Financial Times article. GM got an initial spike on that one.
What's up, Kevin, though? How are you doing today?
I'm doing pretty good. No, I was just saying the key is for the news reports to hit and then the
market to open up so we can all sell into it before anybody fact checks it.
That's been the key trading strategy for me for the last week or so.
So hopefully we do see some exemptions there.
But Kirk is right.
I mean, it's either got to be the parts either have to be exempted or the parts only can be tariffed once.
And I don't know how they're going to really track that.
You know, that makes it a little bit difficult
as things are moving back and forth.
But they're going to tariff these parts
four or five different times.
It makes it very, it makes it uneconomical
when you build a car.
So you're going to have to figure that out.
So hopefully this report is true.
It does sound like it is in the Financial Times.
So we'll see.
This is something that initially DM and Ford
getting it up, but as we've said,
every single time we get a little
bit of hope in there, someone,
one of the four, four horsemen comes in and
stomps us back and tells us why it's not happening.
So, I won't lie.
I wouldn't be getting any of this stuff here.
Although, you know, Kevin, let's keep it on you.
You have any thing that was kind of top of mind?
Emp was talking there.
We did have a bunch of earnings here in After Hours,
names like IBM, Texas Instruments, Slam Research.
There was a lot of forward guidance as given.
And, you know, for some of these semiconductor ones,
they weren't bad.
They weren't bad at all.
Discover Financial did just report earnings DFS, as I said.
I haven't looked at that one.
I know credit card defaults or whatever the exact terminology.
The stock hasn't moved in after hours.
But the forward guidance for some of these semiconductor's names has been interesting for me.
Besides that, just in general, what have you been watching for, Kevin?
Well, for the Discover one, I mean, it's going to be hard for that stock to really move it seems like they're this deal with uh discovering uh capital one is going to
go through so um at some point i think will probably be pinned so um you know today i mean
we had a very strong open i you know i always get like wary of any open ever sitting at two and a half or like
3% on the open.
Um, that's just very hard to maintain.
So we started seeing the market get a little bit heavy.
And then obviously the news reports came out, uh, we started seeing a little bit of a fade.
So, um, it was, I mean, it's nice to have what, 1.3% for gains.
You're getting a pop now because of these news reports,
but the candle on the SPX is not really that good.
So I would just be like very cautious around it.
It looks more like a shooting star pattern.
You got a gap below.
So I think there's, you have the 20 period moving average
is going to act because of the area of resistance.
We've had the, what, 5,400 level, 5,450-ish has been an area of resistance.
So technically, we need the bulls to really kind of follow through here and break higher on very large volume.
So I'm still very skeptical of all of these moves, both to the upside and downside.
moves both to the upside and downside but um if the news flow continues to get incrementally
positive um or we start getting a little bit more clarity i think that gives it to the to the bulls
for now i still would say that i don't think we've done yet um i think we could have a very strong
counter trend rally but i would be hard pressed for the market to like kill some highs in a month or two months.
Just the fact that we don't have the fiscal spend, we don't have the monetary policy in place in order to support that.
You're going to have the student loan payments and things of that nature really like hit, you know, 5.3 million Americans, what have you, to be impacted.
So there's going to be a lot there that I still believe are going to be challenges, but there's still opportunities to pick up values. And so I
would kind of continue to look for those opportunities. I was thinking about it the
other day. I think people are trying to figure out, like, do we full port now? Is this the
bottom? Is this not the bottom? I think you just got to be very incremental with it. And I think if you wanted to put dollars
to work, you look at the sectors of the industries that might be the direct beneficiary of a trade
deal. Earlier today, LNG was mentioned for Euro, it looks like the Eurozone, for the most part,
has agreed on principle for an LNG deal with the U.S. It'd be a part of a potential plan.
And I think that's a good thing, right?
And so you're going to see some LNG plays really get, you know, maybe some love here.
Now, Chenier got a little bit of love.
It did fall off a tad bit.
But if you look at Venture Global, Tickersimo BG, I would say smaller as far as not as well known or traded, even though they actually have a really robust LNG operation, export operation.
Recently IPO'd, but this was very high beta, but this one caught a little bit of a bid today.
So I think that would be kind of one that's a little bit on the radar.
And then just kind of look for other industries that might be impacted.
I think grains are going to be another one.
It would be very shocking for me to have the EU change their policy around GMOs to open up for greater trade.
but I've seen crazier things, but I just would be hard pressed.
But I've seen crazier things, but I just would be hard pressed.
But let's just say that they are going to do that.
Then a lot of these food processing companies or those that are related to the agricultural business,
I think it'll also be something that we would have as far as beneficiaries.
Market breadth today was okay.
We had what, 62, 63% of the stocks in the S&P 500 moved to the upside.
But I would just, once again, I would just be a little bit cautious.
Oh, the industrial sector, too, could be also beneficiaries.
The deers, caterpillars of the world, things of that nature.
Brought up a chart earlier.
I'll post it to the top so you guys can kind of see this.
So you guys can kind of see this. I brought this up this morning when silver was actually down, but let's say that you do believe that this is kind of like the worry's over, right? You might have some residual economic data, but if you are of the belief that the bottom's in, we have greater clarity, and you're kind of looking at this gold trade and you look at the silver trade, I mean, there's still something that's in the commodities to be able to be played here.
I brought this up this morning.
Silver was actually down.
Now, I won't call a top on gold.
I tried doing that two months ago, three months ago.
We had a pullback, but it was only like a six and a half percent pullback.
It didn't get back to the 50 day moving average I was looking for at that time.
So full disclosure there.
And that's just really because that physical demand or those, you know, intent to delivery notices continue to ramp up. And that's very hard to
fade, right? Because that's straight up producer and bona fide hedging flows. So at the end of
the day, it is what it is. But let's just say that maybe gold takes a pause here or it continues to
go up. But if it does, I believe that silver is actually going to be the outperformer here. And I'm not just like doing it just to chase. When people look at the
catch-up trade for silver, what I see a lot is like, oh, look how stretched it is compared to
how much gold has returned compared to silver. We got to see a catch-up trade. And it's like,
that's not how that usually works. The catch- up trade for silver is when you are going to get to pretty much trough levels for economic sentiment data.
Right. And you start seeing optimism being back into the market, even though maybe the economic data doesn't truly reflect that.
And then also the inflationary global growth story, because silver is more of an industrial metal than it is a precious metal.
And that's where you're going to get that rotation
if where is going to be one and so today you actually saw that pretty much in full force let's
see if it's going to continue because there's a key area of resistance for silver or if you're
looking at slv but silver for the most part was up around two two percent if you're looking at the
silver futures contract if you're looking at slv it was a 3.59 percent let me just veer real
quick and I'll try to wrap this up SLV trades spot right and so and then silver
futures are the futures contracts so if somebody's saying spot we're kind of
looking at the SLV contract so if you are a bad belief and you have this risk on everything's okay, tariffs are going to go down, economic activity is going to, you know, it might wane and decline, but it's not going to be as bad as 145% tariffs on China.
And you think that's the case.
Usually then that's when you actually get the risk on sentiment for silver relative to gold.
Doesn't mean that gold has to go down, but it means the silver will outperform.
So that's one that I'm kind of keeping my eye out on.
It's a tough area of resistance to the upside.
If you're looking at the forward contract or the futures contract, which you're sitting at around 35 bucks, 3550, 36.08 to the upside is an area of resistance.
But these things can be fairly swift and quick. I don't know if the economic, I'm not of the belief that the economic data is
like that. But I think that there is going to be a cohort of traders out there that does believe
like, oh, man, this is max bottom. Everything's good risk, pseudo risk on. So I'm going to ride that wave with them.
Right. Even though I don't believe it.
So look for that rotation trade for now, because it could be something that does, you know, does provide some some defense in alpha.
SLV, though, if you're going to trade the options on it, in my opinion, go out in time.
The premiums are very expensive compared to the dollar moves for SLV.
And so you're going to get a lot of theta burn.
So if you want to try to avoid or minimize that theta decay, you should just go out in time.
And that would be the way to kind of play it like uh and if you you know it's pretty cheap um relative but there's a lot of theta decay
on slv gld uso ung so you got to kind of structure it a little bit differently or do like calendar
spreads you could do diagonal uh spreads as well buy a long dated call sell an upside call against
it that's near dated to try to reduce some of that premium. That's another way to do it.
You can go long GLD or you can go long SLV, you go short GLD. If you're going to do that, though, you're going to have to break out the notational ratio.
So it's the right ratio.
So if you bought 100, let's say you bought 100 shares of SLV and 100 shares of GLD, that's not the right one to run ratio there.
You're going to actually have more exposure on the GLD side than you are for SLV.
So you're going to have to rotate it the right way.
But I think that's something that could be beneficial for people that are watching here. And if we do get a breakout to the upside for the S&P 500, I'm looking at 5,500.
5,550, actually, is your main area for shorts to come in and have a really decent opportunity to try to short this again.
So we're making some headway, but we're not at all clear yet.
So until you start breaking some key technical areas of resistance,
I wouldn't get on the high horse yet.
I would just continue to trade around it,
continue to be very tactical in this market
until you get confirmation otherwise.
So I'll kick it back.
Hey, can we just take a second to talk about service now?
Yeah, go for it.
Dig in.
What's standing on the numbers?
Fabulous.
The numbers look fabulous, okay?
Just off the top of my head, I want to get that out first.
You know, 19%.
So we're in high teens, you know, subscription revenue growth.
RPO is growing at 22%, actually 25%.
You know, margin is bumping up, both gross margin, net margin, both bumping up and really good.
So free cash flow is growing.
So everything, their larger customer base, deals over 1 million is growing.
Everything looks great and the stock is up 10%.
But God, it's expensive.
Even at $18 for the next four quarters,
it is at 50 times, you know, next 12 months earnings.
50 times next 12 months.
That's expensive in the current context.
This is price that we are going to not see too many problems, you know, going into the market and the customers that sustains over time, right?
This is actually assuming that problems get resolved and we move on back to, you know, a sustaining economy.
Otherwise, this thing is dangerously expensive, in my opinion.
50 times forward?
Yikes.
But fabulous results.
No question about it.
Really good results.
They've, for the most part, reiterated a little bit up.
So none of that is a problem.
But the underlying assumption is where I question, where I question the sanity of the valuation here.
for the companies that did report today i mean the guidance for the most part look pretty decent
right outside what chipotle um the trends is is definitely still there are you are you a little
bit more confident that we're gonna be able to sustain this or hold hold this in but but but
they're stuffing all their worries in the in you know in the in in the risk skull right so they're not
they're not changing their guidance which is my point right everybody's expecting this to resolve
and not impact you know GDP growth or the economic situation you know for any length of time if if
that is the case if we resolve all this this, then yeah, I get it.
I think software was sold off enough and it might be time to wait in.
But that's a huge assumption where every rhetoric we hear every day tells us that's a big risk to go out on a limb and pay 50 times for that.
That's my worry. to go out on a limb and pay 50 times for that. That's my worry.
The numbers look great.
Everybody seems to be holding their guidance or upping it or adjusting it only very, very minorly downwards.
And that's what's surprising, right?
I really hope that's the case.
I just don't have the confidence to put my money at work at 50 times forward.
Yeah, no, I get that.
You know, I was looking at that LAM research guide in Fort, man.
Like that really surprised me, given the fact that ASML gave a horrible guide.
I believe LAM research still has around, what, 31% of total rev,
at least for the quarter, coming from China.
So I don't know. I don I don't really follow Lam that much.
I don't know if it was just super low bar or something different.
I don't know if you have any thoughts around that, but I just, that divergence,
it's not, it's not out of the ordinary for them to diverge,
but like the commentary was completely night and day between wham and asml so the only look
first of all you're right right all three all all four of the the the uh the semi-cap majors in us
have over 30 exposure to china revenue okay more than 30 of the revenue comes from china this is for all of
them uh applied uh you know um what's the other one um kla applied uh lamb and um anyway the the
point i'm trying to get to is is either they have been given waivers that we don't know of, that's not been talked about.
they will not be tariffed in the same rate by either US or China,
or restricted in the same way either by US or by China.
So some things got to give.
You can't have that much of your revenue exposed
and say that, yeah, our guidance is fine.
We'll get our revenues, no problem.
That's just silly.
It just makes no sense.
So my guess is that they already have waivers
from tariffs on both sides,
and they're selling and they're shipping products.
Yeah, I think for LAMB Research,
their guide for next quarter,
I think beat the streets expectations
by what, half a billion dollars, right? 500 mil. no once again i just find that very surprising compared to lamb i mean
like when you look at asml you would thought the world was falling it might be for them publicly
publicly we've all said right i mean for for two years uh you know the administration the
previous administration has been telling asml that no they cannot ship their you know, the administration, the previous administration has been telling ASML that no,
they cannot ship their, you know, latest EUVs to China. So we know that they have restrictions in
place. The question is, why are the others not impacted at all? And that's the interesting part
is, it's got to be that they have a deal and that deal is just not being talked about. That's it.
I appreciate that. Thanks.
Don't get me wrong. Kevin, don't get me wrong or anybody here.
That's a good thing. That means there's flexibility in the system, right?
So that's a good thing for the markets.
Yeah. I'm with you.
And then also too, like, look, we can't use, like,
LAM might be just like it's on its own island.
I think Texas Instrument is another one that's like super,
we've had low bars for them for a very long time.
So, you know, at some point they got to hit a home run here.
But if we start getting close, 50%, 75% in,
and we continue to see this type of trend,
you also make the case too that maybe analysts,
yeah, maybe too pessimistic for an out, right?
Because I would be very shocked
if a lot of these executives have the same type of trend
and they're really
undercutting the exposure.
If so, then we got a doozy
for the back half of roading season
for this year,
at least for Q4 and calendar Q4.
Well, and the worrisome part
is the first company
that actually comes
with a terrible guy
is probably going to be punished far more than they would have been if it was consistent across the board.
What goes around comes around.
You got to be able to deliver on those guides.
And if it's not going to happen, those companies who did it now will probably end up being better off.
even if they get that big hit.
Even if they get that big hit.
Have we heard Brett too much on this one?
Was that again? Repeat, please.
Have we heard? Am I lagging? That tends to happen sometimes.
Yeah, thank you.
No, no, you're totally too clear.
What's up, Brett?
What's up, Brett?
Hey, guys.
No, I haven't spoke up yet.
Just kind of enjoying the conversation from everyone today.
I think there have been a lot of good viewpoints
and touching on a lot of different topics.
I think what Kevin said about we're making progress here,
but we're not necessarily out of the woods.
I think today's price, I almost feel like today's price action
could be all of it could be summed up in that one sentence there.
When we look at the S&P, it does keep struggling with that declining 21-day,
but even outside of that, that 545 to 550 area, so about 5,500 in the SPX,
SPX, to me, it remains a line in the sand. I think you can be optimistic and start to
it remains, to me, it remains a line in the sand.
pluck away at some positive opportunities or positive potentials, but also be realistic in
the sense of what price is telling you, what the technicals are telling you. If you combine
the fundamentals and the technicals, it's hard for us. We can't make any real meaningful progress
until we kind of clear that level. So at least for me, I have been a buyer at points through this
dip, particularly like longer term sort of core building, especially earlier in this month. But
for me, from a more active perspective,
I'm not really interested in being too involved
until we start to make more progress on the upside
and start to put in somewhat more of a definable bottom.
You know, if we can clear 550 in the SPY or 5,500 in the SPX,
then I will start to peel back some of the hedges and be less defensive.
But, I mean, until then, it's just what the scenario, I think, calls for.
It's just too volatile.
If you're swing trading, if you carry positions for days or weeks at a time,
this is a really hard environment because it's one headline can move things
so quickly.
And so I'm not going to sit
and pretend like I'm long this day and short that day and cleaning up on both sides. That's not
really, that's not my style. It's not how I trade or invest. I typically avoid, for the most part,
I do avoid the short side with the exception of a few opportunities, but generally speaking, I'm a long-side investor, alongside trader.
I think a big part of just even finding success in that is just knowing when to be involved and when not to be involved,
or when you feel like you have an ad or an opportunity to exploit.
In this type of environment, it's just very difficult.
In this type of environment, it's just very difficult.
It's headline-driven. It's volatile.
It's volatile.
If the VIX is going to start to find a floor in this upper 20,
low 30 area and be prone to spikes higher,
then that just creates, for me, an environment
that's just not really possible to operate in.
I think Stock Talks did a good job covering sort of the macro front
and what we need to see, what we want to see on the trade front.
I think it'd be hard to find a rational, reasonable person to come out and say,
yeah, this is going great.
This is exactly what we wanted.
And the approach has been, you know, an A plus on approach.
Obviously, I don't think a normal person would say that, you know,
if they put their biases aside or whatnot.
Obviously, the trade thing has gone terribly.
And I don't need to, I don't think, elaborate too much on it simply because it'd be just
repeating a lot of what StockDoc said on it.
But if we do start to get a little bit more of a walk back, if we do see debt de-escalation
around China, I think, you know, there was de-escalation around the Powell talk in terms of what President Trump
wants to do with Powell or what he can do. I know it's kind of like a back and forth debate,
but at the end of the day, you can love Powell, you can hate Powell, but at the end of the day,
the Fed being independent, I think, is a pretty important component to U.S. central banking. And
I think to see that risk kind of de.S. central banking. And I think
to see that risk kind of de-escalate, and I know it's been kind of buried just because of the China
talk, but to see that kind of fade a bit, I think is important too. So, I mean, I think there's,
it's a little harder, I think, for me to get excited up at these levels. We've moved so
quickly off the lows from Monday, but certainly there is
opportunities in individual names. I think there has been this month, but I think the reality is
I think we're still in a volatile environment. I think we're still in a choppy environment.
For me, it's going to keep me defensive for a bit longer until at least we see some sort of
improvement on the trade front or some sort of technical improvement to, you know, kind of give us a little bit more of a green light on that
side of things. You know, I've been going through spending a lot of time going through conference
calls this earnings season, just trying to get a better read on consumers and sort of what's been
going on on a more granular basis. And to be honest, the takeaway is actually pretty positive.
If you go through, especially a lot of the banks,
I'd be interested to hear Discover's conference call,
which I think is actually tomorrow, even though they reported tonight.
But, I mean, if you go through the banks, if you go through Synchrony Financial,
I think Synchrony did kind of a good job summarizing just the current situation that we're facing.
Brian Double's CEO said it's impacting consumer confidence.
The uncertainty is clearly out there. It's impacting consumer confidence.
But at this point, it's not impacting what consumers are actually doing.
So I think the read through on a lot of this so far and that's why I'm I'm really curious over the
next really 10 days or so we'll get a lot of names that that touch with the consumer that
aren't necessarily retailers unfortunately but you know we'll see them on a lot of different
sides whether that's the restaurants fast casual visa and mastercard obviously pretty important in
that aspect but when you look at amex when you look at Amex, when you look at Synchrony, the banks, a lot of them are telling the same story, which is this cautious tone.
Like we're sort of on edge that things are going to deteriorate.
But so far, even not just in the quarter, because, you know, the quarter goes back to when things were actually OK before we had all this concerns about the slowdowns.
okay before we had all this concerns about the slowdowns, but even the trends into
the first few weeks of April remain either strong and in line with Q1 or actually pacing above Q1.
And I know that's not going to be the case everywhere. We certainly saw a slowdown on
the airline side of things. And I'm sure some of these other companies will have their own
headwinds to report as well that are consumer oriented, not just tariff or trade related. But
for me, I was impressed. I guess I would say positively surprised that the consumer is not
only holding up, but continuing to spend. And so that's, I mean, two thirds of US GDP is from
consumer spending. So it's very, very important to see that the consumer holds up. And when you look
at, I think USDA, and this will just be my last point, but when you look at a lot of the US data,
so much of the soft data has been really negative, like the sentiment surveys, the
confidence surveys, we get another consumer confidence number. We'll get one on Friday
and one on Tuesday. So kind of an update there will be interesting. But like the vibes, I guess, if I'm using just a more relaxed term,
the vibes have been down considerably,
whether that's investors, Wall Street, consumers, businesses, doesn't matter.
Everyone is really not enjoying this environment.
But the hard data is actually, to me, it's kind of holding up.
Obviously, not everything's been perfect. And in the retail sales print, the last one we got like a week ago showed some
pull forward just ahead of the terrace. But even if you strip out some of the pull forward, like
in electronics and autos, like the sales number was actually, it was like pretty, it was okay.
It was solid. Like it definitely wasn't a concerning number. I didn't think in my opinion,
and we look at like jobless claims, weekly jobless claims, we'll get that tomorrow morning, the next one. But we're not
seeing a spike, a sustainable spike in jobless claims either. So to me, the labor market's
holding up, the consumer's holding up. Obviously, the big risk being if everyone's sort of on pause,
I think. They're not deploying, starting big projects, they're not deploying large amounts of cash, because we're kind of in a wait and see mode. I think that's another thing from the conference because it's pretty clear. Customers are in wait and see mode. And so a pause has the potential to really slow things down as we push forward through the rest of the year. But I guess that's, that's. The positive takeaway being that so far the vibes are down, but the actions aren't.
So we'll see how long that can hold up.
But, yeah.
I agree with a lot of that, Brent.
One thing I will say is that, you know, I think part of the reason why the hard data doesn't look bad is because I think the issue that we're dealing with is,
you know, it hasn't really gone into effect yet, right? Like, we've barely, we've seen these
tariffs roll out April 2nd, right? And so I think a lot of people's economic concerns about
what the impacts would be from tariffs probably aren't going to show up in the data right now.
Right. I think what people are probably concerned about is if they show up in the data, you know, six months from now.
And so I think that's probably why the hard data looks fine right now.
And I agree the hard data does look fine.
I think in the early stages of a major policy shift like this,
most of the panic is going to be reflected in the soft data and the survey data and the sentiment data. Because, you know, it's more so about how people are expecting this to roll out over the next several months or next few years.
And I think that's where you're going to find the pessimism because, you know, over the long run,
this sort of trade environment is probably not sustainable. And so, yeah,
I think that's, I agree with your points,
but I'm just kind of trying to diagnose the difference between the hard data
and the soft data.
And I think that's probably the most reasonable diagnosis for why they're
deviating from each other.
And it could be, we could also be seeing pull forward effects too, right?
So like people accelerating purchases where it may look like it's, you know,
spending is very strong, but I think GM sales are like a perfect example of that, right?
Like the best sales, I won't say ever, but they have really strong sales in February.
Yeah. Yeah. And it's like's like okay is that really the the case and then you go to the dealership level and they're like yeah we're
just trying to push through as much as we possibly can before we get an inventory glut i will say
though um you know i'm gonna try to say this like in a nice way but you guys will catch my drift
right you're seeing i call it capitulation because that's exactly what it is.
But it's not so much like, okay, maybe you can't make a deal.
Maybe the administration can't make a deal.
But it's also when something gets close to breaking.
And so if you want to look at a key bull signal, look for something that's actually cracking.
Because that's probably when they're going to make a policy shift.
And if you're a poker player, I know Kirk is,
I don't know if he's up here anymore,
but if you're a poker player, you find telltale signs, right?
From the people that you're playing.
And the Powell adjustment didn't happen
until we started seeing dollar down,
yields up, equities down, you know what I'm saying?
Like until we started seeing correlations that
haven't occurred in a very, very long time or very rare correlations, they're not going to do
anything. So that's when you're going to see that walk back. I think that's the same way when you're
looking at China. The reason why he's saying that is because he's got to show some respect.
I think we talked about this about two weeks ago. right? The Chinese want respect, right? It's not all about the dollar for them.
Does money influence people? For sure. But there's other things out there. And I think that's another
reason why you're seeing this kind of walk back. And I think it is a walk back. I think he is
capitulating just in general. And I think that he's going to get a deal and it's going to be a
very weak deal. I think it's on the horizon. And unfortunately, his commentary around China is probably going to impact all these other trade deals.
Right. Stuff for these countries like India, Vietnam.
OK. But like when you're looking at the EU, you know.
What's the best way to make a deal with this guy? Don't say anything.
Don't make any comments. I mean, China has been very minimal when it comes
to the commentary around tarot policy in the US. And they are also making very big deal,
you know, trying to make deals as well. So I would say like, wait, we obviously have a put
out there to put sitting at around 5,200, say 5,000 on the S&P 500, you're seeing the yield side of the equation, probably a 4, 6.5,
4.7 to the upside for yields. Downside for yields, what, getting close to 4% or so.
And that's kind of his barrier and then the trajectory of the dollar. But we got to be
mindful too. The only reason why he's backtracking some of these things or making adjustments is
because things are breaking because of the commentary before.
So he's trying to clean those up.
So just look for anything that breaks.
If we start seeing a sell-off again and we do retrace from these levels, because I mean, this is an island candle reversal pattern that is taking place right now.
If you're looking at the E-mini S&P 500, if you're looking at the S&P 500, the only thing about the E-mini is that it's a green bar, right?
So because of the overnight trading session, but this is kind of a pretty big deal for this candle.
But if we go back down again and the rhetoric starts to ratchet it up again and you start seeing stress in CDS markets or credit default swaps,
you start seeing stress when it comes to spreads between 10 year, three month,
10 year to two year spreads. Start seeing the dollar rapidly deteriorate. I would say best
guess now is like, there's probably going to be a positive announcement on the horizon to try to
back that out. This guy, I mean, and then you had the headline too, right? He's going to be like,
if we were on the same trajectory,
this would be like the third worst start for the stock market for a new presidency.
Like he doesn't want that stuff on his name.
So I think there's a lot of things that bulls can actually get confident on.
But I think he's really trying to see how far he can go with some of this commentary
before it actually goes and breaks anything.
He doesn't want to break anything, but he wants to get dangerously close.
And that's why we're seeing some of these adjustments.
Even the commentary from today from Besant
during the IMF conference or what have you.
I mean, it wasn't like he was singing, you know,
sunshine and rainbows about China
and coming up with diplomacy and coming to the table.
I mean, he still has some pretty choice words for him.
So just something to be mindful of
as we're trying to navigate these day-by-day news items here.
Until something gets close to breaking,
if something gets close to breaking,
I would surely bet that they're going to come in
and try to fix it.
They're not going to let this thing crack
if they can avoid it. Evan, I think you might be talking.
Nope, that was Emp.
It was one for Emp.
All right.
Okay, so he's not going to go stock talk.
I want to come in over to you and hear what other,
were there any analyst reports today that were interesting for you
nope nothing today that i was really looking at i mean there was a handful on some small
and mid-cap stocks but i don't think that's going to be of tremendous interest to the most of the
audience um no there wasn't much today you know most of the commentary this week came on monday there are a handful of reports that we
looked at but since then there hasn't been there hasn't been a ton jeffries came out on a couple
things today piper did on a couple things like i said some smith caps um there were some
international stocks that had some coverage reshuffled by morgan stanley early early in the
morning um but i didn't really find anything interesting in that
commentary either obviously a lot of tesla price targets being lowered uh this morning which was
expected pretty bad earnings report uh but that stock went higher anyway um it's been sold off a
lot and yeah whatever whatever you think the justification for being up is but it went up
anyway um with the market today so yeah there wasn, there wasn't a whole lot, I think, worth remarking on
on the sell side from this morning.
Sounds good.
Hey, I know that we have a couple of guys joining up here.
If you're able to bring up David and justice on stage,
one of the co-hosts that'd be perfect.
He's up here.
Might be on stage.
Yeah.
Justice.
I don't see requesting yet.
There we go.
I do see him down there though.
I sent that over.
I don't know if I'm see or not,
but.
Okay.
Well,
we are going to go ahead.
Yeah.
I got,
you know,
right.
Okay.
Well,
I wanted to, before we go into that next topic, just to kind of roll into it a
little bit, I wanted to roll back to you for a second, Stock Talk, because we've been talking
a lot about space.
We've been talking about satellites, this different industry.
I had some people yelling at me the other day with just ways that they'd be getting
exposure.
And I think it's an interesting time, right?
So you have a lot of different names that are publicly traded already in the space.
And then you have some that are not publicly traded, obviously, like a SpaceX and Starfighter.
So we've been chatting about one of the ones I was looking at today was even like Rocket Lab.
You know, they were up almost 10% today.
And so that's definitely been seeing a push.
It's up like 500% in the past year.
I know that you've been on top of some of these names.
So before we roll in with this next piece of the chat with David and Justice Stock Talk, just be curious to hear your updated thoughts on where you stand with this area, how you analyze it as an industry.
I think there's a handful of next-gen industries that are emerging in the markets, especially in the last five years.
I think the back of the EV hype that started picking up in 2019, 2020, there was a tremendous amount of speculation that followed that hype.
Industries like batteries and lithium exploded.
exploded. And, you know, since then, we've seen a handful of other cutting edge next
gen industries, including what I think is a new age in aerospace and defense as well
emerge with obviously SpaceX leading the way. And then obviously, you've had this major
AI theme that's picked up steam in the last three or four years, started with the consumer
facing LLM side and is now expanding to real-world applications.
So I think those three major themes, I think, are going to carry a lot of technological weight in the next few decades.
And when it comes to aerospace and defense particularly, I think it's not just about the technology in that sector.
I think it's also about the idea that governments are shifting spending priorities when it comes to both aerospace in a vacuum of success in the next decade or so.
Obviously, Starfighters is a part of that, attacking a niche part of that industry
with the nanosat launches.
So they're in a really interesting, I think, position with not, frankly,
not a lot of competition, if any at all, in that space.
And obviously, SpaceX is doing some exciting things as well.
So there's a ton of progress in the space. And obviously SpaceX is doing some exciting things as well. So there's a ton of
progress in the space. I think the emergence of hypersonic and supersonic technologies as well
is something we'll probably touch on here. But I think that's of relevance as well. You've seen
so many contracts being signed in that space. In fact, the Rocket Lab news you just referred to
was in reference to the Kratos contract, the mock TV contract,
which is a $1.45 billion contract. So yeah, there's a lot of government money being thrown
at this thing, as I said, and obviously a lot of private sector money as well. So it's an exciting
space. And, you know, I think it's certainly worth making the public privy to.
Yeah, I'm on the same radio wave there with you as well.
What better time than to bring in their team that we have on stage.
We've got David Whitney, the CFO, and then super excited to have Justice Palmer up here,
the venture capitalist in chief over at Fortuna.
So excited to have you both on.
I will real quick say we're going to go through this discussion.
There's a lot of money already being invested in this area.
We pinned a tweet from Evan to the top of the space.
That has a link to the Equifund.
I encourage people to pull that up as we're talking throughout this conversation.
You're going to hear from some people who have already been heavily backing this area.
And even from the public, already over $21 million has been invested into this reggae
raise. One of the reasons why we're doing this on the space with our audience is because this is a
reggae, meaning it's not the type of investment where you have to be an accredited investor.
It's not the type of investment where you have to have 50 grand, right? This is a sub $1,000
investment at a minimum level. Of course, you can't put in more if that ends up being what
you decide to do after doing your due diligence and diving into this. But to me, this is a really
interesting one. And you just heard from Stock Talk. They're in a unique area, very, very minimal
competition. And this company's looking to type you later this year. So with that being said,
I want to welcome in the team and talk with them and get some insights. Justice, do we have you on
stage? Hey, Gav, what's up, man? Thanks for having us, buddy. Appreciate that.
I appreciate you coming on.
Justice, it was a pleasure meeting you a couple weeks ago.
You really introduced me to this company.
You have a pretty legendary background.
And you being so involved here and behind this, I think, is one of those things where you have this legendary figure that's backing somebody like, why are they behind this?
Something makes sense here can you give people a little bit of background
on yourself as an investor as an entrepreneur and then we can catch up to speed on the starfighter
side sure that that sounds good and i'll try and keep it relatively short i don't want to bore the
audience but uh and it's also hard talking about yourself but uh yeah i was a professional money
manager for over a decade i was i was really, really good portfolio manager. I had an amazing track record. On the heels of that in 2015,
I started my own firm, Fortuna Investments. We've been involved in a handful of companies
that have gone from zero to over a billion dollars in value. I guess you'd say we've made a name for ourselves really in 2016, 2017. That's when Elon
Musk, Elon Musk, he wasn't the rock star then that he is now in a certain way, if that makes
some little sense. And what I mean by that is back in 2016, 2017, although not that long ago,
people forget Tesla was the number one shorted stock on the planet.
He was barely selling 20,000 cars a quarter.
Everybody thought it was going to zero.
We had a different look.
We had a different nuanced look on Tesla. We figured our bet was if he's able to pull this off, the EVs and Tesla, the demand for
lithium and the lithium-ion batteries is going to totally explode.
So we co-founded a couple of companies.
Two companies went to over a billion dollars in value
on NASDAQ, and then we were founders
and financial backers of another company
called Millennial Lithium,
which we sold to Lithium Americas in 2021
for $480 million.
So we did exceptionally well in that arena. This is now 21, 22. We were kind of
trying to figure out what the next thesis was. And we were enamored with the space industry.
And not just from a pleasure perspective, when you're young, you're looking in the stars,
you're wondering what's going on, but there's a real commercial or viable space industry in 2021
and 2022. Obviously, our friend Elon was the guy who's really leading the charge.
SpaceX is 90% of the launch market.
So we started really digging in a lot deeper at that moment.
And then we realized, wow, you've got guys like Jeff Bezos
and all sorts of brilliant folks.
Fast forward now, you've got folks like Eric Schmidt,
the former CEO of Google, now putting his hand up to run a space company.
And in the financial world or in the business world, there's a saying that success leaves clues.
There's a whole lot of clues in the space industry, if you guys can connect the dots, right?
You've got some of the most brilliant, brilliant folks that are really starting to open up this industry.
Historically, it was only NASA. NASA was the driving force in the space industries, as I'm
sure everybody on the call can remember. The key that's really started to shift the paradigm now
is the cost. And I think you'd largely have to give Elon Musk the credit for this. But, you know, 10 years ago, it cost about $30,000 a kilogram.
So if you're going to take a kilogram of payload or matter into outer space, it'd be roughly $30,000, you know, for all in costs for R&D, for this and that.
And so now with the Falcon 9, you know, Elon's got the Falcon 9 going twice a week.
The cost is in around 3000
bucks. So he's single handedly been able to take that cost from 30,000 down to $3,000 a kilogram.
The future, you know, we're internally projecting that with the Starship, the Starship's the big
rocket for people who might have trouble placing it. That's the big one that he's been able to land
on the chopsticks. To give you perspective, it's larger than the empire state building so the visuals do not do
it justice so when he's able to get that operational and i think he'll be able to
successfully do it in cadence within let's say 18 to 24 months maybe on the outside might even go
faster just with the new administration and jared isaacson and all the different things that are
happening but let's just say it takes a couple of years to really perfect. We anticipate that cost to go down to about $3,000 a kilogram.
And why that's important, or sorry, big of a problem, $300 a kilogram.
It was 30, it's down to 3,000.
It's going to be $300 a kilogram.
And I really want everybody to stop and think about that for a second.
It's going to be so cheap to start taking things into outer space.
The possibilities are literally going to be endless.
And I'm just trying to articulate the way I'm seeing the world in the space
business. And it's going to become so cheap to take things into outer space.
It's going to really start advancements in, in, in all sorts of arenas,
whether that's energy, you know, collecting, you know, the rays of the sun,
the energy, the soul, the solar that's up there.
Cause you got to keep in mind down here on planet earth,
we get a distilled version of the sun.
The atmosphere blocks it out, which is really good for us and humanity
because we can go outside and sunbathe and the sun doesn't torch us.
But outside the atmosphere, it's a lot more poignant, it's a lot more radiant.
And I'm not saying in the next couple of years we're going to be able to capture
the sun's rays outside, but these are some of the things that they're starting
to look at, pharma, biotech.
It's almost equivalent to, you know, if you were to ask anybody in 99 or 2000, this internet thing.
I'm 42 years old, so I'm old enough to remember it in 99, 2000.
It was a very piss poor version of the internet.
It takes so long to download things.
things um there's certainly no e-commerce there's nothing on there but it was essentially a magazine
There's certainly no e-commerce.
There's nothing on there.
online and you'd have a dial-up modem or a router to um to really understand the way that it was
working at the time but my point is it was only 20 years ago i don't think there's a single person
on the planet at that time that would have been able to articulate that hey we're going to be on
this x spaces today on the internet we're going to have gps on the internet we're going to have
facetime on the internet all my stocks are going have GPS on the internet. We're going to have FaceTime on the internet. All my stocks are going to be on the internet. My family pictures are going
to be on the internet. We're not going to be able to do anything without the internet. And that was
only 20 years. So technology is advancing at such a clip now. It's really, really starting to become
very, very interesting. And then back to my earlier point, you know, you've got, you know,
Jeff Bezos, who doesn't live very far from me here in Miami. He's no longer, he's no longer at Blue Origin. He's full time at, or sorry, he's no
longer at Amazon. He's full time at Blue Origin. You know, even Elon, you know, I'm sure a lot of
the people on the call really admire his work. He's building these companies self-admittedly
so he can fund his space endeavor. And this is not a guy you really want to bet against. I mean, that's the one sure way to lose money if you bet against Elon. And so, you know, you've got all these, as I said earlier, success leaves clues. And so for me, this arena, I think is just starting to open up. It's being passed from the government. It's given to private enterprise. I can't guarantee you who are going to be the winners and losers, but there's something really magical happening here. And as you start to peel the layers of the onion back, I think you'll
be really, really blown away and surprised about how quickly things are moving. And I think that
the Gavin's point earlier where, you know, you look at the marketplace where, you know, the space
stocks kind of go hot in 2021, the SPACs, you know, some blew up, etc.
But you kind of need that first vintage, that first kind of run through of things to really kind of perfect things, right?
And so I think we've had that first vintage.
I think there's been a handful of companies like Rocket Labs, like somebody mentioned on the call earlier, that have come out of that.
I think there's going to be a large appetite for space.
The space stocks, I know there's been turmoil with the tariffs and stuff.
So all the stocks are down in the last six to eight weeks. But, you know, the space stocks were
actually up until the tariffs conversation. They were some of the best performing stocks on the
planet. They were up 300 to 800 percent over the last year. Right. So what we think is this,
we think Starfighters is a great company, really well run management. They've got a really good
shot. They've got prime location prime real
estate it's impossible to get into NASA even if you've got money they've been there they're
operational they're doing a lot of really really excellent things and so the way I'm looking at
this is you know we've really been financially backrolling it bankrolling it for the last year
year and a half we want to actually take it public at the end of this year to try and time uptick in the marketplace. Because I actually think that some people may disagree on
this point, but I actually think the administration picked the really, really hard things to go after
at the very beginning, knowing that it's not going to be popular, they really wanted to tackle some
of these things. And as soon as they start to announce some of these wins in the tariffs, and they're going to start announcing deregulation,
they're going to start announcing dropping interest rates with any luck with Powell,
there's going to be probably the biggest tax cuts we've ever seen in America coming here.
I think what I'm getting at is I think the president's going to start to announce a lot of
wins going into those midterm elections in only 14, 16 months. So I guess what
I'm saying is from a market perspective, I can see the market heating up as the year goes on.
As soon as we get to this churn oil, we would love to list this company to kind of meet and
coincide with that. And then ultimately it's up to Dave and the rest of the smart folks at the
at the company to really see this thing through so we can financially make a big return.
company to really see this thing through so we can financially make a big return.
That's probably the best pitch that we've heard so far.
I mean, you guys, you're putting money where your mouth is and also just really have a
clear understanding of the last decade and what everything is leading up to.
David, I want to pull you in.
And this might be a funny thing.
So, David, I'm curious.
You probably already asked
them, but for the sake of being on here, what questions do you have for Justice when he looks
at your company? I'm just trying to get into the mind of like the conversations you guys have had.
Yeah. I mean, obviously Justice is an early investor into Starfighters already. So, um, you know, I've known justice for, uh, a couple of years now.
Um, yeah, I mean, justice has sort of, uh, made a really strong name for himself in the space
arena over the last few years. Um, you know, he's an early investor in SpaceX. Um, he, you know,
he's on programs all the time, talking space. So he's a really recognized figure in that department.
So, uh, we really look to justice for guidance on, you know, um, just sort of trends in the
market, uh, where he sees, sees things going in the next 12 to 18 months.
And for the most part, he's pretty much been bang on.
Um, you know, we are seeing things turn around now we're seeing, like I said, on the last,
uh, spaces, satellites getting smaller and smaller and smaller, which is perfect for
Um, and you know, really this, uh, as Gav, you mentioned the last time space race 2.0.
I mean, that's all sort of happening right before our eyes right now.
And we're kind of right in the thick of it. So
it's all pretty exciting for us at Starfighters.
Yeah, that makes a lot of sense. It is the space race. Okay, very cool. Justice, let me flip it
back to you for a second question here. Like, you have a pretty good feel for these timelines in
different areas. And obviously, there's a lot of things that have to go right
with administration, with other areas,
but where could this company be in five years, right?
You look back to your lithium ventures, cannabis ventures.
Now you look at the space side,
where could this company be in five to 10 years
as kind of a vision here for those that are looking at it
and going, hmm, like, is this where I wanna invest?
Is this where I wanna put my money?
And I'm not just, Gavin, I'm not just saying this because David's on the phone, but I actually think that all the companies we've been involved in are currently investors.
And I actually think from this particular time, you know, at the valuation, it's, you know, 100 million or so, give or take, 150.
I think this actually has the biggest upside of all the companies if they can execute.
And I say that because i'm a top-down
guy right so like by that what i mean is you know if you've got a great company but for whatever
reason sector is not working out or it's in your face oh man you're going to be in a heap of trouble
right you've got to do everything perfectly and you're not going to get any love or you're not
going to get any help because your sector is so out of favor and so i i crutched that with i
i think that with this new administration i don't know if you guys have touched on it but i i think
that adding jared isaacson who's now taken over nasa um he's close with elon um self-made billionaire
guy fintech guy smart guy i've actually had the pleasure of meeting him twice now.
Super, super smart, smart guy, young guy in his 40s. He's taking over NASA. And so what he brings is it's not a government lens on things. He's a businessman, right? He wants to,
he wants to approve efficiencies. He wants to get rid of deregulations.
It might feel like a long time ago, but it wasn't that long ago where i remember elon musk
was trying to get the rockets up and then he's trying he was trying to get starship up right in
texas and and so his thing is he's he's got tons of money behind him so it sounds a little bit
counter or counterintuitive but he wants the rocket to go up quickly he wants to fail quickly
he wants to get it back on the pad quickly and he wants to keep to go up quickly. He wants it to fail quickly. He wants to get it back on the pad quickly.
And he wants to keep iterating as quickly as possible because he's in his
fifties now and he wants to see this project through.
And so his problem was,
is he was able to get the rocket up after four or five,
six months.
He'd then do a test or an experiment,
but then the Biden administration and the FAA and all these government
agencies, they were making him do all these perverted, you know, EPAs. And look, I'm for
some level of EPAs, but you know, some endangered fish in the middle of nowhere isn't going to
necessarily, you've got to weigh some of these trade-offs, right? And so they were making him
keep the rocket on the pads for many months at a time, just waiting for this little stamp so he could go up again. What I believe is
having, you know, Jared Isaacson, a private business guy, you know, this new administration
might not feel like it with the tariffs, but this new administration is pretty pro-business.
I actually think they're going to be very good for the space industry. It is Elon's baby. A lot
of people can't get into SpaceX because it's a
private company. But I think from a top-down perspective, I think having a guy like Jared
Isaacson in the space arena is going to be very good for the next four years. I think the
deregulation and the capital flows and the growth of the private industry, I think is going to be
good. I think companies like Rocket Labs that are out there, I hope,
or I've got to know Peter over the years.
I think he's a great CEO.
I hope they're able to continue to perform.
And so I only mention that, Gab, because I think the upside
in the industry is so explosive.
I've seen how many companies are out there.
There's not that many.
It was only, you know, when we first wanted to get in the arena
in 2021-ish, you know, we had
Citibank and all these different New York banks, you know, I run a VC firm. So they're like, Hey,
you guys should do a stack. You guys should do a space deal. That's how we'll do it.
Fortunately, I don't know if it's our spidey senses or just not being comfortable enough.
We kind of declined that offer because it wasn't the right time. I'm a timing guy. Right. And so
I think the right time, and it's not going to be perfect, but I think the right time is coming up a lot sooner than maybe people think.
And so I guess with that backdrop, I think the upside in the industry is extremely, extremely large.
And then within that, you know, look, I think David and Rick and Tim and the rest of the management team, they'll have to obviously execute.
and Rick and Tim and the rest of the management team,
they'll have to obviously execute.
But if they can pair both of those things, I mean, I can,
I can see this being a many, many, many billion dollar enterprise.
And so we're very excited about that.
Yeah. I love the vision you're creating and,
and it's really cool to see somebody who's had so much success, you know,
bringing companies, like you said,
to over a billion dollars and that
you're looking at this and saying, this is the next thing for me. This is where I want to focus.
That's a lot of conviction, I'm sure, for our audience as well. Stock Talk, what questions do
you have for Justice or Dave? Hey, Justice, good to chat with you again. It's Vishal over here.
Hope you're doing well. Great commentary so far i agree with pretty much
everything you said i mean i kind of operate in that uh next-gen industry environment as well and
you know it's funny that you brought up lithium we've been hosting the show for a lot of years and
you know uh doing spaces for a lot of years and years back i was talking about that as well so
it's funny uh you know i think we we have we share a lot in common terms of
vision. But what a question I have for you is, I think, you know, you're the point about the
aerospace and defense industry growing is something that a lot of investors are becoming
more cognizant of you brought up, you know, the space stocks being some of the best performing
stocks in the market, you know, stocks like lunar rocket lab, pretty much anything related
to the space industry, red wire, all of these stocks like Lunar, Rocket Lab, pretty much anything related to the space
industry, Redwire, all of these stocks went on insane runs in 2024 prior to the market
correction this year.
What do you see as the broadening of industry from a volume standpoint for players like
Starfighters, you know, who are focused on, you know, at least currently that niche area of
nanosat launches, how do you see volume evolving over the industry over time when it comes to
things like that? Yeah. And again, I mean, first of all, I'd say, Vishal, I think great minds think
alike. So I'm not surprised that you're thinking about lithium and things like that. But no, look,
I mean, here's what I think. I think that I think guys like Elon are inherently going to drive the bus, right?
He's 80% plus of the launch market.
If you were to, let's say we had a satellite to take up, he's got wait lists for 6 to 12 months, right?
Unless you're a huge, huge buyer of his,
he doesn't really do individual,
call it like ride share programs, right?
He does two a year ride share.
Meaning if you've got a smaller satellite,
you can put your hand up,
you can pay him five, $10 million,
he'll take your satellite on the ride share.
Because he's got so much business,
he doesn't want to tie up the rockets
on such these smaller things, right? He's very focused on very, very heavy
payload. So for me, I can't give you an exact quantum on
what that dollar figure is actually going to look like over the next three to five years, but I'm just
a very sensical kind of guy on the street, observing things, observing what the
biggest players are doing, where they're succeeding, where they're falling short. The demand
is absolutely there, right?
And so he's cranking the, and a lot of what he's doing is he's using the Starlink.
He's using his SpaceX rockets for Starlink, and he's starting to really take that,
obviously, globally.
He's cutting, even before he joined the administration, he was on this world tour
where he's meeting with foreign leaders to start sending these star links to India and places like that.
And so he's focused on really big things, really big payload, as he should be.
So where does that leave the other, you know, let's say 20 to 30 percent of the market?
They're in a bit of a tough spot because they can't afford to take a whole rocket up.
You know, Rocket Labs is another bonafide player, but after that, it kind of
falls off a cliff. And so going back to my earlier kind of commentary where if you understand the
pricing is starting to go off a cliff downwards, inherently the demand is going to accelerate from
even here. Now the billion dollar question becomes who's going to be able to take these
payloads into outer space? And it's really, really difficult. And to date, not many people
have been able to do it. I'm actually very bullish Blue Origin. I'm a Jeff Bezos fan,
so whatever it's worth. But look, I think he's built one of the greatest companies the world
has ever seen. He's built a $2 trillion company in Amazon. Jeff, unlike Elon, he admittedly says,
I can't do two things at once.
I certainly can't do three.
I can only do one thing and I can do it really, really well.
And so Jeff has $200 billion behind him.
He wants to focus solely on Blue Origin, a private company.
So even if we wanted to give him money, we can't.
But I think he's a smart guy.
He's a generational talent.
He'll work that thing out.
And I only say that because I can see Blue Origin over the next three to five years emerging to start taking some of that Elon market share. Aside from that, Vishal, I think it's totally wide open. I think it's absolutely wide open. I think that's exactly where you want to be. You know, you talk about being in disruptive areas where, you know, your upside is unlimited and there's not that much competition at the moment.
I would take that bet any day of the week and I'd probably take it twice on Sunday.
Yep, I agree with that.
I think, I think, I mean, I think volume expansion is kind of inevitable, like you said, as price comes down dramatically.
And I mean, that's been SpaceX's mission from the beginning is just to drive costs down.
I mean, that's the purpose of the inception of the reusable rocket
in the first place.
So, yeah, I mean, I agree with all of that.
And I think, you know, the other question I would have for you would be,
how do you, are you guys planning on, you know,
I guess in the theme of this investment,
looking at nanosat development
and looking at some of the niche players in that space,
because that's a space I think that may be kind of a picks and shovels complement
to all the things that you're bullish on in this area.
I mean, Dave, where are you handling that one?
Yeah, I mean, I think anything is possible.
Right now we're solely focused on hypersonics, Star Launch 1, which is sub-orbit, and then Star Launch 2, which is low-Earth orbit launches in partnership with our friends and partners at GE Aerospace.
They're currently building our Star Launch 1 and 2 rocket.
So that's sort of our main focus, I would say, for the next, call it two years. But I mean, absolutely, things are changing
so rapidly right now that I could see a possible roll-up strategy for starfighters in the future
where we could get into nanosat development. So yeah, I mean, to answer your question,
that's totally possible. I mean, I even love the idea of us getting into vertical launch as well in time.
I mean, we've got our hangar out at Kennedy Space Center, but we're also opening 150,000 square foot state of the art hangar in Midland, Texas.
So we are expanding and anything is possible.
Yeah, I don't even think it's necessary to do it internally necessarily.
You know, there's some niche nanosat developers.
There's a couple in Ohio.
There's a couple of American nanosat developers,
very, very small companies, small teams.
It could even be something like a partnership in effect, you know.
Yeah, absolutely.
Yeah, I think there's a lot of opportunity there, you know,
because I think nanosats is an area where, you know, the leaders like SpaceX aren't necessarily, a complimentary opportunity to, you know, help advance or internally advance nanostat development and thereby increase the efficiency of payload launches for those smaller launches.
Yeah, and Michelle, just to expand on that, I think one of the, I mean, he's done a lot of good stuff, obviously, Peter Beck, but one of the really good things that he did that I would love to see Starfighters maybe be able to execute is he acquired like 12 different companies over two and a half years because he had a public currency being the NASDAQ company.
And he actually acquired a lot of kind of peripheral players that were maybe small, too small to be billion dollar companies.
And he started to grow the supply chain within that company of Rocket Labs.
to grow the supply chain within that company of Rocket Labs.
And so with Starfighter's plan of going public and being on the NASDAQ and let's say have,
you know, fingers crossed, have a billion dollar valuation, you can actually, you know,
look to do some M&A transactions as well too, where if you're not building it yourself,
you can tuck in some nice businesses.
Yeah, absolutely.
Yeah.
And, you know, investment enthusiasm begets investment enthusiasm, right? That's how sectors get hot. So, yeah, I agree. I think there's a lot of comment there.
Great questions. There's Stock Talk. Appreciate that. Want to just rotate around, see if there's a couple of others that have thoughts. Before I do that, Dave, just wanted to circle back to you for a second.
And before I do that, Dave, just wanted to circle back to you for a second.
One of the things which stands out to me is, especially compared to the field, the relatively low valuation that this is at right now.
This is a pre-money, $65 million, post-money, $100 million.
And when you look at some of these other companies in the space, it's crazy right now.
It's crazy right now.
Obviously, this is not SpaceX.
Obviously, this is not SpaceX.
The SpaceX is currently valued at $350 million.
So even half a percent of what SpaceX is at would be a massive multiple here, right?
And then other companies, which we've talked about as well, that are publicly traded.
I believe this is because this raise was launched before we saw so much growth in this industry.
So it does to me feel like people are able to get in on a bit of a discount still.
But this is not going to be open forever. Can you give people just a little bit,
maybe more context on the valuation here, the amount that they, you know, the amount that people can invest and also just how long this opportunity is going to be around?
Yeah, for sure. So yeah, you're, I mean, you're absolutely correct in that we launched this reggae, which if everyone is not familiar with what a reggae is, it's a regulation A raise that we're able to offer to sort of the general public.
So not necessarily just institutional bankers or accredited investors. Anyone can invest in Starfighters for as low as $718, I believe is
the number. So that was by design. We feel that Starfighters is an America first company. And we
wanted to allow the general public to become our shareholders. And it's been amazing. Now we've got thousands of loyal shareholders who
are loyal to the company, who aren't necessarily looking to just make a quick buck on day one of
the IPO. But yeah, to answer your initial question, we absolutely started this reggae right before
those huge runs that you guys were referring to before for lunar and rocket labs and
almost all the other space stocks went up like four or 500%. Um, so there is an opportunity here
where you're getting in sort of like at this crystallized valuation that, um, has, you know,
remained still while all these other space stocks have gone crazy. Um, bad for us,
but good for our investors. And I'm okay with that. Um, in terms of timing for the reggae,
I would be, um, you know, I would say another maybe five to six weeks, we'll keep this thing
open. Um, and then we'll start the process of our listing process after that.
And I hope that answers your questions,
guys.
Yeah,
it does.
So obviously,
like you said,
it's not a ton of time left here.
And definitely if you,
you know,
we're doing this again right now,
you would do the higher valuation,
which I think is great for the audience to hear.
And then I love that you're moving forward towards that listing process.
I think that having this IPO in the near future is good for everybody.
It's going to provide that liquidity.
It's going to allow people to hopefully see
some great upside as well.
And I think that those things are all very important.
Okay, good pieces there from Dave.
I want to bring it over real quick
to a couple of guys on stage.
Logical, I did see you joined up.
Did you have any questions for Justice or for Dave?
Yeah, just maybe a little bit more
clarity about what you guys are raising the funds for. Obviously, every company, especially in
GrowthPoint, could use more money because more money means more opportunities, but just maybe
a little bit more specific on what the funds are being raised for. Sure, you want me to take that? Or Justice, do you want to? Yeah, I mean, I can take that on. Yeah, I mean, we keep our burn relatively low. I mean, we're running super lean, comparatively speaking.
operational costs, but we're keeping that well below, um, 300,000 a month right now. Um, we are
investing in a, uh, what we call platform two squadron of next generation fighter jets that
will be used primarily for, um, low earth orbit star launch two. Um, Those, you know, we're buying a squadron of 12 of those fighter jets.
I need to be careful in mentioning what type of jets they are,
where they're from.
But those should be arrived.
The first four will be arriving sometime in July or late summer.
And so that was, I'd say, about 25% of the money we've raised thus far.
We obviously have partners like Justice involved who understand that the capital markets, you do require some funds to make sure that, you know, you're defending your stock and that, you know, you're able to have some marketing budget as well.
So some of that will go to that.
And as mentioned before, we're opening a new facility in Midland, Texas.
So we'll be spending some money on sort of CapEx development over in Midland.
And then as well, just building out this rocket, as I mentioned, with GE Aerospace,
which is going to be ready in a few months here, has cost a few million dollars as well.
And so, yeah, I mean, just mainly just R&D, like we're not really wasting a lot of our
money. You know, it's all going to sort of hard, tangible assets to the company. So,
you know, we'll continue to make a raise. And then I could see, you know, after IPO-ing,
maybe going out and doing sort of a larger raise after that to expand the fleet and maybe open up another, a third
spaceport somewhere.
No, I mean, that's great context.
I think people are generally okay with it if it means like some sort of investment in
assets.
And it seems like that could be the thing that propels the business forward.
Yeah.
And I have certainly downplayed like our CEO, Rick Svetkoff, um, you know, he's managed to,
managed to get a squadron of seven F one Oh fours, um, for, you know, almost nothing just based, you know, just his Rolodex of being, uh, a Navy piled and being someone who's flown jets
his entire life. Um, it's always blown me away how, how he manages to pull some of these things
off. And even for the, the next generation squadron we're bringing in,
you know, I would be remiss to say that, like,
this squadron is probably worth close to $200 million.
You know, these are frontline fighter jets,
but we've been able to get them for, obviously,
a fraction of that cost.
And so, you know, it's going to get them for obviously a fraction of that cost.
And so, um, you know, it's going to be a really incredible things for thing for
star fighters when that, when those land stateside and, uh, we can make that
announcement. I mean, it's just one of those things that I think will propel
this company into sort of that, you know, without sounding cliche, the
stratosphere. So we're really excited about it.
That's a great question there logical from yourself as well appreciate that evan want to bring you in to
see if you have any thoughts here yeah no i definitely appreciate the conversation and
there's more info up in the nest above the equifund has a lot of information on there
which kind of puts in words
and the stuff that we're talking here.
I want to ask Justice a question if I can.
I know you were kind of talking about, like,
you think stuff is going to move very quickly
in the space area.
And I don't think you have to convince a lot of people
that there's a lot of opportunity in space.
I think the question is, like, why is it right now?
Or why is it within the next couple of years?
So I'm curious if there was anything you saw whether it was a couple years ago with them kind of starting to launch or
relaunch rockets or maybe it was a second or third company starting to do it was there anything
specific that started to kind of make you think that the the time for space and you know
commercialization there is now in here yeah hey i have a great question by the way so i mean for for me it's the setup right and i
mean i'll crutch it or a caveat with nothing moves as fast as we'd ever like it to obviously in life
and especially nowadays where everything's instant gratification and things are moving every day and
you know things like i get it but what i what i like it sounds crazy but what i like about the
industry is that there was a huge boom in the industry in 2021.
There was hundreds of, there's billions of dollars that have gone into the ether.
And again, there's a couple of companies that made it out really well, as Michelle mentioned, Lunar and Rocket Labs and a handful.
But again, there was the Virgins, right?
Orbit went bust.
Virgin Galactic should be bust. They have a business plan that doesn't work and they're doing this
perverted instrument called an ATM or at the market financing whereby any liquidity, they just
take out of the market and they put it in their treasury and they've got this big science experiment.
out of the market and they put it in their treasury and they've got this big science
experiment.
And again, I'm not, you know, I'm not, you know, I'm a pro optimist and I'm not here
to, you know, be critical of anybody's business.
But what I'm getting at is that, you know, there's been some tremendous winners, but
then there's also, you know, a graveyard of companies that just pissed through a lot
of money and they didn't work.
And so some people might be like, wow, that's a total disaster.
But I actually think that's good. And it's needed as, as, you know,
as this industry evolves. Right.
So I think the industry learned a lot through that call boom and bust.
And I'm just fortunate to be on that next side. And I,
and if history repeats itself in any way, I mean, Evan,
the biggest thing for me is, you know, this is, it's a risk on trade, right?
And so as I'm sure you guys know, on the phone here on the spaces that the current environment isn't necessarily a risk on at the current moment.
You know, if you listen to CNBC and all these things, you know, everyone's buying the bonds and getting out of the risk trade.
But things change so quickly.
And I do think whenever that risk trade shows up,
and again, I'm just thinking it's going to be in the back half of the year, maybe it's closer
towards fall or something like that. But I assure you during this administration, there's going to
be a booming risk on trade. And so you got to ask yourself the questions like, okay, well,
you know, if you believe in that, do you want to be positioned when that shows up? Or do you want to be positioned slightly
before that wave kind of starts to form? Right. And I would kind of rather be a little bit earlier
to that. And, you know, and so that's why I think that setup for me is interesting. And then again,
from, you know, just from a, you know, from a structural perspective, I think this Jared
Isaacson, you know, pro business, businessman,
I think any redundancy or any stupidity where, you know, the government slowed things down,
I think he's going to tear a lot of these things up. I think Elon's like, let's get on with it,
let's go with it type of guy. I think he's in the air as well, too. He's got a big vested
interest in space. And so I think the deregulation is also just going to help that environment.
Good question there, Evan. And I remind everyone, if you came in late,
if you want to see everything we're discussing, it is pinned to the top of the space. Last pinned tweet up there. You can go take a look at the Equifund and get a ton more details on everything
we've been going over with Starfighter Space.
I really think it's such an interesting area with the space economy.
I also had this interesting comparison that I was talking about the other day.
Dave, when we were on our live stream, we were chatting through this just to kind of make this simpler for people that are unaware of everything that's going on.
And maybe, Dave, you can help me as I walk through this right now.
If you want to send a satellite into space,
what are your options and how long does it take and how much does it cost?
Yeah, I mean, not a ton of options out there.
You know, you guys alluded to it earlier.
SpaceX represents about, you know, 90% of all launches,
represented about 90% of all launches last year. Most of those were for
Starlink. And then you've got, you know, Chinese enterprise is what represents about 5% of the
remainder. Like I said, you can try to tag onto a ride share. I mean, I've gone onto the SpaceX
website before and tried to like type in, you know, I've got 100 kilos and, you know, tried to set something up.
I couldn't get anywhere with the website.
I don't think that's their focus.
I think they just have it there for the sake of having it available.
But I don't think you're, if you need to get something into space on a SpaceX Falcon 9 rideshare program, I think you're waiting two to three years
if you can even get a spot.
So your options right now are extremely limited.
That's where Starfighters comes in.
I mean, we're offering quick access,
direct access to space.
I love the analogy that we keep bringing up over,
and I know it's cliche,
but the Uber versus UPS.
You've got UPS picks up a package,
delivers it to one spot.
It has multiple packages.
Whereas Uber, it's fast, quick, affordable.
You go anywhere you want.
And that's what we do. We're rapid deployment. We're location agnostic. So, you know, we can deploy our aircraft virtually anywhere, any aircraft capable facility we can launch from and launch your stuff into space wherever you want. Right. Whereas you've got a Falcon 9, you're launching from one spot and
you're going to one spot in space. So right now options are extremely limited. And that's a huge
problem right now. I mean, I know, I mean, I wouldn't be going too far out on a limb to
suggest that most people on this call are pro Elon and pro Trump. But I mean, we shouldn't forget
that half the population didn't vote for
Trump and they don't like Elon very much. And Elon's got a monopoly on space right now. And
that's a big problem if you're on the left. And so you're going to, I think, you know,
I believe that you're going to start to see more and more companies being funded and coming out that are not necessarily,
I hate to say it, right-leaning, but that are maybe more bipartisan, like Starfighters,
I consider us sort of right in the middle. And I think it's really important that we start
to sort of demonopolize what Elon has done. I love what he's done, but there just needs to
be more options out there.
And I think for the next couple of years,
it's going to be the big space companies
that we're all aware of,
SpaceX, Blue Origin,
maybe Virgin to some degree,
and then Starfighters.
I really believe that.
If I can ask a question here,
I would just add like the other angle of it,
like the satellite market.
I'm curious on how like that has changed over the years of how many
satellites are being launched.
Like I know we can see all the,
like the,
how many satellites are in space.
I think like a couple of years ago,
it was like 3000 and this year it's like 25,000 or something like that.
How many of those are those like really big satellites versus like these
kind of smaller ones that maybe we're talking about here.
And I'm like,
I'm also just curious on like what becomes more possible as the satellite gets
smaller and the technology gets kind of in there.
But I'm just curious from the other side of from like the satellites side of it,
from the stuff that you guys want to launch into space,
like how is that kind of developed?
And, um,
yeah, I mean, obviously you've got your like legacy,
you know, satellites still floating around up there.
You know, the ones that we're all sort of used to seeing in movies, you know, there's
the size of a truck with huge wings and, um, but, uh, 90% of all satellites that will be
launched over the next decade will weigh 300 kilograms or less.
or less. They're all, I mean, everything's going to microsat. So, um, I think, you know,
They're all, I mean, everything's going to microsat.
in the coming decade, everything in space will be like the size of a backpack.
What has happened? Like where I'm curious on like, if you can like, okay, so we're talking
about the size of a backpack. Where do you think the average like okay so we're talking about the size of a backpack where do you think the average was like we're talking about you know these giant things with multi-trailer
lengths long or whatever like where where is it now if you had like where's like the last 10 years
I'm just curious on kind of where that trajectory is going obviously we're just talking general areas
but yeah I mean um we've got a pretty good slide about this in our on Equifun website there.
But I mean, it's really hard to say.
But I mean, I will say that like not much stuff was launched before like a couple of years ago.
So it was only like recently that you're getting like thousands and thousands of satellites launched into space.
Like last year, I think it was like 15 15 000 satellites were launched into space most of
those were starlink um i don't have the numbers on how big like the average starlink constellation
satellite is but i i'm guessing there are lots lot smaller than sort of those legacy satellites
that are floating around um if i had to guess i would say like right now, I would probably say like 60% of the satellites that are currently orbiting are probably considered like nano size.
So smaller, maybe 500 kilograms or less.
And then as I mentioned, everything going forward is going to be even smaller.
is going to be even smaller.
We're just going to keep going smaller.
We're just going to keep going smaller.
And Evan, the interesting thing is
if you kind of do the circuit,
there's a lot of space conferences out there,
like technical folks in a lot of cities in America here.
One of the prevailing, I guess, issues,
and there's companies trying to address for this,
is space junk, right?
Because a lot of the times the company
that launches the satellite doesn't,
there's
no way to bring it down so it's kind of hovering there so that they're projecting so much activity
to go up there there's there's a lot of enterprises that are trying to solve for how do we get these
things back down to keep it safe in in outer space as as things are orbiting believe it or not
Good points, y'all.
You can run for another quick 10 minutes here.
If anyone in the audience does have questions, you can feel free to comment them below, DM
it to us.
I hope that we've given a pretty good outline and understanding of what's happening here.
One of the things I know our audience hears a lot about, Dave, is revenue, right?
I think that obviously, right,
people can look at the page right now.
This is pre-revenue.
Can you talk a little bit about
what revenue could look like
in the coming years?
Any projections that you have,
profitability, those areas?
I love digging into the numbers.
Yeah, sure, absolutely.
You know, our focus largely
has been R&D in the past year and moving into this year, though, you know, albeit we do have some small revenue coming in from hypersonics and astronaut training.
this year. And then we'll be taking the Elon model, which is, you know, one launch a quarter,
a couple launches a month, and then eventually moving into hopefully daily launches
from multiple spaceports. So we anticipate being cashflow positive in, I would say, mid-2027.
In, I would say, mid-2027, the real uptick in revenue begins when we start launching rockets.
Like, as I mentioned, Star Launch 1, which will be a suborbital launch, is slated for the end of this year.
With Star Launch 2, which is launching a rocket into low Earth orbit will be, um, likely Q3 of 2026. Um, the star launch
one revenue will average about, um, you know, call it one to $2 million per launch and, uh, star
launch two, you're looking at about, you know, four to five million, depending on what
you're launching, where you're launching it. And, you know, the, the response time, like how quickly
you need things launched. Obviously, there's a volume discount as well. If you're launching
10 things into space, there'll be a volume discount for that as well. Next year, we anticipate,
or so for 2026, we anticipate about 15 million, give or take in revenue, if we stick to our
trajectory and execute on everything that we are planning on executing on. And then it really jumps from there in 2027
when you've got Star Launch 1 and Star Launch 2 in operation.
And I believe that we'll be well over $100 million in revenue.
Again, I have to be very careful of what I say
because some of this revenue does come from
government national defense contracts,
but we are working on a pretty significant contract at the moment that I think will
probably blow our numbers out of the water. I think everyone on this call has probably seen
the news about Rocket Lab today and Kratos for the Mach-TB 2.0 contract for hypersonics. We are actually a subcontractor
on mock TV as well for the area one. And we're also looking to expand into area three as well.
So I mean, there's, like I said,
there's such a huge amount of opportunity out there
that we can grab and we're expanding our fleet
so that we have the bandwidth and capability
to handle these hypersonics contracts
and rocket deployment into space.
And I think we're just in like a really good position
to execute.
I hope that answered your question.
Let me know if it didn't, and I'll expand.
Basically, you can only give so much color to it.
But I think that for where we're at,
you did a great job of covering it.
I'm just trying to get as many details for people in the audience.
I got a question here, if we got one.
I'm curious on what some of the hurdles look like between like now and,
and those first launches.
And like,
obviously we're,
we're talking about kind of regulations and stuff like that.
And I'd imagine they're,
they're very heavy in this space.
So I don't know what type of tests you guys have coming up or even how much
public information might end up coming out of it.
But are there any like key milestones that kind of get you to that first launch
as we're kind of from a tech side?
Yeah, I mean, the cool thing is, and you guys alluded to it earlier,
is that the overall bureaucracy and red tape is certainly being lifted
with the Trump administration.
The new head of NASA is an ally and he's someone that's
sort of looking to take away that legacy red tape that's been really slowing things down and
creating a lot of roadblocks for everyone in the space industry, really.
I'll give you an example. Probably the easiest example is before we actually launch our first rocket, like during the Biden administration, we had to do something called a drop test where we take a very expensive rocket over the ocean and just drop it into the ocean to make sure it sinks.
And if it sinks, you're good. If it doesn't, you're not good. It's kind of this ridiculous thing where you spend millions of dollars on this rocket to drop it into the ocean. That I don't believe we need to do anymore with the new administration. So we're just going straight to launch. front of, you know, frontline jets that have launched things for, um, you know, decades and
through thousands of missions. So, I mean, the great thing about starfighters is we're not doing
anything, um, completely cutting edge. Of course we are launching rockets into space and that's
cutting edge, but we're losing, we're using legacy technology to do this. I think that's what kind
of sets us apart from a lot of these companies
and gives us the ability to be agile and move quickly.
Yeah, Jordan?
Yeah, I just wanted to pop in.
I think the combo is super interesting,
and I'm getting just more familiar with Starfighters and everything.
And, you know, Gav has put a few private investments on my radar in the past
that I'm always interested in finding more. So I'm super interested in all this.
But just a few basic questions I have, I might have missed it because I did hop in late, but
what platform are these shares? Like when I go and I actually purchase shares,
what platform is this all being traded on?
Yeah, so Equifund, and I believe that's the link that's pinned to the top,
Equifund is the processor for these shares. They are common shares. And just to make sure everyone's
aware, these shares are the only shares that will be free trading on the IPO, all the shares that
are sold through the Reg A. So the platform is Equifund.
Is that what you're asking? Yeah, yeah, yeah. And then just curious too about like actually
being able to access like any money that's put in there, you know what I mean? So let's say I,
you know, invested however much amount, am I able to actually access that money? Is that locked up
for a certain amount of time? Because I know with some investments, it can be like that. So I'm just kind of curious on how that
works. Well, I mean, once you invest and you receive your share certificate a few weeks after
we close the funds, I mean, you are essentially locked until we IPO, which should be this sometime this year. But the second we IPO,
as I mentioned,
the shares sold through EcoFund
in the Reg A offering are free trading.
So you're able to sell
as soon as you deposit your share certificate
with your bank.
Gotcha.
Makes sense.
Yeah.
And I don't know,
to me,
it seems really cool.
And, you know,
low barrier to entry,
which I always love to see.
I see the minimum is $718 for 200 shares.
So relatively low barrier to entry.
If the audience knows anything about the investing world in this area, it can be a lot more expensive than that.
So super interesting to me.
I appreciate answering the questions.
answering the questions.
And David, do you think it makes any sense
to elaborate on why
I guess the company decided to go kind of reggae
versus more traditional
kind of Wall Street financing for this particular
kind of offer?
Yeah, I mean, absolutely.
I think
I mentioned it before that
Starfighters is an America, pro-America company.
And we just wanted the ability to let the average Joe invest in our company.
And it's been super cool to see over the last eight months.
And it's been super cool to see over the last eight months.
You know, we've got thousands of shareholders now, many, many of which aren't in this just
to make a quick buck.
A lot are in this because our team are mostly veterans.
Rick Speckhoff, Navy veteran, he's been flying since he was 17 years old.
All of our pilots are Navy veterans.
So there's a really America, pro-America, patriotic story here.
And we just wanted to make sure we were capitalizing on that.
And this offering that we've done has just enabled us to do that.
Like we were saying earlier, the minimum investment is less than $1,000.
You don't need to be an accredited investor to join us. And I mean, that's really been the thing. And then obviously, there's like a whole other capital market strategy behind it.
Like the bank takes a huge allotment of shares.
And quite frankly, they have zero interest in the growth of the company and the story.
And they're just looking to sort of exit in three to six months after IPO.
And we don't have that, which I think will really help strengthen our share price after IPO, if that makes sense.
after IPO, if that makes sense.
And you can't necessarily bank on this,
but I do think there is some portion
that's greater than zero
where you've essentially, Dave,
what you've kind of done
is you've developed a bit of an army of folks
that all kind of see the vision.
They recognize this is a one-of-one company.
It's America First company.
I'm not saying it's a Newsmax company,
but even an army of people that, you know,
that even with the folks on this spaces,
you know, Evan and Gab and all the guys where,
you know, don't bank on this,
but there is that ability to, you know,
kind of be in the meme stock world as well too,
where, you know, you could get some potential explosive growth
where, you know, these traditional bank financings, these institutions take them,
they pound the stock, they turn, they churn. But if you've got a, you know, if you've got
a like-minded following of 10,000 folks that really believe in the company and, you know,
you've got a company that's got the collateral to go viral and things like that um to be determined to be
determined but i think there's a as i said there's a chance that's greater than zero that
there could be an aspect like that that might come to fruition but yeah yeah i mean absolutely
we certainly have all the ingredients for um you know a quote-unquote meme stock. I think when people start seeing rockets launched into space
off the wing of a F-104, F-4 Phantom,
it's going to generate a lot of excitement.
So we certainly have all the makings of that for sure.
Well, the guys,
going to hit some quick final comments here.
Justice, anything else you'd like to share, though?
I think you guys have been very thorough.
You've asked excellent questions, and I think we've covered a lot of ground.
The one thing I would maybe just want to comment on, and forgive me if it's already been brought up,
but just the, I guess, the significance of the reusability.
And I'm not sure if everyone on the channel maybe really appreciates that uh i'm more than gav will take your lead but i'm more
than happy to walk folks through why that's the most paramount thing for the launch game
yeah i mean i i'd say i mean if you're able to i think people understand reusability definitely
important but yeah i would say go for a quick thought on it yeah no and look i don't want to
take too much time on it but um going back to the old world right like when when nasa would take
these rockets up they would they would only keep one stage of them the other stage would blow up
they'd leave the other stage you stage in outer space and they'd
just return the capsule. And so imagine being a pizza delivery company. And then every time the
delivery driver came, they blew up the car. That's why the cost was so ridiculous and crazy.
And it was because of Elon Musk and the reusability of his rockets where he realized,
holy shit, if I'm going to do this thing, I've got to bring this car back home. And so that's what
everyone's dumping billions and billions of dollars into is trying to perfect their reusability.
Jeff Bezos just launched a couple of weeks ago on his Blue Origin, able to do that. He's got
very deep pockets. Rocket Labs, they've got 50 launches successfully. They reuse their rockets.
But the other plethora of companies, they're trying to figure out the reusability. It's not easy.
The fact that you've got a fighter jet that flies Mach 2 that can take off the same day, land the same day, got great airspace.
That is the reusability aspect of this particular company.
Not many other companies in the world actually have a fleet of a dozen fighter jets that they can do this that fly Mach 2.
I'm originally from Canada.
I love that country, but I don't even think our home, my home country of Canada has 12
fighter jets in the entire fleet for whatever it's worth, let alone a private business.
And so I just, I really wanted to just, just to complete the picture.
I'm sure maybe it's obvious, maybe it's not, but I just wanted to get granular on that
one specific aspect when people are trying to wrap their head around the launch game in America.
I'll jump in here for a second as we wrap it up. Justice, it was great having you on the space.
Super interesting as I was sitting back here listening to this entire conversation, some great comments and questions from, you know,
the crew up here, the panel that we've had as well. David, definitely want to circle back to
you and see if you had any final comments to wrap up this conversation. Once again,
we appreciate you guys coming on. Appreciate your time. Yeah, thanks, everyone. Thanks,
Justice, as well for joining. Yeah, final thoughts. I mean, we obviously covered a ton of stuff, but if you're looking to
dig deeper, please, the link to Echo Fund is pinned at the top here. Feel free to, there's
tons of information in that document that will tell you a lot more about the story and what
we're trying to achieve. So please go ahead and check that out. And other than that, just thanks for having me on.
I had a great time.
Absolutely.
It's always great having you on.
And we do appreciate everyone that jumped up here on stage
and, of course, the entire audience.
I would encourage everyone, that link that is up in the nest,
make sure you check that out.
I'll tell you, me personally, I've gone in here.
David, you guys have done a great job of putting out a ton of information on space on this link. I know I've gone in here multiple times now. And every
time I go on here, I learn something new and expand. You know, I'm hungry to learn more about
the space economy. And this website alone has taught me so much. So I definitely encourage
everyone check out that link up top in the nest. We appreciate the starfighters team and crew for coming on as
well as justice everyone else up here so talk any final words for you as we uh close this out
no it was great having them uh always good hearing from justice he's obviously a very accomplished
investor and uh is also a great speaker as well so hopefully you guys enjoyed having him and
obviously great to hear from david uh as well once again it's good meeting you guys
you know uh just i'll hit you up at some point next couple weeks and chat with you a little bit
about nanosats i think it might be something you might be interested in so i'll shoot you yeah
please do it and thanks for having me man i really appreciate it we should do this again on on whatever
medium or form that you guys want we appreciate it yeah absolutely you guys are always welcome
even if you guys want to jump in on the panel whenever.
You know, we do this every day.
So you guys want to jump in anytime.
You're always welcome.
Awesome.
Appreciate that, guys.
Take it easy, guys.
All right, everyone.
Yeah, 100% would love to have you guys jump up here.
We do the show each and every day, Monday through Thursday,
right at Power Hour of the stock market. We also
run into a lot of the live earnings and stuff. Of course, we talk about the macro, everything in
between with a great panel. And that's it for today. We will be back, of course, tomorrow.
Like I was just saying, power hour, same time, same place. We will see everyone then. Hope you
have a great, great rest of your evening and take care. We'll see you guys tomorrow. Thank you.
