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THE STOCK MARKET IS UP BIG | CEASEFIRE? | STOCK MARKET TALK
Recorded: April 8, 2026 Duration: 3:11:12Space Recording
Full Transcription
Thank you. Hello.
Sometimes we just, I was going to do my normal intro, but I was like, you know what, let's
change it up a little today.
I hope everyone is doing well.
It's been an interesting day.
That is my go-to word.
Am I here?
Have you kicked me yet, Evan?
I do hear you. Sometimes normally I would make the joke to kick you at that point, but honestly, you might never be back.
So I won't do that to you.
But what a day in the stock market. Late last night, there was talks.
Well, medium during the day. Yesterday was a tweet from the Pakistani prime minister,
which if you actually look at the last edited, it had some cues on there, which were supposed
to be deleted, which is funny.
But talks of a ceasefire coming.
And then both sides kind of confirmed it last night.
Market rips.
My portfolio is still up 3% today.
It was as high as 4.5% on the individual stocks.
I can look over to the ETF portfolio.
But overall,
it's a pretty solid day. Going into the market this morning, the S&P 500 was just like 3% off its all-time highs. The Nasdaq 100 was just 5% off its all-time highs. Obviously, it's been a
crazy couple months. There's a lot of single stock names which are struggling. But when you look at
the index level, they really are not that far off of all-time highs after these last couple days here so i don't know maybe it's
the top of a range we'll see i have not transparently looked at the 200 day or anything
like that at this point let me pull that up right now but yeah some of the news from the day is is
this ceasefire holding now i would say is i i'm not we are over the day is, is this ceasefire holding? Now, I would say is, I'm not, we are over the 200-day SMA.
This is actually just a four-hour chart, so let me switch to the one day.
It is above it.
We're well over it.
We gapped above it yesterday, last night, early on.
You get an article.
Yeah, five minutes.
Well, I know what I'm about to get told on later on.
Yeah, well, you throw, say, technical analysis,
that's going to do it, then it's the whole thing.
But you tell me, look at one or two indicators,
and that's what mood I'm going to get stock talk in,
then I'll look at it.
So we should get a little bullish stock talk here coming in today.
I wonder if he's going to want to watch
and want to see a retest hold of this.
This is probably where the language will be.
But this is what happens the language will be but
this is what to see happens in ceasefires most of the time at least in this part of the world in these conflicts that have been going on there's both sides the way iran's military is set up it's
a little more decentralized i i don't know i think that it's still too early even at this point to see
if anything's done but the market is maybe it just it just went too far too fast to really give it back.
But the market is still up a couple percentage points today.
It's still kind of telling you it does think this ceasefire is at least going to hold a little bit.
But we are still in a headline-driven stock market.
I think that is going to continue here a little bit.
But it is a headline-driven stock market that is a couple points higher than it was yesterday.
I'm sure all of your guys' portfolios are green. If there are any individual stocks,
any stories or anything like that, that you guys want us to specifically talk about
on this basis, you guys are one of the first 160 people in here. So I will make sure we cover it.
Go down in that bottom right of your screen.
It's a little comment symbol or whatever like that.
And then it's a Spaces chat.
Go in and drop a comment there.
While you're there, give the stream a like.
The Spaces is like, I think, obviously, Twitter algorithm likes when there's likes on a post.
I'm saying it too many times.
But we are testing, getting some help with that.
So we're targeting 50 likes i don't know if
we'll get it or not but yeah so let us know topics i appreciate everyone for hanging out with us
today what's up options mike yo yo you're unmuted you're you're excited to go i am excited to go
today brian i'm excited to do that as well i'm very excited to go today. I honestly think this market held in very, very well today.
It came down.
I know it's dropping here again.
But whenever you have a ceasefire or something like this, there's going to be a lot of bumps in the road before it settles in.
And including last night after the ceasefire, we hit Iran 800 more times.
That was from Herzegov this morning announcing that.
So, you know, all this back and forth, take a large grains of salt.
The market gapped up huge and is holding it extremely well.
And I think the things you should look at here is you're right back to that 675 area.
That was where we broke down from. So you're into resistance, it came right up to it.
That was where we broke down from.
So you're into resistance.
You came right up to it.
And I think, you know, when you have a move like this in an overnight period,
and you come into the market this morning, you have to be able to take a deep breath. So,
you know, last night when I was on, I told you we had that breakthrough from the Prime Minister
of Pakistan. I went out and I bought a bunch of ES contracts into the close and sat there in them
and then sold them all yesterday after after the announcement that came out.
You know, Trump announcing it made nice money.
And I knew with this kind of move today, it was going to be a very difficult day to trade long here.
So, you know, everything gapping up that big.
You know, my goal, one of my strategies is always to wait at least five minutes.
Let that opening candle tell you.
You'll notice that very few names took out for opening five-minute candles today, and that was part of it.
My other thought process today was to add to existing positions, and I did end up adding to Meta when I got that news with their new super intelligence AI model, which looks good.
I liked that.
I wanted to add to Salesforce, which is loads of the day, and I wanted to start a new position, IGV. And I didn't do either of those because the market, they were
weaker than the market all day long. I'm like, market's saying it still doesn't want that trade.
You know, why put money to work there if it's, you know, if they're selling it here? I also took
profits today and Black Sky, the BKSY. I had over 100% gain on my stock. So I decided to, you know,
move on to another trade there.
But if you approach today really over-bulled up, and I know a lot of people get like that.
They get really amped up on a gap up like today.
It's a great way to get yourself in trouble.
Today was not the day to buy right on the open.
It was to wait and see.
And I still think we're fine.
I think we're going to start to work our way higher.
I think earnings now comes into focus.
Is the Iran conflict over?
I don't know.
There's bumps.
There's going to be bumps there.
But both sides needed this to be over.
Both sides needed a de-escalation.
I think the biggest sticking point right now is Israel is not letting up on Hezbollah, and that's causing a lot of grief.
And that will stop as soon as the United States puts their foot down quietly on Netanyahu and says enough.
Not everything's equal here.
The financials were stronger today.
They're going into earnings starting on Monday morning with Goldman Sachs.
If you're a bear and you want to point at something, you could point at crude still here and back up to the 96 area and crude is not really coming down.
still here and back up to the 96 area and crude is not really coming down and i'm not sure how
fast crude's going to come down because it will take a while for before crude gets fully back
open in the straits uh whether iran lets everybody through or not also there was a ton of
infrastructure damage to crude as well as natural gas so you know we may not get up the full export
capabilities there for quite some time so So just keep that in mind.
But Intel was a monster today.
This was day four, another huge move there.
Apple had a nice move intraday.
Meta had a huge move.
There were definitely names that outperformed here
and if you just kept your eyes open and you're patient,
there were things to trade.
By the way, those are the three names I did trade today.
And that's really all I did.
What's up, Stock Talk?
Gapped above the 200-day. This is the greatest day ever.
You take some longs?
Are you all in on calls?
No, no, no. It works.
I'm just kidding. It works.
I'm just kidding.
I don't buy gap-ups.
We've spent a lot of time talking about this 200 day. At least
1, 2, 3, 4, 5, 6, 7,
8, at least 10 trading
days. Maybe 12.
I'm not the only one that wasn't buying today.
I upsized
one of my existing positions
slightly.
No, MITK,
Matek Systems.
Upsized that position.
I like the way it gapped over the 9 and 21 this morning,
and it wasn't up too much this morning.
It was up like 3%.
It's really up 3% right now into the close.
So I upsized that a little bit.
I added 1.5% weighting to it.
So it wasn't like super aggressive or anything.
But outside of that, no, I didn't buy anything.
Look, when I talk about index conditions,
that means that I'm waiting for the conditions to improve
in order to feel comfortable buying.
It doesn't mean that on the gap up, I'm going to chase those names.
Those are two different things, right?
So I think some people misinterpreted that. I even had a lot of people in Discord today going like, what's the new position? What's the new position? that on the gap up, I'm going to chase those names. Those are two different things, right?
So I think some people misinterpreted that.
I even had a lot of people in Discord today going like,
what's the new position?
What's the new position?
And I was like, easy, patience.
I'm not going to chase an 8% move.
So yeah, I upsized MITK a little bit today just because I really like that stock.
I want to hold it for the extended future
and see where it can go.
And so I figured, all right, I'll take a little stab and add more to that today.
But outside of that, I did nothing.
Obviously, it was a good day for the portfolio.
I'm not alone in that.
Anybody who's long anything today, I'm sure, is celebrating.
There were a handful of names read, but none of mine.
Well, except for Tesla, which has acted like shit.
But that's like a less than 1% weighting in my portfolio. So it doesn't really matter.
But yeah, everything else is up a lot. I mean, Amcor, which is my second biggest position,
was up over 10% today. Centris was up seven. VIAVI was up seven. ENS was up six. So my big
three are VIAVI, ENS, and Amcor. They were all up big today. So that's nice to see. Portfolio did
well. Portfolio hit a new all-time high today. Highs for the year, they were all up big today. So that's nice to see portfolio did well.
Portfolio hit a new all-time high today. Highs for the year, all-time high as well. I'm up about close to 62% now on the year. Total return since I began sharing my portfolio in 2024,
the beginning of 2024 is close to 1900% now, 1885, I think is what it was when I took the screenshot.
So yeah, it's great. I don't complain about a day like today. The thing that allows me to kind of
be comfortable in all market environments is the fact that I don't sell my position trades when we
have volatility. Like I just don't sell them. And so when the markets do turn around,
that benefits me because I don't have to worry about re-upping exposure from zero to 100% long
overnight trying to chase a gap up. I can be like, okay, I have my existing longs,
they'll rally with the market. And then when the new stocks that I want to buy set up, right,
they give me entries flat against the moving average,
then I'll add those new stocks.
So I don't really ever feel in a position of stress
whether the market's up, down, or sideways.
And that, to me, helps a lot.
It helps me manage my positions a lot.
It helps me stay on an even keel.
So even on a day like today, yeah, great day for the portfolio,
great day for the market in general.
But I'm not getting ahead of myself saying like, let's buy everything. I want stocks to set up for
me, right? My strategy and my process for those that have listened to the show for years,
it's different from Brian's and from Mike's and from everyone else that we have on these panels.
We all have our own types of processes. My strategy and process is highly dependent on acing entries because I'm a position trader.
I'm holding stocks for many months and in some cases, many years.
And if you're in that type of strategy, you have to get good entries because compounding
from good entries is what makes that strategy work. And it also allows
you during periods of market volatility to sit on a green position rather than bag holding a red
position. And so psychologically speaking for my strategy, and again, I'm speaking, I can only speak
to what I do. I'm not speaking in an umbrella fashion, but in my strategy, it's very important
to get entries flat against the moving averages
when stocks have had room to consolidate. That's what I like to do. So there were stocks that I
want to buy. There are still stocks that I want to buy. There's three at the top of my list.
There's seven total on my to-buy list that I have. There's three that are high priority.
All three of those stocks gapped up today. So am I going to chase them to the upside?
I'll wait for them to base out, retest their moving averages,
whatever the case may be.
I mean, all three of their charts are quite different,
but I'll wait for an ideal entry.
Discipline serves you well in markets in general,
but especially in headline-driven markets.
So yeah, didn't do much today.
Added a bit to MITK.
Other than that, didn't do anything.
I will do more things if we can hold up here.
If markets can defend this 200-day moving average retake,
which seems like decent probability,
then I'll be happy with that.
Alternatively, we can see a break to the ceasefire at some point
and the markets turn back down,
in which case I'll be glad that I waited for a disciplined entry.
So yeah, still sort of in a wait-and-see environment,
but obviously I had plenty of long exposure, right?
Like I was 96% long going into today.
So it's not like I have a ton of cash sitting on the sidelines anyway.
So yeah, good day.
I don't need to point out how much the stocks were up
because I'm sure everyone's stocks were up today.
But just being patient and waiting for the right entries
on those new names that I want to buy.
I appreciate you for
starting us out here in the first
early parts of the space. We can go
let Leo get his walk. Where are you going to hang out with us?
I already walked him.
Oh, all right. Let me start you off on this topic
and then I'm going to go over to Roy on the same question.
And then I know he's also been
watching AEHR, which is the name we've talked
about here. Maybe we could talk about that too.
Down below, we had Joey trades, I asked
the star of the spaces if they had any stocks they wanted us to
talk about. And Joey put Robin Hood. So I'm curious if you have
any thoughts about Robin Hood and specifically like I don't
know. They're pretty focused on prediction markets. I know public
put out this whole AI agentic browser thing.
I imagine Options Mike's hand up is not about this.
It is.
Go ahead.
Finish off.
Let's see.
What do we think about Robinhood?
Is this a thing that's still going to be solved?
I do work with Public.
I'm getting a demo of that.
And my account's being set up for that agentic AI. So I'll be testing that i'll let you guys know what that looks like um i think hood is
is kind of it's in the same boat you see a lot of these companies especially in finance
for newer ipos go after you have that huge big move to the highs like you saw on it they come
down they just cannot find traction quite the same way they did uh i think it's a there's
nothing wrong with it i think it's a good company i don't think it's going any trouble or anything
like that i think it's just been left behind now in the market that's what the chart's saying the
chart's saying you know they just don't want it now it had that huge run up what would we get to
130 something on it top of my head gotta go look one i'm sorry 153 86 all right now we're down into the 70 area right we got down to 64 area as well
I think it's just in a tired mode and it just is basing maybe being consolidating
So I think it's not a if you want to buy it here and nibble at it
Sure, I would don't know they go all in here because I can see this thing getting down into the into the 40 area if they don't like the next report or if they really just don't like the
market yeah i think that would make it a little bit more simple it's it's cyclical it's always
been cyclical they're less cyclical now but the market doesn't doesn't think that way um oftentimes
it's just trading in a basket,
and it's attached to the crypto basket.
We're in a crypto winter.
I know Tom Lee likes to say mini crypto winter,
and people are saying we're out.
We're not.
We're still in it.
Crypto is, of course, a much smaller part of the revenue.
I think it's around 12% this last quarter.
As prediction market scales, as international scales this year,
that's going to continue to get smaller and smaller
until we have the next crypto bull run.
So yeah, just between now and then,
like entering the year, it was my largest position.
It's my second largest position now
because that era is kind of done well.
But they have a lot going for the long term,
but in the short term, like I'm not in a rush to add to it necessarily, partly because of the sizing my position.
I don't think it would go to the 40s.
I would be pretty surprised, especially given the revenue ramp that they have from the Rothera.
Once they end up completing that with Suscohanna, they effectively can double their prediction market revenue instantly because they're not paying half of their revenue from the predictions markets over to CalSHE. Of course, you know, it's not going to happen
overnight, but or they can just really start winning and taking market share even faster
than they would otherwise by actually having cheaper rates. So between that, international
is scaling. There's plenty of other products too.
So, I mean, could it fall to the 40s?
Yeah, if we have just incredibly worse.
I'm just looking at the charts.
If it loses 60, it's got a hole in the chart down to 50 and under.
That's the only thing I'm looking at.
I agree with what you're saying in terms of what they're doing.
I'm just looking at the chart.
Yeah, no, that's fair.
I use technicals, but lightly, I'm more looking at the chart. Yeah, no, that's fair. I use technicals, but lightly I'm more of a fundamental investor. So, but yeah, I am looking like if we get to,
like, I'm like not $60 flat a share, but like under persistently for a while with Robinhood
and we're kind of bottoming at that point, I'd actually look at adding some leaps,
but I'd give them, I would, they'd be pretty conservative and as long a time as I can give
them just because it's going to take, like you said, some time, I think, before we really see it put in a new all-time high.
It's probably not this year, in fact.
Yeah, I would be hard-pressed to imagine that Robinhood's forward multiple can compress much further.
forward multiple can compress much further.
Stocks trading at a forward P of 25,
they run a 42% net margin.
I mean, the company's growing at like a 30% clip.
Fundamentally speaking,
I mean, maybe stock could fall to 60,
maybe it could fall to 50.
I'm not saying that that's out of the possibility.
Stocks can always go lower when they're in a downtrend like this.
But I'd be hard-pressed to imagine that the Robinhood could compress too much further from a multiple standpoint.
I think the stock is relatively cheap here, to be honest.
I didn't buy more.
I own it.
I've owned it since $19.
It's kind of hard to average up at $70 when you have a $19 cost basis.
But I think it's cheap.
And technically speaking, yeah, I mean, like,
it's not going to be the most attractive stock in the market
because it's been in a five-month downtrend.
And the monthly chart, I don in a five-month downtrend. The monthly chart,
I don't love where it is right now, but if we can get a monthly close for April above 76,
I think that it'll look much better, right? Because that 76 spot is important. It coincides
not only the 21-month EMA, but the nine-week EMA and the 50-day.
So if you can take that spot out by the end of April, I think it'll look like a really attractive bottoming setup.
So I'd like to see a little bit more technical structure build out on it.
But from a fundamental standpoint, I do think the stock is cheap.
I mean, I think they're in a league of their own.
In the finance world, the financial ecosystem world, they're still growing very fast.
You can make an argument that they're not growing as quickly as they were over the prior three years, which is true.
But even at the current growth rate, I think it still deserves a relative premium to other fintech and other financial stocks that are peers of it even though there aren't really any direct peers i would argue um so yeah i think it's cheap
i'm not saying you should go out and buy it hand over fist but i do think it's cheap here
well so oh go for it i was just gonna add my input on Robinhood. Live monitoring the situation in the region, Sam Badawi.
That's right.
Well, actually, it's a complete opposite.
No one's here really talking about it.
Egypt's a very peaceful country.
As I said yesterday, I'm fairly close to where all the conflict is.
It's nearly, I don't know how wide Saudi Arabia is,
but I'm on the other side of Saudi Arabia.
17 square miles.
17,000 or 1,700?
What?
Just keep moving. Don't let me knock you off.
Okay, so when it comes to hood, I don't think this is a hood problem.
I think this is a fintech problem.
If you look across the board at a lot of fintech stocks today coinbase is down d locals only up 25 basis points shift
four is one of the most outperforming ones today it's up about four percent hood is up 2.7 percent
clarna is only let down up two percent not even the cotyledon is up two percent a lot of these
fintech companies are outrageously underperforming on a relative basis of the entire stock market that is accused and spy.
The leadership today is just hands down semiconductors.
Not looking specifically at other portions, but Microsoft turned red today.
I mean, software is obviously not doing well today.
Meta is up strongly today, mostly because of the newscasts that did have coming out.
However, you did see a lot of flows did bottom around 525.
So that continued relative upforms and strength is continuing to proceed with the stock.
I mean, it's just this still continues to be narrowed leadership in the market.
Even though we did bounce way above most of the moving averages, i would still say that these still need time to
play out i mean maybe we're out maybe we're out of the woods here but for me personally i wasn't
adding aggressively to anything i did i did start a hedge in oil today um i've been actually waiting
to find an opportunity to start a position in vg um actually i did get in that one not too long ago but i did make that one a size position so now sitting on just a little bit of cash i was
sitting at about 78 percent um but a lot of the stocks portfolio are reacting very strongly today
congratulations crossroads 25 move in ahr after an already 25 move a lot of semiconductors a lot of asic chip companies are moving very
strongly today asmls near all-time highs again broadcom is up five percent dell is up four
percent indie semiconductor i don't know why that's down to 2.7 but a lot of these semiconductor
stocks are moving very strongly today and in fact on semiconductor power chip management is up seven
percent today amcor is up I think it's nearly 7%.
I saw the exact number, but that semiconductor AI supply chain
just continues to relentlessly outperform the entire market.
And I think as long as that continues,
the money is not going to go into what's underperforming.
And unfortunately, that is fintech.
It's just you have not seen that strong bounce that we've seen throughout the entire market within fintech.
Even Circle had really good news today, gapped up strongly this morning above the 21 EMA at $101.
And it faded the entire move while semiconductors just continue to push near high of day levels.
Also, the data inference stocks, Fastly, DigitalOcean, CloudFlare,
these are all rallying aggressively today while the entire market is basically fading.
And some of them are getting hurt a little bit, but really, it just continues to be the leadership continuing to push themselves higher than where the market's going.
And again, I'm a shareholder of a hood, and it really sucks to see the position basically got cut in half since its highs around $150.
Not looking to add to it right now.
I already made my position size when I opened the position at around $31. I already
played the call option side, the leap side and everything as it continued to be a very strong
uptrend. But here, I don't know. I don't know if I'd want to add to it, mostly because if I were
to add to something, there's lots of other companies to add to that are still finding a lot of strength in this market.
And, you know, to be honest, it's it has been pretty stress free the last couple of weeks.
I mean, don't get me wrong. No one likes to see the portfolio draw down.
But haven't really made too many moves lately.
There's some swing positions, small positions.
I have I still have my small position in gold gold futures that is and that
sucks that it completely pulled back and faded not the entire room it faded about 50 percent of the
move but still sitting on that one i think i i think there is still risk on the table obviously
with the headlines but yeah when you gap up three 3.%, I saw a lot of buying on Twitter this morning, a lot of excitement.
And we have not even headed near those highs throughout the day.
In fact, a lot of rips are being sold off.
And we're probably going to get an opportunity out again.
I mean, if I'm looking at the SPY chart right now, the 200A is sitting at 663.
So that's about less than 2% low over here. I'm not saying we're going to go ahead and hit that. But even the 50MA sitting at 663. So that's about less than 2% low over here.
I'm not saying we're going to go ahead and hit that.
But even the 50MA is at 669.
So even if we dropped down about 50 basis points on SPY right now,
like we'd still be sitting pretty nicely at a nice recovery.
We saw this happen last time.
About a year ago, we had the conflict between Israel and Iran.
We called for a ceasefire.
And of course, they kept on attacking each other and things,
like back and forth and whatever.
I mean, I don't know if it's going to turn out the exact same way this way.
But the market isn't necessarily like gung-ho that we definitely have a ceasefire event
that's going to continue to follow through.
This is certainly much different because last year,
we had the Strait of Hormuz
was open the whole time. This year we don't, right? And Iran is playing that card, that pair
of cards close to their chest. And at this point, it does not seem like there's really anything the
U.S. can do to stop these countries from fighting with each other. And unfortunately,
part of the terms of the agreement that Iran did have was that they would not be getting any additional fire on the country,
including Lebanon. And if that happens from Israel, whatever neighboring countries,
it's going to be very difficult to navigate this whole situation. I think ultimately the war is
going to be ending at some point. The question is how soon, and is the market patient enough to do that,
or are you going to be remaining solvent until it happens?
So, you know, it's been pretty, I don't want to say pretty difficult,
but, you know, it sucks seeing a bit of a drawdown.
We covered pretty nicely in the last week, which is great to see.
And if we do pull back, I got some names I want to add to.
And today, besides the oil hedge, hedge i mean that's pretty much it a lot of a lot of stocks and portfolio are continuing
to act very strongly on the tape yeah considering the weakness throughout the entire day but yeah
go ahead man no no i appreciate you i um i think that was good coverage on the Robin Hood topic.
I want to make sure we get over to Mr. Brian Lund.
I know he's going to drop off after a little bit as well.
And then I definitely want to ask more about AEHR and talk about that.
But Brian, you got anything you want to add to the conversation?
Well, look, I always, whenever I'm talking like this or whenever I'm speaking to subscribers, I'm always concerned about what people are hearing.
And the thing that is the most important to me is not that people make money.
It's that they don't lose money, right?
Because you can't stay in the game if you lose money.
If you lose money and with that is my metric, I think we've done a really good job of navigating these markets this first quarter, you know, for most of the first quarter while the market was just chopping around.
We've been very, very risk off, certainly once we started breaking down in, you know, early March and.
in early March. And I put out a post on the 26th. And look, you can go back to my Twitter feed.
You can see everything I'm going to reference here. You can look at the beginning of the daily
update videos. They're free for everyone to look at. And on the 26th, I said, the market is creating
future non-believers. People that when we do get a rally, when we do get a technical
change in the market, are not going to believe it because they don't have a process and they
don't have guidelines to understand what the difference is between a counter-trend rally
and the start of a new up rally. And then on the 27th, when we were starting to hit lows and
everyone was panicking and we were hearing those same sort of, you know, the, this is it, it's over, it's different this time, just like we heard last
year with the tariff tantrum, I put out a post that said the four most expensive words are back.
And those words are, it's different this time. And then when we finally got that reversal bar,
which is now a reversal bar for sure on the 31st, that day I put out a post that said, was that the perfect reversal candle?
And I walked through six technical criteria to evaluate that candle while everyone else is saying, oh, it's just a counter trend rally.
I said, no, there's probably five out of six metrics here that give me like a B plus rating on this in terms of is it a reversal candle?
Obviously, those things you don't know until after the fact, but you have to have a little sense of it at the time.
And then on Friday, we finally started adding names back to our watch list, added more on Monday.
I put out a post on the sixth saying, are we ready to go? People were
like, what do you mean are we ready to go? This is just counter trend rally. We're going to fail.
And then yesterday, I put out a post called Setup Perfection. And I literally walked through why
the market was at an inflection point and it was ready to go. And that, you know, the big point about technical analysis
is it's predicated on the idea that big money has a lot more information than we do. And sure enough,
yesterday, after hours, we all know the story, we were rocketed to the moon. But even after all of
that, I told my subscribers today, I said, today is a trim and trail day. If you took those names that we added on Friday, if you took those names that we added to the list on Monday,
now's the time to hit the cash register.
Now's the time to trim some, trail a stop.
It's not the time to buy new positions.
It's not the time to jump on this thing.
Will that time come?
Maybe.
What I'd like to see is similar to what Stock Talk was talking about.
I'd like to see some basing. I'd like to see some digestion of this move. I'd like to see some stabilization. If we do see that, that will give us a great level to trade against for people that are more into swing trades and that are not like trying to catch that first falling knife. So I'm really, really happy about the way we've navigated this because again,
you know, when you're looking at profit first, when that's your lens for the market,
that means you're always trying to figure a way to squeeze out money in any sort of market
environment. And that is very, very dangerous unless you're someone that does this full-time
like Options Mike or like Scott Redler or whatever. So for me, I like to frame it with what's the environment first?
Are we risk on, risk off?
When we get to risk on, yeah, then we push it.
But when we're in risk off, it sucks.
It's uncomfortable.
But we sit with that discomfort and we wait until the odds get in our favor.
So I'm really happy with how things have transpired the first quarter
and then the first part of this month. So what's going to happen tomorrow?
You tell me, dude. I have no idea. All right. Bull run. Buy BM&R, right, Mr. Roy?
Well, I'll tell you what you don't buy right now is you don't buy Tesla,
and you don't buy Palantir, and you don't buy Adobe, and you don't buy Hood, and you don't buy
Nike. In a market that's up so much today, looking at the action in those names, it's disgusting.
Those are names that you definitely do not want to be in. Now, if you're going to invest in those,
if you're trying to pick up some positions that you're going to have for 10, 15 years, great.
But right now, the market is telling you that those stocks are hot death.
So those are the things I would definitely stay away from short term.
Ironically, I picked up a little bit of Palantir.
But it was, like you said, it's a five to 10-year.
Yeah, absolutely.
If it's an investment and you know your methodology, go for it.
I'm just saying the average person out there that thinks they're going to get some sort of snapback.
I mean, that candle on Palantir today is, whew, that's ugly.
Yeah, yeah.
And there's some factors there, too.
We can talk about it if we want.
But, yeah, I ended up taking some gains and some money off the table, selling some covered calls pretty close to the top on some names and just raise some cash. I thought even when this was announced last night that it would take a while longer to actually cement and that there's definitely going to be, not definitely, but very likely going to be another big wave down of like, oh no, this thing is unraveling.
It's happening maybe a little bit sooner than I expected, but I was light on cash, just like Jason was talking about earlier.
And so I've topped that up. And I'm okay.
I have a bunch of long positions.
If we just are off to the races, that's awesome.
I love that.
If there's a dip by opportunity, I've reloaded and I got some dry powder.
And I think there's a scenario that a lot of people are overlooking.
And I talked about this yesterday.
I get it.
Everyone thinks that every mark move is correlated to whatever the headline is.
And there's always some aspect of that.
But like what happens if we get a two-week breather in the hostilities?
Maybe it doesn't even go to a full ceasefire, but we just get some – they're going through the motions.
We're negotiating, whatever.
And next week we start earnings, right?
earnings, right? And what if we start seeing earnings like really doing well? And in that
And what if we start seeing earnings like really doing well?
two-week period where we have kind of the little dip in the hostilities, we start seeing the market
getting excited about earnings going forward. Like that is a definite possibility. So again,
we can sit there and game this all out. We can all go to the bar and have a beer and give our
theories. For me, it's all about technicals. It's all about managing
risk. It's all about knowing where you'll be right, where you'll be wrong, and just taking
it day by day. But it is fun to kind of theorize on things that can happen. I never like to think
I know what can happen because not only could I be wrong, but when you're so focused on what you
think is going to happen and what you're predicting is going to happen, oftentimes you're not watching what is happening. You miss out on
a move that you didn't think could happen. Roy, if I could ask you, you said you put some
cover calls on some stuff. I'm curious on what. Also, AAHR is a name doing well.
I mean, I know a lot of stocks are doing well today, but doing well for you.
I think they had earnings recently. At least I know it had a big move.
But I'd like to hear more on that one and maybe some of the other names
that kind of you talked about and covered the most.
Yeah, I mean, I've been careful with covered calls.
I've been warning folks, like when we're trading near oversold conditions on the S&P 500 on the weekly timeframe, it's not the time to write aggressive covered calls unless you are okay selling there.
writing very carefully and selectively only on names that I'm comfortable with selling if we
get to that strike on taking the premiums otherwise. So today, yeah, it wasn't across
every single name, but most of the names I hold in my portfolio. For AIR, they reported earnings
yesterday. And I was telling people coming in to this quarter, next quarter as well, it's not that
much about revenue. The second half of our calendar year, it is a lot much about revenue the second half of our calendar year it is a lot
more about revenue and there's what what is happening basically is last quarter gain erickson
came out with a a statement during earnings and if you look at the actual numbers and everything
nothing to be excited about like literally nothing but what's been happening in the space, and you see this from peers, you see this also
from like everything in AI at this moment. It's like, okay, these guys are perfectly positioned.
And again, Erickson had the confidence based on a relationship with a hyperscaler who has come
through and made good many times in the past of saying, hey, we're going to have 60 to $80 million
in bookings by May. And they'd come
out with $6 million. So that was a meaningful increase. So all of a sudden, they came out this
quarter where you see the bookings. So revenue has not grown yet. But again, this takes a little
while to realize revenue. It's a longer sell cycle as well. It's not up to the $60 million to $80
million yet. It looks like they're going to hit that on the high side based on the guidance and
comments in the call. And then there's a clear acceleration in the second half. So essentially, they're going to double revenue, which is,
it's still very small. It's a niche player. This next quarter in terms of revenue based on guidance
looks like in the second half, they'll double again. And it looks like the year after that,
it's hard to project, but there's a whole lot of lines in the water. They keep having engineering
qualifications with brand new clients that are
major in whatever space, including one last week, which is probably AAOI, which a lot of people are
talking about in Silicon Photonics. And that one was incredibly rare because in this space, usually
you don't buy the systems before you do the engineering qualification. You pay a little bit
of money just to make sure that it's a good fit for you. And then you'll talk about actually buying some of these units. Instead,
they said, let's do both at once. And it's pretty clear that it's, I did a silicon phantonyx.
It is probably these guys, if not, there's one or two other names where it could be.
So we've kind of shifted things from just kind of believing and trusting gain to seeing four very significant,
well, three of the four were very significant orders that happened in the last few months.
Clear acceleration is happening. And there's a lot of yet to come. Not everything was perfect,
but I think the stock might be a little ahead of itself, just to be honest. So I did. I had
not taken gains before. I had a $19 average. I took some gains today,
just like, hey, I'm going to go and do that. I sold a set of covered calls at $75 for next month.
If we get there, I'm happy at selling at that price. If we don't, that's fine. And I have
just a couple of covered calls that are underwater at $55, which I'm fine letting go next week as
well. But I would still retain two-thirds of my position,
but basically I paid for my entire position, which is nice.
Boymath says the rest of the shares are free.
That's right, yeah.
Yeah, and this is for me, I know there's a lot of traders
and technical analyst guys too, and I'm curious what you guys have to say.
It's been interesting because when I was talking about it, there's a few others that were talking about AIR2 and have been in, but not many.
And now everybody is because, I mean, if the stock runs like this, people flock to it.
So it's, there's, everybody is focused and looking at this.
And it's kind of funny to see a company execute and go up that
fast. But like for me anyway, I see this, I don't know how long that'll hold it. And of course,
there's a price where I'd sell all of it that it would just get too silly and too stupid.
I don't think we're there. I still see at the very beginning of the year, actually late last
year, I put a price target of 70 and we're trading at 20 bucks a share. It looks like we're going to
probably smash through it, although it could take some more time.
They'll probably retrace some.
But I still think that there's material upside over the next few years.
I just kind of have to watch this company a little bit closer just because we need to continue to see them execute.
So but their position so nicely, whether it's silicon photonics, whether it's even in the memory space, although they don't have much there, there's a lot of lines in the water there.
So it sounds like that they're talking to at least two of the big three, as well as
an additional brand new hyperscaler.
So I think that they are now, have relationships developed with every single hyperscaler.
So lots of possibilities.
At this price level it feels
like you're paying for some possibility rather than just what what is almost for sure going to
happen uh but i mean that's the nature of the stock market stock um stock talk aehr that's one
we talked about a while ago burn in systems i know what i know how to say it
i don't know what it actually means are they just testing new semiconductor lines
give or take that's what this is roy what is it yeah real quick automated testing equipment and
so like the teradyne and advantage are the the big two um there's a bunch of niche specialized
players what makes air a little bit different are two things.
One is they actually show the ability to scale.
And I should have mentioned that.
Like one of the most interesting things of this call, last call, and actually at Needham, right, following the call, Gain had talked about the need to scale.
It's one of the reasons why they did their acquisition last year of NCAL for their Sonoma units, which is package level burn-in.
But there are these massive hyperscalers that are developing their own chipsets and hadn't really done enough on burn-in initially with their product runs.
So they are now realizing, hey, we need to do this.
So they're positioned on further upstream than the system level tests you typically get with the Teradyne and Avantis.
And they want to go all the way upstream to wafer level testing.
Now, there are some with some certain substrates that do this outside of air,
but not many and not as developed as air has done.
And so as basically constraints hit and as a cost of failure continues to be higher and higher,
you can move things all the way further upstream out at the wafer level. If you look at the actual impact as far as throughput, and as far
as being able to catch these errors very early, and instead of throwing out a $40,000 part,
you're just throwing out the bad decor or whatever, you end up saving a lot of money,
it makes sense. But customers don't switch their systems in the middle of production run. They do
it for future runs. And so that kind of adds to the sell cycle itself. But anyway, last quarter,
they mentioned that they could do up to 20, either Sonoma, that's package level, or the Fox XP,
which is their premium wafer level tests per month with their warehouse that they had. And
they're basically right now doing maybe one.
So that's a pretty big ramp. What's really interesting is GAIN came out this time,
and this wasn't like a headline thing. It wasn't trying to just pump the stock.
It's kind of like in the middle of their report. And he just casually mentioned it in the middle
of some other things in their earnings call. So I don't think it's to pump the stock, but he said,
hey, we have developed a relationship with a contracting manufacturer to push out these Sonoma units.
So the Sonoma units specifically are what's being used by this large hyperscaler.
It's probably Google for their entire next production run and the one after that as well.
And what's interesting is effectively this doubles their capacity again from 20 units to 40.
And these units, depending on a lot of
different factors are like four to $6 million each. You look at their revenue, they just said
10 million in a quarter. That's why the market is really excited. It's like, okay, there's clearly
the revenue is accelerating. You can see that now. And there's speculation as far as, okay,
how big can this thing get? And it's not going to be a Teradyne. It's not going to be the next
Teradyne. It's still niche, but there is a lot,
and I mean, a lot of upside,
even if, I mean, they're not gonna want
every single customer and every single client,
but I don't think it's insignificant
that Gain Erickson is like,
hey, 20 may not be enough.
And one part of that is just the conversations.
He talked about this,
well, not this quarter, but last quarter.
Customers come in, they're these large hyperskillers sometimes, like there's other smaller clients
too.
And they want to make sure that their order can be fulfilled in a timely basis, not like
some of the other niche players that can only do one a month and that's their capacity.
They want to order 20.
Well, that's a problem.
So I think that Gain is doing this in part of those conversations, just saying, hey,
these guys can do the Sonoma and Guinness for us. And yeah, there's a little bit less margin there as a result, but we need to show these big clients that we have the capacity to be able to ramp accordingly, and this did that exactly.
So there's smoke there, but the smoke signal is very strong.
strong. Yeah, for people, I think to Evan's initial question, just Evan was looking for
a layman's term explanation of what burn-in testing is, but yeah, I mean, he got a good
explanation either way, but for people that don't know, so when you're producing chips,
you need to make sure they're fail-proof, right? Like that they can undergo high heat, high voltage.
And so burn-in testing, which AAHR does,
some other companies do as well that Crossroad just mentioned,
is they do burn-in testing at the wafer level.
So you have chip wafers, which are basically plots of chips
with a bunch of chips on them.
And before you cut them into individual semiconductors,
you can do burn-in testing on them.
And that's what AAHR does.
So they expose the wafer to basically they're these specialty ovens.
You can think of them.
They're not really ovens, but you can think of them as ovens.
And they stress the wafers, okay?
And so they'll put them up to like 100 degrees Celsius,
sometimes even higher. And they'll put them up to like 100 degrees celsius sometimes even higher and
they also introduce them to high voltage and if the chips fail then you know that there's they're
not fail proof and so that's what burn-in testing is in a in a in very simplistic terms for people
that don't understand that phrase because it gets thrown thrown around a lot um but yeah it's an
interesting story i've traded it in the past many times. I've never
owned it for an extended period of time as a position because it's very speculative. I mean,
I can't wrap my mind around the valuation, right? It trades at, I don't know what it trades at today,
something like, pull it up here, 45 times sales, right? It's a $2 billion stock doing 10 million
in revenue a quarter. So yeah, if you're willing to underwrite
that level of speculation, it's an interesting story. And to Crossroads point, if they secure
one or two major hyperscaler customers, it'll transform the revenue story and the valuation
will seem a lot more reasonable. But on a trailing basis, it's obviously very expensive.
But that's how a lot of speculative stocks are. So, you know, there's a lot of spec stocks
that trade at 30, 40 times sales.
I don't own it.
I don't plan on owning it,
but yeah, it's an interesting story
and it's obviously up a lot today.
And there's a lot of speculators
that really like that story.
So yeah, that's in a nutshell what AEHR is
and Crossroads explained the details
much better than I would anyway.
But yeah, I don't really have,
I have a pretty neutral opinion on it here. Like I'm obviously not short the stock,
but I'm not long the stock either. I do think burn-in testing is an interesting
sub-segment, but it's traditionally not a very high margin sub-segment,
at least not a high net margin sub-segment. And so it's not extremely interesting to me.
But yeah, I mean, it plays a role in the ecosystem.
And if they ink more big deals, then stock will probably keep going up.
I just add on real quick.
I added the bathtub curve graphic, which kind of helps understand.
They're just trying to get the infant mortality.
So you guys can see that in the chat.
A lot of what the testing that happens right now, there's exceptions, of course,
is just to make sure that the thing turns on and works versus this is trying to get that infant mortality out of the way.
So what you're shipping out is not going to fail.
I appreciate the run through there.
Roy, what are some of the other names that you watch
and are just kind of generally interested in?
Yeah, Figure is kind of interesting too.
I had a look because FinTech has been selling off,
like Sam was mentioning, Figure Technologies.
It's holding up really nicely.
It actually performed
pretty well relative to other fintech names last month. I feel like it's caught up a little bit in
the crypto basket, even though they do lend against crypto to a certain extent, but it's like
6% of their lending, I believe, and they're growing like 100% year over year. So the preliminary
numbers came out last week. They're really robust, which isn't a big surprise.
I mean, it's off of a small base.
But yeah, this is one that I added to last week,
and I'll continue to just DCA into it.
It may not be the time to add right now, but it's very violent.
So my eyes pretty close on that one.
And Nebbias is one of my other newer positions too,
which I mean, Sam kind of did justice
to what's happening in this space right there.
But it's been good getting in that name
and going in heavy.
Some people call it Nebius.
I'm actually trying to guess.
Yeah, those people are wrong.
Those people are wrong.
Exactly.
I don't care.
Blot those people, please.
Yes, yeah.
We need to get those people out of investing,
or at least they can type it.
That way we can't hear it.
And I will always hear Nebius when I see it.
Those are the same people that say VWAP instead of VWAP.
Double checking.
You never know.
There's some people that do.
I'm actually trying to talk
with the team to get a good interview with them. We'll see if it ends up happening. What
about I did what I did want to ask you about fintechs. And just in general, like there's
there's a lot going on in the world. There's a lot of different sectors. I know fintech
in general is one that you're interested in. What about that sector makes it a part like
it's something that you need to make a part of your portfolio make a part of your finite capital no robin has another
one sofi are we in sofi no yeah i'm still in sofi it's going into the year i'm i'm pretty close to
break even at this point just because all the new names that i put into have done incredibly well
robin hood is our biggest position going in.
SoFi has performed poorly, PayPal and out of, but it performed poorly as well. So FinTech's in kind of a tough space right now. At some point, that'll change and the market does
tend to rotate sectors. But a lot of it's been uncertainty. Some of it's been related to the
Clarity Act. It's impacting not just crypto names, but also those that could be impacted positively or
negatively from passing the Clarity Act. And I think that we just need, the markets really
appreciate the ability to actually project things out. And in the current environment,
between that and between what's happening, of course, in the Middle East with inflation and
rate cuts, like a lot of these names do some form of lending and also understand consumer stress.
And so obviously, if we're in an environment, which I don't think that we are, I think that
the market always overreacts. But a few weeks ago, we were talking about rate hikes instead
of two rate cuts being the consensus. That's not a pretty thing for SoFi. That's not a pretty thing for really most fintechs at all.
So I continue to hold those names.
With pretty much all these names, I've taken gains along the way,
so it makes it really easy just to hold.
And I know at some point, we'll get to the other side of this,
but they're all names that are performing well.
But I'm not in a hurry to necessarily add to any of them.
I am starting to look at maybe adding a little bit more to Bitmine.
There's some relative strength there.
I don't think we're at a crypto winner,
but when I did my portfolio review a week ago,
I'm like, oh, I actually have a much smaller position
than I was expecting.
Part of that was price performance,
but I don't mind adding some and holding it
for the next couple of years and letting it play out.
But yeah, just not adding heavy to the space, focus more on like Sam mentioned, VG.
Like if we continue to fall and retrace more, I don't mind averaging up my position at all.
And, you know, looking for those opportunities of actual strength.
Like I wouldn't mind adding more to Nebius, even though it's close to the all time high.
I'd probably wait for a little bit of pullback but um i think fintech's time maybe to shine might be closer to midterms when
the market can actually look and see okay gridlock that's beautiful let's start running these names
up much like what happened with the last election what part how much of your portfolio is, do you think is in FinTech?
Like, is it like, you think it's like a third or something, or you think it's more?
It's less now, and a lot of that's due to price performance.
I would say probably 20 to 25%, 25% maybe.
I would have to double check.
Like, it's hard because the market has moved so much for everybody, I think,
over the last couple of days.
AESHR is doing too well.
Dude, yeah.
I took gains.
Well, so it's funny.
So entering the year, I allocated initially 5% up to air in my portfolio,
and then when we had that pullback in the previous earnings, I'm like, okay, yeah, I know the algos are carrying off on the numbers, but it's missing the story.
I never use margin. I never use margin. I use margin. I bought there like at 21 bucks, filled out my position, allocated up to 10%.
allocated up to 10%. And henceforth, Robinhood has continued to sell off,
era's gone up. And so it's not just my biggest position, it's my biggest position
by far. And I've taken gains on it. So it's like, I like that. It's really helped my portfolio
immensely this year. I can't have to say that. So very thankful for that one that I didn't just say, hey, let me add more to PayPal.
Hoopal or Paypal, as we like to call it.
Absolutely. I've been looking at the five-year returns and how much you would have had if you would have bought in this stock.
And there's some ugly ones.
Did you know the worst stock in the S&P 500 over the last five years?
It was PayPal.
But also on here is Square XYZ.
We got Jack Dorsey joining him on there.
Trade Desk is also on here.
Estee Lauder, Paramount Skydance.
These are some of the worst performers over the last five years.
Best performers.
We like good stuff.
We like exciting times.
Anyone want to guess what the best performing stock is
over the last five years?
Stock Talk loves when I ask him questions like this.
Is it a pot stock?
No, it's...
What was your question?
What do you think the best performing stock
in the S&P 500 is over the last five years?
I said this is your favorite.
NVIDIA is third.
The first place is one that got added this year.
So I don't think you really think of it.
And the second one's got a center.
So is four.
So we're two minutes away from the club
you tell me, tell me the top five Evan
alright here you go, exactly
it's your favorite, Comfort Systems is the best
performer, it is up
1900% basically, then Vertive
then NVIDIA, then Lumentum
then Vistra Corp
there you go, there's your top five everybody
what were you saying Brian Lund, were you going to say we're two
minutes from the close and we're talking about this? no Were you going to say we're two minutes from the close and we're talking about this?
No, no.
I was saying we're two minutes from the close and we're inching up towards the highs of the day on the SPX, on the Dow.
A little bit off on the Qs and IWM.
But I would agree.
I don't know if Mike's gone.
But I would agree this is really good action based upon – I mean, look, there's individual names that are looking ugly like Palantir and Tesla.
But as a whole, the market holding this gap up I think is pretty healthy. based upon, I mean, look, there's individual names that are looking ugly, like Palantir and Tesla.
But as a whole, the market holding this gap up, I think, is pretty healthy.
Stock Talk put out a post saying that he thinks tomorrow, next couple of days is what really matters.
Brian, as you're getting out here in a second, what are you watching over the next couple
of days?
What do you want to see tomorrow?
Yeah, you know, it's not the move.
It's the move after the move.
And so, you know, you get the move and if you just give it back the next day, what I want to see is I don't want to see us retrace this gap very much. I would love,
ideal situation would be to go basically sideways for a couple of days, you know,
intraday, it's going to look like barcoding. I think if we do that, that's going to give us a
great level, which you can add or start positions and have a little bit more confidence that you have a safety net in
case they break below there. What's the title of today's show going to be, Ryan?
Today's is going to be Nailed It. You know, I tell people...
Nailed It?
Oh, W's...
Put a W in it.
I tell people that I'm the biggest idiot
and I call myself out when I make mistakes,
but you can't be asymmetrical.
When you make mistakes and you call yourself on it,
you also have to give yourself a pat on the back
when you hit it out of the park,
and we've really done that for the last seven to 10 days for sure.
So I'm going to take some victory laps.
I'll be using the chat.
Start with I told you so.
No, no, it's never I told you so.
It's like we do this so that you can look back at what happened.
You need a hater to call out.
Yeah, that's young, Brian.
You do this, it's a post-mortem, right?
Sometimes the post-mortem is ugly.
Sometimes it's nice.
And you're doing it so you can remember what you did wrong, what you did right.
And then next time you're in the similar situation, hopefully you can bring some of that knowledge forward.
Appreciate you, Brian.
Roy, I am curious on what the title i know you're doing a lot of live content here doing a lot of live streams a lot of different stuff in different areas what
you got any titles in mind here for stuff you're excited to make we we take some victory laps on
aehr what are some videos where we're thinking on we're cooking on where's the energy going
where's the mind going yeah i have a really fun one that's like way overdue and i think i'm gonna actually
combine two different video ideas but maybe i'll split it um so i you know i bang the drum pretty
loud on paypal and like literally every single person will have multiple l's and your investing
career that was one of mine uh thankfully uh what's happened this year so far with the new names
have has more than erased that gain uh but so i ended up uh of course selling out of paypal i
want to do just a little bit of a retrospective of like what went wrong so the anatomy of a bad
investment uh that's the title probably uh in the paypal stock in parentheses and then maybe
depending on the length i don't want to go too long in these videos. Also kind of show like, hey, it makes sense to concentrate in your core convictions.
It doesn't mean that it's going to do exactly what it did for me, but I think 40% of what I sold
PayPal and it was beaten down pretty good, went into air test systems. A good chunk went into VG.
This is all last quarter. So before the big run up,
a large chunk went into Nebius. And then I had some NVIDIA, which is basically flat.
So a lot of times retail falls in this trap where you think, even if you realize the stock that you're in is no longer really something that you want to own, it's not because of the price action.
It's because the thesis has materially worsened that
you instead say, well, I'll hold on to it and wait until I break even. But that is, you know,
I'm not here to give financial advice. In my opinion, that's a very big mistake. Because if
you see something out there that's a screaming buy, and you're holding to something that you
hope might break even in the next couple of years, that is a colossal mistake. I've made it before. I haven't made it since 2022.
So I'm not going to make that again. It doesn't mean that if I'm holding a stock and I'm like,
hey, this is a really good opportunity. The other one is slightly better. It doesn't mean I'm going
to sell everything from the one and put it in the other. But yeah, when one is like a dud and I'm
like, okay, the thesis is broken, I'm out. And I will rotate a dud and i'm like okay the thesis is broken i'm out
and i will rotate into something where i'm like hey it's just obvious and clear
we were kind of talking about this yesterday of finding those different areas and different sectors like i love a lot of names but for me this ai thing super cycle whatever we want to call it
thing super cycle whatever we want to call it just feels too real too right now for me to try it and
not have a lot of my portfolio into so it's definitely made me think a little bit more but
it does seem to be not a we were talking about this it doesn't feel like uh no offense to crypto
i want to get a little bit of crypto it's a great thing but whatever uh or like internet of things
or all these different buzzwords that have happened for the year.
This feels more like the internet or some other like really big stuff.
You don't think AI is the next NFT?
Yeah, I don't think we're in the next NFTs.
I don't think we're in the next all this other stuff.
Like the hype is real on this one.
And honestly, like humanoid robotics, I don't fully know one.
Space, I think that's a big thing.
But I don't know if there's anything with that
coming in the next decade or two or whatever it is.
Robotics, I'm less sure on.
It feels like AI and autonomy and self-driving cars
and industrial robotics feels like a thing that is here now
and feels like an obvious investment case here.
It feels hard for me to think sit down and justify other other stuff also a thought that's going through my mind is big
continuing to get bigger these mag 7 type names large companies that are dominated being able to
dominate more and maybe the chain the names change a little bit but just the concentration at the top
Maybe the names change a little bit, but just the concentration at the top.
We'll see.
I agree with that.
I think that theme is going to continue for quite some time.
This is – in many ways, it's different, but it's like the internet in that the more – the further that we go, the more that the use cases actually expand, the more new businesses are created, the more demand there is for things like infrared.
I mean, the whole thing. There's a lot of different ways to play and invest in it.
But it's I still think that there is it will have pullbacks.
But actually, I wanted to pitch a question to you guys that know a little bit more than I do as far as this.
as far as this. But going into the situation with Iran and Strait of Hormuz, the twin narrative,
which kind of killed the momentum of a lot of the AI plays at the time was, on one hand, AI is going
to eat every business out there and just kill it. And on the other hand, AI is basically going to
just drop off dramatically for CapEx. Now, I don't think either of those are
really true, but the hard thing is, and the AI does too well like a TSMC or NVIDIA, then it feeds
one of the narratives, or if it does too poorly, it feeds the other. So it felt like we were kind
of in no man's land, surrounded by landmines. Do you think that we've been long enough away from
that focus, because we've been focused more on the Hormuz and Iran thing,
for that to have dissipated or materially weakened as far as a narrative? Or is that
going to come roaring right back after this Hormuz situation is resolved and the market
takes its attention off?
So, I've got any thoughts.
Thoughts on what?
Roy, honestly, I need a little summary.
No, no, you're good.
You're good.
Roy, can you give me one quick summary?
Yeah.
So the market oftentimes trades on narratives.
And the narrative right now is Hormuz.
The previous narrative,
there could be multiple previous narrative was the twin narratives AI, which was a can't win
situation for a lot of AI names. Either AI is going to eat the world or AI CapEx is just going
to drop off and it's just kind of a bubble. Both can't be true. I think there's a little bit of
truth in each, but very little, but it made a can't win situation for a lot of AI names. I'm curious if we've been shifted our way as a market enough towards the Hormuz situation
that should things resolve there, that the market doesn't even return to that prior narrative as it
relates to AI and we continue to see names like they're doing today just continue to run up.
Well, I mean, I think today reinforced the idea of the software narrative, at least. I mean, software flush red today, right? Software and energy were the only red sectors today.
or I should say early 25 behavior,
because we actually saw the separation in the AI trade start in October and
November of 25.
But I don't think you're going to just resume 24 early 25 behavior in the AI
trade,
like in the snap of a finger markets do get easily distracted.
I will agree with that by narratives,
but I don't think the straight of our moose thing is fully behind us yet oil did
drop below 100 which is nice um and that catalyzed a lot of speculative stocks today but uh
yeah i'm not just i'm not sure the situation is over you know we have a meeting
this friday with iran you have two weeks of supposed ceasefire that I guess could be violated in theory. So yeah, I don't think like all of the potential negative catalysts are behind us. But even if they are, let's just assume that they are. Let's assume that the war is over.
You know, oil is going to find its way back down to the 80s and the straight will open up and traffic will resume at the level that it was in the straight prior.
Let's just make that assumption.
I'm not saying that will happen, but even if we make that assumption, no, I think there'll still be a level of distinction in the AI trade.
And I still think you're going to see software probably relatively underperformed. I know there's a lot of value hunters looking at software right now,
especially because in the last quarter,
we saw a lot of big gap-ups in software names
that have been neglected that had good reports.
But structurally speaking,
I think there's still a boogeyman
in the software narrative.
And I think that's Anthropic.
And the more that Anthropic continues
to release new products,
especially products geared towards software creation,
like they have with their new Mythos model,
I think that continues to be an overhang for software.
And I think today's action was really telling in IGV,
with IGV flushing red.
I think that was really telling on a day like today.
Because you would have expected on a day like today, you know, because you would
have expected on a day like today to see at least some level of short covering at the very least
in that index, and you didn't see it. I mean, you saw a little bit of green off the open, but
sellers were very willing to come in in that category, and they were not willing to come in
in most other technology categories today, especially in semiconductors and the rest of the hardware group.
So I do think there's a preference here for AI hardware over AI,
not even AI software, but over software in general.
And I think that that preference has been pretty pronounced in markets
since November of last year.
I don't think that that's going to change.
I think that if you were to have
a technology-oriented portfolio, I think a hardware-oriented technology portfolio will
outperform a software-oriented technology portfolio meaningfully over the next year,
in my opinion. We'll see, though.
It feels like the type of thing that I don't know when this is going to develop,
but a K-shape is going to come out of this where
you need both sides of this to make it valuable.
The AI model is the super powerful thing here,
but also making it valuable to people is what actually makes the money.
So these software companies have the making it valuable to people part
and Anthropic just has the money. So these software companies have the making it valuable to people part and Anthropic just has the models. But like any company can just go to GPT or whatever open
source model and make something that is just as good or build on top of it. So I feel like you're
going to see companies that adapt AI and internalize it start to succeed and do really great in software
because everything that all the tailwinds that software has been running on are
still there and are probably enhanced from this and there is probably higher revenue higher profit
opportunities coming out of this but i think it's just going to be some companies aggressively win
some companies maybe don't the market seems to be pricing in that the model companies are going to
be some very big winners here but who knows if that's going to actually happen.
But I think you're going to start to see some companies
really utilize this into their tech,
and other ones are going to get it utilized,
watch their competitors do it first.
I don't know.
I don't know what the end is.
Maybe, like...
I'm sitting here thinking,
does AI lead to a world
where there's 500 different choices or
just one that's dominant?
500 different choices in what?
In models? Not necessarily
in models. There's probably going to be a couple but like
in most of these industries.
Like just overall does AI lead
to increased competition or does it
lead to less competition and more
large companies dominating?
Like does the cybersecurity names go from 10, 20, that matter or whatever it is to one, two
or something like that? That's a good question. I think that the, you know, consolidation is sort
of the natural order of things, especially in American markets.
It's sort of how you get multi-trillion dollar companies in the first place.
I mean, multi-trillion dollar companies are not really a thing globally, right?
But they are in American markets because of consolidation.
You know, there's always going to be market share leaders.
And in America, market share leaders tend to leverage their position
because the American system allows for that, right?
And we are in a very market-driven economy
compared to even a lot of our other capitalist peers globally.
We're a very market-driven economy. And so
your stock price goes up, you raise capital at a higher stock price, you use that capital to
make acquisitions, to out-compete your competitors. I mean, there's so many stocks every cycle that
are shitcoats, that are trading at insane valuations. And then they get to these really
high valuations, they raise capital at really high valuations. And then they get to these really high valuations.
They raise capital at really high valuations
and then they buy revenue.
This happens every single cycle.
There's 10, 15 names from this cycle
that have done that, probably more.
There's 10, 15 names back from 2014, 2015
that I can remember that did a very similar thing.
So it happens every cycle. There are winners of speculation back from 2014, 2015 that I can remember that did a very similar thing.
So it happens every cycle.
There are winners of speculation in terms of their stock price that then leverage their stock price to build real businesses.
You know, one example from this cycle, which is not a stock that I own
or a stock that I particularly care for, but IonQ, for example,
had a dead business, right?
Their organic quantum business wasn't growing at all.
But what did they do?
They raised capital at a really high valuation and then started buying revenue.
And now they have some of their subsidiaries winning $30, $40, $50 million contracts, which is driving all the revenue growth for the company.
And you go down the list and all sorts of speculative themes.
There's space satellite companies that have done this, there's semiconductor companies that have
done this, so on and so forth. So yes, I think the American system favors consolidation
by market leaders. But I do think to a degree, AI will make some of the lower rung players more competitive if they can integrate it better. It's a question really of who is willing to integrate AI at scale pervasively across the business and who's willing to do it early.
doing it very incrementally. And they're looking for benefits that they can ride. For example,
Meta is doing it specifically, overwhelmingly, I should say, in their advertising business,
right? And they've seen real benefits from that. But they're not yet fully integrating it across
the company. Same thing with Microsoft. They're using it a lot for internal coding. They're
starting to integrate it into their co-pilot software, but they have yet to integrate it across the entire business.
Same thing for Amazon, right?
You're going to see Amazon starting to integrate it
into consumer-facing aspects of their platform,
but they haven't integrated it yet fully
across the other parts of their business.
Maybe that's largely because AWS
is already a passive beneficiary of AI.
But even when you take it out of the big players,
you go down the ladder
and you go to these smaller players,
there hasn't been meaningful integration of AI yet.
And largely that's because enterprise level systems
haven't really been developed yet.
Like Claude is working on this aggressively.
I would say they're the leading lab
when it comes to enterprise level systems.
But, you know,
think about
what their adoption curve looks like. Go to the average business owner and be like, okay,
how deeply is Claude embedded in your business model and your workflows? And I think the answer
is still pretty limited for most companies. So we have yet to see what the competitive
landscape will look like once AI is really deeply integrated into all industries. I think probably
in areas like financials, you'll probably see more consolidation than you will in areas like,
you know, hardware areas like semiconductor, for example. I think you'll probably see less
consolidation in those categories because there is more room for competition. And we've seen that too with these ASIC programs,
these custom ASIC programs that have been developed,
the TPU programs that have been developed by Google and Broadcom
that are now beginning to incrementally win some market share
from the GPU-heavy buyers.
So yeah, I think depending on the category, you will see more competition,
but I'm not sure it can overwhelm this sort of inertic force in markets and US markets of
consolidation because that's what US markets tend to lean into. And so I do think you'll see
four or five really big winners from AI and a bunch of smaller ones. But I do think you'll see four or five really big winners from AI and, you know, a bunch of smaller ones. But I do
think you'll have probably a couple of new multi-hundred billion dollar companies that
emerge from this in the very near future. Very near future, meaning four or five years from now.
So yes, I think there will be new juggernauts that emerge from this. And I think a lot of that
will come from industry consolidation.
And you can start to see this, like, not to toot up Nebius' horn too much or anything,
but you've also seen this to an extent in the data center category, right?
With a lot of these NeoCloud plays, like, Nebius is winning all the big contracts.
Why? Because in my view, they've been a much better integrator.
And they have the talent from being an AI company before anyone was, right?
When they were Yandex and they had a ton of AI talent in the pool and they're very, very willing to deeply integrate AI across the whole business.
Whereas a lot of these other businesses that are pivoting away, for example, like the Bitcoin miners that are pivoting to becoming data center providers, those guys have to shift a business, right?
There's inertia involved in that.
And so pivoting a business is much more difficult than being an AI native business short, I do think consolidation as a pattern will still exist in the AI industry.
But if some smaller companies integrate AI rapidly and early, I think they can outcompete their bigger peers because I think it's that powerful of a technology.
as you were talking there through amazon i think a world of uh autonomy and robotics and all that
stuff e-commerce could be a very high profitable business which right now it is high revenue, low margin. I don't know what the future of Amazon could be.
Yeah, I mean, but I think AI is more of a driver of,
as opposed to being a driver of purely margin,
incremental margin in e-commerce,
I think AI, at least in terms of e-commerce,
will just be a driver of more volume.
We're going to find better ways to present more
convincing products to people fluidly, you know, rather than having these sort of predictive ad
schedules that we've been using for the better part of five years now to do that. So,
yeah, AI is going to make that industry better too, but I think more from a volume standpoint.
better too, but I think more from a volume standpoint.
Yeah, it'll be interesting to see what happens too with the agenda commerce stuff. I still think
that's a little ways away from a meaningful revenue driver for a lot of companies. And I'm not
really positioned much in any names now since I'm not in PayPal anymore that would benefit from that.
But yeah, that's been,
it's been talked about a lot and there's so many divided opinions on both sides. Like for me,
like to your earlier conversation, are we going to see consolidation or more specialization
or are moats more accessible so there's going to be more companies? That's too hard of a question
for me to answer right now. I think that over the next year to two, we're going to pretty much know
the answer at that point.
But it's pretty impressive just how many things that there are in the market right now. Like agentic commerce is one, software is another, the Clarity Act, where if you talk to brilliant people
that are experts in the field and you ask their opinion, you're going to hear very different
answers. So some people are going to win massively.
But for me, like I'm kind of like you, Evan, right now, where the unknown, I'm like, well,
I don't know, maybe this will work out really well. Maybe it won't. I'd rather just focus on what I know is going to do well. And that's AI. So it feels easy to just like continue to invest
in the hardware side. For right now, that's where we're at in the cycle. And the rest can be speculative, and I can just wait until it clears up a bit.
Yeah, that's fair.
I got to say, when we think of the second order things, I know Stock Talk loves to talk about that.
No matter what's going to happen, these things are going to win if this industry works.
I know there's a couple ways I could take this but I really do this grid infrastructure this power all that stuff
Boy that feels like
Look at how those stocks look at how those stocks have held up. Yeah, this whole this whole two months, right?
The grid plays have gone nowhere in terms of volatility. They've all held up. Why?
Because because it's a pretty surefire thesis, right?
You need more electricity, period.
So yeah, grid is like one of my favorite categories.
I actually have another grid stock I'm going to add.
I have three right now.
I have another one on my radar to add.
I'll probably have five or six stocks
in my grid basket by the end of the year,
probably, maybe more.
So yeah, Power Grid is my highest confidence investment over the next 10 years for sure um when you say i know you kind of separate into baskets what and waiting is a tough thing to
say i don't need an exact number but where do you envision that waiting being in like a perfect world
is like a 30 basket whoa right now e and that a perfect world? Is it 30% in that basket?
Well, right now, ENF by itself, which is the largest position in that basket, is sitting at 14% of the portfolio.
The whole basket right now is at 24%, 25%. I'd be willing to bring my power card basket like to north of 35% of the portfolio.
So yeah, there's room to expand it
from where it is currently.
I mean, just my top three biggest positions alone
make up 45% of the portfolio.
Amcor, E&S, and VIAVI are like 43% of the portfolio.
And I have 16 positions.
So, yeah.
I mean, it's pretty clear where my conviction is
when you go through my portfolio and look at the weightings.
Yeah, basically.
The whole portfolio.
Except for some defense.
The grid basket really is
a function of...
It kind of is a function of AI at this point.
Although not really. Even if AI does fall off
the grid basket will take a little bit of a hit.
I feel like it would still be
an above average market compounder.
Yeah, it's like the power grid is pretty impossible to lose on over the next 10 years, in my opinion.
Now, a lot of stocks are still reasonably priced.
Like ENS is still dirt cheap.
It's up like 70% from where I bought it.
It's still very cheap.
So, yeah, I mean, I have zero qualms about investing in the power grid.
Like it'd be very, very hard to shake me out of that thesis, if not impossible, because
it's like, where is, I mean, with or without AI, everything's being electrified.
Everything's being digitized.
You need more cables. You need more substized. You need more cables. You need
more substations. You need more power
fittings.
There's no way around it
at all, period.
PLPC, which is
my second largest position in that basket,
is up like 50% this year.
ENS is up like 25% this year.
So it's like, I mean,
I don't... I never want to say you can't lose. Cause that's like, you know, I'm not saying it's free money, but it's as close to that
as I've seen in a long time.
Um, so yeah, I think if you're like an investor and you don't have exposure to the power grid,
I think if you're like an investor and you don't have exposure to the power grid, I think you're a crazy person, to be honest.
I think you're a crazy person to be honest.
But yeah, I have a tremendous amount of confidence in that.
Fun story on that.
I looked at LNG late last year.
I'm like, hey, I need to be in this.
I need to be in this.
I need to be in something energy.
And I just decided that might be a good shift.
you know,
that might be a good shift.
It's one of those where I think regardless,
like venture global,
I didn't get in next,
but next is a good solid one.
LNG.
We're talking about very different things,
but yeah,
I'm not talking about,
I'm not talking about energy at all.
Yeah.
I'm talking about power grid,
hardware,
infrastructure,
but yeah.
Okay.
Yeah.
Not energy.
energy is not a,
energy is not an investment that you can just hold on to and close your eyes.
Oil prices are very, very volatile.
And there's a supply gut in oil globally and in LNG globally that in a normalized environment will sit there.
So, no, I don't have any energy investments at all.
It's power grid.
Yeah.
That makes sense.
Yeah, thanks for the clarification.
Isn't there any you've looked into it all before, Roy?
Not really.
Not at just a glance.
It would take me some time to actually be comfortable making investment because I know not enough in this space.
So I tend to just invest in those areas that I know.
Yep, that is fair.
I don't know.
It's been an interesting one
as we've been talking about all these AIs
and gigawatts and all these data centers.
I'm just sitting here thinking,
how are we going to power this?
And I don't know.
It just doesn't feel like the long-term,
like we all know the long-term answer
isn't oil and gas for many many reasons but also just like it's
being exacerbated here like some countries have it some don't for you to have energy independence
you know there are ways to generate energy and fuel and as you look at every single technology
there's a couple things underpinning pretty much every single advancement here semiconductors is
one of them which is kind of why i've been in nvidia and held it much every single advancement here semiconductors is one of them which is kind
of why i've been in nvidia and held it for every single time and why i still feel comfortable
holding nvidia at this point whatever whatever the leader in the semiconductor space is because
whatever technology is next the recent future has told me that it's going to have semiconductors
driving it and it's going to be powered by energy and we need more it's going to be more
energy maybe it's going to be more efficient but we're just going to continuously find a way to
need more and more energy so i don't know it just fears like it feels like an area that has been
neglected and and i'm intrigued in and i don't necessarily i don't think the the investment
thesis of clean energy of it being like clean and efficient, is necessarily a thing.
But abundant energy is an important thing.
Maybe the answer is nuclear.
I don't know.
But those are just so expensive.
Yeah, I think there's a lot of answers.
It's hard.
It was pretty easy, although I didn't expect Hormuz or anything like that.
It just benefited.
But it was pretty easy to see on the short term what might do well.
But on the long term, like, I think that a lot of spaces and a lot of spaces energy are going to do very well.
But this is also a space that I've been looking into for not a long time.
It's just been like maybe three years.
And it's not like I look every single day
or anything. So trying to pick and see like nuclear, yes, is going to be an answer. But I
think like all jokes aside, like you said, it's not going to be gas and oil. I think it could be.
There's still a need for that, especially overseas. A lot of things are made from oil as well. But
just from an energy standpoint, like LNG, this is a good thing if the straightened or mousse is kind of resolved,
because you don't want to see this massive spike like what happened with the Russia-Karine war,
which could cause people to kind of reconsider if they're going to want to be dependent on LNG,
which has a fairly frail infrastructure that you can't store. Nuclear, there's certainly a push,
but it takes a long time to build that out. Coal, a lot of places are turning to coal. But I think that we might get,
especially if things continue to go the way they are with AI, to the point where the answer is
just yes, as far as energy. And yes, as far as power grid, there's just such a tremendous need
that some will benefit more, but we have not done what we need to do here in the United States, especially in taking care of maintaining our grid and improving the power.
And it's causing a lot of constraints. We haven't had major headaches yet, but I mean, I think that's almost inevitable.
and on that note uh i need to go to my next engagement but uh thanks for having me on
really appreciate talking to you guys shout out to roy you should make sure you're giving
roy a follow there's a lot of awesome stuff on x also hosts some great live streams and live
content go check out his YouTube
page. He's awesome. I appreciate
you, Roy.
Likewise, Evan. Take care. Have a great
one, sir.
Interesting times. Interesting times.
Alright. I was trying to think of the question. i feel like i had a good question in there but we lost it as we just transitioned so it is what it is
what's up logical how you doing sir
how's it going doing well you in the gym? Yeah. Yeah.
I had to do these during the lunch hour.
What's today's workout?
And then tell me, what are you thinking on this market?
You in any trades right now?
Yeah.
Yeah, I finally put on exposure.
I think it's necessary.
I have long exposure.
So I cut a few things by the end of the day if i felt that they were way
too weak and i just didn't like how they acted but um yeah so i i'm much much much longer than
i was before i mean that's not saying much because i was basically 100 cut so uh yesterday before the
ceasefire i figured when the pakistan dude was talking that that was the a good sign of the
escalation because he's on the iran side first time i've heard someone from the iran side I figured when the Pakistan dude was talking that that was the good sign of de-escalation
because he's on the Iran side.
First time I've heard someone from the Iran side.
So I took on some exposure there.
Obviously, market tripped after that.
But I put on a lot of exposure this morning.
I absolutely got stuffed on a few things that I bought.
I guess my logic here is, you know, if this is going to be the beginning of a uptrend,
then, yeah, I'm not going to really pay too much attention to one to two day things.
But there were a couple names that, you know, I think Stock Talk mentioned earlier,
like software that were really weak.
Like Microsoft is a name that I added yesterday and, you know, it was up nicely,
but then literally went straight to red.
Yeah, I figured if the mags took us into a pullback,
if they led the correction, then they could lead us on the way out.
But while, you know, Amazon and NVIDIA met us,
stayed strong, Microsoft definitely not.
So still very much in the IGV narrative.
So I cut that.
I cut a few other names that just weren't acting as well as I'd hoped,
holding up as well as I'd hoped.
They faded throughout the day.
So yeah, so I mean, my take on the market is just,
I think that this would be probably the beginning.
I think the correction might be over.
And that's my just general thought.
Because, you know, while there is still volatility ahead
and there's headline risk and, you know, all sorts of things.
At the end of the day, you had a de-escalation event, right?
So I think that's an important part is like people are always waiting for like the next shoe to drop.
But if you think back to what happened during tariff stuff, the market bottomed whenever we had a tariff delay.
And every bear came out and said, it's just a delay.
It's just a delay. It doesn't
mean anything. That means in 90 days, it's all going to go back. Guess where the market was 90
days later? It was way higher. So I think the ceasefire is a delay that is going to give them
time to come up with a longer term deal, which is exactly what happened with the tariffs.
So I've just been generally looking for
not necessarily good news,
but less worse news.
I mean, think about it.
This dude was tweeting yesterday saying
he's going to kill an entire civilization.
I think pretty much anything that comes after that
is probably less worse than that.
So a de-escalation is what happened.
So do I think that it's going to go straight V-shape?
No, not necessarily.
But this is one big fear off the table, oil back below 100.
I'm not saying it's going back to 70.
There's structural things that change.
But the NFP print on Friday is actually what got me incrementally bullish
was that we had a really good jobs print.
And I was expecting after the February print
that we would get a very bad March print,
which is why I was mostly in cash.
I'm like, if you get a second bad jobs print
while oil is high and we're in a war,
that is really bad because that can't cut rates. But when you get a second bad job sprint while oil is high and we're in a war, that is really bad because that can't cut rates.
But when you get a very strong print, it tells you that,
oh, okay, the consumer is not entirely screwed.
The economy is not entirely screwed.
That means that even if we have higher oil prices,
the market can basically digest this for a little bit longer.
So that gave a little bit of room.
I mean, look, if we had a negative job sprint on Friday,
Monday morning would have been very bad in my view.
So two points make a trend.
You didn't get two points.
It disrupted the trend.
That got me incrementally bullish.
Then if you looked at like kind of like
advances and decliners,
you saw that individual stocks stopped going down. So even though the index was still looking weak individual stocks potentially
already bottomed so there's enough indicators that make me think hey this this might actually
be the bottom and then the um yeah the de-escalation yeah i think it's not going to necessarily get
necessarily get worse from here which is all that really matters i think the next thing that'll come
worse from here which is all that really matters i think the next thing that'll come into play is
into play is are we um you know are we gonna now folks shift our focus through the you know
economic issues right like labor market slowing growth etc that's fine because now the fed can
cut rates you know you could tell me oh but you know inflation will be high they can't cut rates
yeah but there's less uncertainty now because the oil thing will be
a shock. And we know what comes after oil costs, typically like demand destruction. So we know
that CPI should theoretically go down over time, if the oil like if the war does not reignite,
which I don't expect it to. So yeah, I mean, oil shock, demand destruction, okay okay the economy is weak, we have rate cuts.
So to me it feels like this could end up being like climbing the wall of worry
and I feel like the worst is behind us.
I don't know if that'll be famous last words.
Again, if they just you know violate the ceasefire and start up the feud
then all bets are off but that's just not my base case.
but that's just not my base case.
Stock talk.
Have you been monitoring the situation?
Any thoughts that in?
We were talking about some other stuff.
How monitored do you feel like the situation is right now?
How monitored do I feel like the situation is?
How closely is your monitor? Yeah, okay. How closely are feel like the situation is uh i mean is your and your monitor
yeah okay how close to the situation right now i mean i mean the only thing that matters is the
straight opening up yeah all this other stuff about like whether we're still gonna bomb them
or whether israel is gonna do something or whether like you know hezbollah is gonna continue to be
attacked it's all irrelevant.
The only thing the market cares about is the flow of energy and energy prices settling and, you know, giving a tailwind to stocks.
That's all the market cares about.
Rate cut expectations have been a volatile mess for the last six months.
I think the market has become sort of numb to volatility and rate
cut expectations. I think the market sort of expects that we will eventually get cuts. I mean,
even if you look at the Fed minutes commentary today, they said many members said inflation
might become a problem because of energy, but most members said that the war is more likely to have an impact on
the labor markets. Now, if the latter happens, and that seems to be the majority opinion of the Fed,
that's a tailwind for cuts, not hikes. And so if the position of the Fed where we stand today is
that the war is a bigger threat to labor than it is to inflation, then you have your answer there.
And it goes back to square one, which is, does the strait get opened or not?
And today we had, what, 20 to 30 ships flow through?
I don't know, depending on the sources you looked at.
Prior to the war, I think we had 120 going through the strait a day.
You need that to normalize to some degree.
If you want oil to stay pinned down here,
really you want oil to float down back to the 80s is what you really want to see.
But today's move was good.
I mean, the other good thing about today was that the S&P 500 didn't fade into the close.
That's another good sign.
Now, does it mean it's all over?
You could just buy everything
and you're gonna get 12 gap ups in a row?
But structure has repaired on the indexes.
It would take a very negative catalyst
to bring us back below the 200 SMA,
in my opinion.
And when you go back to other market corrections,
go back to last April if you want, which was really a flash crash.
But even if you look back to just general corrections, 5%, 10% corrections, you do not often see a 2.5% gap up to reclaim the 200-day moving average.
That just doesn't happen.
If somebody wants to give me an example where that happened, I would love to see it. But in my memory, that doesn't really happen. If somebody wants to give me an example where that happened, I would love to see it. But
in my memory, that doesn't really happen. I mean, I can go scroll through the charts right now to
make sure, but that's just not a characteristic of bear markets. What is a characteristic of
bear market counter trend rallies is rallies into the 200-day that are rejected.
And that didn't happen today.
If today we had moved up, I don't know, half a percent and then faded into the close and fell back below the 200-day,
that would have been a different story.
Instead, we gapped up 2.5% and the S&P 500 held the move into the close.
I don't know if it closed at the highs, but it closed pretty strong.
And a lot of individual leading stocks closed pretty strong.
That's the market telling you that it believes what's going on for now, which is de-escalation.
And it also, I'm hard pressed to believe that the White House was celebrating this as a victory last night and then would want to just
return to the war. That seems odd. I mean, the press secretary came out last night and said,
this is a victory, right? They're already selling it as a victory to the American people. It would
be odd now to say, well, actually we're going back. Nevermind. Now, if you want to be completely balanced here, it is, I guess, a little bit of a concern that U.S. forces have not left the region.
Now, you could say, okay, they're trying to stay there to ensure security or whatever, but that does leave it sort of open-ended as far as further conflict is concerned.
further conflict is concerned. And obviously you have a wild card in this situation,
And obviously, you have a wild card in this situation, which is the Israeli government.
which is the Israeli government. And if the Israeli government decides that their interests
have been compromised again, they could very well resume hostilities and that may drag the
United States back into the war. Now, Trump, I don't think wants that. If I had to make some
sort of calculus here, and I'm not in his head again, so I don't
know for sure, it would be that he thought this would be a quick operation. He thought this would
be a Venezuela type of operation where he could just cut the head off the snake and be gone in
a few weeks. And then he realized very quickly that the Iranians had the ability to hold the
global economy hostage. And so he looked for an exit ramp and he got one through the Pakistani
prime minister yesterday and he took it. And so, I don't know, Trump historically isn't the type
of guy that takes an off ramp and then jumps back on the ramp. He's just not historically that type
of guy. I mean, last year's tariff example is a good example of that. It's not completely analogous
to the situation, but it's a good example of that. If you go back to his first term, for those that
were trading back then, for those that remember his first term, he wasn't like that then either.
You know, he has things that he's willing to die on a hill about. And then he has other things where
usually what happens is he looks at the market reaction and then decides if it's amenable or not. And in this case, he realized pretty quickly
that this situation was not tenable for the market and backed off. So yeah, I do think this
was a pretty convincing move for the market today. Do I think the markets are going to be green every
day for the next 10 days? No, probably not. I think you're still going to have headline-driven volatility. I think you'll probably still have
some fake-out moves. I think you'll have some flushes to scare people out. But today was a
index structure repairing candle by all measures. And that's a good thing. So I'm not a market
predictor. I'm a market reactor.
I've always lived by that philosophy.
It's served me very well.
And I'll continue to do that.
So I'll react to the situation as it develops.
But in terms of how closely I'm monitoring the situation,
the only thing I really care about is does the flow of oil resume to normal levels in the straight?
And I think if it does
over the course, even if it takes a few weeks, even if it takes a month, I think if the passage
of oil returns to normalized levels in the straight, I think markets will like that. And I
think you probably can continue an uptrend from there. But that doesn't mean everything's going
to go up. And I think some people have a mistake perception of that, like just because the markets are going to resume an
uptrend or maybe even on a gap up to like today, a lot of people thought everything would be up.
Not everything was up. Software was still down. A lot of names faded to red intraday.
And so you have to be cognizant of that. Even if you rewind the clock to before the conflict,
that, you know, even if you rewind the clock to before the conflict, you know, you ask yourself,
like, there were weak stocks in that environment, right? There were a lot of weak momentum stocks
in that environment. There were a lot of weak software stocks in that environment. There were
a lot of weak AI stocks in that environment. So you can't just assume that just because the markets
are going to turn around that everything is going to turn around. But I did feel good about today's candle.
I mentioned this earlier.
I didn't go out and add a bunch of stuff today.
I upsized MITK.
That was it.
Outside of that, I didn't really add anything because I have more than enough exposure.
I was 96% long going into today.
So yeah, I feel comfortable where I am.
The portfolio, the cushion on the year continues to increase. I have a lot of cushion on the year now, you know, I'm at 62% year to date. So I feel very comfortable, regardless of what happens. But I did want to see something like today. I did want to see at some point, a reparation of index structure. And we got that today.
of index structure, and we got that today.
I'm not a complicated technical analyst.
I don't use Fibs and Bollinger Bands and MACD and RSI.
I don't use any of these things.
I just look at a chart with volume and moving averages,
and I ask myself, is the incremental buyer willing to pay more?
That's it.
That's what chart reading boils down to me. And I don't ever make it more complicated than that.
I haven't made it more complicated than that in the 15 years I've been trading, but I've never
needed to do more than that. And that's partially why, because I think once you monitor structure
and you ask yourself the question over and over again, is structure fine, is structure fine, is structure fine? The answer to that is yes, then you can play ball, right?
And to me, doing well in markets
is about answering that question repeatedly.
Is it okay to play ball here?
And if you're in a market environment
where the indexes are trading above the 200-day,
I think you're in an environment to play ball.
If you're in an environment
where the indexes are trading below the 200-day, I think you're in an environment to not play ball. It's really
that simple. I think people overcomplicate it dramatically, especially on the TA side. People
really overcomplicate it. I see so many squiggly lines and insane chart drawings all the time
that sort of make me scratch my head because I wonder when I look at that stuff, why do you need all of that noise? But yeah,
today was an index repairing candle. Most stocks did well today. The stocks that didn't do well
today, you probably stay away from. And over the course of the next few days, whether the market's
green, red, or sideways, you will begin to see distinguishing action. That's what happens. When you get a big inflection candle like you got today,
you don't just see that action for the next five days straight.
You're not, tomorrow, whatever happens,
whether the market's green, red, or sideways,
you are not going to see every stock that was up today up again tomorrow.
That will not happen.
I can guarantee you that.
You know, if the markets are green again tomorrow,
what will happen is,
is the weak names that were bought up indiscriminately today will probably rest or pull back.
And the strong names, the market leaders that gapped up today above their moving averages,
will probably see continuation. That's what happens when you have real bottoming action.
So we'll see. We'll see how it pans out for the rest of the week. But yes,
today was an incrementally positive sign. I don't know how else you could paint it.
But there are still concerns in the backdrop. There is still the concern of will Israel continue to want to fight? Because if they do, that could compromise the ceasefire. And there's also still the question of,
will the strait, even if it is reopened,
resume normalized levels of oil and gas flow?
So those are the two big questions.
Will Israel re-exacerbate the conflict
and will the strait actually normalize
in terms of the amount of volume that's going through it?
If the answer to the first question is no and the answer to the second question is yes,
I think markets will continue to rip.
But if either of those situations don't pan out as expected,
that will be, I think, sort of a conditional disappointment to market expectations here.
Because I do think, based on today's move, with oil falling 16% overnight,
markets gapping up 2.5% across the board.
That to me is the market saying they expect the strait to resume normal traffic and they
expect Israel not to exacerbate the war.
So that's what I would consider the market status quo expectation.
And if either of those, the needle moves on either of those things, you probably
get a pullback. So that's how I would think about it here, personally at least.
What's up, Will? How you doing, sir?
What's up, everybody? Good afternoon.
I'm out in the fun Southern California weather.
It's 97 out here today, so it's hot.
So I'm spending a few minutes inside with you guys.
But I agree, like, Stock Talk is a very good point,
is that, like, we're probably past, like, the peak volatility.
And I think if you look at the administration
in the last couple of weeks,
even the last 10 days,
and you just say, okay,
their headlines are getting,
you know, they get ramped up.
It looked like Trump's looking for some type of off ramp.
He got it yesterday.
He took it, you know,
unless this blows up again,
where he says, okay, they violate the ceasefire. We're going back in.
We're going to decimate them. Unless you get that type of rhetoric,
you're probably past peak volatility. I was talking about this with Ryan,
I think late last week. I kept saying the VIX peaked on March 9th. And when we made new lows
a week ago, a week and a half ago, down to 63, whatever it was, 6380, we never made a new high in the VIX.
So there was, you're making a new low, volatility's not going up.
And you're like, okay, we had the peak of the VIX a couple of weeks ago and we're not getting that now.
So I'm like, it just feels like somewhere in here, you're going to get a bounce.
You started seeing small caps start to outperform the last handful of days here.
That was one sign.
I watched credit like HYG, JNK, those in the last four or five, six days, never made lower lows.
That's another sign.
So you're like, all right, there's probably a bounce in here coming on some type of news event.
And obviously you get it yesterday, right? Now, the question is, where are we in relation to the, at least from a short-term technical
trading perspective, we're right at a, where we kind of broke down from, which was 67.75,
6,800 in the S&P.
So to Stock Talk's point, it's like, are we just going to rip higher from here?
You know, another two, 3%, we just keep gapping up.
I don't think so.
I think you could probably got some type of backing and filling.
Maybe go fill the gap that we've left, which is pretty big as possible.
Sure.
But I think the focus now is going to be, what do the earnings look like?
What is the guidance going forward from these companies?
Can they guide?
And to Logical's point is, do we start to see some type of demand destruction
in the economy that's starting to filter through? Because here's the point, oil's 96. It's not like
it's 50. So yeah, it's not 117, but I mean, hey, I'm out here in Southern California, I've seen
diesel for 829. And it's been like that for three, four weeks, and probably going to continue for
another three, four weeks, not just going to come back to five bucks. So I think there's some risk to the economy that's
probably going to filter in. And I think that the narrative will start to turn to what does
the economic data look like? What do the earnings look like? And what is the guidance going to tell
us going forward? And how do these companies guide for the foreseeable future? Do they start to
not give great guidance or they say there's uncertainty or they don't know,
which they'll probably use that as an off-ramp
if the earnings aren't that great or something like that
because they're getting basically a freebie.
But I think we're probably past some of the peak volatility,
but I would expect as we go forward,
we probably get some two-sided action
where maybe we just stay kind of in a range for a little while
until things calm down further, the VIX comes down further, and then we get a clear direction,
a trend, or we get some strong earnings that catalysts higher. But all you've done is basically
move back to the level of which we fell from. So there's a lot of overhead supply here.
And the difference from last year, I just
bring this up from a structure standpoint. Last year when we had the tariff lows, we rebounded,
we went fast. But the difference is when you look at the chart for the past six months and you start
really looking the fourth quarter into the end of the year, we spent a lot of time distributing
where we didn't do that as much in the tariff time, where we went February,
March, and we flashed down and then we come back. We spent a lot more time in this upper 68,
6900 area where there was a lot of distribution that happened over a longer period of time that
we didn't get this time. So software was terrible today, like these guys are saying. So I still
think you got to pick your sectors.
I mean, look, Meta had a huge rally.
That was down to 517.
That went up to 630 today.
That's a massive move in a couple of weeks.
So I got to think there's got to be some consolidation,
maybe some digestion here that we go forward.
But I still think in the next few weeks,
maybe the next month or whatever it is,
we get into the earnings.
I just think it could be kind of more of a choppy market and maybe we get some headlines to the downside. But if we don't take
out the most recent swing low, 6,400 or whatever, that's probably your bottom and potentially we
could trade higher. But I think you just need to be nimble and pick the right stocks and
trade accordingly. I think that's kind of my thesis for now
sometimes for the record i do just like to leave a long pause thereafter if anyone wants to just
jump in i find spaces to be the best when we kind of just go across.
But in general, we're getting close to the top of the hour.
As always, on Spaces, we're live.
Our stocks on Spaces, we're live Monday through Thursday,
3 to 5 p.m. Eastern at least.
A lot of times we have friends of the show,
different sponsors, stuff like that. Join us here after five.
Our goal is to create as much free content as possible,
create as much free value as possible.
We all do different stuff.
And then to do that, we work with really reputable people
doing interesting stuff in the space.
We got Adam, Patty, and Vista Shares coming on here in five minutes or so.
I am excited for that conversation.
We're going to talk more about the grid, probably.
My guess.
I'm excited to talk more about the grid and have some of their insights.
They have a team.
I won't dig too much further into it.
Make sure you are following the speakers.
I do appreciate everyone for joining in.
It's a fantastic crew of people.
Shout out to Ryan coming in from the Wolf Trading Livestream.
We're going to be talking about VistaShares in a little bit here.
Shout out to the speakers.
Shout out to Roy, who is up here as well.
One of his tweets is pinned up in the nest above.
That's a great first part of the conversation.
But yeah, what's up, Ryan?
How are you doing?
Doing well, Evan.
How are you?
I am doing well.
I am doing well. It was obviously a green day a wonderful day we were actually live on a call last night when everything was uh going down
but um yeah it's it's a good day yeah good day um i agree with a lot of what i just heard out of
will who's the first person i listened to. I mean, today you find opportunities to strong gap up tape. What holds? What are people buying?
What are people not touching like Tesla? Goodness gracious. But relative strength,
I mean, Paper Gains came on our stream this morning and he talked about that. He said, look, I'm looking for stocks that are strong within this tape. And, you know, we inevitably probably going to pull back,
retrace a little bit at some point. Then you find out if we're holding, but you look around and you
see what's strong and what's relatively weak. If the market starts coming back in,
stay short the stocks that are weak or don't buy the stocks that are weak if you don't have to short them.
But look for the ones that are strong.
Look for ones that are making all-time highs, like Adele today was on the all-time.
Did you ever get that all-time high list, Evan?
I was curious.
I saw Dells do it.
52-week high was what I did today.
Dell's on there, SanDisk, GE, Renova, Planet Labs as well,
A8OI, I know that's a watch one on here, GE, Vernova, Planet Labs as well.
A8OI. I know that's a watch one on here.
Warning, but not too many names.
Lumentum.
Yeah.
There you go. Planet Labs, there was some chatter around that one.
These space talks,
Rocket Lab, a lot of people talking about Rocket Lab.
Seem to be a lot of
interest around that volume, options volume as well.
I don't know. We'll see.
It sounded like somebody probably mentioned IGV today.
Put that one in the Tesla basket as well,
where IGV software stocks were just, I mean,
down 1% while the market's up 3% is pretty crazy.
Pretty telling on top of that as well.
I mean, you look at some stuff like CRM, Salesforce,
just getting wrecked today.
Adobe not doing anything, being red on a day like today.
I mean, those are the stocks that I don't even want to touch.
Now, Palantir is interesting because people bid this up on the war narrative.
So it's selling today was not as shocking to me.
So I kind of almost give that one a pass.
But I don't know.
We'll see.
It's to me today.
I mean, you don't look past that.
We've got good news overall.
There's going to be some counterpoints and some bad news.
Obviously, we saw that post come out
with some of the rejections
to a couple of points and stuff
within the ceasefire.
But you're going to have
some of this negotiation stuff
going back and forth.
I think the full plan is for them
to meet in Islamabad,
I think as soon as Friday,
the negotiator side of things.
But either way,
things are going in that direction.
Are you going to get the counter headlines?
Yes.
But I think you don't miss that the big piece of this headline was there's some type of negotiation and work towards a peace deal and towards opening the Strait of Hormuz.
So we can celebrate that.
What tells me more is what happens after this.
I mean, I think Stock Talk has mentioned this a few times here on this space.
Several other speakers have mentioned this.
You're looking for good news like this to pop you out of kind of that drawdown.
And then what happens next is the most important part.
So that's what I'm waiting to see.
And it could be the next few days.
It could be another few weeks.
I mean, I was talking this morning with Paper Gains and some other traders.
This could be a gap that we never come in and fill, at least not anytime soon.
It could happen.
It could take three weeks to come in and fill it, or we could be filling this gap in two, three days.
So it would just be interesting.
But retaking all the moving averages, now do we come back and hold them?
That's probably the main watch for me on a lot of things.
But I like it.
I like the fact that we didn't just sell off today, that it kind of just held in here.
But to me, I don't put much weight into today's action.
I put a lot of weight into what happens after today.
Fair enough.
That is what has been said on this basis.
It's funny, Stock Talk said the same thing earlier
when you guys weren't
separately.
I feel like that probably happens
pretty often with a lot of the points.
Not just things that I make, but
just points in general
from different people around here. I saw one of Stock Talk's
names getting absolutely bid like crazy today,
by the way.
Of course.
MTKI or something.
Oh, MITK?
Yeah, I added some.
Yeah, yeah, that one.
It was like it hit the squawker at one point.
They were calling out like unusual volume or something on it.
That happens now, unfortunately.
Yeah, it was funny.
I heard that.
And somebody came in my chat and was like, hey, have you seen this name today?
And I looked, I was like, oh, wow, yeah, that looks great.
And then somebody else in the chat was like, oh, that's a Stock Talk name or whatever.
And I was like, yeah, that makes sense.
Well, obviously, I see it in the Discord, but I'm not going to just jump out there and say it.
Let somebody else, you know, put that out there.
But it was a good day for some of those names. Yeah got the squawkers 16 names green today i mean obviously tesla was
red but i mean it's barely any my portfolio now it's pretty crazy how much tesla has reduced in
size in my portfolio i mean my portfolio is up 18 or almost 1900 now in in two and a half years so
tesla has just gone from being like a eight percent weighting to being a one percent weighting
so it doesn't really affect me when it's red but that was the only name that was red today out of
the 16 spots that i have
irdm was somehow green again today which was surprising to me
that's like my only options, only position I have.
I thought that would be red today because of the defense relationships that it has.
But a lot of defense names actually were still green today, which was kind of interesting.
HII was green.
IRDM, Kratos.
So my defense basket did well today, which I was surprised by.
I thought at least those names would be read with a DS collection.
You know what I was going to say?
Sock Sock around that,
because that was one thing I was looking,
if you look at the different thematics
of the market themselves,
because obviously software has been a weak spot
in the market for the last little bit,
but the things that were strong,
so a lot of these defense names,
memory stocks, for example,
some of these other pieces of, I mean, the grid, different things around that, data centers, I guess, in some cases
were. But to me, the hotter sectors of the market, the stocks that have been strong, the thematics
that have been strong were very strong today. I mean, I looked at industrials that I think have
been pretty strong. You look at Caterpillar and John Deere with massive days today that charts look really
good still in these uptrends.
And then just the general thematics.
And I thought about your portfolio construction during the middle of the day.
I was just going through charts and I was like, boy, these are the sectors that I'm paying
attention to when these are the ones that are bouncing the hardest and showing the strongest
pieces of the market.
While you have things like IGV
that go red on a day like today.
Where do you want to be?
I want to be in those type of names.
Yeah, you definitely want to pay attention to the strengths, especially on these balances.
I think if the market can hold up these next couple of days, you'll probably see even more
distinction between those leaders and laggers because a day like today, I tweeted this earlier too, you're going to see some level of indiscriminate buying.
I mean, there were names that were up today that have been pretty weak in the last couple of weeks.
And so I think once you get, even if you don't get follow through, like if you don't get a big
continuation candle, I think if markets can just hold into the end of the week, and obviously we
have CPI on Friday, so that's another catalyst on the table, but if markets can just hold into the end of the week, and obviously we have CPI on Friday, so that's another catalyst on the table, but if markets can just hold into the end of the week,
I think that you get a little bit of a clearer picture on where the strength is.
It's tricky on a day like today to look around and be like, where's the strength? Because there's
so many names up 5% to 10% today that don't necessarily all have great daily charts. But tomorrow,
Friday, you'll get some more distinction where we can kind of look at a basket of names and say,
okay, this is strong. This isn't. This is strong. This isn't. This held up. This held its gap up
from Wednesday. This one didn't hold its gap up from Wednesday, so on and so forth. So that's kind of what I'll be doing for the rest of the week is just picking through the names I am interested in.
And an easy way to do this if you're like a newer trader is just make a watch list of like, you know, if you're interested in buying, let's say, 10 stocks are on your radar.
I don't think you should ever have more than 10 stocks on your buy radar, but maybe 10 or 12 or whatever.
Make a watch list and then notate where you'd like to get an entry
or where an ideal entry would be for you,
flat against the moving averages or whatever your style is,
and monitor them this week.
And if you see an opportunity that you can snipe, go for it.
And if not, then opportunity that you can snipe, go for it.
And if not, then just wait it out. But I did notice a lot of people today just chasing like 12%, 13% gap ups, which I get it's tempting to do when you see an inflection in a market like this.
But I don't think it's an incredibly wise decision to make over and over again.
You want to be as disciplined as possible with your entries.
Ideally speaking, and this doesn't always have to be the case, but you want to buy when a stock's red and sell when it's green, not the other way around. And I think a lot of newer traders do the
opposite, right? Where they buy gap ups and then sell gap downs. And that's not a really productive
way to build performance. So I think keep your eyes out for the rest of this
week. If there's stocks you want to buy, just watch how they act and then respond to them
appropriately. But don't get ahead of yourself either. I mean, I don't think we're completely
out of the woods in terms of this headline-driven environment. There's going to be plenty of
headlines. There were a lot this morning too, a lot of potential shakeout headlines this morning.
People saying, oh, well,
we're closing the strait. Israel broke the ceasefire. The market didn't give a shit.
The market held up very well in spite of those shakeout headlines. So you're going to see more
of that. You're going to see statements coming out from the IRGC, from Israel, from Lebanon,
and so forth. And so it's going to be really, really easy to get
caught up in the narrative. I think as much as you can, you sort of, I won't say ignore the
narrative. You don't ignore what's going on, but you try to block out the noise and just pay
attention to what the charts are telling you. And if the market can keep this structure repair that
it pulled off today, that's bullish. If it gives it all back,
that is a concern. Now, there is a gap below. Somebody mentioned that earlier. There's a gap,
obviously, because of this big move that we had. I don't think it's completely necessary to fill it
because we have been in this price territory before. I find it less important. I mean,
most gaps get filled, but I find it less important
to fill gaps when you've already been in that price territory, right? And so you've been through
this range before. S&P 500 has lived through all the levels of this range. So you don't have to go
all the way back down, but you might nonetheless still see a little bit of a cool off just because
it was a really, really big move. I mean, today was one of the biggest moves in the markets we've seen in a long time.
We got a simultaneous 200 SMA and 50 SMA recapture on the S&P 500. I would have liked to see a
little bit of a bigger volume move, but we did get enormous volume on that first gap up candle
on the 31st of March. So maybe that's where, you know, the real bottoming event was.
But I mentioned this earlier too,
and maybe we weren't here for that,
but it is rare to see really aggressive recaptures
of the 250 when you are headed for a deeper correction.
You know, usually we would have gotten stuffed
either at the 200 or the 50 on a candle like this,
and we didn't.
So that's encouraging.
But I think you have to stay measured still and understand that you're probably going to get more volatility, even though the war, I mean, I'm not saying it's over.
Maybe it's over.
Maybe it's not.
Whether the war's over or not, you're still going to get some headline-driven volatility.
That's a hallmark of Trump administrations.
For those that traded the first one, I'm sure you guys will remember
all the headline-driven volatility back then.
And obviously we had a lot of it last year as well.
So you can't just write it off and say,
you know, everything's good now.
You're not going to get any more volatility.
You probably will see a lot of volatility still.
You just have to stay measured,
stay committed to your high conviction names,
understand what you're looking at
when you're looking at the structure
of those conviction names
and work from there.
So, yeah.
It's almost like, to your point,
it's almost like I think the market
is more concerned with,
even we got those headlines today,
it's almost like they're really more concerned
about Trump's rhetoric
and how he's either ratcheting up or rationing it down. And I think the market
kind of looked through some of the stuff and said, okay, look, Trump's in the last week,
we look at yesterday after he ratchets it up and then kind of takes the off ramp to
look for a peace deal or negotiation. I think he's probably the biggest wild card in the whole thing
is that if he's cooling off, the market probably suspects that, okay, Trump's going to cool this off.
There may be some volatility to your point, but it probably gets worked out over time.
And the end of the world is not going to be here.
We're not going to World War III.
So I think the peak volatility is probably past unless we get some type of headline from Trump that says we're going in there, you know, absolutely obliterating them. They broke the deal. But I think that's a probably
low probability risk at this point. But yeah, like the gap thing too, we got a gap down. I think it's
like 6620. It doesn't have to be repaired, but when you get a gap up, like you said, over the
200 period, that's very strong like that, maybe the test, if we burn
some of this off, would be go test the 200, see if we support there. And if we get some nice
responsive buying that comes in, then maybe that gap holds for a while and it doesn't necessarily
have to fill. So I think probably majority of the volatility, I would say for now, probably looks like it probably will be behind us.
And the volatility that I think that could come
will be, again, from the other stuff
that nobody's been paying attention to,
which is going to be earnings, guidance,
and what's the economic data look like
going into the second quarter.
I think that's going to be a much more important thing
that comes to the forefront of the market.
So I don't know.
I think we're – the other thing too is I think at oil at this point, the fact that we didn't take out a couple Sundays ago's highs and we got close yesterday.
We hit 117 and change.
and change, and we never took out that 120 level to the upside.
And we never took out that 120 level to the upside.
I would have to say I think probably we're at peak oil unless, again,
the rhetoric ramps up.
But oil's probably going to get faded from here because if they do cool this off,
oil is probably going to go back into the 80s.
There will be some premium that stays in oil for probably a little bit of time,
but I'm going to be in the camp probably for the rest of the year where I'm just
going to be probably selling premium, upside premium in oil for the foreseeable future as
it's probably past the peak. Just like we had Russia, Ukraine, when they invaded there,
oil went to 130 and then it went lower for two years after that.
So I think that's probably the play.
And if you're in energy names, this is probably, as you see, some of those names got faded.
You probably look to rotate out of those into stuff that's got better opportunities for upside.
Yeah, and I know you want to jump in, but real quick to that point.
Today was the biggest single-day drop in oil since oil peaked in 2020.
So, yeah.
I mean, I'm not saying it's a direct analogy, but it is the biggest one-day drop in oil in six years.
Anyway, go for it, Em.
There's a couple things to point out here as well.
And it's probably you mentioned at some point, but you look at today's gap up, we gapped up back to where basically we were when this whole thing started.
The 28th of February, I think, was a Saturday. If you look at where we were trading, whenever conflict started, that's where we came right
back to. So like Will was talking about kind of the distribution area up here. If you look at the
lows of February, the lows of January in SPY, that's exactly where we closed at today, right on
those. We're trying to reclaim those. You have to watch for reclaims as much as you watch for just,
you know, straight up rejections, support rejection zones.
But we're right back to where we were before the conflict started.
So in the market likes overshoot.
So I think you kind of have to grain of salt that a little bit.
There's also, and of course, you can say statistics, you know, you could cherry pick whatever you want.
I did see one that was interesting.
But gapping above both the 50 and 200 day moving average simultaneously is a very rare thing. It's happened four times since 1950. In every instance, the index faced significant pullbacks
shortly after. So what I'm looking for based on that, you know, data set now for occurrences,
isn't that much. It's a rare event, whatever, but going with that and just looking at it,
I expect maybe some rejection here.
Come back in, hold those moving averages,
maybe even undercut them
and act like you're going to fill the gap,
fill half the gap, something like that.
Hey, that's great.
I loved what you said, Sock, talk about.
We have traded in this range.
Not only have we traded here recently,
but we've traded here multiple different times.
This area, this gap area that we have, we traded here all of September, a lot of October and into November. So there's been a
lot of historical positioning in this area for this gap, which makes it much different than
a gap up like we had back in October when we were gapping up into new all-time highs.
Price discovery, much different than historic price. Also, if you go back on your chart,
you'll see there was gap ups back in May
coming out of the tariff lows that never got filled. They don't have to get filled every time.
Not every gap gets filled. Most of them do. Not every gap gets filled. So I'm not trying to put
confusing stuff out there with different sides of stuff, but just trying to say, hey, a lot of
different pieces to consider here, but could this be an exhaustive gap
that comes back down and fills?
History says the last four times this happened, it did.
That's not a big sample size,
so just be careful what you listen to,
but I do think that's pretty interesting
how rare of an event this is,
and the fact that if you go to the 27th of February,
that Friday, look at your QQQ chart,
look at your SPY chart,
all we did was come right back to where we were pre-conflict.
Oh, I'll throw one more thing in because I see Monitiv down there.
Monitiv and I discussed this a little bit last night.
He's discussed this a couple of times in a few different spaces.
But, you know, at this point around the oil side of things and why obviously oil, big fall, but it still caught
a bit. I mean, we're still waiting on ships to start flowing through there. An actual, some type
of written deal maybe agreed to, but the other piece, and I see Monitve jumping up here with us,
but the other piece Monitve explains this much better but my thought process is similar to that that we have a lot of damage to a lot of
infrastructure a lot of oil fields facilities etc over there you don't just have in the middle of
of quote-unquote war you don't just have like analysts and people engineers out there
assessing the damage and saying hey, we got to fix this.
We got to do this.
People aren't out there while missiles are still flying, looking at all this stuff.
It could take several weeks for them to assess and actually know the damage of what's going on, what has to be rebuilt, and start pricing that into the oil market.
And I'll cede that over to Monitiv if he wants to add anything there or any other topics.
What's up, Monitiv?
Yeah. Ryan, thanks.
So again, right, I've been calling this out.
I think the new low for the oil industry is a function of what capacity we have left, right?
This daily damage in Russia that's still happening, right?
Ukraine has been taking out facilities export
terminals production capacity you know quite regularly and now in this last month we know
that there's been very significant damage to to qatar's you know lng trains at least two of the
seven are are you know damaged to a considerable extent that it puts
recovery in couple you know in in years not not months the others could be damaged too so we need
to take stock of what's there and we need to understand how long it'll take to bring back
production that's shut in and then you know the rest of it is you know different levels of damage
that has to be repaired so so yeah i mean i i don't know whether the new low is uh is 80 or 70
but but i think certainly you know for it to go back that far the you know damage assessment has
to come out incredibly good otherwise you, we're stuck with probably somewhere
in at least the high 70s to 80s as the new base for oil.
At least that's how I see it,
based on talking to a lot of people
that are traders in the industry.
Sorry, go ahead.
Yeah, I was just going to ask you a question.
What do you think is,
if oil stays obviously higher over the next, you know, let's say it's 85.
Let's say that's, you know, the new until infrastructure gets rebuilt and it's out of combined.
Obviously, supplies have been disrupted and that's going to carry into the summer months for the global economy. Do you see a path where that does impact the consumer and we have
higher gasoline prices throughout the summer and it starts to have
some demand destruction in the global economy well where it is i don't think
demand destruction follows from oil price.
It might be one of, you know,
any number of factors that taken together contribute to it.
It's gotta go a lot higher before oil itself, you know,
demand for oil itself falls off because it's too expensive
to afford, right?
I don't think we're there.
I don't know we'll get there.
I'm assuming that, you know, we've been chastened with this, you know, with this experience in a month and a week.
And we're not going to get too much worse than where we were last week, right?
Maybe a continuing wally here and there.
But if we do go off into, you know, talking about sending, you know about destroying the civilization as we know it, that's permanent removal of 3 million barrels.
That's not going to be the same situation as where we are today. all of this contributes to to to economic to to uh loss of consumer confidence i think so i think
there is some damage whether that's manageable salvageable i don't know yet but but i think
we've done a little bit of damage to to uh consumer confidence and i And I'm hoping that we see at least the beginnings of that
either confirmed or discounted away in earnings.
The first two weeks of tech earnings
should give us a lot of info on consumer confidence
plus JPM's comments should get us most of the way on consumer confidence plus you know jpm's comments should should get us
most of the way there to at least form an opinion whether there's some damage or whether we can
safely ignore that but if we do have damage right it is going to have a lot of knock-on effects
just go back to you know covid time i mean i'm taking an extreme example here you know, COVID time. I mean, I'm taking an extreme example here. You know, both Meta and
Google had, you know, negative revenue growth in, you know, for at least one quarter. So,
you know, things can get bad. And these two are, you know, pumping, you know, expected something
like $300 billion into Infra this year year and what's to stop them from putting the
brakes on if if if if their core business is is is seeing some weakness right so so i think i think
we it's a little early to say that it's happening i don't i don't know i don't think there's enough
data yet to make that call but we should have the beginnings of that data very soon right so this is why I keep saying no the first three weeks or so of S&P earnings gives you enough data to extrapolate pretty much anything you would want which is more relatable than you know stale data that comes from government agencies, especially big banks, right?
I mean, they have to create daily balance sheets.
So they have a pulse on a daily heartbeat
of the US economy,
especially for people like JP Morgan,
which has exposure to every part of every geography of US
and every sector pretty much.
They have a pretty good pulse on on on
the economic data flowing in on a daily basis so i am that that's something i'm watching out for
i'm very concerned i hope i hope there's no confirming the data that that uh that consumer
is damaged but you know if you take uh just a data point here right delta from this
morning delta had a six percent non-energy price inflation um in their call out so so uh casmx
energy was up six percent so cost for for average seat mile you know outside of energy cost was up 6%. So cost for average seat mile
outside of energy cost
was up 6%.
So that's something
we need to worry about.
Again, it's one business.
We have to see
if it was more specific
to them or not.
The other thing too is
obviously we've pulled
rate cuts out of the forecast.
So if rate cuts are pushed out further and we have higher interest rates across the curve,
you have obviously higher oil and then it becomes real wages are really down because
of higher impacts from higher gasoline and then obviously higher interest rates.
So you have tighter financial conditions. So it will be interesting to your point is we need to wait and see the data
and how it affects the consumer.
But I'm thinking I'm in the camp.
Obviously, there's no rate.
There's not going to be rate hikes.
That was premature, I think, to even consider pricing that in
because I don't think it would
have got that out of control.
But we could be in the situation which if, this is a big if, if the consumer weakens
and the data and the earnings start to maybe look a little bit weaker, I think one of the
areas that's probably the most beaten up part is the long end of the yield curve.
And if you look further out and say, okay,
well, maybe we get some type of bull flattening where if the data turns soft and earnings and
guidance isn't that rosy, then maybe you have somewhat of longer term yields that fall first
because oil is still high and they maybe can't cut because of the headline inflation.
But keep in mind, core inflation, 50% of it roughly are two things, and that's shelter.
And the second thing is autos. So higher interest rates are going to continue to put pressure on
housing and then also automotive. And I believe in the first quarter, year-over-year sales for autos was down like
6%. So there is some softening in the auto space, and I don't see any situation where
the inflation shock from oil is going to bleed into core because I just don't see those two
sectors that are very interest rate sensitive all of a sudden picking up in inflation
due to higher oil and higher rates. If anything, that's a negative for those two sectors. So I
would think that core inflation will probably remain in the same area that it's in. And that
probably gives the Fed cover later this year, if oil continues to trend lower, that they will start to reprice cuts in maybe in the fourth
quarter or the first quarter of 2027. So Will, the problem is not just oil, right? It's every
petroleum derivative that's become either severely supply constrained or altogether too expensive that that substitution
is being considered right like fertilizer is a good example plastics pretty much across the board
this is a problem so there will be a feed through now how much again right? We don't have that damage assessment yet, right? If you take smaller economies that are very dependent on oil flowing through that geo, it's easy to see the damage, you know, not tiny, but small industries in India where,
you know, feedstock supply has become a problem.
They raise prices of almost every plastic input material, you know, some anywhere from,
you know, 5% to 25%.
So all of those get fed through back to you know consumer
and whatever goods that you know they're part of either in packaging or in you know composition
itself right uh pharmaceuticals there's a lot of uh input chemicals in pharmaceuticals that are
derived from from petrochemicals so so this this problem problem is deeper than just headline oil or gas prices. It's
that entire complex that's going to be messy. Plus, if it costs more in fuel costs,
the cost of transportation is going to go up, which is going to affect pretty much anything
delivered to you. So I'm not that confident that we're not going to see that pass through,
but I don't know if Federal Reserve will be able to increase rates
given how weak the economy is starting to be.
You've seen all the big guys you know that have been
slowly cutting behind the scenes in very small numbers start to scale it up dramatically
now oracle might be an outlier given that you know they had a weak balance sheet to begin with
and announced a you know a massive capital program that was really not supportable of the cost structure they had,
because there was just not enough free cash flow there, and the balance sheet was going to go,
you know, pear-shaped very quickly if they kept with it. So they had to cut costs. I get that. But,
you know, Amazon's cutting, Microsoft's cutting, Google's cutting, you know,
Meta's cutting. It's not stopped and we'll get to a
point where this becomes a problem. So I think there is enough weakness that will force Fed's
hand to at least delay this and see if the prices are sticky before they consider interest rates.
So I think we're fine for a while. I don't think we're going to get a hike and i certainly don't see how we get a cut here outside of you know completely
giving up on logic and and just doing it for political reasons so i don't discount that
completely but but i think it's it's far-fetched now given you know we're we're getting closer to the election cycle. So no rate cuts, no rate increases,
which puts us squarely back to earnings,
the war situation, and if the AI trade survives.
And I think the earnings data will give us the answer
on earnings and the ai trades
uh you know uh health and then you know we we get the daily war situation right so
i i i am very worried but i've not changed anything dramatically to you know to go one
way or the other based on that worry yet because
we just don't have enough data.
So a couple of weeks, I think we should start framing that data in a better shape.
And I've been saying this for a while.
I don't think we are going to see CapEx guides change.
I don't think companies are going to come and tell us, oh, we're not going to spend
175 billion.
We're going to instead spend 140 billion this year.
I don't think you're going to say that.
Why would they?
You just have to look at, you know, actual spend versus guide and see if it's starting
to trail.
And that's my worry is that we're going to start to see the actual strain.
And then it becomes a very difficult thing because there are good
reasons for the capex to not hit the target. You know, power supply, hardware. Do you think the
price of like oil and some of this stuff is going to actually drive up the cost to build some of
these things and maybe increase the other, like up to the other side of this, increase capex?
I have asked people that are smarter than me
to try and model this.
So think about this, data centers somewhere
like 23% of the operating cost of a data center is power.
And all of them are starting to depend more and more
on natural gas fed turbines for power and natural gas prices
moving up, you're going to see some of that, you know, these are not customers that are protected
by, you know, rate control, right? So they're going to pass on whatever the cost is plus their
margin directly to data centers, the power producers.
I mean, so whether the economics change, if you go from 23% of your operating cost in
power to 25, 26%, I don't know.
But that's something that I'm sure will be discussed in the coming months.
I do appreciate everyone for hanging out with us, as always.
What a fantastic conversation, a little extra one here.
Are you playing ping pong?
No, I'm not playing ping pong.
I'm making a post right now.
FedEx pilots are about to get a raise.
They're doing a little, the FedEx pilots union negotiated a 40% increase in hourly pay,
followed by 3% increases after that.
Captains are going to get as much as $150K to cover raises missed during negotiations.
I'm sure they love that with fuel prices, but this was the single most biggest
decrease in oil prices in
whatever. Should I go and book my flights right now?
Some of you just ship
yourself.
Should I ship
myself? Fair enough.
Yeah, why not?
Are you guys watching anything for tomorrow?
Or is it just another day?
Is there anything specifically happening?
Do we have any data in the morning?
We do have
PCE and GDP
in the morning. So the GDP
number could be interesting.
So we do have some data coming up.
Interesting.
I know we also have CPI on Friday as well.
So there's a little bit of data.
Erting season starts next week, I think.
Yeah.
Well, Delta reported this morning, but your banks start, I believe,
next Monday is the first one on the schedule.
Is it Goldman, I think, on Monday?
And then all the banks start going on Tuesday?
Goldman said they want to be first.
Yeah.
And then your tech names will kick you off, too.
So, ASML will be overnight from Tuesday night into Wednesday.
Taiwan semi, Wednesday night into Thursday.
And then Netflix on Thursday after the close.
That kind of gets you started on the tech side of things.
That should be fun.
Yeah, I mean, the expectations are pretty high for financials.
I think 17%, if I remember correctly, off the top of my head.
Earnings growth, so that's a big number.
Johnson & Johnson, to me, is going to be interesting
because there's negative growth for that consensus for healthcare.
So anything positive from Johnson & Johnson
probably kicks us off into a good run for that sector.
I'm excited for Honeywell.
Sorry, Will just tagged me in a photo of a ping pong table saying, come get it. I'm excited for Honeywell. Sorry, Will just tagged me
and I put a photo of a ping pong table saying
come get it. I don't know that.
I'm ready to go. I would cook everybody.
I'm just letting you know. There's a ping pong table.
Evan's not good. He's just left-handed.
His only advantage is he's left-handed.
No, listen, I'm getting better, though.
Watch out. I'm getting better.
Evan got wrecked. Listen,yan's good ryan is good but
watch out next time we play the other thing on friday is i think you'll have the first uh look
at consumer sentiment as well for uh the march time frame so i think that'll be be a uh interesting
data point just to see to monitor this point is about where's the consumer
at and all of this and what's what's the sentiment look like from the March data so I think that's
that'll be a big data point absolutely I think that that's going to be really important but but
we have to start trending it right I mean one data point is still one data point right we have to start
watching this but but the one thing that, you know, you guys were talking
I don't know
I was in another space talking about software, right?
One thing that
went under the radar was
last week or week
last week, was it?
Snowflake
filed an 8K because
they had a
new change in the C-suite.
They appointed a new chief revenue officer.
In that, they confirmed their quarter and full year guide.
So think about this for a second.
Not that Snowflake itself is a bellwether for anything beyond itself right
but well actually that that was on 31st so the last day of the quarter uh
coming out and confirming their numbers pretty much takes away any risk of
unless they're completely shady any risk of of miss this quarter from Snowflake.
That to me is pretty darn bullish,
and the market just waved it off.
That's how weak software is, right?
So that's...
We are in the pre-announcement season,
so I've not seen anything substantially negative or positive yet,
but it's things like that, that, that, that bear watching.
Were the numbers as expected or were they like lower above?
They didn't release numbers. They just,
they just said that they're confirming their guide and they're comfortable for
the quarter and the year,
which I think is a very big deal, right?
To, you know, the last day of the quarter, they're already telling you that, yeah, we're good.
And their earnings is, what, three, four, five weeks away.
So, you know, at least my takeaway, at least minimally, movies that they're not gonna miss do you think that
bodes well for maybe the rest of the software space that maybe when you look at like igv and
you look at microsoft and service now and some of these other names that have been completely blown
out is that is that a sign maybe for some of these other ones that maybe they've maybe got
a little washed out thanks for connection reestablished i i okay that's that's the connection i'm making but but but it's wishful thinking so far right
i've been wrong about uh about the turn in software and i've been stopped out so
look the the the depth of software is stupidly over-exaggerated.
It's a narrative that's taken hold rather strongly.
And I don't know what it's going to take to break that.
I think that was like his background squawker, Monotiv.
I don't know if you were done.
I think you might have lost internet.
Sorry.
Yeah, my computer went to sleep for a second and all my brokerage connections, you know, lost
and it's freaking out.
it's freaking out it's okay i walked away but uh but yeah i mean look every at least for
It's okay.
I walked away.
But yeah, I mean, look,
software companies that support the enterprise business things that are business critical
things that are regulatory or accounting financial legal things like that, or security for that matter.
They are telling you again and again, and they've told you the last three quarters, four quarters,
that while growth is naturally slowing, because these are against very large numbers,
their growth has been slowing for quite a while now.
It's not disappeared.
It's still somewhere high 20s and above,
depending on, you know, the company itself. But all of their SaaS metrics, they're hitting those
numbers, right? If they don't, then it's a dead case, right? You could just write it off,
take it off your list. But there are quite a few companies that are meeting all these metrics and better and guiding aggressively. So we've discounted all that away, right? And these companies are already down anywhere from 50 to 30 to, let's say, 80% in some cases.
percent in some cases.
It was not that long ago that Snowflake had recovered and, you know, MongoDB, for example,
had recovered after that.
And all of the move was two earnings, right?
MongoDB was a perfect example of that.
It was off its bottom.
I think it went up.
It's given up a lot of that in the last two months, three months.
But its move off the bottom was two or three sessions in total that formed most of the move.
And that was the day after earnings and maybe a session or two after that.
and maybe a session or two after that, and that's it.
And that's it.
And two consecutive earnings, you saw 20-20% moves in each of those two consecutive earnings,
quarters in 2025.
So these things can rip, but again, that depends on the narrative being broken conclusively,
convincingly, that people are willing to take that risk.
All of these companies have tried to push the narrative.
It's almost comical to
listen to ServiceNow CEO
trying to ask what the hell is going on.
To the analysts during the call,
it's like you guys are discounting everything we do here
and we are here yet again delivering numbers for you.
This is the thing.
Is there any data that there is destruction of consumer licensing numbers
or any of that for some of these, like I said, core to the business companies?
Not yet.
Doesn't mean it's not coming, but the data just does not exist yet, right?
People have said, oh, yeah, AI is going to, you know, upend every one of these business.
Yeah, but when, right?
That is the part that's not been answered.
We don't know how far away the disruption is, so we just de-risk completely to a point where some of these are
you know very reasonably priced and they're not cheap yet but neither is the market right at 25
times so you know i i think there will be there will be opportunities like this at least as a trade on earnings and i i am going to i i have smaller positions but i'm
going to take a swing at um at at snowflake for for one because they told you already that you
know they're at least going to meet their numbers so you know i i think it's worthwhile playing the earnings trade but not holding too long after that
because the sentiment has not changed uh you know it it doesn't take that much to change the sentiment
and some of these companies are doing the right things uh salesforce is doing a large massive
buyback right at at uh at these discounted prices that's a smart use of your money.
In fact, I don't know what many of these companies can do besides what they're doing already.
So it's going to take time for the sentiment to change.
But there are also real problems, right?
Like Microsoft.
I think Microsoft's not you know, not the largest
part of IGV now, or at least I heard someone say that.
It's waiting, it's not the highest in IGV anymore, which is
weird to hear. But when you have, you know, 30 or
40% of your, or more of your RPO
you know, still dependent on open AI, and they brought you most
of the growth and your stock ran, you know, based on that, and they are not in any better financial
situation than they were, you know, two years ago, then you have to question. So my point is,
so so my point is when there is data you know believe it don't don't don't discount it you know
assuming that the narrative will shift when there is absolutely no data then you know it's it's
probably you know worth the risk you know if you have enough other reasons to take it, you know, whether
that's technical or, you know, or whatever else, right, whatever you used to do it.
For me, it's always a combination of technicals and fundamentals and news flow.
So I am going to take a swing at earnings place on some of the software names.
If it works, I'll double down.
If not, it's an earnings trade anyway.
It's always going to end up in a zero.
So I'm going to size it appropriately.
But I think a few of them will get out of this mess and get out of the mess fast.
So anyway, that's my
take but by the way cisco is still doing well it does not want to stay below 80 for long
see that it's 83 or something today i think that's very close so so that's you know cyber
security is probably you know the first one that's going to come out swinging from the software
sell-off.
Cisco, I talked about it extensively last earnings on this space.
They said that, what is it, 450 basis points or 250 basis points of margin was likely a hit from memory.
And they were honest about it.
And, you know, it was sold down 10% just because they said that.
They also said, which nobody listened to afterwards, was we are going to try and pass on as much as possible of this number but it's very
possible based on our calculations that we're going to take a small hit try to have quarter
quarter percentage hit on um you know on margin from from memory prices two days after that
after that, Cheshree, when she was, you know, in her commentary on, on, on, on Arista said,
Oh no, we have no problem.
We're just going to pass it on.
And she was rewarded for that.
And like, you know, Cisco is a much larger buyer of memory.
If they don't have the ability to, to, to, to negotiate prices, there's no way there's no way Arista is able to do that.
And the CEO is honest enough to say that, yeah, there is a risk.
And well, Jayashree was just like, yeah, whatever, no problems, and got rewarded for it.
So I talked about it here.
I loaded up on Cisco as a swing trade, and I'm getting ready to sell off on that.
That was a good $15 or $12, $13 run, so I'm more than happy with that move.
But I still think it's got some ways to go.
Palo Alto was also one I discussed on earnings here.
And I talked about that after listening to the call.
Same story.
There isn't a panic in the management.
Well, you can neither assume they're completely lying or full of shit,
but that's a different story.
They're telling you that their business is solid. They're telling you that their business is solid.
They're telling you that their guidance is fine.
They're telling you that their customers are still spending.
They're telling you that they're not being appended by, you know,
white-coded applications of any sort.
And yet, you know, it held for a day and it sold off.
So I added again and all those swing trades, you know, paid reasonably well, right?
Some, you know, 20, 30%, some, you know, 200, 300%.
But it's trades like that that makes sense to me is look at the numbers, look at the guidance at the commentary look at the look at the competitors
see what they're doing if there is enough confluence in all this to me it's worth the trade
whether the software narrative is bad or not so anyway that's that's my long-winded um
oh i talk too much, man. Sorry.
I had to get back to the screen. Honestly, we're in the overtime section. So this is
the perfect time to talk too much. I appreciate it. And I don't think you did for the record.
So I appreciate the deep dive. I appreciate the. And I don't think you did for the record. So I appreciate the deep dive.
I appreciate the deep dive. Any other topics? No, no, no. I'm glad for the earning season because, you know, it's something that I can chew on and data that constantly updates my model.
and data that constantly updates my model.
So I'm looking forward to those, you know,
those long earnings related spaces.
That would be something, you know,
at least something to get our minds off the war
and all the destruction, right? earning season should be interesting i did think in the tesla delivery numbers that the war and
stuff would have maybe had a little bit more of an impact but they missed pretty aggressively
and i don't know i i'm just curious I'm sure in this last month or so, people have been concerned, again, not necessarily about the
war directly, but about energy prices going up. So it'll be interesting to see how companies
choose to guide going forward if they take a-
We'll just start pun on it like they did for the tariffs, or a 90 a 90 plus barrel oil uh guidance and a 70 barrel like guidance i don't
know i just wonder if they'll give like multiple scenarios and pun on it like they did last year
with tariffs yeah you could see that right i mean uh delta said uh their average price for next quarter is four dollar thirty a barrel
and this because they own a refinery and uh you know so so some of that margin is absorbed in in
in in their lower cost from refining but four dollar thirty average price is still a lot higher
than what it was in Q4.
I don't know.
Can you repeat what you said there?
Was that bank specifically or was that for everything
delta delta it was for their no it was it was for their average cost of uh of fuel
so delta's average cost for fuel projected for q2 is 4.30 a barrel uh 4.30 a gallon sorry okay
and what was it for this last quarter
do they have what they charge that they paid uh i have to go back and look at that i i will i will
dm it to you i don't have that off the top of my guess is four dollars thirty cents doesn't seem that high for jet cool no reference besides just the regular cost of gas.
Again, that's because they have their own refining, right? 81% or something like that of their fuel needs are met by their own refinery.
So they don't pay that margin.
They said that at $430 a gallon on the forward curve,
it was still over 2 billion of incremental
fuel expense compared to normal.
Okay.
Where is their oil refinery, out of curiosity?
Do we know?
Is it in the Permian?
We talking US?
Let's look.
I think it's in Pennsylvania.
I don't remember. I could be wrong there Pennsylvania. I'm not, I don't remember.
I could be wrong there, but it's not in, it's not in Texas.
Drainer, Pennsylvania, right outside of Philadelphia.
On the Delaware River, 10 miles southwest of downtown Philadelphia.
Yeah, there you go.
Owned by Monroe Energy, a subsidiary of Delta.
owned by Monroe Energy, a subsidiary of Delta.
Why don't more companies do that?
Is it smart or has it just been an L for them in general?
I mean, right now it seems to be a W.
Well, when the price is low, they lost money, right?
So when the crack spread is low,
they actually underperformed others
because you can just buy it
and you don't have the expenses
of running the refinery at a loss.
So it only works when crack spreads
widen beyond a certain point.
I think there was one quarter
when they broke that down.
It might have been either during the Ukraine war
or a start or right after.
There was one quarter where they broke it down and when it becomes unviable for them to have a, you know, refinery.
So throughout the period of COVID, when they were shut down, they were, you know, oil was dirt cheap.
down they were you know oil was dirt cheap and they had the expenses of uh you know going through
a shutdown restart at the refinery running it at very low uh you know capacity utilization so
it was a significant uh uh downer for them for three four quarters at least so
so that can happen too it's not it's not always a positive right so yeah
it's basically a hedge right it's a hedge to against spiking fuel prices but if fuel prices
are low then it's going to cost them more to operate that than if they just bought it on the
free market yeah well it would be a hedge if if the refinery was also hedging their costs and locking in prices
right otherwise the hedge is only to the extent of the uh the crack spread widening or narrowing
right so they hedge for that crack spread so so the delta between the retail retail product and and and the crude costs
have to be hedged at the refinery still right i i don't think there's any u.s airline that's hedging
most of the european airlines are you know significantly hedged i think think Ryanair is hedged over 85%.
So your standing room only airline
is probably the one that is going to be
the most profitable in the next couple of quarters.
Yeah, AI is telling me that Delta
is the only major airline in the world
that directly owns and operates a refinery.
Stat that. AI is telling me that Delta is the only major airline in the world that directly owns and operates a refinery.
Stat that.
You know, you could always say, you know, airlines like Emirates and Qatar, really, you know, they're an airline owned by a gas station, right?
It's like the other way around.
They are the opposite edge.
It's like the refinery owning its customer instead.
I think if I'm flying an airline and I can pick any, I'm probably going Delta delta i thought other people sometimes i i i have flown by you know pretty much every major airline to
you know to india in the last five years and i have to say qatar was was the best and i am damn thankful i didn't
take it for this trip it was just more expensive so i cheaped out and didn't buy that ticket
but thank god i didn't man that was one that was in the worst of you know the the mess and remember
i flew on the third of april so you know it would
have been a hell of a time to be flying qatar well it was just shut down so it didn't matter
but yeah yeah that's a new risk now right these were the largest growing airlines and with some
of the newest fleets and the best service now you have every one of these guys in trouble, right?
Emirates, Etihad, Qatar, Saudi, a whole bunch of Kuwait Air, everybody, Oman Air,
a whole bunch of these guys that have massive fleet additions over the last, you know, 10,
15 years.
I could just see their market disappear, which might help all of the, you know, the big ones outside, right?
Singapore Airlines, United, you know, Air France, KLM, British Air,
all of these might get, you know, knock-on effects of people trying to avoid going through through the gulf um all together
All right.
all right we're coming up here at the top of the hour
We're coming up here at the top of the hour.
And you want to say, one more time,
make sure you're following the speakers.
I appreciate them for joining in, hanging out with us.
Shout out Monitive.
Active member of the spaces, very smart guy.
Always love hearing your insights.
Shout out Frank hanging out as well.
Great trader.
Ryan, host of the Wolf Trading Show.
If you guys want live content,
if you're a trader and you want live free content
all day, every day,
the Wolf Trading YouTube page,
place to be.
It's growing really quickly.
You just get a couple hundred live concurrent there.
Now we're getting like 400 every day or something.
So go join there.
A lot of people are loving it. A lot of people are loving it.
A lot of people are watching it.
I'm actually going to get that tweet pinned up in the nest above Ryan.
Tell me more about Wolf Trading.
Well, we're just, we're live anytime the market's open, basically.
Obviously, we have the spaces going on in the mornings,
most of the week as well.
But I'm over on YouTube on the live stream
from the market open until the close,
all the breaking news, all that stuff. Obviously, News Squawker, I've got multiple sources for that.
So keep everybody informed, especially for day traders that are reacting quickly to headlines
and stuff. Getting all that out there to everyone. We're doing charts, analysis, multiple traders
come on there, different styles too. So it's not just trading one style, there's multiple different perspectives on there.
And we have different special guests and stuff come through there.
So a lot of you guys probably know Paper Gains.
He was on there with us today.
A few others came by.
Chris Patel came by this morning just to say hi and talk about some investing side of things too.
So a little bit of everything.
Stock market news comes by sometimes.
Plays ping pong on my stream.
I have that tweet pinned up in the nest above, guys.
Go check it out.
Wolf trading, honestly,
one of the better things we do.
Tweet pinned up in the nest above.
Go subscribe to that YouTube page
and tune in to tomorrow's live stream.
Honestly, I think you'll very much enjoy it.
And then obviously, shout out to the co-host, Mr. Stock Talk.
He's awesome. He's fantastic.
He's probably deep in some research right now, looking up some new names.
We're going to talk about everything going forward.
Obviously, he's got the group link in his bio if you want more of the stuff that Stock Talk is doing.
But if you enjoy a live, free conversation with people like the ones up here on stage,
make sure you are following the host of the spaces.
How many followers do we have now?
49.4K.
But you're less than 600 followers away from 50K.
Damn.
Let's see.
Is there anyone in here who's not following?
Let's get some people ramana ops r-a-m-a-n-a-o-p-t-s is not following uh the stocks on spaces
let's find two more people most of you guys are following shout out
mark hill me five five nine two29 not following the space uh the crew i have to do
that 598 more times now we gotta find a couple more listen this guy co puty co puty it his bio
is only cups c-o-p-u-i-d-i-o- Not following. We are less than 600 followers away from 50K.
We got a couple followers there.
It worked a little bit.
I called.
No one I called out, but.
Sock Sock, any final words you want to slip out there?
You doing anything in the group?
I mean, look, it's a hard market.
It's been a hard market this year.
I know a lot of you probably found yourselves offsides
on gap ups or gap downs.
I've traded for my entire adult life,
and this is one of the harder first three months
I think I've seen in a while.
I'm doing better than I expected, to be honest.
I didn't think I'd be up so much this year,
but really the key in markets like this is two things, appropriate sizing and not letting your bias get
dragged with the ball. That's the way I like to phrase it. But what that means is that you can't
be somebody that's extremely fickle in an environment like this. If you are, what you're
going to end up doing is buying the gap ups and selling the gap downs and you won't get anywhere. So what you need to do is deep
research, know what you own, understand how to read a chart. It's more critical in environments
like this than it ever is in my opinion. When you're in a raging bull market like you were in
in 25 and 24, you can just pick stocks and just watch them
go up. You can throw mud at a wall and get plenty of capital appreciation. But in choppy markets
that have headline-driven risk, it's very difficult to do that. So you have to capitalize on the big moments.
And a lot of statisticians in the market will go over stats like, if you weren't long for
these six days this year, you went from outperforming the market to underperforming the market.
And that's really important to keep in mind because every year there's about 15 days,
sometimes 20 days where most of the stuff happens. Most of the moves happen. And if you get locked
out of those days, it throws you for a loop. You start feeling like you're missing out,
you start getting FOMO. You start getting greedy.
And so you have to position yourself in a way in these markets where you kind of do have to have rolling exposure.
Now, for those of you that are day traders and scalpers out there, this is irrelevant to you because when you're in an uncertain environment as a scalper, you should just go to all cash.
But I don't think the vast majority of you out there are that type of trader.
I think the vast majority of you out there who listen to the show and who are on Twitter probably have a portfolio of stocks
that you're actively managing.
And if you fall into that boat,
you have to learn how to weather volatility.
If I had to pick one character trait
that separates people who make a lot of money in markets
from people who make a little bit of money in markets,
it is that.
It is the ability to weather volatility.
And part of it's just having a strong stomach,
plain and simple,
but the other part of it is positioning your portfolio
in a way
where you can look at it on a day-to-day basis and not be terrified. And a lot of you who are
newer traders who are constantly going from long to short to long to short to long to short,
you don't have that liberty. Because when you're constantly flipping your bias,
your back is always against the wall.
You're relying on the market to follow through constantly, right?
You get short, you need the market to continue to the downside.
You get long, you need the market to continue to gap up.
For example, let's say you're somebody that came into today all cash, okay?
And you see the market gapping up today and everything's up 5% or 10%.
So you buy a bunch of stuff this morning.
That puts you in a tricky situation
because now you need continuation.
If the markets roll over tomorrow
and then gap down on Friday,
let's say on a bad CPI print,
you're fucked.
You bought 20 things today
and now you're down 12% on everything you own.
That's how you destroy performance.
So keep rolling exposure of some sort.
This is just my view.
Understand what you own.
Be knowledgeable enough to monitor the charts on the individual positions that you have.
And also be really, really cognizant of backdrop and understand that when the indexes are trading
below the 200-day moving averages,
you're not going to have strong institutional bids.
When the indexes are trading
above the 200-day moving averages,
you're going to have more supportive institutional bids.
So recognize the environment,
learn how to monitor individual stocks,
have rolling exposure, and be confident.
If you put in the word work, be confident.
You know, like the idea of being able to weather volatility,
which, like I said, separates the people
who make a lot of money from the people
who make a little bit of money,
one of the biggest components of that is conviction.
Yes, cost basis matters too.
That's another component of it that I talk about all the time.
One of the biggest components of that is conviction.
So if you put in the work, be confident.
And if you're somebody that just flippantly bought something,
then no, you shouldn't be confident,
but that's with good cause.
So yeah, I mean, those are a couple of pieces of advice
I think that can help people in environments like this,
but also don't misunderstand what I'm saying.
It is a hard market.
Even I think it's a hard market
and I have plenty of experience.
I do this, I've done this every day
for almost 15 years now.
I sit in front of my screen for six hours a day,
every day for like my entire adult life
and I still think it's a hard market.
So if you're new and you're like,
oh, this market's difficult, you're not alone.
But be sure to understand
that there are ways you can manage through that.
And there are decisions you can make in terms of your portfolio organization, your portfolio construction, that'll make it a lot easier to sit through it.
We will talk more about some of those stuff tomorrow.
Anthropic loses appeal court to block Pentagon blacklisting.
Follow him, follow speakers, follow his account.
I just dropped off anyway, so we'll see.
I feel like Stock Talk attacked me in the middle of that.
I'm just going to ignore it.
No, no, that wasn't a shot at you.
I just always like to repeat that just because a lot of times when I'm, like, preaching.
Yeah, a lot of times when I'm preaching, the traders are like, oh, you're talking to me.
And I'm like, no, no, no, no, no.
I'm not talking to you.
And the thing that I preach is every day trader should have a long-term portfolio
completely separate that they don't tinker with
every single day.
Like honestly, it blows my mind
how many people are day trading
and they're not running a long-term portfolio.
Yeah, that's crazy to me too. Yeah,
there's no, you're never going to compound wealth if you don't have stocks that you sit on for a
long time. Like, you know, if you, if you want, if you ever want to have a stock that you're up 10X
on, you're not going to get there by day trading or scalping. You have to sit on a stock through
crazy periods of volatility. I mean, I shared a screenshot of my MBIS position earlier today, and I'm up like, what am I up on that, 421% now?
I bought that at 23 bucks last May.
It went up to 125, came back down to 60,
now back up to 125.
And people are like, how do you hold through that?
And I'm like, you just do.
You have conviction.
You understand the story.
You ask yourself constantly, has the story changed?
Has the thesis changed?
You don't sell positions.
I'm talking about when you're a position trader.
You don't sell positions because they're down X amount.
You sell them because something changed.
And often that is paired with the price action.
Sometimes you have a drawdown on a stock for a good reason.
Sometimes you have a drawdown on a stock. Maybe good reason. Sometimes you have a drawdown on a stock,
maybe they have a horrific earnings report
and the thesis is broken.
Yeah, you can sell a stock in a situation like that.
But in other cases, you have volatility
just for the sake of volatility.
And if you're a seller in those circumstances,
you're never going to make it through a 10-bagger.
I mean, I brought up this example all the time,
but even with the best stocks in the world,
like Apple, Amazon, like Apple has been through 80% intra-year drawdowns before.
Amazon has been through 75% intra-year drawdowns like three different times.
Microsoft, I think it has 68% drawdown one year.
Like, you know, Microsoft was flat for like eight, nine years. You can't just, you'll never be able to get to an insane weighted compounded return.
