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VC & PRIVATE INVESTING
Recorded: April 10, 2025 Duration: 3:02:06Space Recording
Short Summary
In a recent discussion, industry leaders explored the burgeoning space economy, projected to reach $1.8 trillion, highlighting innovative partnerships like Starfighters and SpaceX, which are set to revolutionize satellite launches with F-104 jets. The conversation also touched on the ongoing fundraising efforts at a $65 million valuation, signaling strong investor interest in the sector.
Full Transcription
What is up, everyone?
Happy Thursday, April the 10th.
Here we are, Stocks on Spaces again.
Let me get all my friends up here on stage,
our great panelists that we have each and every day.
Wild day in the market.
Gav, what's up?
Yes, sir.
No, I'm super excited.
We are going to be kicking
off the first 30 minutes today as well with Steph Guild, who I see is already in the audience. So
I do want to get her up on stage. And to be honest, we can go right into it. This market's
been crazy. We nearly hit that circuit breaker. I know that you guys went live on a stream and
we're like talking about it. We were 0.29 away from it i believe percent from hitting
that circuit breaker and now we've come all the way back from there and spy is up about three
percent from the lows and continuing to move to the upside here especially after trump mentioned
that the first tariff deals are close to getting done so just a couple things to continue to keep
an eye on uh let me know whenever we have step on stage. There we are, actually. I see her coming up now.
Steph, how's it going?
Doing well, I guess, personally, but not financially.
I hear you.
I hear you.
No, it's definitely an interesting time to be alive.
And that's why I had to get you on stage up here
to chat through this conversation.
If anyone's unfamiliar, so Steph, Stephanie Guild,
head of investment strategy over at Robinhood. If you watched the Robinhood Gold event two,
three weeks ago at this point, there was a lot that was announced around different things that
they were doing, and she's very involved with that. However, Robinhood is in, I believe,
a quiet period right now, so we're not going to talk about that. We are going to talk about the
market. With the market, we're going to go over some of the big themes what no continue sorry sorry i'm i'm allowed to say the word she's not
so um we're going to go over the big themes the risks and the conviction uh slash contrarian
opinions that's going to be kind of the thematic here for the first 30 minutes happy to take some
questions from uh the rest of the panel as long as they are focused on the market with that being
said we'll start out with the big themes. Obviously, everyone watches the MAG-7, everyone
watches the S&P, everyone watches QQQ. Where does your mind go as you're looking at this from a 30,000
foot view, understanding tariffs, Fed, and so many other items? Yeah, I think before the tariffs were
even announced, so just like taking a quick step back, I know everyone just wants to know like a future. But I just I felt like the Mag 7 year pre-tariff that, you know, other things were going to shine.
You know, there was a lot of policy in this current administration that was going to support other things.
Interest rates were higher and looked like they were going to stay higher for a while.
I know that's been pretty volatile, actually, this week, just like the stock market.
That's been pretty volatile actually this week, just like the stock market.
And when you have higher interest rates on average, that tends to, you know, cause CEOs
to have to really think about their decisions because the cost of borrowing, you know, is
higher than it was, let's say, when the MAG-7 was running uncontrollably, you know, in the
in the sort of leading up to 2022 until 2022. So I think there's because of that, I felt kind of
sort of leading up to 2022, until 2022.
like, oh, this was a year to kind of be more diversified away from it. And then, you know,
you had the tariffs come in. And that was to me like the thing that just like it made the market
really rethink valuations because you no longer had the support of potential
economic growth. Like we, you know, leading up to the tariffs, we had decent employment,
unemployment, you know, low unemployment numbers, historically speaking anyway.
You had, you know, inflation that looked like it was starting to come down.
You had interest rates that were probably going to stay where they were, but, you know, it seemed
like it wasn't going to go much further. And then you had an rates that were probably going to stay where they were, but it seemed like
it wasn't going to go much further. And then you had an administration that was going in and really
trying to cut spending, which is longer term going to really help our deficit. So I thought
this is not a bad entry point, but the tariffs is a tax on all of us and it can contribute to
inflation. So I started thinking like, okay, maybe I'm
just wrong about all of this. And, you know, you mentioned this and I actually am allowed to talk
about this. We launched Robinhood Strategies a couple of weeks ago. And so we're managing money
for the people who ask us to for a portion of their money. And we went pretty bearish.
of their money. And we went pretty bearish. And it's hard for, you know, when you're thinking
about like equity investing, it's hard to really say, okay, I'm going to go bearish and just own
some T-bills. But we did that. And we added to T-bills more. Today, we did make some other
changes where we looked across the landscape and we're like, OK, it's clear that the tariffs, that to me, the tariffs are much more about China than they are about any other country, although they want to make changes everywhere.
But there is now we know there is a bottom somewhere for right like 40.
It was like 4950. It was right around the resistance level on the S&P.
And I think the other thing I always always look at is the 10-year.
Where is the 10-year heading?
And the 10-year, you know, had been getting low, but then it started rallying again with
the market dropping.
And that was, I think, that to me is more of a so-called put on the market because I
do think this administration wants to get interest
rates and inflation down. And so if interest rates are going up, like that's, you know, that's,
that's not the direction of travel that they want to see. So that's where I, you know, as soon as we
saw that yesterday, I was like, oh, this might be a place to step in. Obviously, you know, they made
the announcement, the markets rallied hard,
but then today they're back down again because the cold hard truth is that the tariffs are still
on an average across the country and what affects consumers, you know, they're still pretty high.
And that is going to affect us for an indefinite period. And that's why I think the market is like,
okay, we made some money short term. Let's see what happens. But it's, you know, it's going to be really volatile.
It's going to continue to be volatile. Sorry, I feel like I answered three questions in that.
No, you're all good. I think you hit on it pretty well. And there's no wrong answers here. We're
just walking through some of these different pieces. There's some interesting statistics that,
you know, I was chatting with your team a little bit before this on some of what we talk about. This one I thought was really interesting. It said, historically,
every 1% drop in year-over-year GDP growth has translated into a roughly 5% drop in S&P 500
earnings per share. And on March 12th, you know, we lowered our 2025 real GDP. Well, maybe you can talk
through this, but March 12th, there was a lowering of some of those pieces. Depending on tariffs,
you could see potential for 1% earnings growth. Basically, we're about to get into earnings
season. Netflix earnings is in seven days. What do we need to be watching here?
The banks kick off on Friday. I was just trying to do some analysis last night. So when you look at
like S&P 500 earnings, they just started coming down. I was looking at this, right? So up until
I'd say like two days ago, the average weighted S&P 500 company like earnings estimate, right? So if you take all the underlying companies, for 2025, it was 11.8%.
And it hadn't really come down. I noticed after yesterday or the day before that, now it's 10.7%,
still really high historically. So to put earnings expectations, like earnings estimates,
so the market is saying that S&P earnings growth this year is going to be 10.7%.
Previously, they had it at close to 12.
At the end of last year, it was more like 13.
So it's been slowly dribbling down, but hasn't really made a big move lower in terms of expectations.
Expectations are everything.
To know the expectations can then help you define whether
you agree with them or not and then help you in the direction of your investments. The
long-term earnings growth for the S&P, the average, and it's not consistent, right? It can be a lot
and then a little bit, but the average over long-term is 6%. So that's why I say like 10.7% is still a really
strong number. It's still double digits. We had two double digits the last two years. The market
does look ahead. So I am also looking at what they're thinking for 2026, which they haven't
changed at all. And that means to me that analysts still need to adjust their numbers down. And
earning season is kicking off actually Friday with the banks.
Bank earnings expectations are not that high.
But other sectors are still pretty high.
So that's like you want to start like digging into the sectors and things like that.
And then, Gav, to your point, we did also an analysis that showed how GDP is related to
earnings. The better your economy is growing, the better the earnings growth can be as well.
There is a correlation there. It's not one-to-one. But for every 1%, as you said, of earnings, sorry, every 1% of GDP is about a 5% change in earnings,
either growth or detraction. So when tariffs were at their extreme estimates, right, and we know
that they've got a 90-day stay of execution, They're 10 percent now across the board, except for China.
That they are. That means that the Yale Budget Lab had put out something that said, well, with these tariffs, we're looking at a 2 percent drop, close to 2 percent drop.
I think specifically they said 1.9 percent drop in GDP estimates.
Specifically, they said 1.9 percent drop in GDP estimates.
I don't know if it's going to be 2 percent.
The Fed, Atlanta Fed puts out a GDP estimate quarter by quarter looking ahead.
And back in February, when the market started turning, they actually went from a 2.8 percent
estimate down to a negative 2.3 percent estimate.
And that was a huge like that actually, I think,
caught the market off guard. And now when you look at it, actually, this is a side note,
but the reason why it dropped so much is because there was a ton of imports coming into the country. And imports are a detraction, right? They subtract from exports.
So it looked like we had even more imports than we normally do.
And that was true, partially because people were trying to get things into the country before the tariffs hit.
I think I read an article that Amazon airdropped things some places, but also that people were importing their gold.
So wealthy people tend to keep their gold in vaults in London and Switzerland. And you saw a
huge uptick in imports from the UK and Switzerland for that reason. So people were bringing their
gold closer to them in advance of the tariffs as well. So the Fed did an adjustment for this gold thing.
And and then they changed their estimate to negative point five.
Either way, we had been trending between two around two and a half percent.
So if GDP does drop by two percent or let's say it's less because the tariffs end up being a little less than expected.
Let's say it's one percent. That's still a five percent drop in earnings expectations that are not
yet baked into analyst estimates. And that's, I think, something, you know, the market, I think,
is maybe considering today now that we are past, you know, the the threshold of pain that
the administration is is maybe willing to bear
based on their actions yesterday and can look ahead to earnings and what needs to get adjusted.
Beautiful. I will check with Evan and Stock Talk, see if they have questions they want to
throw in here. I think that there's a few more things that I want to touch on. I know we have
you for about 60 more minutes. Again, for those that missed it
when you first came in, super excited.
We have Steph Guild on stage with us right now,
head of investment strategy over at Robinhood.
Very well versed in the markets,
the wealth management side of things as well.
So we're just going through some of the thoughts here
on tariffs, earnings,
and other items affecting the market.
Evan, do you have a question here?
How is the sound called?
Let me know.
Not good.
Not good.
I'll come back.
Go to Stock Talk.
I do have a good question.
Okay, Stock Talk, what's on your mind?
If you do have a question, and if not, worry because i have more okay stock talk it was actually
glitching for him he glitched down all right i want to skip over risk for a second we can come
back around what about now what about now yeah your sounds fine all right there we go all right
the rough times on the spaces first of all i appreciate everyone for joining and you should
definitely make sure that you are following steph We appreciate you being up here with us. one of the best days in S&P 500 history. When you look back at some of the other days in that area,
there are a lot of fears and crashes, both on the upside and downside.
But I just want to hear your thoughts on where you think general fear is at right now.
That fear and greed index is hated by a lot of people,
but it's been at like four for the last little bit.
I don't know where it is right now.
I definitely don't think we're out of that extreme fear area, but it's not quite what it was a couple of days ago. I just want to hear where your kind of general gauge is on that. Yeah, I think we talked about this, colleagues
and I, last week on Friday, we were like, okay, what do you look at? Like, how do you kind of
decipher how much fear there is besides like
the indices that are, you know, out there and people try to measure it. And I always,
I look at a couple of things. One being, you mentioned it, the VIX. Once it was over 45,
I was like, oh, that's, you know, if you, if you look at it relative to its history,
and I actually, I put out a piece today that just showed like the VIX
index over time. And that I, you know, there, there's, there was really only like two other
times that it had been higher and that was in 2020. And then in 2008. So I felt like, okay,
we're probably close to extremes. Of course, the one difference is that the Fed isn't going to step in here right
now. And those two other times they were able to. And the other thing I look at is the put call
ratio. You know, SIBO kind of puts it out, you know, every day you can you can follow it.
follow it. And that had gotten, I want to say it got as high as like 1.8, you know, a couple,
like two days ago. And I thought, oh, that's kind of a sign that it's gotten extreme. It takes the,
there's different composites of it, but if you take the entire composite, it looks at like how
many outstanding puts there are versus calls.
And typically, like on any given day, it's like not really a great measure, but in extreme environments, it can be a little bit of a signal on how far it's gotten. So VIX has calmed down,
obviously, a bit after yesterday. The SIBO put call ratio, I see it. It's, it's definitely back down. Yeah, it's definitely back
down. I see it. It's, it's actually quite a bit lower than it had gotten. Yeah, it was, it had
gotten over one and that's a pretty, like once it gets over one, you want to sort of take a peek.
And it's, it's about half that now, a little bit more than half that.
And then the other thing I look at, and I don't know if, and I would love to hear from other
people if they get the same thing, because you're all, you know, obviously focused on the markets
in some way, shape or form is you get like friends reaching out to you and like texting you and
saying, what should I do? Like, should I change anything in my 401k? Should I change anything in my kids
529 plan? And once you get that, you know, and I used to have a good gauge for that when I,
in my alma mater, I worked at JP Morgan for over 20 years. And there was definitely a day in
March of 2020 that, you know, a client or two called me and said,
I can't take it anymore. I got to get out. And I was like, please don't do that. Now you have
born this whole, this whole downturn. And, you know, of course that was very close to the bottom.
So I think those are some things that can, you know, some things that can show you like they we've come off the boil now, but things are still pretty like they're.
Uncertainty is still high. And that's uncertainty just just leads to fear because the unknown is our minds.
Our minds are not trained to go to the positive. They're trained to go to the negative.
they're trained to go to the negative
that's why
Warren Buffett saying
when markets go up slow down fast
greed takes time to build
fear is instant
yeah
that's very true
Stock Talk
did you have any thoughts or questions here for Steph?
I know it was not working for him before, but it looks like
he had came down.
Yeah, we got you now.
Okay, perfect. Sorry about that earlier. I was trying to get in, but I don't know what's going
on with spaces. Hey, Steph, good to have
you again. I'm curious
if you think, you know,
I know we got the big, broad
sweeping pause
on most of the tariffs
yesterday, and the market loved it. In my view,
the main concern is still the tariffs with China. And I think that's probably why we're down big
again today, reversing a lot of that move. But in your view, do you think a resolution with China
is something that you see potentially coming in the near term? Or do you think this is
something we're just going to have to deal with for most of the year with a tit for tat back and
forth with the US and China on the tariff issue? It's hard to say, but I think I lean toward it's
going to take longer than we would like. The reason why is because I think China will be pretty steadfast
about their reaction. I think they're definitely to strike me as a country that isn't just going
to give up quickly. And they do have some leverage in this because we do buy.
I think we the biggest region that we import from is is the EU, but we also export a lot to the EU.
The second biggest import is is China, but we don't really export much to China.
So so there's a bigger much, you know, very big gap there.
And they have leverage in that because so much of what we consume comes from them.
And that will take a long time to unwind if it's actually going to change.
And I have one of my colleagues, you know, born and raised and lived in China, except for like the last, you know, she was doing her, she did her PhD here
and then stayed. But she, you know, thinks exactly the same. She, I've had, you know, she's giving me
the Chinese news. And she said, she said, you know, obviously this will make, this will make
certain people in China suffer because it's their businesses that will be hurt.
But that like the general attitude is like they'll, they'll suffer.
They don't like, they'll, they'll just suffer because they have to.
And, and because just things are, it's not, you know, such a democratic country and all those, you know, along those lines.
So she, it made me feel like we could
be here for a while. And I do think like China is the biggest, like I put out a piece yesterday
and I, you know, there's a little bit maybe too much of my own personal opinion in it because I,
I feel like we spent years, our government spent years spending on things that like could have
been put to better use.
And that's where my article ends.
But I did put a bunch of data in there about as soon as China joined the World Trade Organization in December of 2001,
you saw our numbers change dramatically in terms of industrial production, the number of manufacturing employees,
labor share of income and GDP
calculations, all of it started dropping. And it directly correlated to China being a greater
trading partner for us. So, you know, when Trump says that there's, you know, these are just the
bad decisions made from past leaders and I'm
trying to fix it.
Like that's not an unfounded statement.
You know, it's just the, the fixing of it is quite painful.
Um, you know, and, and it will be, I think for a while.
Uh, so yes, I lean toward that, but, um, maybe there is a, uh, maybe there is a point that
can, can be reached that can change things for the better.
But it feels like it could be a standoff for a while.
I'm concerned about that as well.
And I hope not.
Obviously, optimism has to be kind of removed from from reasonability here a little bit which which sucks but um yeah i hope
it gets done sooner than later but i agree there's a lot of uh political ego at play and
i'm not sure i'm not sure it's gonna get done as quickly as people want it to but who knows i
didn't think a delay would happen on day one either so you know i guess we're all just after
yeah it was like 13 hours yeah like literally
like yeah 13 hours into the tariff we get a 90 day pause and i didn't think that was gonna happen
either so who knows yeah but i do think the bond market is something to watch for that because i
do think they care about with the direction of interest rates um and you see yeah yeah that
seems to be that's an interesting point you bring up. Because they clearly don't care about the market in a vacuum, right?
Like equities, right?
Trump keeps saying, I'm not watching the stock market.
I'm not watching the stock market.
Except for yesterday.
Because it was a record day, so he had to watch it yesterday.
But outside of that, it's like, yeah, the bond market seems to be the only vehicle to pressure them.
I mean, I think it's pretty hard to argue that yesterday's decision wasn't in light
of the move in the 10 year overnight that we got. I mean, I know percent that Trump said it wasn't,
but I mean, I think any reasonable thing person thinks it was, but yeah, I think that's going to
be the way to, to put pressure on the white house going forward is going to be the bond market. So
we'll see if, if the bond traders out there feel like they want to do that again.
Yeah. Another Japanese fund blows up. I mean, the other thing, right, like Jamie Dimon put this,
he wrote his shareholder, his annual shareholder letter, I believe it published on Monday. And in
it, he talked about how, you know, we've run a deficit for decades. And when you run a deficit,
a country runs a deficit on the other side of that is investment. And when you run a deficit, a country runs a deficit, on the other side of that is
investment. And there's more investment here from foreigners than there are from domestic investors.
And that is also a point of leverage for the foreigners. That's why when rates started moving
up, the rumor was that China was selling their treasury holdings.
From what I understand, that actually wasn't the case because there were people who had made money in the drop in rates and they were unwinding that. There was also some deleveraging happening.
So I don't think it was necessarily that, but it was the rumor because that is a point of leverage. I think the other thing to just watch related to, to bond yields.
So last year we paid over a trillion dollars in interest because our,
you know, because we have so much debt,
like so the government paid over a trillion dollars in interest.
So it's another reason why, like, if they're doing government cuts,
they got to get interest rates down.
And they're also trying to pass a budget. And the House was trying
to pass a budget. It got thrown out yesterday because there's just too many other people,
you know, because in it, it was just still a lot of spending. And there's a lot of deficit hawks
in Congress, which I don't, you know, I don't blame them. We can't continue to borrow more and
more forever. But that, you know, not having a budget done, not being able to get a
tax, like all these things show that like, it's going to, it's not that easy to do all the things
that the administration said they want to do. They do want to lower taxes. I understand why they want
to do it. And this is why they're going after tariffs so they could try to plug the hole. But,
you know, when we already starting from such a deficit that,
you know, you have to get interest rates down. And one way to get interest rates down is to get
growth down. And tariffs will could certainly do that. But tariffs also contribute or can
contribute to inflation. And inflation will do the opposite to rates and keep them high. So
this is a tough game to play. Beautiful. I know we just have a few minutes left here.
I want to check Ryan Edwards. You're on stage. Did you have any questions for Steph?
for Steph?
No, as if not.
Okay, no, he needs a second.
Okay, cool.
Then I get to get the last question in here.
Perfect.
Well, first off,
I just wanted to voice my appreciation
for you jumping on on short notice.
I know I reached out and I was like,
hey, we just have so much going on
that we'd love to get you into the mix for.
And so very cool to see that come to fruition.
I know that you're going on our
Investing with the Boys podcast as well shortly. So it'll be great to have you on there as well.
Yeah. So a bunch of different stuff. I would say just to kind of like
close out this part and then we'll rotate around with some more of the panel and get some just
general thoughts and go to different people for opinions. Seeing what we do see right now,
what do you think people should be doing in the short term,
not just from a perspective of necessarily trading or investing, but in how they intake
information and digest things? I think you want to stay skeptical. I know I try to keep checking
myself in terms of like my own, you know, personal beliefs
relative to things that are happening in the world.
So I think, you know, sometimes like you end up wanting to like your, you know, whatever
you think is right ends up being like something that will drive your decision making.
But it doesn't necessarily mean that that's like that's like reality. So you want to just like sort of check your assumptions.
Like I always try to talk to different people because they can give me different perspectives.
And it helps me like form an opinion on investments, on my own personal financial decisions.
You know, in these kinds of environments, like I think there's a
couple of like do's and don'ts from an investing perspective. One is that like when vol is really
high and this is just like a good reminder, I think like it was a good reminder for me. So I'm
sharing. I was reading a piece of research from a third party and they were like just reminding,
like don't go too heavy and like buying call options because, um, you know, no matter what it is, when vol is high, if you do
get a reversal, like yesterday where vol falls, you've got to hope that the thing you went long
on, um, rises faster than the vol falls. Um, and so these kinds of environments are like not
terrible to sell options, um, you know, on things you want to own down the road or just to collect income on positions that you're holding and may not go up in the near term. environment. And then I think it's just make sure, like to always take a look at your portfolio and
be like, am I very heavily weighted into like one or two or, you know, one sector or one industry
or one stock or that kind of stuff? Because I do think diversification right now is really
important. You know, in our strategies portfolios, we have a balance between risk on
and risk off. And we, for the first time in a while, because we've been running test portfolios
for a while, we have some international exposure because, you know, I think it feels like an
environment too where some of the policy changes may actually lead to economic changes,
meaning, you know, where it looks like the U.S. may not step in in every place they used to just
step in and be the big brother. And what does that mean? What would the other countries do?
And like I know there's, for example, Germany, you know, their bond market has actually been very volatile because they've decided that they're going to do fiscal spending for the first time in a while and allow their deficit to expand.
Why are they doing that? Because they think they are they're physically closer to Russia and they need to be more on top of that because they cannot they don't feel like they rely on the U.S. as much.
because they cannot, they don't feel like they rely on the U.S. as much. So that, you know,
what is that, what does fiscal spending do from a country usually provide some support
for the economy? So, you know, it's just like looking at things, looking at how things are
interconnected like that. I love it. Steph, thanks so much for coming on today, even spending a
little bit of extra time with us. Looking forward to having you on the podcast shortly as well and going from there.
Thanks so much. And hopefully we can, well, we will get through this. That's all I'll say.
We will. We will survive. We will persevere. Beautiful. Everybody make sure you're following
Steph. Feel free to comment on her stuff. She puts out some great stuff that Robinhood shares
out as well. And looking forward to more great conversations as we work our way around here.
Thank you. Take care. Absolutely. Take care. Awesome. All right. Going to work our way around
here a little bit more, get some different thoughts and opinions. I do see a bunch of
people up on stage. Emp, I might have you run parts of this, but let's kick it off with,
let's go over to Wolfie first.
I think you were like the first one up here
and then we'll go over to Larry after him.
But yeah, Wolfie, want to kick in with some market thoughts?
Yeah, what's up?
Thanks for the little Q&A there.
That was informative.
The last bit I totally agree with.
I think it's like if you want to own things long-term
and you know what they are
and what levels you want to own them,
you can take advantage of this high volatility and sell, you know, protected puts, I'd say.
You know, so you're not really blown out of the water.
But you've got to know what you want to know, know the balance sheet, know what kind of debt they have on hand,
know what kind of cash flow, all that stuff or whatever it is that you use to invest and go from there.
But from a generalized perspective,
I think it really changed, in my opinion,
in the last couple of days outside of just that
quote-unquote 90-day pause and leniency.
But the problem is that it's really stipulated.
And there's also other troublesome, worrisome headlines, in my opinion, that
kind of snuck in on the back of it.
The last couple of weeks, I've just been talking, we've just been talking about trying to map
out how things could fall, and for me, I said i wanted to pay attention to um the china headlines and then
on the back of it any sort of tiktok stuff because it was supposed to be due last week
that can got kicked down the road for 75 days but you know other china headlines that seem to be
net positive on a terror front kind of get removed once you start digging a
little bit deeper. And then in addition to that, you get the headline yesterday, which is like a
second order. At some point, if you have a tariff stuff, you're going to have inflation and that's
going to box the Fed in. But yesterday there was that headline that got snuck in about
Trump wanting to ask the Supreme Court for basically like autonomy on the Fed, basically like being able to fire people and appoint people and things like that.
But just at least calling into question the full autonomy of the Fed.
autonomy of the Fed. So that I think is kind of a pretty big deal because, you know, if you just,
if you have tariffs get pushed out for 90 days, let's just in a hypothetical world say that there
are just a baseline 10%, which is not what's going on, but let's just hypothetically say
that's what's going on. Then you would still have some sort of creep in inflation for that period.
It'd just be a little bit less. But if you have a creep in inflation,
then you're going to have a situation
where the Fed can't really act
unless you have one of their dual mandate things
provide them that opportunity to act
in favor of what the administration wants,
which is lower rates.
But then you just pay attention
to what they've been doing the last 48 hours.
There have been several from David Sachs to, you know, other people like Navarro and others.
It kind of, they're kind of, and Trump himself, pushing, pushing the Fed to like, hey, now's
the time to cut, right?
So I just think that that's a word salad, a lot of like words there, but I think that it kind of,
it sets up for more of this confusion,
more of this uncertainty, more of this, you know,
up down situation.
And I don't really think that we have a resolution or we're going to have any
kind of clarity or resolution for like material trending stuff, at least for earnings season. And then from there, it just depends on how
things shake out. If you, now that I said all that, if you just look at things technically,
you know, two nights ago, we were on the thing and said, if we got some sort of resolution
headline, it'll give you an opportunity to trade it.
You didn't have to be early yesterday.
You could have just traded the headline and emphasis on trade and made some money.
Now, if you didn't take any of the profits on a historical move, it's kind of like you're bad.
But today, if you look at where we kind of stopped on the downside,
it effectively stopped just short of 7%.
And it stopped just short of that breakout.
So effectively, you want to use that breakout level that you got on the back of the 115 tariff headline yesterday as your bull bear pivot.
If you want to trade around it, have a ball.
You got 3% from trough to peak here in the last couple hours.
And it just comes down to a trader's market. For me, I spoke briefly yesterday in your space and
had my own space, but I carried Alibaba into today and I had a little bit of Chevron. I also
had a couple of SPY calls that just stayed on the table.
I'm down on the SPY, down on the Chevron today, not in aggregate. But Alibaba is holding up,
which I think is interesting. And I just want to see if this China pumping stimulus into their
economy continues and if it keeps getting rewarded or if there's going to be some sort of,
you know, headline shock.
So it's a pain market,
up-down pain market.
It's more of like a positioning thing.
And if you want to be nimble and trade it,
trade it.
If not, just wait for like some clarity
in actual baseline headlines
and you'll have an opportunity.
I'll stop there.
Appreciate that. Yeah, pain pain market i like that uh good thoughts are wolfie larry how's it going yo yo can you guys hear me all right yes sir great yeah i it's funny that people love the
prediction side of things and hey we have to wait for this headline and wait
for that headline which I totally get right I am a technician so we have to weigh this information
because price is moving based on it right now but first thing I just want to comment on is
if you take a look back at the market from November to the beginning of March, right? You had a large four-month distribution pattern building.
You already had breadth breaking down.
You already had rotation out of tech.
Look at semiconductors versus S&P 500 on a ratio chart.
You already had the mags breaking down.
The market was already telling you
there was warning signs
of something coming.
Was it this tariff information?
Who knows, right?
So I think the reason I bring that up is to think that we were like in a hummingable market
and then Trump said something.
And now we have to wait until Trump resolves this problem for us to go higher, I think is a little bit silly because we were in a messy market pre this.
All this essentially did is we broke down last week and we now recovered it.
And today's an inside day, which if you're a technician, basically the move yesterday was so large that the move today is within that move.
So which is formative of a continuation pattern.
So there's a chance we could go higher here.
But the reason I bring that up is I think we can go from headline driven back to the technicals dominating and the price dominating, which if that's the case, the move is going to be lower, right?
Because we're below the 200 day, we're below the 50 day.
And if you're interested in like 50 day,-day, there's no voodoo there.
It's more just measures of trend.
And so then if you look at the 50-day, the 50-day is currently, right, it's a calculation
of the past 50 days.
We're about to enter the period where the market started to correct.
So the 50-day is going to start curling down and it's going to break below the 200-day.
And you're going to hear everyone talking about death crosses. And my point with that is the trend is down in the market, regardless of what just
happened the past 10 days. So just keep that in mind from a longer term perspective. And so
technically, from a longer term perspective, you should have been de-risking pre this event.
And so now it's, hey, is there a chance to take a stab at a bottom?
I would look at the prior cycle highs in the S&P 500, which is 480. That's the prior cycle highs.
And coincidentally, that's where we bottomed this week. So the technicals kind of gave you that
risk management scenario. Now we have this 520 level in the S&P 500, which I think is pretty
significant. And if you're tactical, the way I would look at it is,
can we stay above the five-day moving average? And can we keep RSI on a shorter-term basis above 50?
If you look at a daily chart right now, we're getting rejected at 50. So price is still telling
us that, hey, we had a four-month distribution pattern that resolved to lower. Whether or not
that's Trump's fault or not, or it's because of tariffs, yes, right? But now we're struggling to get out of this range. We
have this inside day. So I think the anticipation we have for the headlines to solve this problem,
I think is a little bit hopeful. I think you really have to see repair occur. We need a higher low. We need
to start to see breadth improve underneath the surface. Stephanie crushed it on here before
talking about what she looks at for fear and stuff. Look at put call ratios. Look at the VIX.
Look at VIX term structure. Look at percent of stocks above a five day, 50 day, 200 day.
All of that was at washout level. So I think one of the things you can do
here, I think a lot of people talk about the long side for trades. If we get overbought into some of
these resistance levels, you can look to de-risk again. Because if you're a longer term trader,
that might be what you're doing currently because the trend is down. It sucks to say it. I'm the
most optimistic person you'll ever meet. But it's just something we have to understand regardless of the news is that there's pressure
from the top side that occurred prior to this event driven headlines that we need to recoup
in order to really regain our foothold in the market. Individual charts I like. I like cyber.
It's an ETF. I like crowd. I like the cyberspace in general. You look at something like Palantir.
Obviously, a lot of the move has already happened. But I think cyber is a space where you can kind of still see names within there that are showing some relative strength.
And that's an area I continue to see some relative strength in. I heard someone bring up international.
Yes, it's a good time to be international. Gold, also a great place to be. Yes, the moves have occurred, but those moves
could continue to occur. So I just, I'm longer term bearish because, right, we kind of topped
in a lot of ways. The market kind of topped. Is this the bottom? Maybe, but the best and worst
days occur in bear markets, not in bull markets. You'll see the stats about if you miss the best
10 days, well, if you miss the best 10 days, you also probably miss the 10 worst days. And that's kind of a
framing fallacy that buy and hold people tend to use because you would have missed, if you missed
all of this and got out at 5,800 or 580 on SPA, you'd be sitting pretty good right now, right?
Just chilling. And you would have missed all of this and still been in a less of a drawdown. So
those are just kind of some of my perspectives from the technical view. I think there's a lot
of damage that we need to repair. That 575 level is kind of a key level that we need to recoup.
I want to see some higher lows. I like today that we got punched in the face and didn't make new
lows. So like someone mentioned on a tactical basis, you can kind of start to play these higher lows
to a degree on a tactical basis.
But I would keep my timeframe pinned to,
hey, if I'm being short-term, I'm being short-term.
Let me also pay attention to the underpinnings
of the long-term trend kind of breaking
over the past several weeks to month.
So that's kind of what I had.
Yeah, hope the market rips in my face
and I have to get back in, but that's it.
Great thoughts there.
Appreciate you coming up and sharing.
Hey, Gav, could I just real quick?
I just mentioned I wanted to see
what would go on with some of these Chinese names.
And there's just a headline that came out said,
Trump administration is moving forward towards the possible delisting of Chinese public companies in U.S. exchanges.
Source's incoming SEC chair Paul Atkins likely to take up delisting issue when he takes office
officially. This is from Charles Gasparino. Yeah there you go things are progressing indeed what's up sam
yeah i just wanted to uh i just wanted to talk about a few things here so there's a clear line
between someone who is more of a short-term investor or tactical trader um and someone
who's more of a long-term investor.
And that quote where if you miss the 10 best trading days in the year,
then you underperform the market by like 8%, something like that.
I do believe in that quote, but it also matters what your timeframe is.
I mean, if you are someone who's tactical, tries to get in and out and so on,
then yeah, I mean, that's probably not a quote for you because you see the picture, you check the charts, you're looking at all different
sectors in the entire market, not just tech, but everything. You're looking at national stock,
you're looking at all that stuff. But if you're someone who's more of a long-term investor where,
I don't know, let's say you bought Amazon 20 years ago, right? Are you going to sell Amazon stock as you see the market falling,
or are you going to hold on to it and then just sift through the volatility?
So even though it might not be a difference if you're a long-term investor,
because sometimes some people who are long-term investors also do some trading.
I do some trading my own, but only the portion of my portfolio.
But to say like the blanket statement that,
yeah, of course, if you miss the 10 largest days in the stock market, then you probably did miss the 10 largest down days. But if you expand over a long period of time and you do that every single
year, you're probably going to underperform the market. And then you also have to deal with timing
certain things correctly and putting a lot of effort into that. Some people don't want to do
that and some people don't have time to do that. So I think it really is an eye beholder. As part
of my portfolio that I do some swing trading in, yeah, I don't want to sit through a short-term
call or something through a massive 20% drawdown, let's be 500. But at the same time, I'll look for
levels to get in that for a short-term. But for the same time, I'll look for levels to get in that
for a short term. But for long term, I mean, those are some great buys on the way down. And
there are some companies, including CrowdStrike, that are trading higher than where they were on
Sunday. So and even on Sunday, they were trading higher than where they were a few weeks ago. So
you mentioned the cybersecurity stocks. So then you would miss that as well. I'm also a big fan
of the cybersecurity stocks as well. CrowdSt also a big fan of the cybersecurity stocks as well.
CrowdStrike, definitely one of the leaders in endpoint security management.
Palo Alto, leader in network security.
Rubrik, leader in data security.
And there's also CyberArk.
I forgot to take a symbol name, but that's leader in identity management with cybersecurity.
That's something that, shifting over to Michael, that's something that I don't see going away anytime soon. And I would say that a lot of companies don't really trim the budget
on a lot of the cybersecurity protection for their company. That's basically saving money by
not buying your medication. So yeah, I see your hands up over there. So you can go ahead.
buying your medication. So yeah, I see your hands up over there. So you can go ahead.
Yeah, I think you bring up a good point about the best day, worst days. But my point is a math
point, not a believing or disbelieving. The point is that in an environment where volatility is high
is typically a feature of a bear market. And there is very robust technical tools you can use that get you out of the market before
the bad and worst days occur, because the bad and worst days occur in a bear market. That doesn't
mean, right? Like if you're a buy hold investor, that's a whole different concept. What I'm saying
is that if you use robust indicators in math, like the 200 day, for example, or you look at bull markets are built on quiet strength.
Bear markets are a lot more volatile.
And there's plenty of tools within the technical toolkit.
I can share some of them in this tweet.
But if you look at that volatility metric, what I'm saying is that you then you miss both of them and have better returns over time.
I'm not saying that there's some secret sauce to time in the market. I'm saying that
this is a feature of a bear market that you can...
Did you cut out for anyone else?
Yeah, I don't hear him.
Yeah. I mean, I see what he's saying um right i think that i i think that sometimes when there's the um when there's a debate between
you know being tactical or even looking at math perspective i think there's some times that
you don't like as a long-term investor, you don't
really take that into consideration of getting in and out. I understand the math, but at the same
time, it's not really something that I would necessarily advise for someone who's looking to
build long-term wealth for possibly something that they would need in like four years.
That would take quite a bit amount of effort.
I apologize if I'm not understanding your point correctly. I think I use technicals pretty aggressively compared to some of the other people that
are on here.
Outside of just standard technicals, I use some of the gamma stuff as well.
I think that for trading
that works and even for like investing in a quiet like in a quiet market works but i think in this
instance the one caveat that i'd add to that is you have an audience of what 1200 people so outside
of like the basic stuff it's very difficult to have full-on conversations for quote-unquote
investing um where people have the same you know
baseline i'll have 250 all that stuff it's very basic i'm with you there and then the second thing
is this is this is a market that's also currently in this moment driven on headline sentiment on a
day-to-day basis so while the the breadth comment stands, while the comment about
the prior highs stand, on a day-to-day basis, you're getting headline shocks in either direction.
So even in this space, I just mentioned Chinese stocks, a lot of them are down like 4%
while we're talking on a headline. So the point of saying the headline stuff...
Well, that's a massive headline as well.
Exactly.
The point of saying the headline stuff is right now we have a very vocal administration
for policy that they want to frame or things that they want to have happen.
So if you're just a layman investor, right,
while you're trying to
digest from headline to headline like this, like as Gav just said, massive headline headline like
this, it will spin you out more likely than it won't. So the comment is just like a generalized
comment. If you're one of these people that wants to be an investor, and I'm just i'm not really saying anything you know luminary here it's you're you
know you're not going to miss more if things clear up then you know trying to get in front of it
outside of just trying to take shots for trades right so that's like the whole gist of the the
comment i think that sam and myself i'm trying to put out there um so if you're trading
it you're trading it but if you're trying to invest you're gonna you have to either block
out everything for the next x number of years and in that case you gotta do your math figure
everything out otherwise you know it's going to be headline to headline you know i'm just
realizing now there is another colored wolf account in this space i swear every day there's
there's gonna do one what's this one this one. I swear every day there's, there's going to do one.
What's this one?
This was nice.
I honestly, this one's close to my,
I like this one better than the main one.
If I'm being real.
Wow.
Hit them with it.
Yeah.
Hey, why not?
We've got 1300 people in here.
Quick shout out.
Something big is coming.
If you haven't already checked that wolf trading account up here,
it's that slightly lighter blue.
You may see a full day of spaces hosted from it tomorrow.
Starting tomorrow, first initial kickoff.
Something that we've been cooking up behind the scene.
And we are going to be running with very heavy.
Soon, since we're teasing it anyways, you may be seeing morning to evening,
pre-market to close and pass-closed spaces
every single weekday coming from that account.
Something that we've been building out.
If you're a trader,
Wolf Trading, good account to be following.
Shout out, shout out.
I would advise it.
Also, I see Gerg in the audience. Get Gerg on stage.
Gerg's actually currently shit-talking
me on Snapchat. He's like, my spaces
are bigger than yours. It's just me.
I want to go over to Stock Talk anyway,
but you got any comments on that to Gurg?
Is Gurg Gavin bigger than you,
even when he's been gone for months
and Stock Talk's been ranting?
Over 300k followers, might I add you,
not just over, destroyed through, 305k.
Well, you know, the bots don't count for spaces size so i saw the guards
i'm just kidding uh i think talking about his followers i agree he's on he's on here
he's gonna co-join in from an alt and try and join up watch that's what i know but uh follow
trading follow that account up here stock talk i want to bring you into it though and
hear your thoughts on today and we got six minutes until the market closes. You make any moves today?
You long everything?
You long Amazon?
You asked me yesterday if I was chasing that move.
And I said no.
A lot of people up here were like, oh, well, it's the bottom.
It's going to be the bottom.
Wait until tomorrow.
Big continuation rally on a 12% day.
I don't know about that.
But, you know, obviously a big down day. I don't know about that.
Obviously, a big down day again today. At the lows,
we were down almost 7% on the Qs.
Maybe even got to 7%.
The China thing
is what matters.
I know everyone was hyped
up about the 90-day tariff pause.
Look, I'll
reiterate what I said yesterday.
I think it's positive from the sense that about the 90-day tariff pause. And look, I'll reiterate what I said yesterday.
I think it's positive from the sense that we know there's a Trump put at some point,
whether that's via the bond market or via the equity.
Well, it really doesn't seem like it's via the equity market,
but we do know that the bond market can force his hand,
force the administration's hand.
So that's a concession that we got yesterday, and that's positive,
because the market knows there's some semblance of support somewhere.
But the negative part of the news is that the most important tariffs in the whole situation
was the tariffs on China, and those have only gone up.
Those have not been paused. Those have not been removed.
They've just gone up. And I think as of this morning, they're 145 percent. Trump's at 125
yesterday and then the White House at 145 percent this morning. So, I mean, they don't even seem to
know what the numbers are at this point. But, you know, once you're at 130, 140% tariffs, like, I mean, you might as well just halt trade.
Like, you know, and I don't mean that seriously, but this is going to have an enormous dampening effect on the volume of trade internationally.
And it matters less what we do to Campodia and Lesotho and even Vietnam.
It matters significantly less what we do with those countries than it does what we do with China.
And, you know, I get the gung-ho attitude that many Americans have.
I think most American patriots or most American pro-American people in general are going to be anti-China and say, look, this country's taking advantage of us for a long time.
They've done espionage and IP theft and so on and so forth.
And this country clearly doesn't have our best interests in mind.
And, you know, we need to play tough with China.
play tough with China. I get that mentality. I actually agree with that. I think, you know,
I get that mentality.
I actually agree with that.
I was in favor of like the GPU export restrictions we were putting on them. I was in favor of a lot
of the restrictions that both Republicans and Democrats have put on the Chinese over the last
decade or so I've been in favor of. But I think when you're attempting to do something like equitize the trade balance
between the United States and China, I think you have to take a more measured approach. I don't
think you can take a hardline approach in that sort of scenario. And the reason why is because
China has leverage too. I know a lot of like, I get this in the comments every time I tweet something critical about this tariff policy.
I'll get people in the comments saying like, well, we're the toughest, we're the strongest, we have the most leverage.
They can't live without the U.S. consumer.
Yeah, all of those things are true.
But the U.S. economy, at least as it stands today, also needs the international supply chains that we've grown accustomed to over decades.
The businesses in this nation are not going to be able to change that reliance overnight.
And it's not just about things like the auto industry.
I know there's been a lot of conversation about the auto industry and how it's going to become untenable for GM and Ford to do business at all without their plans in Mexico.
That's true for a lot of industries.
It's not just the automobile industry.
That's true for a lot of American small businesses that depend on supply from China.
I mean, look, Fox Business hasn't been particularly critical of this tariff policy over the course of it.
But even over the last few days, they've started sharing stories as well.
They were talking about a small business owner yesterday
who imports plastic parts from China to build toys
for special needs children in the United States.
And he can't source the plastic affordably in the United States.
And so he pays with the existing tariffs. This is pre-China
tariffs. This toy producer pays $26,000 a year already pre-Trump. He did this during Biden.
He did this during the last Trump administration. He pays $26,000 a year in tariffs for his supplies.
With the new tariffs in effect, he'll pay $300,000 a year for those parts,
meaning the business is no longer viable. People are like, oh, we'll pay $300,000 a year for those parts, meaning the business is no longer viable.
People are like, oh, we'll pay it.
Well, obviously he's not going to pay it.
He's a small business toy producer.
He can't afford to pay $300,000 in tariffs.
So this effect, magnify this effect across millions of businesses, and you have a massive economic impact to the American economy.
This isn't just about, like, let's put the pain to them. Right. And that's been the attitude from a lot of supporters of
this policy. Let's put the pain to them. You know, it's about time. It's about time for fairness.
We've, you know, been the been the world's piggy bank for a long time. And look, I agree with all
those sensibilities. I agree that, you know, the balance of international trade has probably been leaning on the United States since World War Two.
Is that an inequity that we can correct overnight?
Of course not.
Is that an inequity that we can expect American businesses to blink and be through with overnight?
Of course not.
And so, you know, I think you can acknowledge the inequity.
I think you could want to do something about it. And all of those things can be true. You can agree
with all of those quotes and statements I just made and still want this to be done more reasonably
and still want this to be done with a more responsible use of leverage. And that's the
camp that I stand in. i think the policy is fine
i think that it has the right intentions in mind as with regard to bringing manufacturing and
industry back to america i just think it's remarkably poorly executed and is begging for
nuance and is begging for detail and when it comes to china look like i guess the stance here is that
we're going to leave these 140% tariffs in
place until China blinks. And apparently the Trump administration is looking at potential
other avenues by which to apply that pressure, right? We got that report out today. I know
Charles Gasparino tweets a lot of speculative stuff, so maybe it is or isn't true. We got the
report out today that they're considering a delisting of Chinese ADRs in the United States.
Now, I would imagine that's more of a threat than an actual policy change they're going to make.
But who knows?
You know, clearly they're trying to do stuff on this end of the pond that the Chinese will notice and then say, oh, OK, well, that's too far.
It's time for us to make a deal.
But you look at the commentary in China and it sure doesn't seem that way, does it?
Look at the commentary to China and
they're like hey dude we're willing to go down with the ship like that's literally what China
is saying they're saying we're willing to go down with the global economy we will cut rates we will
fiscally stimulate as we're already planning on doing keep in mind that's an economy that's
not seeing inflation unlike the other major economies of the world
they're seemingly willing to go down with the ship they're like hey let it burn you know pull that's not seeing inflation, unlike the other major economies of the world,
they're seemingly willing to go down with a ship.
They're like, hey, let it burn.
Pull the pin on the grenade.
We will sit in the room with you.
And if that's the attitude they're going to take,
you're not going to get a deal done.
And that's my concern.
But look, cooler heads prevailed yesterday when a lot of us were at the bottom of pessimism when it comes to this conversation.
Cooler heads prevailed yesterday and gave us a pause, which was much needed in order for this to be even remotely tenable.
Do we have any data on like previous situations with china with you know similar type maybe
tariffs or trade wars and how those things resolved who blinked people find pressure
2018 feels like it was a like a one-week thing like i feel like they never went like it wasn't
a one-week thing it was a it was like a three and a half four month thing um that's how long
the last five years have been that's how long the last
five years have been that's why it feels that way yeah i mean i remember i remember it like i'm
watching okay i guess 2018 do you see okay so then do you see this as potentially similar to 2018
uh look i do see a lot of analogies to 2018 in the sense that this is a headline driven market
again and for the people that didn't trade trump part one, you're probably like, what the fuck is going on?
But I mean, it's, I don't say it's normal,
but the headline-driven volatility is normal.
Trump likes to say stuff.
And that was true in his first term too.
And unfortunately, the way the world works
is when the most powerful person in the world says stuff,
whether it's flippantly or with actual seriousness,
it actually doesn't matter much.
When the president of the United States says stuff, it moves markets.
And it moves markets enormously.
And it did in the first term as well.
I think the difference in the first term was the numbers were much more palatable.
Markets actually reeled in reaction to tariffs.
Well, it wasn't just tariffs, but there was a pretty big downturn in markets around the time of the initial tariff conversation. You could argue that it wasn't
just tariffs. There were other factors at play, but markets ended up recovering and ripping to
new highs during his administration after that pullback. But it was a pretty significant pullback
and it was a lot of chop for several months. Now, again, the big difference is those numbers were magnitude smaller those
numbers were in the 10 to 20 percent range and now we're operating in the 100 plus percent range
that's the difference i think like if somebody were to say hey let's rewind the clock to april
2nd and if on april 2nd he came out with 10 tariffs on everyone including china i don't think
the market would have given a shit.
I actually think we would have been higher.
In my opinion, we would have traded higher on April 2nd had that been the case.
But we didn't get that.
We got insane numbers across the board.
Most of those numbers were paused yesterday, but the China number wasn't.
And the China number is arguably the most insane of them all.
Not in absolute terms.
I'm not saying, oh, the number is higher than the rest of the pack i mean the china number is the most insane of them all because
it's affecting hundreds and hundreds and hundreds of billions of dollars of goods
you know the number if you put 100 tariffs on close your eyes and pick a random country in
east asia or in africa it's not going to matter because the trade balance of the United States is meaningless with most of those countries, meaningless to our GDP. So you could put 500%
tariffs on those countries and it would be meaningless. It would be meaningless to the
market as well. But with China, it's not meaningless. With China, when you put tariffs
of this size in and the Chinese are retaliating with 84% tariffs of their own, any trade between the United
States and China just became enormously more expensive.
And any good exchange between the United States and China just became enormously more expensive.
And like, that's a problem for the consumer.
And I mentioned this in our long 24-hour space that we hosted the Day of the Terrorist.
But I really feel that in the process of trying to do this for the little guy, right, like the whole intention, or at least the publicly stated intention behind this policy has been let's save the little guy.
Let's bring jobs back to the
little guy, right? Let's bring jobs back to the middle class and the people that have been left
behind. In the process of doing that, you're going to bankrupt many small businesses and
choke the wallets of millions of low-income Americans. Is that the right way to accomplish
that objective?
You know, hey, don't worry, we're saving you. You're just not going to be able to afford anything for the next six months. And the global economy is probably going to go into a recession
and your wife might lose her job or you might lose your job. Like, is that a good way to do it?
Do you think if you pulled the average American and said, hey, do you want a steel producing job back in your community
in the next five years? But in the meantime, you get to have a way higher cost of living
and people in your community lose their jobs due to lack of business confidence.
And you see a general slowdown in the global economy and your stuff on Amazon gets more
expensive and your stuff at Walmart gets more expensive. And like, do you want that trade off? If you ask the average American
that and took the political angle out of it, right? Don't ask them if Trump wants to do it to them or
Biden wants to do it to them. If you just ask the average American, would they take that trade off?
What do you think the overwhelming answer would be you had me until my stuff on amazon getting more and i became a hard no yeah then yeah then you were like hey
that's that's that's the limit right but my point is is that we are we are basically signing a
and again i want to reiterate this because i had people in my comments today like saying like oh
dude you sound awfully liberal and i was like laughing like dude i'm a texan and not a liberal at all i've been very conservative my whole life talk
has blue hair i've seen it in person yeah blue hair um but no i'm nothing i'm quite the opposite
of liberal so it's funny that people think because i'm criticizing this policy i'm liberal no it's
quite the opposite i am a conservative and I did support this administration.
I do support this administration, but I'm not a partisan hack.
And when things are done that deserve criticism, I criticize it.
So that's the distinction I think that's important to make here.
And also, like, again, you have to ask yourself if you want this tradeoff as a policymaker,
not just as an American. And I feel like these policymakers are not asking themselves that
question. You know, like, what level of pain do we have to cause in order to get to our end
objective? And Trump said, oh, there'll be a little bit of pain, you know, only the weak will fail, this sort of stuff. I mean, I think it's a cool,
like, you know, tough guy thing to say, but, you know, that's not going to help Americans who can't,
you know, afford basic goods. And that's why my issue with this policy, my issue with this policy
is that it hurts Americans way too much in the short term and the long-term
results are not guaranteed. You know, just because we do this and stick with it, it doesn't mean that
for sure the American steel industry is going to be revived or that for sure we're going to have
shipbuilding back in the United States in a few years or for sure we're going to have
cutting-edge semiconductors produced here within a few years. We don't know that for sure.
And so we're gambling, literally gambling with the lives of millions of low income Americans saying, hey, you take on the pain and do what's right for America.
You know, you take on the higher costs in the short term.
Don't worry. Don't worry.
We'll get plastic toys back here.
We'll get cotton T-shirts back here.
Just wait. Just wait.
But in the meantime, it's all going to be a lot more expensive.
You know, and your back-to-school planning for your kids is going to be a lot more expensive.
And the groceries over the summer are going to be a lot more expensive.
Like, no one wants that.
You know?
And again, people keep acknowledging that Wall Street is railing against this.
They hear people in the financial community railing against this and they go, oh, you privileged titans of industry.
You know, you fancy guys in your stocks don't want this to happen.
No, this is no longer about the stock market.
The stock market's down 20, 25 percent, depending on the index that you want to look at.
And the market's probably closer to a bottom than it is to anything so this is less about market fears at this point this is more about how
does those market fears and that sell-off in the markets and the pressure and bond markets going
to translate to the real economy because yes the stock market is not the economy okay but the stock
market has a wealth effect both on everyday consumers who have 401ks.
And it also has a wealth effect on businesses who are willing to deploy capital, whose stocks have gotten crushed by 40, 50 percent.
And that matters to the economy.
And when the market goes down 20, 25 percent and has no hopes of recovery because there aren't any positive catalysts on the table. That is an issue for the economy.
That is an issue for investment.
You know, if you're somebody that wants to invest billions and billions of dollars in
this environment, you're probably not going to want to do it.
And that's not just in the private economy.
That's in the public markets as well.
You know, I had somebody today saying, well, I saw somebody in my feed say, well, I love
this volatility.
It's great for day trading. Of volatility. It's great for day trading.
Of course it's great for day trading.
Of course it is.
But an environment where you have minus 7% move in the Qs the day after a record-breaking
plus 12% move up, now the Qs are trading like a penny stock, literally.
And that's a problem. There's a reason why when we look at
the historical anecdotes for this level of volatility, when we look at the other plus 11,
plus 12% days on the queues, why do they all come during bear markets? Why is it like the
anecdotes are from global financial crisis and the COVID crash? It's because those types of characteristics
happen in bear markets
because extremely high record level
day-to-day volatility like this
is not an incentive to capital deployment.
It might be an incentive for day traders
to trade the volatility.
And if you're a great day trader,
I'm sure you're doing very well in this environment.
But outside of the day traders
who are all cash at the end of every day, people who are putting cap investing capital into the
markets are not going to feel overtly confident in a market where the queues can go down 7% one
day and up 11% the day before. That is not an environment where you want to drop billions of
dollars on the table. And that's another problem. And that's a real economic problem. That is not an environment where you want to drop billions of dollars on the table.
And that's another problem. And that's a real economic problem. That's not just a market problem. So yes, the market's not the economy, but there are residual impacts of a significant
market decline that are relevant to the real economy. And if this keeps up and we don't get
any resolution,
I think you'll start to see those real impacts
in the economy and the data in the summer.
I love it. I love it. It's good thoughts.
I want to get to Kevin.
Is that Kevin on mute?
Yeah.
I just have one yes or no question for Stock Talk.
So you're saying you're chasing Luka and not the stock market?
Exactly. Exactly.
Oh my God.
It was so good to see him last night.
He killed it, too.
Like, 45 points.
And everybody in the stadium was, like, screaming when he touched the ball.
It was awesome.
People were rooting for the Lakers to win.
Like, I was with three of my buddies who were lifelong Mavs fans,
and they were wearing Lakers jerseys.
So, that was cool.
What's up, Kevin?
Not much. I was just going to say, I don't know
if day, I mean, I'm a day trader.
I like ball. I don't like
this ball. So I don't
know. Well, there you go. Day traders are good.
Yeah. Well, and the
problem is that like the
technicals on an intraday
basis, like you kind of have to, in this
environment, now let me sit, in this environment the technicals, you got to discount them because like, dude, you know, the tape bombs are what really destroy a day trader, right?
So unless you're really scalping, and when I mean that, I mean like if you're putting, and I used this term yesterday, A lot is just a contract. So if I say 10 lot, I mean 10 contracts.
So if you're putting out like 10, 20 contracts and you're scalping two points, three points,
then yeah, I mean, this probably would be the market. But if you're out trying to scalp 15,
20 points and you have like a trailing stop on there, especially now, you're getting whipsawed
out. So unless the market's really trending,
which I mean, we've had trends, but these trends are very quick. And I just think that you start
against them as a day trader, but who knows? There's a lot better day traders out there than
I am, but I have been kind of very selective. I mean, I went from like trading 60, 70 like trades a day to today I did three.
I popped off three trades and just watched the rest of the time.
Like unless we get to a super critical areas to the downside or the upside, it's like you got to kind of hold on to it.
Right. Like hard to trade breakouts like today is a really good example.
Right. I think everybody and their mother, if you're a J trader, a day trader, you were looking at that breakout on the ES there, trying to get above
what, 53.45 and break to the upside didn't happen, right? Chopped in there, probably chopped a whole
bunch of people up. Saw the flush to the downside, got to 5,200. Now the 5,200 level on the S&P 500
was, you know, towards the close was a pretty key level there, but it is a difficult market even
for day traders, in my opinion.
I think that you,
when you hit, you kind of keep this game.
I'm not a day trader, so I trust you.
And maybe somebody else is, right?
But I'm just saying, it's just not.
Sometimes people are like, oh yeah, dude, this is the greatest
environment. It's like, no, like
see a 6%
move to the downside, and I'm not even lying to y'all six
percent move to the downside and i in my head today i was like dude watch us go green like it
seemed like we wanted to go green there for a second like and we were still down two and a half
yeah and it's like that's not that that's just not a healthy market and so you know i think we
still in my opinion sit back watch be very, be very tactical, trade smaller lots.
Like you can do a lot of damage in this market on a micro or just one micro contract.
You could do a lot of damage, right, and protect risk.
You don't have to go out there and trade the same size.
And I keep seeing people posting, you know, good trades and bad trades.
good trades and bad trades, but people are like, dude, I just got blown up. And it's like, yeah,
But, you know, people are like, dear, I just got like blown up.
well, because you're still trading your 10 lot when you should be just trading one and just
letting the price move. It just makes you feel a lot better. So I think personally, it's really
hard to overcome that engulfing candle that we had because it was a historic candle. That 6%
moves to the downside that we saw today, we got very close to that circuit. I just wanted
to see his home. That would just be epic just because. We got very close to that circuit break.
We saw some buyers really stepping in. This market's not healthy right now, honestly.
You're seeing these swings. It's not a healthy market. And I think if you're trying to deploy
long-term capital, you still dollar cost average here, deploy. Some, but not all of it. I actually do believe,
and I'll probably be wrong on this. I know that there's still some headwinds out there.
I truly believe that we have not seen the lows yet. I think that we're very close to them.
We're very close to them. I think we're about maybe 250, 300 points close to the lows from our lows.
But I don't think that this is it.
And I know stretch of the imagination.
Yields look like they're going to go higher on a weekly chart.
If you look at bond futures, you can look at the yield chart.
But if you go to bond futures and you go back in time, five years, 10 years, we got a bear set up on bond prices, right? To the downside,
meaning yields move to the upside. That's not going to be something that the president really
wants to see. Does that really push him back into trying to do all these things, right? Like,
does that, did we break something, you know, CDS or credit default swap started to inch back higher?
It just seems like a market that's not on the right footing right now.
And with the lack of liquidity, if liquidity was back in this market, we were printing 45 contracts
on the bid, 45 contracts on the ask. I honestly would be like, this is a bottom. It's time to rip,
but we were not. You're seeing two lots on the bid, two lots on the ask and people blowing out
500 lot, thousand lot contracts,
market orders, and flushing books. This is not something that's normal. So be very tactical
with this. I don't really like anything in this market, even on the short. It's a hard short until
you break critical levels right now. Quick question for you, Kevin. Do you, and this is
just explanatory
towards your current statements, but do you think we're at the lows of current yields,
like especially long-term yields? We've reached a peak for the 10-year and 30-year. I have my
own presupposition, but I was just curious your assumptions here. No, I think the 10-year goes
up to 4.7 and a half. That's just my thinking. I think yields still
go up. We have this pause right now, but something's a little bit wrong with the plumbing.
You can see that with the dollar. It looked like dollar wants to break 100. I think yields,
once again, move up a little bit more. I don't think the rhetoric is going to stop. I think
the rhetoric will chill for now. And even if we do see a consolidation range, and I think that the
administration sees that there might be some more market stability, I think they'll probably
push the button again, just because that just seems like that's their demeanor.
And I'm not like, you know, once again, long term, if you look at a long term chart right now,
if you, you go on a monthly chart, and we hit an RSI that's oversold on the monthly and you are a long-term trader, it is time to deploy capital.
My thoughts are not, I want some clown coming to me a year from now and be like, yeah, you thought we weren't at the lows.
A year from now, we will be higher.
A year from now, we will be higher. I'm 85, 90% sure that we will, unless we have something
really cataclysmic happening geopolitically or economic wise. But I think if you're looking at
the next day or if you're looking at the next week or two weeks or three weeks, I still think
that we have some room to the downside. I'm looking at 46, 60, 46, 80, but I think yields, I think the 10 year hits 475.
And I think if you get 475 on the 10 year and we still see some issues when it comes to
liquidity, especially in the debt markets, I think that's enough to actually get the Fed off
the sidelines. I think that would be a threshold. Yeah, that's to be determined as to the Fed's posturing.
And let's say if yields really do have its abilities to, let's say, dictate Fed policy,
that's to be determined.
I won't agree nor disagree on that point.
I think that the big conclusion essentially is that if we've confirmed, and I agree with
you, yields do have an upward trajectory specifically, so prices down, yields higher for the 10-year and 30-year.
We've obviously seen the actions occur to date.
If the trend continues and stock or Evan,
do you mind if I post a chart in the nest
so that everyone can get a bit more context here?
Okay, so I got stock talk to give me the okay.
But like a lot of the conversation was around foreign holders.
So specifically, Kevin, I'm sure you're aware we've been discussing a lot of, let's say, Japanese and Chinese bond holdings.
And if we're looking at the trends, I'm not going to go too deep into it.
I'll just go really quick.
Essentially, Japanese started faltering and divesting via the yields and their treasury demand roughly in 2023, late 2023,
and it continued going higher. Chinese, on the other hand, since 2020, has slowed down the pace
of purchasing. For a small period of time, we actually saw that the Japanese were undertaking
all of the lack of Chinese demand that we've seen. But now, again, there's inherent risks and potentially
like effects, contagion effects within both countries. And I think that if we're looking
at Japan as well, there's probably BOJ type policies that are interplay here, where they're
probably going to divest and deleverage outside of the yield in order to support their own economic
status. And so this is just a little thread that explains that dynamic very bluntly and so but I think that if that continues to happen
essentially yields only have one way to go for a time being right and if yields
only have one way to go ie higher then markets are probably going to see forms
of compression in that environment and and we're heading into like quote-unquote
if the yields still continue in this space we're heading into like, quote unquote, if the yields still continue in this space, we're heading towards a bear steepening.
But again, if the 10 year and the 30 year essentially falter at this point, then we're heading into a bull flattening, which in itself is unhealthy for markets.
Because just to finalize this point, I know, Wolfie, sorry for this.
But just to finalize this point, bull flattenings have on aggregate the worst performance for S&P.
Yeah, well, right. And then we could focus on the long end. Right.
Because, I mean, the 30 years actually looking a lot more dire.
But even if you kind of look at the short end of the curve and you start getting, you know, a decent move to the downside when it comes to two years or even two years earlier.
Right. That's when you
actually start talking about the financial plumbing itself being a little bit disconnected,
right? If it's too disconnected from Fed funds, then you start talking about overnight rates,
overnight lending, small business lending. I mean, that's really what actually kind of was
the underbelly of the beast that people were freaking out about. That's really my biggest
concern there. And I don't think the Fed's going to be okay with 65, 70 basis point yield moves on
a weekly basis. That's just not conducive for lending conditions for financial institutions.
So that's why I say that, yeah, I mean, if you continue to see this type of wall,
I think the Fed's going to have to at least announce or open a window, a liquidity window,
to make sure everybody's good to go, which would force their hand. It doesn't mean that the Fed
has to cut rates. It doesn't mean, right, but it does mean that they might have to take additional
action as far as open market facilities. And that's something that they have been springing
into action, even when we saw the regional banking crisis. And I think that would be
enough of a signal that we have a little bit of a problem. But we might be at a bottom
too. I don't know. Long term, yes, good opportunity. But to swing, I think you still need a little
bit of confirmation. I'm looking at 57.50 to the upside. Hold on to that for three to four trading sessions in order to try to really confirm a bottom, which I'm fine with that.
Even if we get to 5800, I think I'm fine with waiting rather than this being kind of like a doomsday scenario.
Because we will have a cross.
We might have actually had it today.
We're damn near really close, right? Like tomorrow we might have it, but we're going to start also
having this, you know, this death cross. We can go and look at the technicals like David,
I know that you and I kind of talked about it, but if you kind of go back and look,
we either have this at the end of a cycle, which could very well be, or we have this before the final leg of a
pullback in the market or a drawdown in the market. And I think we've already gone through two solid
waves to the downside for the S&P 500. I don't think we've done the third yet, but you can make
the case on the equal weight that we might be in that third wave right now. So that's why I'm
leaning a little bit more bearish than bullish right now. And I'll let Wolfie go. It'll be really quickly here.
But structurally speaking, we can't say that being completely bullish on the market is accurate.
I think because one, tariff pause and still inconsistencies within fiscal policy remains questionable.
questionable and so i.e. heightened volatility within market performance two we still have no
And so, i.e. heightened volatility within market performance.
clear direction for economic uh economic data and how tariffs are actually going to affect economic
data and then three the big of the big one out of all of them we still have disjunction within
the yield curve and i think that personally the yield curve is going to dictate a lot but like
until we have all those three factors come into play i i don't think it's it's it's it's
positive for us to think that quote unquote a bottoms in i think that we're still in this
heightened volatility environment and that could swing either way sorry for that long uh turn
wolfie go for it no i'm just gonna follow up on um kevin's uh comments here so So Kevin's saying he wants to wait for 5,700 to be basically reclaimed and supported.
5,750.
5,750.
Call it the 200 days, basically what you're saying, right?
Yeah.
You want to see 5,750, call it 5,760 if you want to be generous, right?
5750, call 5760 if you want to be generous, right?
And earlier, the commentary was basically long against 4800, right?
So effectively, you're right in that midpoint.
And it's a 10% move to the downside, and it's 10% move to the upside,
which 10% is a lot, but it's also in this market a couple hours, one headline,
or one day away, right?
So with a 40 VIX currently, and I think the highs today was like 53,
it makes it just really difficult unless you're just trading
against an intraday level or an hourly level,
and you're just trying to get a point, get a couple quarters,
or get a couple bucks, depending on the size, right?
But outside of that, you really just need either another really solid hole
to that 4800 level that you can go long against,
or get close to it enough to where you can go long against.
Or you need that upside swing into resistance that you can kind of fade.
Otherwise, flip a coin.
That's just from my technical perspective, just flip a coin. thing that I'll say is we broke a trend line that started on the COVID lows in the last week,
right? And then the reclaim yesterday, reclaim that trend line. And today the battle really
kind of snapped up and down at that trend line. Curious to see if it holds and that's it.
Yeah, and I just look at the back there, real quick.
Yeah, and I just look at the backdrop too.
So like, let's X out some of this stuff, right?
So tariff policy looming,
let's just say that that goes away, right?
It goes away, cool.
You know, you're still looking at an environment
where fiscal spending is gonna get cut.
They continue to talk about tax cuts and the biggest tax cuts in history, but it's like it's just a continuation.
So everything's going to be the same for the most part on that front, except for maybe the salt tax adjustments.
OK, so you might get a little bit more liquidity there.
Fed obviously is kind of telling you that they're not really trying to do anything until something really actually breaks here.
I mean, it doesn't sound like an environment that, you know, that screams like massive liquidity coming into the market anyway. So I still think that there's an overhang of economic data and pressure on the consumer that it's definitely getting discounted.
Yeah. But the earnings thing, though, you know, people are moving guidance and pulling guidance.
They're not getting hit.
Like, you know, it might be already priced at.
I don't know.
Love it.
Hey, guys, jumping in for a second here.
I did get Adam Patti, who's the CEO over at VistaShares, to come and join us.
He was on a space with us last month as well.
I wanted to chat a little bit with him on his thoughts here on the market.
And then as well, VistaShares, myself, Evan, Stocktalk, Greg, a bunch of others have been
working with them, getting out some of the word on their ETFs.
They have a couple of ETFs that have been really popular lately, especially with retail.
So going to roll us into a conversation.
You're still talking about the market and some of these different pieces, but also going
to be discussing these other items.
Greg, I do see the audience if you want to jump up on stage.
I see him up here as a speaker.
But I want to say, as we're heading into that, make sure you're following everyone up here.
I really appreciate everyone for joining in.
I'm really excited.
This next conversation should make sure you're following Adam and all the other amazing speakers up here should make sure you're checking them out.
Give the people a follow.
But, yeah, no, I'm excited.
Yeah, 100% great panel and love the thoughts
throughout the past hour.
I feel more educated
from Kevin, Wolfie, Stock Talk, David,
so many others
that have been speaking up here.
This has been great.
Adam, super excited to have you on.
It's been a very wild week in the market,
especially someone
who's actively managing funds.
I'd really love to hear from you
your perspective.
Yeah, well, first of all,
thanks so much for having me.
It's always a pleasure. Gosh, I was listening to you guys for the last 10 or so
minutes and it's just an incredible time we're living in now. I just think that somehow the
fundamentals have been kind of divorced from the storylines, right? I mean, at the end of the day,
the storyline is driving the market instead of the fundamentals.
And I think we're going to be in that kind of regime for a while.
You know, maybe tomorrow we'll hear about a couple of deals being cut with Japan or South Korea and the markets go up or we'll hear some bad get through the next couple of weeks and hopefully get some real information out of the administration on, you know, how the talks are going with these various countries and, you know, where these tariff conversations are going to end up.
You know, on the one hand, you've got, you know, you know, the strategic genius of the administration being talked about, about boxing in China and, you know, setting the high bar on these tariff deals and hopefully coming down somewhere in the middle. You know, and then,
of course, people dispute that that's even a good position to be in, you know, why the tariffs even
good for the United States. So, you know, I think we're dealing with a situation where we don't have
enough information, which is always the worst case scenario for the markets, obviously.
Yeah, I think that that really gets a piece into it.
One of the reasons that I wanted to bring you on today is because there's one feller who,
you know, people are looking around the market and all the billionaires, they're losing money,
hand over fist.
And there's this one guy who is not losing money.
He's up 13% year to date.
His name's Warren Buffett. And you guys have been building
this OMAH ETF around Berkshire Hathaway, but with this extra income target of hitting that 15%
income. So I really wanted to get your thoughts on, first off, just looking at the mind of Buffett,
how he's green 13% year to date when SPY and others are down 20%. And why you're, you know, building
this off of what he's doing? Well, I mean, the initial premise of building it off what he was
doing, because who doesn't want to invest like Warren Buffett and then have the added benefit
of some income on top of that. So that was the original premise. But I guess timing is everything,
right? And Warren Buffett has certainly shown his brilliance as an investor, the best investor probably who ever lived. So Omaha, OMAH is a ticker. It's a very simple
strategy. It's the equity strategy. The equity portfolio portion of it is comprised of BRKB as
our top holding. And then we have the Berkshire Hathaway's top 20 holdings in the correct proportions that they hold them in as the rest of the portfolio.
So 21 equity holdings. And of course, you know, Warren Buffett's top conviction or top holdings are the likes of Apple and Bank of America and Citigroup and Visa and VeriSign and Kroger.
Kind of, you know, well-known names.
And then what we do is we run an active options overlay
over those holdings, writing calls against those holdings to generate a 15% annual income target,
which we pay out monthly. So the target is 1.25% per month. We did our first distribution
about a week and a half ago, which was right on the nose for that 1.25. And, you know, I think
about a week and a half ago, which was right on the nose for that 1.25%. And,
it's a very timely strategy. I mean, you know, look, I mean, our portfolio, you know, Apple
didn't do us very well over the last week or so, though it had a huge run up yesterday. And some
of the financials have certainly taken a shot. But, you know, it's a blue chip portfolio. And,
you know, we think it's the right time. So if you're looking for a solid equity, a core equity holding, but want the consistent
income that can be provided by an options overlay, I mean, certainly this is a good
play, I believe.
Yeah, it's definitely something that's interesting to me.
You know, I think a lot of people are getting attracted over to everything that Warren's doing. There's a lot of good information on your website that I point
people to. And I also posted and just pinned a bunch of threads up top. A lot of people have
been talking about this. It's been kind of catching fire within, especially that, you know,
I would say that covered call ETF community, right? With high monthly dividends, this guy
Dividendology wrote like this whole thread about it, where he was breaking down a bunch of the
different pieces that I pinned to the top. And so I've just been looking at it
and just kind of going through the different unique pieces to it. And I think it all starts
with like the initial question from my end, which is where does something like this fit into a
portfolio, in your opinion, for the average retail investor? Yeah, I mean, I think there's and this
is what we try to do when we bring a product to market. We need to we don't want to be one of those companies that just throws a bunch of product out there hoping that something will stick.
When we bring something to market, it's got to have clear use cases.
So I think in this case, there are two clear use cases.
The first is obviously as a core equity holding.
So you have your SPY, your Qs, or whatever it may be.
you have your SPY, your Qs, or whatever it may be, you know, having exposure to Berkshire Hathaway
certainly is a good way to deploy some, you know, core equity exposure in your portfolio.
The other way to use it, which has really been interesting, which I keep hearing more and more
about as I've been talking to investors, is, you know, those investors that already own Berkshire
Hathaway, you know, they want the exposure. But as we know, Berkshire Hathaway doesn't pay a
dividend. So you carve off a small piece out of your BRKB and you buy OMAH and you create really
a synthetic dividend for your BRK holdings. So you're getting a similar equity exposure to
Berkshire Hathaway, but you've got that dividend kicker on a monthly basis. So
it's really a synthetic dividend for your existing exposure. And it seems like a lot of investors are
migrating towards that. Great points. Appreciate that there, Adam. Okay. I want to get some others
on the panel involved, hear some thoughts from them. Shai just got on stage. By the way, Shai,
so I know Shai and me and you had a whole live stream the other night on AIS. And I definitely encourage
people to check out AIS. That is the picks and shovels play of AI that they have also been
building a ETF around. Again, AIS is that ticker. But Shai, today we're talking a little bit about
AOMAH, which is also something that we talked about on our call.
And I think for me, there's just a little bit of fascination, you know, around Warren Buffett.
And I think it's cool to see people building products and other things like that off of his mindset and mentality.
So just curious, any thoughts you have here on OMAH?
And we can also talk a little bit of AIS, mix that in here as well.
Yeah, I appreciate that, Gob.
Hey, Adam, nice talking to you again. So it's crazy to say a statement, but I want to say the Oracle, or I'll just say Buffett,
kind of went out of style in the recent years, which is just an insane statement to say because he has done so much for the equity markets.
But I think a lot of investors are used to years like 2023, 2024, just explosive, up
to the right, 30% CAGR type of years.
I think this year is a sober reminder that that's not the norm.
Choppiness is the norm.
And it's actually really difficult to outperform the market.
So are you noticing any kind of new trends in 2025 and characteristics of investors kind
of returning back towards the mean, which is a lot with the Omaha O-M-A-H ETF that you kind of launched at a really great time?
Have you noticed more people going towards that than like, I don't know, a risk on type of vehicle?
Oh, I mean, we've seen a huge change in risk on versus risk off, right? I mean,
it is clearly risk off environment. You know, everyone was a genius buying the Mag 7 over the
last couple of years, to your point about the incredible returns everyone has seen. You know,
you didn't have to really do too much thinking to do very well in the markets. But to your point,
you know, that's not normal, right? I mean, that was a straight up market for many years.
And now we're back into a, you know,
probably a little more volatility than we're used to.
But, you know, the choppiness of the market
is just the way the market typically works.
So people are looking for quality.
And, you know, Berkshire Hathaway has that value tilt for sure.
I mean, it's been a growth market
and we're certainly moving more into a value market
or a quality market.
You know, OMH or Berkshire Hathaway should say, you know, it's not all value, right?
In terms of kind of those typical value play stocks.
And you do have the apples and the VeriSigns in there.
So you do have that kind of tech, you know, a little bit of that tech exposure.
So it gives you a nice broad portfolio, which is excellent to see. But, you know, we are seeing the migration to a risk off environment to kind of the larger, more quality plays.
And we're seeing a major shift over to income, you know, across the board.
It's not just the retail investors. It's it's the RAs. It's the financial advisors.
You know, they're looking for that upside potential, but they really want to lock in income for their clients in such a choppy market. So, you know, we think that, you know,
at the 15% level, and we chose a 15% level because we felt, you know, there were a bunch
of products out there that were giving me kind of the eight to 12. And then there's a whole
another type of product out there. They're doing the kind of the shoot the light lights out type
approach on income. You know, we didn't want to do that. We wanted to be in a range that was unique, but where we didn't experience the nav
erosion that many kind of the higher yield or yielding products would experience. Because
that's not, you know, from my perspective, as somebody who's really more about portfolio
construction, you want something that's stable, that's consistent, and provides repeatable performance.
And that's really what we're going for.
We're going for that $1.25 a month with a portfolio of equities that you can go to sleep at night feeling good about.
So do you think that – great points, by the way, Adam.
Do you think that this kind of vehicle has always kind of been for the older generation?
You could say the boomers or maybe the older millennials.
Do you think that the Gen Z demo, also the younger millennials,
they kind of love that balance in life where you work,
but you don't have to be on the screens all the time.
You want to enjoy your life.
You want to be living instead of just saving.
Do you anticipate going forward like
these kind of vehicles capturing that demo where they can be making money can be their money can
be making be working for them but they don't really have to be at the screen because i anticipate that
being kind of somewhat of a trend especially if the markets isn't as easy as a bit as it's been
and returns back towards mean curious on your take Yeah, well, that's an interesting point because it really is a phenomenon that I've experienced really over the last few months.
I really was not kind of part of that kind of income world on social media, on X, diving into the minds of the millennials and the Gen Z investors.
But income investing has really taken hold.
To your point, it used to be kind of an old man thing, right? You buy your dividend stocks and
you sit back and get your dividends. But today's investors are extremely savvy. I mean,
far more savvy than when I was that age, to be honest. And they are looking for that income that
can build over time. They're buying,
you know, they're buying five shares at a time, one share, 20 shares, building this nest egg of
equities that hopefully, again, does appreciate over time. But really that where they can get
that income, you know, hopefully cover some of their monthly costs for living and then reinvest
the rest. And that in 10 or 20 years, they have a nest egg that
is driving significant income for them on a weekly, monthly, quarterly basis. So it's a whole
mind shift. It's a total shift in mentality that I've seen, at least, in the use of income type
products. And I think we're really in the early stages, because if you think back, you know, in the ETF market, I mean, there's always been dividend stocks, dividend ETFs. But, you know,
in terms of these kind of income overlay, option overlay type strategies that are giving a little
more juice to investors, you know, it's only been a couple of years, really, that they've taken hold.
So I think we're in the beginning of a trend. And, you know, I don't think it's too bad. I think it's
a good thing, right, for investors
to be a little more conservative in their expectations. I mean, when I was, you know,
20, 25, I was looking, you know, it was all about day trading. It was like, let's find the next
stock to, you know, triple, quadruple, whatever it may be. And most of the time, you just end up
losing your money. Here, the investors are being a lot more mature with their money and more
conservative and really have a long-term goal in mind to generate significant income over time.
And I think it's a great thing.
Love it.
Stock talk.
Can I bring you have any thoughts here on OMAH, Warren Buffett being this outperformer, AIS, just anything across the board we've been hitting on.
Yeah, I mean, I think, you know, it makes sense in this market environment, you know, as Adam was saying, in a market that seems to be, I don't want to say prioritizing defense and value, but they're certainly faring better than your high payday names in this kind of environment.
And so, yeah, I do think this is a time where, you know,
especially investors, maybe retail investors who aren't used to exploring those stocks on their own
can use vehicles like this to give them a little bit of firsthand exposure.
Because, look, let's be honest, most retail traders nowadays are
just picking stocks and they're mostly picking stocks in industries that they think are sexy,
if you will. And that tends to be the tech stocks, your high beta, small and mid cap stocks.
Those are the stocks that the retail tends to chase. So it's
good, I think, to give retail a little bit of a perspective into more of defensive positioning in
moments like this, because you don't know how long it's going to last. Right. And in an environment
where this market lasts months, the only stuff that probably is going to find local bottoms and, and begin to see, you know,
maybe even potential uptrends is the defensive stuff. So yeah,
I think it's a good time to be exposing retail,
even an institutional to a degree investors alike to, to,
to those kinds of assets. So yeah, I think it's well-placed.
I think it's probably the right time.
So definitely go check it out if you're in the audience and you're not familiar with more defensive allocations and you're used to buying all the high beta stuff.
like this, they're all in on something like AIS, which is AI infrastructure. But, you know, having
a good, you know, well-defined portfolio where you have your kind of growthier equities for the
long term. And then, you know, you have your more defensive positions where you're generating the
income. I mean, that's a good mix. And, you know, you stick to your plan and be disciplined and have
a long-term perspective. And, you know, everyone should, you know, it should all work out.
Yeah, I agree. Yeah. You don't want to be all in on anything that's for sure yeah i i love the thoughts here across the board i think you guys are asking really good questions
i know we've you know uh we got a few others hanging out up here but evan i'll bring back to
you yeah no i appreciate you like i said earlier make sure everyone should be following adam
follow the other speakers uh big theme on the spaces a lot of people come on here and talk No, I appreciate you. Like I said earlier, make sure everyone should be following Adam, follow their speakers.
Big theme on the spaces. A lot of people come on here and talk negative things about Apple. It's now used as an example as downside stuff by people up here. Wolfie loves to go for it.
Warren Buffett owns a little bit of Apple. I know he was selling a good bit last year, but still owns some.
So I don't know if you have any comments on that one.
What's been like kind of trying to get some of the income on that one and how you see it playing out.
Maybe if you have any nice words to say about it, that's cool, too.
But yeah, how are you feeling on that?
Maybe some of the other largest holdings that Buffett has, kind of how they've been moving recently and what the options have been like around those.
Yeah, I mean, Apple is our second largest holding.
So BRKB is our first holding mean, Apple is our second largest holding. So BRKB is our first
holding. That is always our first largest holding. But in terms of the top 20 that Berkshire is
holding itself, Apple is number one. So it is a sizable position for us. And look, Apple is a
bellwether stock. They've gotten beat up recently, obviously, because of all the tariff, the tariff nonsense that's going on.
And, you know, that's been a shame for sure.
You know, what's going to happen with the iPhone and, you know, all that things.
But, you know, in terms of generating option income from that name or any of the other names, I mean, volatility certainly helps.
Right. So in the markets over the last couple of weeks, we've been certainly able to bank a lot of income just from in a specific in one day we could bank enough for the monthly payout in some cases.
So, you know, that's been a positive thing. And clearly for us, we're not looking to provide more than the 1.25. We're looking, again, just to be consistent.
So if we are generating more than the
one point two five, we're going to bank that and we're going to put it back in the nav. So that's,
I think, an important distinction because we don't want that nav to erode. And, you know,
and we don't want also to provide a lumpy experience to investors. Right. Again, it's all
about consistency and providing the right results. You know, that were at least that were, you know,
that we're saying, you know, not over-promising and under-delivering is really the main positioning for us.
We're like a month away from rebalancing 13-and-a-half season.
And now we've had some craziness going on right now, and this is conveniently March 31st,
so right before all this.
But how does rebal it end up working out here
yeah we rebalance quarterly so we'll have to see how it works out I mean clearly there's not going
to be a lot of positions being removed or added that's not Buffett's game he's a long-term hold
you know he holds his securities long term but you know we'll have to see how it all shakes out
in terms of you know the rankings of the actual holding so I'll'll have to see how it all shakes out in terms of, you know, the rankings of the actual holdings.
So I'll be interested to see that when we do the actual rebalance, which is upcoming.
You know, a lot of the financial stocks have gotten hit really hard.
I mean, Bank of America, Citigroup certainly got hit hard.
You know, Kroger was a surprise winner during all the volatility.
was a surprise winner during all the volatility. So it's going to be interesting to see what the
portfolio looks like based, again, directly on what Berkshire Hathaway holds.
It's so interesting to me. I know me and you talked about this the other night,
how different the price movement on OMH can be from Berkshire, even with it being its largest
holding. And you were mentioning to me kind of
those tail companies of Buffett's are, you know, largely what's holding him up. Maybe you can just
go a little bit through those details from people that look at the two and they're like,
I see the top holdings are all similar, but there's different movement.
Yeah, it is interesting. I mean, yesterday during when the market went straight up,
we beat Berkshire BRKB by I think one and a half percent. And today we're, you know,
we underperformed by one and a half percent. But, you know, we're not trying to benchmark against
Berkshire Hathaway, though. I mean, that is really not the benchmark. I mean, of course,
we would use the S&P 500. But, you know, look, with an options overlay strategy, it's really,
you know, all about the income. That's the number one goal. And then capital appreciation is our second goal.
So over time, through a normal cycle, a market cycle, instead of having these tremendous
drawdowns and runs up, we should be providing somewhere in the 70 to 75% of the upside
of Berkshire Hathaway and probably kind of in the 85 to 90 percent range on the
downside. We're not specifically trying to buffer the downside, but just the nature of the options
overlay will give a little bit of that downside protection over time, though certainly looking at
a day like today, it doesn't seem apparent that's the case. But, you know, over time, over the,
you know, let's say a year, that's kind of where we should see it fall out.
But, yeah, in terms of the holdings, you know, we have those 21 holdings.
So Berkshire Hathaway clearly has more than that.
So they have a long tail of additional holdings that have performed exceedingly well over the last kind of month, month and a half.
Much better, in fact, than, you know, their top 20 holdings, you know, the big names that, you know, the big financials, the apples
and so forth. So, you know, it's an interesting phenomenon to see. And, you know, we're going to
have to run an attribution over here at VistaShares to really identify where those returns
came from on the Berkshire side, just so I can speak a little more intelligently about it.
But, you know, that long tail is giving him that buffer on the downside and giving him some upside
participation that we're not seeing in the top 20 holdings.
Got it. That makes sense to me as well. A lot of interesting pieces. Do you want to talk for
a few minutes on AIS? I'd love to. I mean, again, you know, AI, you know, this is the shame of it all, right? I mean,
the AI story has not changed, right? The fundamentals of that business have not changed.
You know, just yesterday, or maybe it was the day before Google reaffirmed its $75 billion
CapEx expenditures for this year. You know, winning in AI is an existential issue for countries or, you know, countries around the world, right, as well as companies.
I mean, it's an arms race to ensure that, you know, whoever's in the game needs to win because it's going to be such so impactful for so many parts of life, as well as, you know, defense issues, national security.
So that whole part of the story hasn't changed. And, you know, of course, the baby goes out with
the bathwater. So, you know, the AI stocks certainly have gotten slaughtered over the last,
you know, six to eight weeks, and particularly over the last week or so. You know, but my
contention remains the same. You know, If you want to harness the power or the investment
upside of AI, you need to go where the money is being invested. And where it's being invested is
in infrastructure. So when people think of AI, they're thinking Amazon, they're thinking Apple,
they are the companies that are putting a lot of capex into the infrastructure to enable them to create the high performance AI models down the road that can one day lead to incremental profits for them.
They are not there yet. The infrastructure is the number one thing that needs to be built out.
So when you look at the infrastructure, and this is what we do at AIS, our product. It's a very different approach to the AI marketplace. What we do is we analyze the supply chain to try to determine where are these CapEx dollars being deployed. And what is very clear is it's being deployed to the companies that are building the high-performance AI data centers and the high-performance AI semiconductors.
building the high-performance AI data centers and the high-performance AI semiconductors.
So then the trick is you've got to look at the supply chain, determine what are the components
that go into, let's use data centers as an example. You look at the supply chain, you find
out that, wow, cooling systems is 30% of the cost of an AI data center. Servers and IT equipment is
around 30%. And you go down the list to racking, fiber optic cable, and all these different components.
So those companies are the ones that are soaking up all these dollars.
And that has not changed over the last couple months.
And so that is what AIS captures in the portfolio.
Our portfolio is the picks and shovels.
We don't have the Apples, the Amazons, the, you know, Netflixes and all these other
companies that a lot of these funds, these, you know, these companies, these funds that
call them AI funds have.
You know, you look at your typical AI fund in the ETF market and 40% of your exposure
is in the mag seven.
You know, that doesn't add much value to investors, in my opinion.
You know, we want to give you something where you don't own the companies that are in our portfolio, or in some cases you might not have even heard of them. But those are
the companies that where the profit pools are and where, you know, at least in the next three to five
years, that's where the investment's going to be going.
Yeah.
What does the acquisition,
I try to ask what the acquisition landscape looks like in that arena.
Obviously it's kind of a loss in this,
but I saw even Amazon CEO Andy Jassy say that he thinks that the acquisition,
you know, they might be able to make more deals.
It feels like, you know,
they might want to deploy in some of this area, especially AI.
Yeah. I mean, that would be a smart move, right? I mean, look at, look at, I mean,
not that Amazon's going to buy a cooling company, but you look at a company like Vertiv,
right? I mean, I love that company. It's just one of my favorites. I love talking about it,
but you know, they're, they're the leader in cooling systems for AI data centers. And, you know, there were 110, $120 a share and, you know, dropped down. I don't even know what they were today, but, you know, dropped down to the 50s.
That's a huge haircut.
So, you know, I think, you know, look, there was a lot of froth in the market for sure.
You know, you look back at the kind of like November, December, January, a ton of froth in the stock prices.
I think a lot of these securities kind of got ahead of themselves on a multiple basis.
A lot of these securities have kind of got ahead of themselves on a multiple basis.
So I don't think it's such a bad thing that the whole market in this part of the market
has taken a haircut because it kind of right sizes the valuations to some extent and allows
investors who had not had the opportunity to get in to get in now at probably the right
valuations versus a couple of months ago might have been more overpriced with a lot of froth built in. So, yeah, I think the M&A market is
definitely going to be something that's going to drive returns because there's a lot of small
companies out there that, you know, people have never heard of that are, you know, dominant in,
you know, little niche areas where, you know, you wouldn't expect such wide profit margins to be enjoyed by them.
But that's the case.
So, you know, I think M&A is definitely a good play.
So we have 83 companies in our portfolio.
And, you know, it'll be interesting to see what kind of action we do see on the M&A front.
Very nice.
Adam, we're coming up to the top of the hour here.
This was super informative.
Again, I encourage everybody.
I pinned a bunch of threads
that have been getting written on these,
but OMAH, that's the VistaShares target,
15 Berkshire Select Income ETF.
That one has been getting,
like we talked about, more and more popular lately,
almost at 10 million AUM there,
which is cool to see.
And then AIS, that is the VistaShares Artificial Intelligence Supercycle ETF, very similar AUM on that one as well.
And that one also, again, if you're into AI, is that picks and shovels play there of AI.
Adam, any other comments you'd like to share on the two of those with us here today or any other general comments on the market?
Well, I just appreciate you having me on. You know, if you're interested in AI or kind of the
income space, you do have a lot of research on our website, VistaShares.com. So I'd encourage
people to take a look there and look on the market. You know, just be fun to watch over
the next couple of weeks and see how it all plays out. And I'll certainly be listening to you guys for keen insights every day.
Beautiful. Appreciate you, Adam.
Thank you so much for coming up and looking forward to the next one we do
with you.
Thank you very much, guys.
Awesome. Evan, Stock Talk.
I'm going to rotate back to you guys for a sec.
I know that we're going to be talking some venture capital and private
investing and other stuff like that on here, but has anything else as we were talking
here come out on the market that you guys want to share and get into the mix?
Nothing too much for my ends. One thing that I do want to talk about here that I think even
leads into that conversation is we talked about it briefly on the spaces, us getting to meet,
We talked about it briefly on the spaces, us getting to meet, us going to get in person and see a freaking private jet go 700 miles per hour right in front of us, see a demonstration.
Some wild stuff going on, but I don't know.
Do you have any initial reactions of a stock talk?
This is your second time meeting.
Loud guy.
Very good talker in person.
Honestly, was making the...
I've been told
my shoes were pretty bad.
Yeah, Stock Talk's great in person because it doesn't matter
where you are in the room. You can still follow
the conversation that he's having. You could be
on the other end of the dinner table. It's all good.
You know exactly what's going on.
It's really nice.
What's up, Stock Talk?
That is true. I mean, hey, look, I'm's really nice. What's up, DocTalk? That is true.
That is true.
I mean, hey, look, I'm a loud guy.
There's no question about it.
But that was a great trip.
It was awesome.
Yeah, it was nice to see those F-104s in action.
It's really cool to see a plane from, like, decades ago be repurposed for a new industry.
That's, like, just a cool thing to see.
Yeah, we're going to talk about it in just a second i'm getting a tweet up but before we do that i figured just see if there are any other
general thoughts on the market that came out uh while we were just running through this or evan
do you think we should maybe start to roll in and talk about like our experience last week
well i will say um well i want to talk more about our experience but i may have done something something, a little bit of a gamble, a little bit of a sports bet, some could call it, but not on sports.
You want to know what I did?
Talk, talk, you might like this.
I might have gone into the close with a couple Amazon calls for tomorrow.
A little swing.
4.17s expiration, $200 call.
Give me a little rating on that one.
Obviously, we're going D-Gen here and no financial advice.
You say 4.17?
Yeah.
Yeah, that's pretty D-Gen and which is where it is.
Yeah, I wouldn't touch anything with less than 60 days on the clock
with the VIX where it is, personally.
Can you tell me why Amazon's going to gap gap up tonight i can't tell you that i mean look i don't feel until china and
the u.s de-escalate this i don't feel confident in any equities globally i actually don't feel
confident in any economies globally so i have a very pessimistic worst case outcome with this tariff shit. And it's like as bad as it gets.
And so hopefully that's not what happens and we get some kind of deal. Um,
yeah, I mean, I don't know any other way to put it. I don't, I don't know anybody reasonable with
like any sort of economic knowledge outside of the flag waivers. And there's sure a hell of a
lot of flag waivers in this political environment. Um um i don't know anyone with like any sort of semblance of economic knowledge
that doesn't think that the china situation is going to cause a serious problem
hey i'm bringing up uh ravi here i see kyle's on stage cool well then i guess maybe let's get
into it let's talk a little bit about this trip that we had because Stock Talk, I feel like you're
always ready to talk a little bit about the space industry.
Yeah.
Yeah.
Yeah.
It's something I've studied pretty well.
And aerospace and defense has been something I've been focused on for the last couple of
years.
So yeah.
Fantastic.
Definitely.
Let's get into it then.
Let's talk about it.
So this was really cool because we finally got to meet in person.
So I did post a picture of it from the Stocks on Spaces account, which you guys can get in there,
scroll back a week, and you'll see that photo in there, which was super cool. But yeah, myself,
Stock Talk, I'm usually behind the Wolf account. Stock Talk and Evan all got to meet up in person.
This was a very, very cool trip that we got to do. So essentially the gist of it is,
especially with Stock Talk, getting so bullish on space,
I think that we've been getting more and more into that area and talking more about it.
We ended up connecting with Starfighter Space, who is really in this mold of pursuing,
I guess it's not really the space race, but the satellites in the space race, right?
Kind of following in very similar footsteps to where SpaceX is. And these guys had a very unique business model. And I think for us, there was
only one way to truly understand it. And that was to go out and see it in person. So they ended up
flying myself, Evan and Stock Talk and another group, including Shai, Ryan Edwards, who's up
here and a few others out to the base, which is super cool because they are incubated out of the Kennedy Space
Center slash NASA. Right. And so they got asked to come out there and incubate, which is very
interesting to us. And so we got to go and actually be inside some of these warehouses that
NASA has and see them. And the reason that I'm bringing it up on this VC and private investing
space is because these guys are currently running around and they're raising at a $65 million
pre-money valuation. And so for us, we got to really dig in. We got to interview the CEO. We
got to interview the head of operations. We got to see the jets fly in front of us. Obviously,
they didn't go supersonic in front of us because it would have ripped our faces off.
But we did get to see them go like 700 miles per hour. We got to learn about this concept of
sending these nano satellites,
these, you know, sub 100 pound satellites into space and what that looks like. I really would
love to turn it over to Stock Talk here because you have such a good grasp on this. Maybe you can
give people a little bit of context, especially on the private investing side with SpaceX and
other things. What's been happening in this space venture? You know, there's a lot of defense pieces
to it, right? These guys were very gung-ho on like,
we got to get there before China, other pieces like that. Just curious to hear your thoughts.
And then I know we've got a great panel here. Welcome, Rick, up on the panel. I know Hadley's
in here. I see Isles up here. Ravi's coming up. So yeah, great panel. We'd love to hear from
everyone. I think for the first portion of this, we're going to talk on the space side,
since we just had a very unique experience where we literally got to go out and check this out. And then we'll
open it up into more like a general private investing and VC chat as well for the rest of
the guests. So with that being said, Stock Talk, let me turn it over to you to give people a little
bit of context to what you've been paying attention to in this area, what's been standing
out to you. And for everyone else, while he's talking, I encourage you go up top and everybody
should go drop a comment on it.
Go up top and check out that link that I pinned.
It's the only pinned tweet up top.
And that is actually the raise.
And it's not just the raise.
There's a ton of information about space.
And there's a very unique chart that when I saw it, everything kind of made sense to me about just how much stuff is getting launched up there.
So Stock Talk, I'll turn it over to you for this kind of like private side, because there's not a lot of public companies in this area yet.
Yeah, I mean, there are a handful now. But yeah, certainly most of the interest is on
the private side, with obviously SpaceX leading the way. But, you know, for me, where my interest
started in aerospace companies was obviously with SpaceX. I've been following Elon closely for
most of my adult life. You know, the first ever major, major investment I made in the stock was
back in the end of 2015 in Tesla. And since then, I've been following Elon very closely. So it's
been at least eight years, nearly a decade that I've been paying attention to everything Elon does
and kind of treating him as sort of a technology visionary, which I know a lot of people's
political opinions might have evolved about him over the last few years. But outside of all the
politics, I think he's still the greatest visionary and innovator of our time. And after Tesla, a lot of people or after Tesla's early stages of their success, once they kind of overcame most of the doubters on Wall Street and started really venturing into the electric vehicle industry, making it a real industry for the first time ever, a lot of people started looking towards SpaceX,
which was also kind of viewed as this sort of joke of a project when Elon first started it.
If you go back and look at the front pages of your favorite investing and finance sources
back then, most of them were just laughing at Elon for even trying SpaceX because it was viewed as pretty much impossible for a private company to become the premier launch organization in the world.
And he stuck with it. And, you know, over the years, in my view now, SpaceX is arguably the most advanced manufacturer of technology hardware in the world.
manufacturer of technology hardware in the world.
I don't think anyone else can build Starship on the planet.
And that's a testament to not only competence, but it's a testament to
the different qualities of a private business that allow it to become what SpaceX became.
I think in the wake of SpaceX's sort of
rise to dominance in the last five years, where the valuation is
practically 10x,
there's been a wave of additional interest in the private markets to sort of chase that theme and to be involved in the periphery of that theme. And so you've seen tons of private companies
spawn in the wake of that and a lot of private investment as well.
in the wake of that and a lot of private investment as well and I think the
premise here is quite simple which is that SpaceX well I don't say is on the
way to solving they effectively have solved and are now on the way to
lowering cost when it comes to payload to orbit and you know reusable rockets
were tempted before SpaceX nothing was ever produced at scale.
And so SpaceX is the first company ever to produce a reusable, landable, reiteratable rocket at scale that has now been tested hundreds and hundreds and hundreds of times successfully.
And so they're the first ever private company to do that.
And by virtue of doing that, they they brought down costs of payload orbit significantly
and generally that's the impetus for an industry to grow it's like the central cost of business
activity in the industry goes down you know and you can kind of make analogies to what tesla did
in the ev industry with this as well right the? The idea that like very early on Tesla knew they had to build an in-house charging network.
Most car companies weren't even considering that.
Like car companies that were considering EVs were like,
oh wow, like the charging problem is not solvable.
You know, we would need chargers on every corner in America.
Like people just refused to address it because they were like,
hey, even if to the extent that we are going to venture to create an electric vehicle, there's no way we can create an electric vehicle charging network.
And Elon was like, well, in order for the industry to grow, you have to enable the industry at the base level.
And so Tesla began building the supercharger network.
And it's it's a huge reason why EV growth was even able to get off of that zero percent playing field in the first place was the infrastructure that Tesla built
to sort of facilitate the industry.
And they did this.
And SpaceX effectively has done the same thing, but not through a secondary network,
through the technology itself.
And by doing this, they've not only turned more eyes towards the space industry, turned
more interest towards the space industry, but they've also opened up this idea of private companies being responsible for payload to orbit.
And since the inception of SpaceX, private companies have taken over that market.
Now, SpaceX controls 90 to 95 percent of the payload to orbit market globally today.
But there will be a bigger vacuum that grows there.
And in that vacuum, a lot of other private companies will live.
You know, I mean, we don't talk about it as often, but, you know,
Jeff Bezos' Blue Origin is one of the top space companies in the world as well.
Now, they're arguably a generation or two behind SpaceX,
but that's more of a testament to how far the lead SpaceX is
and not really a knock on Blue Origin or any of
these other companies, you know, and then you have companies like Rocket Lab, which are now
beginning to reiterate and, you know, starting to get their technology to a much more accessible
and industrial scale. So you have this industry growing very rapidly under the surface it began with you know launch technologies
large launch technologies where we get payload to orbit and useful payload orbit in the traditional
sense you know standard size satellites and it's now evolved into new areas where people are
starting to think about start think about nanosats people are starting to think about you know
immediate and emergency deployment,
which is sort of some of the aspects that Starfighters addressed when we went to see them.
And so, you know, what Starfighters is doing with the F-104, repurposing it for these quick,
small nanosats to orbit and being able to reiterate it on that quickly. That's one of
the examples of this. And there are many, many other examples in the private industry as well of people trying to fit into this industry as it grows and is sort
of born. But private space is one of the newest industries in the world. It's really been a one
player market for the last decade. And that will change as the industry grows as all as happens with all industries
right most new industries have usually have a first mover they usually end up being a juggernaut
in the space but it doesn't mean that no one else is in the space you know there are other companies
that evolve you know you saw this a few years ago with food delivery right you saw this with
you know uber eats and postmates and DoorDash. And,
you know, we saw how much consolidation happened in that space in the years following, right? So it happens with every new industry, you will see more entrants, you will see more competitors. And
I think it's good for the market. I think it's healthy for competition. And yeah, I'm excited
about it. I think, you know, there's a lot to know. And the last thing I'll bring up is, you know, where it's become in particular interest for me over the last six months or so,
where I've kind of become more zoned in on it, is the relationship between aerospace and defense, obviously,
which there's a very intimate relationship.
There always has been.
There's a reason those sectors are grouped up together.
grouped up together. But I've also been interested in another global thematic, which is this
not only boost in defense spending from the rest of the world relative to the U.S.,
but in my view, what I think is going to be a multi-year transition of U.S. and international
defense spending away from major legacy contractors to smaller companies. And that
includes private companies. You know, one that comes to mind in the private space here is Anduril.
And so, you know, I believe in that thematic as well,
and that makes me even more interested in being exposed to aerospace and defense.
So, yeah, I think it's super interesting.
It's fast growing.
There's a lot of opportunity.
It'll probably require patience and a willingness to endure volatility from
anyone that's interested in it but that's not surprising that that's true with all cutting
edge industries and um so you know that's that's there's there's no exception to that but
yeah those are sort of my general thoughts i don't want to i don't want to ramble for too long but
yeah those are my general thoughts on where we are and why i'm interested in that industry so very very quick and i'll see you keep this like two minutes and i'll circle around
and saying all that you got to go and actually see starfighters in person you got to interview
the ceo any just and again like people can go and they can read through all the details i pin them
above but just any quick thoughts on your end as to what we saw, kind of what your takeaways were from them specifically? Yeah, I mean, first of all, fascinating. It's
awesome to see those jets in action. For people that don't know, and I'll be quick about this,
you know, where these planes come from. These are planes from back in the 60s, 70s, and 80s,
the F-104s, and supersonic flight was sort of discontinued in fighter jets
because we had supersonic ordnance.
And so, you know, we didn't feel the need to keep making Mach 2 fighter jets.
And so there are still Mach 2 jets that exist,
and the F-104 being one of the only ones.
And what Starfighters did is they went and acquired basically every working F-104 and
all the F-104 parts globally.
And they've built a fleet now to attempt to launch nanosats.
And it's a really interesting concept.
It was awesome to see it fly.
The sonic boom, I think, was pretty incredible to hear up close.
So, yeah, it was a really fascinating experience and i think what they're doing is uh innovative i think it's uh probably
one of the more innovative uses of an existing technology i've seen in a long time and they
obviously have a lot of industry experience you know one fascinating thing that we found out while
we were over there was uh that they trained the pilots for Boom Supersonic.
And Boom Supersonic is their CEO is kind of become a Twitter celebrity in recent months.
For those that have been paying attention to him, because they've found a way to make the supersonic boom much, much, much quieter and not being able to be audibly heard from the ground.
And that's one of the huge problems with supersonic flight.
It's the reason why supersonic flight was banned in the first place for
commercial purposes.
And so that's a big development as well.
And they train their pilots.
So yeah,
a ton of talent on that team,
really fascinating technology.
It was,
it was awesome to be invited to Kennedy space center to see it.
And yeah,
I'm interested to see the rest of the conversation.
Let's keep prodding stock talk.
I'm going to ask you about, you know, space is a theme here.
Space is a theme here.
You've got to get a couple other people's thoughts in first.
It's been 17 minutes.
We'll come back to Stock Talk in a minute.
I like where you're going with it, Evan.
Evan, why don't you share real quick your perspective?
I'm a little busy, so I'm good.
We can go to someone else.
Okay.
All right, all right. Let me bring in Kyle and Jared so they can talk a little busy, so I'm good. We can go to someone else. Okay. All right, all right.
Let me bring in Kyle and Jared so they can talk a little bit.
We can work and maybe get some thoughts from a few other guys that are on the VC and PE side,
their thoughts on the space industry, and we can work back around through this.
But, yeah, Kyle, want to jump in?
Hello, hello, hello.
Hi, everybody.
It's so good to be here.
We have a record crowd for our VC spaces.
Thanks a lot to Stocks on Spaces and Evan and all the boys for letting us crash the party and all work together here.
Now the markets are closed.
The great thing about private markets is that despite all the volatility that you guys have been facing in the public markets,
us private market VC guys have no idea because valuations in our market really don't change that
often, certainly not at a moment's whim. So a lot of the discussions macroeconomically this week
really don't impact that much what's going on in the startup ecosystem. In fact, I've had multiple calls with actively deploying investors yesterday and today that
don't seem to be directly phased by a lot of what's going on.
And that is one of the benefits of operating in markets that don't necessarily trade 24-7
and have so much price discovery discussion points.
So it is an interesting transition.
And space is definitely a topic that I think really blurs that line
between the public and private markets
because there's so much venture behind it
in terms of how much cost is associated with innovating in this space.
But because of that, you're going to see a lot of public market activities
as these companies just need to keep fundraising.
And at some point, you may run out of private market funding.
And we do see some public market alternatives.
And with this Reg A Plus deal, that's even more blurring the line because you've got a retail investment opportunity of a private investment.
So it really is starting to call into question how we delineate between these different types of deals.
But I can't wait to dive in.
I also want to give my co-host, Jared.
Jared, are you up here on Spaces or maybe not?
Yep, I'm here.
Awesome.
I can't see it on my screen.
So maybe if you want to say hello and introduce as well.
Yeah, appreciate it.
Thanks for having us here, guys.
Stocks on Spaces on spaces guys we appreciate that
but it's definitely interesting you know you think about the aspects of you know who have basically
been the two richest guys in the world for close to a decade now of elon and and bezos and where
are they focusing a lot of their priority obviously they've had success in other businesses but now
those guys are both shifting to the space side with SpaceX being valued at over $350 billion and Blue Origin, depending on what you're looking at, because they don't release financials, somewhere around $40 billion valuation.
So the two richest guys in the world are spending a lot of time there.
You could also look into guys like Bill Gates and Farmland, but that's a different discussion. But just everybody's wanting to go to space and there's
definitely going to be more attention that being put there. And so that's what I think is interesting
about this is, you know, kind of an opportunity to get in early on something where more and more
companies are going to be wanting to send satellites into space. So definitely interesting to see how that progresses over the next few years.
I wanted to pass it to Hadley here. Hadley, do you have any thoughts on, you know, where the
space movement is going? You know, the updated space races is who can develop space first,
not necessarily who can get to the moon first.
So kind of what are your thoughts on that?
I mean, honestly, I have very little to add on space.
You guys, I'm really an early stage kind of AI software investor, was lucky to get in on kind of SpaceX secondaries pretty early.
So that's been nice.
But honestly, I'll give the time to people to have something to add.
Once we get to more kind of general VC stuff,
I'm happy to talk about that.
Yeah, real quick, just question,
because you're talking the AI side,
do you think that that's going to be a big component,
though, of this area?
I'm sure.
I mean, you know,
I don't think it's a lot of the stuff
that you're seeing kind of getting inroads
within kind of large organizations or even consumers, but this is going to touch everything,
especially once you get into kind of where you can go with better forms of computer vision
and decision making.
I would imagine, again, don't know much about it in particular, but I would imagine it's
going to get pretty interesting.
Very nice.
Appreciate it.
Oh, sorry.
Yeah, I'll turn,
no, I'll turn it back over to you, Kyle,
to keep it moving around.
But yeah, I think we'll probably do
maybe like eight to 10 more minutes
on the space side of things,
and then we'll kind of open it up
into more general areas.
But go for it, Kyle.
Yeah, well, look,
I think the offering is interesting because of the Reg A plus exemption.
And one of my companies that I've built over my career actually did a crowdfunding campaign. And
we had raised some private funding from investors, from angels, from some family offices. I'm based
here in Miami, Florida. And so we certainly see a lot of activity
in the family office space here.
And then we conducted a crowdfund
and it was kind of a fascinating experience
to go through that
because it is a totally different pitch
and totally different experience.
And so I know that, you know,
Gavin and some of the guys
that got a chance to go to this company,
their headquarters,
it sounds like they have plans around future IPOs and things as well,
provided that this works out, which I think is really interesting.
They call the Reg A Plus the mini IPO because of a lot of the compliance
and regulatory capacity that comes along with doing these things the right way.
And I guess that sets them up very well.
So it's an interesting
way to fundraise and it ties into the future of crowdfunding. And we've had this conversation
on venture capital, Twitter spaces. We do this conversation every Thursday at 5 p.m. So thanks
to everybody that's joining here on the panel, talking about the different mechanisms for
private startups to fundraise. And I think that for a long time, this idea, this promise of
allowing the crowdfunding industry, allowing individuals to invest in these companies before
they become the biggest companies in the world is definitely fascinating. So I'm really happy to be
here. And I love really happy to be here.
And I love the conversation around space
just because it does seem like
it is a multi-trillion dollar industry
that only continues to grow.
Even if you look on the space platform
for space fighters,
the amount of satellites coming into the market
is increasing exponentially,
which again is probably a solid indicator
of the size of this market.
So I'm pretty psyched about all this stuff.
And Jared, what else are your thoughts here?
Yeah, I'm not too up on the space side.
Evan, if you're not busy anymore, I'd love to kind of hear more about your experience
hear more about your experience going to the event.
going to the event.
Yeah, no, I mean, I don't want to ask what we don't want to ask about.
But I thought it was interesting.
I thought it was really cool getting to see the events.
But beyond that, kind of getting to see here the economics of the company a little bit
and what they're trying to do is kind of why I wanted to go back to StockTalk. And, you know, these small launch satellites,
that was something that is kind of seems to be very pivotal for what's happening here.
You know, it's the bet on that market that there is going to be a lot of satellites that are really
small that are going to need to go up. One example they were kind of giving us was like hey yeah
i don't know there was a couple
yeah one thing here is the efficacy of these kind of small vehicle launches if you know there is
enough demand for them so stock talk i'm kind kind of curious, because also we've seen Rocket Lab,
they moved up market pretty aggressively
in kind of what their capacity was.
And when I say that, I mean, like,
they are going for the bigger launches.
And there is a gap in the smaller launch market.
I'm just kind of curious in, like,
what the demand was for that.
And, you know, how much you watch the satellite space?
I don't watch it as closely as i used to i was more you know intimate with the satellite space a couple of years ago than i
am now so i don't want to uh you know make any broad statements that might not be accurate today
and even if they were accurate a few years ago but what i will say is nanostats are still sort of an emerging technology, and the use cases are also emerging as a result of that.
So, you know, you have, you will have a scenario eventually where nanostats will become much more powerful and thereby much more useful.
And emergent deployment of those nanosatellites will therefore be a use case.
But right now, it's not a huge use case.
There's no telling how quickly it becomes one.
You know, that could happen a year from now.
It could happen three years from now.
It could happen maybe even sooner than that.
But that's more about technology development in nanosatellites themselves
than it is about development and, like, the demand for nanosatellites themselves than it is about development and like the demand for nanosatellites.
Because again, it's sort of a what came first, the chicken or the egg argument. And this is
true with a lot of technology where it's like, hey, does the technology have to get better
for the industry to want it? And a lot of the times the answer to that is yes.
And as the technology becomes more efficient, more cost productive,
then, you know, you get more players interested in using that technology. And that's sort of where
nanosatellites are today. Most of the interest is still around your major, your traditional
satellites, I should say, your foldable satellites, your constellations to affect things like satellite imaging, you know, space to ground analytics.
In SpaceX's case, you know, these these communication satellites for things like Starlink.
And so that's still the major primary use case where most of the money is going.
But over time, like I said, you will have have more money going to nanosats as they
become better and as that technology develops and evolves like it's really hard to say
where nanosatellite technology will be in 10 years from now because who knows um but it will
certainly be better than it is today yeah i think that by the way i did pin up in the nest above a
place uh which has more
information about the company and place that you can start to do your research into it i think
that's one of the things that when i'm looking into it that that i am also like doing my research
into about about those small satellites about the demand for and kind of the areas that that can
come from it but they have a lot of stuff in that that link that we pinned up in the nest above
they're doing around and it has a lot of information about the company and kind of the
use case too so um yeah i pinned the link up in the nest above where you guys can start to do your
research i'd be curious on some of the other guys up here if i can ask ty i'll start with you i do
real quick i did see a hand up from ravi i'm not sure if you saw i saw he tweeted out that we were
talking about space too so did you have a quick comment off of what was just said there? which was about 580 million. So I think the point is very important here is whoever gets the cost down
is going to start dominating.
And I think India was nowhere near the scene
when it came to commercial.
And now you see this new,
I don't know if you guys caught that,
maybe the stock you talk about it is the MOU,
which is coming through with SpaceX and ISRO,
which is the whole idea is to really look at India
as another opportunity to really
create and do some launches and really reduce the price. So that's something which I'm watching
way carefully. I do invest in aerospace back in India. So that's definitely a very big sunrise
opportunity, really, really a big sunrise opportunity.
Very cool.
All right.
We can do just some quick other comments.
Maybe if Kyle or Jared, you guys have anything else you want to share on this, then we can open up into more of this general private investing.
I do appreciate the others, Rick, Hadley, everyone else that's on here for hanging with
us through this piece.
It was something super cool for us to be able to get this experience being brought out there.
And then, of course, seeing that they're running this, this raise as well. And again, I'd encourage everybody, it's the link pinned up in
the top of the space, you can go ahead and just find it right up there. And I'd say more than
just looking at the raise, they put a ton of interesting information just about this move to
space and what everyone's doing there. And this like the big idea page, if you go to that link,
is really interesting, where they talk about this $1.8 trillion space economy. And honestly, I just personally,
before I went out there, I'd heard about it from Stocktalk, a lot of these pieces,
but it really opened up my eyes to what's coming. And it does make sense that this is that next
move with low Earth orbit and other areas there. Kyle or Jared, did you guys have any other
thoughts you wanted to share on that? And then you can open up into a bigger conversation. Yeah, I don't think I have a ton of other
thoughts at this time. I'm excited to dive more into this and hopefully we can spend some time
next week as well talking about the space race and the opportunity there. I think on that note,
you know, Hadley, I did want to ping you back in because you do have in your Twitter bio there, you built AI companies way before they were cool.
So talking about an industry now that is so huge and has exploded, how do you identify a market like that?
And how did you see this market becoming so big before maybe the mainstream adoption had happened?
What are some of the signs that you look for in an emerging market to understand that?
Yeah.
No, thanks for asking.
And thanks for having me on, guys.
Yeah, I got really lucky.
I got hooked up with a couple of guys at MIT.
This was back in like 2007 that had built a new way
to do voice recognition and AI.
And we built a company called Vlingo
that was the first voice-based assistant,
which after acquired later became Siri.
So like, you know, I can't take any credit,
but through that process,
I got to see the potential of AI.
Anyone, you know, who's used Siri can attest to it.
It's very limited and brittle and frustrating but you know
saw that that potential so that's kind of driven a lot of the investing I've done over the years now
you know being kind of pretty AI focused before chat GPT came out was amazing was able to
spend my time and and get to know a lot of founders and make some investments that are looking really
good. Of course, after ChetGPT, most of the VC industry started focusing on AI. And that's like
right now, it feels like it's almost everything we see. I'm sure Rick can talk a little bit about
some non-AI stuff that he spends time on because I know he's a little more diversified.
But, you know, if you look at most VCs, you know, pretty much everything we look at is kind of AI first, whether that's using LLMs or other kind of transformer-based models.
We're spending most of our time, and I think probably not that.
And for context, we're a seed fund so um we focus the very early stages so a
lot of these companies um will just be founders and maybe one or two other people uh they may
have a product market but they're often very early they may still be building that product
so it's really about the founders um and then uh the vision that they're that they're able to
articulate uh it's not as much about kind of
traction. And in some ways, I don't consider myself even in finance, because there's just
not that much kind of numbers to crunch. But where we're pursuing a lot of our time is what I'd call
kind of vertical applications of AI. So I'm a little skeptical of companies that are kind of
doing stuff horizontally. I think it's just the defensibility of a little skeptical of companies that are kind of doing stuff horizontally.
I think it's just the defensibility of a lot of these companies is pretty questionable
when you have folks like OpenAI and Google and Microsoft that already have a lot of distribution
that often are going to be, you know, tight or have control over the underlying models.
to be, you know, tight or have control over the underlying models. But what they're less likely
to do is kind of build things within certain, you know, very healthcare, financial services,
and a lot of very kind of niche horizontals where you can maybe use the AI as a wedge,
but then you can kind of build out longer term modes first competition,
whether that be, you know, a marketplace or a system of record. And as we've seen kind of
traditionally with these kind of vertical solutions, a lot of times they can kind of
become the kind of de facto solution that everyone within that, those organizations use,
solution that everyone within that those organizations use um which i think different
now than that in the past is that not only are you the software solution but you can also eat away
at the labor cost so i i think these companies can be much much bigger than uh than vertical
solutions have been in the past uh because you know if you look at most industries, like large companies,
you have like a seven to one or like a 30 to one ratio
between the cost of they spent on tech versus humans.
And if you start kind of having the ability
to kind of eat away at that,
the human cost,
I just think the value can be a lot greater.
Do you think that the traditional like seed round
is starting to change due to the fact that developers these days can be so cracked using AI tools?
Are you seeing seed round companies that now have substantial products built or ARR that they're generating, whereas in previous iterations, that would have been a later stage thing?
Or are you still trying to, are you kind of adjusting to that in different ways?
Or what's your perspective there?
Yeah, no, that's a great question.
I think that you will see that in the future.
I can't say we see it very often.
I think the problem is that because the environment is pretty hot, because there's a notion, which
I believe, you know, as I said, that these companies can be bigger, they're on average raising at higher valuations.
And just because of the dynamics of funding rounds, a lot of times they're raising even
bigger rounds than they did in the past, because traditionally kind of the size of a round tended
to be tied to your valuation.
So, you know, a company that would have raised three at like a 15 post not long ago is now, well, okay, this is a hot market.
I'm going to raise five at a 25 post.
And it's kind of stupid, right?
Because they should need less money.
And I actually kind of disagree with that.
I've kind of been outspoken.
I disagree with this approach.
You know, they should raise less.
And if the market bears a higher price, that's fine.
You dilute yourself less and be, you know, leaner.
And, you know, given all the tooling around co-pilots and cursor and, you know, that stuff's only going to increase over even the next six months.
I don't think that makes sense.
But I think where it's going is what you described,
where founders should be able to do a lot more with less.
They may only raise a small seed round
and then never need to raise again.
They also may be able to bootstrap and get a lot further.
So I think the reliance on VC over time should go down.
Fascinating perspectives.
And Rick, you know, Hadley kind of referenced you over there.
Perhaps you have a different perspective, whether it's on AI or on different industries.
But I know that your perspective is certainly different in some of these spaces.
So do you have any thoughts on that conversation, Topple?
Yeah, look, I'm fortunate to be a co-investor
with handling this firm and a couple of companies,
but decidedly I would say like,
we are not the cool kids in the AI spectrum.
I think for us, we really focus on what's a great business.
And as I think of the space conversation, as I think of AI and all this stuff, there's
a big difference between what are cool products and what are exciting, what are high growth
markets and what are good businesses.
And for what it's worth, that's all that we care about.
I would invest in the least cool thing on the face of the planet, provided that I thought
it had the chance to be, you know, a cashflow machine at scale.
And, you know, I think a lot of where
the biggest opportunities are in AI,
I've been pretty unabashed in the belief
that private equity will make actually way more money on AI,
largely based on those things that Hadley was talking about
when you talk about that employee to IT
ratio. I was chatting with the head of a $60 billion private equity fund the other day, and
for them to go and shave off five, 10 percentage points of operational costs across really large
service-based organizations, that's not crazy for AI to do that to them. That would make them tens of billions of dollars Vibra and create probably hundreds of billions
of dollars of enterprise value.
That's a way bigger outcome than most venture capitalists are going to see from investing
in most of these feature or product level companies that I'm sure have seen and I've
seen and I largely agree with him as
it relates to the horizontal to vertical conversation.
We do invest in some AI-oriented solutions, but I think the best businesses are going
to be best businesses that are accelerated by AI.
If you're just building AI for the sake of it, you're probably going to get some product pool and maybe some early traction and maybe you raise a great seed in Series A. But
at the end of the day, you got to build a great business. And that's usually coming down to
who has network effects, who has distribution, who has captivity of the customer and all the
things that are important 10 years ago and 10 years from now, AI is a great tool to achieve those,
but it's not the only tool to do so. Great points. Great points. So that's, I think,
a key opportunity in the AI space. Ravi, I know we've spent many conversations going back and
forth regarding the opportunities in AI. Can you talk about how that's going to impact emerging markets
and your perspective even on the U.S.?
I know you're super, super focused on U.S. success here.
What does this look like for the future of AI
and how all of these different countries around the world
and industries inside of the country actually interface with each other?
Can AI play a key role in connecting different industries to each other and different communities?
Yeah, and a great question because, you know, honestly, the fourth industrial revolution has been totally turned around.
You cannot really industrialize unless it's by AI, whether you're looking at AGI and upcoming ASI,
which is going to be absolutely critical.
But I really do agree with Rick's point because ultimately it gets into the basics, right?
Because you need to look at those distribution networks, et cetera.
But really on the emerging market, you know, if I look at the conversations last night
with Singapore and some other folks in Thailand, for example, like Thailand is working very
high on looking at AI integration in weather predictivity.
You're looking at India and the sunrise area, a lot of agri food.
Pharma is becoming very big.
Biotech, everybody is really looking at will AI really help me get the solution.
But once I have the solution on Rick's point, you know, you need to look at distribution, right? Do we have to understand the markets? Because these emerging
markets are very, very different. Like similarly, if you look at the market in Rwanda and Kenya,
again, a great opportunity people are really looking at going beyond the GPT, really into
looking at those solutions. The arm production is another very big sunrise in the global south,
where people are looking at moving away from China and some other parts of folks exporting arms from Europe,
but looking at innovation there.
Last, not the least, is another area, I don't know, maybe, you know,
hardly have seen this too, is really, especially, I see that a lot in Southeast Asia and Asia,
which is on data security and, you know, overall internet
security, especially with AI, because you know that AI is almost like a double-edged sword,
because it can be used positively. But as we speak right now, it's also being used and being
manipulated. So that's something which we're looking at. I'm not so sure of Latin America,
because, you know, I've had some conversations with Colombia and with Brazil. They're really looking up to the U.S. innovation, but the other markets I spoke about, they're really looking at a lot of models. You've seen the DeepSeek and others, but the problem with China is that whatever comes out of China cannot be completely relied upon. So I think the other big opportunities are really, you know, coming through India as an
emerging opportunity there. So sorry, but I have a sorry, I have a question for sorry, I have a
question for Rick, Rick, on your point, where do you see the sunrise opportunity with manufacturing
here? Because that's another area of interest. In terms of what? Are you talking about from U.S. developing
its own industrial base or as it relates to emerging markets? I think both, but definitely
U.S. because I see, at least in the last 10 days, we've seen a lot of some of the conversations I
had with some friends and some investors as really looking at putting in money and innovation in
manufacturing here.
So I just wanted to understand from your perspective.
Look, there was an amazing podcast with the CEO of Brookfield that came out maybe last week.
And as I look at the beneficiaries of the reindustrialization of America, it's going to be companies like that that are able to –
so much of manufacturing was put overseas because of,
you know, labor components. And, you know, anyone who thinks that the re-industrialization
of America is going to be a job creator program is kidding themselves. It's going to be, you know,
completely dominated by, you know, robotics, by automation, you know, it's going to be a massive CapEx investment going from offshore
to inshore. And that should be very scary to the overall emerging markets landscape.
I actually think AI is going to largely benefit emerging markets very heavily because it's going
to be able to take a lot of those folks who may have previously been on largely lower income jobs in those countries.
And I used to do a lot of international development work in DACA and India and Latin America and Africa.
I have some companies that continue to do work in those places.
the fast follower effect of everything that we're seeing.
And I should enable those folks to, you know,
have technology maturity and the ability to leverage technology
that's pretty much on par with what anyone, you know,
with what we have available to us in the US.
You're seeing the cost of software, you know, drop dramatically.
So, you know, I think we're going to see, you know,
manufacturing bases become much more distributed. you know, drop dramatically. So, you know, I think we're going to see, you know, manufacturing
bases become much more distributed. I don't think there's quite as much of a labor advantage and
quite as much economies of scale, you know, advantage that we've seen historically in
manufacturing. And, you know, that's going to lead to, you know, products getting closer to
consumers and more manufacturing here in U.S. And that will certainly cost emerging market economies. But I think that's actually going to uplift emerging market economies
by enabling folks to get into new forms of entrepreneurship and services business that
will have much higher levels of productivity. And unfortunately, I don't quite know what's
going to happen with the lower end of the base of the U.S.
What are these folks who have been counting on either agriculture or industrial jobs?
And we might have things all of a sudden made in the U.S.
I don't think they're going to be made by Americans.
They're going to be made by robots.
Rick, sorry, just a comment.
Last week, we had a fantastic space here,
and we were talking about AI manufacturing.
So you really are bringing the memories from last week,
100% spot on, because the manufacturing here
is going to be very much automation, robotics,
and very clearly looking at dark factories
and looking at, you know, the factories of the future.
And there's a lot of work as we speak happening right now.
In fact, next week, there's a very interesting conference with University of Wisconsin,
which is really getting deeper into this.
So we will see that for sure.
Yeah, it's just unclear to me whether that's a venture opportunity or, you know, is it something separate? Which as we look at most robotics companies,
the exit and acquisition environment for them hasn't been great.
You've had a couple of companies that have had some solid outcomes
for what it's worth.
Brett Atcock, CEO of Figure.
I was an investor in his very first company.
Brad and his previous co-founder of Archer, great guys, incredible builders, perhaps some
of the best entrepreneurs in America.
But I think what they're doing on the humanoid space is very different than what you're going
to see and what's happening in standard manufacturing hubs in Wisconsin and places like that, which,
you know,
my guess is that's going to be a lot of folks who are developing
internally. There may be using bits and pieces.
There's going to be large services organizations.
I actually hope that that will be a much more equitable, spread out opportunity for people to make money.
I'm not sure that I see outside of the potential use case around humanoids, a huge VC bull case around specific industrial robotics use cases right now.
I think everything's getting so customized,
everything's getting so programmable
that it's probably the software layer that's actually
the more exciting place to play.
So we'll see how it plays out.
Hadley, I saw you come off the mic a few times.
Did you have something you wanted to add there?
I was going to touch on Ravi's question around data security and privacy, because I think it's super interesting and probably especially folks that are, it's kind of a well, it's
a big problem, I think more than a lot of people realize, and especially kind of in
the early stages, it's one of the areas I think you're seeing a lot of investment go to that I would guess maybe at the later stage
in kind of public markets, people don't have visibility. So maybe it's interesting for you
to think about. Yeah, you know, if you think about kind of privacy within like large organizations
and around data, it's actually kind of a somewhat simple problem.
You have all these kind of individuals and then they have access to certain data and
you can kind of just index all those individuals and index all the data and then kind of
control what they can see.
The organization of the future is going to be like agents working with humans and those
agents, you want to have access to everything.
And then you have humans working with the agents or different forms of AI.
It actually gets really kind of complex.
And to this point, there really aren't kind of good problems for that.
And I think you could think of that kind of problem within an enterprise like I'm describing,
but then you can start thinking about that globally where you have
these models that have access to certain data sets um and then uh humans interacting with those with
those models via agents it actually uh it becomes a huge problem and just kind of thinking about kind
of data who owns that data um and and from both the security as as well as kind of a privacy and business model point
of view.
So I just think it's like a super interesting problem that I don't think we have good solutions
yet, but there are a lot of strong founders working on that.
And Haley, just a very quick response to that.
It's very interesting because I was two weeks ago, I was in Europe and they're very interesting
kind of startups coming up in Germany and Netherlands
in that space. I was totally taken by surprise. And I was like, why are you guys looking at this
as a problem? And it was very interesting. At least I got like five decks to review,
which is pretty interesting. Definitely a sunrise opportunity.
Yeah. And kind of given kind of regulation over there, GDPR and other issues, I wouldn't be surprised to see some of these companies come out of Europe. It's a little bit more of a hair on fire problem for some of these companies.
to you guys as we're on this topic of AI. You all sound pretty bullish on AI, but do you feel like
the valuations that these companies are getting are worth it? Or do you think they lose a lot
of value because basically one company comes out and the next company just rips the product?
I know there's some regulation and some protections, consumer protections or company protections around that
in the US. But I know overseas, some of that can be a little not quite as tight. So I wanted to
get your guys' thoughts. Are these valuations we're seeing on these AI products worth it?
I mean, at least for us, I've never seen a time during my career as an investor that I've seen more companies go from zero to 10 and back down to zero so quickly.
We're seeing a tremendous amount of companies that get explosive traction very, very early.
Then 1,000 competitors jump in, pricing curves collapse, the price of what they have to offer to have customers actually
want to buy it, especially as an enterprise customer gets to choose between 15 different
folks offering the same thing, collapses 80%, 90%.
It's just made a lot of these companies go from zero to 10 to being bankrupt companies
into like being bankrupt companies very, very, very clearly
very, very, very quickly.
that, you know, I think it goes back to Hadley's earlier point.
Like you need to be figuring out very, very early on,
you know, are you a system record?
Do you have a network effect?
What is your defensibility?
Otherwise, you know, people are gonna, you know,
mimic you in any way, shape or form that they can,
you know, to kind of grab some of those dollars.
And that's happening very, very quickly, especially with how easy it is to discover products in this
day and age and replicate that. And that, you know, you can launch an application in literally
minutes now with products like cursor or bolts and so forth, you know, that there's very, very
little defensibility in product alone
that you need to be thinking through all the other aspects of the business for these things to be
worsening. So maybe some of those businesses will be incredibly, incredibly valued, but I would say
the median company that VCs are funding does not have a high level of defensibility, that folks are not thinking through those.
And I find those companies are tremendously overvalued.
And especially at the seed stage where
the median seed stage valuation just came out,
it's 20 million posts.
Hadley and I are probably old enough
to remember when a seed valuation was a four to five post.
And that wasn't that long ago.
We're not that old. So.
Yeah. Well, Rick's not that old. I'm a little older, but yeah, I agree with everything Rick said there. I think the industry as a whole will not make money, but that's actually
generally true with venture. The outcomes follow a power law. They follow a power law within individual
portfolios, and then they tend to follow a power law across the entire industry. So I think you're
going to have, you know, a small number of companies that will be gigantic outcomes. And
I think there is the opportunity for those outcomes to be kind of relatively unprecedented,
you know, similar to what we see from the hyperscalers now
and the investors, and then we'll do extremely, extremely well.
But to Rick's point, the kind of median company,
I think we'll do poorly.
So, you know, that's why, you know, we do what we do
is to try and kind of find those outliers
and make sure that we're not kind of overpaying.
I think 20 posts is ridiculous for the average across the entire industry.
I think it's really hard to, I think, you know, if you invest in the right company at
20 posts, of course, you're going to do really well.
But for that to be the average, even I'd say two years ago, I bet you that number was like
So it's really kind of come up really quickly.
So I think the industry is both overhyped, but it also, there is substance behind it.
I mean, the amount of value being created in an aggregate is going to be extremely high.
You just have to be careful of what Rick's talking about, which we're seeing a ton,
which is companies that can scale extremely quickly because every enterprise wants to try your product because there is a ton of value created.
But, you know, it's this relatively thin value on top of existing models like OpenAI or Anthropic.
So many copycats can get launched very quickly. you know launched very quickly and then you're kind of in
this very kind of commoditized space so uh and the churn of a lot of these companies even the ones
that are growing extremely fast is really really high because again you're you have a lot of pilot
a lot of enterprises and companies piloting your product you know the conversion overall pilots to
kind of long-term contracts tends to be pretty low.
This is where it's an interesting case study of companies like Clio,
which was kind of like a sleepy company in the legal software space,
servicing law firms for a pretty long time,
versus a lot of these high flyers like Harvey that have popped on the scene.
I was with an investor earlier today,
and they were just telling me Clio is absolutely crushing it. And that's a much quieter name.
But it's been the system of record in a lot of these law firms for a long time. And they raised capital over the course of the last 24, 36 months from a couple of investors to really jump on the AI bandwagon and it's just
massively accelerated their business. So you had a company that really already had captivity over
its customer and AI is just taking it to the next level versus a lot of folks who,
I don't know how much money has been spent on AI productivity for legal services, but it's got to be a billion
dollars of venture capital then poured into that over the course of the last 24 months at least.
Heather, I'm sure you guys have looked at a bunch of those still. And it's just interesting to see
that you're going to have a lot of opportunities for folks who are not AI native companies to become
I have a lot of opportunities for folks who are not AI native companies to become AI dominators.
And that's very, very different than in the internet.
In the early days of internet or other kind of ways we've seen, it hasn't had the same effect.
There was no way that Goldman Sachs was going to be the number one dominant financial service firm for the internet age.
You had to have new players born for financial services, whether that be Stripe or Robinhood or so forth.
In this day and age, we're just seeing a lot of folks who are incumbents in these spaces who are able to massively take advantage of this in a way to build really productive businesses.
this in a way to build really productive businesses.
And I can make a pretty strong case that Google, Amazon, and all those players are going to
have really, really, really strong advantages over particularly the horizontal players
that I think there's going to be a lot of value destruction that happens along the way.
Maybe one thing to add to Rick's point.
Sorry, I'll make a quick point and pass it back.
It's interesting
because the Clio example, we are seeing that a lot, but for every one of those, there's actually
two of them where it's a company that I think Clio is eight, nine years old, is really well
positioned to utilize these new technologies, and they're just not doing it well. I think it's
generally just not, it comes down to the quality of founders and the management team and just being able to iterate.
So it is interesting. Like, it's hard to predict in some cases, in which case the incumbent that has some good distribution and maybe has something that's defendable, like a system of record, will take advantage of the situation or not.
We're kind of seeing in both cases.
Love it, guys. Hey, we hit the top
of the hour here.
We actually have a huge space
that we're going to
migrate over to.
Stock Market News
just opened it up.
We are going to have
the CEO Perplexity AI
coming on Spaces
in just a second.
So that's going to be huge.
I do need to close
this one out right now.
Ravi, did you have
a 10-second final comment here?
No, I think the
important point here
is really understanding the pain point that AI is solving
and you need to be very, very focused.
And I really understand the IP opportunity there.
I would just give that as a tip
so we can always go back to it.
But excellent points, everybody.
Beautiful, beautiful.
All right, really good stuff.
Jared, anything else from you?
All good.
Perfect, Kyle. Really happy stuff. Jared, anything else from you? All good. Perfect. Kyle?
Really happy to be here. Thanks so much for everybody tuning in.
It was great to hear the conversation.
Slightly different format this week, but we'll take it away.
Good luck on your next space.
Beautiful. Hey, final thing I'd encourage everyone. Again, if you have been listening, follow all the speakers that are on stage.
And then again, we talked a little bit about that Starfighters piece when we first rolled
into this VC side of things.
That is still up top in the space.
Make sure you're checking out their Equifund if you're interested in taking a look at their
round and learning more about space investing.
Ryan, I'll turn this one over to you to close out.
And then, yeah, if you want to jump in that other one from the Wolf account, I'll jump
in on this account perfect sounds great what a
conversation today all the way through uh three hours straight now beautiful job uh shout out to
the entire team the vc crew coming in here stocks on spaces crew and follow us all straight over to
stock market news right now for another space let Let's do it. Take care, everyone.
