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WHAT IS HAPPENING TO THIS STOCK MARKET
Recorded: Feb. 12, 2026 Duration: 3:08:42Space Recording
Short Summary
In a dynamic market landscape, Anthropic's monumental $30 billion fundraising at a $380 billion valuation highlights the explosive growth potential of AI companies. As major players like Coinbase and Airbnb prepare for earnings reports, investors are keenly observing trends and potential recovery signals in the crypto trading sector, particularly with Cathie Wood's strategic investments in Robinhood.
Full Transcription
Thank you. What is up?
What is up? Everybody, I hope you are all doing well we have a very interesting day
coming up today a lot of earnings a very busy earnings day we got oh i have it coming as an
echo in my other ear i was like what is happening there um but yeah we got a bunch of earnings
coming up after the close today i hope you guys are all ready and excited for that.
It was a little bit of an interesting day in the stock market.
The stock that was on my screen there was Micron, which was up 2%.
But there are not an aggressive amount of names that are up today.
The single stock portfolio that I have is down 2%.
Apple.
Apple stock is a name that has been aggressively underperforming today, is what we could call it.
Down 5%.
They had some news around Siri and that being delayed, some AI upgrades there.
And the stock did not move down too many yesterday.
Maybe a little bit of reaction lower.
Down 5%.
I guess that would be a little talk going on and see if there's other conversations going on there.
But a little bit of a red day across the board.
There are some pockets, guys.
BMNR is actually green on this day.
Weird times.
Markets red, portfolio red, and BMNR is a name that is actually not in the active participation
of dragging the portfolio down on the day.
So shout out to that.
ETF portfolio is down 1.5%, QQQ down pretty much 1.5%, VOO, S&P 500 down 1%.
So it is a little bit of a red day in the stock market.
I have an ETF that tracks the top 30 NASDAQ 100 names,
so it's basically even larger tech is what we can call it, and that one's down 2%.
So MegaCap tech is the thing leading us lower
today. Probably a lot of that is a move in Apple stock. Like I said, that one moving down by a good
couple percentage points, four and a half, 5%. A couple of stories from the day, and then we'll
start to go around, bring some of our friends into it. Anthropic just raised $30 billion,
into it. Anthropic just raised $30 billion, 3-0 at a $380 billion valuation. At that valuation,
$380 billion, that makes Anthropic, if it was a public company, the 29th largest public stock
in the world. It would make it larger than names like Alibaba, Procter & Gamble, Caterpillar,
Coca-Cola, and AMD. Anthropic now having a larger market cap valuation whatever it is private
markets public markets not the exact same thing but it does have a larger valuation let me get
this stock i need to count up join a speaker so yeah let me i also do want to get this one tweet
pinned up in the list above with the earnings calendar up there. We have a bunch of names that will be reporting earnings after the close today. A bunch of names. And if
you look in the nest above in one second, you will see that. But we do have names including
Coinbase. I just clicked out of it. Coinbase, Airbnb, DraftKings, Arisa Networks, Rivian,
Pinterest, Roku, Dutch Bros, someos some others all those names report earnings today
after the stock market's closed get excited there's a tweet pinned up in the nest above
with that calendar most of the names 405 410 415 that is when most of the earnings get sent out
there there is a story that google owned waymo has started rolling out its sixth generation
robo taxis starting in san
francisco and los angeles two months you might start to see some new looking robo taxis out
there mr beast currently starting a stock market youtube channel so we're all about to be replaced
nebius reported earnings this morning nbis it was a mover up, a mover down. Where is it now?
I see down 0.76%, but not a huge mover there.
Missed on EPS, missed on revenue.
$228 million is what was reported.
If you look at the year over year and the quarter over quarter numbers,
it's still some pretty decent growth there for Nebius.
This quarter, they reported $228 million of revenue.
Last quarter was $146 million.
Same quarter last year was $35 million.
So $228 million, up from $35 million in the same quarter last year. Obviously, the stock has moved up quite a bit in the meantime. But Nebius reported earnings this morning.
We did have initial jobless claims that came in slightly above expectations,
but within the range where I
don't think it moved the market to too much. There was a positive story about Apple in the
overnight or in the early morning. CounterPoint Research put out a little story that Apple was
the only smartphone to see growth in China, major smartphone to see growth in China in January.
And yeah, there's one or two stories last night in meta opening ground on one of their
largest investments in data centers 10 billion dollars in indiana indiana apparently this is
their largest infrastructure investment to date single infrastructure investment and then china
has already bought some of the venezuelan crude oil that has been sold by the united states
government the energy secretary chris wright he came out and said that late last night. But that
is a lot of the news stories. We also
had Cathie Wood buying the dip
on a couple
names, but Robinhood was the
one that I thought was kind of interesting. Cathie
Wood buying the dip on
Robinhood. I know a couple of us were talking about
that on the Spaces. I actually bought
some Robinhood over the last little bit. So me and Cathie Wood
buying at the same time. There you go go i don't think too many people are surprised
um option mike how are we doing sir fine hood huh i'd wait a bit but i get it okay slowly buying i
have i have more more time than i see buy in oh sorry geez i don't know if you heard that background
you're kind of breaking up today how is it right now has it been breaking up consistently yeah a little bit i don't know if you get mumbled
muffled every so often whatever's going on interesting okay let's try to switch the the
headbutt to the other other one but tell me what's going on in your world apple stocks down five
percent today a little interesting i mean well Apple getting wrecked after that report yesterday that they're delaying their
Siri integration with Gemini. You know, kind of a really strange day. And you look at what's going
on last Thursday, you know, we've had three days in a row down, right? We had Tuesday, Wednesday,
Thursday last week, Tuesday, Wednesday, Thursday, we did the same thing. Then we gapped up on Friday.
Will the pattern hold hold I don't know
today is kind of a weird little surprise there was no real good reason for what happened today
you know we have CPI tomorrow and the people think well the market's worried about that I'm
like market hasn't been worried about CPI for a while but who knows all I know is we had big
volume on the selling and there's really been no buying if you look what's going on the spies on
the lows and not really seeing buyers stepping in here volume is 83 million shares with an hour to go
we're going to easily break 100. we sliced right through the 8 to 21 and even the 50 day on the
spy and we're just ever so a little bit off the lows here and you know the vix um you know vix
has got above 20 it's back down you know and you're seeing the selling come back in.
It was really all the big tech and technology.
The SMHs were, you know, at all high-time highs before they sold off.
NVIDIA, AMD down.
Apple getting destroyed.
Amazon, Tesla, Meta down big.
Microsoft off the lows but was down.
Palantir getting killed.
Hood getting absolutely massacred all the way down to the low from last week there and the same time you have staples moving back up you have
names like walmart putting in another new all-time high today costco strong uh you see names like
procter and gamble and coke and j&j and merc strong you know they're hiding in safety names
defensive names still you know it's been a been a rotation and market breadth is not good,
but it's not as bad as it should be on a day like today.
So for me today, not the easiest of days.
I came in, I still have a couple of AMD and NVIDIA calls,
which I should have cut off already out in March.
So I'll make that decision tomorrow morning.
Fitted a nice trade on Micron,
had a really nice trade on Google off the lows on that
big move up, and then gave a little bit back, very small loss trading Tesla during lunch
time, trying to go long.
Obviously, trying to long, it was not the right thing to do today.
You know, outside of that, I haven't touched anything in my long-term account.
I'm not overly worried.
I just, you know, this action today kind of surprising. And, you know, the one thing that continues to ring in my ears as a problem is just all these earnings
reports are getting sold. It almost doesn't seem to matter how good they are, like APP last night,
which I thought was a fabulous report and guidance. They dumped it. They dumped Cisco.
There's just some, unless you're a Kraft Heinz or a McDonald's or a Coke, they're not they're not holding your the earnings aren't holding up here.
So the market has some concerns here. We have one more day to go.
Then we have a three day weekend. Like I said, CPI tomorrow.
We have a bunch of earnings. I haven't covered that tonight.
I think Apple is part of the problem. Typically, at a day like today, Apple would be stronger.
It's not. And I keep pointing out the weighting of these names, these big tech companies on the index is a big part of the problem because if the rest of the
market's not doing much, still can't get going with these names getting beaten up.
You know, bottoms present themselves. You know, the one other concern we continue to have here is,
you know, continue to talk that institutions are sellers into this. They're not buyers and retail
is buying. So, you know, something going on here, the market's not buyers and retail is buying so you know
something going on here the market's not quite happy about and you know so it's time to be a
little more careful we've been talking about that whenever we get up towards the highs or you know
yesterday we were just uh buck 70 or 60 shy of the all-time high we seem to run into problems
we run out of buyers the best trades have been to buy uh these dips like we had last week. So SPY never got back to all-time highs.
The 3% pullback 676.90 that we hit last week is still there.
So we're just above it still.
And I don't know.
We'll see what we get here at CPI tomorrow and some earnings.
I don't expect anything much from earnings here in the market like this.
Let's go over to Mr. Brian Lund right away right away you can bounce off of that we can get into
a topic or two i see wolfie down below get some good discussions there yeah so i mean i think
there are a few other macro factors that are weighing on the market a little surreptitiously
i mean we do have a looming government shutdown which which may or may not be. The last government shutdown we had –
Isn't it only for homeland security, though?
It's just homeland security this time.
It's very small.
Yeah, but I just think – look, I think in the environment we're in right now, you never know what's weighing down the market.
I think that could be it.
There's news today that a second carrier group is now heading towards the Gulf, which is kind of maybe a hint that we're going to get involved in Iran.
That's a problem.
But I think if you look at what's been happening and you look at what's been oversold so badly the last few weeks, obviously, it's the software names, right?
It's everything software.
It's IGV.
And that kind of started the waterfall
that's now going into the other areas. But I feel like we're getting to an inflection point
where this might end. Sometimes what happens is you have to marry technicals with the narrative
and see if there's some sort of overlay. If you're on Twitter, which y'all must be because
you're listening to this, yesterday there was this post, I think it was yesterday or the day before,
from Matt Schumer. It was about what's happening right now in AI. It's got 75 million views. It's
gone hyper viral. And it's all basically an apocalyptic look at AI. And the idea is it's not going to be two years or two
months from now when it starts wreaking havoc. It's now, right? And a lot of people have glommed
onto this story. And a lot of people are talking about this is the reason why the software stocks
are cracking. Today, it's logistics stocks. Somehow, AI is going to kill logistics stocks.
And it just feels like we're kind of at that inflection point where it's getting too
extreme in one direction.
A lot of people are now pushing back on this post saying it's hyperbolic, saying that it's
not even accurate.
And then you take that narrative and you lay it over some of these names that are really,
really stretched.
And I feel like we're pretty close to a spot where
we're going to get a pretty big counter trend rally. Now, do you trade that counter trend rally?
I don't know. I mean, it depends on how aggressive you are. It depends on your risk profile. For me,
I generally tend to wait for the move after the move. And what I mean by that is,
so you take a look at a day like
Thursday, right? Last Thursday, IGV, the software sector, which we'll just use as a proxy for all
the oversold software names, it's hitting lows, right? There are no support levels in sight.
There's nothing really except that it's been sold down a lot that's saying it could possibly pop.
If you're trying to buy it at that point, you're literally trying to buy a falling knife. And that's fine. Some people do that.
But if you bought it the second day, the day after that, right? On Friday, last Friday,
and you caught an intraday turn, so you didn't take overnight risk, and you held onto the stock
till it finished strong, then you had more options, right? Then you're like, okay, maybe I'll sell a
little bit, lock in some profit, and hold it over the weekend to see if it can follow through.
And then we did get that follow through on Monday and a little bit on Tuesday.
So that's the initial countertrend move. That's the move that you get off an oversold condition.
What I like to wait for is what I call the move after the move.
So the move is the countertrend move.
It comes out of nowhere. It's very binary. It's like flipping a coin. Then you get the move after
the move, which is like maybe a one or two day consolidation. Then if you break higher, if you
continue that initial countertrend rally, you got a level to trade off of. You can manage your risk
and you have a much higher probability of taking a winning trade.
Now, what happened with all these names and IGV is they never made that move after the
move.
They just rolled over, right?
And so a lot of them are back at those levels where they were last Thursday.
Some are starting to try to put in a higher low, but it looks to me like the beginning
of the bottoming process for that sector and for
a lot of these oversold names, I think it corresponds, like I said, with this apocalyptic
AI narrative.
And you just have to determine what your risk parameters are and how you want to do it,
how risk averse you are, how aggressive you are.
Like I said, I don't usually like to catch the following knife.
I either like to try to find an intraday spot, trade against that,
or the more conservative move, the one that gives the odds,
it puts the odds in your favor more, is to wait for the move after the move.
Counter-trend rally, two- or three-day basing,
and then if you break higher from there, that's where you get involved.
Wolfie, I'm curious your thoughts on what he was talking about there i think you were here for also part of options mike as well and you can get in kind of into your intro there
but um i'm curious your thoughts on what brian was talking about there there's some stuff around
the software sector which has obviously been getting hit pretty hard and also just kind of
the you know different styles of trying to play for the move after the move yeah so um you know i'm not as i'm not as seasoned or as old as uh and i don't mean
that pejoratively as brian or mike but why say wise instead of old that sounds wise i apologize
i'm not i'm not trying to be i know you Bobby. I'm just getting your hard time. Yeah, yeah. But the reason I say that is because when I first started was the tail end of that housing boom.
And then the subsequent 20% rally, 30% sell-off days that you had afterwards.
And I wasn't around for .com. I could just
go off of what I read and all that stuff. I'm not making an analog that companies are overvalued
like they were in .com. But based on what I remember when I first started, some of the
way this stuff is trading is very, for me at least, and maybe if I'm started, some of this stuff, some of the way this stuff is trading is very,
for me at least, and maybe if I'm wrong, that's why I'm going to default to them. My memory might
be a little bit murky because it was so like violent and new at the time. But some of the
way that some of these stocks are trading reminds me of some of the way things started to trade back
then when things broke. So there's a cut.
I agree with Brian when he says, you know, a lot of times when you get the sentiment overkill,
there's a violent reversal.
But whether or not, I think the more important thing is whether or not that violent reversal
results in anything, or is it just a positioning violent
reversal? And then, you know, we go business as usual. Because I feel as though a lot,
and it's not just a feeling, the data suggests that a lot of these names have already been in
or begun being in bear markets. And you get these like like violent snapbacks, sometimes on almost nothing.
And then you get these really violent intraday moves that go to,
you know,
extreme lows or extreme highs.
And I get,
I'll just use like HubSpot as an example,
right?
Like HubSpot basically like baby with the bathwater gets thrown out.
You know,
this thing peaked last year in february at
about 900 a share yesterday in the after hours i was when we were on they had the earnings i was
messaging monitor but like yeah if this thing doesn't sell off any further when is it 200 i'm
gonna probably take a shot for a trade i mean just look at the range on that name today right this
name uh effectively opens at 213 or 220.
I don't even remember where it opened,
but you get a range basically of 205 minutes before the open
and it gets all the way to 245.
And right now, as I speak, it's sitting at 220.
That's a violent freaking range, right?
Like for someone who wants to trade stuff like that, it's awesome.
There's also like data that kind of supports that we might be in the middle of something that's wonky and different.
So particularly the S&P.
S&P in the last month or two months or so is flat.
The average stock in the S&P is up about 10%.
And you're like, well, how the hell can that be?
What's happening is like these,
to kind of speak to what Mike was saying at the beginning,
these larger names,
this narrowing that's happened in the market
are getting this degross that's happening
as people move into some of these value picks and shovels things
that account for a smaller percentage of the index.
And so you basically get the index going nowhere, and then you get these violent shocks.
Outside of that, just like the dispersion in day-to-day, first of all, dispersion in
general, but the dispersion in day-to-day movement for individual names and the volatility
on individual names has been really aggressive.
I think it's two standard deviations above like historical, while at the same time,
the volatility itself of the overall market's been suppressed, right?
So like if you look at some of the ways some of these names are trading individually,
you look at stuff like, you take a look at Apple, for example.
We talked about Apple yesterday.
You know, Apple's down 5% today. Generally, Apple, when it has larger moves like that, it's either in the middle of a really nasty sell-off across the board with volatility expansion, or it's the start of something.
sell off across the board with like volatility expansion or it's the start of something.
Right.
And so because generally Apple, the way that it's been treated in the last few years,
is kind of like a safe haven.
You know, we use Apple as a conduit to kind of like prop things up, you know, inverse
the AI trade or what have you.
And then if people don't know where to go they just kind of like okay
what happens fine i'll just park my cash there right um but you know take a look at the vix
if it's just as i speak hitting 20 right like these like some of these moves some of these types of
moves intraday and uh you know on the session itself don't they don't really jive with you know
a 20 vix they jive with like something that's higher
and the reason i say that is is i think i think brian's correct when he says that sometimes you
get these these like um sentiment expand like these sentiment um shifts or these this like
dire sentiment at extremes and then you get these violent reversals.
But the, the important part to me is, you know, the way that this stuff has been trading,
um, this like rotation, deleveraging, de-risking is, you know, it's trading in, in such an
extreme, um, while the index itself hasn't gone anywhere that, you know,
even if we were to get,
even if we were to get some sort of reversal on some of these things,
the data suggests that two, three, six months out,
the average returns are negative.
So I think, I think it's like that think that kind of illustrates to some extent what
kind of environment we're in, where you can have some of these extremes that set up a really good
opportunity for you to make money to the long side. But I also think that you have to be
pretty measured and pretty realistic. For the better part of three, four months,
the former leaders don't really lead like they used to. Like NVIDIA, if I just pull up NVIDIA,
NVIDIA traded in July 31st, traded $183 a share as we talked at $187. So yes, Nvidia did rally to 210 at one point in that, but it also at one point got down to 160.
So for the better part of, you know, six, what is it, eight months now, six months, something like
that, the better part of that half a year, it's gone nowhere. You take a look at like Amazon,
Amazon, you know, had this rally, and we're basically back to where we were um may of last
year right so you you were getting all of these and in amazon's case i could zoom out even further
same thing but in all of these instances some of these favorites they're they're kind of
becoming trading vehicles more than they're becoming workhorses. And then the opposite end of that
spectrum, you take a look at stuff like Deere, you take a look at stuff like Caterpillar,
you take a look at stuff like Exxon. I've been on here for months and I'm a boring boomer type
stock guy right now. Those moves have just been up and to the right. And as of today,
some of those moves look like they've reached some sort of pinnacle exhaustion.
So I think the next couple days, weeks, whatever, probably be important.
Because if you get a moment where...
And there's another...
Before I say that, there's another...
Brian was talking about viral tweets and stuff. There's another like viral post or semi viral post like that I've,
that I've gotten, you know,
sent to me today about like the XLK versus short interest.
And that like we're at historically shorted levels on the XLK and it's like
super crowded and it's, it's big, it's more than 2024 peak,
the COVID peak and stuff like I've gotten that too. So in a, in a perfect world,
if we, if we are at a spot where you get some of these names that have led for the better part of
the last four or five months that have been parabolic up into the right uh if you if we do get a situation where that that physical trade kind of stalls for now in a perfect world you'd want some
of these some of these uh heavily shorted names in the xlk in particular to kind of like um
get get a bid and kind of get covered so you you get this rotation back to that. Now, having said that,
I don't, one, I don't know if we're going to get that. Two, if we do get that, I don't think that
it would potentially be the start of something. I think it would be determined on rates,
determined on this CapEx stuff for the data centers and the AI theme. And then, you know, all of these other headlines that these guys talked about at the top.
So I think like the all that word salad comes back down to know what you own, which is I know it sounds like a lazy, like, you know, basic Wall Street jargon.
But in my opinion, you need to for the better part of this year,
you need to have strong free cash flow companies, lower debt loads, companies that don't need to
refinance anytime soon until we actually get some sort of clarity on what these mid to long-term
rates are going to look like. And then I think things that have, again, a physical
intrinsic value of like whatever it is that they, whatever it is that their business is
over having like, you know, the productivity value offset for labor. So like, you know,
the last couple of years have just been like all these ai companies and all this
tech stack and all that stuff's going to create productivity and it's going to be awesome and that
was awesome and i think now we're kind of going into this like physical value thing so uh it's a
lot it's where it's out all that stuff um for just quick quick notes um there's a couple of names have earnings today. Uh, so like, uh, a couple of names that like I own, I own Rivian.
I've owned Rivian since a lot lower.
Um, well, not, not a lot lower now, but I've owned Rivian since lower.
Um, I think the cash burns is going to be an important thing to kind of, uh, pay attention
And I think, uh, any sort of clarity on their R2 launch this year
is going to be important. Beyond that, there's Arista, you know, any sort of insight that we can
get on the China exposure and export controls, or any sort of like advanced packaging stuff,
or anything related to the, you know, any sort of read through to the CapEx spend
would be important.
And then the last one, just from a sentiment gauge for me, Coinbase, I don't know how that
business is going to succeed if, you know, volumes are drying up across the board, at
least on the short term.
I'm not talking about long term.
I don't know how they're going to have a good report and good guidance.
Yeah, that's what I'm saying. I just can the short term. I'm not talking about long term. I don't know how they're going to have a good report and good guidance. Yeah, that's what I'm saying.
I just can't see it.
But it will
be important to me because
we're actually going to get
some of this
direct read-through for
how bad some of these
crypto
stuff has been.
And then there's two more.
Airbnb, which is coming up on a major trend line.
It's down 15%, I think, in the last year.
You know, if...
Hold on one second.
Bless you.
Yeah, thank you.
If...
I don't want to sneeze in people's ears.
If they can't get a tailwind from some of this Olympic and some of this
world cup action, you know,
it could be a situation where people are defaulting back to traditional
hotels. I know I am personally, I'm traveling right now.
I'm defaulting back to a traditional health hotel, just easier for me.
And then on the other side of that coin uh you also have uh xpedia
and win xpedia uh has kind of shifted their business to kind of focus on more of like the
b2b segment they have a thing called a unified loyalty one key and so like they're basically
trying to get you know uh businesses on board businesses on board and get integration to this like loyalty thing so that people can use Hotels.com, Expedia and Vrbo.
It's been pretty effective in the last year or so.
It's also like the benefactor of like that K-shaped recovery.
You know, people at the top aren't really feeling the stress as much as people at the bottom.
And then the last one on the same vein for that K-shape will be Wynn. You know,
Wynn, if you just take a look at that chart in the last, I don't know how long, it was a really
stellar performer. Today, it lost the 200-day. You know, want to pay attention to see what they
say about Macau. And, you know, just any sort of read through on that upper end consumer,
because again, they're a little bit more insulated.
We talk about the case stuff.
This has been one of those trades that's kind of worked and had people scratching their
heads and it's effectively a case shape.
And then beyond that, just like I own stuff like Vertex, which is not really an earnings
thing for me.
It's just like long term.
So I'll stop there.
I've been rambling for about 10 minutes.
So I'm happy to answer any questions anybody has or have them back forth.
Might have lost Evan.
Oh, wait, sorry. I i was talking i was unmuted
wait so wait wait i'll ask i'll ask i'll ask what am i am i um mike and brian am i like
wrong and or am i like not wrong but if i'm am i like misplacing my memory maybe of like how
certain things may have traded when you started to have like rolling bears and certain things that were loved before?
No, I mean, I think the difference here is the algos now are so much more fiercer and stronger and more of them than we ever used to have, right? In the markets that kind of changed everything,
everything's automated now. You know, very few of our trading, you know, our actual trading here,
most of this stuff is being done automatically
But yeah, I mean this is there's some very bad feelings here that said I think
You know, it wasn't too long ago We were talking about a bubble and this is certainly taking any air of any possible bubble out of the market, right?
So, you know, you know the bubble we're talking about back in December last year
Nobody's talking about it here anymore. And I think that's a good thing
And the question is this is just just a short term thing or not?
You know, I continue to say I remember, you know, about 10 or so years ago,
any time you had a rumor that Amazon was getting into this industry,
the whole entire sector would drop because Amazon was going to take over the world.
Right now, it kind of feels like AI, the same thing.
Any time you say AI is getting into software or gaming or this week was
finance, right? They're going to start doing taxes and stuff for you, planning. The sector just gets
killed and crushed. And it's just this irrational move to just get out of the way and nobody's
stopping to think. So I think there's some truth to what you're saying, but I also think that we're
just seeing some irrationality here in the markets that is going to lead to a hell of a buying
opportunity and probably not too far in the distant future. So I would frame it a different way. I agree with everything Mike
said. First of all, it's so much easier to liquidate. You can liquidate positions with
the touch of a button before you had to call your broker or you had to go through a big process.
And that friction was actually important because it functioned like circuit breakers, right? We
don't have that anymore. But I think what's different now, and this is something I've been kind of harping on for the
last year and a half, two years. I believe we've not only gone into a post-truth world where people
don't really care about what the truth is. They just care about believing in a narrative or
believing in whatever their side says. We're also in a post-data world, right? People think,
well, data is data and you can't
have beliefs around markets. Well, sure you can. I mean, we've seen literally them say, yeah, no BLS
numbers today or this week or whatever. And people go, all right, like we're in my day.
If that was the case, the market would have imploded. So what happens in substitute for data,
case, the market would have imploded. So what happens in substitute for data, you have to
substitute with something, right? Nature abhors a vacuum. So when data is no longer relied upon,
it then all goes to beliefs, right? And now people believe in their stocks, believe in the stories,
believe in the sector, believe in the technology. Do you think that though, or is this just macro
data points? Because I i mean the earnings never
stopped within that you know earnings growth monotone i see him down below he'd come in and
tell you growth the u.s economy us sb 500 earnings grew by 10 15 20 uh year over year this past
quarter so i hear what you're saying on like the macro points uh i'm sure the government shutdowns
have happened in the past i know it's more of a recent ish phenomenon i know there would have been one or two times where that would have
happened but i don't know i still think we are getting the data and what's really moving
no i think i think what he's saying is like not the shutdown specifically but like this is the
first time that i can remember where they're using the shutdown as a reason for not giving us
the data that we were given before, if that makes sense.
And what I'm saying is I think if you took 100 random shareholders out there that held everything
from crypto to small caps to big cap, I would say that today, opposed to maybe 10 years ago,
certainly 20 or 30 years ago, I would say a higher percentage of those people are holding or in their
positions for reasons that are more focused on beliefs than they are on actual data, whether it's price to earnings ratios, whether it's even technicals.
Right. And so what happens is when.
Let me let me let me let me just finish my point and then you can challenge it.
So then when there is a shockwave to that belief, that's when you get kind of a panic. And this is what I
was talking about earlier is I think so many people have been on the AI train and they're
buying things based upon what's going to happen and all this capex that's coming from these
major tech companies. And so the narrative we've seen for the last week or so is this narrative of
AI is a bubble. AI is going to not only change the world,
but wreck all these other things, the software stocks.
And so when you see those things,
people, they're not basing their positions on earnings.
So they don't look at a software stock and go,
yeah, I know this is a weird story they're saying,
but we're only trading at two times forward earnings.
They just get out.
And this is why you're seeing mass liquidations
in like the quantum stocks. times four earnings, they just get out. And this is why you're seeing mass liquidations in the,
in like the quantum stocks. I mean, Q, Q, U, B, T is off 66%. I O N Q is off 60%. All these things
that were big, big belief names last year are tanking. We're seeing the same thing in crypto.
Crypto is nothing but a belief system. There is, There are no underlying fundamentals. This is why.
So I believe, I think it's more, what we're seeing right now is more of a shock to people's belief systems than it is anything that's particularly substantive or tangible.
Vlad, what do you think on this?
Sorry, I was trying to find the mute button there.
Yeah, about Brian's comments about, you know, tangible, or like, what's going on in the
markets and like, what how people have been investing for the last few years.
I mean, look, in full markets, these kinds of things happen.
Multiples expand.
Sometimes speculative stocks get bid.
Crypto gets bid.
There's like excess liquidity.
I feel like it's just I don't think necessarily it's like this is a new phenomenon because
we've had this for decades.
You had this in dot-com.
You had companies that had no revenues.
It was based on eyeballs, right?
So I don't necessarily think it's any different.
I think it always finds a way to express itself in a similar manner.
But there is no fundamental valuation support for any of these names.
So when the market turns to selling,
there is no bottom that you can rely on.
Like when it comes to most other assets that actually have value earnings fundamentals,
you can say at some point of the price being down so much,
you could stick your neck out and buy that stock because you could say,
look, at this point,
it's like if a stock gets to five times earnings and they're growing earnings at
10 20 you could say okay that means that in literally less than five years i will get my
full investment recuperated that's a very good uh return on your investment so you know i think
So I think that's the issue is like right now is that what's one like the valuation
is not there.
So people can tell me how great Palantir is as a business.
But I've done the math and I had $200.
Even in the most bullish scenario, you're at best case break even on a forward return
basis over the next five years.
Best case. Best case, you don't lose money. And that could mean that you get a big correction
in between and then a big rally after. You're going to have volatility in higher beta stocks.
So and then people are going to tell me, well, what about Apple 11? Apple 11 is putting up
monster numbers, trading at like, I don't know, 20 times earnings, just like Reddit.
I think then I would say there's two scenarios here.
I think that some of those businesses make a lot of sense.
But either the market is completely wrong and it's just based on fear-based selling,
or the market is sniffing out some sort of slowdown in the consumer. And if there's a slowdown
in the consumer, the first names that get sold off are marketing related names. Meta,
Reddit, like Trade Desk. We've seen this always. So the marketing names typically get hit first
because they're the most sensitive. And yeah, so they're the quickest to turn.
So it's like, I owned Lending Club and today sliced right through the 200-day and made new lows.
I have to cut that thing.
It's hard for me to cut it because I know that based on the numbers they just reported
two weeks ago, that this thing trades at like eight times earnings and they're about to
grow their bottom line 50%.
And I mean, for the life of me, I don't think we're going to get a recession because that's
a time when banks and lenders are going to have a really tough time.
You're going to see weakness in financials, which you are seeing, especially today.
I'm wondering now if that is any sort of signal that the market is telling me
that they are expecting a consumer slowdown potentially up to a recession.
It's hard for me to believe that given the macro data that we've seen and all the spending we're getting.
So I don't know if I believe that.
I'm just trying to read the tea leaves here because, you know, while Lending Club is trading at eight times earnings.
What if the market is saying no, actually lending is going to suck for the next 18 months.
And we have the alt data to show that it's actually slowing.
The marketplace is not looking as good.
I mean, so maybe then they actually take a, they don't grow revenue.
They actually decline in revenue and they have a 10% decline in revenue that leads to
a 30, 40% drop in profits.
All of a sudden, it's no longer like growing.
You know what I'm saying?
It's just, what are the forward numbers? And that's the only thing that I would question
in what's going on right now is, I don't think that there's necessarily enough signal to believe
any slowdown is actually coming, which makes me think that my base case right now is this is not going to be a full blown bear market. This will probably be a reset, wipe out the froth.
I think tech probably needs to go lower because it just feels so damn heavy.
Like if it doesn't start contributing positively to performance here, I think we're in pretty
dire territory.
So you'd want to see eventually like tech come back, lead, growth, lead.
Nobody's saying, you know, these stocks at like 50 times sales should, you know, come
back anytime soon.
Those things could continue to flounder.
But if you want to see stability in this market, you want to see that, okay, no, no, no, like
everything's totally fine.
There's just so much market cap weight in tech.
And without it, it's going to be really tough, especially when every other sector has run so much.
And all it's done for us is spy is 1% year to date.
That's how heavy the drag has been from tech.
So if you get a situation where people start waking up to the fact that they just bid up
industrial staples and materials, whatever, to 50% runs in the last month.
Okay.
You know, I was talking about another space about this earlier.
So let's say the stocks were trading at 16 times earnings.
And maybe that's considered quote unquote low.
But these are low gross margin
businesses like industrials in general. They don't have a lot of growth, like mid single digits.
Maybe some of them are in the AI tailwind trade, fine. But probably a lot aren't. So now we bid up
a lot of these stocks from 16 times earnings to 25 times earnings. Like, does that make sense?
So what happens when people start thinking,
oh wait, no, like, who's the incremental buyer
of industrial low margin, low growth stocks
at 25, 30 times earnings?
Eventually, you're going to realize
that that's not where you want to be.
And so my thought, now my question is like,
okay, so what happens if people start profit-taking
and start selling those things?
It's very possible that that's going to be
downward pressure on the S&P.
You need tech to step up to be able to stabilize.
Because you can't just have tech and every other industry
that's been doing well start to decline from here.
So that's the only thing that I'm a little concerned about.
Look, no matter how you slice it, you need tech to stabilize and you need tech to continue its uptrend.
And the tough sell there is that tech has a very big investment year this year where their caEx is extremely high. And maybe not a lot of investors want to sign up
to be invested in that for the next one to two years
until they see the ROI
because the CapEx numbers are so big
that it's going to take all of their free cash flows
and turn them negative.
So what used to be businesses
that commanded a very high multiple
because they were lower,
they're higher margin,
lower need for, they were lower, you know, they're higher margin, lower, you know,
need for their light asset models. Now they're turning the highest high asset models, lower
margin businesses. I don't know, is there going to be a rewrite here now where big tech starts
transitioning more towards like, I don't know what we've seen from industrials and the like in the
past? You know, I don't think necessarily that's true because they're going to probably benefit a lot from AI,
cut jobs and be able to boost their margins,
increase their revenues.
But I think maybe markets kind of like,
okay, I don't want to buy this
until I can kind of have a clearer picture.
And so that's the tough part.
You need tech to step up,
but tech is not looking like an amazing investment
right at this moment.
So yeah, and then what you have financials kind of falling off, which makes me concerned about
consumer. Could you imagine if the consumer weakens and then you have Amazon with the retail
business, Meta with a big ad business, right? So they're spending a lot of money. If their revenues
even, you know, slow down from here, and you know, there's a 10% lower than estimates situation,
profits come in 30% lower than estimates, then you have this double effect where profits
are going down while they're spending so much money on capex.
So look, am I speculating too much?
Yes, but the market is making me a little nervous and I just need to see tech step up.
Otherwise, I don't know what's going to happen from here. Let me just put one finer point on the concept I was trying to get
across about beliefs. And this goes to Wolf's point. So back in the dot-com bubble, which I
was there for, right? There was this expansion of irrational exuberance. And it was based around
people believing in things that they thought would
happen, right? But it was very limited. It was in tech stocks. It was in NASDAQ stocks. It was
in the internet stocks. There was a whole section of the market that still stuck to fundamentals,
people that were still going on price to earnings and all those things that you know about.
But there were also people that would invest in a stock like Cosmo.com, which was a stock that offered one hour local delivery with no fees. It had literally no way
that it would ever make money in any scenario whatsoever. And it went up for a number of years,
and then finally people realized, oh my God, this is ridiculous, and it blew up and it went away.
We're kind of in that same phase right now in a certain part
of the market, not the whole market. Take a look at Oklo, right? Oklo's got no product. They've got
no potential for revenue. They're trading for a $10 billion market cap today, but a few months
ago they were trading at a $30 billion market cap. What changed between then and now? There
hasn't been anything fundamentally changed because there's nothing fundamental about the company.
There's been a belief, a core belief in the people that thought it's going to go up forever that's been shaken.
So what I'm saying is I think we're in this spot right now where people's beliefs and a lot of these software names and a lot of the AI names has been shaken temporarily.
I think it's a little overdone.
I agree with, I can't, I remember it was Wolf that said, we will get a snapback trade, but then what's
the move after that? That I don't know. That's a great question. But I just believe right now,
this moment, we're pretty close to a big counter trend rally. And then we'll have to see if there's
a whole new narrative that comes in and all the believers come back, or if they're like what happened when the dot-com bubble burst and it
took 5, 10, 15 years for people to regain their belief in certain sectors of the market.
I wanted to follow up because you kind of touched on it, but
the other way, because I never thought of that particular point.
But the other way, excuse me.
I see.
Sorry.
Sorry.
Battling a little sickness.
The other way is if we just go back like 10, 12 years, I remember there were a couple of
stocks that people viewed as cult stocks. So it'd be like Tesla was a cult stock.
Netflix was a cult stock. I remember, can't think of any of the other ones off the top of my head
right this second. But I believe today, there are significantly more cult stocks than there were back then.
And I believe today they're more impactful than the cult stocks were back then.
So like the market cap of like Tesla 10 years ago is nowhere what it is today.
And the market cap of like Netflix 10 years ago, nowhere what it is today.
And, you know, you take a look at like you mentioned Oklo.
I know, you know, I own some of the Rocket names.
ASTS has, like, an emoji that they call themselves by.
Robin Hood's got a crew.
You know, Palantir's, like, just seems as though that's an important piece to it.
Sorry, Wolfie.
Earlier, after you were done talking uh the long one i
didn't say anything i was speaking while muted one of the things that i was saying actually
talking about coinbase and a couple people were worried about the quarter fair enough i know
they're trying to do something as well i'm actually gonna they're doing a live stream or
something early next week with the ceo i'm gonna get to ask them a question so if anyone has a
question that i should ask they should let me know but coinbase is trying to get in on that as well sorry for cutting you off no no you're good
no it's coinbase is another one it just seems as though you know this and i and i agree i think we
live in a post-fact world post-truth world post whatever world you want to say but it seems as
though today there's more market cap tied up in the s p uh in some of these cult
names belief names whatever moniker you want to give them than there was 10 years ago and i think
that's important i think i think because anytime you stress something with actual data you know
data doesn't matter until people need cash and when people need cash then it matters because
then you have to you have to
be able to stress test and validate why you own something and i don't think i don't think all of
them can be you know tesla right like tesla has the the teflon touch not all of them can be netflix
right you they can't all all these like little niches and bubbles they can't all have that same thing but i think that they uh in bull in the bull runs they they attempt to duplicate that same type of core holder which
i think is i never i never considered that that way so it's i think it's a really important point we are 10 minutes from the stock market being closed we've been talking about a little bit
uh at different times here I'm going to change the uh the spaces title in a second or two here
but there are a lot of companies that report earnings not going to keep reading it off every
single time coinbase airbnb draft kings rivian
etc all about to be reporting earnings coming up after the close here most of them will be coming
out 405 410 415 p.m eastern that is normally when a lot of earnings come out so you guys should stick
with us for those so i do want to shift the conversation this way we'll have plenty of time
to uh to get the conversation back going again after this and montev i know you enjoy earnings should be having some more friends joining us
sam i'll come back to you for some other stuff after but is there any earnings you're watching
today any news names that are interesting for you arista network supply materials yeah those two
Those two.
Those are the two you're watching?
Okay.
Yeah, ACLS is a competitor to Applied Materials, Arista Networks.
It's not necessarily a Broadcom, but they are in the networking segment.
They are related and are in the same sector as Astaire Labs.
So we'll see what happens in that one.
Obviously, Arista Network is a much better profile in terms of profitability.
And it's part of the narrative and the theme with AI.
And so is supply materials.
So I'm expecting both of those numbers to be good for both of those companies.
It would actually be very interesting to see the stocks go down after earnings.
because what we've seen is that companies that are profitable,
Because what we've seen is that companies that are profitable, that are part of the theme,
that are part of the theme,
and that are growing in the industry
or leaders in the industry
tend to get marked up after these earnings.
The ones that didn't usually are companies
that are not profitable at all,
like Astero Labs or companies that are losing market share,
like Marvel Technology and so on.
You know, those are just my thoughts around it.
So I'm keeping an eye out on that to see what those numbers are and how the earnings
can react.
But generally speaking, semiconductors are still outperforming.
Like semiconductors are near an all-time high and or SOX is near an all-time high.
And there's a reason why a lot of my portfolio is positioned around semiconductors or things to do with these themes like two positions that I added, ACLS, as well as
a Silicon Ocean or Simo. They're both green from when I bought it. And I sold, I ran at 45 bucks
and I sold lemonade 72. And it was much lower. And it's not like that might last forever. Like,
I'm not going to sit there and be like, Hey, look, two days performance, I'm doing so much lower. And it's not like that might last forever. Like I'm not going to sit there and be like,
hey, look, two days performance.
I'm doing so much better.
Because I'll be honest,
I said the same with Meta when I sold Google
and look where it left me.
But this is much different.
I'm rotating basically out of themes
where the chart looks terrible,
themes where it's associated with software,
which is Lemonade,
or themes where it's not a full-stack AI cloud.
It is a full-stack AI cloud,
but they have to raise a lot of capex
in order to fund their future growth.
I think that that is being hit by the market.
I'm actually kind of surprised
that Nebius is actually greener today
since they projected $16 to $20 billion in capex this year.
And I don't know. i didn't think the mark
was going to take that good but uh i mean here we are so i don't get me wrong i'm happy it's green
um but i thought i'd be able to buy a better prices uh considering that the entire data
center sector is down um but yeah i mean a lot of the positions that i've leveraged in
A lot of the positions that I've leveraged in, in addition to shares, they're flat to green today.
So it's not that bad.
But Amcor is a big holding in my portfolio.
So that has dragged down a lot of performance.
Amazon's a big holding in my portfolio.
You've built some shares.
It's still a big position.
Meta's down.
Rubik's down.
Zeta's down.
Hood is down.
It's dragging down the portfolio, regardless of other positions being
green or flat that are leveraged. It'll still have an impact. So I'm going to wait and see.
And I did say, you guys mentioned earlier, I'm sure you guys talked about the technical analysis
here. Qs look terrible right now. Rejected the 100-day moving average, well below it.
If it's anything, this is the second time I was rejected. This is actually the first time it came back up to test the 100-day moving average
on the Hughes and the Daily and completely rejected it. We've never seen that before
since April. And every time, it always came back and saved it. We did not have that lately. It
completely rejected it. So, I mean, it looks like it wants to go to the 200-day at 580,
completely rejected it. So, I mean, it looks like it wants to go to the 200 day at 580,
which arguably it was almost there after hours last Thursday. But we'll see.
SPY is about to close near the 100 day moving average. Like that, the markets are just not
looking good from a technical analysis perspective. And fundamentally, a lot of these companies
deserve to be down.
But today's a day where,
and it's been happening for quite some time,
where the baby's being thrown out with the bathwater.
If I had to pick a few software names that I know are going to do great in the long run,
that will survive whatever this fear is,
because I think this is like DeepSeek 2.0,
but for software that's being amplified.
ServiceNow is a leader in the industry.
A lot of Fortune 500 companies own them, own their software, and they basically have near 100% retention rate.
Annualized retention rate or net retention rate is actually around 120%. So they're growing by
increased prices and their customers are sticking around and they're cross-selling. That's something
I'll be looking to buy once we get some recovery.
So is Rubrik.
Not as good in the profitability profile, but still a really good company.
Cybersecurity.
CrowdStrike is still expensive, even after this dramatic pullback it had from $550 down to $410.
But, you know, if we get a lot of downside there when we see some recovery, maybe that might be something to buy.
But, hey, the mistake I made getting into last April last year was that i kept on thinking it was the bottom
kept on buying more and buying more more more and i'm not going to make that mistake yet it saved my
behind uh a lot in the last couple of months by avoiding falling to that trap so but that's just
for me might not be everyone that that's for me. So I'm going to continue to monitor.
Obviously, earnings season this week has,
this year has just,
this quarter has been horrendous.
AppLovin's down 20%. AppLovin down 20% today.
All right.
That was a darling.
That was like a,
that was a Finn's weight Wall Street darling.
It is down 20% today.
And those earnings weren't even that bad.
Shopify completely reversed its earnings. Did Cloudflare give back all of its earnings gains?
Nah, it didn't, but it gave back most of it. And that's obviously a winner.
I have no idea why DigitalOcean is green today. Someone tell me. I mean, Adobe is green because
I mean, it's like basically falling off a cliff, but for some reason it's green, which is fine.
DigitalOcean just doesn't stop going down.
Can I just say one thing real quick?
Look at the SPY right now, man.
Do you see the volume that just came in at the end of the day near the lows of the day?
Dude, we're at 103 million volume on SPY today.
If you've been wondering, like, like dude there has been clear distribution in this
market for the last three months if you just look at the red candles or versus the green candles
over the last three months you will see every single time we get to the top of that range 6.95
we just get slapped right back down oh yeah no yeah Dude, look, but it's a low volume float up.
The sellers find liquidity and then they smack the bid so hard that they just like,
dude, they just, you know, like stuff it right back down.
And just look at the volume of these red candles.
Yeah.
I mean, we've basically been in range since October we are um we have not exited that range
yeah go for it Evan we're getting two minutes to the close here so I do want to make sure we cover
some of these earnings in and Sam I do promise I will circle back with you first I do want to hear
all the thoughts on this stuff it's all good um when I'm looking at the times here and I'll come
to Skype in a second maybe you could read give me the readout on uh some of the coinbase and airbnb are the ones that people are watching the most but coinbase
arista networks ribbian i see all around 405 p.m eastern airbnb and applied materials should be out
right out basically after the close and draft kings a little bit later uh stock sniper what's
what's expected on coinbase hey there um on coinbase're looking at a $10.80 move or 7.64%.
This is due to the open interest coming in at 1.303, 361.
And when we take a look over at our last four earnings reports,
and again, keep in mind that every single earnings reaction I read
is at the day after at close.
That's where it's recorded.
It's not about what happens in the after hours but we see plus 4.65 minus 16.7 percent minus 3.48 percent minus
7.98 percent and the craziest thing that's jumping out to me about coinbase is since the last report
coinbase is down 57 percent it's a completely different setup than the last time that they
reported and they're significantly trading lower which was the next most interesting one to you a Matt yeah give
me let's give a Mac is should be up pretty quickly just yeah our implied
move on a Matt is $22 and three cents or six point seventy percent an open
interest on a Matt is that 344,803 keep in mind it's much larger premium on
these options contracts. Gotcha.
All right, and then I'm also seeing Airbnb should be out any second as well.
But I just want to give a quick preference here.
Earnings time is a little craziness.
All the numbers are going to come out at once.
We're going to go around, look at the news pretty quickly, get you some of the numbers.
And then we'll cycle back in in dig into a couple of things and then uh sam will come back and have some good conversations about some of the topics that we're having there because i didn't do any conversations a bunch but earnings little hectic
we're looking at the moves right away take a couple numbers we'll dig in we'll try and get
stuff out as quickly as we can amat is one that should be out pretty quickly the move is up initially four percent in after hours
i'm seeing verdicts expedia and applied materials all just reported earnings applied materials
revenue was 7.01 billion eps was two dollars and 38 cents amat that would be a beat on eps
and then a beat on revenue uh so amat initial move was higher up four percent to keep an eye on that one
applied materials mr sam saw that i'm not gonna ask you right now but if you could take a little
deeper look into that one and if you see anything interesting uh on applied materials awesome i
know you're watching that i'm seeing xpedia group expe came in with a beat on EPS and a beat on revenue.
Beat on both of them, the EXPE stock is higher, up by 5%.
So initial moves on the two names that I've looked at so far have been a little bit better.
A little better.
Win earnings, beat on rev, missed EPS, $1 1.17 uh expected was 1.48
when i say beat they're literally 6 million dollars over expectations basically in line
expedia forward guidance also slightly above expectations. So, yeah, so Expedia is
a little bit,
still with some decent forwarded guidance there, getting a little
bit distracted. Expedia stock is now
down 3%. AMAT
stock is down up
8%. AMAT is up 8%.
Accelerating Expedia, giving some of the back.
Roku. Vertex Pharma,
miss EPS,
revenue. What did Roku do? Just Pharma. Miss EPS. Beat revenue.
What did Roku do?
Just give me the beat and miss.
Did it beat and miss?
Beat and beat.
Massive EPS.
Or 88% EPS beat.
53 cents versus 28 cents expected.
Revenue 400 million higher.
Nice.
Yeah, that's good.
Rivian I'm seeing is up 5%, 6% initially.
Roku stock up 5% there as its initial move.
We're getting a lot of earnings coming out.
Rivian stock around $14.67.
Basically just kind of fighting back a little bit on the day.
Airbnb also just reported too.
Let's see what this initial move is.
Rivian numbers.
Yeah.
1.28 billion.
Expected 1.27 billion.
EPS, minus 66 cents.
Expected minus 79 cents.
Double beat for Rivian.
Nice.
Airbnb has not moved too much just yet.
All the earnings are
coming in
hot and heavy
AMAT
forward guidance
EPS next
quarter is
expected to be
between 244
to 284
Wall Street
running 228
decently above
revenue also
above guidance
AMAT
was up
Airbnb stock
now down 3%
but AMAT
was up
that was not
one that reversed
that was the one
that accelerated yeah okay I can see why good 3%, but AMAT was out. That was not one that reversed. That was the one that accelerated.
Yeah, okay.
I can see why.
Good numbers there from AMAT.
I'm pulling up the AMAT numbers.
Yeah, take a look in.
I'm curious to hear some of the thoughts there.
Coinbase should be out any second here.
The stock was down a good little bit today,
so maybe some of the weakness, other stuff there is already priced in.
We shall see.
Airbnb, $2.77 billion, $2.71 billion expected.
EPS at $0.56, expected $0.66.
Airbnb has some weak numbers.
In this market, if you're missing one you're missing both in this market if you're not beating both by 10 you're missing coinbase stock with a small
tick up the numbers still have not been posted just yet speedy of reverse expo is down seven
percent now damn really the network is up 5% yeah
Dutch Bros is up 9% Rivian's up 7% Roku's up 6%
toast is up 9% so toast is not toast coinbase should be out all toast is still toast just not toast did just report though I'm seeing the numbers just crossing so give it a couple seconds
Obviously, the number is just crossing, so give it a couple seconds.
We'll circle back on a couple of these as well.
Meta just declared a quarterly cash dividend, $0.53, basically, in line with the previous ones.
Arista Network came in $2.48 billion, $2.39 billion expected. EPS at $0.82, 2.39 billion expected EPS at 82 cents 76 cents expected double beat for
Arista Networks um five materials estimated 6.9 billion beats 7.01 billion contracted
two percent year over year but this is not a growth expansion story um eps 254 cents versus two dollars and 20 cents
guidance for next quarter is 7.65 billion dollars which i believe it is an acceleration uh non-gap
eps 264 for next quarter coinbase stock is up 10 percent um coinbase bricked um revenue at 1.78
billion expected 1.83
minus 2.49
expected at 96 cents
there we go
we're getting some more people up here
we are getting a lot of these earnings coming in right now.
And again, we'll circle back on a bunch of these.
People are reading them out.
Sometimes we'll read out the same number twice.
It's okay.
Some people will be digging deeper.
But yeah, Arista Networks.
I'm seeing those numbers in front of me.
Coinbase, like you were saying, stock is down about 2%.
Some weak-ish numbers there.
I got a notification that Rivian was up 10%.
So that is a nice move.
We'll ask Amit about that in a second.
What's up, Matt?
How are you doing, sir?
I'm good.
How are you?
I am doing well.
We are in the thickness of earnings coming out right here.
We didn't have those apples of the world, the Amazon, the Tesla, the big dog names,
but there's a lot of names that people are interested in. Coinbase, Airbnb, DraftKings, et cetera. Absolutely. Don't
let me stop you from getting the news out. Are there any of them interesting for you? Or were
there any ones that you were excited about, even from a personal level? Not today. Yesterday,
AppLovin was in our ULTI product. So we paid a lot of attention to that one and uh you know that that
was that was disappointing but we we played we tried to play a lot of these at rex shares we're
trying to play a lot of these through options um and so so apploving gave you gave you some
good opportunities in the uh the options market to take advantage of the volatility there
nice yeah we'll talk a little bit more about some of that stuff. I just want to circle in on a
couple more of these ones. If you have any thoughts on any of the companies that are reporting today,
that'll be the conversation for the next little bit. I mean, I did see Rivian getting a nice
little bounce here. Have you had the chance to look at any of the numbers? I have not.
no i i haven't seen the numbers on rivian yet but uh it it looks promising that the stock is up 10
I haven't seen them either yet.
so um i'm actually driving right now so it's kind of hard for me to like look at the numbers at the
same time although i should say fsd is driving no, in a Tesla, in a Cybertruck.
I haven't switched to a Rivian yet, but largely because of FSD.
Yeah, so Rivian stock is moving higher.
Delivered $100 million gross profit.
10.9K, 1,000 vehicles produced during the quarter. I bet you there's going to be something in here,
forward guidance or the Rivian R2 lineup.
Sam, are you saying anything?
I'm pulling it up.
Yeah, I'm pulling up Rivian.
Yeah, 62.
They gave some 2026 annual guidance summary
of around 64,500 vehicles delivered for the year.
Just an EBITDA of negative 2 points,
or 2-ish billion, 1.95 billion.
CapEx, around 2 billion.
So, I don't know.
Rivian is still not pointing towards
positive numbers just yet, but that stock,
whatever something was said here,
was good for the company, up 11%
in after hours is that initial move.
Rivian stock hanging out around $15,
$60 in after hours.
We're a couple minutes from DraftKings coming out.
DKNG should be reporting in five minutes or so.
I thought that was another one that people would be interested in.
Obviously, we're in a very intriguing world right now with the prediction markets coming in.
And yeah.
Amcor Technologies announced a secondary offering of 10 million shares by selling shareholder.
AMKR.
Oh, that's down another 6% after hours.
Normally, when it's like selling the selling shareholders,
it's like, doesn't have as big of a move.
This isn't the company selling it.
It's like, it's not dilution.
It's just transferring the shares.
Maybe making shares that weren't previously public uh more likely to be moved but still yeah it's not the same
i mean the thing is up like 27 year to date so give back a little bit not a big deal
so i'm going to circle back on one or two of these earnings look back at the price moves
draft kings will come out and then we can shift back and keep moving on with the conversation
coinbase stock missed some numbers stock is down four and a half percent in after hours coinbase
stock is moving lower airbnb i also did see miss a number or two, but the stock is having a higher move. Let's see what's happening there really quickly.
AB&B, they missed an EPS, beat on revenue.
Airbnb gave some forward guidance that was slightly above expectations I'm seeing on sales.
So Airbnb, I guess, forgiving a little bit of an EPS miss for some forward sales, guidance being slightly above expectations.
AB&B stock up around 3-ish percent.
Arista Networks, ANET, up 6%, 6.5%.
Okay, nice move there on ANET.
Looks like they also had some forward guidance that was above expectations.
EPS revenue also coming in there to beat.
Arista Networks stock hanging out around 5%.
These are just initial moves they could change.
Earnings calls tend to start around 5 p.m. Eastern, 5.30 p.m. Eastern.
And they are important.
They can move the stocks.
Line materials, AMAT stock up around 5%.
Again, we were saying this, EPS, revenue beat, forward guidance,
both above expectations, EPS.
They guided towards EPS around $2.64 for next quarter.
Wall Street wanted $2.28 for applied materials.
They guided towards revenue of 7.7-ish billion,
7.6 billion.
Wall Street wanted 7 billion.
So applied materials, decent EPS revenue beats,
but also decent forward guidance
coming in slightly above expectations on amat
rivian as we were talking about there stock is up by 11-ish percent in after hours right now
rivian stock moving higher don't have quite as good of estimates in front of me although
we'll just give this a quick refresh
all right i got rivian yeah Yeah, no, Rivian.
Revenue.
We already, we did already run through it on here.
I think it was.
Oh, you did?
Okay.
Yeah, yeah.
I'm just kind of cycling back through.
But if you want to read what it was quickly, EPS revenue.
Revenue, 1.29 billion.
Beat, 1.26.
Adjusted EPS.
Beat.
Why did I have, didn't beat.
Beat by minus 66 cents versus minus 81 cents.
Gross profit, $120 million.
Shout out earnings hub.
What else can I do, right?
Yeah, yeah.
Shout out to that.
Rivian stock is up by 12% here in after hours.
I saw someone ask how big that ad for offering was
i believe i saw 10 million shares from those selling shareholders correct actually it might
be 11.5 million shares is what it was so somewhere around there that is what is being also if it's
by selling shareholders if it's selling shareholders i mean that the company's not getting the money
yes yes so it's not dilutionary just i think it's important for people to know company's not getting the money. Yes, yes. So it's not dilutionary.
Just I think it's important for people to know it's not a dilutionary.
Yeah, I was pointing it out before.
That's why I honestly don't even post these ones.
When it's by selling shareholders, I don't like to post.
When it's by the company, I do.
It's dilution and it's a little different.
But Rivian came in.
Are they...
Sorry, quick question.
On that, do you know who the selling shareholders are?
Are they like management?
Oh, okay. So it's not like management uh and poor majority shareholder 915 investments okay not a big deal uh are you saying that 915 investments so intense still 10 million shares of common stock
some shareholders granted underwriter additional purchase of 1.5 uh i just got
notification airbnb did a little bit turn around up five percent now but continuing going through
this pinterest was another company that just reported earnings pinterest stock down 20 percent
p-i-n-s moving down lower and snapchat by the way it was on the 52-week low list snapchat was
getting hit pretty hard but pinterest stock missed EPS expectations, missed revenue expectations,
forward guidance below expectations.
Pinterest came in with EPS of $0.67, below expectations of $0.69,
revenue of $1.3 billion, below expectations as well.
And then forward guidance they said they expect
around 951 million dollars of revenue below expectations of 980 million dollars of revenue
so a little bit of a rough numbers from pinterest that's rough um pinterest stock down around 20%. That thing is still public?
Wow.
Snapchat getting wrecked as well today.
Also, some earnings from before.
Roku stock up by 10% here in After Hours.
Toast stock is down by 12%.
We should have DraftKings numbers coming out right now.
DraftKings initial move is down by 12%. We should have DraftKings numbers coming out right now. DraftKings initial move is down by 12%. DKNG is down 12% initial move. Doesn't mean that's the move that's going to
happen here, but Amcor is moving lower. Sorry, sorry. Well, it is moving lower,
but DraftKings is what I meant to say there it was on my mind it was on my mind draft
kings now it's down by like six yeah so toast is toast toast is toast man it's crazy because i saw
um like i've been seeing so many bullish calls for toast like but
the stock kept dwindling and dwindling i wanted to follow them so bad but just didn't feel like
the right environment to chase it and yeah even into this earnings like somebody put two million
dollars of calls or like 1.6 million into the 30 34 call spreads for february those things are toast
man like you can't in this kind of like when are toast, man. Like you can't…
In this kind of…
Like when it's a good trending market, you can listen to options flow.
You just can't do it in this kind of choppy market where you're going to get wrecked on the premium every day.
I mean, you don't know. It might…
I mean, I'm not hoping for it because I don't really care.
I used to own this and I cut it.
I broke that 200-day but…
I mean, you never know. It might just reverse.
But yeah, this is…
But it did just reverse.
It did just reverse.
The other direction.
Oh my god, it's down 50%. It already did reverse.
It did reverse.
People had time to process it and it went down.
I'm trying to look at their earnings right now.
Holy shit, dude. $22? How is that not a buy?
How is that not a buy?
Is that not a buy?
I'm not buying…
I'm not buying anything like that.
But I'm just saying.
But like, dude, here's the thing.
It's wild though.
Just to anyone listening to this.
If you are listening to this, you're showing up every single day.
It's getting…
It's red.
It's bloody.
If you just try to manage some of your risk and not absolutely decimate your account
over the next like month or, you know,
however long this takes to resolve,
there are going to be so many great opportunities.
I mean, dude, like you could have bought Toast for $30 last week
and now you can buy it for $22.
A 30% discount in a week.
So I'm just saying like, be hopeful
because there's going to be a lot of opportunity.
You just have to survive in the limb yeah this is a really good company i'm not gonna lie i mean just okay
like here's the way to think about it right like let's say your favorite companies are dropping 50
to 70 if your portfolio isn't dropping 50 to%, then that means that you can actually own more shares
if there was no correction at all.
So, I mean, something to think on is like lower prices are good for you,
especially if you're younger.
Like you don't need this for retirement right now.
Matt, and wow, the background noise right now is crazy loud.
If you guys can't hear this,
by Apple stock, you know, these noise cancellations. Can you guys can't hear this by Apple stop you know these noise cancellations
can you guys hear the background nope okay or anything loud if someone has allowed me I've
ever seen in my life um we're talking about a VIX around 20 we're talking about earnings moves being
pretty large here it's a pretty crazy time um I wanted to give any thoughts obviously you're
uh active market participant here Matt you guys are doing some interesting stuff over there at WreckShares.
But you're just sitting there.
The VIX is around 20.
Some of these stocks are getting killed off of the earnings.
Earnings is always a time for big movers.
Empirically, it feels like there's a lot more downwards movers.
I don't necessarily have the data in front of me to say that versus some other ones.
But I'm curious your thoughts around this and their new season and options and all that
stuff.
Yeah, it's I mean, it's certainly a time of at least in some of the smaller names is
a time of heightened volatility, you know, anything that's aligned with, you know, with
cryptocurrencies or with AI.
We've seen some really high volatility and, high volatility and certainly around the earnings reports from
those types of companies. Like you're saying, you need to survive. And one of the ways that
we try to do that is through options. And that can be very tough around the earnings season
because the volatility has become very elevated. And you're sitting there like, oh, I want to buy
a put to protect myself. But boy, that sure does look expensive. But I mean, there's a lot of different
strategies that you can use to try to protect yourself without paying those elevated
volatilities, maybe use put spreads or something like that. And so that's what we're trying to do
to, like you said, survive these kind of turbulent times. And then, you know,
when you come out the other side,
there's going to be a lot of great opportunities, you know, and, and,
you know,
it's the time to try to find those opportunities and take advantage of it.
Unfortunately, right now,
it kind of feels like the first quarter of last year when we had the sell-off
that bottomed out around April.
Hopefully this doesn't last this long this year, but you know,
hopefully it's coming to an end soon here as, as we go through it,
but it doesn't feel like that.
And I don't recommend anybody try to catch the falling knife right here.
Yeah. We talk a lot on this space kind of about not doing that,
not trying to get the bottom, not trying to even just get the top as well.
There's the fat juicy 80% in the middle there, which tends to be where the real money is made.
Yeah, definitely.
And remember, you don't have to have a position at all times too, right?
So if you feel that this is a time that's just too turbulent for you and maybe you're not comfortable trading options to protect yourself, then you don't you don't have to have a position position.
It's OK to wait to see that, you know, wait to feel more comfortable at something's bottom.
You know, maybe you missed the initial five, 10 percent move up.
But a lot of these names, you know, that you're not playing for five to 10 percent up here.
You're looking for bigger moves.
So it's okay to be a little bit late getting back into these things.
100%.
100%.
I am looking down at the Spaces chat as well.
You guys should drop some thoughts, comments down there, down below.
I appreciate everyone for joining in.
The Spaces, you should make sure you are following the amazing speakers up here um stocks on spaces
great time we appreciate the people who come in make it possible we have a really great interesting
conversation coming up here for the next good little bit we had all those earnings coming up
there's a lot of stuff going on in the world uh so we're going to continue to talk about it here but
i just want to make sure you guys are checking out giving the people up here a follow sam i cut you off also before
you were talking through your day some of the stuff there some of the conversations um
i wonder if you had a point on just what was what was in your mind in general i know you were up
very earliest early this morning for the nebius earnings. Oh my goodness.
Ungodly early.
Yeah.
I got up at 3.30 a.m. California.
At least I got the rest of the day left,
so I'm not going to complain.
Tell me on this Nebius though.
Did you say that they were doing like $16 billion of CapEx
and it's like a $20 billion market cap company?
So I was saying on the earnings
and guys, go ahead and check out the Solid Report show.
It's on the Wolf YouTube.
I'll pin it to the nest in a second.
But this is obviously a very popular stock out there.
It was not even that popular probably like a year ago.
And now I see it on my feed all the time.
Maybe that's just my feed, whatever it is.
But I'm sure a lot of you guys have come across it.
And they're certainly not an $8 billion company as they were or less when I bought the stock.
They came into their earnings at a $21 billion market cap.
So they got it for $7 to $9 billion AR for 2026.
For $7 to $9 billion ARR for 2026, and that still stands.
And that still stands.
They raised their contracted gigawatts from 2.5 to 3.0 by the end of 2026, which is good news.
That means that they're looking to expand more, looking to acquire more customers.
They are sold out of their existing Parodon gigawatts, but it sounds like they're going to have room for more later on.
But they are communicating with their sales team
to make sure they don't oversell themselves or overextend themselves.
First quarter of adjusted EBITDA profitability,
that was interesting to see.
I think it was about 18% adjusted EBITDA margins.
So you're going to have to make those adjustments
so we're going to get that actual EBITDA.
CapEx, that was the big thing that I saw in there.
So actually, there were no new deals that were announced for Nebius.
And I didn't really expect it coming to this earnings.
But besides that, they're on track for that $7 to $9 billion ARR by end of 2026.
And I always say this all the time.
$7 to $9 billion ARR does not mean for the entire 2026,
they're going to have that much in revenue.
It just means that the last month of the entire year for the fiscal year, which is December,
multiply that by 12 for that revenue for that month. And that is your annualized revenue.
So they're supposed to be sitting with $7 to $9 billion. And they didn't say that they were
short of it. They said that they can confirm that's still going to happen. They reiterated it. The big thing that came up, in my opinion, was the $16 to $20 billion in CapEx
for 2026. I didn't expect that number. I'm not surprised by it, but I didn't see anything heading
toward that number coming into it. I was looking at the price action after hours. It did react
negatively, but as you can see, the stock closed green today,
which is good to see, considering all of data center is pretty much down today along the stock
market. I do think it's going to take two to three days for this play out, right? So one day is in
forward telling of the earnings reaction, you're going to have to wait for probably two to three
days after that to see what's fully priced in. I didn't see what Wall Street said
about it today, but I'm sure there's still a bullish it because that dip was definitely
bought up. It was down as much as 10% or 8% pre-market and has fully recovered. I think
entry day is also down to 8% and that's recovered too. So it's good to see. I mean, still bullish,
but you're not really going to get that massive $300 price target this quarter,
you're probably not going to see anything close
to a massive rally toward the end of the year
when the revenue starts to look like
it's really meeting up with that.
Because right now the scare is that
these companies are spending so much in CapEx,
but they're going to be left in the dust
after all is said and done once supply meets demand.
I think that's really the scare of it.
And I think the even bigger scare is that you have clawed work and AI features accelerating
as well as genetic AI that maybe the efficiency of all this compute is not going to need all
this gigawatt capacity.
And I think that's what the scare is.
But I would argue the other way around is that technology is exponential and there will
always be usage for capacity no matter what.
The problem is that the market doesn't believe it right now.
So it's probably a little bit of a pullback.
I think the valuation now makes a little bit more sense
than when it was $145.
That was pretty insane that early in the game.
That was a lot of hype.
We pulled back considerably.
But if the market stays bearish,
it's hard to be bullish the short-term price action if the market still stays like this.
So this can easily go back to like $70 or even $60, very easily. Obviously, much more attractive
if it does come down to that price, because then you have to factor in ClickHouse, which is about
$4 billion. They did confirm the $15 billion valuation. They own about 25% to 28 factor in ClickHouse, which is about $4 billion.
They did confirm the $15 billion valuation.
They own about 25 to 28% of ClickHouse.
That's about $4 billion.
You have the other business segments.
You have triple 10 to Loca, Avride, which probably amounts to maybe like $2 to $3 billion.
And then you have the core business, which has assets that would put it beyond whatever
mark can't be trading at 60 bucks.
So I'll be looking to buy the dip there.
I already have my position built out.
So not looking to add any more to it.
But yeah, I mean, I think if you're like a long-term investor, like 10 years in this,
right?
Probably doesn't matter whether you buy it here, you buy it 10, 15% lower.
As Matt was saying, the 10, 15, 5% is not the gain you're looking for.
The gain you're looking for
is much bigger than that.
Two to three times
when you're investing in a company like this.
You can't invest in a company like this
and only look for 30%.
That's,
the risk is too far
to only look for that.
This is going to be like
a four or five times
if things pan out correctly.
Nebius stock, Nis one of the ones that reported earnings this morning it's become a fin twit favorite and pretty much just ended the day even just barcode for the entire day
it's a lot does add some lows did an m in the pre-market uh and came back matt can i ask you
then sam welcome back to you.
Is Nebius the name that you've looked at, sold any options on, anything like that?
No, I'm not familiar with that one.
Got you. Okay. It's going to be like a little bit of a fin-to-it favorite over the
last couple months.
Too much of a favorite, in my opinion. I don't like it when stocks become like so favorite because then people start levering up on it
people get axed and then it comes crashing down like that is ultimately what caused the volatility
up and down when people put on massive leverage and margin with these positions they get margin
called they close their positions at a loss whatever it is and those are calls and you have
the market makers and the dealers they have to hedge against those calls they're buying by selling, by selling that call to them, but buying a
hundred shares in order to hedge against it.
And when they sell their calls, that liquidity comes back and then the price contracts like
that, that is called a gamma squeeze and it goes both ways.
So, you know, it's seen it happen.
You saw when it goes to one 45 and things can come crashing down.
So just be careful when you're playing options on this thing. it is the premiums are extremely high yeah that absolutely agree with that
when people start trying to fight negative gamma that's when really bad things happen and and you
get the big down moves because everyone's rushing for the door at the same time okay
you look at uh do you pay attention to the Greeks and Gamma and Gex?
I've heard different things when you're looking at all the stuff, Matt.
Oh, yeah, absolutely.
I'm always looking at Delta, Theta, Gamma, and Vega.
We're calculating that on all of our positions.
Are there ones you look at more than others?
Are there ones you're kind of just like, you know, it's a little overrated on other people?
You know, it depends on your time frame um you know if some if you're you only have a one or two week time frame then i don't worry about uh vega very much um you know if you're out
there for six months then you know that vega becomes much more important because you know maybe
you know maybe you own a call it's not a money call and, you know, the stock rallies, but vol comes down and you didn't make any money.
But in the short term, then I don't worry about Vega.
You know, you always you dealt with most important. You got to know what what your what your equivalent position is.
And, you know, the end data, you got to know if your, you, you got to know what your time decay is every day.
Uh, that, that's very important because you don't want that to eat you up and then you have to manage that.
You, you have to manage that actively just, just as you do your Delta.
It is interesting.
What about all this other stuff I've heard people i don't even know if
this is like with options stuff like jex and gex and all these different terms i don't even know
people throwing out here yeah i'm not not familiar with those
interesting times in the world interesting times in the world
i'm curious i'm like as the vix is here getting closer to 20 what this last couple
days and weeks have been from like the looking at the options market options
stuff there matt has it like is this a trade up trade down type scenario is this like
how you feeling about it just looking at this kind of it's been a really interesting market
there's some stocks that are working there's some stocks that aren't working there's a lot of volatility there's a little bit more fear but when i look at the 50 to be k, it's been a really interesting market. There are some stocks that are working. There are some stocks that aren't working. There's a lot of volatility.
There's a little bit more fear, but when I look at the 50-week high list,
it's a lot more full than the 50-week low list, you know,
but it's an interesting environment.
Yeah, it's definitely an interesting environment.
You know, it's a cliche, but it's, you know,
it's a stock picker's market right now.
But from a volatility standpoint,
volatility is getting elevated,
especially on some of the specific names,
but the realized volatility is still pretty high.
So although volatility may look like
it's starting to get expensive,
the returns that you're getting day to day,
you could certainly pay for that if you're an active trader.
You know, so, you know, one thing that we're always looking at is implied volatility versus historic volatility.
You know, so implied vol being, you know, what the market's looking for in advance and historic how things have reacted in the past.
And that's a very important relationship.
And that relationship is telling us
that volatility is still a little bit underpriced for these moves that we're getting. And a lot of
that's related to earnings season. But there's been some big moves in these names and with the
Bitcoin move and with all the AI is going to be the greatest thing or it's, and then all of a sudden,
the market doesn't believe it. So you're getting all these wild swings um yeah so so so volatility is is still uh you know
to me a little bit a little bit cheap and and certainly has more uh more upside here
oh interesting do you uh do you play around in like gold anything like that? I know these rare earths have been crazy markets.
I have not.
Before I started at Rex, though, I was at a commodity hedge fund,
a commodity and equity hedge fund.
So I have traded a lot of gold in the past,
but I left that fund right before gold and other precious metals
got really interesting.
So I have not been involved in that in the last year i don't know if that's so low or it's just like uh stress or something like a stress
missed you know but yeah yeah there's definitely some uh fomo on that but the one way that we used
to always try to trade the precious metals was a relative value so you know what one of the best trades from last year like maybe you don't want to go outright long any of them uh but you
know playing silver the silver to gold ratio was uh was it was a great trade last year with with
silver having to move at that so i knew a few people that were long silver and short gold and
made out pretty well so that that's another way to play it if you don't want to have the
outright directional exposure. Yeah, interesting. We do also have 13Fs coming out in the next
couple of days-ish here. It can also lead to some fun moves. I wonder if that's something
as you guys are, I know you're doing stuff on a bunch of different stocks. I'm sure over the
last couple of quarters, there's been one or two times around this time of the quarter where 13Fs
comes out and there's some moves on it. Do you have any thoughts or anything you learned through
this time or is it just kind of like another move in the market? Yeah, it's just another move
in the market. I mean, there's always something that's going to generate the next rate, next round of volatility.
So, you know, you know, and before you know it, we'll get through the 13 F time and then then it'll be, you know, three months later and then we'll be in earnings seasons again.
And so there's there's always something there. And, you know, that's why you got to you got to monitor the volatility markets.
Even if you're not an option trader yourself, you have to look at what the market is expecting.
You guys did a really good job of, before the earnings numbers were coming out, talking about what the implied moves are on these.
And if you're not involved in options, you still need to know those things so that you can prepare yourself and manage your risk and your overall portfolio.
Can I ask you, and then I'll bring Monitiv into this.
I enjoy hearing his thoughts on the protection side of this, the risk side of this.
Do you have any thoughts, strategies?
Obviously, it's different based on what rewards you're looking for and strategies you're
running, but just in general, when you play in these options,
how you think about the risk and protecting downside
and whether it's stop losses, whether it's whatever in there,
kind of that side of the mindset?
Yeah.
Everybody should have – when you're getting involved,
when you're getting involved in an individual name especially,
you should have your upside target and your downside target and stay disciplined. Now, you know, maybe you just want to buy the, you know, let's say you have a stock that's at $100 and you think the downside is 80.
Maybe you want to buy the $80 put and then you don't have to think about it again because, you know, certainly for people that aren't sitting at their computer watching the numbers all day that that's the safer way to play it uh if if you're sitting
at your computer then maybe you don't need to buy the put you you can sit there and then just you
know have a have a stop loss it um you know so a lot of it so much of this depends on your own
individual situation you are are you an active trader are you a passive trader what's what's your
time frame uh you know what's your timeframe? You know,
what's your risk tolerance? All those things go into the decision, you know, whether or not you
want to, you know, get into an option and how you want to manage your risk. You know, what's your
overall risk tolerance? Are you okay with being long in name, knowing that the earnings are going
to come out? And are you okay if the stock gaps 30% lower?
If you are, then don't do the options.
If you're not, then make sure you have a put.
And same thing if you're trying to play for the upside.
If you're really bullish about a stock, I would say buy some calls to try to increase that increase that uh uh upside for you or or you know we we have a few products where
we're long the stock and then we sell uh we sell an out of money call to try to generate income
you know so there's so many different ways to play these options and um you know in the etf
world there's so many different products out there uh that that can do it for you if you don't want
to be if you're not active and and sitting at your computer all day.
So again, just know your own profile and either find the ETF product that's right for you
or set it up yourself so that you don't wake up and have a to that you weren't expecting, basically.
Options are a great way to manage that.
For sure.
Managing your risk is super important.
I appreciate you, Matt.
That's an awesome guy.
You should check him out. Give him a follow.
Monitiv, I did see you also joined us up here.
Monitiv, I prompted you a couple times.
I'm curious on what you were excited to talk about. There was a bunch of earnings. Well, actually, I wasn't going to
talk about earnings today because you guys have already discussed that ad not soon. So
I was actually going to talk about something nobody's mentioned. So today there was a very
interesting research report that was getting passed around if i remember correctly it's ubs
they are postulating that up to 30 percent of the capex increases that were announced is because of
memory price increase that's exactly what i wrote us when we were here discussing the Google numbers, I tweeted that out.
I said, I am pretty sure a good part of this increase
is because of a desperate attempt to lock in memory prices
and supplies by Google.
And this is adding more fuel to the fire.
That could very well be the case.
But more interestingly, if you read through the Cisco numbers and listen to what their commentary was, they said there is going to be a margin hit of up to 150 bps or so in gross margin because of memory.
You back calculate that,
turns out to be something like 600, 700 million dollars of margin.
I mean, million dollars of decrease in gross margin
because of memory, which is what they're calling out, right?
And the way I calculated it is product is roughly $45 billion,
and their gross margin this year is just shy of 64%.
If you bring that down by 150 bps, that's about $700 billion.
Anyway, that's how I calculated it.
These are not accurate numbers.
I mean, the calculation is accurate, but they're still going to pass on some price increases.
They're going to do other things to try to mitigate that.
But it's one company, one company that's not even producing servers and chips in the quantities.
But look at what they're facing.
If they're facing, you know, 650, 600 million,
700 million increase in cost because of,
or loss of profits because of memory,
just imagine what somebody like, you know,
a Google would face, you know,
with the volume that they've scaled up to on TPUs,
or for that matter, what somebody like Apple or Dell or any of the big players
who produce massive volumes are going to have to face because of memory, right?
It's a reckoning. It's really going to be something terrible.
Do you own any Micron stock or San Diego? It's really going to sugarcoat this. But where I actually asked to come up to speak is when Sam was talking about Nebius.
And here is my thesis, right?
Not specifically Nebius, but on data center.
are now starting to see on memory price increases, there's going to be a fall off in in-house
data center capacity addition by corporates. And they're going to lean more and more on
hyperscalers and data center providers. So I think that entire industry is going to get a tailwind from companies
who are going to find it not very, I mean,
even less economical than before to run their own data centers,
at least not by, you know, servers at this time.
And you already see, you know, Dell and HP and Lenovo and everybody else has been lining up
at the doors of Chinese memory makers, trying to get them certified quickly so they can, you know,
actually build enough servers to meet their demand. So I think there's a lot of interesting
undercurrents going on. So that's something I don't, I have a thesis. I don't have a, you know, a tradable idea yet,
but I'm working on it.
But anyway, that's what I wanted to come up and say.
Thanks, Monthev.
I appreciate you joining into the conversation
as always has some great insights.
Yeah, do you have the earnings numbers in front of you?
I'm curious on how an update we were talking a little bit earlier and I did
try and quote the number.
I think earnings year over year you were saying was up like 15% ish around
there.
S and P 500 earnings.
I have a few days ago.
I've not downloaded the latest one,
but,
but roughly about 13 and a5% to date for earnings
growth and a little over 8% for revenue growth, 8.2%.
So like I said, I think the number has not changed. There's only one sector that has underperformed what we expected when we closed the quarter.
So January 1st updates.
There's only one sector that's underperforming from that time to now.
Everybody else has done better than was expected before the earnings season started.
So it's across the board.
These are pretty good numbers.
I mean, only utilities, like I said,
is underperforming expectations so far.
Everybody else beating,
and we are past the two thirds mark here.
So this number is not going to swing all that much from here on out.
It might be two-thirds by number of S&P constituents, but probably closer to 75% or so by S&P market
cap.
Since it's a market cap weighted index, we probably can extrapolate the final number pretty close to truth right now.
You're really just waiting on a big dog, NVIDIA, to come in and close off the earnings season.
Yeah, it's really only a handful of big players left, right?
NVIDIA, Oracle, probably the large... Adobe.
They're probably the largest
mega caps left to report.
Adobe's obviously been one that's been
absolutely destroyed.
Adobe's been on that 52-week low list a lot recently.
And obviously it starts with an A, so it
sounds out to me it's the first one I see most of the time.
Sometimes it's good, sometimes it's bad to be at the front of the list.
Sometimes it's good, sometimes it's bad.
I'm always used to it.
I'm always like one of the first ones to be called all the time.
I'm so used to it.
I'm normally close to the front.
Give you guys a little bit of a hint.
But you know what's funny? I'm normally close to the front. Give you guys a little bit of a hint. But, yeah, you got it?
You know what's funny?
The NVIDIA chart, it has been consolidating since the last quarter.
Even before the last quarter, it's been consolidating.
So I think this is the earnings where you're going to see a big move
that's going to follow through in one direction,
whether it's up or down.
I don't know.
Yeah, I agree, Sam.
But the more I think through this, right, NVIDIA has been projecting large numbers.
So my guess is they're locked in their memory supplies.
So it probably is least impacted by memory price increases, at least until their contracts start rolling
over, right?
We don't know when that is.
It could be, you know, this quarter.
It could be a year from now.
We don't know.
So they're going to face a massive headwind.
But for now, it looks like their top two suppliers, they have what they need, which is a big deal
first, right?
Because others are clearly facing shortages.
So it's going to be interesting.
I'm pretty positive on NVIDIA here for now.
If people are really, I mean, here's my thought, right?
Just extrapolating that a little bit further.
Both Amazon and Microsoft have had very low ASIC volumes relative to where they want
to scale it to. And that means it's likely that they did not have long-term contracts in place
for such large increases until maybe a few months ago, maybe they saw it right and jumped right in and got it.
So that cost differential is going to be a little bit less,
maybe a lot less.
I don't know the answer, but it's going to be interesting.
And I think the likelihood that NVIDIA still has another solid quarter to me is pretty high.
Just trying to extend that thesis on locked-in memory contracts.
Others may be not able to deliver what they need.
Then they might even be getting larger data center,
CPU business with ARM if the struggle on the other side
with like AMD and Intel not being able to,
sell as much because their vendors don't have memory.
It's gonna be interesting.
What, we are a week out from Nvidia, two weeks out?
I can check my handy dandy earnings hub i'm curious matt i forgot it's gonna be uh what is like options applied volatility around it looks
like we're two weeks out from video but i'm curious on the type of move that's being projected
in there nvidia earnings wednesday the 25th. So not this
upcoming Wednesday, the Wednesday after that one.
It's a bit more than
two weeks out.
No, less than two weeks
out, yeah.
There you go, 13 whole days out.
But NVIDIA earnings,
that should be an interesting one.
Obviously, that can always shake up the market.
But he's not going to report a bad number. I can tell you that much based on how the conversation has been going
looks like they projected 65 billion dollars which would be another huge growth it's just insane
these numbers and videos doing wow i'm excited the multiples are starting to you know get more
interesting for nVIDIA.
I'm not suggesting that it's cheap.
I'm just suggesting that it's cheapest it has ever been and getting cheaper relative to its own multiples.
The law of big numbers has been saying some things for a while on NVIDIA,
but it's just kept doing it.
Just kept doing it.
We're looking at 27 times forward
based on, what is this,
earnings estimates if I go to...
So for the current fiscal year,
I don't know what their quarter is.
They have a weird year start.
So they actually are in the same quarter system, but they're just a year ahead.
Yeah.
next full year, right? Fiscal year
Yeah, for the next full year, right? Fiscal year 2027, they're expected to make $7.
2027, they're expected
to make $7.
My guess is that they're going to
end up making more like $9 or $10.
At that,
you know, we're well below
multiples here very soon.
Think
about that.
Nvidia,
$4.5 trillion.
$186,, 189.
I think the average price target is somewhere around 220, 230.
It would just be weird if Nvidia is the cheapest Mag7 stock.
Yeah.
You got any thoughts on this one, Matt?
I don't know if you have the implied move for the earnings.
I know it's a little early and it'll get more set going on that one.
But NVIDIA is obviously a popular one to trade as well.
Yeah, I mean, that's something, you know,
we tend to take a one-week view before those earnings.
So, you know, at the end of the next week,
we'll look at what the implieds are.
You know, one of our go-to strategies is we'll probably sell a straddle,
an at-the-money straddle at that time and buy a lower delta call and a lower delta put for protection.
You know, we use that strategy on app loving this week.
And then you had the you had the rally before the earnings came out and we were able to buy in the put that we were short.
And then the stock came off after after earnings.
So and then we were able to buy in the call that we were short and then the stock came off after after earnings so and then we were able to buy in the call that that we were short too so collecting on both sides of that straddle so
that's something that we'll look to do uh with nvidia or any of these names that uh that that
report um you know we we don't want to just sell that straddle by itself because you know that
especially in a market like this so that's why we buy a lower Delta call and a lower Delta put to to protect ourselves but you know we're
still looking to to collect some premium you know especially on a stock like
Nvidia which you know it has been the volatility will certainly be elevated
going into that report but you know the the stock itself is not quite and is not
as volatile as a lot of these other names that have reported recently.
So, you know, it might be a good opportunity to try to collect some option premium there.
Yeah, that is a good, some good thoughts there.
Do you straddle, strangle, everything like that?
I am curious on how advanced we tend to get these strategies when you're going in there are you
trying to do like obviously there's somebody's strategy with two legs i'm sure there's strategies
that can be four six eight legs when you're trying to do these earnings things i'm just
kind of curious i'm like that type of thing you said you even kind of were talking about there
that's sometimes even a little bit more complicated on top of it. Like when you're going into this, what is like the average, like what would normal be?
Yeah, well, we do do a lot of four-legged option strategies where one of the most common in our ULTI product is selling the straddle and buying the strangle.
strangle. And that is a short vega strategy. But you're almost you still want the volatility
because you're looking to buy in those short legs as the stock moves before these announcements
come out. So, you know, I think one mistake that people make when trading options is that they think you buy or sell the option and
then you just wait until expiration to, you know, either finishes in the money, out of the money,
whatever. But if you need to be actively trading those, you don't just put the options on and then,
you know, go walk away from your computer for a week until they expire. You want to be, you know,
if you get a rally ahead of time and you had sold the put, buy that put in. Don't, you know, if you sold it for $10 and it's worth 50 cents, are you really
going to sit there and just hope that last 50 cents decay? Why not just buy it in, take your
win and move on to the next thing? And at the same time, reduce your risk. You know, again,
options are a risk management tool. So, you know, I think a lot of people put them on and then just, you know, don't manage them the way they should and don't manage their Greeks the way that they should, like we were talking about earlier.
So, you know, you can have a complicated option strategy and then throughout time, simplify that before you get to these big events.
You know, you can make the money before
the numbers even come out. You don't have to wait for the big event. The market's giving you
opportunities all the time. You just have to be willing to take profit and not try to
scratch out every cent that's out there. You want that 80% of the move?
you want that 80 of the move yeah yeah exactly and then in options that's you know that that's
there's a lot of ways to do that so yeah if you sell something for 10 you know be happy buying
it back in for two don't don't wait until the last minute to try to get that two because next
thing you know that that option might be worth 50 especially in this environment right now
option might be worth 50, especially in this environment right now.
Yeah, I think those are some good points there.
We are coming closer to the top of the hour.
For anyone who doesn't know, Stocks on Space, this show is live every single Monday through
Thursday at 3 to 5 p.m. Eastern at least.
Live earnings season was very busy this week, And we still probably have some more coming up.
Let me take a quick look at the calendar for next week.
I do appreciate each and every single one of you guys for coming in and hanging out with us.
Make sure you are following the speakers.
I'm going to go around one more time and let everyone give us some more thoughts.
Talk through some stuff.
But I do really enjoy these earnings spaces.
Next week, we do have a crowd strike on tuesday crwd
reporting earnings then we have a costco cost reporting earnings on thursday a couple other
names marvell mongo db a few names reporting earnings but it's a little bit it's a little bit
lower and obviously oh wait whoa whoa whoa whoa i am in the week after nvidia earnings we are at
a wrong point there cycle that back we got palo got Palo Alto next Tuesday. We got Occidental, DoorDash, Carvana next Wednesday.
Also Figma. Thursday, Open Door, Newmont, Texas Roadhouse. So there are a lot of names,
transparently, not many that I care about. I'm sure there are some that you guys do,
so that makes me care about it. Cheesecake Factory, Sam Solid's favorite place, reports earnings next Wednesday.
I love that place.
Oh, my goodness.
Cheesecake, ticker C-A-K-E, earnings next Wednesday.
Sam, why don't you start us off here on some kind of final words,
anything you want to leave the people with?
Yeah.
Yeah, I mean, really depends on your timeframe.
I honestly feel like this year has been a crazy year.
We're only not even 45 days in, 45 calendar days in, not even 30 trading days in, I believe.
And be prepared for it.
I always expected 2026 to not, you've had three years of nearly 20% gains, right?
So at a certain point, you're going to have a red year or maybe an extremely volatile
year.
And I don't want to take that away because we've been having volatile years, right?
Last year, of course, the 23% intraday drawdown from S&P 500 didn't have a bear market.
But we are in a new time where markets can quickly fall
and quickly recover.
V-shaped bottoms.
And that tends to happen more often than not.
And you just have to be dynamic.
You have to change the way that you either trade around this, the way you swing trade
around it, the way you invest around it to be prepared for those moments.
This year is not the year to be practicing margin.
I'm sorry, because if you have been using margin
or you haven't been pressing calls,
you likely did at the wrong time
and you just got decimated this year
and you just got to remain solvent.
That's it.
Just remain alive to play the next game
and don't get too greedy, as Matt was saying.
If you reap a 20%, 30%, 40%, 50% gain on a call option,
take your profit.
You don't need to get that two to three times or whatever.
I feel like those times we've all gotten used to in the last three years.
It does not happen often.
So just don't play like it's going to happen again this year.
This is the big dip that everyone's waiting for
because we are literally just a few percentages away from the all time highs.
We're not even close,
not even close to having like a bear market or a correction.
And we have not had a correction since last April.
So they happen and they can happen quickly.
And then they can snap back very quickly.
Just stay humble.
Stay humble, react quick i appreciate you sam shout out to sam doing the solid report live on the wolf financial youtube and x page every single day right around 2 45 p.m eastern time might change
but place will not you can also check it out on his own personal YouTube page.
So shout out to that.
But I appreciate you for joining in.
Motiv, you got anything you want to leave the people with?
No, I think Sam said it very well,
so I don't have much to add.
Shout out Motiv.
Great addition to the spaces.
Always love when you join in.
You guys should check him out.
Give him a follow.
Matt, anything you want to leave the people with?
I appreciate you guys joining us here.
If anyone was just hearing Matt for the first time,
you should definitely guys go in, check him out, give him a follow.
Smart guy, great addition to the spaces.
But yeah.
Yeah, Sam said it well.
Stay solvent.
And you do that by knowing your risk tolerance and use options if you're comfortable with them.
If you're not comfortable with them, just make sure you have your targets.
Make sure you have that order in on a stop loss or diversify.
You've got to stay nimble in this market.
Don't fall in love with any of the positions. Be happy to take a profit and live to fight another day, like Sam said. That's
great advice. Matt, what's your professional background? What were you doing before this?
I know obviously REC shares now. Yeah, so I'm at REC shares now. And before that, I was at a
commodity and equity-based hedge fund for 20 a, which is an eternity in the, uh, in the hedge fund world.
Um, but yeah, we, we traded a lot of options there and that's where I got my options background and now, now trying to take that, uh, those hedge fund strategies and bring them to the ETF world.
them to the ETF world. Very nice. Very nice. And obviously, ULTI is the one that you're going in
and working in on. What's the strategy there? Yeah. So that one, we pick 20 stocks each week.
We look for the most volatile stocks and then we put on an option strategy, usually a four-legged
And then we put on an option strategy, usually a four legged strategy and we're long stocks at the same time.
So the strategy works very well in a bull market. It works works very well in a stable market.
You know, the when we launched in early November into a sell off.
So we didn't get off to the start that we wanted. And then we had a good couple of months.
And then the last week's been a little bit of challenging, but it's very actively managed.
So, you know, we've been we've we've gotten much better at capping our downside by by
either buying inputs that were short or buying additional puts to protect ourselves.
So it's a it's a volatile strategy.
I don't recommend to anyone to put all their money into it, but it's, it's, it's a strategy that, that works well as a part of,
as part of somebody's overall portfolio. We,
we provided a weekly distribution.
So you're getting a dividend every week. Yeah. And it's, it's,
it's a very active strategy. It's a very interesting strategy. I, I,
I hope some, I hope everybody will go to the RecShares website,
take a look at you, LTI, and take a look at all the other products that we have, because
we have a number of option products that are great for diversifying somebody's portfolio.
Yeah, for sure. Shout out to RecShares. As with anything, my goal with the space is just to have
good people up here, have some good conversations. And Matt, it was a great addition, good conversation.
They're talking a little bit more in the options world there.
So definitely should go in and check out Matt, give him a follow.
I just enjoy having smart people.
And obviously, RecShares has been a friend of the show, a friend of the team for a very long time.
We've been working with them.
And as within any product, any ETF, you guys should just be informed investors.
Go to the website
maybe it's right for you maybe it isn't our goal is to just put interesting stuff on your radar
rec shares.com prospectus all that stuff you guys know the drill that is the place to go in
and look for that i'll actually pin that up in the nest above chat to matt give him a follow
stock talk i see uh you're joining in. How are you doing, sir?
Yeah, sorry. I had some apartment tours to do today.
No ranches? We're downgrading?
Well, no.
Portfolio's not up enough. Ranch is up.
My lease is coming up for renewal, so I had to find a place to, another apartment to go to.
A better apartment? Not staying in the same one?
No, I'm just changing up the scenery.
Gotcha.
Yeah.
Moving to a different part of Uptown.
Okay.
Okay.
How was the tour?
Was today a good one?
Did you like it?
It was all right.
It was all right.
I didn't really like it.
We'll see.
I have some others scheduled for the rest of the week.
Next week, too.
I don't want to give away too much, but what's on the stock talk needless?
Need a balcony, yes or no?
Obviously, need a gym in the building.
Yeah, need to have a nice gym, need to have a nice balcony, good amenities,
all that good stuff.
Would you rather pay more for amenities or the right location?
I like being in the heart of Dallasallas so that matters a lot to me but it's not i mean it's not as expensive as other major cities in you know in up down and downtown dallas it's
not that expensive compared to like you know other cities of similar size are much more expensive so
dallas is actually pretty reasonably priced even in the city i think i mean it's not cheap but
compared to the other major cities it's
pretty reasonably priced um but i missed the conversation today what did we touch on obviously
the carnage in stocks um in momentum stocks continues today the carnage actually spilt over to
even some of those rotational sectors that we saw right i mean i think there was a big down day for
trans transports today right down four%. So that was interesting to see.
And, you know, it goes by the thing I've been saying for most this year,
which is that there is no way this market can hold up without the AI trade.
And the blips of rotation that we're going to see are going to be short-lived.
And on days like today, you see the rotation trade get washed out too, right?
I mean, I think KRE was down a percent and a half today as well.
It was down more than SPY.
KRE XLF was down more than SPY today.
XLE was down more than SPY today.
IGV just goes down every day, so I don't know what to say about that.
And transports were down 4% today, 4%.
You know, that's a big move down and transports were down four percent today four percent you know that's
a big move down for transports right so clearly there are a little bit of concerns about the
economy um emerging in the markets now but what i would flat out simply say is that almost all
the liquidity not only in the stock market but but in the actual real economy, is coming from one place, and that's from AI.
From investment in data centers, a lot of the economic growth is coming from data centers.
Certainly, a lot of the market capitalization growth, if not almost all of it in the last three years, in terms of just market capitalization growth, has come from tech, which is indirectly tied to data centers and indirectly tied to AI. So you can't escape it. I mean, if there is compression and speculation
and a slight shift even in the narrative around AI at all, it's going to be carnage. And that's
kind of what you've seen in a lot of the red days of the past several weeks.
So, yeah, it's starting to get more difficult, obviously.
You're going to have to be much, much more selective with what you are in and your risk points around those names.
But, you know, it's still a market that you can find opportunity in, I think.
And there were still names today, even in this brutal market that were up, you know, IRDM had a great earnings. I know
some people were in that one. You know, the digital ocean held up extremely well is when I
was watching in the end of the close. There's a lot of names that are still holding up. Now,
the names that aren't, you have to obviously take a step back and say, okay, what's my cost basis?
Can I afford to hold these things through more volatility? If they go down another 10, 20%, can I afford to hold them?
And I think a lot of people who are completely underwater in this market,
who are like buried on everything they own,
just bought things at the wrong times, you know?
And that is a shitty situation to be in, obviously,
when markets are rolling over on an individual stock basis,
you know, especially on a momentum-driven basis. That's a difficult scenario to be in, obviously, when markets are rolling over on an individual stock basis, especially on a momentum driven basis. That's a difficult scenario to be in. And that's
what we're seeing. So yeah, there are some stocks that I'm looking at too now that I own that I'm
like, okay, if we see more pressure in the markets, how low can they go? What would my total risk be?
Am I going to be able to sit through that? Right. And I'm starting to make those assessments.
So we'll see.
We'll see if there's any big changes for me.
But what I want to see tomorrow is a big recovery day.
And if we don't get that tomorrow, then I think it's time to start shifting bias.
Because the Q's today got their second rejection in just a very short period of time off the 21 EMA.
They can't retake the 50-day moving average, which is not great to see.
It's starting to look double-toppy.
But here's what I'll say.
Last time the market started to look double-toppy on the index level, we had a monster reversal on Friday and St stick saved it so it's really really hard it's
really easy to get faked out in this market it's really hard to try to forecast with the technicals
but we are trading as of the close today on the queues 600 uh down 1.5 percent today on the queues
which means barring a big reversal tomorrow the queues would have to be up over one percent
tomorrow to recapture that 21-week EMA.
If not, you're going to get your first close
below the 21-week EMA on the Qs in nine months,
in over nine months,
since the April flash crash that we had last year
over Liberation Day.
So, yeah, you could be headed for that type of scenario.
You could be headed for, you know, a longer regime of selling scenario
where you just get chopped and sort of a bleed out.
But you have to pay attention to the failure to recapture moving averages.
That is a critical, critical signal in markets always.
You know, moving averages are nothing but just average price over a period.
They're not an astrology tool or a forecasting tool.
But when price is unable to recapture moving averages, that is a sign that the incremental buyer is paying less.
That's all that means.
You know, a lot of the fundamental guys were like, oh, TA, this is bullshit.
They just don't understand what it's trying to communicate to you. And that's all the moving averages are trying to communicate to you that
the incremental buyer is not paying as much as they were just a week ago or two weeks ago.
And that's a problem. And that's what we're seeing on the index level. So you don't want to see that.
And that's what we're seeing. And so now you have to be realistic about the analysis going into the
end of this week. Now,
the reason I'm giving it through tomorrow is that there has been a legacy in this bull market, at least in this bull market run of the last nine months of the markets faking us out going into a
Friday and then seeing a big recovery day on Friday. And so I'm going to allow the markets
to set up for that. And if they don't give it to us tomorrow, then that's a bad sign. And so I'm going to allow the markets to set up for that. And if they don't give it to us
tomorrow, then that's a bad sign. And that'll be a genuine character change and genuine shift in
the bullish behavior. Now, SPY looks fine. It won't if it closes the week below 674 tomorrow,
but that'd be an awfully brutal drop to follow this off. We'll see if it can pull it off. But
the cues don't look good. And that's starting to raise you know a warning signal about momentum
because again all the tech is sitting in the queues and all the momentum is correlated to that
action so yeah it's um it's starting to get not ugly because we haven't fallen off from the highs
but it's starting to get concerning from a technical standpoint for the indexes.
That's just being straightforward and being,
if you're technically literate and you look at the indexes right now,
it's starting to look double-toppy.
And you don't want that double-top to complete itself
and watch the Qs fall off a cliff here
because that means the S&P 500 will follow
and that means the rest of the market will
follow um there's there's just not enough liquidity elsewhere it's just not there and it's not only
not there in the market it's not there in the economy outside of the ai trend and theme like
all the money this year and last year has been spent on one thing that's data center infrastructure
and ai investments um both on the the and private level and that's where literally all
the money is going and and the same thing is true for for the stock market is that individual
investors have been enamored with this and have dumped hundreds of billions of dollars in capital
into the stocks that are related to this and the more they bleed out the more pressure you put on
the average investor who then translates that pressure
to the other stocks that they own and that's how you start seeing indiscriminate indiscriminate
selling or broad selling uh that's really how it happens and you can apply that same logic to like
an institutional investor who owns you know exposures to tech and ai who gets pressured by
the drop-off in those stocks and the momentum stocks and then is a forced seller of other equities, right, that are unrelated. And that's how you end up seeing
babies getting thrown out with the bathwater in action like this. And that's why you're seeing
such broad-based selling. I mean, now, today was a day where you look at the last three big red
days in this market over the last couple of weeks, they were red days where it was mostly targeting momentum. And there was a clear bout
of relative strength in a lot of sectors like transports, you know, energy, healthcare,
you know, those types of areas, right? Industrials, XLY, XLV, XLE, right? XLI.
That's where you've been seeing relative strength and XLP as well,
which actually was green today,
which is about the only major index that was green today was, was staples.
But you saw relative bouts of relative strength in all those areas.
And the reality is, is on a day like today,
you see selling in those areas as well,
because eventually that liquidity crunch bleeds over and, over. And that's what you saw today.
So, you know, that is an environment where you have to respect the price action and kind of just allow the market to dictate where it wants to go rather than trying to like fight the trend.
And right now, the market is certainly trying to dictate that it wants to go lower.
The bulls will have to step in tomorrow and save that.
And if they don't, that'll be the first Friday weekly close in nine months where the bulls
failed to save the market. And that's something you just have to acknowledge and be like, okay,
that happened. How do you adjust your portfolio from there? So as much as I want to buy some
stocks in an environment like this, I never
buy stocks in an environment where there's indiscriminate selling. I try to wait for
action to stabilize. You know, like I always say, I'd rather buy a few points higher than buy
on a day like this, but, um, I may end up having to flip my bias completely on the market.
Should this type of action continue on the index level? It's less about how I feel about what's happening to individual names
and much more how I feel about what's happening on the index level.
So, yeah, that's my line of thinking right now.
So it's obviously an interesting scenario situation
because there's a theme that's been happening,
the Stips Save Fridays.
Once Evan starts to bet on it it that's when it stops happening and obviously you don't want to get in front of
that but are you you think you're looking to maybe uh sometimes you come on here and said uh
on the thursdays i was excited to buy something on a monday is this the type of thing we get that
stick save friday you're maybe looking to deploy some cash on the Monday?
If we get a stick save Friday tomorrow, then yeah, of course.
Yeah, yeah. Then the party
goes on. But you need a big stick
save tomorrow. You need a 1%
move to the upside in the Qs to save that level.
A full percent
at least. And you need to close
at that spot.
And on Spy,
he's still intact.
You know, Spy's 21 EMA on the weekly is down at 674, so Spy is still fine, but it won't be if the queues break down.
Like, you think about how many shared weightings and exposures
are in the queues in Spy, the answer is a lot.
And some of Spy's biggest exposures, in fact, not some of, all of Spy's biggest exposures are in the queues in SPY. The answer is a lot. And some of SPY's biggest exposures, in fact, not some of, all of SPY's biggest exposures are tech-related.
And so you kind of have to look at the NASDAQ as a leading signal in this market,
because the NASDAQ is the AI trade. And if you ignore the action in the NASDAQ,
what's going to end up happening is you're going to be
seeking what I call false relative strength or misleading relative strength. And this happens to
experienced investors too, where they see the Nasdaq breaking down. They're like, okay, well,
what's strong? Where's the money going? And when they do that that it ends up being bad because they buy stocks that
they think are going up or holding up and instead they're stocks that just haven't gone down yet
and they end up buying the names that are the last to roll over so um markets going up is a function
of one thing and that is liquidity that is that's that's why markets roll to the upside constantly right
new entrance new money entering the market constant liquidity and usually that liquidity
has a focus a place that it wants to go and that place is the ai trade has been for the last five
years or three years um and so if that trade is not working and people especially people are losing
money on that trade which in this environment they, then that is going to put pressure on investors, both
institutional and retail alike to become forced sellers.
That's the mechanism that's dangerous.
And that's where we are right now.
Oh, somebody reminded me in the chat, the market's closed on Monday.
That's true.
So it is closed on Monday.
That is a great point.
I won't be buying anything on Monday.
But on Tuesday, yeah, if we get a stick safe tomorrow, then I will feel fine about being long on whatever I'm long on.
But yeah, you have to be careful.
You have to be careful in this environment.
And you can't get caught trying to look for blips
of relative strength while the main story is melting down in front of you and i see a lot of
this like on twitter a lot of it where people are like oh well this index still looks good or like
you know financials still look okay or whatever um doesn't matter financials can't hold up the
stock market right how much market cap is there in financials?
Not nearly enough, right? And I mean, actually today, XLF knifed through the 200-day, which is
not good. You don't want to see that, right? Like, I mean, financials are, if AI is not the hard
blood of the economy, which I think it is at this juncture, financials certainly always are a huge
part of the real economy. And, you know, you're seeing financials have a big breakdown here
and potentially lose their 50-week, which is sitting at 51.64.
The XLF closed at 51.69, 5 cents above the 50-week moving average.
So you want to see that resolve itself tomorrow too.
So, you know, there's a lot of points of concern now.
The last two or three days of action have raised a lot of points of concern i think in broader market action
and so that's something we have to we can't ignore that
um i don't know if you saw the amcor news after our secondary offering do you yeah i did i just
want to explain to people like what
that means yeah i need to look at it but i'm pretty sure it's non-dilutive it is it's it's
from selling shareholders yeah it's just shareholders on the shareholders right yes
yeah okay so it's a non-issue but yeah i mean obviously there's an after hours reaction because
people have no clue um how to distinguish that but yeah i mean it's a non-issue amcor's held up very well on a daily chart compared to a lot of other names i
mean you look at the daily chart and amcor i mean you know it is held up extremely well today's
selling even brought it into the 21 ema and then it popped back above the nine but um yeah that that am core offering is is a non-deltative sorry let's send the other text um yeah that was one of the stories today obviously leu has been
another interesting one it's just been an interesting market here obviously and we're
just sitting and waiting do you are are you think you'd be in closer and like cut mode on some of the positions here?
Or is it like a sit tight?
Like, what does that look like on a Friday,
potentially tomorrow?
You know, it's also weird because the market's closed
on Monday too, which I don't know.
Yeah, exactly.
So you don't want to get trapped in anything
over a four-day weekend.
But I mean, there is, I mean, at the end of the day,
most of my, not most of my positions,
all my positions have a very deep cost base advantage.
All, all of them, all 16.
And so that gives me the flexibility to kind of endure drawdowns in the names that I own.
But it's obviously not fun.
I mean, it's not like you like to see money disappear.
No one likes that, you know, but it does give me the ability to sit through the volatility because I'm not like actually red on the positions. Um, you know, so I'm willing to endure volatility
and potentially add to those positions if the market does go lower. But for now, no,
I'm not looking to cut anything. Um, if the action worsens, then yes, there will be cuts.
Absolutely. Um, but for now, I'm, you know, I'm, I'm resorting to look to those weekly charts and
saying, okay, we're coming into the weekly 21 EMAs on a lot of stuff.
Um, there's some exceptions to that.
Like centrist has gotten absolutely killed in the last three weeks or so.
But again, I own that at 96.
So I'm allowing the carnage to happen.
It's a name that I know is going to be volatile.
It's a 21% short interest name.
It's a highly speculative name in the sense that, you know, they're not producing the fundamental value today. But, you know, I could see that thing falling to 170s,
which is the 21-month EMA. It fell almost there today to 185. That's where I may potentially
look to add more. But we'll see. We'll see how the action goes and what the broader market,
if the broader market gives me confidence to do that. But outside of that name, no, there's not really been any points of panic. Robinhood is obviously
down quite a bit from the highs, but that's a very, very small weighting for me. So it hasn't
really hurt the portfolio too much. But if Robinhood can come into the 62 spot at the 100 day,
that may interest me too. I even looked at it today because it sold today into the monthly 20 moving average.
Today might have been a local bottom, but I don't know.
We'll have to see.
Obviously, if the markets are getting hit tomorrow again, then it won't be.
But today was a sell-off into the quarterly 9 EMA and into the monthly 20 moving average.
So maybe it was a nice spot.
Maybe I should have grabbed grabbed some but we'll see
um but i will i would like to play that hood rebound because i do think the selling at hood
is overdone like i genuinely think that it's it's gotten um too aggressive you know stock
has fallen from 153 to 71 it's actually trading pretty reasonably now in terms of valuation so
um that's a name i am looking at to potentially buy the dip.
But outside of Robinhood, LU, there's not really been any points of concern in my portfolio. And
those, again, those are all common share positions. I don't have any options on either
of those positions. So they don't really have as much of an adverse impact on the portfolio as they could. But yeah, they are,
they are, they had been weak. And, you know, I've been acknowledging that too. I mean,
I do workshops every week on chart reviews and we've been talking about the fact that those
weekly and daily charts have looked weak. So yeah, it's an environment where you have to be
attentive and you have to know what you own and decide what your conviction level is on what you own and what you're willing to sit through.
And that's going to be different for different people. You know, some people look at a stock and they're like, well, you know, it's below its 21 moving average.
I'm I'm going to sell it. And other people look at a stock and they go, yeah, look, I know the market's weak right now.
I'm going to sell it. And other people look at a stock and they go, yeah, look, I know the market's
weak right now. Speculation's weak. Momentum is weak. This is going to get caught up in that
selling. But I like the story because of X, Y, and Z. So I'm holding it. That's a virtue of your
own research, right? And your personal conviction. You can't transmit conviction to another person.
It's impossible. Some people think you can. Other people will hear me talking about a stock or
somebody else talking about a stock and they go, I really like the stock, you
know, so they treat that as, oh, my conviction has been transferred to them, but that's not
what it is.
It's just people deciding that they want to buy a stock without having built real conviction
around it.
And if you don't have conviction around a stock and you don't have a good cost basis, this market will destroy you. There's just no way you're going to be in, out,
in, out, in, out like a bunny rabbit. And you're going to get just decimated because you're not
doing enough work on the stocks you own. So I don't want to be that guy. I'm certainly not a
person to flip my bias constantly. But again, if tomorrow we don't see really, really good
stick save action across the board,
then that will be a real character change in the markets,
a genuine character change.
So, yeah.
You knock on the door enough times.
I guess you just got to knock hard enough, but it does tend to open,
at least in the stock market world.
But we'll see if tomorrow's that day with continuation or the stick save.
I'd put my money on the stick save.
I don't know when too much has changed, but we'll see.
I might have just bought some Robinhood stock in after hours.
I have been adding in a little bit over the last couple of days.
Yeah, Robinhood sold into a really interesting spot today.
Now, that being said, it sold into an interesting spot the day before that so um
you know a lot of people with i rodham robin had bottom yesterday so yeah i mean i don't know
the only thing in markets you can do is identify areas of support to buy app and then when you buy
at them you acknowledge hey the stock might not bounce here. You know, not every support works.
You can't just like buy points of support and be like, yep, this is definitely going
to work and the stock is definitely going to reverse.
That's how it works, right?
You buy points of support and you hope that it bounces.
And if it doesn't, then you use that point of support as your stop if you're doing a
short-term trade.
And if you're not doing a short-term trade, I hope you have more capital because then
you buy at the next stop down.
You really treat stocks like buses in that sense.
You know, there's stops along the way.
And those are your points of support and points of resistance.
And you decide if you want to get off or get on at a given stop.
New York City has free buses now, apparently.
There you go.
Well, you know, there's no free lunch in the market.
So maybe in New York City, but none of the markets.
So, yeah.
I mean, you have to figure that out.
You have to decide what your maximum allowed risk is.
Every time you buy a stock, if you buy a stock at the 50-day, let's say,
stock that's breaking down below its 9 and 21 EMAs,
you buy it at the 50-day, right?
You have to acknowledge, hey, if it breaks down here,
there may be downside room to the 100-day.
And if you look down to where the 100-day is,
and you realize, I can't stomach
that drop, you probably should not be buying at that spot. Right? Or you should be buying at that
spot with a stop loss at the 50, one of the two. And so a lot of people, they see stocks selling
at the 50 and they go, okay, well, this is definitely where it's going to bounce. And they
go in with a huge amount of capital and then they get buried alive you know and so that's a problem and something you have to avoid tying yourself to
if you don't understand how basic moving average analysis works or how basic price action analysis
works and if you get lost in those things then you're quickly going to get caught up buying a bunch of stocks
that you don't really understand at spots where you don't really understand the risk. And that's
how you die in markets. That's how you blow up an account. So don't do that. Try to stick to,
in this environment, maybe one or two or three stocks that you really want to own.
Watch them like a hawk. watch the action like a hawk.
And when you feel like they found support and you can justify that analysis through
some basic TA, then you can throw a dart.
And if that dart lands and it works and it's constructive and it starts rebounding the
upside, good.
You do that with another stock now.
But be careful in an environment like this because the whip ups and the whip downs
are certainly brutal. And good stocks are going to get caught up in them. Bad stocks are going
to get caught up in them. And so you have to acknowledge that and be ready for that. But
I didn't have many names green today. I only had four names green in my portfolio today. So
I mean, I'll take it. But Nurses seems to be green every day outside of for its earnings days.
Synapics had a nice day today too.
Relatively speaking,
Huntington Ingalls had a nice day and that'd be said a nice day,
but the rest of the port got hit with the rest of the market.
So I'm not immune to days like today either.
Drawdowns are part of the game.
You know,
I took a 3.1% drawdown today,
I think,
which is pretty,
pretty decent hit to take, but considering how, how much I'm up here to date, I'm not overly
concerned about that. Um, you know, I'm a big year to date. Uh, and so I am, I'm, I'm pretty
relaxed with the drawdowns, even when they do come. Um, and I'm welcoming that action to allow
it to happen. Now, rewind the clock back to April of last year.
You don't want to see that type of action, right?
You go back to April of last year, what happened?
You had a breakdown on the queues, double toppy sort of action,
and then a really, really brutal sell-off on the queues from 540
all the way down to 400.
So that scenario could be set up again.
Now, it may not happen that way.
It may not happen like a flash crash.
It may just be a chop and bleed.
Right.
And if it's a chop and bleed,
that's a lot harder to manage because it makes it harder to hedge and it
makes it harder to like pick up long exposure on the other side of it.
Because if we keep getting this action,
we sort of get these,
these,
these big
up days in between which is by the way generally what happens in bear market environments but if
we get this action we get these big updates in between they get two or three red days like that
um that's hard to navigate even if you're like a good short-term trader it's hard to navigate so
you don't want to see that i'd rather just see a rip the band-aid off type of moment like a flash crash that moment that's what i would rather see but um i don't gotta say on spaces wise it's probably the
worst environment possible is just slow small downtick every single day it just kind of gets
boring after a month give me some excitement give me some excitement for any slow and boring you
might as well be making money during it that is is the worst time in pretty much in this area.
It's not even a big downwards move quickly.
It's a long, drawn-out downwards move.
Yeah, I mean, the thing with markets is that the whole game is about the incremental buyer.
is about the incremental buyer, the whole game, right? The ability for bull markets to
The whole game.
extend and remain relevant over time, the ability for bear markets to develop. All this is about
the incremental buyer and their role in the markets. And if the incremental buyer can hold
up the market or not. And that's why we look for these moving average fidelity. That's why we look for that because when you look at
the moving averages and you look for fidelity to the moving averages what
you're doing is you're tracking the incremental buyer that's what you're
doing by watching moving averages you're tracking the incremental buyers desire
to continue to buy stocks at higher and higher prices and when they are not
willing to do that that's when you see stocks break below their moving averages. And that's not what you want to see on an index level.
And that's what we're seeing. So be careful, be wary of that, be cognizant of it. You should
be watching the indexes like a hawk. I really think the cues are the key to all of this.
And you need to be watching the cues, right? I said this earlier, but to reiterate,
everything was weak today except for staples,
like including transports, including financials,
including, you know, even into the close,
healthcare was green for most of the day.
Even into the close, you saw a little bit of a flush in that,
back to red.
So pretty much everything was,
every major index was right today except except for XLP staples.
And staples can't hold up the market.
They cannot at all.
So you just have to be logical about it, right?
It's basic math.
It's not like somebody, it's not my opinion on it.
It's just basic math.
And when you do the math, you're like, all right, you need the tech giants to consolidate
rather than fall off a cliff.
And you need the market to be responsive to those stocks.
And if the market's not responsive to those stocks, it's going to be a hard market.
And, you know, that's where we're getting to that juncture now.
And so you have to respect the action.
You have to respect the action and not try to be smarter than the market.
And, you know, that's kind of the situation we're in right now.
And so I am being cautious at this juncture.
And if tomorrow we don't see the action I want to see,
then it'll graduate from cautiousness to a little bit of bearishness.
And I'll probably put some hedges on at that juncture.
But we'll see.
We'll see what happens.
I've raised a decent amount, a little bit more cash over the past week or so. I did some options trimming about a week ago to reduce my
margin. I closed GLDD yesterday, which raised some nice cash as well. So I'm giving myself
flexibility, you know, getting to a nicer cash amount, And that'll help. That'll help not only soften the
blow from the drawdown, but that'll help me when markets do decide to bottom to be able to be a
dip buyer. So that's kind of where I'm at right now as far as the portfolio and my decision making
goes. But yeah, I'm certainly in stocks that are enduring a
drawdown too. I don't want people to think that my stocks are not going down. A lot of my stocks,
most of my stocks went down today too. So you have to be ready to sit through that.
And the only way you can is if you buy right and sit tight. You can only sit tight if you buy right.
That phrase goes in both directions. So
buying right is the most important part of the equation. Buying at the right times is the most
important part of the equation. And if you buy any stocks at the wrong time, even my stocks,
even my stock picks, you buy them at the wrong time, you're going to get buried.
And that's how these type of markets work. So buy at the right times, at the right prices,
when stocks are flat against their moving averages. And I see a lot of people, there's a lot of FOMO in this market
because of how selective the stocks are that are working. I see a lot of people in this market who
are going, okay, well, you know, my favorite stock is down X amount, I'm going to buy it,
but they're not paying attention to the charts at all. And they're just buying at random places because they feel like a stock they own is
down a lot, you know?
And that's that buy the dip mentality that's been bred into people over the last few years
in terms of, you know, feeling like they can buy any big dip on any momentum name and be
rewarded for it.
And now you're required to be a little bit more cognizant of the charts and certainly
a little bit more cognizant of the valuations.
Yeah, I tweeted this a couple weeks ago.
I think last week I tweeted this where I said, you know, there is a.
There's a tendency for people to say, oh, this is a good company,
and I love the company,
and the stock's down 12%,
so it must be a good point to buy it.
It's not how stocks work.
You have to look at the charts.
You have to understand where the next pain point might be,
where the stock could sell into,
and then you make that decision.
You don't just flippantly say, Robinhood's down 12% today.
It must be a buy.
Everyone who thought that yesterday, they're down another 9% today.
How many times can you do that?
Some people might think they're billionaires and just have unlimited capital.
And even if you are a billionaire, you don't have unlimited capital.
So, yeah, it's a tricky situation and it's
something you have to be very you have to be very attentive to the charts and to the valuations
in this environment that's what the market is demanding right now it's being very very selective
it's also always a balance i know it's at some point it's like when you look at the stats if you
miss the best days in the market there's five ten whatever it is best days in the market and you're
always so scared you do you do miss a lot of the returns on the year you do have to stay invested
yeah you have to stay invested absolutely you have to stay invested yep yep you have to stay
invested but you you know doesn't mean you have to be invested like 120% long or anything, you know,
but yeah, you have to stay invested to some degree.
I'm very much a proponent of that philosophy.
You have to have some longs on the table, even when the markets are brutal.
And again, the only way you can do that is with a cost-based advantage, right?
Like if you're, if you bought everything in your portfolio two weeks
ago how are you gonna stay long like what you just have everything you your
whole portfolio is gonna be bags you can't but if you bought all of your
stocks in May and June and July of last year it's a lot easier to stay long right?
Because you're looking at a drawdown instead of just an absolute brutalization of your portfolio and look money is money
Right and some people will I get this argument all the time when I talk about cost-based advantage people say
Well, what's the difference if I'm up 100k in a position and I go down 50k
What's the difference between that and just going down 50K on a new buy?
Well, the difference is that you can't hold the ladder unless you just don't care about risk management.
When you integrate risk management, that's where the advantage of cost basis rears its head.
If you just assume I never manage risk, I'm an investor, I don't manage risk.
That's a stupid-ass statement, but some investors do say that. Um, but if you take, if you adopt that philosophy of like,
I don't manage risk and the question becomes, okay, like you just going to buy anything and
hold it in perpetuity, no matter how much you go down, that's not a winning game. And so,
yeah, I mean, your ability, your ability to hold is a function of your cost basis and your ability to stay invested is a function of your cost basis, literally.
You can't do it otherwise.
How are you going to stay long in this game if you are underwater on everything you own?
You're not going to be able to.
And so that's something that people just are failing to acknowledge.
A lot of people, even smart people, who think that it's the same thing to take a drawdown versus being
net down on a position it's not the same thing at all psychologically it's certainly not the
same thing but even in terms of actual position management it's not the same thing so yeah in
both cases you'd be down a hundred grand but in the in the former case you would have a cost-based advantage to defend your position and potentially add to your position.
In the latter case, you're underwater and you're like, when do I have to cut this thing?
When is it at my max risk point?
So you're thinking completely differently about the second position where cost basis is higher.
So, yeah, it just really impairs management of your
positions.
You going to the gym today? Yeah, I am. I'm going to do back.
Nice. What's the pre-gym meal? I heard you, it sounded like you were dipping into a cooler
there but it was just getting nice. Getting nice a glass of water.
No, it was just getting nice. Yeah. But no, I'm probably just going to eat a Rice Krispie
and go.
At least I'm not funny.
It's just quick
carbs. That's all it is.
It's fair.
It's not like I love Rice Krispies. I mean,
Rice Krispie, Uncrustable,
Kodiak Cake Cup, whatever.
Any of those things.
Kodiak things are pretty good I'd like
the pancakes those little breakfast cups yeah power bowls or whatever they're
called yeah they make some good stuff they make some good stuff I think that
the move in Robin Hood is kind of linked dish to crypto so I mean if you're
buying Robin Hood here I mean maybe you're just like yeah that's a huge
problem with Robin Hood I know I think you're just like... Yeah, that's a huge problem with Robinhood. I know.
I hate that.
It's probably like Coinbase.
You're not going to talk about Coinbase here.
But, I mean, yeah.
Yeah, I just hate that Robinhood has become a proxy for crypto.
It's annoying to me because I don't want to be alone in crypto.
But I do want to own Robinhood.
So, it's like, yeah, I hate that that's happened.
But it's part of the game.
I mean, sometimes stocks, like, you know, even how it's funny, I was looking at potentially buying
some coal names last night. I didn't today, which was a good idea because those got caught up in
the selling too. But I was looking at some coal names last night and I was looking at like,
Met C for example, was one of the names I was looking at too. And I was like, you know what,
I'm not going to buy that one because it's trading less as a coal name and more as a rare earths name now because they've adopted the whole rare earths strategy.
And so I'm like, I'm not going to buy that because I want theme exposure to a specific thing.
And sometimes what happens is the stocks, even if they do that thing that you want exposure to, they end up getting narratively caught up in some other theme.
And then the market treats them like members of that theme, even though it might be only
a small portion of their business, right?
And so thematic relevance and narrative relevance is a real thing in markets.
And sometimes the market just treats a stock like a business that it's not actually.
And you can't fight that because that's just how the market views the stock at a given
time you can't fight perception when it comes to that you know yeah that makes sense let's go to
logical for a bit i gotta go down and get a package real quick stock track by the way um i know you
gotta go down a package honestly we'll close the space soon. I have a call coming up at the top of the hour.
Stanley Druckenmiller's portfolio will be updated next time we're on the spaces.
Also, Warren Buffett will be giving the whole time.
Yeah, Tuesday is when that deadline is.
But yeah, so expect a lot of 13Fs over the next couple of days.
I am a fan of it in the time of the year.
The logical, you got any thoughts here?
Yeah, man.
Look, it's kind of what I was saying earlier
is like the rest of these sectors simply don't have,
I mean, I know Stock Talk says it too,
but like they don't have enough market cap.
So you keep bidding up industrials,
you can keep bidding up all materials and all that,
but they would literally have to triple in size, like get
to run up 3x the entire sector for it to make up like a 10-15% drop in tech. That's how
much of a weighting there is from the tech stocks. So it's live or die by the by the
queues. You know, it's great that all these other sectors
are starting to catch a bid,
but if you do not get participation from the Qs,
it's just too heavy of a weight.
And the problem with all those other sectors
running up 3x is that they don't deserve to.
Sure, they might deserve a 30%, 50% re-rate.
Again, some of those names that have the AI tailwind
because they're seeing inflecting revenues
because of new contracts, blah, blah, blah.
Okay, fine.
You know, those businesses do need to see, you know, some inflection.
But those sectors, those sector ETFs aren't just filled up with those kinds of AI tailwind names that are seeing the hundreds of billions of capex.
So basically, what you've done in the last month where all these stocks are up 50% is that you've re-rated the multiple on a low margin, high asset, potentially high debt kind of business, low growth.
You've taken the multiple from 16 to 23.
Okay.
Historically, now that kind of business is pretty expensive.
So what are you going to do?
Take it to 30?
Or you take it to 30?
Take another 30%, 40% up, whatever.
At what point are those just awful investments in a vacuum?
And that's the problem.
There isn't enough market cap to outweigh what happens in tech.
And again, the issue with tech is that if nobody is getting along these things,
if the incremental, there is no incremental buyer, as StockTalk was saying,
there are only incremental sellers at this point.
We've been in this range for the last three, four months.
The same pattern has been playing out.
You do a low volume float up to 6.95, top of the range,
and then you get a big volume float up to 695 top of the range, and then
you get a big volume selling over the next couple of days. And it basically undoes the
price action from the last week, two weeks, three weeks. So very bearish distribution
action. The market is heavy. And the issue with, you know, expecting the mags to catch a bid here is one, the people who just sold them,
I don't think they're going to rush back into the market. I don't see that. The mags are still
within a few percent of when they probably sold them or the Qs or SPY or whatever. So one,
it's not enticing enough of an opportunity. It hasn't been enough
time. So getting those sellers to come back and become buyers again in this market, that's probably
out of the window at current prices, unless we see another leg down, right? Like if you have like
Amazon, whatever, down 20% from the highs, yeah, maybe now we start getting into a little bit more
interesting territory, incremental buyers show up. But for right now, we haven't seen enough pain in those names where we need to see the bid for that big to come back.
So that's one.
Two, you have extremely high capex from the recent guide.
It's really funny because what kept this market up in the last year or so was that we wanted to make sure that,
hey, the AI story better stay intact.
And the way we're going to measure that is that CapEx spending remains high.
And every single time they came in $10 billion over like 10% over whatever their CapEx debt
was.
Now they're coming in 30-40% above.
And I don't think that's necessarily an issue because we know the true impacts of AI are going to be very high.
But the problem is that historically, it has not been a great time to buy companies when they're in a high capex reinvestment period.
A lot of times those stocks go down during those periods.
Their free cash flow will inflect a negative.
They go from big time surplus and profits to literally becoming unprofitable
overnight. And a smart investor will say, yeah, but that's growth capex. It's not going to be
forever. Someone might rebuttal and say, well, are we sure it's not going to be forever?
Are these NVIDIA chips going to keep getting better every year? Are they going to have to
continue to refresh this? Either way, the point I'm saying is that whether there's truth in that statement
or not, there's doubt now. And so the doubt will keep the incremental buyer away from wanting to
buy these stocks. So you can just tell from the price action, look, Amazon, Meta, Microsoft,
all below the 200-day. They just are heavy. Who's going to stick their neck out as a trader?
If anything, traders and momentum traders are going to be piling into the downside.
So there's no incremental buyer.
There's likely an incremental seller.
There's still a lot of people who own stocks.
A lot of people who are still like retail margins levels are still really high at the brokerage firms.
We see that data.
So I love when people are like, oh, the pain trade is
higher. No, dude, the pain trade is always lower. And so, yeah, I mean, I raised cash
today, I honestly want to raise more cash. I don't see how this at a minimum doesn't
become like, at a minimum 10-15% down in the queues. It feels like if that happens, it's probably going to be a 10% correction in SPY.
Especially because here's the interesting spot.
The RSP has been so strong for the last month.
And so there have been so many sectors that have been working.
SPY has gone sideways while the queues have been really weak.
And the queues, it's not like they've literally collapsed.
They're still just a few percent off the highs.
So it's not a big deal.
But after this big run in all these different sectors,
what happens if now we get even something as a healthy consolidation period?
Because XLP, XLE, XLM, XLB, XLI, whatever,
all of these sectors that have been hitting new all-time highs every
single day, they can easily do a 3% pullback, right? And so that's downward pressure on SPY now.
So RSP, which was holding this market up in the near term, even if we get a healthy
consolidation in some of these sectors, it's still downward pressure now. What was upward pressure? And then you couple that with the fact that mags, Qs, they don't look healthy. We just
explained why there's probably not an incremental buyer here. That means that both RST and QQ,
basically the biggest components that make up SPY or tell you about the direction of the market,
they're both going to probably have have like, you know, headwinds here and you know, to downside pressure. So the question
will be, you know, how big does this correction get rather than is this correction going to
happen? I think the correction happens for sure. I you know, the only thing that would,
you know, cause us basically not to have a correction is if buyers come in for
tech stocks in a very big way. It's possible. I mean, it happens. But I just given the facts,
fundamentally, even, it doesn't feel like it. And so my base case would be, we get like a, you know, 10-15% correction in the Qs, you know,
10% correction in Spy. People are like, everything is actually totally fine. We buy that back up,
and that becomes viable. Because like, we never really got to bubble status. If this was the top of the market,
I would just feel like,
wow, that was a shitty end to the bull market.
That was very anticlimactic,
especially because this is the AI-driven bull market.
You would have thought you would see crazier moves.
Obviously, you're seeing pretty crazy moves
in names like Micron, etc., but there's like bottlenecks there and that specific sectors. And I guess I mean,
if you really think about it, let's be real. You know, Palantir went from $7 to $210 a 30x from the
lows to the highs within three years. I mean, if we're being fair, I mean, there have been signs of
there were bubbly things that were happening in the last couple years.
You know, you can argue with me that, oh, but, you know, the business performance.
Yeah, okay, I get you.
But if you want to, like, use business performance as, like, an argument there, then you should go look what happened to Microsoft stock in, you know, 2000.
And basically, it never saw its eyes again for 17 years.
And guess what, in 2000, they were growing fast, I think they were growing like 60% or
something like that. So, you know, you could put up bonkers numbers, but it doesn't mean
that your valuation hasn't gotten ahead of yourself. And I think my only pushback for
the bull side would be that, yeah, but the main market cap
in this market is big tech.
And that to me hasn't really gotten out of whack.
They have very solid gap earnings and operating income.
And then my rebuttal of that would be, yeah, but their free cash flow is about to suffer
because of this capex cycle and nobody knows how long that's going to go. So are these now going to go from high margin asset light businesses to lower margin?
Like, you know what I'm saying?
Like, you know, that's the issue.
You know, are people seeing in real time the inflection of these big tech companies
going from, you know, what we treasured them for and what gave the MP its premium multiple
was driven by the concentration of these high growth,
high margin asset light stocks
to now becoming low margin and high asset,
like not asset light, asset heavy companies.
And that's going to mean that return on assets is lower,
return on equity is lower.
I think that is actually the bear case
that people aren't really thinking about
is that ROA and ROE for the largest stocks
that make up the market are going to trend lower over time
because of how much money they need.
And I think that's something
that people are probably not considering. So I don't know, I like when I put it that way,
that could lead to a bear market. I don't want to believe it. But I'm preparing for
it. So I'm raising a lot of cash and I have 37% cash right now. And I actually feel like I am underexposed to cash at this point.
So, yeah.
I mean, you saw my reaction whenever we got those Google and Amazon numbers.
When they said $185 billion on the Google call, I'm like, what the f***?
That's insane.
That is $60 billion or 50% higher than their number, which is above my wildest expectations.
It doesn't mean that there won't be ROI on that investment.
It just means that those companies might command a lower multiple.
So we might be seeing the multiple compression in real time.
And that would be detrimental to the market.
Gotcha.
Yeah, okay.
Stock Talk, I don't know if we have you up here or not,
but I do have a call at the top of the hour.
I do appreciate everyone for joining in
on these spaces.
They're always a good time. Thanks, Logical.
Shout out to the speakers
who joined in on this one.
Shout out to Stock Talk for coming in and
hanging out with us here today. I know we had a
pretty crazy day, but you can see
how dedicated he is to all of you guys
and allowing us
to be a part of your
daily routine.
Every single Monday through Thursday, 3-5pm
Eastern at least when the market's open.
The market won't be open on Monday, so
not that day, but when the market's open.
If you enjoy live free content,
make sure you are following this account,
the host of the spaces.
Stocks on Spaces.
Stock Talk. I got a call in four
minutes. You got a four minute countdown if there's anything you want to leave the people with.
I know you told me at one point your group's going to go up in price.
I don't know when that was.
Yeah, on March 1st.
Yeah, on March 1st, we're going to be doubling prices.
If you guys are interested, links in my bio.
Do I get grandfathered into the price I have?
Yeah, I mean, you don't pay, but yeah.
Yeah.
You're not supposed to say that part. You're just supposed to say yes. I mean, dude, I'm pretty sure people are aware that you don't pay but yeah yeah you're not supposed to say that part you're just supposed
to say yes i mean dude i'm pretty sure people are aware that you don't pay but um well no no
just about if they get grandfathered in but yeah yeah yeah existing members do get grandfathered
in whatever price you're paying um you will continue to pay uh as long as you don't cancel
or your car doesn't bounce or whatever but yeah that'll that'll be on march 1st you guys have a
couple weeks if you do decide to join up you can um but as far as what i't cancel or your car doesn't bounce or whatever. But yeah, that'll be on March 1st. You guys have a couple of weeks.
If you do decide to join up, you can.
But as far as what I'd leave you guys with is just, you know,
it is certainly a harder market than last year,
but there is blips of opportunity.
If the market, in terms of the major indexes, roll over,
a lot of that opportunity will disappear on the long side.
And so you have to be respectful of that. As much as everyone wants to just play to the long side. And so you have to be respectful of that. As much as everyone wants
to just play to the long side and be a long only trader, it is important to acknowledge that the
market conditions are king. Market conditions dictate the ability for any individual stock
to break out, to hold its gains, et cetera, et cetera. And so if you don't respect index level volatility,
you're going to have a hard time.
And so right now the indexes are very volatile.
They're beginning to break down.
You have to hope the structure starts to repair itself pretty quickly.
Otherwise you flip your bias and buckle up for a bigger drawdown.
And, you know, there's different ways you can handle that.
You can raise cash or you can
put hedges on. It just depends. But you have to allow markets to work out their structure.
Sometimes what happens is you'll see a breakdown in a week during the week, and then people will
assume that the weekly close is going to be bad and the weekly close ends up being very strong.
And so you have to wait, in my view, until be bad and the weekly close ends up being very strong.
And so you have to wait, in my view, until the end of the weeks, as brutal as that might be sometimes, to definitively make those decisions and to definitively flip your bias.
And so I'm giving the market until tomorrow to show some signs of life.
And if not, then, you know, I will prepare for that accordingly.
So, yeah, we'll see how the action goes tomorrow.
Bulls should hope for Bulls to step up in a big way.
And if they don't, you'll know that that's the first time in nine months that they haven't.
Can I ask you something?
Do you make that move on Friday or Tuesday?
It depends.
It depends on what the action looks like. I mean, tomorrow, if you see some stabilization earlier in the session,
you see maybe a recap of six or six on the queues in the front half of the
session,
then I'll start feeling better about it early.
And maybe I'll make some purchases tomorrow.
And on the flip side,
if we don't see that and you see just like a weak bounce into,
you know, six Oh, 604 and a rejection, then no, I won't be buying anything.
And I probably won't be buying anything on Tuesday either.
I'll probably just be putting on hedges in that case.
Okay.
So does the fact that we have CPI coming out tomorrow morning, maybe skew it?
Maybe we have, let's say we have a move off of that a little lower
and then it comes back,
fights back,
ends the day 1% higher.
I mean,
there are scenarios where different things can happen.
CPI doesn't matter.
CPI doesn't matter.
We'll see what the move is.
Yeah.
I mean,
I don't think CPI managed as much as it once did,
but it is a potential catalyst.
I mean,
I wouldn't write it off completely.
I mean,
you're not, it's not like you're way below, like the level you need to be at on the Qs.
You're $4 below.
I mean, if you include the after hours action here,
which Qs are up to 602, but you're like $4 below.
You need a percent move to the upside.
You need Qs to close a percent up tomorrow.
So it's not a crazy
ask but considering the market conditions it obviously feels unlikely um you know even on
spy you would need what is that 681 to 686 so yeah it's not a big move on SPY either. You need to take 686 on SPY and then take 606 on Qs.
So we'll see how that goes.
But I really do think Qs are the leading indicator in this market.
And you have to pay attention to how they're doing and how they're holding up.
One thing I will say is SMH has just been a beast of its own.
say is is smh has just been a beast of its own um you know the the semiconductor etf benx
semiconductor etf has been a beast i mean like even today's selling it didn't even give up the
90ma on the daily not the weekly on the daily um so that's surprising to me especially considering
how weak the queues are and maybe that's your saving grace there that is capable of holding the market up
because there's certainly a lot of market capitalization in SMH.
And so we will see.
We'll see how that goes.
But I hate making predictions.
I'm not a predictive guy.
I'm a reactive guy.
So I have to wait till the action tomorrow and then make decisions from there.
Yeah. tomorrow and then make decisions from there. Sorry, I was muted.
I was saying I am a prediction guy.
I've net lost money when I've been playing on these prediction markets.
But give me, you owe me $5 if Kevin Warsh comes out tomorrow
and says something along the
lines of he's going to cut more than people
expect right now later in the year.
I mean,
you think you'd directly say that?
No, but you never know. Some people
you can read through the headlines. I also kind
of feel like there's a couple things happening here.
Software stocks getting hit hard
around AI fears. There is
also this kind of, it feels like there's
a little bit of a turn when kevin warsh became the fed chair pick people thinking maybe a less
fed uh rate cuts than were expected so i don't know i'm just kind of thinking here that listen
i'm a positive guy i'm gonna keep playing for the team that's been working that stick save
if we go the other way we'll react on on tuesday i mean i'm not super
leveraged but uh and i still have cash on the sidelines so i'm good but um i'd be i'm i'm
thinking we're stick saving here again uh the same team that's been working we got prime henrik
lundquist in the net we got prime shack down below down by the hoop. And we got someone small coming up to take a dunk.
But I don't know. We'll see.
I do appreciate everyone, though.
The call I had actually ended up getting canceled, but I do need to talk to you.
We got a very exciting event coming up
in the not-too-distant future,
and we got some stuff to talk about
and plan about it, but I do appreciate
everyone for joining in. You should make sure you're
following the speakers. Sock Talk. talk rings going up march 1st you got a bunch of uh
rooms you've been doing what you're saying seminars whatever you're calling it before
um and then also i know the live stream's going on in the morning i'm sure you'll be there tomorrow
i've been doing a lot of i've been doing a lot of workshops this year, a lot of chart review workshops. So I think those have been pretty helpful for people.
But, you know, I'm doing a lot more live streams this year
for the community as well.
But obviously you can access my full portfolio.
And, you know, I'm pretty sure we're doing better
than pretty much everyone on X right now.
I don't know anyone that's outperforming me right now.
But we're actually doing well this
year, even though it's been a tricky year. So yeah, and I try to be able to perform in any
market environment, including market environments like this. And, you know, we've had a lot of
stocks do very well this year. So yeah, just trying to keep on keeping on. Obviously there
are drawdowns in some of my older names from last year, but you know, those have not been
new purchases of mine. Those have been, you know, older, older some of my older names from last year, but those have not been new purchases of mine.
Those have been older stocks.
The new stocks from this year have all done very well.
I mean, GLDD, one of our new picks from this year, just got bought out yesterday.
Pangeo Logistics has held up very well relative to the broader market.
Amcor, which is one of our legacy positions, has held up very well and has gone up a lot this year.
And so there are bright spots in the portfolio, certainly. And
I share all my weightings too, so you can know where my money is, not just what my stock picks
are as well. So yeah, come check us out if you want. Like I said, prices double March 1st. If
you sign up before, then you keep your current price. So it's basically a 50% discount essentially.
a 50% discount essentially but yeah come check us out if you're interested in
But yeah, come check us out if you're interested in that.
that so I'll to that go check it out you guys hear stock talk on here every
single day this is where he's coming in and sharing the stuff after he shares it
on the group so you get it on the group throughout the day you get it on stocks
on spaces around 3 30 ish p.m. Eastern we make sure we do it before the close
and then I know he's doing on his show with Amit as well,
which is a fantastic watch.
Shout out to that.
Shout out to Stock Talk,
co-host of the show for like three,
four years-ish now.
Yeah.
If you want to hear more Stock Talk insights,
Stock Talk takes his group is the place to go,
but also every single Monday through Thursday,
he'll be in here hanging out.
I do also want to say,
like I was,
the reason I got to get off this thing
is so we could talk about this in-person
that we're planning to do,
which, you know,
we're still planning out August 3rd,
in-person.
Stock talk saying he's going to be out there.
So we got some cool stuff going on.
But that is the tweet pinned up in the nest above.
If you want to come in
and maybe see an in-person stocks on Spaces,
we'll get some of the crew up there. We'll have a good time uh i am looking forward to that but
yeah uh that form in the nest we were kind of a little bit further on on what exactly we're
going to be doing but uh we're a little bit before we have necessarily the the public pricing page
so this is just uh let me know you're interested if you guys want to put in what you what you guys
are like would want to do and what you what you guys are like
would want to do and what would have it still can frame some stuff and then um
yeah just put in your email and we will send you guys an early bird pricing which will be cheaper than the rest of the stuff that's going on there so in-person event to be picked up in
the nest above link to stock talks group is in his bio. Separate things. Make sure you're following the speakers.
I appreciate you, everyone.
We will catch you all on Tuesday.
Stock market is closed on Monday.
One thing to also look out for, 13F filings.
The deadline for that is Tuesday.
So Warren Buffett, the last time his portfolio was going to be updated,
the last time Berkshire Hathaway's portfolio was going to be updated
while Warren Buffett was CEO is on Tuesday.
Bill Ackman, Stanley Druckenmiller,
all these famous people who you guys hear talking about,
not Michael Burry anymore, apparently.
All these famous people that you hear talked about,
even a lot of companies, they're going to be updating their portfolios,
updating their 13Fs, their holdings.
It is a note that these are going to
be as of December 31st, as of the end of Q4. A little bit delayed, but I mean, still some
valuable information. What were they buying in Q4? That information comes out Tuesday is when the
real deadline is there. Watch out for that. Covering it live on Spaces. A lot of it will
happen on the Spaces. Always a good time. Still some earnings. NVIDIA a couple weeks away.
I appreciate you.
I see a couple people coming in and filling out that form right now.
So yeah, check the tweet pinned up in the comments above.
Definitely will be some networking going on in that in-person event.
Some lessons.
Smart people coming in and sharing some thoughts.
But networking, cocktail hours, good time, full day.
It'll be Monday, August 3rd
in New York City if you want to save out
the time and date in your headspace.
Have a great one, everyone. I appreciate you.
