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- [00:00]
A
That's the most important thing to figure out is, Jonah, how did you make your money? Why or why is the AI trade going up? The hyperscalers decided to build out massive data centers. They decided to invest 600 billion, 700 billion. You saw that value basically be baked into the price and now you're seeing cracks. And the things that are holding up the market are where those hyperscalers are putting their money now. Not necessarily the Google meta, Amazon price action themselves. It's all about what are these companies spending their money on? That's what's driving the market for if the market's going to crack. And the general approach is, okay, hyperscalers are cooked, memory is cooked, you know, what's, what's going to happen next? It's what is AI actually going to affect in the real economy? And then you kind of have to hide there. Jonah.
- [01:09]
B
Avi. How you doing, my brother?
- [01:11]
A
I'm doing great. Today's, today's an amazing, wonderful day. Mostly because NASDAQ is not down 3%, which it was yesterday. That was a, that was a crazy move. That was a, that was a pretty aggressive fall from, from the top. And Nasdaq obviously right now is looking a little bit shaky. Just, we had that double top formation and. Wait, what, what am I talking about, Jonah? Am I using technical analysis to try to trade a megatrend? Somebody slapped me.
- [01:46]
B
Technical analysis never works, Avi. It's, it's, it's a road to ruin. Unless, unless it is working, in which case ride the tiger, because if it ain't broke, don't fix it.
- [01:57]
A
You know, it's one of those things that I think does actually work in certain contexts. And where does it work? It works specifically when there's a lot of retail in an asset and there aren't many fundamentals that are backing up how this asset should be trading, right? And so then the only thing that you can use to get in and out of the asset is technical analysis. And that's why Bitcoin traded basically technically perfectly for, for many years until the quants sort of came in and took it over. But technical analysis was a great way to trade. And even in crypto in general, technical analysis is, is still better. I mean, things tend to respect support for the first time, they tend to respect resistance for the first time. Buying breakouts tends to be very good. In crypto, that tends to be a very high hit rate strategy. If something trades above all time highs, you buy it. Because crypto tends to be a momentum asset, not necessarily a mean Reing asset. Although you have to obviously figure out what type of market environment you're in. I mean, when there's high upside and downside volatility, basically what you want to look for is you, you want to look at Vol to determine what regime you're in. And generally in crypto, the higher volume regimes tend to be momentum, which is actually different a lot of the times than the equity markets or the higher volume regimes tend to. That. That's when, when people don't know what's happening, there tends to be chop. Like what you're seeing now with NASDAQ. You've sort of gone sideways. I mean, basically NASDAQ's gone sideways since May 15th. We're kind of at those. Or yeah, May 14th, we're kind of at those prices. And volatility has been extremely high and volatility is low when NASDAQ is, is going, is going up. With crypto, it tends to be when volatility is very high. There are a lot of people that are interested in the asset because crypto and in general a lot of these assets, their main thing is that volatility is the reason that you're playing with these assets. Right. And so the higher the volume, the better the actual asset itself when it comes to crypto. Yeah, I mean, that was a total, that was a total tangent for, for the beginning of the episode. But a good lesson for you, the listener.
- [04:09]
B
Yeah, I mean, I don't, I don't know if I completely agree with that. I, you know, I feel like, I
- [04:14]
A
mean, you, you designed the strategies at Cumberland for a bit. I, Right.
- [04:17]
B
I am an options trader by trade, so I should technically have opinions on volatility. Basically, what I, what I know about volume is that it really depends on the asset class. So in equities, volatility goes up when prices go down. Volatility tends to go down when prices are trading sideways or grinding higher. Only in extreme like euphoria, events like 1999 in the NASDAQ did equity volatility increase as the price went up. So realistically, like in equity markets, it's a place where people, it's a store of value. So volatility and panic are kind of related. And panic happens to occur when prices go down because that's where people put their nest eggs in crypto. Volatility, oddly is, it's like a barbell. It's most extreme when vol. When prices are going up during a sort of euphoric bull run or down during like a 2022 Unwind. Style event on the to the downside once again, it's panic to the upside. It's like extreme greed that causes the volatility oil mo the big fallacy that ruined a lot of market makers for many decades is the idea that volat when prices go down. But if you actually do the analysis properly, volatility is quite stable in oil if you model it in dollars per barrel instead of percentage because it turns out that a barrel of oil tends to move about as many dollars and cents per day whether it's trading 30 bucks or a hundred bucks, which is unusual. Most, most asset classes are a little more stable in percentage space. Oil is more stable in dollar space. So that impacts the way that you model volatility. Needless to say, where I'm going with all this is if you're going to ask your if you're seeing volatility in markets and what the markets happen to be, you know, equity markets, usually it's associated with some sort of panic or extreme greed. And so I think that's why if you're seeing volatility, the upside, it's probably a time to lighten up your position because extreme, you're not going to get it on, you're not going to get heightened upside volatility on mild greed. You're going to get heightened upside volatility on extreme greed. And to, you know, just zooming back out. Obviously there was a pullback in some of the big white hot memory stocks. Nvidia, whatever. You know, I saw some charts on Twitter alluding to the idea that hyperscaler free cash flow after like a steady almost two decade uptrend is like going down to zero because of what they're spending on AI build out and they're hyperscaling. You know, there's a little bit of fear that these companies are no longer as sexy just because they're spending like crazy. And I view this as like white hot upside volatility. These stocks are exhibiting the behavior of the NASDAQ in 1999. There's a whole lot of room for these stocks to run. But you know, anything that's ripping this hard is going to have some crazy pullbacks. So if anything, these are dips that you should either buy if you have tremendous conviction or you should just be looking at this and sitting on the sidelines if you're not heavily invested because it's starting to get into the scary zone, the later innings. I don't know. What do you think?
- [07:53]
A
Yeah, I mean I definitely think we're in the later innings of the trade. But it's the late innings of the trade that often provide the most insane returns. And you know, for, for a tremendous amount of time. Obviously the hyperscalers were the ones that were sending this market higher. And you kind of have to know, well, how did you make your money? That's the most important thing to figure out is, Jonah, how did you make your money? Why are, why is the AI trade going up? Well, I think the answer is pretty clear. The answer is that the trade went up so much because demand for AI shot through the roof. And as a function of that demand, the hyperscalers decided to build out massive data centers. They decided to invest 600 billion, 700 billion. Google had an 80 billion equity raise to continue their, their capex spend. All of these companies are spending absurd amounts of money on building out the future of AI, making sure that we can bring the cost down and serve as many people as possible and integrate AI into the, into the economy. And so what you're seeing right now is you saw that value basically be baked into the price of these hyperscalers, right? You saw them shoot up in a straight line and now you're seeing cracks. And the things that are holding up the market are where those hyperscalers are putting their money now. Not necessarily the Google meta, you know, Amazon price action themselves. It's all about what are these companies spending their money on? That's what's driving the market forward. And so to me, that represents the second leg and then the third leg is when you have, you know, like fiber optic cables go crazy. I mean, aaoi, for example, I guess that's not that those are, those are the opto electronics, right? That obviously performed really well. You see energy performing really well. I mean, basically everything has gone downstream. And so now what I want to see is, is I want to invest in areas that are actually genuinely going to benefit from AI, right? What is this mega trend actually going to change? What are the fundamental demand drivers that are going to be different because of AI? Great example of this is shorting Accenture, right? Consulting firms are probably going to be less in demand. Another example is why I'm spending all this time on biotech and why I just bought a ton more architect. I bought a lot more of the XBI Biotech etf. Why I'm, you know, another one is blln, which is billion to one, which was shilled to me by a good friend that has put a substantial amount of his money into it. He's a, he's a biotech he's, he's smart on this and you know, cure, for example. Right. So all of I'm trying to figure out, okay, well, what's actually going to be impacted downstream from AI if the market's going to crack. And the general approach is, okay, hyperscalers are cooked, memory is cooked, you know, what's, what's going to happen next? It's what is AI actually going to affect in the real economy? And then you kind of have to hide there. Now, all of this being said, I'm not a doomer. Right? Like, I actually don't think the market's fully cooked yet. I think that we have,
- [11:21]
B
I think
- [11:21]
A
that we have time, right? I think I, I think that, I think that we have, we have time and the market is actually, I mean, we'll see with earnings today with Micron, but I think that we still have time left. I think that we're going to go, I think that we're still going to go higher. But you know, you, you have to shift your mentality is, okay, well where, where are we going to start going higher. Right. And I think it's in these, in these places where AI is actually going to revolutionize those industries as opposed to just demand for AI going higher. I was having, I'll stop there and I kind of want to hear your take, but yeah, that's, that's kind of what I'm thinking about right now, unfortunately.
- [11:56]
B
Yeah.
- [11:56]
A
And by the way, like, biotech has like great risk reward right now.
- [12:00]
B
Biotech is something that I stay away from. Not because I'm lazy or not because I'm just the type of person who considers things outside of my wheelhouse to be untradable. I love to trade new things. I love to explore. Just biology happens to be a weak spot of mine. You know, it's the way that some people, like, hate.
- [12:18]
A
What's wrong with our biology? Jonah, are you saying that, I mean, your biology is weak?
- [12:24]
B
I mean, we are, we all know that.
- [12:26]
A
I mean, look at, I mean, I don't know, I think they're kind of. I'm pulling up. If you're listening on audio, someone commented, Jonah just looks like he finished a Vegas bender or his kids didn't let him sleep for a couple days. Which one is.
- [12:39]
B
Would be the latter. I no longer am allowed to do Vegas benders. After Vegas bender earlier this year, I'm
- [12:48]
A
now prohibited out of Vegas bender. Where's my invite? The hell is this?
- [12:53]
B
It was last minute. I got invited to something and I went and it was fun. And then I came back and I got reamed. And now I don't think I'm going on any Vegas benders for at least a little while. Maybe if I achieve something in life. But for, for now, it's. I think it's pretty much on lockdown. Think. You would think so. You would think so. But then when you just, like, float in your pool, crack open a beer in the middle of the day, while your wife is, like, dealing with three screaming, tiny little kids, the whole, like, I did my I paid my dues, now it's your turn argument doesn't really work as well, so. So this time I look like crap because my kids didn't let me sleep for a couple of days.
- [13:33]
A
I'm not gonna lie. That kind of sounds like a scene from BoJack Horseman.
- [13:37]
B
I love that. I actually know the executive producer. Shout out to Andy Redmond. He's a really cool guy. Really? Yeah, I met him in la. He's an awesome, awesome dude.
- [13:47]
A
Actually, I went to this event. It's total tangent, but somewhat related. I went to this event called the Tablet Awards. The Sinai Awards by Tablet magazine. I don't know if you've heard of Tablet.
- [14:00]
B
Why were you there? Tell me, tell me.
- [14:02]
A
I was, I was just there for a reason.
- [14:04]
B
But okay, thanks for that.
- [14:07]
A
I just, I showed up and it was, like, kind of interesting. There were a lot of. There, there was, there was a guy there who had written Wall Street 2
- [14:17]
B
and horrible movie, Money Never Sleeps.
- [14:20]
A
Yeah, Money Never Sleeps. He, he had written that. His name's Alan, Alan Lo. Great guy. We, we hit it off. Very nice guy. But there's a point to this story. I'm going somewhere, I overhear him talking to this kid and I won't dox the name, I won't, like, dox his kid because this kid's like 13 years old. There's a 13 year old there, and this kid has a portfolio and he's. I, I, I just over, I, I had just walked into the event and I hear him talking to this kid about what to buy, what to put in his portfolio. And so I immediately turn around and I'm like, I gotta, I gotta, I got to figure out, like, what are the 13 year olds interested in buying? Like, what, what could possibly be in this man's account or child's account, I guess, man, because he was 13, he had this bar mitzvah and what was in the account was Google. Uber. Uber, for some reason. And then just like NASDAQ and just, you know, the rest of the rest of the hyperscalers. And at that moment it kind of struck me that if 13 year olds are buying single name stocks in the hyperscalers, maybe the trade's over. Like, no offense to the kid, but, you know, I'm sure he's smart, I'm sure he's got really smart parents. But it's just like that. If that information has filtered down that you should be in, like he, he wasn't just an index fund. Like, you should be in these single name stocks, you should be in Apple, you should be in Google, you should be in Meta. Like that's where you should be putting your money. And then so I turn and I go, well, maybe you should consider putting some memory stocks in your, in your portfolio. And the guy looks at me and he's like, well, don't you think they've run up a little bit too much? Don't you think they've gone up far, far too fast? And I go, well, did you take part in the rally? And he's like, no. And I, and I mean, look, this guy, this guy's a, this guy's a Hollywood guy. You don't expect him to, to, to be crushing it on memory stocks. He crushes it everywhere else. But what also struck out to me is, okay, well, if the hyperscaler trade is saturated and people are still not, they have the most people actually still haven't taken advantage of the memory trade. It's just a small subset. Maybe we have room to go. Right, like all of this stuff. Yes. You might see the nat, you might see the NASDAQ come off. You might see, you know, Google come off. You might see Apple come off. You might see all these other assets come off because that trade has been saturated. The, the memory trade is still maybe not fully penetrated. Like your taxi drivers are not buying memory stocks yet. Your 13 year olds are not buying memory stocks yet. I did tell them to buy Intel. I really hope that that works out because it was not financial advice. I never give financial advice to anybody. But that was a kind of interesting moment where I realized that, wow. Yeah, like we're still, we're not fully, we're not fully there. Like it, what I would expect to see peak bubble is like every 13 year old is buying sandisk in their account now. Right. And he, he hadn't, he had bought me Santos. So that was, that was at least somewhat reassuring to me.
- [17:22]
B
That's reassuring for me too. The anatomy of a bubble is like when your Uber driver starts talking to you about like Should I buy XRP here? It's usually near the top, right? Or should I buy Cardano? So I, I think we, we from the crypto world definitely have a, A bit of a window into what a bubble looks like and when it's about to pop. I don't think we're at peak euphoria yet just based on price to price to forward earnings ratios, especially for the, the component makers like the memory stocks, the. The Intels of the world, the sandisk of the world. I, you know, I don't have it in front of me here. I'm obviously. Yeah.
- [17:58]
A
Are you like a pool or like a basketball? Like, where, like there's like leaking in the background?
- [18:06]
B
Oh, yeah, sorry. There's a bunch of kids over there. I'm in a hotel. I, I don't have access to my room right now because my family's saying it, so that's why there's a no smoking sign above me.
- [18:17]
A
And yeah, kids don't smoke. Smoking's bad for you.
- [18:20]
B
I'm not in, I'm, I'm not in the lobby, but I'm in like a lower lobby. So I apologize to anyone listening for these screaming of a bunch of love 7 year olds beating each other up over there.
- [18:31]
A
So anyway, you know, I will say I am endlessly shocked that Jonah has three kids and somehow we have managed to not have. Did you guys remember that event on CNN during COVID where the kid runs into a room while the guy's on CNN or something like that, and the mother has to like, come in, falls over herself, grabs the kid, drags the kid out, and he's just sitting there like this the whole time. Surprised we haven't had that yet with you, Jonah. Thank you.
- [19:01]
B
Yes.
- [19:01]
A
Like, it says a lot about your conscientiousness, your ability to navigate podcasting and being a father. I'm, you know, one day I hope to be as good a father as you.
- [19:12]
B
Thank you. I appreciate that. Yeah. The way to be a really good father slash podcaster, in that order and not the other way around, is to lock your office door and force your screaming kids to become desperate and cry themselves into, you know, basically submission in the hallway outside of your office door. That's how you keep them.
- [19:33]
A
Oh, has that, has that happened?
- [19:34]
B
Yeah, at least once. It's. It's a pro. Pro technique. Pro technique for fathering and negligence as a strategy.
- [19:46]
A
Just like that's like, I wish that applied to trading as well. It's like, I wish negligence was a good trading strategy. Like, if you Ignore your stocks. They do back. Well, maybe that's actually true.
- [19:57]
B
Sometimes it is, honestly. Like sometimes we may have happened upon something here. Like, sometimes negligent is just the way it's. It's basically like, man, that is a really annoying noise. I. I'm gonna have to like, come up with something and feed it back to you so that you can talk while whoever they are calm the down. Anyway, what I was gonna say is I think you can't ignore your white hot bubble assets, but you can certainly ignore the S and P until the socialists take over the country, which they're, they're ceasing.
- [20:29]
A
Oh. Which by the way, you're seeing a little bit of that happen with the New York election cycle. It was bad.
- [20:36]
B
What the heck is that?
- [20:37]
A
I mean, this is that this matters for your future, for the Democratic Party. This is the future of the Democratic Party. It's just a bunch of people screaming, free Palestine, saying, free Palestine, free Palestine. Vote for me. Because pre Palestine. And you're just like, that's insane. Because you're about to be a congressman for New York. Like, what about New York issues? And look, obviously, obviously, if you're like, one thing that Joan and I will always do, this is actually really important, is obviously we have biases. There are very clear biases in the way that we grew up. There are clear biases. And what we think they're. Obviously, we're both Jewish. We grew up. Well, Joan actually did not grow up in a pro Israel environment. He just came to it later. I did. I know my bias. I understand it. I'm not here pretending like I don't have it, but I had a conversation and I really don't feel the need to talk about that specifically with you guys, the listeners, because I don't think it's important and I don't think we're going to change minds. And my goal is to provide you what I view as reasonable information so that you guys can make decisions on the markets and try to be as unbiased as possible. And this is not going to help, Right. Like, going down this path. Like, I know that I'm not thinking about this in a clear, unbiased way. So I'm not going to preach to the choir about that. But what does bother me is socialism and communism and redistribution and the idea that if you, if you stifle the rich's ability or the capital class's ability to invest and you take money from them and you tax them, that's going to somehow make everybody better. And that's just wrong. And it's been wrong for 100 years, it's been wrong for a thousand years, and it's going to continue to be wrong for the next thousand years. The best way to get a microwave and the best way to get a car and every driveway is to allow innovation to flourish. That is what America is built on. There's an incredible book called the Empire of Wealth which I have right here by John Steele Gordon and it details exactly how America managed to become the wealthiest and most successful country on the planet. This guy is actually not really right wing or left wing. He's just a historian. In fact, I would classify him probably as more left wing than he is right wing. But if you read the history, what you realize is that the Americas allowed people to come exist in a framework where they knew that the government was not going to interfere with their day to day life, that their communities were the most important thing. And what that engendered was a culture of celebratory success. If somebody next to you is successful, you cheer for them. And that's a very beautiful and powerful thing. And so what I see right now with a lot of what's happening in, right now in New York, politics specifically, is people don't actually disagree. People disagree very sorry. People disagree very heavily on taxes. They disagree very heavily on some social issues. They disagree heavily on how you should teach, you know, how you should treat the rich. But what the unifying issue is is Palestine. People all come under the same roof and they say, okay, well yeah, what Israel is doing is bad and we're going to band together and we're going to use Palestine. Whether you agree with it or not is irrelevant. Whether you agree with my take or I agree with your take is irrelevant. What is objectively happening is that they're using it as a wedge issue to shoehorn in communism. All of these people are out there saying free Palestine. And everyone gets under the banner of that. And then they don't realize what's actually happening, which is that nothing's going to change for Palestine because you elected a congressman from New York. What's going to happen is that more communist policies are going to be passed in the city. Right? And that's the danger. That's, that's what I'm worried about. You know, forget whether you're a Zionist or an anti Zionist or you're this or you're that. If you want a better world, you should probably make sure that you don't vote in people that are trying to tear it down. Yeah, I mean, that's my political rant.
- [24:33]
B
I mean, it's a markets rant as well. It's important to make the distinction here. It's a markets rant as well. The things you can set and forget are the positions that will be fine until there's a socialist wave. And I thought that possibility was very far off, but now it's clear and present danger with the 2028 presidential election because the Democratic Party, like the, you know, Hillary Clinton and Barack Obama seem like real centrists compared to the new wave of Democrats who are like, you know, just freakishly, freakishly extreme to the left. And you know that that matters for your assets, that matters for your real estate decisions, that matters for your job decisions. Basically, this is all about capital flows. So there are two threads that we've talked about so far in this podcast. The first is like allocating to what the hyperscalers are spending on and shorting what the hyperscalers are selling, which is their stock and their credit ratings to fund their purchases. So sell their stock, sell their, sell their corporate debt, buy what they're buying, which is like data center assets. Now just a quick asterisk on that. It's not as simple as like, oh, data centers consume like optoelectronics and electricity. So let me buy natural gas, utilities and optoelectronics companies. Like, it's a little more nuanced and fundamental than that. So tread lightly. Would you try to buy what the hyperscalers are buying? Like, again, you're not going to get your hands on physical high bandwidth memory chips and then resell them to data center companies at higher prices, which is what they're actually buying. And if you're buying Micron stock as a proxy for high bandwidth memory, the thing is rallied a lot and it's super volatile. So like again, Google, Microsoft, Meta, they're not buying Micron stock, they're buying Micron's products. So be careful there. But you know, another just capital flows issue is like, of course, hey, what, what happens if socialism takes over? What if these elections in New York or the canary in the coal mine for broader national elections, then let's say that, you know, maybe dissatisfaction with Donald Trump or what he's doing on the foreign policy side lead to a blue wave in 2028 where, you know, the Senate, the House of Representatives and the executive branch are all controlled by this sort of like neo Democrat, the sort of left winger 2.0, you know, mom, daddy, communism type person. What does that mean? That means that assets which currently flow, you know, a lot of wealth is being generated right now and that's obviously bothersome to people who aren't getting a piece of it. But like instead of that wealth going to people who mostly earned it, you know, you look at today's entrepreneurs, cuts
- [27:28]
A
off to eat most mostly. But I do think that there is,
- [27:32]
B
there, there's around the edges of any
- [27:34]
A
economy but for the most part that it's just the stock market going up is also a huge portion of the wealth being created. I mean like if you look at.
- [27:42]
B
But hear me out, hear me out.
- [27:43]
A
Yeah, I'm sorry, sorry, sorry, sorry, sorry.
- [27:45]
B
It's like, it's like right now capitalism tends to allocate in a quasi meritocratic way to people who have built stuff or people who have invested intelligently or have a good process at something. You know, in socialism, capitalism, sorry, capital is basically like there's still people living in big palaces in the Soviet Union and people living like kings. Just those people have, have been the winners of a different type of system. It's usually, you know, like if it. Highly recommended book the Oligarchs. Another highly recommended book to understand socialism is Putin's People. Right? So there's like in socialism, the way that you get ahead, the way that you amass wealth and power is either by being a very good politician, which is not necessarily meritocratic, it's a lot of times backstabby. And politics is different than business. It's just a known fact. Another way is you can be a good gangster, right? That works really well in socialist systems. Sort of a kleptocratic gangster. And then the third way is you can become an oligarch. And these are again entrepreneurial people who find ways to extract natural resource wealth for the most part, but other types of sort of businesses, like I dated the daughter of one of these guys 12 years ago. Her dad basically had a monopoly on the buns, like the bread that went into some bunch of Soviet like the equivalent of Burger King nationwide. And you know, he got that contract through cronyism, right? So like, you know, who are we in the west to throw shade on an eastern or non western style of, of business, which you could call that, but it's, it's, it's anti capitalistic, right? So the, basically it's just like in the same vein as sell what the hyperscalers are selling. Buy what the hyperscalers are buying. Like if socialism starts to creep into the American economy, like sell what this with the socialists are going to Redistribute and buy where you know, buy whatever. Buy into whatever monopolies they're going to create in the name of equity and the common good. The utopian common good. I certainly hope it does happen. I'm in Israel right now. It's pretty awesome here.
- [30:11]
A
Very. That's where you are. You're in Israel right now. Why don't you start the stream with that?
- [30:17]
B
Yeah, I probably should have. It's. It's a pretty awesome society. But what are you in?
- [30:21]
A
So I can tell the IRGC to send a drone there.
- [30:24]
B
Kempinski. Not to dox myself. The Basically like the, the. When you have a bunch of missiles pointed at your country, it sort of forces like the type of meritocratic capitalist system that breeds success and not like some weird comic five year plan type thing that Mom Donnie's proposing. Like very. Socialism is very much a thing that happens. Like it's like a victim of your own success or victim of like extreme persecution kind of outcome. Capitalism tends to be like what people revert to when they need the best possible outcome for survival safely. Yeah,
- [31:09]
A
no, I 100% agree with all that. But I do think that what, what's happening right now is very, very was predicted sort of by Francis Fukuyama. And people always say, oh well, he was wrong. Like the end of history was wrong. And that's because they've never read the book. And basically what he actually says is that once we've solved the idea of liberal governance and we figured out sort of what the quote unquote best system is, if life is too good, people will find struggle anywhere and they'll find struggle against themselves. And that's really what's happening right now is people are struggling against themselves. That's why, that's why we get so much emphasis on, on Palestine. That's why we get so much emphasis on things that people are not necessarily actually part of. That's why when you go to A wa. When you go look at the videos of the watch parties of all the socialists, they're all transplants from Ohio that are displacing the real working class people. They're trying to find a struggle for themselves, right? And that's what it is. It's a, it's a piece of identity that they're missing. Who am I? What am I? How am I? How do I become a good person? And all of that channels itself into socialism right now. But I think we've talked a lot about that. What I do want to actually talk about, the markets we Started by talking about what was happening with biotech. And that's been great. I mean, Basically arcg is plus 8% since our show last week, which is great. NASDAQ came off a ton. But what people are really looking at right now, at least in our comments, are people are really worried about crypto. And I do want to address that for a second. I mean, guys, we've been saying this for a while, but Bitcoin's cooked. Bitcoin's cooked. Ethereum's cooked. Everything that doesn't make revenue right now is cooked. As long as there is a trade that has higher volume that is more interesting than crypto, you just can't buy bitcoin. And that's AI right now. And that, that, those, those are memory stocks. I mean, SanDisk can go up 40%
- [33:09]
B
in a few days.
- [33:10]
A
Nobody's buying bitcoin. Not only that, STRC is depegging. And the reason that it's degging is because basically the way that it works is in order to pay the dividend, you sort of need to do, well, really one of three things. You can sell. You can sell STRC itself to raise money, you can sell MSTR to raise money, or you can sell bitcoin to, to, to. To raise money and pay out the dividend. So Sailor really doesn't want to. He, he, he really doesn't want to pause the dividend because obviously that would kind of nuke the product itself, right? The whole point of the product is that it pays you a consistent dividend. And he can't sell Bitcoin right now because if he, if he keeps selling bitcoin, bitcoin's going to collapse in on itself and that's going to be really bad. He's running, you know, and then mstr, basically, he, he has to sell, he has to keep selling it. But if he keeps selling mstr, then what's that, what's gonna, what's gonna happen is obviously that stock price is going to go down. And so he's stuck. Maybe he needs to sell Stretch. And that is obviously going to drive the price down because people don't really believe that he's going to be able to continuously sell these equity products to raise money to pay the dividend. And at some point what's going to end up happening is he's going to pause the dividend, which obviously is going to make Stretch kind of a useless product. And that's what the deep is about. It's, what is the probability that this guy is just going to Fully pause the dividend. Also. That's just like Sailor designed it with chat GPT. It's, I mean, he's, he's like cooked from that perspective. And so my take is just short, like stay short the crypto complex, but have a list of assets that you would buy lower. I mean, you got to look everything that we've talked about that makes money. This is how crypto works. When, when, when you get into trouble, when the market falls apart, you sit and you wait and then you accumulate. That's how you win. That's how you get really, really, really easy. Two to three X's. The best part about the crypto market is that people are so bipolar about it. They either hate it or they love it. And when they hate it, you know at some point they're going to love it again. And so you just have to buy when things start going sideways. So wait for the crash, wait for the collapse. Buy cards under 10 cents. Buy hype under 45, maybe 40. If, if, if, if we get there, you know, you just have to, you just have to wait basically for these things to be forgotten about and get back in the market. And that's, that's really, that's really my take with, with the crypto markets. And actually right now. Whoa, look at this, guys. Bitcoin just broke. Bitcoin just broke 60. We're probably heading down to the 50s there. I shared a short trade a few weeks ago on this. I mean, basically what I said was, look, you have to, once you re enter a range. Let's see if I can share my screen here so that you, you understand what I'm talking about. Share screen here. Can you guys see this? Let me get rid of that. I mean, here you go. Look, when you trade in a range, I mean, we can even go to the weekly here. If you trade in a range for an extended period of time, which is what you did here from February 2nd all the way to March 23rd. And if you're, if you're on audio, what I'm doing is I'm just looking at the weekly bitcoin chart here, which you can, which you can pull up and just take a look at February 2nd all the way to April 6th. You trade in a range, you break out of that range, and then you re enter, retest the bottom of the range. I mean, this is a phenomenal short. I mean, you can probably even. I was talking about the, the setup when we were trading at around 65. I said, you basically want to just short here and Just ride it, ride it down. I mean this is my target here is going to be like anywhere cover from 49 to 53. So you can still short here. Obviously the trade's a lot worse. Like you probably want to short something like a world coin instead, which is actually oddly near the highest of recent weeks. Like that's, this is for sure going down probably to the lows. Fart coin is quite literally going to zero Solana fully cooked as well. You could, you could probably see 46. I mean that nice 50% draw down. I mean Zcash also as well. Like I'm probably buying it around 280. I mean these are all just to, just to show you. And then the, the best, the best looking chart I've seen in a long time is ArcG. I mean this is, this is why you got to just, this is why you got to just ape. Now this is the Drucken Miller approach is you buy a little bit to force yourself to do research and then you actually do the research. I'm still in the middle of the research, but that's just a good looking chart. I mean that, this is, this, this is the, this is the base. I mean we based for freaking five years now four years, we're going to break out. That's going to be good. So that's, that's what I want to throw out there, people. What you might want to think about doing is if you, if you're really scared to just short crypto, you can buy Hood and short crypto because I think there's an asymmetry there where if crypto does well, Hood does extremely well, but Hood can still do well even if crypto does poorly, at least relative to crypto. And the reason is because they're really expanding the revenues outside. So that's, those are, those are some of my favorite trades for the next few, few weeks. And this is, this is really important I think to understand is just if you're an investor, if you're a trader, the most important thing that you can do is just make sure that if you have a thesis, if you do actually think about a trade, you get to a yes or a no or you get to where you would be a yes or no. And what do I mean by that? If you think to yourself, okay, I think that cards is going to do really well or I think that hype is going to do really well, but I don't want to buy it here. Set your alerts and really get into that trade. When it gets to the price that you think is, that you think is good. I mean, one of the things that often happens is you say to yourself, I want to go buy cards below 10 cents. And then you get below 10 cents and you go, ah, you know, I don't know, it looks bad, it looks really terrible. Don't change your mind. Some of the best trades I've ever taken are just where it looks the worst. But I've had that target six months out and we hit the target and then we rip it and that's just a phenomenal trade. And so just from a process standpoint, what you want to do is you want to make sure that you're following through on the lessons and, and trades that you've put together even three, four months ago. So I'm, I'm waiting right now.
- [40:26]
B
Yeah, I mean crypto that, I'm not a technical guy, technical analysis guy, but man, that chart you showed a bitcoin, the weekly chart, boy, does that look like a flaming pile of elephant shit. I haven't seen it look that bad.
- [40:40]
A
Poodle, flaming pile of elephant shit.
- [40:42]
B
Now I, I think the, I think the issue with bitcoin, like, you know, I, I'm as guilty as the next guy of being bullish on the highs at 124k. But you know, I lightened up on the way down. I'm glad I did. I'm certainly not rebuying. Even though I, I still have my million dollar price target. I think the next, the, the next trough of bitcoin is going to be probably the best trade of, you know, of my lifetime. You know, I bought the previous, most amazing trade I've ever done probably for myself was buying GBTC in December and January of 2022 and 2023, just after, after FTX blew up, when GBTC was trading at a huge discount. Even though, unlike mstr, there's sort of no bankruptcy risk. I think bitcoin on a sailor blow up, which feels inevitable at this point because you, you said he designed it with ChatGPT. I, I think he designed it like with a couple of friends over a table of God knows what at three in the morning. Like this isn't poorly thought through. We're gonna, we're gonna buy bitcoin with more money than we have and we're gonna dividend equity holders and, and take money from bondholders and give them to equity holders and also sell our bitcoin when we run out of money. But bitcoin's going to go up forever. And we're, but we're going to accumulate 5% of the supply until nobody else can. Can match our size. And then, you know, and then become the. What is it? What is it? What is the name of the Eggman?
- [42:16]
A
Yeah, it's just, it's the eggman, which is like that very famous trading story.
- [42:23]
B
It's very poorly concocted financial engineering.
- [42:25]
A
It's obviously not going to say who, but somebody, somebody ripped it from me. Not going to say I love.
- [42:32]
B
Yeah, come on, thread guy. But basically the, the like I was always wondering when. And the time is now, right? So he's going to blow up when he finishes blowing up. The story for bitcoin will never have been better in terms of just like the long term value proposition. The regulatory framework for crypto will never have been better. The setup will be the best in history. The price will probably be like maybe not Covid lows, but like FTX lows after he's done just like exploding spectacularly. And that's when I think that's when bitcoin can finally run and do its thing. And that will be an epic, epic trade. So I think that's coming. I just don't want to jump the gun. So the bitcoin that I sold at higher levels that I want to rebuy, I'm just waiting very patiently. I have all the time in the world. Nobody's going to jump in front of the bitcoin train right now. There's so many other shiny objects. Also, if the broader market implodes, it's not like bitcoin is going to hedge you. It's going to go down twice as fast as the nasdaq. So yeah, just stay away, do your thing and just monitor that situation. Now just.
- [43:45]
A
And remember to tune in to a thousand x. We will tell you when to buy bitcoin. Not we will.
- [43:52]
B
The other thing you mentioned biotech stocks. Here's why I don't like that. And you know, so take this with a grain of salt. Biology was always my weakest subject. I just don't vibe with the mitoplasms and the chronoblasts and the blastochronoplasms. It's not my thing. I don't really understand how the body works other than that I feel a little bit better when I drink a beer versus when I don't. And you know, biotech is like a very complicated thing. And so in the spirit of like the advice I received a long time ago, which has served me very well, which is you can't succeed unless you know the Fundamentals, unlike crypto, like there are real fundamentals in biotech. Like if you have a PhD in biochemistry, you will have an edge analyzing biotech equities in biotech. You know the best VCs in biotech have those degrees. It's really, it's a fundamental thing. Now obviously the AI makes biotech more interesting. Thesis is kind of, you know, a meme stocked meme meme coin type trade. So you can probably mess around with this some biotech ETF the way that you would have messed around with Fartcoin or WIF a couple of years ago and get in and out for a quick buck. But I just, I'm personally wary of dabbling too deeply in spaces where fundamentals matter and you have no edge. We can all pretend they don't matter and maybe they don't in the short run, but it's just like, come on guys, they fricking matter. I ran over people once I knew how to profitably trade oil fundamentals and before I knew the fundamentals I looked back on that and I was adrift. Like if your thesis, and I'm almost done ranting here, if your thesis is AI makes drug discovery easier. So biotech stocks up, only number go up, right? What's going to happen when number go down? Are you going to, are you going to be like no, no, no, I still going to really help biotech. So I'm just going to hold this while I'm losing my shirt or are you going to wonder to yourself, hey, is there maybe something going on here? Maybe the FDA something something. Maybe there's a molecule issue with, with the biggest holding in this ETF that I'm long, that I don't, I'll just never understand. Like you just don't have a good objective framework to cling to when you're losing money. So here's the takeaway for the listeners. If you're, if you're buying biotech stocks because I ask yourself how you'll feel if you're down 50% and knowing full well that that Ark G or whatever this stock thing that you're referring to isn't a meme coin where everybody else has the same information as you, which is there is no information this time. There's real fundamentals and real information. How will you feel?
- [46:38]
A
I think that's a brilliant question to ask not just of biotech but of quite literally every trade that you ever take that you're looking at holding for an extended period of time if the price goes against you, are you adding to it. If so, do you? If the answer is no, then do you really have conviction in what you're doing? I personally am very convicted in the idea that biotech is going to be radically changed and the entire industry will reate because we are going to be able to produce more drugs at a cheaper cost and serve more people. And so I'm not really in the single stock name game because I agree with you. There's no way for me to predict. There's kind of no way for me to predict which single name stocks are
- [47:24]
B
going to do well.
- [47:25]
A
But as an etf, if I buy XBI and I buy architecture, I'm basically making the bet that the entire industry is going to rewrite. And that's why I actually have mostly xbi, because it's a much larger selection. It's like more. It's a wider piece of the biotech world, and it's more of an index on the actual industry. And ARCG is obviously a bet on the sort of higher octane, higher risk, higher reward. So I own. I own them in a 70%, 30% ratio. But we will. I know that you gotta. You gotta roll here soon, but we will be talking about this on Friday before we go. You need to please, like and subscribe. If you're on YouTube, remember that. If you're not, if you're watching this on X, go to our YouTube. YouTube. It's a thousand. It's a thousand X pod. Get on there. Like, subscribe. I go live on Fridays, 1pm Sometimes joined by Jonah, sometimes not. Wednesdays, 1pm as well. The more you guys interact with us, the more you guys chat with us, the more you guys subscribe, the better and more content we can bring you. Because the more motivated my dopamine will be to actually talk to you guys. Because right now my dopamine is low. Because none of you have liked and subscribed yet.
- [48:41]
B
If you want me to subscribe button.
- [48:43]
A
You want me to have high dopamine and talk to you all day. Gotta like and subscribe.
- [48:49]
B
Time.
- [48:49]
A
All right, guys, this was. This was a pleasure. This was awesome. We almost hit. We're like, what? We're like, almost at 5,000 viewers.
- [48:57]
B
How did that happen? Did somebody retweet this? That's unusual.
- [49:00]
A
Capital flows retweeted it, but I think I. I think it's just because we're. We're vibing, Joe. We're having a great.
- [49:05]
B
I think it's. I think it's a combination of us having another. Yet another great session and capital Flows. What a. What a dude. Thank you. Capital flows or girl? I have no idea.
- [49:19]
A
What do you mean we. We talk to him. It's. Unless he used a crazy voice changers. For sure, dude. Although I guess. I guess that. That. That's banned. I shouldn't be using gendered language in New York of 2026. Sorry guys. Should miss person.
- [49:31]
B
Capital. Capital Flows.
- [49:32]
A
Otherwise Manani will come after me.
- [49:34]
B
But you mispererson him or her or they.
- [49:39]
A
Jon, what. What. What are your plans for Israel? What are you up to? Well, after this call, what are you getting done?
- [49:45]
B
After this call, I have another call where I'm going to be just hustling on one of my other side hustles. That is not this podcast. And then, because you know, that's what every good person should do. They should have a job, a side hustle, and then like a side side hustle. So this is a side side hustle call after this. And then, you know, I'm probably gonna pass out on this couch here and not even make it upstairs at the end. I'm so jet lagged. And my kids, honestly, jet lag is fine, but when you have jet lag children, they amplify the jet lag because whenever you're just like getting back into your circadian rhythm, one of them goes and ends it. So that's that. And then so I'll be sort of, you know, just struggling through the week, wandering around, eating and being merry and getting back at it. And then Friday we're in Jerusalem doing some sightseeing and checking out the old city and then go stuff a note,
- [50:50]
A
go visit the Wall for me.
- [50:53]
B
Thank you. Will do. I'll say a prayer for you, Avi. I think Jerusalem is a worthwhile visit for anybody.
- [51:01]
A
We should say a prayer for everybody. For. For all the listeners. Just know Jews will be praying for you. If you're. How about this? If you like subs, if you like and subscribe, and if you listen to this podcast, Jonah will go to the Wall and pray for you. And we all know how powerful that is.
- [51:17]
B
You know what? I will. I will do that. I will. I will say a prayer for all the subscribers at the Western Wall. Hashem should bless you all with tremendous success, financial returns and protection from your enemies and yourself. Basically, I think. Yeah. And then we're gonna. Then we're gonna do a little Euro summer in France. A couple of weeks. I'm supposed to.
- [51:40]
A
Where are you gonna be? Because I'm actually coming out on the
- [51:43]
B
8th south of France, Ken, where we
- [51:49]
A
were I'll be there on the 8th.
- [51:51]
B
Really?
- [51:51]
A
July? Yeah.
- [51:52]
B
Oh, dude, we gotta do a live podcast.
- [51:54]
A
We're going to do a live pod in the south.
- [51:55]
B
We're going to do a live pod. Yeah. So sick. Come over, come over. I. I'll. I'll do the audio setup.
- [52:01]
A
All right. Amazing.
- [52:02]
B
The garden or something.
- [52:03]
A
All right. I'm excited.
- [52:05]
B
This is great. Totally unexpected. We just.
- [52:08]
A
Can we just serendipitously figure this out on the pod, guys? Thank you. All right, thanks for listening, Jonah. This is awesome, as always. We'll catch up soon.
- [52:18]
B
Thanks, man. Great seeing you. Talk to you guys later. Nothing said on the Thousand X podcast is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only and the views express by anyone on the show are solely their opinions, not financial advice or necessarily the views of one KX Media. Our hosts, guests, and the one KX team may hold positions in the company's funds or projects discussed.