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- [00:00]
Avi
So many people are still playing the old game of fundamentals and they're not playing the new game of flows. And so we just have to continue to play the new game of flows. You as the listener, you as the investor, you as the trader, play the game of flows. Now forget the game of fundamentals. At some point, when the credit cycle resets and liquidity gets drained from the system, the fundamentals game will come back, maybe, but right now it's, it's, it's, we're, we're nowhere close.
- [00:27]
Jonah
You got to know the fundamentals. If you don't know the fundamentals, you'll never have a career. You may have a good year here or there. Never have a career. It's true. You got to know the fundamentals. But right now my point is that SpaceX is a purely technical trade through the unlocks. So when does the level end? How? You're collecting gold coins in SpaceX. When does the level end? The level ends when the unlocks occur for the broader market. When does the unlock occur? It could be rate rate hikes, basically whenever there's a credit problem, whenever there's a borrowing issue, that's when the level's over and that's when you got to get out. But you know, we're nowhere near that. And in the broader markets, we're nowhere near unlocks in the near term for SpaceX. So basically, you know, I think, I think that's the right framework to look at equities right now with SpaceX as sort of a mini technicals microcosm of the broader equity market.
- [01:31]
Avi
What's up, Mr. Jonah?
- [01:34]
Jonah
Peace in Iran. Yay.
- [01:37]
Avi
We did it.
- [01:38]
Jonah
It's over. It's over.
- [01:41]
Avi
We've solved the conflict.
- [01:43]
Jonah
Just send in Jared Kushner and everything gets better.
- [01:46]
Avi
That's Witkoff Kushner, Trump. I mean, man, you know, all of those, all those people out there that accuse us of being, that accuses of being Zionists, which we are,
- [02:00]
Jonah
what Zion is.
- [02:03]
Avi
Hey, you can't, you can't show the gleam, the secret symbol.
- [02:07]
Jonah
Yeah. Oh, sorry. No, but believe that, Brad.
- [02:10]
Avi
Yeah, People are like, man, these, these, these, these thousand Zionists, they're going to be so upset at the deal. I'm actually not. I think that this is, this was probably, this was probably the best outcome that we could get right now. Markets are absolutely happy. Markets are ripping. It's kind of incredible. Jonah, take a step back and think about this and I want to get your. Take that. We barely had a sell off. We had a full blown war with Iran. And we barely had a sell off. We had the straight of Hormuz shut and we barely had a sell off. What is going to tank the market. Right. You have to take a step back when things like this happen and start to realize that we really are in a world where these catalysts seem to not be able to crack the story. And the story is just massive growth because we're entering into the megatrends of the future where we're just making more money than we've ever made before because the products that are being built are truly world changing. Yeah. And so the only thing that's going to be able to affect them is forget war, forget this, forget that it's financial engineering probably is what brings it down. Because that, you know, it's kind of, it's just kind of crazy that we went through this whole, we went through this whole war and basically ended up in a spot that was probably, we probably weren't going to get to a good place with Iran. They, they definitely quote, unquote won this interaction, unfortunately. But, you know, not nothing, nothing happened. It's kind of amazing.
- [03:59]
Jonah
Yeah, I mean let's, let's just go through all that. So I agree that financial engineering is what ultimately torpedoes markets. There's no real sell off without a credit crisis. Right. So if you look at what's causing the sell off in bitcoin, the active float in bitcoin has become Michael Sailor, Michael Saylor has a credit problem. Right. That's basically why bitcoin is underperforming, you know, when it comes to the equity markets. You, you know, I've given this example on the pod a number of times, but let me just rehash it again because I think it's extremely important. When I was the dollar again options trader back in 2010, early in my
- [04:36]
Avi
career,
- [04:38]
Jonah
Kim Jong Un was constantly threatening to nuke South Korea and Tokyo. And he was like, he went from like not really ICBM nuclear capable to ICBM nuclear tip capable very quickly and was starting to test these missiles. And every time he would do a new launch he'd be like, I will, I'll destroy Asia and America. Right.
- [05:00]
Avi
Like, is that your North Korean accent?
- [05:03]
Jonah
Yeah, that's right.
- [05:04]
Avi
This was close. It's good. It was good. I thought, I thought that was, I thought that was solid. Hop in the chat. Tell us what you think of George Yonder's North Korean accent.
- [05:12]
Jonah
I should just, I should have used the one from Team America. I hear you. That's, that's, I'm so Ronary, I'm so roaring. That's how we get in trouble. It's the south park guys, not me. Anyway, every time I would do a
- [05:24]
Avi
launch, I can quite literally never run for political office because of all the things that have been said on this podcast. Or maybe in the future they're going to love extremist jokes.
- [05:34]
Jonah
We live in idiocracy, Avi. There was a UFC fight on the White House law and I'm pretty sure you could.
- [05:38]
Avi
And it was so incredible. I mean that was genuinely Americana in a nutshell. I've never seen anything that inspired more patriotism in me than a shot of a UFC fight and like seven F16s flying above the White House streaming behind red, white and blue. I mean, this was just peak America.
- [06:00]
Jonah
There's my.
- [06:03]
Avi
This is a new investment thesis is the American century is back on track. We'll talk about.
- [06:10]
Jonah
So yeah, just. I don't want to get too much on a tangent just to respond to that. My group chats with my like extremely left wing liberal Columbia friends from university. They are so upset about the UFC fight on the White House lawn. There is upset as my conservative, religious, Jewish group chats were about the like, drag, the nude drag gay pride parade on the White House lawn four years ago under Biden. Remember when all the, the feathers and gayness. Anyway, like it's, I think just, I think it's just part of every administration to just piss off the other party as hard as they can. Right. For at least an afternoon. Anyway, getting back on track. Only half the country is stoked about that. But back to, back to Kim Jong Un and North Korea.
- [06:57]
Avi
Well, well, obviously. Sorry, one question because I want to dig in there. How do you. Were you a progressive?
- [07:04]
Jonah
Yeah, I, I grew up. I actually had a communist Russian flag on my wall growing up in Berkeley, California.
- [07:11]
Avi
So you were, you were a full communist at some point.
- [07:14]
Jonah
So you plan on communists.
- [07:15]
Avi
You kind of understand these people at a deeper level.
- [07:18]
Jonah
Yeah, I mean, put it this way, like, and it all ties back into markets when I was a child. You know, my parents were hippies. That's why I'm from Berkeley, California. My father was an actual communist, you know, very prominent labor lawyer. And my mother was carried mail in San Francisco during the Haight Ashbury era and was just a hippie. Came. Came to California in a flower bus and basically the, the thesis back then was that black people should be able to use the same bathrooms as white people and. Very reasonable, very reasonable and you know, we shouldn't send our children off to die in Vietnam for no reason and you know, like equal rights for everybody, like the basics, which I still to this day like strongly, strongly agree with. Then all those battles were won. And the thing about the progressive movements is that when they win a battle, they don't just pack their bags and go back to whatever they were doing before, go back to farming like Maximus and Gladiator. They, they're like, oh no, we gotta pick a new fight. And then the fights got increasingly ridonkulous. And that's when I think I did what most traders have to do. So my number one interview question when I, when I hire a trader is name the biggest decision you've ever made that involved changing your mind. Right? Like, and what, what's the thing, what's the biggest mind change you've ever done? Because most people just can't fricking do it. If they're born a Democrat, they die a Democrat. If they're long stocks, they can't be short stocks. You know, it's. Traders have to have mind like water mentality and change their mind and be fluid and adapt to the situation. And so for me, I would say aside from, you know, going from like turbo atheist to turbo religious, the biggest thing I've, the second biggest thing I've ever changed my mind on was like switching parties when I saw that the ideals that I grew up with were no longer, you know, part of the party that I identified with. So I still consider myself to be a 1990s Bill Clinton Democrat that just happens to be represented by the Republicans now, not the Democrats. So that switch was really tough. Anyway, back on track, Kim Jong Un would send, you know, like threaten Tokyo, threaten South Korea and the yen would puke every time, but it would puke a little bit less every time because finally the market was like, show me the war, show me the action. So the same thing is happening with, you know, under the Trump regime, markets are equity markets in particular, which we told you were a buy on every sell off as a result of this Iran war, which we told you would not shut down the economy and we told you by when it would get resolved because of the barrel count and the critical barrel count versus the non critical barrel count in commercial storage around the world. We told you this would happen because at the end of the day markets are telling you like basically daring Iran and Trump to keep the straits shut. Are we still? Yeah, there we are. Markets are daring Trump and whoever's in charge of Iran to keep the straits shut through to the point where Critical oil supplies drop below that threshold that we've been tweeting about and talking about all ad nauseam. It's until that happens long only. And realistically I think that, that, that, you know, there's too much invested interest in that not happening for it to happen. It's really just going to get to the point where financial engineering is the, A credit crisis is the only thing that can take us out.
- [10:46]
Avi
Yeah, no, to your point. Yeah, yeah, unfortunately I 100% agree with that. And not necessarily unfortunately because it's, it's good for the markets to go up. I think that's a, it's a very, you know, let's smile and put our, put our two thumbs up and say let's go markets. But I say unfortunately because that means that we're going to have to pay very, very, very close attention to what the Fed is going to do. And we're kind of going back into a regime where for a long time the economic data that was coming out of the White House, the decisions of the Fed, it stopped mattering as much. And I think we're heading back into a period now where you're going to have to be paying attention to all these things, all these machinations that are going behind the scenes. And this is part and parcel of us talking to you about, hey, you have to look at the inflation numbers, you have to look at whether we're going to have hikes or cuts and what's going on there. Because if the economy really starts to struggle, X AI we're going to see, we're going to see some cracks and those cracks could really impact your portfolio. And in the meantime, what you're supposed to do is you're supposed to gather as many gold coins before the end of the level and you get reset back to the start. And that's kind of how I feel about this market.
- [12:02]
Jonah
But I love that analogy. I love it. Great one. A plus.
- [12:07]
Avi
Yeah, thanks, Jonah. I mean, maybe I've been playing too many video games recently, but that's.
- [12:11]
Jonah
No, no, no. It's so apt because it's like the music's gonna stop or the level's gonna end and run up your score while you still can. The Trump administration will be ending their, their goal is just to turbo pump your, your bags and there's going to be a credit crisis brewing. We don't know when, how or why. You know, let's take SpaceX as a microcosm. If I were long SpaceX right now, which I'm unfortunately not, and feeling extreme FOMO about Jonah.
- [12:40]
Avi
But we talked about this on the last pod. We said you got to buy around 1 6,165.
- [12:46]
Jonah
Yeah, I got lazy.
- [12:47]
Avi
I mean, this, this was, this is, this is, this is something that actually I struggle with and you struggle with and every single trader struggles with. And it is, you have a plan, you outline it, and then you don't execute on it. I've actually noticed this in myself. When I'm streaming, sometimes I'll come up with an idea on stream and I'm like, okay, wait, this is a really phenomenal idea. I really need to execute this. And then I'll just fully 100% forget about it and not go into it. And then look back on it like five days later. I'm like, oh, me? I really should have executed on this. So one of the things that I've instituted post is what I call the idea journal. And this is a very simple concept that a lot of people should be doing. But it's just every time you have an idea, your job as an investor and a trader is to make sure you get a yes or no on that idea, a yes or no from yourself. So if you think maybe I should buy SpaceX at 160, you can't just leave it there. You write it down and you go, should I buy SpaceX at 160, yes or no. Write out as much as you can, do the research that you need to do, and then if you come to the conclusion no, then you've at least made a decision no. And if you can come to the conclusion, yes, great, execute on it. Some of the worst missed trades in my life are the ones that I was just too lazy to make a final decision on. And I said, I'll think about this later. And then you realize that it just got away from you. And there's kind of nothing you can do at this point because the quote, unquote, trade is gone, right? So every time you have an idea, write it down in your idea journal and then come to the conclusion, yes or no, I'm buying this or I'm not buying this. And that's going to provide massive dividends for you. I mean, you can do it in an Excel sheet, you can do it in a notepad, you can pick up, you know, your notepad and, and use it. But I, I, I always suggest having paper and pencil on your desk because that's the, Generally, I think it's a good way to form those neural connections in your brain not to go on a complete and utter random tangent. But actually if you write things down, you remember them better. But yeah, I want a tangent on that.
- [14:59]
Jonah
That's a great idea. I should do that. I mean, I have a journal on my desk anyway. I'm constantly scribbling notes. I should just annotate trades in there. I feel dumb for not doing that when I was like a locked in professional trader. I was doing that. Now that I think about it. And I was never not doing trades because it was my actual freaking job. Now that I'm just sort of like floating around the ether, I don't do that as much and I should. So sorry, Avi, you're on mute. What were you saying?
- [15:26]
Avi
No, no, I was just saying most people aren't professional traders. I assume most people that listen to this podcast are not professional traders. I mean, hop in the, hop in the chat if you're a professional trader and tell us exactly where you work in your entire portfolio. But if you're not a professional trader, this, these, these small frameworks for making sure that you become a more efficient person with your time when it comes to investing. Very, very, very important, you know, because I think one thing that I've always been in the world of professional money management and I've always had a lot of respect for the people that are somewhat successful that aren't. But what you realize is that over and the main reason that I have so much respect is because you have so much less time. But then what I realized is after, after eight, nine years of being a professional money manager, you just get so much more efficient with your time. Like when I look at the top people that I know, all the billionaires that I used to work for, they're not, they're sort of maybe spending 30 hours a week like actually on the markets and then doing whatever the hell they want to do with the, with the rest of their time because they've got so efficient at processing information and understanding what it means and then really just executing it. A lot of people waste time on decision fatigue. So what they'll do is they'll have a decision to make and they're like, I need more information, I need more information, I need more information. And then suddenly 10 hours have gone by and you've consumed useless. I mean, you've read like Investopedia articles on some company that you're going to invest in and it has absolutely nothing to do with the thesis that you actually care about. I mean, the core thesis here is what matters and you need to distill it and I'll use SpaceX as an example. If you buy SpaceX here, you can go deep and say, well, the revenues are 18 billion and compared to Amazon, it's so low and the, you know, the valuations are so high. And I don't think Starlink has the right tam and I don't think that we're going to get asteroid mining for another 30 and it's like enough. That's not what matters. What matters is that there's 4% of this thing on float, that index funds have to allocate to it, and that retail is obsessed with it and that makes it a phenomenal trade for the next month. Right? That's what you have to understand. Like distill the trade into what actually matters. What is it actually? What are you betting on? When you bet on intel, for example, like, what specifically are you betting on what actually matters? Are they able to improve on chip design? So when you see, when you, like that's number one, like, are they able to actually compete with tsmc and is there higher demand for other products that they offer that they're best in class at? So CPU usage and whether they're, they're able to innovate on tip design? And so when you see that they are, okay, wow, their advanced packaging is being accepted by Google, they're getting a 3 million order of TPUs. That confirms the thesis. Everything else is noise. So it's always about distilling what you actually care about, right? You don't need to spend 300 hours looking at a company in order to come to a conclusion. You do. If you're working in like distressed debt and you're, you have to understand every like, debt covenant that's involved. When you're working with more complicated products. You have to understand this stuff, right? If, if you're, if you're working, then at, at some point you kind of have to become a lawyer. And you know, you, you really, if you're buying muni debt or something like that, you, you obviously have to really spend a lot of time digging into the contracts. But like, if you're buying equities and you're trying to bet on a trend, you're trying to understand, will this company do well in the future? You can distill it. Robin Hood's another great example. What, what matters for Robinhood, Are they able to generate more money and higher margins from equities? Because they made a lot of money from cryptos, but are they able to diversify out of crypto and build really robust revenue streams? And they seem to be doing that. They got the Trump account. Right. And are they able to capture the entire lifespan of a consumer into their product? Because they're trying to be the end all, be all financial application and they seem to be doing that pretty well. Right. And so like all the other stuff, it's, it's kind of almost irrelevant. It's like, are they, are they doing the core things that will give them 10x value if their crypto revenues fall? It's like, who, who the cares? Yeah, it doesn't matter. Because if, even if their crypto revenues went to like, if their crypto revenue quadrupled, that wouldn't matter. That's not the core reason that they should be going. That's not the core thesis. Right, the core thesis is the Everything app. Yep. So that, Sorry, that, that's, that's my rant on how to evaluate companies in today's day and age.
- [20:27]
Jonah
No, it's a great rant. I've got a few things. Few sort of. It covered a lot of ground. So I have a few different responses. The first, let's go back to SpaceX. And SpaceX is kind of a microcosm for the broader market. Let's talk about collecting all the coins before the level. And it touches upon a few points you made. You talked about TAM and Starlink and all this. Basically, I think, you know, you just need to focus on what matters and what doesn't matter over the long run. Fundamentals matter. Fundamentals means TAM of Starlink, potential of data centers in space and mining fricking diamonds on Halley's Comet and whatever the hell else Elon is promising. Right, that's the, the sort of EBITDA of that over the long run is a fundamental issue. In the short run for SpaceX, this is a high FTV, low float meme coin. Fundamentals do not matter. If you, if you pull a David Einhorn and you get short SpaceX because it shouldn't have a 2 trillion valuation on however many billion of revenue and however many less billion of profit, Elon will be sending you a pair of short shorts just like he did for David Einhorn when he got blown out of his entire career. So. And by the way, that was, yeah, that was satisfying because David Einhorn was the cheerleader for shorting Lehman while I worked there. That was painful to watch him on TV every day.
- [21:55]
Avi
He was kind of right.
- [21:56]
Jonah
He was right, but whatever. Right doesn't feel good to be wrong and have the guy who's right sitting in the front of the class raising his hand, being like, ooh, teacher, teacher. Anyway, on TV. Anyway, my point here is SpaceX fundamentals don't matter right now. Technicals matter. This is a high ftv, low float meme coin. Every, every single person who's got SpaceX stock but can't sell it yet is salivating over their 10 million, $20 million home in Tiburon. Actually, maybe 10 to 20 million buys you a two bedroom shack in the hate district these days, but like 20 to 40 million dollars home in Sausalito or Tiburon, these beautiful suburbs of San Francisco, you bet your boost they're going to be selling the second they can, but they can't. So until then it's just indices buying and retail fomoing in right now. So you can be probably comfortably long, but the level is going to end when the unlocks start happening. So if you're long this stuff and you're not mapping the unlocks, you're going to get torpedoed. That's, that's when the level, and this is, this will go down a lot.
- [22:59]
Avi
This people don't understand is everyone in crypto thinks they know the game. And so they're like, let me be contrarian, everyone knows, well, low float thing pumps and then when unlocks start happening, it goes down. And everyone in crypto loves to be contrarian and they love to say, well no, if everybody knows that game, then maybe what you need to do is you need to take the other side. And I'm here to tell you, first of all, it didn't even work in the crypto industry. Every time unlocks came, yes, it might pump for like a week because they orchestrated something and then it would just go straight down forever. You have to remember, you have to remember that we are a unique subset of people that have a unique experience. The vast majority of the world is not thinking about this game. They're not really understanding what's happening. They don't care about the unlocks. They just, that's why everyone sort of missed this entire trade in the traditional world because they were playing, they're playing the old game. So many people are still playing the old game of fundamentals and they're not playing the new game of flows. And so we just have to continue to play the new game of flows. You as the listener, you as the investor, you as the trader play the game of flows. Now forget the game of fundamentals. At some point when the credit cycle resets and liquidity gets drained from the system, the fundamentals game will come Back maybe, yeah, but, but right now it's, it's, it's, we're, we're, we're nowhere close.
- [24:35]
Jonah
The fundamentals game exists, but like, if you try to trade things without understanding fundamentals, you will get screwed over the long run. My point here is like, this is the best advice I'd ever been given in my entire career. Right at the beginning at Lehman Brothers, had a great boss and he's like, you got to know the fundamentals. If you don't know the fundamentals, you'll never have a career. You may have a good year here or there, but you'll never have a career. It's true. You got to know the fundament. But right now my point is that SpaceX is a purely technical trade through the unlocks probably for another year or two. It's like Tesla in the 2000 teens, but broader markets wise. So when does the level end? You're collecting gold coins in SpaceX. When does the level end? The level ends when the unlocks occur for the broader market. When does the unlock occur? It could be rate hikes, basically whenever there's a credit problem, whenever there's a borrowing issue, that's when the level's over and that's when you got to get out. But we're nowhere near that. And in the broader markets, we're nowhere near unlocks in the near term for Space X. So basically, you know, I think, I think that's the right framework to look at equities right now with SpaceX as sort of a mini technicals microcosm of the broader equity market. Furthermore, just zooming even, you know, one layer back out to what you said about journaling. That's really wonderful advice. I'm actually going to start doing that. I'm going to, I'm probably going to start journaling trade ideas and being a little more active about them and less lazy. That's a great idea. And also to your point about how billionaires only spend, you know, the billionaires you know are in trading only spend 20 to 30 hours a week on, on markets and digesting knowledge. You know, it's really interesting. You know, I lived in London for 11 years. The taxi drivers there, maybe they all use Google Maps now, but back in the day it was called the Knowledge. It's a big test. You have to memorize the entire street map of London, which is like a mind boggling, bogglingly complex task. It changes their brain chemistry. And like they talk about how they can't remember normal things because they have just Too much of their, their neural activity is dedicated to that, or used to be. I don't know what it's like these days. Anyway, the same thing happens to traders after, you know, after having spent 15 years of my life on professional trading floors. And then the, you know, post Covid, it was a little more work from home, but like I. You just, you. There's a constant fire hose of information. You develop a very good sense of what matters and what. And you sort of discard everything that doesn't. So I still to this day have these problems where, like, my wife will start talking to me about something I don't care about and I. My face will register. Jonah, be careful.
- [26:55]
Avi
Jonah, be careful.
- [26:57]
Jonah
Yeah, I know my face will register. This podcast, she. She doesn't. But she already knows what I'm about to say, which is like my face will register the expressions of, you know, a humanoid ingesting whatever she's saying, but I'll literally have already forgotten it within microseconds of what she said if I don't care. Because that's, that's how you have to operate as a trader. You know, you're sitting there in the middle of some oil crisis at, at Goldman or VTOL and somebody starts talking to you about their weekend plans, you're like, yeah, yeah, absolutely. Uhhuh. And like, you, you, if you were asked to repeat what they just said three seconds later, you'd be like, I have no idea. Right. So I have that problem in my personal life. It's literally like your brain chemistry gets altered as a trader as a result of this. But if you want to be successful over the long run and you can't filter like signal from noise and you're sort of screwed. So I think at this point I would, you know, looking at Twitter, which is the fire hose of, you know, let's call it Fintwit is the fire hose of, you know, people like us trying to trade bitcoin, trying to trade SpaceX, trying to trade all this stuff. You have to do the equivalent. You have to filter out all the tweets about Starlink, TAM and fundamental blah, blah, the master optimists using a mass driver on the moon. And you just have to say, like, who's buying, who's selling? It's a stock and flow problem. It's just like bitcoin after a having right now a bunch of indices need to buy, Maybe S&P 500 needs to buy CH. Double check the rules, you know, check your notes and then when do the unlocks Occur. Let me just literally take a note of that in my notepad. And that's literally the only thing that matters.
- [28:30]
Avi
And, and, and speaking of that, I do want to give, I want to do want to give the people the actionable what's, what's actually happening here. So the way that SpaceX unlocks are happening is after the first quarterly earnings report, 20% of the stock will come off. Could be up to 30% depending on where SpaceX is trading. If it's consistently above 175, then 7% of the stock unlocks at 70 days, 90 days, 105 and 135 days after the IPO. And then 28% of the stock comes off after the lockup, after the second earnings report, second quarter report and then the final amount is unlocked after 180 days. So there are no, until August or September I guess there, there are no unlocks coming and the SpaceX is going to enter NASDAQ later this month. So we are at least going I think until August without anything major happening. I mean obviously we're going to get Those unlocks are 100% going to be front run. 100%. Need to say that again for, for emphasis. So you probably want to sell two weeks before if you own it. Just like there's no bullish unlock here. Those people are cashing out. But that's, that, that, that, that's very, that's very important. The amount of SpaceX in the NASDAQ 100 is adjusted for float to minimize volatility. Initial buying might amount to 7 billion to 10 billion according to Barron's. So I'm again, we're still bullish on SpaceX up until then. But you do, you do have to get, you do have to be a little nervous.
- [30:16]
Jonah
I'm neutral at these prices. I'm not bullish. I have no, I'm not buying or if I were long, I wouldn't be selling either. I'd be doing nothing and watching.
- [30:26]
Avi
I guess one thing that's important to talk about is definitely going to be the Fed meeting today at 2pm so that's coming up in 22 minutes. It's absolutely irrelevant in my opinion what actually happens because the rate cuts are like it's 99.9% chance, I think 97%. It says here that the range stays put. But what's really going to be important is what the Fed chair Kevin War says at his 2:30 meeting and basically the way that he talks about rate cuts. Because what's happened here is that we've basically priced out any chance of rate cuts in 2026. If he says things that might indicate that we, he doesn't worry about where inflate, he's not worried about where inflation is, he's aligned with Trump, then we could see a rocket in the markets. And you really need to pay attention to that because the way that this is then going to play out is we're going to get the craziest sugar rush that you've ever seen over the summer. And then probably if inflation keeps coming in high, that's what sets us up for a real unwind. I mean, basically the way that Powell ran the market, which I think was, which I think was good, is he would let it go and then let it come back and let it go and let it come back. And this gave space for valuations to grow and for the market to really work its magic and to make sure that companies weren't getting too ahead of themselves because the worst thing that can happen to them, it's all psychological. At the end of the day, it's much worse for the market to get way ahead of itself and then have a massive crash than it is to go up a little bit and then come back a little bit. Go up a little bit and then come back a little bit. That allows for greater resilience to be built into the markets. And so what we want to avoid, what we want to avoid is Kevin Warsh saying, hey, let's absolutely pump the shit out of these markets, get a massive rally and then inflation stays high and then we have to start hiking and that's going to be really bad. So I'm hopeful that he plays a similar game to the way that Powell was playing it, which is let's, let's bake in maybe 3 to 5% pullbacks to make sure that the market stays healthy so that people don't get in over their skis and we don't get a massive leverage buildup and we don't get a massive unwind. So that's what I'm looking for. Other than that, I think this is going to be a reasonably fine meeting. I don't think it's going to be too crazy. If you look at the other thing that I, I was just looking at is if you look at like CDS and you look at high yield spreads, spreads are fine. They're a little bit, I mean it says the, the US high yield spread was 275bips versus a long term 30 year average of 525. It is tighter than it's been in the past. But there is, there is room there and we're not. I think, I think what just back to the, back to the main point here is that the high yield is not really what matters. What matters is where the mega scalers can finance and what their credit looks like because it's, that's what's driving the entire market. So overall I feel okay.
- [33:41]
Jonah
Yeah, I feel okay too. I mean, when it comes to, when it comes to the Fed, I feel so on my back foot. I don't understand interest rates. I don't understand how the Fed does their thing. I do my best to do some research.
- [33:56]
Avi
That's why you gotta listen to forward guidance and capital flows if you want some real good insight into, into that aspect of the market.
- [34:05]
Jonah
I mean like no disrespect to Felix, I think he's a G. I, I don't like following the Fed. And it's minutia. When we're in a multi year hike cycle or a multi year cut cycle, it's like the trajectory is there. Who freaking cares? Week to week. I'm not, I'm not trading like twos, tens swap spreads or two and a half, three and a half swap spreads. It doesn't matter. I like, what matters is inflection points. And we, you know, objectively, maybe it may be sensible to tune into forward guidance from at the moment because it feels like a cut cycle could suddenly turn into a hike cycle. The reason why I think it won't is because of what just happened in Iran and we should talk about that. But a, an ocean of oil is about to whack the market. You're seeing it in crude futures. This is extremely bearish inflation, meaning I expect inflation to drop globally. Energy is, I think, what is it, like 10 to 40% of CPI?
- [35:01]
Avi
It was, I think it was 30, it was like 35 to 40% of the most recent rise.
- [35:05]
Jonah
I mean, honestly, like your gas prices are going back down. It's time.
- [35:09]
Avi
That's true, that's true. Maybe, maybe. I mean on the last pod, what we did talk about is we talked about turning bullish. You know, we were, we were a little bit nervous for a while and then we turned bullish on the last podcast. Basically. Basically because the market wasn't caring about inflation and because we've sort of pulled forward these ideas. We've pulled forward the idea of a rate of rate cuts like where we'd already priced them out. Like they basically the, the probability in 2026 went to zero and the market didn't really care. And so I'm, yeah, like I'm, I'm definitely bullish now.
- [35:50]
Jonah
I mean here I'm sharing my screen.
- [35:53]
Avi
Okay, share it.
- [35:54]
Jonah
We got, we got to talk about this. This is the bitcoin MVRVZ score. It hard bounced a couple of times off of this buy zone when the Z score is down to 0.25 ish. Look for indicators like this in everything that you do. To me, oil is the MVRVZ score for the broader economy right now. Inflation is the threat. Inflation is the driver of whether we stay in a cut cycle or we switch to a hike cycle. Oil is the pivot point for that. Oil just nuked from north of 100 to the 80s, maybe the high 70s. I haven't checked today, but that's that for bitcoin. MVRVZ went to the bottom like we're, we're flashing bullish across all of the underlying indicators across multiple markets now. And you know, I didn't mean to interrupt an oil conversation with a bitcoin indicator but like I'm just. No, it's broadly speaking. Yeah.
- [36:55]
Avi
The thing about bitcoin obviously that still worries me is just that it's lost mind share. I mean I'm bullish on the rest of crypto, but bitcoin has really just become the sailor asset and I think that's, that's just, that's just not where I want to put my money. Right. Right now we are in apathy mode. What I want is disdain. I want true disdain for this asset to buy it.
- [37:17]
Jonah
I mean, you don't think we're in disdain?
- [37:20]
Avi
Not yet. Not yet. Trust me, we're not yet. I know what disdain feels like.
- [37:25]
Jonah
Every crypto professional has pivoted to AI, literally everyone.
- [37:29]
Avi
It doesn't matter. It's not, we're not grave dancing yet. People aren't, People aren't grave dancing. I think we're going to need saylor to really talk about how terrible, you know, people are going to really like genuinely start talking about sailor blow ups and, and how bitcoin has totally lost its way and how nobody wants to own it anymore and the traditional media is grave dancing on it and Bloomberg has a front page article about is the era of bitcoin over? And that's really what I want in order to buy it because there's so much other opportunity in the markets. I mean we've been extremely, we've been extremely bullish on Hood, for example, for a long time. If you Remember the first time I think hyper liquid hit 60, I was sitting here going, I think that the hood hyper liquid ratio were probably really good. I think Robinhood was trading at about 75 at the time, hyper liquids at 60. Now Robinhood's at 108, hyper liquids at 75. Both have obviously gone up because both are obviously going to have a lot of appreciation just from the fact that they are tackling the traditional financial system and sucking in a lot of, a lot of volume. But Robinhood was overlooked for a while and they're really making inroad, they're really making inroads to capture, like to institutionally capture trading. And I'm just, I think that Robin Hood's going to outperform bitcoin over the next six months. Right? So like why would I, why would I bet on bitcoin when I can bet on something that if bitcoin goes up, benefits massively but also has all these other ways to benefit massively? Right? Yeah.
- [39:02]
Jonah
Why, yeah, why another one? Why hyper gamble on bitcoin when you can hyper gamble on Nia Rahman and Spencer Pratt, right? Like, oh, by the way, breaking news, shout out to our boy, Capital Flows. He just retweeted our stream. So thank you very much, Mr. Capital Flows. You are the man. Thank you for amplifying us. We love you.
- [39:23]
Avi
And if you, and if you haven't watched his stream, you should absolutely watch his stream.
- [39:27]
Jonah
Go check out the capital flow stream. That's actually, you know, more, more so than forward guidance, what you should be looking at. So anyway, yeah, it's just Bitcoin's not a hyper gamble asset right now. But once it's, once it's loathed enough. I still have a million dollar price, million dollar price target. It's obviously replacing the dollar, you know, in terms of certain global trade. Should we talk about, where should we talk next? Should we go through the mechanics of the Iran deal and what it means for markets? Do you think people care about that or do you think we should talk more about other investment asset classes?
- [40:02]
Avi
I, I think that, I don't know. Chat. If you're listening, toss in some questions and we can do a Q A here. If you guys have specific topics you want to talk about. Literally anything. But I think that people are kind of tired of Iran. I mean, we're over, right? It's in the past now, so it's
- [40:20]
Jonah
going to flare back up in my opinion. So it's something to monitor.
- [40:24]
Avi
Why do you think it's going to flare back up?
- [40:27]
Jonah
I think it's going to flare back up because the current deal is unsustainable. I think basically what the gambit is is like let's, it's basically a pause. Let's just let the oil stocks build back up. Let's let the Iranian oil fill global stocks, fill refinery throughput. Let's just let things normalize for a few months. Let's save our political hides here without getting flayed. And then I think it's going to be right back on, you know, on the one hand, geopolitically, some strategic, some strategic things were accomplished, right? Like if you assume that we weren't totally lied to, just give the benefit of the doubt to, you know, the American government for a second. You don't have to actually believe this, but let's steal minute. Let's assume that Iran was, you know, let's say months away from being able to develop a nuclear weapon, right. And test one successfully. This probably set them back a couple years. They lost their leadership, they lost a bunch of scientists, they lost a bunch of material. This, this kicked that can down the road objectively, but it didn't kick it. You know, technically they, they've agreed to never develop a nuclear weapon, but they've, you know, they've lied in the past, so they'll probably keep trying. That will, that is a red line for Israel and for the United States. I, you know, may or may not be a red line depending on who's in charge. If you have people who believe that the ayatollahs can be, you know, negotiated with, then America won't care if they have a nuclear weapon. They'll treat it like a Kim Jong un situation. If you have a somebody with Trump's mindset or Marco Rubio's mindset, it is a red line. But it's whether or not it's a red line for America, it's a red line for Israel because they, they are, no matter who's in charge of Israel, the leadership, even the most left wing leadership will never actually believe they can negotiate with Iran. Iran wants. Iran literally has a countdown clock to Israel's destruction in their Central Central park or whatever square. So there will be another war. Mark my words. This is just a pause for I, I think the pause is going to last nine to 18 months, enough to let oil stocks build back up before we get the next salvo. And the nuclear can has been kicked into or beyond that window. So I think markets should be stable between now and then. That's my take.
- [42:49]
Avi
I think that's very reasonable. The main problem that I see, which I'm. I'm agreeing with you. The main. The main problem that I foresee is that Israel obviously is breaking with the United States in many ways on this Iran deal. And Bibi said himself, I don't always see eye to eye with Trump. And that means that you're right, we could see another flare up. But I get the feeling that the United States will stay out of it. And if the United States stays out of it, then I don't think Iran does anything to close the Strait of Hormuz. They just basically, like, the war will be direct. Israel, Iran and Iran probably won't hold the world hostage if it's just Israel, because then that would really turn the world again. Like, anytime Iran gets into a problem with anybody, then the fear just becomes, oh, Iran could close destroyed of Hormuz. This is not a tenable situation. Like, the whole world needs to come together and take down Iran. Does that make sense?
- [43:48]
Jonah
Yeah.
- [43:49]
Avi
So that's one of the main reasons why I don't think that we're gonna. We're gonna flare up.
- [43:55]
Jonah
Yeah, I mean, I. I had. I think the contrarian take there is that if Israel unilaterally attacks Iran, they shut the Strait of Hor to try and hold Israel hostage and get turned world opinion against Israel. The new leadership of Iran, I was doing some research. They are sort of. They're real hardliners. They're guys who have been, like, sort of puppeteering the military and some of the. Some of the political decisions from behind the scenes. I forget his name. The main guy now who's like, basically drafting all of the communiques of Mojtaba Khamenei, who's the de facto nominal leader, but apparently he had, like, most of his face and jaw burned off by the explosives that were dropped on his bunker. So he's like, kind of half alive, half dead, but, like, in his name. Communiques are being issued by this guy who's like a real extremist, like, Secret Services hardliner. He was pushing for the Iran Iraq war to continue in the 80s. He ran for president a couple of times. He got, like, less than 3% of the vote. He's a real psycho. He's the dude running the country, you know, probably an order of magnitude crazier than the Ayatollah, which you could say is, like, bad, mission not accomplished. On the other hand, like, he's way less effective and way less intelligent and way less credible, especially behind the cardboard cutout. Of Mojaba. So basically where, where we're at is like he's the guy calling the shots. He will absolutely try to hostage. I think he'll try to like ransom the straight of Hormuz to try and turn global opinion against Israel. I just don't think it'll work Right. So I do expect another flare up of conflict if they get closer to a nuclear weapon. I just don't think, I think it'll be Israel alone this time. I think America can stay out of it and I think there's a risk that it shuts the Strait of Hormuz, but I don't think Israel will do that until we restock oil supplies. So I just, I basically think we're clear through to 2027.
- [45:50]
Avi
Yeah, no, I think,
- [45:57]
Jonah
Hmm.
- [45:59]
Avi
I think that's probably, I think that's probably right. I mean in the, in the meantime, just gotta, just gotta hope that potentially what we get here is we get a softer Iran because they know that they're less confident than they were before because a lot of their top leadership was. Leadership was taken out. And so I mean, I guess we have to, we have to wait and see on this. But one thing, one like one outcome that I'm trying to work through right now, reason about is with the war with Iran over and geopolitics seemingly slowing down, there are two, there are two paths forward here. One, Trump can say I've realized that I don't want to have the second half of my term marred by any geopolitical fights. I picked a fight with China over the tariffs, I picked a fight with Iran. You know, I picked a fight with Venezuela. And because the fight with Iran didn't go particularly well, the first two went all right, obviously Venezuela, great, the tariff one, I say all right, but obviously he was struck down. So maybe not so much. So he's kind of one for three right now. It's possible that he just takes his foot off the gas when it comes to geopolitical issues. Which would mean the theory or the thesis for America first assets might end up weakening. Right. So for example, critical rare or the, the thesis that I've had for a long time re like remx, that trade I've had on for almost a year at this point. Do I need to get out of that now? And this is something that I'm thinking about and I think potentially because we might just see less geo. We might just see less conflict in the next two years, especially heading into the midterms, which is going to drive a lot Less investment into these companies that are protecting America's interests, like usar. Remx Uranium doesn't really have anything to do with this thesis. But I'm thinking basically, if you're heavily allocated to the America first defense contractor thesis, maybe you need to get out a little bit. We got the, we got the Fed meeting coming up in five minutes, so unless anybody has anything else that they want to, that they want to talk about, maybe we wrap up here. Jonah?
- [48:17]
Jonah
Yeah, let's wrap it. Just, just as a quick preview, our friends at Morgan Stanley have warned that the Fed under Warsh will adopt a quieter communication style like Vegar, scaled back fewer press conferences and reluctance to provide forward guidance. So, again, I'm the wrong guy to listen to on interest rate stuff. But what I would be looking for is like, what kind of poker player is this guy? Does he play, you know, does he play with the cards face up or face down? And if it's face up, great. We can all make decisions based on if it's face down. Like, I don't know. I. If we're, if we're approaching an inflection point in rates and the trajectory of rates tighten up the risk. But again, because oil just collapsed on the back of the Iran stuff, I don't think we're facing an inflection point. I think that was a gift to Warsh. He doesn't have to turn the ship around and stake his early reputation on a potentially disastrous pivot. So I think it's just rates lower for the foreseeable future. Rate cuts are not dead.
- [49:26]
Avi
Okay, guys, I'll leave you with this. The market is ripping. You are going to make so much money. Everything's going to go so well for you. And tune in on Friday while I come here and tell you about how amazing everything's going. Oh, last point that I'll make, as always, we do have a terminal at 1000x money. Go use it. Go sign up for it. If you're missing us and you're missing our takes, this is a great place to go. You can ask it anything and it's probably going to answer like me and Jonah. Super useful. Click it right here if you haven't already. I'm going to do the whole YouTube thing, like, and subscribe. It really helps us produce content for you. Remember that it is important for us to have you as weekly viewers and listeners so I can continue to do my job, which is come to you every week now, twice a week, because Fridays at 1pm it's me. Yeah, this is I can't do this. I can't. This. I'm so fucking bad at this YouTube thing.
- [50:23]
Jonah
You're such a. You're such an authentic person.
- [50:26]
Avi
You can't. Yeah, I can't chill like this. Forgive me. Forget for.
- [50:31]
Jonah
I like the terminal, though. I use the terminal of performance.
- [50:34]
Avi
It's so weird going from managing, like, going from managing billions of dollars, like, basically retiring and then realizing that this is actually super fun, and then doing this twice a week. Like, I don't think you guys understand. This is really fun for me.
- [50:53]
Jonah
And it's fun for me, too. It's fun for me, too. As we learned from the. From the bankless guys, when podcasters try to trade, it's not fun. When traders try to podcast, it's pretty funny. It is.
- [51:07]
Avi
It is pretty funny.
- [51:11]
Jonah
All right. Good times. I'm a jump.
- [51:13]
Avi
That's what's needed to eventually get acquired for 100 mil by somebody later. We are never going to sell out. I'm not selling Thousand X ever. Go yourself if you want to buy us. When truly try to podcast, like, fully go yourself. Don't need your money. Like, if OpenAI came to us and tried to buy me for 100 million. No, I would for sure say yes. I don't know what I'm talking. Like, I would 100% if they try.
- [51:39]
Jonah
If you said no, I would literally. It would be like. It would be the scene in Full Metal Jacket. I would. I would literally, like, strap you to your bed. I would sneak up on you in the middle of night, strap you to bed and beat you with a bar of soap in a sock until you said you were willing to sell for. For $100 million. Anyway, I'm.
- [51:57]
Avi
I'm not. Yeah, no, I'm selling for 100 million. Sorry, guys. Anyway, this is. This was a fun one. One minute to the Fed release. Nothing's gonna happen. Don't worry, guys. This was. This was a great Stream. We got almost 4, 000 people viewing.
- [52:10]
Jonah
Great stream. Love you guys. Thank you. Capital Flows.
- [52:12]
Avi
You're the man.
- [52:13]
Jonah
Tune into Capital Flows and us in the future.
- [52:15]
Avi
All right, take care, lads.
- [52:16]
Jonah
That's
- [52:20]
Avi
foreign.
- [52:34]
Jonah
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 expressed 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.