Brett Schaefer (4:45)

Depends on each company is a little different but yeah generally big tech you get and again depends on what company you're looking at But a lot of the times they have traded at 30 to 40 times earnings and the few times they fall down to that 15 times range it's typically been a good time to buy now the future you can't just use that for any company and go oh it's an automatic buy. You got to do your own analysis. You got to see what's happening. If see is this moat totally deteriorated But I mean hey look at and this worked out with one of your predictions as a little teaser as well. Alphabet is what up 100% from the lows in April? Something like that?

Ryan Henderson (5:23)

Yeah a little little bit more from the lows year to date I think it's like 60 to 70% but yeah from the April lows I believe it's more than a double the and the the issue and why I say that it might just be a good policy to say to any to create a list and say anytime any one of these get into a mid teens EBIT multiple or lower, buy some is because it's super easy to get shaken out when they get there. And you saw it with Google like there was a lot of bad press around Google at the time. The paid clicks had basically dropped to its slowest growth rate in maybe their like last two decades. The Apple VP of services had come out and said that they're seeing declining search volume for the first time ever. And then there was also kind of this just general belief that ChatGPT was going to take over and that like traditional search was going away. Now part of this is credit to Google because they went out and produced a successful model in Gemini and they kind of rolled it out in a smart way I thought. But yeah, that was the most successful investment for me on the year and I have since trimmed it as well. I think it's basically at the same price that I trimmed it at but that has carried a lot of my gains for the year. Largest detractor for me this year was remitly. However I also find that to be the most attractive opportunity in my portfolio right now. So I'm not like, it's not like I'm eager to sell that one. And then the second best performer was actually coupang which is interesting.

Brett Schaefer (7:19)

It's had a drawdown but you had some good timing. Did you? I guess heading into the year was. It was a bit lower than this.

Ryan Henderson (7:26)

Yeah, I think I can double check my cost basis but I think I'm still up like 20something percent year to date there. Well could be wrong.

Brett Schaefer (7:37)

Maybe you're, maybe you're looking back at all time because year to date I don't think it's been below $2020 but you might be looking at again when we were first looking at the company it wasn't that 14 to $15 range and now we're at 22. I'm just looking live but yeah, maybe.

Ryan Henderson (7:54)

Year to date that wasn't that best performer but since the cost basis it's up there with at one point it.

Brett Schaefer (8:01)

Was my best performer. Year to date it was at 3350. It's now in like a 305030 to 40% drawdown so hasn't been fun the last few months. But I agree with you. One of my favorite opportunities at the moment. Yeah.

Ryan Henderson (8:16)

And looking at what are the two opportunities I'm probably the most excited about in my portfolio heading into 2026. It's kind of ironic that it's Coupang which is one of my best performers overall, not year to date, but based on my cost basis and remitly, which is my worst performer actually in the portfolio overall, not just this year, but this year too. I like them both and I think that's a good sign that I'm not just maybe anchoring to recent performance.

Brett Schaefer (8:52)

Or.

Ryan Henderson (8:53)

I'm not buying only my winners or watering the weeds kind of thing. So yeah, those are the two I like the most. I guess Google was very helpful this year. It has historically been big tech in the mid teens has historically been a safe play and it's your.

Brett Schaefer (9:15)

That's your favorite buy. Yeah, I mean it's worked out when I can't remember. I think this would have been 2022 when Amazon was below 100. That's another one of those where you kind of went, you know, this feels like a pretty easy hurdle there now that their actual earnings weren't that strong. But if you're someone I can kind of look forward and say hey, even if they get just 5% operating margin, things look pretty nice right now. One that we both I guess missed. That was the biggest big tech opportunity was meta in late 2022. That's one where we had a bit of egg on our face. Did not look well and it did not look good in 2023 and 2024. But anything else about your portfolio, Ryan, how you're feeling right now, Any mistakes, anything you missed, anything that you went oh, this was a good like it might not have dollar wise or return wise been a good decision like on paper yet, but what is one, one maybe decision you made this year? We go, all right, I have high conviction on this one or something that you went, eh, this probably is gonna turn out to be a mistake.

Ryan Henderson (10:25)

I would say maybe the only one that I there's probably more that I missed just outright and just didn't buy at all. I guess when I go back and look at some of those small cap of the weeks that we visited, Kraken Robotics and Dave were both huge successes. But I wouldn't really, I wouldn't say those were like in my wheelhouse. The one that maybe upsets me a little bit is that I bought Taiwan Semiconductor at what I thought was an attractive multiple and it had traded down a little bit on some news and management seemed super optimistic. But I just made it a small. It was like a 1% position and that's kind of another one that's big tech in a way like I guess big manufacturing. But it's a huge wide moat if you think you're getting at an attractive multiple. And for that one, you know, you have to do a little bit of forecasting. You have to have a belief of what the future is going to look like because there could be some cyclicality I guess. But I wish I sized that up more than I did because it's been a good performer since.

Brett Schaefer (11:31)

Makes sense. Makes sense. And I will use this to shout out on our sponsor right now, but has been a sponsor throughout the year and was a nice sponsor for us. Portcido It's a very helpful analytical tool to look at not just your overall portfolio performance but what specific stocks on a percentage basis and on a dollar amount actually contributed to your returns. You can really help with oh, did I size this correctly? What actually hurt my returns was this a big winner. It felt like a big winner, but actually on a dollar amount didn't really contribute that month. So it was very helpful for doing this episode and I guess that can lead into my portfolio review. My money weighted return was roughly 11% this year generally as Ryan is as well not focused on one 12 month period. At one point this year I was slightly beating the S&P 500. I think if we look now it's just below. We're tracking it depending on where we're trading. But in general I think I was pleased with my decision making in 2025 outside of a few purchases which we'll get to below. First, let's talk about the good the top three performers in the portfolio on a percentage basis which were Airbnb, IBKR and Grupo Omab, which is the northern airport operator in Mexico, not in this order, were the best three performers in 2025 and they were all new purchases last year. Now my largest contributor on a dollar basis by far was Nelnet, which again I'm happy with because I well it turned into 20% of my portfolio but was at least 15 to 20% of the portfolio throughout the year. So the fact I sized that up and was correct about it, at least so far I'm pretty happy with. Now let's go to the bad performance would have been better in 2025 if I did not start shorting again. The small percentage of the portfolio I like to remind the listeners on this the high flying pre revenue what I want to try to say without swearing businesses along with 3 mega caps I believe are fairly overvalued or highly overvalued. Palantir, Tesla and Apple that I think are going to be good funding shorts over the next decade, the I guess the pre revenue ones, the high flying ones, that would be the nuclear companies, the evtol companies and the quantum companies. It also does not help that I had a good percentage of the portfolio in the long term treasury bond etf, which I think is going to be a great hedge if and when the market ever crashes. Looking at all of these though, let's say the market, you know, it might not turn in 2026, it might not turn in 2027, it might turn in 2028, who knows, it could be any one of the next few years or it might not happen for a few or longer. But I believe all of these are still fantastic counterweights in the portfolio. And the fact that it dragged a bit on returns in 2025 I think I was happy with because or at least it's acceptable for me because it didn't kill the overall portfolio. It's still giving me flexibility as an investor. I still have more money I can deposit each year, each quarter into my portfolio and then during a downturn I hopefully will have the firepower to reinvest when my watch list stocks or some current possessions are cheap. If we look on a dollar basis for the largest attractor by far this year was for midly global, what happened? And if you actually look at the stock, I believe it isn't. You can correct me if I'm wrong here, Ryan. All right, I'm gonna just look at it in real time, year to date. Well, if we go back 12 months plus from now when we were first buying in at least and I was first buying In October of 2024, I think Ryan did as well. They're about flat from there a year to date it's down 35%. But the mistake I made is to size up a little bit more into the position when it was above $20 a share. I think I look at my transaction history in Porsido, which my favorite tool I found on there is you can go and keyword search the ticker to see exactly when you were buying or selling something which could be either nice or very illuminating. Not a bad purchase, but I bought some at $23, I bought some at $20 and I bought a little bit more in the 17 to $18 range. That's been a big detractor so far. The mistake maybe was buying whether it's going to be a revenue decel coming along with flatlining operating leverage for a few quarters. Maybe I should have been able to foresee that and waited for that to Happen. I don't know. I think still over the next few years my cost basis will prove to be a good buying opportunity. I'm very confident in the business but for the last 12 months it has nothing less been a large detractor to my returns. That's about it. Anything else, Ronin, before we head to.

Ryan Henderson (16:13)

Predictions review Now, I actually made the same mistake as you, or at least it's mistake at the moment, which is I sized up my remitly position on the way up, which is something I don't typically do. But I think maybe I was just inspired by David Gardner at the moment and they had accelerated revenue growth. It seemed like there's just ton of momentum at the business and so I sized it at a higher price than my cost basis and in total I'm down I think 25% on the position. But like I said, I think it's in a good spot right now. The other one I mentioned, you called it out as well, is the Argentine airports. Well, I guess it's more than just the Argentina airports, but that was a big opportunity and it was one where I think as I'm looking back at my portfolio, one of the biggest mistakes I make is that I buy positions. And then in my head I think, okay, I'm long that stock or you know, I have a, I'm a shareholder of that stock and I don't really appreciate that it's going to if I have a 15% position or a 10% position, it is so much more important that I am right on my big positions than being right on a bunch of small ones. So that's kind of my takeaway for myself this year is focus on my. It's fine to have these starter positions and you know, kind of as tracker stocks, that's kind of how I treat them. But I need to be very confident in my top four or five positions if it's going to be heavily weighted, you know, I think for my top three or top four positions, I think it accounts for about half my portfolio. No matter how well those starters tracker stocks do, if I have bad performance in my top positions, it's going to be a tough year. So. So that's probably my biggest takeaway moving into 2026. Do we want to look at our 2025 predictions? It's always a little slice of humble pie. I've found maybe one that we got right. But usually it's kind of a slice of humble pie when we look at these.

Brett Schaefer (18:29)

Yeah, to be fair, they're supposed to be really slightly Bold predictions to make it fun. But why don't we go? Well we can just alternate starting with you. You had three, I had two to make it five for 2025 we'll start with one of yours, which you were the only one that had any. Right. So it will start out on a positive note. If you're a regular listener to chit chat stocks, then you know that we love investing in international stocks. And no brokerage compares to interactive brokers, otherwise known as ibkr. When it comes to international trading you can easily trade assets worldwide using a multi currency IBKR account in 160 markets, 36 countries and 28 currencies with low fees. Compare that to your existing brokerage and its limited trading ability and high fees on foreign exchange. There truly is no comparison. Trade stocks, options, futures, currencies and bonds globally with IBKR's unified brokerage platform. I wouldn't use any other brokerage for my investing needs. Switch to IBKR and level up your international trading game today. If you're interested in checking them out for yourself, head on over to IBKR.com Interactive Brokers is a member of SIPC.

Ryan Henderson (19:44)

Yeah, this wasn't that bold, but it was basically the take was that the Magnificent Seven was going to have a good year. And my exact, my exact prediction was that the Magnificent seven equal weighted, which looking back on this I'm surprised I included Tesla. I feel like I just didn't process that. Magnificent Seven included them.

Brett Schaefer (20:08)

Biggest contributor, right?

Ryan Henderson (20:10)

Yeah, they ended up being the biggest contributor but well actually other than Google, I think, I think Google might, yeah.

Brett Schaefer (20:18)

It'S up there though. Better than 12%.

Ryan Henderson (20:20)

Yeah, the Magnificent 7 equal weighted will be up by more than 12% in 2025. That was my prediction. This did prove correct. The Magnificent Seven was up by 24% year to date on average, led by Google and Tesla and then the worst performer being Amazon. But all of them had positive returns in 2025 and Amazon was the only one that had single digit percentage returns.

Brett Schaefer (20:48)

And that leads into my prediction that I got wrong. And this was Amazon finishes 2025 with the largest launch market cap in the world. Completely wrong on that one. And I ran it back from the year prior, did not work out whatsoever. I'm a believer that Amazon could have the largest operating earnings in the world from a single company. Maybe excluding, I don't know, Saudi Aramco or let's just exclude any of those out there. But even of just the mag 7 I think they have the highest earnings potential. But the key there Is could they could have those earnings this year. I think it showed. Again, they have no cost discipline. We talked about on the episode prior from last Wednesday in detail. We had a nice debate on that. I guess I should not have been fooled by that. They completely stalled their operating margin expansion. However, regardless of making any absolute prediction of, oh, they're going to finish the year the largest market cap, they're going to be the best Mag7 in 2026, I think. And maybe you can tell me if you agree or not, this is the best risk reward in big tech over the next three years. Yeah.

Ryan Henderson (22:02)

The only other one that I'd maybe put in there would be meta. At the moment it's technically the cheapest on trailing multiples. But I agree that was actually, it was going to be one of my biggest predictions for 2026. I've since removed it because I don't really see what the catalyst is for 2026 specifically. But I do think, like you said three to five years, this feels like one of the best risk rewards. And it feels like of all the big tech companies, they have the most hidden profit potential. And I say hidden just because it's like they aren't. They aren't showing it now. It's not hidden. People know that they could be profitable, but they have the highest profit potential.

Brett Schaefer (22:48)

That.

Ryan Henderson (22:49)

That's not yet reflected.

Brett Schaefer (22:51)

Yeah. Well, yeah, it's going to take some harsh. How would we say it, cost cutting if they're going to get there. Because I saw today that they announced a new partnership for Alexa plus with Expedia Square and Angie. Heavy hitters. The software space. Yeah, that just kind of encapsulates everything.

Ryan Henderson (23:14)

Yeah. I honestly have no idea what that partnership could entail. I really don't like.

Brett Schaefer (23:22)

Yeah, I agree with you. Okay, let's move on to your second one. It's one that unfortunately is a company that I am short. Luckily, I didn't short it to start the year, although it has been a slight loser for me. Was the company Ryan.

Ryan Henderson (23:36)

Yeah. My second prediction was that Palantir would get cut in half. And I could not have been more wrong. The Stock finished up 157% in 2025 so far. And actually it's funny going back looking at my commentary and it was like the multiple is just insane. It trades at a forward price to sales of like 46 or something like that. Let me check it now because I think that insane multiple might have doubled.

Brett Schaefer (24:10)

Yeah, we're at about 120 or 115 forward. Maybe not trailing, I think we're at about 110, 120. Either way, it's.

Ryan Henderson (24:23)

Yeah. At the start of the year, the multiple, the forward price to sales multiple was 41 and today it's basically 82. So yeah, as crazy as I thought the multiple was then, it has doubled. So I could not have been more wrong on that. I did not short it, so I don't short.

Brett Schaefer (24:45)

We can look at. Let's. We can look at my maybe percent return on Palantir year to date. I think I can pull it up quick here on Port sideo. Let's look. Oh, it says posit. Oh no, it's for the day. Yeah, that was not gonna be right. Palantir percent. Ooh, down. Just remember the tiny position, it's a little less than 1% cost basis, down 49% from my cost base and I still think it's going to be a fantastic funding short over the next decade, just given the absurd valuation. I'm going to debut this term on the power. I think maybe I've mentioned it before with Shopify, but I think we can officially call when a stock hits that 50 times sales, a hundred times sales range. I want to call it the Palantir zone. I think term. Yeah, they're the kind of the quintessential one. Right now we're seeing like Rocket Lab enter that there's some pre revenue ones out there that maybe would also be included. Palantir's entered the Palantir zone and it is expanding the definition of what a growth stock can trade at because 100 times sales, man, it's crazy.

Ryan Henderson (26:03)

What gets me is so for those, there might be some people listening to this podcast that are like, haha, suck it. You were wrong. You were such a skeptic. Which you're right, sure.

Brett Schaefer (26:18)

Yeah.

Ryan Henderson (26:20)

But it be if we're doubling down on that, like say we both double down on that, it becomes much harder for the price to sales multiple to double again when it's had a $460 billion market cap. However much, however much momentum you have, as you know, like think you love your shareholder base, you feel like you're on their team, you're going to have to double that again, basically, or everyone's going to have to double their wealth and buy twice as much Palantir. If you want the multiple to double again. Do you think Palantir's price to sales multiple forward, right now it's at 81. Do you think it finishes the year below 40.

Brett Schaefer (27:12)

Forward? Can we use trailing? Trailing is easier to sure.

Ryan Henderson (27:18)

So trailing 40.

Brett Schaefer (27:19)

I'll still do 40.

Ryan Henderson (27:20)

I'll say below trailing at the moment is 120. How about this? Do you think it finishes below 60?

Brett Schaefer (27:28)

Yes, I, I feel like the, the base rate. Do you want to use that? There's not very many instances in history of stock trading at above 50, 60, 70 times trailing sales. Let's shopify. Barely traded there. Stock totally collapsed on any sign of weakness. I think that's more likely than not to occur because the expectations are so wieldy that no matter what they claim on revenue growth, contract stuff, it's just not going to work out. And eventually once the momentum trade ends it's going to reverse in a big big way. Yeah.

Ryan Henderson (28:16)

And it's like some of this is out of their control. What happens when a big customer drags their feet on an agreement renewal or a price increase or a new customer contract and all of a sudden your revenue growth is a little slower that one quarter when it's priced for perfection you got to be perfect. And some of the sometimes especially in large commercial B2B software there's quarterly like some things don't happen on that three month span. Sometimes it carries over to the next quarter or whatever. And I, I just feel like there's a chance we get like a temporary slowdown and it just craters the the stock. But anyway that was my second one and I couldn't have been more wrong. So so far I'm way off. What was your second prediction?

Brett Schaefer (29:10)

The second one was Nintendo's US ADR will double to $30. This one was much more painful. I'm also a shareholder so it was painful. Realistically I was even feeling pretty confident, a little cocky when it hit $25 this summer. We were ahead of schedule at that point but today we are below $17. They totally fumbled at the goal line. Still a solid 14% return before dividends year to date. So you can't be unhappy with the stock returns. But this one does stink. There are RAM memory issues that really do not change anything about the long term thesis. But I think the stock remains incredibly cheap. The forward returns over the next few years are going to have to be quite strong to make up for a few years of basically nothing. I still think they can do it. I'm pretty confident this business numbers look really great. Yeah, didn't happen this year but it was a fun ride to track. That's all I got to say.

Ryan Henderson (30:12)

Yeah, you were feeling a little confident come summer which you should have been. I mean it went. You were well on the way to 30. Yeah. Still a decent return for the year, so nothing to be too upset about. All right, let me go with my third prediction from last year. I said Google will be the largest company in the world by the end of 2025. I did not quite get that one correct.

Brett Schaefer (30:43)

Close. Almost a comeback. Almost made the huge comeback.

Ryan Henderson (30:47)

I was directionally correct. They went from the fifth largest company in the world to the third largest. But they are still today behind both Nvidia and Apple. Honestly, I maybe could re up this prediction for 2026 and double down here and say that they will be the largest in the.

Brett Schaefer (31:07)

I like. Yeah, let's. We'll do that one as an honorable mention. I like it. I think if I was forced to choose a company I would pick them as well.

Ryan Henderson (31:18)

And it's not necessarily that. I think there's like a whole bunch of room for Google to like. I'm not that optimistic about Google from here just because the multiples doubled in six months. But I'm fairly pessimistic about Nvidia and Apple. Not I'm not like super bearish, but I, I would be. I could see them. If they both drop 20% and Google holds, there's a chance Google's the largest company in the world. All right folks, before we move on, we need to tell you where we get our data. Fiscal AI Fiscal AI is the complete stock research platform for fundamental investors. I use the platform pretty much every single day. You'll see the charts in our podcast, you'll see it in our newsletter. This is our one stop shop for stock research. They've got up to 20 years of financial data on all companies globally, including the largest company specific segment and KPI data set on the Internet. That includes metrics like Duolingo's daily Active users, Oracle's backlog, Rocket Lab's revenue per launch, and literally millions more data points. They've also got earnings call transcripts, ownership data, equity research reports, and much, much more. If you want complete financial data at your fingertips, you need to check out finish Fiscal AI and if you use our link Fiscal AI Chit chat, you will automatically get two weeks of Fiscal Pro for free, no card required. If you want to upgrade, our link will also get you 15 off. Again. That's fiscal AI slash chit chat. The link will be in our show notes.

Brett Schaefer (32:51)

If you regularly listen to Chit Chat stocks, then we know you love analyzing individual companies. We do too. That is why I, Brett Schaefer, co host of the show, decided to start writing the Emerging Moats Stock Research Service. Emerging Moats produces regular stock research reports on companies with emerging competitive advantages, regular updates on stocks I own and on my watch list, and has full transparency to my portfolio transactions and returns I cover under the radar. Emerging Moat companies with prior research reports on Oscar Health, Kraken Robotics, the real brokerage, and much more. Emails will be sent out on a weekly basis. Explore the service today and find your next great stock by going to Emerging Moats. The link will be in the show notes I agree. Nothing to add. Let's move on to 2026 predictions. We're going to do three each. Remember, these are bold predictions to be fun, a little bit provocative. Provocative with the listeners maybe get you thinking. And they're not entirely based on our own portfolio, though some, as we will disclose we either own or are short hollow. First, this one maybe is a two parter that is going to make it difficult but I want to thread the needle here with what I think is going to happen in shows when there's kind of all bark, no bite with the thematic investment trade and then some bark, an actual bite with a thematic investment trade. The first prediction is that the AI boom continues. However the mini bubbles in nuclear, evtol and quantum stocks collapse. And full disclosure, I'm short all three of those thematic investments right now. First kind of my notes here. Even if AI OpenAI wobbles a bit and Oracle is maybe considered, this might be too harsh. But a joke of the hyperscalers, they're free cash flow negative right now. They seem to be signing very uneconomic deals. The reporting out there is that they're extremely inefficient in building data centers using like something like a billion dollars worth of generators was some note I saw that might be destroying your roic. But the big four Alphabet, Amazon, Microsoft and Meta still have that partnership ecosystem. They still have the cash flow to keep growing AI spend. You have others out there. It's hard to imagine why this stops in 2026 from these core people. I mean you could have the core weaves might collapse. You could have an oracle that stops. OpenAI again might get into a difficult spot given their projections and how aggressive they are. But the big four can keep things up outside of a huge energy bottleneck. And second, Nvidia revenue growth may slow down, which I'm not going to take one of your predictions here, but I think that could impact the stock price. So that's even if Nvidia's revenue growth slows down, that's not the End of the world for AI adoption, which I think may even accelerate yet again. I got access with the, I think it's called the Google something subscription. I have no idea. They have a lot of names for things. But I recently got an email. Hey, you have access to Gemini 3 Pro and it is really, really good. It's incredible. Incredibly valued to me it's 20 bucks a month and I think they could probably upcharge me on an even higher price. Third, the nuclear, Evtol and quantum stocks are all pure stories. They will likely end in zero execution. There's either no revenue here or fake revenue. These are classic niche bubbles. We've seen it time and time again over the last 10 to 20 years. 3D printing, solar energy, electric vehicles. You can add any you have in here. Ryan Cannabis. These things go up 10x. You realize there's no business models or broken business models and the stock prices generally collapse.

Ryan Henderson (36:50)

So how are you going to measure this prediction?

Brett Schaefer (36:53)

Oh yeah, good question. I think. Well, the nuclear stocks or the nuclear quantum and EVTL stocks I think need to be down 80%. Is that a fair.

Ryan Henderson (37:07)

Honestly think that's like do you have them picked out? Like do you.

Brett Schaefer (37:10)

Oh, okay, yeah, the nuclear stocks, that's Oklo and Nanonuclear which is an interesting story we don't need to get into. And new stale power EVtols, both Archer and Joby Quantum, there's the big four. Some of my favorite companies out there, Rigetti Computing, as some people like to call Rigatoni. There is Ionq, there's D Wave, Quantum and there's Quantum Computing Incorporated which they got very creative with their name. Those are the ones and they're all shorts in my portfolio. On the AI side I'd say AI capex spend across the hyperscalers the big four higher in 2026 than 2025. This one feels unlikely but if I was at the casino I'd get some good odds on it.

Ryan Henderson (37:57)

Yeah, the AI Capex thing, I think that's already been sort of telegraphed a bit.

Brett Schaefer (38:02)

So that can change though, that, that could change, right?

Ryan Henderson (38:06)

Well, I think a lot cap have already been made probably you can halt.

Brett Schaefer (38:12)

But you can halt those.

Ryan Henderson (38:13)

I mean they're someone else's. They are someone else's remaining performance obligations.

Brett Schaefer (38:20)

So yes, and they haven't. If it hasn't gone into the ground yet, it's not Kex.

Ryan Henderson (38:26)

I know, I'm. I would just be surprised, I would be very surprised if Capex was not higher across the big four next year. However, I would measure this by does the. Does it close higher than their projections for next year? Like if they're. Because that's where I think we're going to see AI get hurt is when what they are talking about their, their full year capex estimate for next year when they start revising that down.

Brett Schaefer (39:02)

Okay, but we're early on this because they haven't given out 2026 guidance at least I don't think so. I think some of them have on.

Ryan Henderson (39:09)

The number for CapEx. Yeah, yeah, yeah.

Brett Schaefer (39:12)

Pretty sure 2026. All right, look them up. Yeah, fine. So I'm gonna find them while I'm talking because what I'm looking is they have the 2025 figure which I believe is roughly about in between 300 billion and 400 billion. My thinking is that the guidance at the start of the year and what they actually spend throughout 2026 is going to be. This is a small part of the bet, a two parter it is fairly likely. Like that is not going to quote unquote pop as some people are proclaiming. Even if I think part of the industry feels bubbly. OpenAI feels bubbly, Oracle feels bubbly, Core weave feels bubbly. Some of the other players out there and then anything associated with this nuclear evtol quantum stocks are going to fall by the wayside as the actual value out there which is flowing to the big tech companies is going to continue to be materialized. Did you find anything for me, Ryan?

Ryan Henderson (40:10)

I think you're right. So. Well, I'm just checking Google. This is the first one but it says we now expect CapEx to be in the range of 91 to 93 billion in 2025. I forgot that they were on Q3 up from our previous estimate of 85 billion. Looking out to 2020, 202026 we expect a significant increase in CapEx and we'll provide more detail on our Q4 call.

Brett Schaefer (40:34)

This is not a high hurdle across the base but I think throughout the year. Yeah, it's not guaranteed that it's going to be higher. There could be some revisions downwards. Things go wrong. All right, we're going too long on this one. What is your first one, Ryan? Also MAG seven related? Not the rest of them? Not entirely MAG seven related. Just for people that get bored with this.

Ryan Henderson (40:53)

Yes. So I was right on Mag 7 last year. I'm doubling down on my Mag 7 senses. I think the Mag 7 equal weighted return will be negative this year. So the only I could be wrong here but what I'm thinking is looking at the Mag 7. Most of them feel richly valued other than maybe meta. Like if we're looking EV to EBIT right now on average and I'm excluding Tesla because Tesla would distort the average much way higher. The trailing EV to EBITDA is 30 times, which is up a lot from last year. And last quarter we saw big tech put up pretty good numbers across the board and they got virtually no reaction from investors. And I feel like historically when that's happened, like you. You beat and raise and investors don't budge, that's a sign that like you're, you're kind of at sort of a valuation ceiling. Like when investors are expecting beat and raises constantly and that's what they deliver and it doesn't. Nothing happens. It's like, okay, this feels like a recipe for multiple compression. So good, so good, so good.

Brett Schaefer (42:12)

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Ryan Henderson (43:04)

A lot of people who will give.

Brett Schaefer (43:05)

You money for them. Sell on Depop where taste recognizes taste. Yeah, the animal spirits are definitely there. There are people just if you're a listener to the show, you may or may not be in this industry or you might just be an individual like ourselves. But we have the advantage where it doesn't matter what we do each quarter, it doesn't matter if we chase the index. But there are a lot of people out there that are either index huggers because of their job or index chasers and they want to try to. It's just would be very, very poor risk for themselves in their job to get behind on any AI stocks. If you kind of get what I'm trying to explain here, right. It's like underperform because you have no AI exposure now, right? As a little bit because Alphabet I have very, very, very little AI exposure and even some on the downside with palantir Amazon too.

Ryan Henderson (44:02)

I own Amazon.

Brett Schaefer (44:03)

Amazon, yeah. We, we can be okay with not with being underexposed to AI for if we think it's not a good risk reward. But there are a lot of people that have to chase into this and it's turned into a whole momentum thing POD shops, whatever and at some point people are going to it's. It turns into hedge fund hotels, turns into crowded trade and now I'm using a lot of, a lot of buzzwords here but eventually people get out and it feels like a good time for them. And EBD but of 30 times giant companies if you add in Tesla there It's trading at 200 times. I think you're probably underestimating the Optimus upside but that company I'm talking my book seems it's at a stock's at all time high. It feels yeah it's extreme to put it mildly. So I like this one to be.

Ryan Henderson (44:52)

Clear this is not like I don't think the Mag 7 is going to implode. I think you're probably going to get some stability out of like Meta and Google and maybe Apple as well. But I just, it's hard to see them putting up another 12% plus return across the whole MAG7 this year. So my, my bold prediction is negative returns for the year. Let's keep moving here. What is your second prediction for 2026?

Brett Schaefer (45:21)

Yeah, this one's a bit of a theme and I think it's a theme that's getting downplayed. I'm not sure why everyone hates these stocks. I guess one of them is Mag7 but it's a theme I like for 2026. It's one I'm invested in. It's one that I can see myself adding to exposure to as I study some more of these companies. I think E Commerce, strong performance in 2026. The criteria is group of stocks, Amazon, Mercado Libre, Coupang. You could even toss in some other ones that I don't know as well C limited maybe exclude Jim Jumia, Alibaba player and some of the Chinese players. Whatever Chinese player you want, all that that's fair game. I believe these stocks and I'll look at the core three are the ones that I'm very optimistic on are Amazon, Mercado Libre Coupang. I think they will be up on average of 20% in 2026 or if there's a market downturn beating the broad market S N, P Y OR S&P 500 Nasdaq 100 indices by at least 10% in total return for the year. Thoughts on this one?

Ryan Henderson (46:29)

Ryan I like it. I like the thematic approach. I've got a thematic one here as well and it feels like there are some like themes, slash, slash segments of the market that have been beaten down in 2025 but it's mostly news and story related as opposed to performance related and I think E commerce is one of those like Amazon, Mercado Libre, Coupang especially. Are are their competitive advantages all still intact? I would say yes. Like they are the leading vertically integrated e commerce providers in their region and for the last 25 years, 20 years I guess that has been if you can deliver faster, cheaper, that tends to win out in the long run. I think in the case of Coupang, MercadoLibre and Amazon that that is still true. I'll move to my second one here. Unless you have anything else on the E commerce basket.

Brett Schaefer (47:38)

Nothing to add. Nothing to add. Go right ahead.

Ryan Henderson (47:42)

I think there will be a SaaS resurgence. So software as a service resurgence. I was looking for an ETF to sort of express this, like to pick one ETF that I could track. But a lot of the software ETFs are market cap weighted so they have a ton of Palantir exposure. So I can't really use that because I my I don't think, I don't think Palantir is going to do well so I have to hand pick a few of these. My focus here is B2B software stocks that are down 15% or more this year and are seen as quote unquote AI losers. So I think an equal weight, equal weighted bucket of these six stocks will be up 20% or more in 2026. Adobe Monday.com, salesforce ServiceNow, Dassault Systems and Constellation Software.

Brett Schaefer (48:42)

Need a better French accent there on Dassault, but sorry, I just looked it up while you're, while you were talking. I hadn't heard of Dassault for a while. We studied them I think back in maybe a few years ago, 2021. Very surprised to see the stock down 27% in the last five years. Because for all intents and purposes, I mean if it's something that engineers, technology people, architects, construction workers, what have you, any sort of technical expertise person, if they have to get solid certified for your software to work, that is a pretty good moat. And wow. Maybe I need to look at this one yet again.

Ryan Henderson (49:24)

Yeah, so that's my those six stocks. One more time. Adobe Monday, Salesforce, ServiceNow, Dassault Systems and Constellation Software I think equal weighted those will be up 20% plus in 2026 for the listeners.

Brett Schaefer (49:41)

Ryan, which ones do you own?

Ryan Henderson (49:45)

Adobe and Monday.com those are the only two.

Brett Schaefer (49:50)

All right.

Ryan Henderson (49:50)

I'm not like I'm not that excited by Salesforce necessarily, but it's more sort of just like a rebound play. Like I think the multiples are still more than I'm willing to pay for some of these. But I think there's the narrative that demand is going to disappear because of AI for a lot of these I think is overblown. And if you get the realization from investors that that's the case this year, I could see multiple rerating for a lot of these.

Brett Schaefer (50:21)

All right, let's get to my third one. I think this is a fun one and it's I guess another two parter because we need something to happen that I think actually might not happen even though there's reporting that there's plans for it to happen in 2026. First, a SpaceX IPO marks the end of the bull market. And then second, it causes a blow off top in the space Thematic trade. Rocket Lab as a part of, you know, one of the only stocks you can invest in in this industry goes through a blow off top and then falls 80% just like Riven in 2021. Maybe it's just me bitter for, for missing rocket lab at $4 and sitting on my hands and having a potential 20 bagger. Although I probably would have sold before, before this run up. Yes. Is this a good business? Yes, I think it is a good business. They're the second coming of SpaceX. I mean it's a good business, but they are at a market cap of $50 billion. And SpaceX at what they are reportedly going to IPO at $1.5 trillion are wildly, wildly overvalued for capital intensive businesses to trade at 50 to 100 times sales in the Palantir zone, I should say, or I mean if you can get that capital raise and raise all that money, fine by me. But I think with Rocket Lab, which I think last I checked 75 times sales, it's going to be very, very difficult given these are low margin businesses for you to make up all of that value criteria. I think SpaceX has to go public and then brought and it marks kind of the top. This one is a little bit, maybe a three parter and it marks the top of the bull market. And then rocket lab falls 80% year to date.

Ryan Henderson (52:15)

It's gotta be like I'm thinking about Rocket Lab's management team's perspective. It's gotta be a little distracting to constantly have either like 50 times sales multiple or 5 times like these. I'm sure they would appreciate a little consistency in their valuation because you constantly have to, I imagine manage expectations internally. And do we like. Unfortunately, I would guess that most people like finance purists would tell you that the right thing to do is shelf offerings secondaries when you're at a 50,000 sales.

Brett Schaefer (52:57)

Yeah, they have an ATM, so pretty smart by them. Another one I'll add in here AST Space Mobile. I know I've never owned it, but we had an interview that was one of our most popular shows of the year. I know some people like the stock, but you want to guess where the stock is now? Ryan? 85. Ooh, $85 a share market. This is pre revenue company market cap. Let's go full screen. Check it out. Market cap. 31 billion. 31 billion. Again, high expectations. The theme for space stocks is going crazy. And I think SpaceX IPO, at least for space stocks is going to mark a top if it happens.

Ryan Henderson (53:43)

All right, my third last prediction for 2026.

Brett Schaefer (53:46)

This one might anger people.

Ryan Henderson (53:48)

Yeah, it might. I think Nvidia will be down more than 15% this year.

Brett Schaefer (53:56)

Now.

Ryan Henderson (53:59)

Let me explain my rationale and I'm not like pessimistic about Nvidia per se. I actually have like Jensen Huang to me is like a top, top CEO if you're picking a Mount Rushmore of active CEOs. I think he's done an exceptional job. The whole management team has. But I think we are starting to see a little more cautiousness from the investment community around this AI CapEx. And I think executives are going to start to feel that pressure and we could see kind of what you alluded to. Maybe, maybe some CapEx revisions. Some CapEx estimate revisions or expectation revisions from management. Whether or not that actually reduces capex outlooks like the. If investor pressure doesn't reduce capex outlooks, I still think Nvidia could have a difficult time. And here are sort of the three dynamics that would concern me if I were an Nvidia shareholder. Last quarter they saw a huge boost in sales, a massive beat. Market didn't budge. That's typically a sign of sort of you're maybe at high levels of investor enthusiasm when huge beats are already baked. In the second one, there's a rising prominence of or at least perception of in house chips or competition with big tech from the Google TPUs. The Trainium, which I don't know if that's really a direct competitor with Nvidia, but there's chime in here, Brett, if you've read up more on Trainium than I have.

Brett Schaefer (55:40)

I hear Trainium's but a bit behind. But hey, it's still supply. That's not going to Nvidia. Even if the chips are quote unquote not as good. Well, if you have a million getting used by Anthropic, those are chips that aren't Nvidia chips.

Ryan Henderson (55:56)

Yeah. That one's a little more speculative obviously, since I don't have. Certainly not a semiconductor expert.

Brett Schaefer (56:03)

But all they need is a revenue, revenue growth decel. That's all I need.

Ryan Henderson (56:08)

Right. I think that is seriously all that it needs. And the last one, and this is kind of the one that maybe makes me the most cautious, is that management seems desperate to keep a positive narrative. Maybe the biggest red flag I saw from Nvidia this year was when they released that private rebuttal just to Wall street analysts, to Michael Burry's critiques around oversupply and stock based compensation. The other one was Jensen publicly stating that if we delivered a bad quarter, the whole world would have fallen apart. Like he knows it. And it makes it feel like he's like, you're kind of trying to keep up the best impressions you can. And it just feels like that can't last, that can't go on forever.

Brett Schaefer (57:02)

He's also. Can I say it's fair, He's a bit of a drama queen.

Ryan Henderson (57:10)

Maybe, but I don't know if. So a whole world wouldn't have fallen apart. Sure. But I don't know if he was wrong about equity markets. I think equity markets would have had a very tough time if Nvidia saw a massive revenue decel. And then there's also been like the kind of Jensen Huang press tour, like him going on Joe Rogan, all that stuff, which, whatever. But it just kind of feels like there's this need across the board for them to keep up a positive narrative, which to me makes everything feel a little fragile.

Brett Schaefer (57:45)

Yeah, really, really trying to get this chip sales into China. Just working extremely hard on that. That's a whole nother piece. It's funny looking at these because right now I'm like, yeah, these are. I got a high confidence in these. These seem like good bets now that I actually make. Not all these bets for my actual portfolio. Although Rocket Lab a little short there. Feels. Feels interesting. Neutron might get delayed. I just got a feeling on that one. But you look at them you go, I have a lot of confidence here. But it always turns out we get more than half of these wrong, at least absolute or maybe if we're directionally right, we're still not right specifically on the bet criteria. It's just a lesson in having that long term time horizon markets can be a bit manic over a 12 month period and that it's very, very hard to make predictions. So maybe we should be in. I don't think we're that bad. But for predictions themselves, the fact that you need think a lot of things to go ripe just makes them less likely. It's not, it's less likely than a coin flip if you're just going to pick randomly. It's not how you should invest. You should wait for the quote unquote fat pitch and hold those winners, let your winners ride, let the companies themselves tell you they're right and then just hold on.

Ryan Henderson (59:10)

Yeah, if I'm, if I'm looking at sort of the vibe check for us heading into 2026, there is some, there's some pessimism with sort of our predictions. Like I think big tech might have a rough time if that is the case. Historically when big tech has had a rough time, even if I've been like, yeah, I called it, my portfolio gets hit, I don't avoid it. So it maybe is a chance for me to kind of do some reflecting on what I own today and am I comfortable with the positions. Like for example, I still own Google, I still own Amazon and I think mag 7/2 weighted will be down this year. Should I maybe trim those?

Brett Schaefer (59:55)

I don't know.

Ryan Henderson (59:56)

I think this is actually a useful exercise for everyone to write down some 2026 predictions for the market and kind of see where you see what the vibes are of your general belief. It shouldn't, don't overweight it, but it's kind of a nice exercise to do.

Brett Schaefer (60:14)

And you can even focus more on your own portfolio. We try to not entirely focus on just stuff that we own since it's only generally 10 to 20 companies and we don't want to talk about that constantly. But again, maybe make some predictions for your own portfolio, see what's right, see what's wrong. It's good to journal and go back a year later. Let's close things out. We're running up on our hour here. Ryan with a listener question. I was in the substack chat. I will say go on to that one. When this, I think drops, you will have one more day to participate in our 2026 stock pitch competition. All you have to do is give me one ticker. You're going to be long that ticker and starting Jan. 1, the performance through 2026. But a listener question in the substack chat which everyone should join. What are your goals Investing related for 2026? Ryan, I'll let you go first.

Ryan Henderson (61:11)

Yeah, I, I've thought about this. I mean I have some like whatever some like nominal financial goals for where I'd like to have like you know, savings but I'm not going to share those. I would like to have a. I know this sounds maybe like not sad but like a low bar. I would like to have a positive year because what I'm, what I'm worried about is I'm looking at my portfolio and aside from coupang and remitly which I'm optimistic about, a lot of the companies I own are kind of in no man's land.

Brett Schaefer (61:49)

Like I'm not maybe a little re portfolio allocation redoing it a little bit.

Ryan Henderson (61:59)

Yeah because it's like I like Taiwan Semiconductor. It could be in for a little bit of a difficult time if we do see that Nvidia slowdown and slow down in some of the AI spend.

Brett Schaefer (62:13)

Yeah. High earnings multiple could be peak earnings. You never know. Right.

Ryan Henderson (62:18)

I liked Google but the multiple's not like a screaming buy. So it's just kind of and I, I like all of these businesses long term but like I said it feels like it's a no man's land because I'm not buying more of them aside from a few of the companies in my portfolio. So I guess an investing related goal for me would be positive returns for 2026 which maybe means time for a little reallocation.

Brett Schaefer (62:50)

All right, I'm going to say my investing goals one just save as much as possible. I guess that's, that's another one. As always be, be, be frugal in that regard. But from a, maybe a podcast, newsletter and personal investing criteria kind of all into one is to study let's say 10 new businesses and become like that I'm interested in and become an expert on 10 new ones. I think that's a good sort of goal for people to have. We try to help out with that with the podcast and newsletter but you're not going to learn every business in a year. But it's something that I saw who is a longtime newsletter writer big fin to it personality a lot of people may know mostly borrowed ideas he has I think for five or six years now wrote once A month I stop research report. That's comprehensive. And like after his research he goes, hey, I think I'm an expert on this company. Does he invest every time? No, but he's an expert to say I'm going to be able to make an investing decision. If you just slowly start studying businesses, that knowledge will compound and it can help you study the next business where if I understand all these players in the industry, we have a new player pop up. Well then it's going to help make me more easily understand that business again. I just think the knowledge compounds. Maybe choose a couple stocks that you want to become an expert in. Study them. Just takes time. Read the annual reports, read all the commentary, read all the news reports, looking at all the research and yeah, I think that's, that's my goal. Plus I guess advice for the listeners.

Ryan Henderson (64:40)

I like that. And I think just to kind of double down there. The something, maybe a mistake I made in the early days was I think a lot of young investors make this mistake. You want to learn as many businesses as possible. You want to go out and like read a new 10k every day or whatever. You're hungry, thirsty for knowledge. It's a lot better, like Brett said, to go really deep on a few businesses and understand really what are the drivers, what are some of the things that you see in terms of like compensation practices with management, how did this result in whatever the performance was. Understanding all the nitty gritty of individual businesses and then being. Because you take those lessons and you're able to apply them to every other company usually, or at least companies in their sector. So I agree kind of going one at a time, going deeper on individual businesses. I think that's a good goal. One more goal, if I might add one, I would like to. I'm not going to do it just for the sake of doing it, but I would like to increase my international exposure. I think there's a lot of opportunities beyond the United States at the moment. I'm seeing some of the most attractive opportunities it seems abroad.

Brett Schaefer (66:03)

My valuation is the U.S. yeah, I.

Ryan Henderson (66:05)

Would like to, I guess coupang's a big position for me, but I think there are some opportunities elsewhere that are worth digging into and potentially increasing exposure in.

Brett Schaefer (66:18)

And the good thing about international is if you're not all focused on the US and especially if you're not focused on the US growth tech, which I know a lot of people are, just the numbers anecdotally versus what you see out there, it doesn't guarantee performance through the market. Cycle, but it helps you maybe perform better as long as you pick the right companies through any down cycle in the United States. All right, anything else, Ryan, for the listeners before we wrap up on 2026? First, wrap up on 2025 and look forward to another fun 2026.

Ryan Henderson (66:56)

I think that's going to do it. The one thing I'll say, I know there was some general pessimism in some of our predictions. That doesn't mean there aren't opportunities out there. Keep digging, keep researching companies. There's plenty out there. Hopefully we will provide some throughout this podcast in 2026.

Brett Schaefer (67:14)

All right. Yes, that is a positive. We usually for the most part do try to invest optimistically, but maybe just with some cynical mindset given all the fraud that is out there in the stock market and some tough, tough valuations out there today. Okay, as a disclosure, we are not financial advisors. Anything we say on the show is not formal, formal advice or recommendation. Ryan I or any podcast guests may hold securities discussed in this podcast, may have held them in the past and may buy, sell or hold them in the future. Thank you everyone for tuning in and we'll see you next time.

Ryan Henderson (68:03)

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Ryan Henderson (68:19)

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Brett Schaefer (68:21)

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Ryan Henderson (68:22)

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