Our 6 Favorite Growth Stocks Today; Soaring Gold And Silver; Taiwan Semi's Accelerating AI Growth

Summary

Chit Chat Stocks – Power Hour #183: Our 6 Favorite Growth Stocks, Taiwan Semi's AI Boom, Soaring Gold and Silver

Date: October 17, 2025
Hosts: Ryan Henderson (A), Brett Schaefer (B)

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Overview

In this Power Hour episode, Ryan Henderson and Brett Schaefer dive into the latest developments across global markets as earnings season kicks off, with a special focus on Taiwan Semiconductor (TSMC) and the accelerating demand for AI infrastructure. They also unveil their six favorite growth stocks (each selecting three), analyze the gold and silver surge, spotlight market sentiment via Charles Schwab data, recap key broker and financial stock earnings, and close with thoughts on luxury auto icon Ferrari. The tone is insightful, data-driven, and playfully skeptical—especially when dissecting hot growth trends and speculative bubbles.

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Key Discussion Points & Insights

1. Taiwan Semiconductor (TSMC) and Accelerating AI Growth

[02:02–16:41]

• Earnings Highlights:

  • TSMC reported 41% YoY revenue growth in USD terms ($33.1B), adding $3B over the last quarter.
  • Gross margins expanded from 57.8% to 59.5%—above the upper end of management guidance, aided by currency effects.
  • 60% of revenue now comes from TSMC’s most advanced nodes (5nm and below).
  • Largest wafer shipment quarter in at least a decade.
  • AI Accelerator Revenue: Previously guided for ~45% annual growth (CAGR) 2024–2029; this quarter, management said they expect to do “a little bit better than that.”

    "They're like, without saying it, they kind of raised that guidance..." (A, 06:27)

• Industry Margins:

  "ASML operating margin...35%. TSMC...50%. Nvidia...over 50%. You have three layers in the chain...quite the lucrative industry, semiconductors, AI computing and cloud computing." (B, 03:58)

• Management Culture:

  • TSMC management’s style is understated and extremely matter-of-fact, not promotional:

    "This isn't a management team that's like, oh, I'm just going to throw out that guidance to bump the stock..." (A, 08:15)

• Bear vs. Bull Debate:

  • Brett proposes the possibility of AI demand “falling off a cliff,” drawing parallels to the telecom bubble.
  • Ryan: “I would be very surprised” if demand vanished, given the scale and visibility.
  • Key Risk: Geopolitics remains the primary threat.
  • Brett argues for valuation discipline, preferring to buy TSMC at 15–20x normalized earnings and 40–45% operating margins.

    "The bull market can tell you things and...make you think 30 to 35 times earnings is cheap and it's not, even for a company growing like this." (B, 15:08)

  • Ryan admits: “If it were more in the low 20s on a forward earnings multiple, I think I'd be interested in adding shares.” (A, 15:15)
  • Both agree upside is high if TSMC’s AI forecast is right, but the current multiples require caution.

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2. Six Favorite Growth Stocks Today

[18:34–41:26]

Selection Criteria:

• 20%+ YoY revenue growth based on recent quarters (with some FX or margin normalization discussed).
• Preference for companies with potential for sustained high growth and margin expansion.

Ryan’s Picks:

1. Remitly (RELY) | [22:37]

   • Digital remittance platform, growing revenue 56% (6Y CAGR), still over 30% recently.
   • Strong user stickiness, turning the corner into profitability.

   • “I feel like over a decade it has 10 bagger potential.” (B, 25:52)

2. Grab Holdings (GRAB) | [28:41]

   • Southeast Asia’s super app for ride sharing, delivery, and financial services.
   • 54% revenue CAGR over four years; clear network effects emerging.
   • Anecdotal feedback from Singapore-based analyst: “Everyone I know uses it.” (A, 29:20)

3. Adyen (ADYEN) [honorable mention] | [35:03]

   • High-quality payments processor with impressive acceptance success rates and retention.
   • Growth had slowed to ~19% (YoY), just below the arbitrary 20% cutoff, but significant value if price is right.

   • “Such a good...backbone, it’s very tough to replace for businesses, especially online businesses.” (A, 36:06)

Brett’s Picks:

1. The Real Brokerage (REAX) | [25:52]

   • Cloud-first real estate brokerage model, digital tool suite for agents.
   • Explosive revenue growth: ~$10M to $1.6B in last 12 months, growing 72% YoY.
   • Small but potentially high-upside position: “It genuinely does have 10 bagger potential.” (A, 28:03)

2. Nu Holdings (NU) | [30:44]

   • Digital-first bank with 114 million users in Brazil, Mexico, Colombia.
   • “Just a better app, better savings rates, credit cards without fees...viral app and one that should be very sticky.” (A, 33:28)
   • FX-neutral revenue growth estimated at 40%, net interest income up 22%.

3. OMA (Mexican Northern Airports) | [39:44]

   • Monopoly on Northern Mexican airports, growing core revenue 17%–24% YoY.
   • Near-term acceleration expected due to new contract in 2026.
   • Defensible, infrastructure-based “moat” business.

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3. Market Sentiment: Schwab Cash Levels Signal Froth

[41:14–43:31]

• Charles Schwab statistic: Schwab customer cash as % of assets at 9%, its lowest since the GFC—even lower than the SPAC/meme bubble peak.
  • “There’s no dry powder...That to me is a real indicator of maybe it’s time to get a little more conservative with my portfolio.” (A, 42:02)
• Both express caution—increasing their own conservatism and noting little appetite for leverage.

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4. Interactive Brokers (IBKR) Earnings—Growth Powerhouse

[43:35–48:07]

• Financial Highlights:
  • 79% operating margin—possibly the highest for any operating business (outside unusual licensing companies).
  • Customer accounts up 32% YoY to 4.1 million; customer equity up 40% to $758B.
  • Net interest income up 21%—remains sensitive to rates but underpinned by broad account growth and margin lending.
  • “They have 20x’d their total accounts since 2012. Massive growth phase out of nowhere.” (A, 46:03)
• Brett and Ryan both hold shares, use the platform, and praise its global reach and competitive advantage.

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5. Gold & Silver Surge—Boom, or Blow-Off Top?

[48:13–53:08]

• Gold at $4,300/oz and up 60% YoY; silver at $53—both at all-time highs.
  • Brett attributes run to momentum, inflation/devaluation fears, and classic “reflexivity”—where price drives narrative and vice versa.
  • “Precious metals have...blow-off tops and then they collapse. Not saying that's happening tomorrow, but…” (B, 50:17)
• Both hosts agree that gold can fit as a portfolio hedge, but caution against over-allocating or over-obsessing.

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6. JP Morgan’s $1.5 Trillion Bet on “Strategic Sectors”

[53:14–61:19]

• JP Morgan committing $10B in direct investments, $1.5T in financing (over 10 years) to “strategic industries.”
• Strategic areas: Advanced materials, microelectronics, mining, defense/aerospace, next-gen grid, battery storage, cyber, AI, quantum, etc.
  • Ryan dismisses the predictive value of bank participation:

    "I'm not investing in any companies in any of these categories solely on the principle that they'll have J.P. Morgan's help." (A, 57:45)

• Ryan and Brett see more promise in defense, aerospace, shipbuilding—predictable margins, stickier contracts, shareholder-friendliness—than in “deep tech” like quantum, AI (“Nvidia does not need your financing!” – A, 59:55).

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7. Bubble Watch: Fermi (FRMI)—A Revenue-Free ‘AI Grid’ SPAC

[61:37–64:01]

• Fermi America: Recently went public, $17B market cap, zero recorded revenue; pitches “private grids for AI.”
  • Ryan: “This is the stuff that reminds me of the 2021, 2022 SPAC bubble.”
  • Both hosts express a mix of incredulity and amusement at the rapid creation of wealth with little substance.

    “If it introduces more private companies to public markets...and we have to go through these...bubble periods...but you find a few more gems, I’m okay with that.” (A, 63:13)

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8. Ferrari – Luxury, but with Limits

[64:01–66:33]

• Stock down 24% post capital markets day.
  • Ferrari guiding for just 5% annual revenue growth, with active client growth but limited unit increases.
  • Market cap at 75B EUR is 27x projected 2030 EBIT.
  • Both hosts agree:
    • Pros: Ferrari’s 52% gross margins are “unheard of” in autos; luxury, club-like exclusivity.
    • Cons: Growth is capped by exclusivity; can't rapidly grow volume without diluting the brand.

    “There’s a cap to growth for a couple of reasons...the more that you do grow volume, the more it hurts the value of the people that are a part of that Ferrari club.” (A, 65:03)

  • Brett: “I’d rather buy Hermes at 33 times trailing EBIT. I think it's growing faster and...can grow faster.” (B, 66:33)

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Notable Quotes & Memorable Moments

• On TSMC’s AI Outlook:

  “They're like, yeah, actually we think we'll grow more than 40% annually for the next five years. And yes, we're already the biggest foundry in the world.” (A, 07:16)

• On Market Sentiment:

  “There's no dry powder...That to me is a real indicator of maybe it's time to get a little more conservative with my portfolio.” (A, 42:02)

• On Gold & Narrative Cycles:

  “Price drives narrative, which drives price, which drives narrative, which drives price.” (B, 51:48)

• On Strategic Sector Investing:

  “I'm not investing in any companies in any of these categories solely on the principle that they'll have J.P. Morgan's help.” (A, 57:45)

• SPAC Bubble Redux:

  “This is the stuff that reminds me of the 2021, 2022 SPAC bubble.” (A, 63:18)

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Timestamps for Important Segments

• TSMC & AI Growth: 02:02–16:41
• Six Favorite Growth Stocks: 18:34–41:26
• Schwab Bubble Watch (Cash on Sidelines): 41:14–43:31
• Interactive Brokers Earnings Recap: 43:35–48:07
• Gold & Silver Boom: 48:13–53:08
• JP Morgan’s Strategic Sectors: 53:14–61:19
• Bubble Watch – Fermi America: 61:37–64:01
• Ferrari Luxury Growth Limits: 64:01–66:33

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Conclusion & Tone

Ryan and Brett bring a friendly, conversational, yet deeply analytical approach to market news—wading through hype to identify real value and caution listeners against both FOMO and bubble thinking. They celebrate strong businesses (TSMC, IBKR), are candid about their own portfolios (growth vs. durability vs. value), and punctuate the show with memorable one-liners and self-aware skepticism.

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Transcript

[A]

Welcome to Chit Chat Stocks, the podcast that helps you discover your next great investment. I'm your host, Ryan Henderson and I am joined as always by the one and only Brett Schaefer. This is our weekly Power Hour episode. We're on Investment power hour number 183. We've been doing this for three and a half years now roughly, and people seem to love it. We do these shows live on YouTube on Thursdays at 5pm Eastern Time. If you want to ask us any questions, head over to YouTube, look up chitchat stocks and feel free to post in the comments as we are doing these shows. But on these episodes we talk all things financial markets. Earning season is back. It's that time of the quarter again. We've got interactive brokers asml, Taiwan Semiconductor trying to think of some others. Name is Charles Schwab, which had an interesting anecdote anecdata I should say that we should talk about might be bubble talk for you. And then we're also going to be doing our six favorite growth stocks for today, going through alternating between Brett and I and we've got plenty to discuss there. Without further ado, welcome in, Brett, how are you today?

[B]

Well, markets are down so my shorts are working today, which is not a bad feeling after it's been a tough month or so in that category. But I went to a baseball game last night where my team lost by 10 in the playoffs. So feeling a little down about that. But I am very excited about earnings season. I have a little bubble watch for people and also a little talk on gold, silver and strategic investments by JP Morgan that I think people will be excited about. If you've seen the charts of gold or silver, I think anyone that has invested in that is quite happy. But first, Ryan, what are we going to talk about? Well, TSMC earnings, I think that that feels like a great one to kick off earning season with.

[A]

Yeah, let's do Taiwan Semiconductor, which had some interesting call outs during the conference call. Maybe that call outs might be the wrong word. But it's always funny listening to their conference calls because it moves markets a bit and has huge signal and implications for other businesses. But the management teams are so like that's not their intention. They're kind of, they're not trying to be promotional but they'll like casually mention kind of insane statistics. So we'll talk about that and then maybe we can get into kind of the meat and potatoes with our favorite growth stocks as well. But let's start with Taiwan Semiconductor In US dollar terms they grew revenue 41% compared to a year ago, which is pretty astounding given their size and, and scale and already being sort of the biggest player in the fab market. But $33.1 billion in revenue. They added $3 billion in revenue over the last quarter. Although there is some season, there's probably some seasonality in that business. So quarter over quarter comparisons aren't always perfect. But as we are moving into a time period where AI infrastructure spending is growing so quickly, I think these sequential and quarter over quarter changes are more important to pay attention to. Anyways, they grew, this one surprised me. They grew gross margins from last year 57.8% to 59 and a half percent. They themselves at the top end of their guidance range was like 57% gross margins. Some of that might been, might have been due to currency translations. So that might have helped because if you look at like their Taiwanese reported revenue growth, it was like 31% and their US revenue growth was like 40%. So that was probably helpful.

[B]

Pricing power. Ryan, do you want to hear some interesting. I think the listeners would like this too, some interesting facts. ASML operating margin, which is a supplier for TSMC, 35% operating margin probably could go higher over the long term since they're investing a lot for growth. So 35% operating margin. If you look at TSMC itself, they have 50% operating margin. And then if you look at Nvidia which TSMC is a supplier for, Nvidia is a customer of TSMC. I, I believe they have over 50% operating margin. So you have three layers in the chain. Maybe we can add an AWS 35% as well. So 35%, 50%, 50%, 35%. It's quite the lucrative industry, semiconductors and AI computing and cloud computing.

[A]

Yeah, and I think you could argue there's pricing power at every stage there of that chain. Maybe less so on the cloud side.

[B]

But that's me in 2028, maybe 2025.

[A]

There is for sure I think certainly for ASML and Taiwan Semiconductor, but Nvidia as well at the moment. Anyways, let's keep going here. So 60% of their revenue now comes from their most advanced nodes. So 5 nanometer and lower. That's really the 5 nanometer and the 3 nanometer. But on top of that I thought this was an interesting stat. I guess it was probably baked in. People probably already saw it coming. But they're delivering more wafer shipments than they ever have. So not only are they delivering their most advanced node but they're delivering more of them than they ever have. This is the first, this is the largest wafer shipment quarter that they've in their history from at least going back 10 years. So this is pricing power, advanced chips, increased capacity or productivity I should say, and increased capacity. This feels like quite the recipe for success for Taiwan Semiconductor. And I thought this quote from the conference call was interesting. So a quarter ago they said that they thought they could grow their AI accelerator revenue, which is quickly becoming the biggest part of their business, but they thought they could grow it in the mid 40% annual growth rate range between 2024 and 2029. We talked about that here on the show and it was like, I thought that was insane. Like, first of all, I was thinking, how do you have that much visibility five years out? Which maybe they do. Maybe they, they book a lot of stuff like multiple years out or they contract it. But the other part that threw me off is this is already a massive business for them. So mid 40% CAGR is truly astounding. Well, this quarter someone asked, do you still believe that? And they said, so far it looks like we're going to be doing a little bit better than that. So they're like, without saying it, they kind of raised that guidance and then on top of it, they're non AI end markets because people forget that that semiconductors, if you stripped out AI is kind of in a recession.

[B]

It, it's a.

[A]

Still in a bit of a down cycle. They, they're saying that they're seeing recovery from their non AI end markets as well. It's funny listening to Taiwan Semiconductors management team because they're very like, matter of fact, not trying to be promotional, not trying to be braggy like you might see with some other companies. But that's sort of how it comes off. They're like, yeah, actually we think we'll grow more than 40% annually for the next five years. And yes, we're already the biggest business in the world or biggest foundry in the world. So I don't see, aside from the geopolitical risk, which obviously that's the one that everyone kind of points at, I don't see how this doesn't beat the market. If they come anywhere near those guidance metrics that they've said.

[B]

Yeah, well it's, that's, that's. You just said it. But it's, they don't come close to that guidance metrics.

[A]

This isn't a management team that's like, oh, I'm just going to throw out that Guidance to bump the stock or, or like be as promotional as possible. Like that's never been the culture at, @TSMC.

[B]

Could you, and I guess if this happens, we talk about this on pretty much every show, but could you imagine in four years the AI accelerator demand falling off a cliff? I mean it's possible, right?

[A]

And falling off a cliff. I don't, Yeah, I would be very surprised.

[B]

Why? I mean they're, they're spending, I've seen data out there that compared to the telecom bubble, they're spending four times as much ahead of revenue as telecom was spending ahead of revenue and they're doing the same sort of circular deal. So am I saying that's going to happen? No. But is it possible? Oh, it's 100% possible. On the other hand, this is a fantastic business. We have a comma here. I agree totally with this. I watched asml or excuse me, TSMC dominate for years and I turned my nose up at a PE of 20 a couple of years ago. I'm kind of in the same boat. Probably should have just went fantastic business. 15 times earnings. Just add this one. I mean it's, it's almost a monopoly at this point.

[A]

Yeah, yeah. Huge moat. Obviously the, I don't know. I, I would be, I, I honestly could see AI demand and specifically 5 nanometer, 3 nanometer and anything below that. They iterate on, improve on, innovate on all those nodes. I could see there being a lot. Taiwan Semiconductor. I could see them shipping a lot more volume of those nodes in four years.

[B]

Sure. Yeah. But when you say I cannot envision any scenario that this underperforms the market.

[A]

I'm not, I'm not saying that there.

[B]

Well, though I think those words may have. Oh listeners.

[A]

If they hit, if they hit those metrics.

[B]

Sure, sure. Okay. That's a good clarifier.

[A]

Yeah, I guess I can't envision a scenario which includes some geopolitical risk, but if they hit those metrics. It's hard to envision a scenario where this, I mean that would be them trading up like five times earnings or something like that in for the stock to not move.

[B]

Well, we're at 33 times earnings right now.

[A]

Yeah, I mean if they, if they compound revenue 40 over the next four or five years, the earnings multiple is going to come down pretty quick, I imagine.

[B]

Yeah, but not, I mean, well, it'll be 10, not, not five. If we're doing some math in our heads here, it's still a great business. Would, would I buy today? No, I don't think so, but kudos to anyone that saw the opportunity 2022, early 2023 and knew that this was a wide moat business, widening moat business and really has a long Runway to grow even though the industry is cyclical but sees growing demand over the long term.

[A]

Yeah, I will. This is one of those. I'm actually I've been a Taiwan Semiconductor shareholder for I think like six months now. I honestly don't even know how it's done. But it's one of those companies. It's just a tracker position.

[B]

It's done well.

[A]

Has it?

[B]

Yes, it has. Look at the charts like the gold chart.

[A]

I know. It's just. It's such a small position that I don't really notice it in my portfolio. The. But there's companies that I own where maybe it's just I feel like a share less. I don't. It's hard to describe. I don't feel like talking about it as much because I'm not as knowledgeable of a shareholder as a lot of the other shareholders I imagine. But it was almost like you read a great article about the company, you read a great write up and it's like sometimes I just take a little tracker position which I think is what I did six months ago and I'm trying to kind of get there by reading the conference calls and get a better understanding and maybe it's not that hard. Maybe it's just they're really good at manufacturing these things.

[B]

These ones. Don't. Don't overthink it. Monopoly, boom. That's it. That's it. I feel like the key things is just to understand you don't want to get caught up in the peak of a cycle right where their trailing earnings ratio is 33 and we're at 50% operating margins. So if they see a little bit of pricing pressure which could happen if demand growth in AI kind of slows down, you might be buying today at a very expensive multiple. But besides that I feel like understanding the wide moat nature of the business is something that's not too bad if you don't try to go. How do I say it? Hedge fund analyst looking at satellite data, trying to understand all the intricacies of the factory and the cost of capital for the Arizona build out. These are things you don't need to worry about. Do you think when he bought it.

[A]

Yeah. No, it truly doesn't matter. The. But there like there's companies. We're going to talk about some of the companies today I imagine on our favorite growth stocks. But there's companies where it feels like it's an idea that I found or it's unique. There's not as many shareholders and I feel com like I like talking about it. Whereas we. Taiwan Semiconductor, it's like I'm kind of just along for the ride. I, I don't need to be a vocal shareholder. It doesn't matter.

[B]

You're waiting for some other people to. Yeah, it's, it's one where you can outsource a little bit to some of those sharp analysts out there. Last question on tsmc. Simon asks, given today's earnings, what market cap would you buy TSMC at? I think I wouldn't necessarily frame it as what market cap I would buy, but maybe what multiple of forward earnings I would buy versus like a, maybe a normalized operating margin for a margin of safety where I, I would worry that their profit margin will come down when demand normalizes. And you don't see pricing power across the industry, especially if that trickles down from Nvidia's insane pricing power that they've had the last few years. So heavy normalized to 40 to 50, 40 to 45% operating margin and a 15 to 20 times earnings is where I would buy. And that's maybe greedy, but look, the bull market can tell you things and it can make you think 30 to 35 times earnings is cheap and it's not even for a company growing like this. So that's, that's how I look at it. What about you, Ryan?

[A]

Yeah, I think forward multiples is always sort of a better way to look at it, especially if you can kind of arrive at your own forward assumptions that are maybe different than the market. But market cap specifically, I wouldn't measure it by. It looks like they're trading at basically a 1.2 trillion dollar market cap. I'm seeing it here in Taiwanese or yeah, Taiwan dollars, whatever the currency is there at 37 trillion. Taiwanese, so 1.2 roughly USD. If it were more in the low 20s on a forward earnings multiple, I think I'd be interested in adding shares.

[B]

Yeah, there's still definitely risk here.

[A]

Okay, we could talk about real quick just to end this sort of discussion, the. You are right. There is a scenario where AI accelerator demand is lower in three or four years.

[B]

Got to factor that in. Got to factor.

[A]

But what happens, you lose some money. I think the, I think the upside is a lot higher. If they are right. If they do compound revenue at 40% for the next four or five years, you're getting probably a 3x4x on the stock, Maybe not.

[B]

We have Tyler in the chat that says low 20s on Ford multiple. I agree with that. But I'm normalizing maybe long term operating margins for margin of safety and responding to you, Ryan, is that possible? Yes, but I'm the type of investor that I don't want to be betting on things I think are a little uncertain. I would rather have the AI. I'm comfortable not investing in TSMC. My portfolio is fine. I'm pretty much 100% invested plus more with a couple of shorts out there. And I want to find things where I can wait for TSMC to either benefit from the AI bubble or boom. And maybe it's not a bubble and it does fine and maybe the stock doubles over the next five years. I'm okay with not getting exposed to that. But if the bubble pops and the stock goes down 60%, I can buy then. And maybe it stays on the watch list forever. That's okay. And I don't own it. But I'm not too worried about that opportunity cost. When I think I have great things in my portfolio where if the bubble does pop, TSMC goes down a ton, trades at 10 times trough earnings, something like that. I think that is a much better risk reward than buying today.

[A]

Yeah, Yeah, I think that's fair. And Tyler, you are right, it is actually. It's a 24 times forward earnings here.

[B]

So again, normalize those margins a little bit. That's what I'm saying. Maybe that's unfair or fair. That's what I would do.

[A]

Yeah, maybe. I just got to take another look at it because I said low 20s forward multiple without actually knowing what the forward multiple was.

[B]

So yes, it sounds like you want.

[A]

To call that out. Uh, let's shift gears though. Top. Are you good to do top six growth stocks?

[B]

I am. You know, I. You made the rule here. 20% revenue growth. And I had a hard time finding stuff. There's not. I couldn't find three. Actually there were three in my portfolio but I wanted to add a fourth because we're doing six. So in case there's any overlap and you take one of mine. Coupang didn't make the list. 19% year over year growth, constant currency, so just missed it. Airbnb? No, I didn't want to put interactive brokers because it's expensive and we're actually going to talk earnings later. But Ryan, I gave away the criteria but. Anything else you want to say before we get started here?

[A]

No, I was trying to think of what the criteria should be for a true growth stock and I basically just pegged it at is the top line for the business is revenue growing by more than 20% annually year over year. On the, based on the last quarter.

[B]

Yeah.

[A]

And I was, I don't know if I was surprised, maybe a little disappointed honestly, when I looked at my portfolio and realized how few companies actually in.

[B]

Future growth stocks we stuff like Portillo's, Airbnb, Nintendo stuff that's going to accelerate revenue growth, right?

[A]

Yeah, in our scenarios, yeah, maybe. But I, I realized I own a ton of companies pretty much. I think I would say 60, 70% of my portfolio is companies that grow the top line in the 10 to 20% range.

[B]

Yeah, you're a durable growth guy. That's what I would describe you as.

[A]

Yeah, I think that's the goal for most of my investments. But anyways, let me just go through a little bit more of my criteria. So typically what I care about most more than just current revenue growth because you can get like comps that are favorable or certain currency headwinds depending on the company you're looking at isn't just so I don't care. Are they growing fast now? But can they grow the top line by 10%, 15% plus for more than five years? Because that's really, I think where you get a lot of true mispricings is when people can't, can't guess how long they will be able to grow at a sustainably high rate. So that, that's what I typically look for. And then the other thing, best case scenario for me is when you've got a company that you think can grow 15% plus for five years or whatever and they're turning the corner to profitability. Because I feel like I tend to see a lot of mispricings with growth stocks when people underestimate how much they can actually earn or how profitable, or.

[B]

Underestimate the growth, or underestimate the growth. I mean, I think I have a tough time looking at a lot of businesses and project unless it's a tiny company and project, oh well, they're going to grow 20 to 30% for the next five years. That's very hard to do because that is abnormal unless you have a company like tsmc. See as we talked about earlier, that just has a massive tailwind at its back and is a monopoly. But if you can get those 20 to 30% growers that compound interest compared to 10 to 15% can add up very quickly over a five to 10 year period. And that's kind of why we wanted to do this exercise. Take a look at you know, watch list stocks, our own portfolios and see what companies we actually own that are growing revenue at over 20% per year. So Ryan, I'll let you go first. What is your first number one favorite growth stock in your portfolio or watch list today?

[A]

If you are a regular listener to chit chat stocks then you've probably heard us talk about Interactive Brokers. Here are four reasons that Interactive Brokers is better than other brokerage platforms. Number one, they've got it all. Stocks, bonds, ETFs, options, crypto, you name it. 160 markets, 30, 36 countries, 28 currencies. They are the absolute best platform for global investors. Number two, best in class pricing. They have zero commissions on U S listed stocks and ETFs and they offer margin rates up to 53% lower than the industry. Number three, you can ditch the separate high yield cash account. Interactive Brokers offers up to 3.83 interest on cash held in your investment account. And lastly number four, news. Stay in the know on your portfolio. IBKR offers news and research from over 60 industry leading sources including including Reuters, Dow Jones and Morningstar. Head on over to ibkr.com restrictions apply. Interactive Brokers is a member of SIPC. Yeah, I imagine this might be on your list as well. And Simon actually called it out in the chat. He's already guessed it. It's from itly. Yeah, I've talked about him a lot on this podcast. It's, I think it makes up. Let me check my portfolio right now I believe this is yeah about 8 and a half percent position, my second largest position.

[B]

I'm at 12. I got you beat. And really the current drawdown, it used to be, used to be 15 for me but the current drawdown has not been number two kind.

[A]

Yeah, exactly. The so quick pitch on them. Digital. They are a digital remittance mobile app that are, it's fast, cheap, convenient and like reliable for customers to send money across borders. And as the world has been continuously shifting more and more towards digital remittances instead of physical remittances, Remitly is capturing a lot of new customers and those customers seem to stick around with remitly. So they're, they're in the right spot. They've built out a really nice user interface, user experience. They've got great brand notoriety, great marketing, just great tailwinds at their back and they're trying to drive down costs for customers where possible. So trying to reduce the transfer fees for customers. And over the last six years they have grown revenue by 56% annually and right now they're still growing revenues by more than 30% annually. So this does check the + more than 20 revenue growth category for me it checks that box. But the other part I like is it's just, we just talked about this, it's just now turning the corner to profitability and it seems like a lot of people are both underestimating how long they can sustain their growth rate and how profitable they can be. I think this could be easily a double, double digit operating margin business. Yeah, at scale probably 20% plus when we think out really long term. I mean there's not a ton of like it's a high gross margin business, it's digital, it's not super costly to run other than tech talent for the most part in marketing. So I think they're in a really good position. That's the one I like the most. And then also convenient in this case is that it's cheap on a valuation basis if you think those estimates long term are right.

[B]

I know, fingers crossed. I like this one a lot too. I feel like over a decade it has 10 bagger potential which gets me quite excited to own the stock. Let me go to my second one. I'm just going to take the one that Simon also stole from me. He pretty much predicted my whole list. It is the real brokerage. It's a company I just did a stock research report on. So if you go in our queue or on our substacking, look at the full stock research report on that them. It's a comprehensive, I think probably about an hour long episode and maybe a 10 to 15 page report that you can read in maybe 15 minutes. It's a cloud based brokerage. It's someone that is taking kind of the legacy brokerage model where you partner with real estate agents but reducing fees, making it digital only trimming costs. You know, kind of a modern solution, digital tools, they're launching things like financial services or real estate agents. Essentially it's your software and financial tool for a real estate agent or their team and they're growing like a weed, taking market share. I mean if for anyone that's listening, if you're someone that is getting, I don't want to, I'm not saying this disparagingly like caught up in the open door management transition. And you like that story. Well, they're talking about a lot of things that sound like the real brokerage's model right now. So if you like open door, I'd take a look at the real brokerage because they've grown their revenue from under 10 million to 1.6 billion over the last 12 months. Last 12 month revenue 72% 2024 revenue 80 over 80%. 2023 revenue over 80% again, so growing extremely quickly. I'm very uncertain on what the long term like bottom line margins will be, but I'm taking a small position in this company. I think it's 3 to 4% of my portfolio today which is again is small for me. I would add over time I'd add if the stock goes higher and the business is doing quite well. I think it's a good growth opportunity. It's one where I think revenue can grow at a very, very quick rate. Is it going to decel a little bit On a percentage basis, yes. But it's one I like the long term growth opportunity.

[A]

Yeah, that's one of those where when I think growth stock I think something like that where it genuinely does have 10 bagger potential if things go really well for them. Whereas the downsides may be a little higher than if you look at some of these mature businesses that we both own. So I think that's a good one. Definitely, definitely could be a great return if, if the business performs. I'm going to skip to my second one here or do we want to go Snake draft?

[B]

Go ahead. Hopefully you're not going to steal mine.

[A]

I think it's unlikely. I'm going with Grab holdings. This. I did a full research episode on them a couple months back. So if you want to go find it, go ahead, just look up Grab or scroll through our podcast feed and you'll find it. But Grab holdings is a true super app in Southeast Asia. They are the market leader in ride sharing, food delivery, grocery delivery, even in eight different countries throughout Southeast Asia. And they also have sort of an emerging financial services component to the app.

[B]

You can say it, Ryan. Super app. Super app.

[A]

I said it.

[B]

Dirty words. Good, good.

[A]

Yeah, it. And we actually just had an interview. I'm not going to say who but great. A great investor that we both admire. We subscribe to his substack. We just had an interview. We had him on the show. I think that episode will be coming out in the next couple weeks. And he lives in Singapore and he mentioned, I asked him like what do you think of Grab? Because he said he listened to that episode and he, he said anecdotally everyone I know uses it. So dominant. Yeah. Did seem to have some real super app vibes, I guess. But it's, it's a lot like an Uber and a Doordash combined. And one of the great things about a business model like that, and you see it with Uber today, you even see it with DoorDash, is there is that embedded network effect in the business model where once you get to scale, it becomes a lot easier to grow at a high rate and at a low incremental cost. And I think grabs in that, that position now they've grown revenue at a 54% annual rate over the last four years, although it's come down a bit lately. So still growing above 20% but starting to see some operating leverage in there as well. So yeah, Grab Grab is my second one. I got to double check the valuation. Not quite as cheap I don't think on forward basis as remitly, but it's one I like.

[B]

All right, that's an interesting choice. Now I'll take a little intermission here. Say Tyler in the comments enjoyed or says they enjoyed the Yelp podcast report says A plus for it. So kudos to Ryan. He's, he's very happy with the research he did. If you're wondering where to find that, that is going to be the one right before this episode. If you're new to the podcast, it is a full stock research report in video and audio format. Ryan goes through the whole business model with Yelp, the potential opportunity and why he added it to his portfolio. So go check that one out. But let me get to my second choice. This is one I think Ryan could have on his list, but one we both like the business and I don't think own it yet, although I could definitely see myself owning it. I actually checked before recording this. The stock is in a little bit of a drawdown. It is New holdings, the parent company of New Bank, a very fast growing bank and dominant bank now in Brazil, but fast growing in Mexico and Colombia. Going to expand into new markets shortly. The pitch is really it's, I guess if people know SoFi, it's kind of like a Sofi of for these Latin American markets. It's, it's a digital only bank plus other solutions for personal finance. It's just simply better than the legacy players in Brazil or Mexico, which are significantly worse than the say legacy players you get in the United States. Like you know, if you look at bank of America or Chase, they're serviceable options but they just offer way worse interest rates buggy solutions compared to with Sofi or an ally or what have you nubank has maybe even a better product and the competition is worse. So this is why they dominate. This is why they have over 100 million users. And I forgot to check the revenue growth or I forgot to write it down, but I checked beforehand. It's definitely above 20%. I think it's 29%. So I think great business. Keep scrolling. Really strong management team. Am I buying? I'm not sure, but it's close to the top of my watch list.

[A]

Yeah, net interest income is currently growing 22% year over year. I mean, for a bank, revenue is like kind of a tough fee.

[B]

They have a lot of fees. Hey, they have non interest, you know, interest income.

[A]

If you use pure revenue as a standardized version, new would not qualify.

[B]

Are you sure? Last quarter. Let me. Let's.

[A]

Because you.

[B]

Maybe I looked at the wrong figure.

[A]

You have to include the provision for loan losses.

[B]

Well, let's. Let's look at what I saw. 29, but 14. All right, let's pull it up.

[A]

Either way. Either way, I agree. This was the number three on my list as well. And it's nothing like. From what I can tell, there isn't anything crazy unique about the business model. It's just the classic innovator's dilemma, like online bank versus a bunch of legacy branch banks. They've got a better app, they have lower costs, so they can offer higher savings rates, they can offer credit cards without fees. All the good stuff that you get from the disruptor. And they've done a really. I mean, the usage speaks for itself. Going from 3 million customers to 114 million in less than a decade. This is a viral app and one that should be very sticky with customers and earn more revenue from them over time. So yeah, I think this is a clear winner. And whether or not they make it on the last quarter's revenue growth figures, it doesn't matter because when you go.

[B]

From 3 million customers. I pulled it up. USD 29, FX neutral 40. Don't worry, I'm qualifying with this company. To the listeners.

[A]

Yeah, I was gonna say you. We're splitting hairs if they've gone from 3 million customers to 114 million in seven years. As a girl that's out of stock. Okay, so that was my third one.

[B]

No, no. What is your third one?

[A]

That was initially in my list.

[B]

Do you have a. Do you have a sub?

[A]

Well, one of them honestly could be Taiwan Semiconductor, but we just talked about them, so I've got some honorable mentions here.

[B]

Interactive brokers.

[A]

They would qualify too, which they just had Great earnings, by the way. Two for you, Monday.com. although admittedly, I don't know, like I don't know the competitive landscape as well there. Apparently it's just like a better bootstrap, essentially, where it's become like a very good, a very, very good CRM and all their customers rave about the product. And you see that in a lot of the attachment numbers. The revenue retention rates are really strong. But the other one I'm going to take, I think instead I'm going to go with Adyen. I, I believe they still qualify, but this is one where I have never been able to get it at the right price that I'd like to get it at.

[B]

There's about two days where it was, it was, it was down after that weird guidance reaction.

[A]

Yeah, there was a 50% drawdown or something like that where maybe it wasn't 50%, but I should have taken a swing on it. But it's such a good. If you can really be the payments processor and be sort of that backbone, it's very tough to replace for businesses, especially online businesses, and they have the highest acceptance rates or I forget the term that's used in the payments landscape, but they're able to process successfully the most payments. Whereas sometimes if you get some of these other processors, you see them failing to have as much success and higher decline rates where maybe it shouldn't be happening, which is huge revenue lost for any sort of merchants.

[B]

I'm going to let you have this one, but I just checked on fiscal last quarter decel 19%. This is in euros and the euros appreciated. So I'm betting FX neutral. They're above 20%.

[A]

Let me see what you're looking at here.

[B]

Total revenue percent change June 2025 quarter.

[A]

I'm seeing plus 19. We're looking at the same data.

[B]

I said plus 19. Yeah, that's under 20, right?

[A]

Oh, I thought you said minus 19 for a second. All right, well, I guess I was wrong.

[B]

I think FX neutral, they probably clear. I haven't looked at the press release, but yeah.

[A]

All right. Well, I guess that's why it's. It'll remain an honorable mention. I need to. I would probably need to do some more digging before I felt really compelled to add it. Like I need a different stock price as well, but I might want to understand the business and the nuances between them and Stripe. But like I'm familiar with Stripe. It is a phenomenal platform and from what I've heard, Adyen is just as good, if not better, and it has such a high retention rate as there might be logo churn because merchants go out of business. But if you have a great payments processor, I doubt you're going to switch.

[B]

Yeah, I don't think you need to do any more research there. You got it there. The Ford EBITDA EBIT or ebitda ebitda which actually I think translates fairly well to free cash flow for adyen. It's only 24. That's according to fiscal EV. Could be do your own definition on that. But yeah, stock's getting a little cheaper. All right folks, before we move on we need to tell you where we get our financial 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 on our podcast and 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 company specific segment and KPI data. That means Amazon AWS revenue, SoFi's total members, Google's paid clicks growth and literally millions of more data points. They've also got earnings call transcripts, ownership data, company specific research reports and much more. If you want complete financial data at your fingertips then you need to check out fiscal AI. And if you use our link fiscal AI slash chit chat you will get 15 off any paid plan. Again, that is fiscal AI slash chitchat. The link will be in the show notes.

[A]

Do you have any others or we just hit our top six? I think it's all done.

[B]

I have, I have my last one. I'll make it quick because we have other topics. It's the northern airports in Mexico. They're actually growing 24 year over year revenue and I think it will accelerate once they get this new contract in there. So I'll leave it at that. Keep that one short Monopoly business we've done. I did a research report on them earlier this year. I think a fantastic asset. And they're getting a new contract coming in that should lead to a step change in revenue growth in 2026.

[A]

So yeah, I did not realize they were growing that fast.

[B]

Part of it is there. Do you remember the construction revenues? Yeah. So if you exclude construction revenues which is kind of a loophole since that's like net, net net zero margin. It's just the one that get. They get reimbursed for I believe from the government. I can't remember exactly how it goes, but excluding that still 17% so good. But the Loophole comes from that construction boost.

[A]

So we broke our rules a couple times, but that's all right.

[B]

Well, hey, that mine's not breaking the rules. That's the revenue.

[A]

Yeah, I guess that's true. All right, quick stat for you. We're shifting gears here. Charles Schwab. Get this. Cash as a percentage of client assets. So basically how much cash they're the Schwab customers are holding on in their accounts is the lowest it's been since the great financial crisis, and it's lower.

[B]

Than the peak of the SPAC bubble. I'm looking at your chart here, which maybe you can share or else people can just look it up themselves. It's a nice, I think a custom one. Did you make it on fiscal.

[A]

No, this is a KPI.

[B]

This one. They do, yeah. So basically, for anyone that wants to know, it's just cash divided by their total client assets. So that just means like stocks, people own all the customer, not necessarily equity, but the assets. It was 11% at the bottom in what would that be? June 2021. It says right around the peak of the SPAC meme electric vehicle Covid bubble today. Sorry to spoil for you, Ryan. I noticed your stat 9%.

[A]

Markets are near all time highs. And this is like the lowest dry powder that's been on the sidelines from Schwab, which is probably a decent barometer for US investors generally because they have 35 million accounts. Yeah, yeah, probably. There's no dry powder. I mean, it feels aggressive. This to me, of all the bubble talk that we do and all the stuff we say about valuations hitting peaks and every other indicator that you see, having just 9% cash on the sidelines, the lowest since the GFC. That to me is a real indicator of maybe it's time to get a little more conservative with my portfolio.

[B]

I agree. Keep a little cash position. I guess. I've been doing a little shorting on some energy companies. Quote on energy companies. They're doing a lot of theoretical energy stuff. But that is a good data point. I think it lines up with what people are feeling. And that's always good where you go, all right. I feel like. Feel like market's getting a little frothy. I don't want to go on margin or anything like that. I don't want to do anything extreme in a time when over the next three to four years we could see terrible market returns. Not saying they're guaranteed to happen, but that is something that could happen. Yeah, it's a good data point.

[A]

Okay. Do we Want to talk interactive brokers earnings?

[B]

Let's do it. Do you. Did you see their profit margin?

[A]

It is the most insane operating mar. I think it's the highest operating margin I've ever seen actually outside of some.

[B]

Like water rights licensing company in Texas or something like that. For an operating business it's definitely the highest.

[A]

79% operating margins this quarter.

[B]

Yep.

[A]

And it's expanding. How is it expanding at this level?

[B]

It's scale and automation. Let's look at what the stock's doing after hours. It is down. I don't know what's going to react to tomorrow when people are listening to this. But what I will say is that this is a company I have high confidence in their long term competitive advantage. I feel like I bought at a right price in the spring. Today the stock is a bit expensive, especially when you consider the potential cyclicality of earnings when they're tied to the potential bubble forming. But there are a few things I just look at every quarter to just track how the business is doing and I honestly just go to sleep and don't even. I don't care what happens. They're going to go. The stock will probably go down 30%. If the market craters, that's fine. I'm just going to keep holding through the long term and as they add more customers things will be good. So what I look at is total Customer accounts grew 32% to 4.1 million. Customer equity increased 40% to $758 billion. Commission revenue, trading revenue on stocks and options both grew. Net interest income increased 21% to $967 million. That may see a headwind if interest rates fall. But there's also growth in margin lending. There's also growth in total accounts. So even if there's a headwind on the net interest income or the net interest margin they can. The spread they can earn or so however you want to define it, they grow their customer accounts. That number should grow the long term as well. And then as Ryan mentioned, pre tax profit margin for the quarter was 79%. That's not adjusted. So they're reported and adjusted for that one last quarter a year ago it was 67% but they had I think some one time fees of $88 million according to some legal. Legal matters. Yeah. It's a fantastic business. I think it's going to generate a lot of cash over the long term. Conservative balance sheet. That's it. That's it.

[A]

They have for a brokerage platform that has been operating for what, 40 years. They have 20x their total account. So since 2012 it's like this, like a growth, just a massive growth phase out of nowhere. They've gone from like 200,000 accounts to more than 4 million. It's one of the most under discussed growth stories, I'd argue of the last decade. It surprises me that most people don't talk about this. As one of those wonderful compounders, my.

[B]

Friend said that since they advertise on the show, which I will say free advertisement, I do use the platform. You're going to hear the ad on this episode. I would definitely consider switching. My friend says the fact that we talk about it on the show, that it's an advertiser, that I'm a shareholder and that I use the platform, it's too self reinforcing and but could be technically, yes, I am talking my own book when it's an advertiser. But I'm one of 4.1 million clients and a small one at that. So am I impacting the business? No. But I'd like to see them grow and it's a great platform. I'd like to see people to switch to it.

[A]

And even if like let's say the market tanked, dropped 30%, whatever and you had a recession, maybe they'll generate 50% operating margins, maybe the, the, the non interest income portion would come down like the commissions and fees. But you'd see less trading most likely. But.

[B]

And it's a buying opportunity. Yeah. This is one where if there's a recession, if there's a bear market, it's just a buying opportunity for me. If as long as those KPIs I mentioned, customer accounts, client equity and I guess margin is more or less determined as Ryan mentioned, by the market cycle a bit. But if they keep growing customer accounts, I'm totally fine.

[A]

Yeah. All right, let's. Do we want to talk gold and silver?

[B]

We had people ask about this.

[A]

Not our typical conversation, but we're not metals guys.

[B]

No. But people like to invest in these, I'd say nothing wrong with it. And as long as it's not your entire portfolio and they've done quite well year to date. It has been a good year, a good two to three years if you've owned gold and silver and a really good last few months. Gold is up to $4,300 an ounce. It's up 60% in the last 12 months to an all time high. Silver is up to $53. This is as of our recording on October 16th and it has a very similar looking chart people ask why. Maybe it's fear out there of inflation acceleration. Maybe there's the dollar depreciation in there. I think that's probably part of it. I also think think there is this is a type of market gold and silver that there is a lot of momentum and reflexivity where people like gold, they want to get in on the trade. And it's something that you can ask anyone. Oh, have you seen the price of gold? Oh, I want to get on that. It's up 50% in the last year. And this is why if you look historically, I hate to be a Debbie Downer, but precious metals have extremely quick historically blow off tops and then they collapse. Not saying, I'm not saying that's happening tomorrow but this is how I would look at. That's maybe helps with the base rate of the situation. That's a weird way to say that's. That was a stupid way to say that. But if you're someone I think this is maybe the smart way to look about gold. I know there's a guy out there that I think we've had on the show before. Someone is an honest account online value stock geek. People have probably seen him. He has a portfolio is like 25% gold, 25% stocks, 25% some other things. And when you have it like that set at a percent allocation of your portfolio, that can be helpful because in a situation like this you're going to be forced to trim back and then add to some other stuff. So yeah, that's kind of how I look at it.

[A]

So question for you because gold, I don't think you've ever invested in gold.

[B]

From what I never have. I don't think it's for me.

[A]

Would you rather if you were forced to put money in one or the other, would you rather own crypto, let's say bitcoin or gold?

[B]

Oh God, I think gold because I don't think it's good zero. But right now that's tough because it just went up like 100% in the last 12 months.

[A]

The yeah, yeah, that's a good point. The do most people buy it through like an ETF structure or are they buying futures and would theoretically have like an actual claim to physical gold?

[B]

Some I think it's both. So someone like us, I think would just buy an etf, something like that. I'm sure there's one out there with a very, very cheap fee. But there are a lot of people that like physical and you can go and sell it at places that have Some decently high fees. But there are a lot of people that hold, hold physical gold and silver. I know some of them.

[A]

Yeah, this is definitely one of those asset classes where price drives. Price drives further price.

[B]

Price drives narrative, which drives price, which drives narrative, which drives price.

[A]

Exactly. Yeah. It's kind of an endless loop. I mean that's the reflexivity portion of it. The. And you see people talk about it so much and it's always in the news, always in the headlines. People always talk about the price of gold.

[B]

Advertisement and FOX News. Yeah.

[A]

Yeah. And it's like that alone. And, and part of it is because they're, it's almost like meme stocks in a way. If gold had to report earnings, then it might have to. You know what I mean? Like it might have to follow fundamentals.

[B]

That's what makes it great. There's never earnings.

[A]

The only thing to analyze aside from macroeconomic conditions, which is too big to, it's too big of a topic, I think to be like, if you're a gold investor, being the person that is constantly predicting the macro environment as your price for gold seems like way too. That's a herculean challenge.

[B]

It's like astrology. I've never seen anyone be accurate with that. But if you want it to be a part of your portfolio, I have nothing wrong with that. Just don't make it 100 of your portfolio. Would you agree?

[A]

And 100 of your personality. Don't. Definitely don't become the person that brings it up at the dinner table.

[B]

Yeah, that's fair. That's fair. That's good for any topics. I do that with Mexican airports.

[A]

Have you guys heard about the monopoly in Monterey that they've got?

[B]

Have you heard any news on the concession, what their rate's going to be? Yeah, that's a great, that's a great topic. All right, here's something that I think is maybe more interesting for some of our listeners. Probably more interesting to Ryan. It is the announcement from JP Morgan that they are going to be doing $10 billion in direct investments into US strategic sectors and are going to be doing, which I assume is facilitating financing, helping with deals. IPOs and other investments is $1.5 trillion in total help, which as a bank, that's a large number, but in reality it's not that large of a number if they're just helping other people invest it. They're going to be doing $1.5 trillion in facilitation and financing for strategic industries. And this is a ten year plan. I'm going to list off. Well, here's the broad categories. Supply chain and advanced manufacturing, defense and aerospace, energy independence and resilience and frontier and strategic technologies. A lot of listeners wanted us to talk about this. I'm going to list off the 27 subcategories and every. If I go, I'm going to go through one and you just tell me one that you're actually interested in. And you think when looking at like a potential investment, you would have any interest in saying, all right, JP Morgan, the government, just the US Economy in general is investing in this category. And I think I could maybe find some stocks that are interesting.

[A]

Just clear. They're committing to one and a half trillion in total facilitation. Facilitation and financing. It's actually usual.

[B]

I know.

[A]

That's what banks do.

[B]

Well, they are committing. They actually originally, according to their press release, had committed $1.1 trillion the next 10 years. That was their goal. And now they're upping their goal to $1.5 trillion. So it's fair. It's, it's, it's like, okay, this is our priority over the next 10 years, this is our goal to hit this number of financing. And they're going to do $10 billion in direct investments.

[A]

So, yeah, the 10 billion, I say whatever, that's kind of a drop in the bucket for them.

[B]

But we're not thinking about J.P. morgan. Let's think about the industries that they could invest in here. I'm gonna go through the list. Tell me anything you might be interested in. Advanced bulk materials, nanomaterials, microelectronics, critical minerals, mining and processing. That's what people have been talking about. A bunch with stocks like MP Materials, you know, the, the rare earth metals that have been in the news lately. Pharmaceuticals, precursors, advanced manufacturing, mission critical, real estate, shipbuilding, autonomous mobile robots. And then if we go into defense and aerospace, we have command and control tech critical components. Spacecraft, space launch, unmanned systems, munitions, missiles and hypersonics. 6G. Hey, we graduated from 5G. Secure communications, mesh networks and then energy independence. We have nuclear grid resilience, distributed energy battery storage, solar, and then strategic technologies, cybersecurity, psi, quantum computing, artificial intelligence, edge computing and sensor hardware. Anything interest you here, Ryan? I think 1. This is going to help Kraken Robotics. I should say that company I did, I think it was the last podcast I did on fascinating company that we did. We did a show on sometime this year. Anything here catch your eye?

[A]

So you're about to make a trade based on a Friend's text but which u do you listen to is it we could buy a house in Tulum, get optioning those options. We could lose everything.

[B]

Or let's do a little research.

[A]

Get your head in the trade and make the investment decision that's right for you. Learn [e-mail] TradeSmart when did making plans get this complicated? It's time to streamline with WhatsApp, the.

[B]

Secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom 60th and never miss a meme or milestone. All protected with end to end encryption. It's time for WhatsApp message privately with everyone.

[A]

Learn [e-mail] no, honestly no.

[B]

You hate deep tech. So I, I was. Well, yeah.

[A]

So it's, I mean on the one hand it's like yeah, it makes all the sense in the world for one of the leading banks globally and, and in the US to be helping facilitate finance. Invest in these categories because they seem critical for American security. Most of them I should say. But I'm not investing in any companies in any of these categories solely on the principle that they'll have J.P. morgan's help.

[B]

Yeah, or the government's help. I mean a lot of listeners have asked about this, been a big theme of like oh, what's the government gonna back next? Which that's not how you run a nice free market economy. But that's a different discussion. I think one thing for me is defense and aerospace. Not that a lot of these stocks are cheap right now, but anything connected to the supply chain or is making stuff again Kraken Robotics is an example for modern defense solutions. Autonomous stuff, military or commercial. Waymo as an example but that's under Alphabet. Ship building and then spacecraft, space launch. I think that is a multi decade tailwind. There's a lot of potential there. You can look at probably a lot of niche contractors out there, not just the Lockheed Martins of the world and there's going to be financing for these companies available and then you can maybe find some interesting opportunities. Such as, you know, maybe not Kraken Robotics today but a couple years ago Kraken robotics is at 50 cents now it's at almost a 10 bagger since then. Yeah, it is a 10. Maybe very, very close to a 10 beggar sense. Then there could be some opportunities there. But if we look at quantum energy, nuclear, AI, I don't know if there's much of AI.

[A]

Do they need it?

[B]

I know it's already there. There's already a lot of investment there. Where are you going to find any edge stuff?

[A]

That video needs you now. They need your financing. It's I think of everything in here. The areas that I'd maybe feel the most inclined to invest are like the defense industry is, is nice because it's easy to analyze and a lot of the contracts are very predictable and the businesses are run pretty well and they're fairly shareholder friendly. The, the rest of these feel pretty outside my circle of competence. I've always wanted to be an investor in shipbuilders and like transportation and logistics companies. I don't know why. I've just always thought that they the massive freight haulers, shippers have a moat. I, I've just kind of always felt like people are not dying to get a massive ship like that and move it across the world. Like there's barriers to entry. Yeah there's capital intensity which is quite the big barrier to entry. So I've always wanted to do that but it feels like a very unpredictable industry and it seems like there's a new geopolitical crisis that hurts these companies every six months or something like that.

[B]

So yeah, I think right now this defense tech stuff is a little bit trendy but if we go through a pullback maybe that's where you can find some opportunities. Who knows. All right, you want to look at related to this a little another energy bubble stock I potentially found.

[A]

Sure, let's do it. Bubble watch of the week. What do you have?

[B]

All right, this is a air quotes energy stock. They seem to multiply like wildfire. They're coming out of the woodwork. It's a company called Fermi just went public. Tickers F R M I actually run or chaired by there's a relationship to Rick Perry who is the old energy secretary of the United States. Market Gap 17 billion. This is what they say they do. Fermi America is pioneering the development of the next generation private grids that deliver highly redundant power at gigawatt scale required to create next generation artificial intelligence. Now that sounds great but can you guess how much revenue they have?

[A]

Either a minuscule amount or zero.

[B]

They've never generated any revenue.

[A]

Yeah, sometimes you'll see like them record like a thousand dollars in revenue from some like.

[B]

Or they do fake revenue.

[A]

Yeah it is amazing like whoever sold, I assume the founder once the lockup's over is going to sell shares of this thing people are getting. It reminds me of 2020. This is generational wealth like they can earn generational wealth from these, from the sellout events. Good. Well, whatever. If you're willing to destroy your reputation and sell out, like, good for you, I guess.

[B]

I mean, if you can sleep at night.

[A]

This is the stuff that reminds me of the 2021, 2022 SPAC bubble. I, on the one hand, I get frustrated and think it's not fair that these people are building generational wealth without building value for anyone in society. But on the other side of things, if it introduces more private companies to public markets, and that's what it takes, and we have to go through these like two year bubble periods where all the crappy companies come public too, but you find a few more gems, I'm okay with that.

[B]

Or just short into the lockup period.

[A]

Yeah, that too.

[B]

All right, before we go, before we get out of here, people want us to talk Ferrari. They mentioned it two weeks in a row. So let me just go through the numbers. I know we've been kind of interested in them. Stocks in a 24 drawdown. They had their capital markets day. People were asking, well, why they're guiding for 5% revenue and growth. Unit volume is not going to grow. Let me just go through what they said quick, just before we get out of here. So active clients grew 20 since 2022. They're guiding for $2.75 billion in EBIT by 2030. The market cap after this drawdown is 75 billion euros. So that is 27 times 2030. EBIT people were very confused that they were guiding for just 5% annual revenue growth. But I think that's because they are afraid of growing unit volume too much because they want to remain a true luxury company. I'll close things out here. Ryan, what price would you buy Ferrari? And how do you compare to Hermes, which is trading at 33 times trailing EBITDA? Again, Ferrari is trading at 27 times 2030 EBIT.

[A]

Yeah, I still don't like Ferrari. Here, look. Ferrari business model is really cool and it's very unique and it's very exclusive. And the fact that they sell cars on average for 450 grand a piece is great. 52% gross margins in the auto industry is unheard of. It's a luxury business, but there's, there's a cap to growth. There's a cap to growth for a couple of reasons. One, they, they just can't grow volume. They've grown volume at I think 5% a year over the last five to seven years. They can't keep doing that. There aren't enough billionaires in the world. And the more that you do grow volume, the more it hurts the value of the people that are a part of that Ferrari club. So it eliminates some of the exclusivity. So I would guess that you're Gonna, if it's 5% annual revenue growth, it's probably all gonna come from pricing.

[B]

And that's good, that's good for durability business over the long term.

[A]

It's good for margins too. Yeah, but there's just a cap to growth with a business like this.

[B]

Yep.

[A]

And, and these items are. Even though it's like. Yeah, they've got pricing power. It's like an hermes bag is 10 grand, 15 grand, 20 grand. This is a half a million dollar car. Some of these are two million dollar cars. It's not something. I think Hermes can grow volume and pricing at the same time. I don't know if you can continue to see that for Ferrari.

[B]

No, I agree. And I'd rather buy Hermes at 33 times trailing EBIT. I think it's growing faster and it probably can grow faster. All right, that's it. We're going long. We got some great interviews coming up on the show. We're always going to have the power Hour. We're actually going to do a special AMA power hour pre. I'm going to figure out the best way to get the questions for that, but those are going to be more hopefully thoughtful questions from listeners and we'll do in depth thoughtful responses that we prepare some notes and research for as opposed to the off the cuff stuff during the power hour. Yeah, interviews with stuff on Fairfax, India. We're going to do stuff on actually a new holdings update from someone. We're going to be doing something on the Argentinian economy and maybe stuff around what's going on there and some opportunities in Latin America and lots of other fun stuff. So follow the show, give us a review, five stars, Spotify or Apple, and let's hit the disclosure and get out of here. We are not financial advisors. Anything we say on the show is not 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 week.

[A]

Sat.