SpaceX IPO Predictions; Buying The Fintech Sell-Off; Has The Bubble Reached Its Peak? $SPCX

Summary

Chit Chat Stocks — Episode Summary

Episode Title: SpaceX IPO Predictions; Buying The Fintech Sell-Off; Has The Bubble Reached Its Peak? $SPCX

Podcast: Chit Chat Stocks
Hosts: Ryan Henderson & Brett Schafer
Date: June 12, 2026

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Episode Overview

Ryan and Brett conduct their weekly Investing Power Hour, tackling timely topics in the market. In this episode, they dive into:

• The ongoing fintech sell-off and whether it's a buying opportunity
• SpaceX IPO predictions and IPO market exuberance (“Bubble Watch”)
• Reaction to Apple’s Developer Conference and its AI ambitions
• A closer look at recent corporate moves at Wix
• Nintendo Direct, the shifting video games cycle, and patient management
• Several watchlist-worthy stocks trading at cheap multiples
• Listener Q&A on options strategies, Sprouts Farmers Market, and non-tech investing ideas
• A quick look at the coming “MANGOES” era (Meta, Anthropic, Nvidia, Google, OpenAI, SpaceX)
• Fun closing predictions for the 2026 World Cup

Throughout, Ryan and Brett maintain their measured, skeptical, yet good-humored style, with sharp market observations and honest self-reflection.

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Key Discussion Points & Insights

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The Fintech & Payments Sell-Off

Timestamps: 01:47 - 11:32

• What's happening?

  • Major fintech names — Visa (-8% YTD), Mastercard (-14%), American Express (-16%), PayPal (-29%), Adyen (-40%) and others — are all experiencing steep declines.
  • Stripe (private) remains strong, but others fall.
  • Ryan: “I honestly have no idea what's causing this... Capital is flowing more towards semiconductor stocks, more toward anything ancillary to the AI infrastructure build-out as opposed to financial services or software.” (03:55)
  • Many of these companies are “inflation protected” and have entrenched infrastructure with high switching costs.

• Favorites and Opportunities:

  • Toast highlighted as especially interesting in the restaurant backend and POS market, possibly with a growing moat.
  • Many stocks in the sector are now below 10x–15x earnings and offer strong fundamentals.
  • Adyen gets deep praise for global reach and reliability (see below).

• On Adyen’s Moat:

  • Brett: “They built essentially modern payment infrastructure for digital and in-person payments globally... closing rate success at checkout can be 98–99%. Adyen... is the best. On top of that you have the durability from the switching costs... and then growing with them over time.” (09:32)
  • Adyen's customer list: McDonald’s, Uber, Spotify, Chipotle, LVMH.

• PayPal skepticism:

  • “I still wouldn't touch PayPal. ... Picking up pennies in front of the steamroller.” (Brett, 12:03)

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Apple Worldwide Developer Conference — Incremental or Game-Changing?

Timestamps: 13:05 – 17:43

• Apple announced “Apple Intelligence” (AI), powered under the hood by Google’s Gemini, not a homegrown LLM.
• Features like advanced Siri, bill split via photo, and enhanced Apple Pay P2P.
• Cautious reaction:
  • Brett: “I don’t know if that’s going to convince people to buy iPhones or upgrade.” (14:44)
  • Ryan: “It’s a nice quality-of-life upgrade... but would it compel me to upgrade? No.” (15:27)
• Concern about the economics of Apple feeding so much AI work through a competitor (Google).
• Memorable Moment: Tim Cook’s overproduced “good morning” celebrity intro mocked as “cringy” and “living in your own bubble.” (16:32)

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Microsoft’s AI & Software Lock-In

Timestamps: 18:46 – 22:14

• Institutional buyers overwhelmingly defaulting to Copilot for AI because of “Microsoft lock-in.”
• Microsoft’s valuation now below 20x EV/EBIT.
  • Ryan: “Google or Microsoft — which has the better returns over the next five years? ...I’m going to choose Microsoft.” (20:36, Brett)
  • Key challenge: Do valuation multiples capture GPU depreciation and future capex reality?

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Wix Restructuring & Guidance

Timestamps: 22:14 – 29:06

• 20% workforce layoff; booking and revenue guidance cut by $50M and $25M for FY26.
• Brett suspects the “reason” for guidance cut is questionable — it's about bookings, not just layoffs; competitive pressure from AI tools.
• The Partners/Agencies segment (38% of revenue) is declining, now a potential headwind.
• Ryan: “If you think this business is deteriorating…look elsewhere and see what else you can find.” (28:10)

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Nintendo Direct — Where Are the Blockbusters?

Timestamps: 29:48 – 34:35

• No new mainline Mario game announced; focus on remakes, Splatoon, some Pokemon news.
• Brett: “I think that’s why the stock is down... Is it time to get concerned over Nintendo’s patience?” (30:50)
• Discussion: Has Nintendo truly broken the cyclical, boom-bust hardware cycle?
• Both see solid trough earnings/cash flows, but missing tentpole releases could keep shares in check.

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Watchlist: High-Quality, Cheap Growth Stocks

Timestamps: 35:09 – 39:58

Ryan’s criteria: >8% revenue growth (10Y), >20% ROIC, <15x EV/EBIT:

• Booking Holdings
• Adobe
• Zoetis (pet/animal pharma)
• Copart (junkyards/auto salvage) — “top of my list,” says Ryan; heavy recent buybacks after years of none.
• Ulta Beauty (durable retailer, outperformed COVID bullwhip era)

On Copart’s big drawdown:

• Brett on Gemini’s answer for Copart’s woes: “Stagnating growth, declining insurance unit volumes, multiple compression... That’s when a stock goes down. Thank you, Gemini.” (39:18)
• Both interested in learning more — more follow-up research promised.

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Listener Q&A

Timestamps: 40:22 – 47:13

Options Strategies:

• Neither host uses covered calls or cash-secured puts; prefer simplicity and time efficiency.

Sprouts Farmers Market:

• Strongly bullish: “No debt, good free cash flow, buying back stock, store growth 7–10%... Near the top of my watch list.” (Brett, 41:07–45:12)
• Unique grocery experience, solid management, room for margin improvement.

Contrarian to Tech & AI?

• Winners: Sprouts, Ulta Beauty, Copart, O’Reilly’s Auto, select airports and durable retailers.
• Reminder: Market comparisons to AI/tech-laden S&P could be dispiriting during AI-fueled bull runs.

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Bubble Watch: SpaceX, OpenAI, and The IPO Frenzy

Timestamps: 47:51 – 59:55

• SpaceX IPO: Reuters claims 4x oversubscribed, $250B demand for $75B allocation. Both predict a first-day IPO pop, then years of flat/“dead money.”

  • Brett: “I think it pops.” (48:15)
  • Ryan: “Bold prediction — things are going to get really crazy… $3 trillion market cap, potentially for SpaceX.” (51:28)
  • “People don’t care about valuation. SpaceX, great story. Elon Musk — look what he did with Tesla.” (49:48)

• OpenAI IPO: “Altman’s just jealous of all the hype. ... Both are going to try to raise $100 billion.” (Brett, 52:46)

  • IPO filings are “confidential” but can be kept on ice for a long time.

• Acronym Alert: The new “MANGOES” — Meta, Anthropic, Nvidia, Google, OpenAI, SpaceX.

• Bubble Hallmarks: Downtown Josh Brown identifies all the marks of a classic bubble: Compelling story, naive investors, pure plays, competitive ignorance, complex business models, narrative acceleration, and leverage.

  • “It checks every box. ... The IPO indicator is undefeated…When companies are rushing to get public…it is a bad time to be a buyer of those stocks and probably most stocks in general.” (Ryan, 59:00; 59:08)
  • “Sound the alarms. Honestly, I think we’re at the top.” (Ryan, 59:55)
  • “Bottom of the eighth [inning].” (Both, 60:06)

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Fun Closing: World Cup Picks & Investment Ideas

Timestamps: 60:10 – 63:44

• Ryan’s soccer bets outperformed last year
• For World Cup 2026:
  • Ryan’s value pick: Portugal at +1600 odds. (62:01)
  • Brazil could be “finally underrated?”
  • “The best way to play the World Cup is a potential underrated wide-moat business in Mexico” — an airport operator! (63:44)

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Notable Quotes and Memorable Moments

• “I honestly have no idea what's causing this [fintech sell-off]... Capital is flowing more towards semiconductor stocks, more toward anything ancillary to the AI infrastructure build-out.” — Ryan (03:55)
• “Adyen ... has the best ... closing rate success rate at checkout…98–99%. On top of that, you have the durability from the switching costs.” — Brett (09:32)
• “I still wouldn't touch PayPal. ...Picking up pennies in front of the steamroller.” — Brett (12:03)
• “If you just took the stock out of the picture … would you feel confident about the results after reading the 6k from Wix? I would not.” — Ryan (28:10)
• “Copart ... top of my list here.” — Ryan (38:00)
• “Sprouts ... maybe number one on the watch list at the moment … Grocery stores are underrated as investments.” — Ryan (43:14)
• “People don’t care about valuation. ... SpaceX, great story. Elon Musk — look what he did with Tesla.” — Ryan (49:48)
• “Sound the alarms. Honestly, I think we’re at the top.” — Ryan (59:55)
• “My value play [for World Cup]: Portugal. ...The return on that investment would probably be pretty high.” — Ryan (62:01)

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Takeaways & Investment Implications

• Fintech and payment stocks are being overlooked amid the AI/infrastructure mania — “a phenomenal pond to be fishing in,” yet fundamental diligence and skepticism are needed.
• Retail and brick-and-mortar businesses (Sprouts, Ulta, Copart) may provide contrarian ballast in a tech/AI-obsessed environment.
• IPO and bubble indicators are flashing red; historic patterns suggest mean reversion may be coming.
• Management, switching costs, and business durability matter — even when the market narrative has shifted elsewhere.
• Market cycles don’t reward the same thing forever; looking at unloved sectors and quality at reasonable prices is always a prudent move.

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Quick Navigation by Topic

• Fintech Sell-off/buying: 01:47 – 11:32
• Apple conference: 13:05 – 17:43
• Microsoft lock-in: 18:46 – 22:14
• Wix guidance and layoffs: 22:14 – 29:06
• Nintendo Direct: 29:48 – 34:35
• Cheap quality stocks: 35:09 – 39:58
• Listener Q&A: 40:22 – 47:13
• Bubble Watch/SpaceX IPO: 47:51 – 59:55
• World Cup fun: 60:10 – end

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For Those Who Haven’t Listened

This episode delivers a sharp, topical, often witty state-of-the-market rundown. Ryan and Brett dissect current sentiment, highlight overlooked value, and warn against both excessive pessimism and irrational exuberance, all while maintaining a friendly, conversational tone. If you want to know which stocks are being ignored while everyone is chasing the next AI bubble — and which flashing red flags to watch for during IPO mania — this episode is a must.

Transcript

[A]

For the past three years, IBKR individual clients averaged 24.3% annually, beating the S&P 500's 23.1%. Lower costs and 170 plus global markets matter Interactive Brokers member SIPC visit ibkr.com performance welcome to Chit Chat Stocks, the podcast that helps you find your next great investment. I'm one of your hosts, Ryan Henderson, and I'm joined today as always by the one and only Brett Schaer. This is our weekly Investing Power Hour episode. We typically do these on Thursdays at 5pm Eastern Time, but we're doing this a day early because we got some travel planned. So we do these live on YouTube, typically Thursdays at 5pm Eastern Time. So if you ever want to ask us some questions live, feel free to head on over to YouTube and do that. You can also check out the substack chat. It's totally, totally, totally free and we get a whole bunch of questions there. We got a bunch this week that we can rip through as well. But on these episodes we talk all things financial markets and we've got plenty to discuss this week. Some of these are news headlines, some of these are more organic content that you and I came up with, Brett. We have Apple's worldwide developer conference. We've got a major restructuring and guidance downgrade at wix. We've got Nintendo Direct, which feels like the only Americans that follow it really closely are just the investors it seems. But we also, and I'm excited to get your take on this, we've got a fintech sell off as well as a list that I put together of five high quality companies that are trading below 15 times earnings. So we'll get to all that. But welcome to the show. Brett, where do you want to kick things off today?

[B]

Yeah, thank you Ryan. And I want to mention that we also have SpaceX IPO predictions which will be coming out today. If you are listening to the podcast on Friday mornings and if we have time, especially with your 2 for 2 execution on the Premier League predictions. We're going to get your World cup predictions, Ryan, as well as it kicks off, but we'll save that for the final part, the final minute of the episode. Yeah, let's hit, let's hit your fintech sell off. I'm interested here. I'm sure you have Adyen in the mix. Someone thought I was trying to use the pronoun, the proper pronunciation. Someone thought we were saying it like a J E U N or something like that. They're like what company is this, it's Adyen for American accent. I think in Dutch pronunciation is a little different. Yeah, I bet they're include your list. What made you want to include this? And what's happening to all these fintech and payment stocks?

[A]

The I honestly have no idea what's causing this is the short answer because I mean I'll just go through this. The year to date returns for most fintech stocks seemingly aside from remitly are down. So Visa is the best performer on this list and it's down 8% year to date. MasterCard is down 14%. Global payments down 16% or 15%. American Express down 16%. Pfizer down 20. PayPal maybe a little lower quality than some of these other ones here, down 29. Toast down 29 FIS which is like it's not Pfizer. It's always a confusing ticker. It's like the.

[B]

It's not. There's data, right?

[A]

No, they've changed. It's like Fidelity Informational Services or something. You should look up the full name.

[B]

But Fidelity National Information Services ignore that. That one just on the name alone.

[A]

I'm not investing but they are a large payments processor if I'm not mistaken. So anyways I throw them in this list Also they're down 40 shift for payments down 40% and Adyen down 40%. Not included in this list is Stripe whose private valuation continues to soar I imagine. But again that's a private valuation. So what's happening? I honestly have no clue. My gut tells me that this is just capital going elsewhere and I'm starting to wonder if that's some of what the software sell off is as well because you've got. It feels like sort of the AI versus software debate is being debunked a little bit yet you're still seeing significantly cheaper multiples. And I just kind of wonder if capital is flowing more towards these semiconductor stocks, more towards anything ancillary to the AI infrastructure build out as opposed to financial services or software. All these businesses, well I shouldn't say all these but Visa, MasterCard, American Express, Toast Shift 4 Aden I would consider all those pretty high quality businesses. They're inflation protected. The sell offs though have been steep and I honestly have no idea what is causing it.

[B]

I like Toast as well. I heard a great pitch on them on business breakdowns and it seemed quite interesting. They, I, I think have a, you know, using the term, I like to coin emerging moat in the restaurant payment processing kind of backend management space. That's another one I want I think, I honestly think I'm putting it on the schedule for coverage on the newsletter. So that one, that one's quite interesting, but I don't know the business that well. American Express obviously like I still think it's kind of at a premium ish valuation shift 4 luckily I've never gotten around to liking. People say it's dirt cheap now. Maybe it is. It's kind of one of those where it was at maybe 8 times earnings and you go man, could it get to 4 times earnings? And it did. So if, if they do execute and they buy back a lot of stock and the business quality is there, that could be a phenomenal opportunity. But the one I do own on this list, luckily I haven't experienced the entire 40% drawdown, but I think maybe 15% a little bit more is Adyen and we mentioned it last week on the show. I don't think I have to go through it any more detail, but you look at a pretty reasonable multiple and a 20% revenue grower, maybe 15% as they get a little more mature, there's a lot to like.

[A]

Yeah, agreed. Also not pictured here is wise down 10% and this one might surprise you.

[B]

I forgot to yeah, your favorite is getting hit.

[A]

True the one I forgot to include here block is up 2% year to date but that's off of probably a lower starting base valuation than some of these other some of these other fintechs. So yeah, I think this is a phenomenal pond to be fishing in. There are once you have a payments processor or a payments service provider integrated as a business, it's really frustrating and probably painful to switch. So especially you think about like a restaurant that has Toast, for example is Runner sort of running the operating system beyond just payments processing, you know, providing a lot of software that helps these businesses run. I imagine that would be cumbersome. So I like I'm probably going to dig in a little more Visa and MasterCard we already know pretty well they're still somewhat expensive but MasterCard's getting there. If you had to buy one from this list, not Aden Brett, what would interest you the most today?

[B]

I think Toast, but I haven't done my full research. It's on the queue. It's in the queue. But look at their valuation and their growth potential. We have a comment here that said that from Chris as I also listened to that episode of Business Breakdowns, not our podcast. The AI integration into toast to give operators KPIs for growth seems like a good catalyst. Can we get fiscal AI integration for. For them. Not sure that would be that valuable but you know, similar, similar for them. If you can get all the sort of analytics you'd want as a small restaurant all powered through Toast, that feels like much more valuable than even just a payment processor. We maybe Ryan you. There's one more question here about Adyen, but what would your choice be for? I don't know if you own Adyen, but for a stock on this list that you don't own.

[A]

I do own Adyen. I would say the next closest for me just because I don't know Toast super well would be American Express. I think it's actually getting into a territory where I could be interested. I believe it's sort of high teens forward earnings multiple right now, which I think once you get to sort of 15 times forward earnings, I honestly think that's worthy of sort of entering the portfolio. But the other one, yeah, Shift four. Again, sort of a battleground stock in a way. I just, I struggle with the inorganic growth and whenever there's a company that. Where there's a lot of inorganic growth I always kind of question like how, what am I missing? Is there some accounting shenanigans that I don't follow potentially?

[B]

Unless it's Constellation Software.

[A]

Well, they report the organic growth. I don't think Shift 4 reports organic

[B]

or split, double check. But they're a little more cleaner. They're a little more cleaner. Yeah. Shift four, I feel like that's high risk, high reward for sure. I've read some of the theses before and they make sense. But yeah, it's not my favorite. We have a question here. Can you go into a little more depth on Adyen? I've been eyeing it a bit. What gives them staying power? Is it pretty much just switching costs or anything else? Yes, just. Just a question mark here. I would say if you want full research. I do have a comprehensive research report for merging modes but I'll try to do a 30 second pigeon exactly where they get there just durability and have stolen market share1 given that they built essentially modern payment infrastructure for digital and in person payments globally. So this would be online meaning. Meaning digital or I guess you could have digital in person. But any way to pay in person or online for large enterprises. Think McDonald's, Uber, Spotify, Chipotle is rolling out with them. There's a lot of big retailers LVMH that utilize them. The reason they choose add in is because Adyen has the best essentially. I forget the exact term always but like closing Rate success rate of when you try to make a payment at checkout. It can be 98 success, 99. And Adyen compared to the rest of the industry is the best. Then on top of that you have the durability from the switching costs once they land and expand with these existing customers. You have these stodgy hold systems within the last 20, 30 years for online payments and in person payments. And they have the ability to take market share by slowly kind of landing with someone like a Chipotle or a Starbucks. All these are existing customers and then growing with them over time. And then as well as that, you have the global expansion opportunity to land with these multinational retailers and in person. So that would be kind of the growth plus the moat. Maybe it was a minute pitch, but I think that sums it up.

[A]

Yeah, I think it's a great description. We also have a comment here that says I still wouldn't touch PayPal. I'm probably in the same boat again. It continues to be pitched as potential value play and I think there's a chance that people are right on that because big buyback yield, big free cash flow yield. But down to 40 to steal. Brett's sort of mantra. I. I worry that you're picking up pennies in front of the steamroller here. I don't know if you coined that, Brett.

[B]

I stole that from someone else. That one's. That one's definitely someone else.

[A]

Yeah, I think that's a valid concern with PayPal. Is there. There's this general trend away from their core PayPal button.

[B]

They just. Ryan, I'm looking at their press releases right now that just launched a partnership with the Seattle Seahawks. Did you see this?

[A]

This? No, I didn't, but they might be up there. They're on the Mount Rushmore of press release happy companies.

[B]

Who cares if you have a partnership with the Seahawks for payments?

[A]

Is that an 8K? Did they drop that maybe?

[B]

Yeah. Yeah. That's what, nine games or eight games? It's eight days a year.

[A]

Yeah. It's not. It's not for me would be my answer there. Let's shift gears a little bit. What do we want to talk about next? I. I saw you have notes on the Apple Worldwide Developer conference

[B]

AI series out. It looks like it's a Gemini wrapper. We'll see what it actually looks like. Of course, they touted some features that they're going to make look good.

[A]

One clarification, Brett. It uses Apple Intelligence, which is powered by Gemini, I believe. I'm pretty sure Gemini underpins Apple Intelligence again there's maybe more customization or more being built on top of Gemini than we're seeing here. Like the layer between Apple Intelligence and Gemini. Don't know how they're intermingled but to be clear you can see it in their capex lines they are not building their own LLM.

[B]

Yeah it might be the right move. We will see but if you're working with your number one competitor who is going to put the exact same tools on Android maybe is there going to be some sort of competitive advantage there? I'm not sure but I try to look through all the features that they came out with. There is a bill splitting feature now that you can use a photo to take of something possibly that's nice. I don't know if that's convinced more people to buy iPhones or upgrade. I think the big question that's

[A]

something to potentially worry about if you're PayPal if they can start to carve into Venmo's market and I do think they've actually made some headway there. The Apple pay is they've rolled out some pretty convenient peer to peer features where you can just hold your phone up, send them money, whatever that might be. Old, old news but the I do think that potentially eats into some of Venmo's market.

[B]

Okay. And specifically on the AI stuff which is really going to drive the needle for Apple if it can do like improve on distinct tasks for Apple specific apps on the iPhone. Do you think there's an upgrade in value here? Because besides that I didn't see anything exciting from their what is called the Worldwide Developer Conference.

[A]

Yeah, I think it's a nice quality of life upgrade if you can really kind of have Siri be a true sort of agent that can span your entire device and all your files and all that. I think that's nice. Is it? Would it compel me to upgrade my iPhone?

[B]

No.

[A]

But come next upgrade cycle when I'm choosing between whatever the iPhone 16, iPhone 17, whatever and one of them has this compatibility or this feature, I think I'd probably be more inclined to go with that one. But yeah, it's fair. I don't see this necessarily moving the needle but I, I could actually totally be wrong on that.

[B]

I think I agree with you. It seems like when we can talk about the Nintendo direct here update people had a question about that as well. It seems like from the hardcore Apple fans, maybe these are just Internet commenters and they're always grumpy but it was the same reaction kind of A meh. And from an investing perspective, again, I will be curious what the economics look like if you're partnering with Gemini. If it's hosted on Google Cloud, where do the economics go and how are they splitting any sort of cost because it's included on an iPhone. So how are they going to pay for all the inference through Google, Gemini and Google Cloud?

[A]

Yeah, I was curious about the economics of that partnership as well. The I don't know if you saw this part, but at the Worldwide Developer conference to kick things off, they had a like minute long montage of a bunch of different celebrities saying good morning. And then Tim Cook starting the conference with good morning. And I just thought what a horrendous waste of for a team for a company that. Yeah, first no one knows. Like you've got to be living in your own bubble to think like Tim Cook saying good morning is like an iconic thing. It's not. It's maybe longtime Apple investors are used to it. But yeah, he, he literally had, I think it was like 15 different celebrities. You should go look up the video if you haven't seen it. Fifteen different celebrities saying good morning. And then Tim Cook walks on. It's like, good morning. It really was quite, quite the cringy moment. But yeah, I didn't come away with anything. I wasn't too shocked by anything announced at the Worldwide Developer Conference.

[B]

No, compare it, compare it to, okay, what Anthropic announces what Alphabet/Google announces what OpenAI announces, what Amazon even announces. Microsoft again, I don't follow them too closely and I guess meta toss them in there. It's like every month these companies are coming out with new innovations. Apple, kind of slow. You research your investments, you analyze markets, you manage risk. But did you research your broker? For the past three years, IBKR individual clients averaged an annual return of 24.3% compared to 23.1% on the S&P 500. IBKR's lower trading caused competitive rates. Efficient execution and access to more than 170 global markets helped investors keep more of what they earn and put more capital to work. Over time, the broker you choose matters. Interactive Brokers Matter Member SIPC if you care about performance, find out why the best informed investors choose interactive [e-mail] performance.

[A]

You mentioned Microsoft there, so I want to derail our conversation for a second. I was on, I don't know, I might have already mentioned this to you, but I was on a. I was in a call with this company that does basically like prompt help for buy Side companies so they'll go to funds.

[B]

It was, it was either offline or online. I can't remember if it was on the show or offline.

[A]

Right, yeah. And if it was on the show and you already heard this. Sorry, I'm going to say it again. But the they said they were shocked. I said what is the most common model that you see banks funds buy side firms using? And they said they were shocked. But unfortunately the answer is Microsoft Copilot. And it just got me thinking like in a world where Claude is so commonplace, Codex, these are like household names, very useful tools.

[B]

Everyone's testing them.

[A]

People are still using Copilot because it's just what's mandated by their company. Like the Microsoft lock in is so powerful and you've got all these companies Claude GPT Copilot building on top of sheets still or sheets or Excel. I feel like the lock in is just so strong with Microsoft and that got me thinking. I looked up the recent valuation multiples. I did something similar, I think last week. Microsoft now trades at an EV to EBIT below 20 times. So my question to you, Google or Microsoft, which has better returns over the next five years? Google, I believe is trading out about 31 times. Microsoft's now below 20.

[B]

Yeah, I think we did this last week with Meta and Google. We're going to keep going through all of them versus Google now since they've been kind of the top dog. I'm going to choose Microsoft because I think cloud, they're probably neck and neck. It's a bigger part of the Microsoft business. And yeah, Office 365 will keep chugging along. I don't love the growth potential over the long term versus the multiple but I like it. It probably does just fine like 10, 10% returns going forward like over a decade. I have no idea what the next year will be, but long term. Yeah, I think you're rocking and rolling.

[A]

Yeah, I think 20 below 20 times, you're probably good. Again, every time I quote EV to EBIT multiples, anything that's using GAAP metrics, which I guess EBIT is sort of gap, same with pe, whatever. It's using GAAP accounting to arrive at the earnings figure. All of that, all of that is still dependent on whether or not the depreciation or the life, the useful life of GPUs is accurate.

[B]

Seems to be the. Or if they can. Yeah. Or if they can grow out of the upcoming depreciation growth. Sorry. If revenue can keep growing at a fat just as fast or faster than the depreciation that's going to hit the income statement from all this capex in the next few years. Yeah. And the PE here, 23 and a half. So not terrible. But we're not back. This isn't 2011 Microsoft, like 8 times earnings x cash. It's nowhere near the same.

[A]

Yeah. No. All right, I want to share. I assume you've already read this since I believe you are a WIX shareholder. But this week and part of this was already like known but there was some surprises in it as well. Wix, the drag and drop website building platform. Website building and hosting platform, I should say released a 6K announcing basically a big restructuring organizational restructuring, which is a friendly way of saying layoffs plus a revision to their guidance. So I'll read a couple of the quotes. Says the company now expects. Well, first of all, I'll just full screen this real quick so I can see it. The first line says the organizational realignment also includes a reduction in the company's workforce by approximately 20% or 1,000 employees. The company now expects free cash flow excluding acquisition and restructuring costs, which. How can you exclude restructuring costs when that's the point of this announcement. Whatever. To be approximately $420 million. A $20 million increase to our prior plan. So that all from an investing perspective should look okay. Increasing free cash flow guidance. They then say while Wix Harmony and Base44 continue to perform as we expected when we issued guidance, as part of the first quarter 2026, the Company expects an approximately $50 million reduction in bookings and an approximate $25 million reduction in revenue in fiscal year 2026 as a result of our organizational realignment as well as a more pronounced slowdown in the growth of our partner's business. So this is kind of what I wanted to talk to you about, Brett. First of all, I find it a little weird that they, they had to reduce bookings because they laid off employees. That seemed a little funny to me. Like is it? I wouldn't have thought there's like a one to one correlation there, but.

[B]

Well, maybe it's inverse. Bookings are down, so they had a lot of employees. There's also the currency stuff. Their salaries are getting more expensive versus US Dollars.

[A]

I know, but the, the way they said it is, it's like bookings are dropping because of the re. The real organizational restructuring, which. That didn't make sense. But I think the big thing here is that the partner's business is declining faster than they expected and the department's business has Been rock solid for five years until up until last quarter and I this was, I think we've talked about this on the show before. I do think if you are a web design agency you can really start to do a big bulk of your workload on Claude, on Codex, on these AI platforms and all these test competing platforms.

[B]

Who knows, maybe WIX Harmony will be the best to breed over the long haul. But yeah, I mean there's definitely a lot more competition for those customers and

[A]

partners or agencies basically or professional designers are. They account for 38% of Wix's revenue. So not the majority but a meaningful contribution. I just, I kind of feel like before I was thinking well base 44 Wix Harmony, those are kind of cherries on top if they work out. But now I'm thinking these have to work out for the thesis to really work because if you do get a partner's business that's in decline, that's going to be a consistent headwind to revenue.

[B]

I agree. I think it's possible that what we talked about, we could be wrong about this stock tomorrow. Well Friday, which this will release on Friday but I have a update on the northern airports operating in Mexico as part of that newsletter as I'm kind of comparing that kind of spoiler alert, a little bullish on them. Their stock's down I think 30% from highs and I'm comparing them to existing holdings and I gotta say WIX is down there as one of the lowest. My cost basis is about 65. And you know, this could be one where you cut your losses before things get worse or you know, I still think the stock works over the long term but if you have another opportunity out there, which luckily I still think there's a lot of high quality businesses out there trading at reasonable multiples if you have another opportunity, nothing wrong with taking the tax loss and moving on to something else if it's frustrating you. That's kind of how I look at it. I still think, look, we're putting a 0.9 times sales, they're still growing, they're probably still projected to grow this year. Market cap is down to what like $2 billion? Yeah, 1.9 actually should be pretty low hurdle to do well going forward. But if you have something that's maybe higher quality, I wouldn't say like all right, the one trap you don't want to fall into is okay, let's say you bought the dip on wicks, 60, 70, 80, 90, 100 something in that range and it's a loser for you don't fall into the trap of saying, oh, I'm gonna sell it now. And then a couple years down the line, it could be at 150 or 200 a share, even higher. If what you invested in, like, with that capital does well, you think it's just as good of an opportunity. I wouldn't kick yourself for removing it around, Especially, again, if you can take advantage of the tax loss.

[A]

It's. And the other thing is, I am typically a dip buyer, usually with existing holdings.

[B]

Like, I. I make sure we like falling. We love falling knives.

[A]

Yeah. Honestly, it's probably hurt me more than it's helped me, but the. That is if I believe that the fundamentals of the business are still strong, if the business itself is still growing. So if you just took the stock out of the picture, imagine that there wasn't a stock, no narrative, no investors. You owned the entire business and it reported to you. Would you feel confident about the results after reading the 6k from wipes? I would not feel more confident about the business today than I did three months ago. So I, I do think it's potentially easy to fall into the trap here of, well, results got worse, but three times, four times free cash flow, now it's way cheaper. I think if, if you see fundamental. If you think this business is deteriorating potentially, look elsewhere and, and see what else you can find.

[B]

Yep. And if you don't, you know, if you. If you're way more bullish on us, probably a good time to add. But if you think it's deteriorating and you don't want to double down on stuff where the business is getting worse with the stocks getting cheaper, that's just a recipe for bad results. And if you want to get out of something, it's not, again, the end of the world to take a 20% loss versus what could end up being an 80% loss. Those are two wildly different figures. And yeah, it's possible that we could be wrong on the stock. I'm kind of. Yeah. Mellow. Mellow on them. Don't. Don't love them After. After this. All right, what about this Nintendo Direct, Ryan? Let's.

[A]

Let's do it.

[B]

Yeah.

[A]

I did not. I did not watch. So give us.

[B]

I didn't watch either. I read us. I read a summary. They have a Zelda game. Bria of famous Zelda game is getting remade for the Switch 2. People seem somewhat excited about that. But it's not a new game. Still, people are happy there. There's Nintendo Sports Resort or Nintendo Switch Sports Resort. Something like that. And there's a Splatoon Raiders game which is not popular in the U.S. popular Japan. But those are going to be the big sellers this year I believe. Should drive some decent profit growth. Maybe a couple million sellers from each splatoon. Might be 10, not sure. Besides that, you had some updates on that Pokemon Pocopia game which is selling pretty solidly. It's not a mainline one, but it's still very, very good. Might be a 10 million unit seller which again will drive some nice profits for them. But besides that, you know there's not a lot of blockbusters, a lot of game remakes, a lot of third party kind of niche stuff which is good. You know, they can earn some fees on that. But you have no Mario game and that's what a lot of people are looking for. There hasn't been a mainline Mario game for a long time. I think that's why the stock is down. The question I have is, is is it time to get concerned over the patience of Nintendo with these game releases for Mario games or do you just have to trust that they don't announce everything? Because I think it's very difficult. You kind of the stock price starts talking to you and sure they always seem to just randomly announce stuff but again the Switch 2 keeps, you know, we're at the one year anniversary and yeah, we're the Mario games is what I would say.

[A]

It sounds like you're maybe finally getting a little frustrated here with management. Brett the I would.

[B]

I just don't know if are they working on this stuff And I'm not like should we just trust that they just don't announce stuff? I think so. That's usually what happens. Like are they, are they working on Mario games? Definitely. Right? They have to be.

[A]

I'm sure they've got an entire division that that's all they do. The. It's okay. I haven't kept up with Nintendo as closely over the last year. I think we first maybe started paying attention to the story around 2020, 2021. And at that time the thesis was this is no longer. They're no longer tied to the hardware cycle. That there might be some cyclicality in new launches with the Switch Pro, switch Lite, switch 2, that kind of thing. But in general people will have their Nintendo online account and they'll be. It'll be more of a seamless upgrade cycle. Do you think that thesis has come to fruition? We're now five years into that potential story.

[B]

Yeah, definitely. I mean the trough earnings were 2 billion. They were about to pretty much back to record revenue. Earnings will lag a little bit. But yeah, we should get to record earnings here pretty shortly, maybe excluding the pandemic boost that was kind of one time catalyst for earnings for video game companies. But yeah, I think if, again, that's why I asked that question. If you trust that they're still working on the blockbusters, 2027 should be a great year. You just get maybe a little short termism with this holiday season because you have a few blockbuster franchises, the Marios of the worlds, the Zeldas, the Pokemons, and maybe stuff like Animal Crossing. Yeah, probably those. If you don't have one of those launching kind of the new novel thing in November, December of 2026. Yeah, maybe sales will be a bit weak, especially with the price hikes.

[A]

Yeah, they are awfully patient. I think maybe they're worried about diluting the Mario brand with too many games. But I.

[B]

The last one was like 2017, so.

[A]

Well, Mario Kart. Right. The new one.

[B]

That doesn't count. Doesn't count.

[A]

All right. Yeah, it's. To me, you making a bunch of games for Mario doesn't have to dilute the brand. I think people think there's this constant balance that if Mario games are being released every two years, it ruins the brand. If you're making quality games and you're making unique storylines in the movies, which they are, and people seem to like them, I think they can be very complimentary and if anything enhance the brand. I think people get worried about it because they saw what Disney did to Star wars or some of their other notable brands.

[B]

Yeah, they're now releasing 10 different Marvel things or 10 different things a year like Marvel. Yeah, I guess maybe the slightly frustrating thing is if they released the movie this year, you maybe wanted to partner that with a mainline Mario game. But who knows, maybe they're about to announce one. They always seem to just announce games like a month before sometimes, which could easily happen now. Yeah, the stock is one that hasn't done too well, but I'd say I'm still pretty dang bullish.

[A]

Okay, we've got a couple more topics to get to and a bunch of listener questions from the substack chat. The first topic I want to hit is a little list I found of five high quality companies that I think are high quality. I think my, my Cutoff here was 8% revenue growth, 8% annual revenue growth for the last 10 years, and more than 20% average ROIC. So those were kind of my two thresholds for quality, growing and high returns on capital. Five companies that trade below 15 times earnings are. And I'm using EV to EBIT, so not price to earnings, but whatever Booking holdings. Adobe, which might not surprise anybody for the who's followed that story. Third one is Zoetis. I might be pronouncing that name wrong, but they're the pharmaceuticals for pets. Yeah, yeah, it's a lot of pets. And like. Like household pets as well as farms, farm animals. Number four. Number five are interesting. Copart and Ulta Beauty.

[B]

Yeah, I wonder what Copart is. Down. They've been. They usually trade at such a high multiple. That would interest me the most at first because I know booking should do fine. Maybe it's getting overlooked, but Copart, I feel like never trades at this multiple or it hasn't for many years.

[A]

Let me show you a chart, Brett, that I think might entice you.

[B]

Is this chart from our friends at Fiscal AI?

[A]

Yes. Shameless Plug here for Fiscal AI. Let's go. Quarterly. Last maybe seven years since.

[B]

All right, before we bring it up, I will mention that. Use our link. It's in the show. Notes Fiscal AI, chitchat. Get 15 off any paid plan. Plenty of value, well worth the money. You can use analysis, KPIs, all sorts of charts. Like one Ryan is about to mention here. What do you got loaded for us? You have two things. Free cash flow and share repurchases.

[A]

This is free cash flow versus share repurchases. They have not bought back any stock for the last seven years up until the last two quarters. And now they are buying back a ton. They spent $1.6 billion on buybacks over the last 2 quarters alone, compared to, I think basically $1.3 billion in free cash flow over the last year. So they're spending more than their year's worth of cash flow. It's certainly a signal for management at the very least.

[B]

What's even going on here? Why is the stock down? I have no idea.

[A]

I'm not sure, to be honest. I did a cursory glance. It's in its biggest drawdown in 15 years.

[B]

For those that don't, low PE. Lows PE since 2017 here. Yeah.

[A]

For those that don't know, they do basically junkyards. And they're. They do a really good job of it as well. So they are home for salvage vehicles. So when. When someone forecloses on there or not forecloses, but it doesn't keep up with their loan payments. The insurance company can't remember the exact Term. But they sees the asset, they send it along to Cobart. Copart, I believe, auctions it off digitally and holds it in its junkyards. So, yeah, I would say they're at the top of my list here. And then Ulta Beauty as well. I. I feel like this is a very underrated business. They've weathered the last few years and sort of the COVID bullwhip really well, and I think it's incredibly durable. People will continue to go in person for fragrances, for makeup, all that stuff. Comp sales look really good. They continue to expand stores. There's economies of scale, plenty to like.

[B]

All right, I. And remember, I asked Gemini, why is Copart stock down? You got to remember the little note. Gemini is AI and can make mistakes. So let's just see what it says. Stagnating growth, declining insurance, unit volumes, multiple compression. Yeah, that's when a stock goes down. Thank you, Gemini. Margin and fee pressures, maybe. It's probably. I'm guessing it's the margins. Then if they're giving out a lot of. I don't know. One of their sources here is perplexity. It's just all one big AI loop. I don't want to research Copart live on the show. We don't have enough time for it. But it's what I want to look into for sure.

[A]

Maybe do some more research on the stagnating growth. Sounds like the reason. I don't know what the culprit is there, but yeah. Thank you, Gemini, for telling us that the multiple is compressing and that's why the stock is going down. But yeah, kind of chicken or the egg there. Let's. What do you say we'd take some listener questions from the Substack chat. I liked this one. This is from Tom Putz on. Or Tom Putz.

[B]

You know, that's. That's my uncle.

[A]

Oh, no way.

[B]

Yeah.

[A]

Let's start the show new. He says new subscriber here. Do you two ever work on lowering your cost basis through covered call writing on stocks you currently own? Alternatively, do you write cash secured puts for price levels you have identified as good entry points for stocks you'd like to own? That's the first part of the question.

[B]

I don't.

[A]

I don't as well.

[B]

No. No options. Too much brain work. I guess it.

[A]

Honestly, for me, I just, I don't have the time to. To manage it that closely or to come up with like, derivative strategies to resemble stock ownership. I'd rather just own the shares.

[B]

Yeah, there's Some good people at the Fool, Molly fool that do work in this Jim Gillies one. I believe he still works there. We haven't talked to him in a while. We should try to get him back on, but he's a busy man. I think maybe Ron Gross. I don't know if he works at the Motley fool anymore. I also could be getting his this person completely wrong. But there's another options person at the Motley fool that does a lot of work that I kind of go, oh, that sounds interesting. But I have no expertise on whatsoever. But I like this other question. Sprouts farmers market seems to have a nice Runway. Looking out at future growth. No debt, good free cash flow ratio. What are your thoughts at the current levels? Yeah, I've covered them at the newsletter. Let's look at what they're trading today. I see PE of 16, EBD, EBITDA of 10. I think EVD is probably 14, something like that. Maybe 13. That feels like a really good multiple. They're buying back a lot of stock and kind of you add everything together where you think over the long term they've had a little bullwhip because last year was a really good year. Comp sales should be low single digits, they can grow store count by maybe 7% to 10%. Get 10% or more revenue growth combined with buying back stock, you should get 15% plus earnings per share growth. You're starting at this pretty low pe. That feels like a good buy and hold candidate. I mean their 10 year for again it's a grocery store, but their 10 year revenue growth 8%. Their 10 year earnings per share growth, 20%. They have a good track record and seem to be really good capital allocators. Yeah, I like it here. It's right near I, I don't own it at the moment, but it's right near the top of my watch list. And I really like how it's kind of inversely correlated to hypergrowth. So it can be a good balance. And I guess we're not in like a meme bubble right now, but when, you know, hypergrowth, AI bubble kind of narrative is taking hold, it seems to lag. Sprout seems to do well when the market's down. I like to have that counterbalance and it can give you maybe a buying opportunity and an extreme bull market. Yeah, I like it a lot. Owned it in the past. It's maybe number one the watch list at the moment. Ryan, do you own it or have it on the watch list?

[A]

I don't own it I'd say I agree. Probably number one on my watch list at the moment. The we first bought it right believe during the pandemic and it traded at like 8 times earnings. So I get this like almost the sense to anchor to that price. Like oh, I, I used to buy it cheaper so it's not going to. I don't feel as inclined to buy it at this current multiple, but that's a mental block that I should get rid of in general, I think. Yeah. At 14 times EBIT, this is a business that I really like. Grocery stores I think are underrated as investments. Generally they're very durable. They're switching costs. Going to a new grocery store to try to figure out where everything is, is, is a pain as I think everyone knows and, and people cling to comp sales too closely. This isn't like, it's not like an emerging fast casual restaurant where you're going to see price hikes plus throughput, plus all that. Like you're going to see ebbs and flows in comp sales some, some years it's going to be better than others. So I think long run you probably get 4% to 6% comp sales growth. Maybe that's a little aggressive. So slightly above inflation. Margins can probably creep up a little bit. It's differentiated. They sell different products than your typical Walmart or Kroger. And store growth, I think they'll probably end up growing stores, 8 to 10% a year. I think the recipe to good returns here is pretty straightforward. I like this business. I really like the management team as well. I think Jackson Claire has done an incredible job since taking over.

[B]

So.

[A]

Yes, thank you, Tom, Great question. And yes, we do agree. We like, we like sprouts here.

[B]

Yeah. This is, this is a family affair. All right, here's another one. Chris says serious suggestion in a fresh portfolio. What would be your contrarian take to tech and AI? I think what I mean here is if you were building a portfolio from scratch.

[A]

This is my take. Sorry, I should have put this in the.

[B]

Oh, oh, oh. This is what Ryan is saying. I. Yeah, okay.

[A]

I didn't totally follow the question. So I think what he's asking is if you were building a portfolio from scratch that didn't have tech and AI in it.

[B]

Sprouts they traded. You know, that could be a good one, right?

[A]

Yeah, that's probably up there. Sprouts would be in there. Ulta Beauty, maybe junkyards, Copart. I think I like all those businesses.

[B]

If he's talking about things that don't trade with AI or maybe trade in the opposite. I think I have a lot of stuff in my portfolio that might be like that. But honestly I was looking at my portfolio right now. I don't think I have any AI stocks. Maybe wix could be considered one but it's also considered an AI loser coupang. They have a little narrative there, but also not.

[A]

Yeah, yeah, I might be interpreting the question wrong, but it. Most of my portfolio is not. Well, I guess he says tech as well. So if we excluded tech.

[B]

Okay.

[A]

I would say I guess nailnet is kind of pseudo technology but they're in my portfolio. More financial services, airports, grocery stores, durable retailers. So when I say durable retailers I think stuff that's not going to be disrupted by E commerce. I think beauty is. Is that for me? So Ulta Beauty, O'Reilly's Auto Parts. That's a very resilient category from. From any sort of E commerce pressure.

[B]

Let's see one I have on the watch list Kraken Robotics. It's. It's down 30% from highs. Looks a little more attractive. Kind of that defense tech disruptor and gay mentioned airports Argentinian and other airport operator corporate assay on America airports, Mexican airports. A lot of stuff. A lot of stuff that's not AI and tech. It's just gonna lag right now. You're gonna have to deal with it. We deal with it at the moment. Just don't. In a market like this, it's only going to make it worse. If you compare your report if you're not AI investor and you compare your portfolio to S and P, you're just going to be disappointed. That's all that's driving the market at the moment.

[A]

Okay. Do we Want to talk SpaceX predictions?

[B]

Sure. I include this in bubble watch. Maybe we can do this first. I also have OpenAI Confidential IPO. I'll give my prediction. I think it pops. This could again, these could age poorly or age well. We're not investing based on this. But it's four times oversubscribed according to. According to Reuters.

[A]

Now again, pops pops up or bubble pops.

[B]

No pops like IPO pop.

[A]

It jumps.

[B]

Okay. It jumps. Yeah, yeah, that's. Yeah, I think it's definitely. Not definitely that would be my prediction because Reuters is reporting that it's four times oversubscribed. There's was $250 billion in demand for the $75 billion allocation which is kind of, I think shows the amount of opportunity there is to raise money. I was saying it's going to be good for these investors, I don't know. But for OpenAI and Anthropic as well, to just raise money out there. Look, if there's, if there's all this money chasing it, I think there's going to be a first day pop and then it's going to for the next three years not do very well.

[A]

Yeah, I saw Brad Freeman had a take on this that I liked where he said it's probably going to pop first few days and then it's actually probably going to pop, maybe even more as people get fomo. I think that's right on.

[B]

Yeah, it could easily happen.

[A]

I think we are underestimating the amount of people. Maybe we're not in general. I think value investors underestimate the amount of people that buy shares in IPOs or in general without caring about valuation whatsoever. A lot of people simply don't pay attention. I saw SpaceX shares were being. I don't know if you saw this. There might have been fake on the grocery delivery app.

[B]

That might have been fake.

[A]

Was it okay? But it's. When you talk to people that don't involve themselves in the investing world as much as we do, they don't care about valuation. SpaceX. Great story. Elon Musk. I mean look what he did with Tesla. It sells to, to the people that don't care that are still going to. Which are the ones that are probably putting some money in this and oh

[B]

yeah, there's a lot of money for it. Look, here's a Wall Street Journal article I think this morning. I think I read it. No, yesterday morning. Musk looks to an army of loyalists to help make him a trillionaire. Dean Nori might be saying your name wrong. Once in on the biggest stock market debut of all time, Elon Musk is counting on it. The 41 year old fintech entrepreneur has spent years listening to Musk's video and podcast interviews. Hopefully listen to chit chat stocks. We could use a little more demand for our services instead of him. Tesla stock makes up some of 85% of his net worth. And when shares of SpaceX start trading, he plans to buy quote. What's there to think about? The Wall Street Journal is really good at this. They pander to the value investors and

[A]

I like know they're good at this because they aren't. They don't actually say anything. They just take the most. The quotes that value investors are going to go insane about. Yeah, that, I mean that, I think that that's part of it. What is there to Think about. And my bold prediction is that things are going to get really crazy. I'm talking $3 trillion valuation market cap, potentially for SpaceX.

[B]

Oh, I agree. I could get there easily.

[A]

Yeah, and the funny part. What if Musk's options vests? Well, I guess maybe there's time.

[B]

No, it has to take. It has to. There's also the Mars colony.

[A]

I guess that's a good point.

[B]

That one's gonna take a while. Yeah, but look it, it's still on it at like you got to do fundamental work. Can't be chasing. Can't be chasing.

[A]

All right, what about this? I would. That's my other part to the prediction is I think things get really crazy after the first. Maybe in the first week or two and then stuff comes back down to Earth, no pun intended, over the last, over probably the next five years. I think it's probably dead money for five years. Maybe longer, maybe 10.

[B]

Yeah, I mean it's 100 times sales at the IPO price. Yeah, we'll see what happens. I mean a lot going to happen in 10 years. All right, what about this? OpenAI confidentially files for an IPO I think SpaceX filed in March, so OpenAI could be going for an August, September debut. Thoughts here? I think Altman's just jealous of all the hype.

[A]

Yeah, these don't technically mean anything

[B]

just,

[A]

just in that they can keep updating their S1 and stay private for a while. Although there's some cost to it obviously you got to pay your auditors and, and everything to keep filing these S1 updates or these amended S1s. But to be clear, they don't even

[B]

have the S1 yet.

[A]

Well, okay, so from what I understand they do like it's like a private S1 essentially. It's. It's what would they would generally be opening to the public, but it's just confidential so far.

[B]

Staying with Morgan Stanley, Goldman Sachs, stuff like that.

[A]

Yeah, I saw recently that someone said we've got a new acronym. It's Mangoes now. Not fan mag. It is Mangoes, which I believe meta anthropic, Nvidia, Google open AI SpaceX. That's the new acronym.

[B]

Good. What about. I thought you spelled mango O E

[A]

S. Well, they missed that part. So I don't have the E. I think you spelled.

[B]

I think you could spell either way. Yeah, Open air. We'll see. We'll see. But it's again, I think our thesis is coming right. Anthropic OpenAI Want to get in on the action? Altman's jealousy of both and he's going to try to get out here and they're both going to try to raise a hundred billion dollars. Here's something I saw that is a very fun account. It's called 2001 live. It's, it's, it was, it's tweeting. It's live tweeting the dot com and telecom bust and on this day, let's see on June 7th, 25 years ago live. You can follow that Twitter account. Enron executive Lou Pai completes the sale of 340,000 shares of Enron stock, cashing out $250 million and formally leaving the company. His reasoning is unknown. And someone said to be clear and then they had a follow up tweet there. Everyone was asking why, what'd he do? And he said to be clear, Pie left the company because he enjoyed going to the strip clubs and his wife was divorcing him. So that's what Enron was like in 2001. What we can't make a prediction but they're probably is going to be an Enron like company this cycle. I don't know what it is but I'm fascinated to see someone right now

[A]

is cooking the books comment that says he's going through a divorce. Guys, Enron is still strong.

[B]

I love this account. It's great.

[A]

I mean he got out, right? So like he sold all the shows, got out and he wasn't. There was nothing incriminating for him.

[B]

Yeah. I think he owns a bunch of land in Colorado and he's, he's like a recluse. No one's heard from him since. He's got his kind of harem. Yeah, it's a little weird.

[A]

Wow, that is, that is crazy. Yeah, I think, I mean the cooking, the books. Yeah sure. Probably someone's doing it somewhere. But I, I think the, what's the expression, the chickens that are going to come home to roost with this are the revenue deals, these sort of circular revenue deals or no margin revenue deals. Like I think X xai is basically producing a bunch of these right now. They just closed it, they closed a deal that is, it's like up to a billion dollars, something like that. A billion in revenue a month. Like what they had with Anthropic. Yeah, but it's a 60 day like Google can get out at any time they want and you have zero clue what the margins are on that so.

[B]

Oh yeah, yeah, yeah.

[A]

I think that's probably what's going to hurt these companies eventually. But Again, the music is playing, Brett.

[B]

We have to do it. Yeah, yeah, I think what I was going to say. Alphabet raised the money maybe last week right before we got on. And it reminded me of when they kind of front ran. Everyone is like, we're raising $80 billion quick here. 85 actually. And it reminded me of the margin call quote. When you're first. That's not called panicking. So Alphabet. Yeah, I think that's smart. But last thing on bubble watch, do you remember and this guy's fairly famous financial media downtown. Josh Brown, CNBC guy.

[A]

Oh yeah, he's still popular.

[B]

Yeah, exactly. They, yeah, they have a very popular YouTube channel. But I haven't looked at his stuff in a while and he's very, very good at getting the vibes of the market. I think that's kind of one of his specialties. He doesn't really do much individual like stock research such as us. It's more of talking kind of this, all right, where are we at in the cycle? Things like that. In an article. Maybe it's not 1999 but 1966. He has a long introduction but he says something I've been spent the last few days thinking about. Everyone is racing to sell as much stock as they can at the same time. This is a 180 degree turn from where we were three years ago during the staying private for longer and record share buyback era. The switch has flipped. It kind of goes through to say, well, there's a famous book bubbles and crashes written by Brent Goldfarb and David Kirsch and they have 1, 2, 3, 4, 5, 6, 7, 8 characteristics of stock market bubbles. Looking throughout the last few hundred years, you know, after the Dutch invented the joint stock company, one story. Is there a compelling story use. Is there good use for the technology? Three are naive investors in the market? Are there novices in the market? Four, are there pure play stocks? Five, is there competition? Does the narrative ignore future competition? Six. Business model. Are there a variety of stories about how money will be made commercializing the new technology? 7. Narrative Accelerator. Did something or somebody turbocharged the narrative cough, cough AI space data centers? 8. Leverage. Are investments significantly leveraged? Do intermediaries play a large role? Are we eight for eight? I think we are.

[A]

It checks every box. And the, I mean the big one, the IPO indicator is undefeated. It really is.

[B]

Mega ipo. Yeah.

[A]

When all the biggest private companies are rushing, or maybe not even the biggest when companies are rushing to get public or rushing to do equity issuances, honestly, kudos, Google for pulling that off. It is a bad time to be a buyer of those stocks and probably most stocks in general. Just pure correlation. Even if your companies perform well, even if they're at cheap valuations, it can still be a headwind, potentially. If there's some sort. Especially with fund correlation these days, it. Yeah, I think. Sound the alarms. Honestly, I think we're at the top.

[B]

Oh.

[A]

Or we will hit the top here.

[B]

Yeah. What do they say? What inning are we in? Yeah, maybe kind of bottom eight.

[A]

Bottom of the eight, I was gonna say. Yeah, we're gonna jam.

[B]

Yeah. We need the closer coming in. He's not. He hasn't been sharp lately. All right, we have one minute left. Ryan, you made honestly your best investments of last year. Could have been Premier League bets. For those around know when Ryan was last offhand on the show, who was going to win the Premier League and who year two predictions were Arsenal wins and Leeds gets stays up, which probably would have made a good amount of money. And a listener reminded us of that. But the World cup has happened in the United States. I actually have four today. Not today for the live recording, but when this comes out recording. I have a semi related stock to the World cup with a northern airport operator in Mexico. Their main airport is actually hosting. Kind of try to time that up for the launch of the event. Ryan, if you were a sharp bettor, what are your predictions for the World Cup?

[A]

Well, first of all, Brett, for the title of that article, I don't know if you picked it yet, but the World cup beneficiary is.

[B]

Yeah, that's true. I might. I might have to mix it up for SEO purposes.

[A]

Yeah. The. So with the. With the Premier League, it's cool that I was right. I really didn't have any company that was rooting for. So no bias, really, with the Premier League bet.

[B]

Let's exclude you're a giant US Team fan. We're excluding the US Obviously. Go far.

[A]

US excluded. There's still national teams that I kind of root against and national teams that I root for. I want to see. I would like to see Portugal when.

[B]

Mike, do they have to bet? Do they have to bench CR7?

[A]

I. You know, they could put the other Ramos as the other striker. They could put him into. I think they've got a good team. It doesn't. I'm not too fixated on Ronaldo with this bet, but I like Portugal. I don't know if they can really put it all together and do it,

[B]

but that's your value play.

[A]

That would be my value play. And I think the return on that investment would probably be pretty high. I think the betting odds right now,

[B]

it's probably 10x World cup betting odds. What about. What was I going to say? Yeah, I guess that's it, huh? What do you think it's going to be? Are you going to any games? Have you decided?

[A]

I haven't. I. I don't have any tickets yet, but I'm kind of waiting to see what happens. I'm trying to get a sense of who will end up where in the knockout rounds to buy tickets for those games, because you don't know yet. So it's kind of. That's honestly a way to bet, is you buy certain knockout round games and. And if the right team ends up in it, you could sell it for more.

[B]

All right, all right. Here, Here. Here's what we got. Better gods. France plus 550. England plus 700. Spain plus 550. Brazil plus 950. Argentina plus 950. Germany plus 1400. Portugal plus 1600. You like Portugal's value? There any other value? Brazil. They are. They are. They finally underrated.

[A]

Hey, you're in.

[B]

Yeah.

[A]

You know what?

[B]

They.

[A]

I do feel like a lot of people have kind of wrote them off. Maybe they're a value play.

[B]

USA plus 6600. You could win 60. Basically 66 times your money.

[A]

That might be properly priced.

[B]

Thank. Yeah, Quarterfinal would be nice. All right, well, I know we got a lot of US listeners that may not care about football slash soccer, but give it a chance. It'll be a. It'll be a fun event. And hey, who knows? Maybe. Maybe Ryan's bets will work out. I like that because I have no. I can't look stupid with any of these.

[A]

And at a bare minimum, the best way to play the World cup is a potential underrated wide moat business in Mexico.

[B]

That's right. A lot of people gonna be coming in airport traffic. Okay, I think that's it, everyone. I can hit the disclosure today. Thank you everyone for tuning in. Remember, we are not financial advisers. 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 once again and we'll see you next week.