B (3:18)

The year looks like it's game back on today. Right. Nvidia is up about 4%. Alphabet 2 and a half you have Metta is obviously higher and then, and then most of these stocks, Jim, are higher as well.

C (3:30)

Well, I'll just finish. I think if one does recover and rally into year end, it will be met. The others are just normal corrections, normal sell offs, not a big deal.

B (3:39)

Well, I mean some cases, yeah, correction. I mean Met is down 22% off its most recent 52 week high. Nvidia down 11 and a half percent. Microsoft and down 10 and a half percent. Jim, you, you own Nvidia, you own Microsoft, you own Amazon, you own Alphabet and of course you own Apple as well. So is this trade now back? This is just how it works. You get a little bit of a shakeout, you have to buy the dip because you know, again, investors aren't going to let these go down too, too far.

A (4:03)

Yeah. In my opinion the fundamentals, as Steve just said, are very much intact for the trade. I don't think this is a bubble. I don't think the valuations are out of sight either. And you know, I spent some time over the weekend thinking about something that I said on Friday and I'm going to repeat it, which is that I do think the swoon in the market in the air sector in particular has been caused by liquidity issues that stem directly from the government shutdown. The fact that so much money is at the Federal Reserve and the Treasury General Account, the fact that the treasury is not paying that money out through the commercial banking system to contractors and employees has decreased liquidity. You see it in SOFR volatility secured overnight financing rate. Now I know this is a little esoteric but I'm telling you this is important. So for volatility in a highly leveraged financial system like we've got think about basis trades, think about multi strat that has an effect. And now that the government shutdown is coming to an end, you'll start to see liquidity start to pick up and it will support these stocks that got hit. But simply because. Let me just finish the last.

B (5:05)

See, that's where you're going to go off the rails. No, I was going to with you for a minute.

A (5:09)

Well let me see if I can.

B (5:11)

Close the train has just lost a wheel.

A (5:13)

Well let me see if I can put the wheel back on. Okay. Because when we talk about things liquidity highly leveraged financial system and de risking we're talking about institutions selling the stock market and where are they going to sell. 40% of the S&P 500 is in the top 10 names which is predominantly.

B (5:30)

I understood but you're, you're making this assumption you know not taking into account I would argue you just had earnings from all these companies. It's not like it's not like there was nothing going on and the whole market came down because the you know they were all of a sudden concerned with the government shutdown. Right. Metta startled some people with their earnings report I think idiosyncratic and the amount of money they're spending. Palantir startled some with the valuation question.

D (6:01)

So.

B (6:02)

So it's not like there was nothing else had to really focus.

A (6:05)

This earnings season should be supportive of the stock market should have been. You've got over 80% of companies reporting having beat we came into the quarter thinking that year over year growth would be 8. It's 13% if you look at reports from Microsoft, from Qualcomm, from any of a number of stocks that out reported and by the way their estimates are now going up. So it wasn't that the guidance disappointed. I get that the stocks went but.

B (6:30)

You can't, you can't cherry pick one and say well it's idiosyncratic because it doesn't fit your narrative like meta going down and then declaring it. Hold on. Declaring it to be idiosyncratic when that's the one that raised the question for a whole number of other names on the amount of money that's what they're.

A (6:47)

Getting in return for Steve goes I'm.

B (6:48)

Just going to say what the end game is going to be.

A (6:50)

I'm going to summarize this so everybody knows that including you Steve, my position, feel free to disagree with it, is that the downturn over the last two weeks has been about liquidity flows, not about fundamentals.

C (7:01)

Okay. In terms of the earnings, can you go quick? Because there's people that the earnings period nobody thought was going to be 8%. Everybody thought, including everybody that ever sat in this desk, that was going to be better than expected. That's what we got. So you can't say the market ignored it, it just pulled it forward.

A (7:17)

Estimates are going higher from here, whether it's the s and P500 or Microsoft or Qualcomm, you name it.

E (7:24)

A lot, lot to unpack here.

B (7:28)

The tables, yours.

E (7:30)

In terms of the trade, I think we've moved into a different phase of it. The first phase of AI was fueled by capital coming from cash flow. Now we're in a few phase fueled by debt and all the companies are issuing debt. So we're closer to the D day, in my opinion, of when you actually have to see the results. And we're clearly not seeing the results from AI as a revenue stream. It is a revenue stream for the cloud companies, but it's not a revenue stream for the pure play AI companies like OpenAI, in my opinion. Yet I was reading a report on the way up here this morning and somebody said if you give away cars for free, you're going to have a shortage of cars. So you're basically giving away AI for free. So it's not surprising that demand is outstripping supply. And right now cash flows and bond investors are willing to finance that. And that money is going to the cloud companies, which is why you're seeing Amazon and Google do so well and everybody else kind of not do so well. So I think we are getting to the point where you have to watch is when bond investors all of a sudden say no more. I actually want to see. I'm not going to give you the debt and the capital to fund this Capex boom. Almost all Capex booms ends badly. It's just a question of when.

B (8:40)

Okay, so great points to further be discussed in a moment because it's relevant to another debate that we had late last week with Jim and Steve. The amount of debt financing being done and the prevailing thought I think here was no big deal. No big deal at these levels.

E (8:59)

Yes. Yeah.

B (9:00)

And we had a debate and we'll get back to in a minute because there are stocks that are moving today and ones that are in the conversation on the street for the very topic that you raised. But sarat, I want your view first.

D (9:11)

So, you know, I agree with Jim, but I also think in addition to liquidity, when you see the government slowdown and you start seeing where it's affecting, which is the consumer, the K shaped economy, so the market does get reactive to that. So the news today, if we go through and we don't have a shutdown is positive, but the market then starts discounting it really fast to saying, hey, the slower part of the economy slowing even faster. Fed can't really do anything until later, then what do you do? And I think that's when you get these powerful moves in the market. And to Steve's point, they can be huge on the up and the down. So we're going to get some volatility until all this gets resolved.

B (9:47)

Now the issue of debt financing, the boom, okay, it cuts both ways. You look at the companies that are raising debt to fund the infrastructure buildouts that they need, Oracle, Alphabet, I mean you go down the list, they're all kind of doing it right. Tens of billions of dollars worth of deals, debt deals done in the last week alone. The other side of it, the lending aspect of it, I thought it was interesting. The New York Times today had a piece. Debt has entered the AI boom to fund heavy spending on infrastructure for AI companies have leveraged a growing list of complex debt financing options. Blackstone is on the verge of of closing an unprecedented three and a half billion dollar CMBS offering to refinance debt held by QTS Data Centers, the biggest player in the AI infrastructure market. So you look at the sponsors, you look at the companies that are raising the debt. You made the argument on Friday that this was no big deal. My word, not yours. Although you may have used those words.

A (10:49)

I'm okay with it.

B (10:50)

In the description of why you're not concerned about it whatsoever.

A (10:54)

I'm okay with it. And I think Amy kind of hit the nail on the head here. Yes, capex booms end in disaster. But the question is when. You said the word yet twice, and I don't want to read too much into it, but I'm just simply saying we're a long way away from it. When I look at the capex that has been announced and probably will be announced, if you look at some of the projections measured in the trillions versus the amount of debt that has been raised, measured in the tens of billions, albeit approaching 100 billion, you know, think about Oracle and Metta. I look at the interest rates at which those debt levels are coming to the market and I say to myself, these are assets Collateralizing them. Data centers that have imputed rates of returns that are most likely in the mid teens. And I believe that, I believe that for the next year. Again this is to your comment about not yet for the next year or two, at least those rates of return are likely. I would much rather Oracle finance that with 5 to 6% debt as opposed to equity. That's going to cost a lot more.

B (11:51)

On that note, bottom Barclays downgrades Oracle today to a sell. Okay, the equivalent of a sell which Wall street calls an underweight. But the implication is sell the stock in part because it has, this is the quote, has high and ongoing funding needs. Issuance is likely to slow from here, but the direction of supply is higher for longer as cash flow is no longer the sole funding mechanism which you're totally fine with as a holder of Oracle. You must be because you bought my more stock today.

A (12:19)

I did buy more stock. I want to make sure I don't come across as too blase. I have clients money at risk and I'm taking that responsibility very seriously. But again, I look at the interest rates at which this debt is coming in market, 5 to 6%. I think to myself, where would I worry, Scott? I would worry if we were talking about high yield debt, that's 8, 9, 10%. That would be the bond market's way of saying this is crazy, don't do this. I look, I'll respect any analyst or any commentator, my colleagues here who wants to take the other side of the trade, that that's what makes the market. I will also point out that the central thesis that I have is that the swoon in the trade and Oracle in particular is far more about liquidity than worries about debt.

B (12:57)

This right, the chart tells a story, right? It had that September high and then you have some concerns come in and the stock is now back to the basic levels before that massive move in shares.

A (13:08)

Yes.

B (13:09)

So obviously the market is paying a lot closer attention to what's happening related to this issue, I think at Oracle.

A (13:17)

Okay, but if, look at that chart right there. And if I were to put up a chart of bank reserves as a percent of gdp, it matches exactly. All right? The Fed is too late in stopping quantitative tightening and we've gotten down to where bank reserves are in the ample as opposed to previously abundant range. Now I know this is arcane stuff, but I'm telling you this matters. When quantitative tightening ends in just a few weeks, this, that plus the treasury spending down, the cash hoard that it's got is going to Promote liquidity and Oracle with it.

D (13:47)

Understand.

B (13:47)

But you cannot suggest that the. Put those big back up there, please. Thank you. That you cannot suggest that the move from the September high to now back to $241 from where it was above 3, almost 350 bucks is because of that. Primarily. We never cannot make that argument.

A (14:06)

What I can do is say two things. We never know exactly what it is. It's not like it's on the Wall Street Journal headlines. And yes, I read the papers all day week. It's not all day long. I'm just going to finish this. The second thing is. And where you may have me because I may be misstating the cases, it's not all one thing. I happen to believe that the biggest factor in that slide from September is liquidity drying.

B (14:28)

How I want to hear from Surat too. You own the stock. What do you think?

D (14:31)

I do. And just we still own it, but I trimmed a bunch of it in the three hundreds for the reason that I thought it was way ahead of itself because of the announcements that they were making. The part that I'm. And I'm owning, I'm still holding the stock. But where I have a little fear because Oracle is always the show me story. Right. They don't get the benefit of the doubt that some of the other stocks do. It is going to be for the next couple of years negative cash flow. The other big boys all have cash flow. So I think they have to execute and that's what the market's telling you and why the Stock's down from 350. So you are.

B (15:03)

Look at you talk. You should talk to Jim.

D (15:05)

And I still own it. So I look at us, I do think they can exit. So I agree with him. But it's also position.

A (15:11)

If it were all knowable ahead of time, we wouldn't have the ability to make a return here. I don't want to keep talking over you, Steve. You want to say something, go ahead. But if it were all knowable that these cash flows, these negative free cash flows back all this debt that they're taking out of fact, if it was all knowable that that is a bad idea, you wouldn't have the opportunity to make money from here.

C (15:29)

First of all, a few things. I find it very interesting that you can say that you can't point to one event for a particular stock when the market's such a much more complex being. And yet your point to one point that's driving the market down. So put that aside. Debt is not all Created equal. There's debt that's collateralized on data centers, but there's also debt that Oracle is assuming to meet their operations, including what they promised to do with OpenAI. And in fact the two events that drove the move in Oracle were their earnings and the Open Air agreement. Now I think what you're seeing coming back from tech overall is all the companies that made these great deals with Open Air that were somewhat illusory because they're years in advance the years forward and they've got to be funded that some of that cream's coming off, off the top. So bottom line is Oracle is as Rob points out, going into a negative cash flow situation and so it should have definitively a different valuation. It's not the same company.

B (16:38)

Bottom line is if you get past that in a debate, we could have the debate forever, you know, whatever is that the pullback in stocks like that and the hyperscalers in general have presented to some a buying opportunity. If you take, if you put the chart back up please of the again the market cap that was wiped from many of the biggest companies out there that are in the AI conversation. There it is, right? Nvidia the most we told you the kind of slide that it's had that has presented itself a buying opportunity as we thought it might in like Amazon for example, which is down 5 1/2% from its 52 week high. Bill Baruch saw that and says all right, enough and he bought more. He joins us now to tell us exactly why you've been listening here. What do you think?

F (17:26)

I think Amazon is a different story than Oracle. I mean this is a, this is a breakout story and I think what we're going to see from Amazon input us. This is where Amazon is going to shine in that data center build out and we saw that reacceleration growth. I was on the show a couple of weeks before the report. We had high conviction that we could see a great report in 19% acceleration we got 20% reacceleration. So Amazon broke out above its February record high and last week there was a pullback last week but for Amazon it was just a pullback into that February record high. A lot of support there. Now this name is trading at 26.6 forward long run average about 37. So we see a lot of value in here. We added to it in our concentrated portfolio. It's our number one name in our main portfolio is about 6.7%. We increase this in our concentrated portfolio on Friday to make it a 15%.

B (18:22)

Holding Amy, you're one of, you know, everybody owns it up here. So what do you think is it. Is Amazon a different story here?

E (18:30)

I think Amazon is a different story. A it has the AI exposure, but it also has a lot of other exposure. I like Amazon for its robotics. I do think if you gave Amazon half the valuation that Tesla gets for its robotics and I think Amazon is better at robotics than Tesla, which might be a controversial statement.

B (18:49)

Oh, those are fighting words.

C (18:51)

Absolutely.

E (18:51)

I mean Amazon's been at this for a long time. So we own Amazon. I have not added to it. I, I'm sort of more. It has more still lagged for the year. I still think it can do okay. But if we, if everything that we're saying about AI comes to fruition and it is as big a market as we think it is and it is as productivity enhancing as we think it is, there's going to be a lot of other things that also do very well.

D (19:15)

I like it. I'm adding to it for positions that aren't the regular size. I think you hit something really important. Not only does NWC and I help it, but productivity gains right at Amazon are going to be really big. I mean, you already read about the robotics, you read about how they're in the retail business and if they can keep their costs down when come Christmas there there's huge. All we always talked about Amazon was when are they going to get the operating leverage. This is the opportunity for them to do it in their warehouses and the execution there.

B (19:43)

I know, but you. What's the valuation? What's the forward P E on. On Amazon? Because I know you're not paying it for the warehouse, you're not paying it for the retail business, you're paying it for AWS.

D (19:54)

Right. It's 26 times forward earnings at this point, which is lower than what it's been historically. So you are, it's.

B (20:01)

It's 34 times, 35 times forward. You know, I'm saying like you're paying for US growth to lead this company into the future, quite literally.

D (20:11)

Absolutely. But you also have other things that it's firing on all cylinders. So you do have a company now that can actually outgrow its earnings expectations.

E (20:19)

Amazon could turn on their cash flow pretty quickly if they wanted to. They're like sort of choosing not to more than other companies.

B (20:25)

The other move Bill that I want to get to you with before I let you go Uber, we talked a lot last week too. I think one of the other interesting stories, the stocks that had good Earnings that got punished. On the, on the backside of that we have a. So there's your one week on it. You obviously see what. The chart is pretty explicit there, guys. That's perfect. Thanks for putting that up, Baruch. You bought more Uber. Tell me more.

F (20:48)

Yeah, it's a, It's a top 10.

D (20:50)

Holding our main portfolios.

F (20:51)

We're getting cash to work in our concentrated portfolio. Bought uber to a 9% weighting. This is a free cash flow story for us. The free cash flow per share increased 45% on a trailing twelve month basis. Stock fell, you know, after that. Like you said, autonomous vehicle operations are expected to be unprofitable for several years. That's not our story here. We think the catalyst is a free cash flow. Free cash flow story and a pullback. You know, $85 is a tremendous area of support. Support did not get there. I don't think it may get there at all. So we're kind of holding in 93 to $95 that, that may spike. So there's a tremendous amount of support here. We think really what I'm getting to here is, is the overall pullback last week in the equity markets that the S and P had a trend line back to the May low. I mean, I think there's a lot of support down there. We've seen early month pullbacks that have then continued to rally throughout the end of the month. And I think this year we want to use this as a reason to get cash to work for names that we liked in those earnings reports.

B (21:53)

Okay, so go grab something to drink. You'll come back with us in just a little bit because I want to talk to you about another move that you've made, but I don't want to do that yet. So we'll see in just a second. I want to hit on the airline stocks given a little bit back today. Obviously we're watching all these flight cancellations, thousands of them, as you know. Now what, what the government shutdown and maybe an end to it is going to mean. Philippeau joins us now with more on that. And I guess the main question I have is we're, we understand the fact that we've gotten all these cancellations. If there is a deal in D.C. and they reopen the government, how long is it going to take to get everything back to whatever normal means today in aviation?

F (22:31)

Right. And basically we would expect it to return to the levels that we saw before the government shutdown began. So what we saw in September in terms of air traffic controller staffing the short answer is it depends on how quickly air traffic controllers go back to work. Now, theoretically, they should report to their jobs that day or immediately afterwards. You know how this works. In theory, that sounds good. In reality, does that actually happen? In terms of how the airlines are looking at this, they're scheduling out two to three days. They're not banking on this being resolved by Friday. They'd love it to be resolved by Friday, if not sooner. But until they get some clarity, they're not gonna set their schedules. And then finally, there's the question of are the aircraft and the crews in position to fire back up? In other words, you just can't say, okay, go back to work, we're ready to fly. It's going to take some time here. My guess is it's probably a day, day and a half until we start to see some normalcy within the system. Remember the flight cancellations that were mandated by the dot? They're in effect right now and they continue at least through the end of this week. Unless we see some firm resolution to the government shutdown ending. That means 6% of the cancellations tomorrow to the top 40 markets, 8% on Thursday, 10% on Friday. Again, that's been laid out there by the dot. They've mandated this because of the staffing levels at various air traffic control towers around the country. This is what they believe works best for limiting the flow of traffic into those airports. So the question ultimately becomes, as you take a look at the airline stocks and what they've done over, over to last week, how quickly do they get back to work? We heard from the president a post on Truth Social last hour where he said, get back to work. Maybe we give these people a $10,000 bonus. That would be great. And if that's what it takes to get people to immediately show back up to work, fantastic. But the bottom line is this, Scott. It may take a day or two, once it is officially over in Washington, for the air traffic controller staffing to return to what we saw in September.

B (24:36)

Yeah, I mean, this clearly was just going to be the chaos, untenable if you start talking about Thanksgiving travel and the nonsense that we're. We're witnessing on a daily basis. Phil, thanks for the Update. That's Phil LeBeau. You guys own these stocks. Big issue for you both.

D (24:53)

You own Delta, we own Delta. So international routes are not being affected. They're not being canceled right now. So that's a positive for Delta because that's where they make a lot of their money. And secondly, if there's a silver lining through all this. When things do come back to normal, the airline is going to optimize the routes that are most profitable. So the ones that aren't profitable aren't the ones going to come back right away too. So if this does get resolved quickly, I think these stocks will do well.

B (25:16)

I mean, the most important in the airlines minds, the hub to hub, the biggest cities to the biggest cities moving around. You know, business travelers in that perspective, those were less impacted than any of the other routes to begin with.

F (25:30)

Right.

B (25:30)

The Denver to Newark's, the Dallas to Chicago's, the L A to wherever.

A (25:37)

Yeah, I mean, I like where you're going with this. I think the, the overall comment I would make, whether it's that or just in general, is that this is a very temporary situation. This started last week. It may last another week or two. But once this is done, assuming that we're close to an end of the government shutdown, you've got pretty healthy demand for travel. And when we talk about the K shaped economy, the upper leg of the K is the one that fills the front of the plane. Delta in particular, as Seurat knows, has done a very good job of extending the front of the plane, monetizing that.

B (26:08)

What do you mean, as Seurat knows?

A (26:10)

Does he? I mean, that's where Seurat sits. That's our guy. He could be private, you know.

C (26:15)

You know, part of the office says.

B (26:16)

He travels with his golf clubs all the time.

C (26:19)

Exactly.

D (26:19)

Sit with me.

C (26:20)

Ship bomb. But part of it's going to be offset. In large part, I believe, is that there's no moratorium on price increases. So with the algos the airlines use to raise prices, you'll find that Chicago costs you, you want to go front of the plane as you do so, right. It's 2,000 bucks. It's ridiculous.

D (26:38)

So the whole row.

B (26:39)

So we're going to take a quick break. That's because no one wants to sit next to us. We'll take a quick break. Bitcoin's bouncing back after it's dropped below 100,000 last week. Billboard. I told you. He's still with us. He has a move related to that space I couldn't resist. Why so?

C (26:53)

I liked it. I liked it.

B (26:55)

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D (28:11)

Welcome back.

B (28:12)

Warren Buffett's final Thanksgiving letter is out. Let's get to Becky quick. Being viewed Becky is very much a Farewell letter from Mr. Buffett.

G (28:20)

You know, it is. It is in a way. He's not going to be writing the annual letter to shareholders anymore. But Scott, he does plan to continue writing this annual letter for Thanksgiving. He's been doing this for several years. In this latest letter this morning, he says that he's converted 1800 of his Class A Berkshire shares to 2.7 million of the Class B shares and then given them over to four family foundations. One and a half million of those shares going to the Susan Thompson Buffett foundation of his late wife, and 400,000 shares to each of the foundations that are run by his three children. By the way, that works out to about a total of $1.35 billion based on Friday's closing prices. Buffett says he is going quiet, Scott, sort of. He's not going to be writing that annual letter to shareholders anymore. He's going to be turning turning over the CEO job, obviously in full, to Greg Abel. That's coming at the end of this year. But he says he will continue to communicate with shareholders and the rest of us in his annual Thanksgiving letter. In this letter, he talks about the many things that he's grateful for through his life. He starts with all of the things that Omaha brought him, from his two wives to wonderful schools and doctors, to the incredible friends that he collected over the years, people like Charlie Munger, Walter Scott and Don Keough, all of whom went on to become Berkshire shareholders and board members. Buffett says he is grateful for his long life. He's 95 years old now, but he says that his unexpected longevity has, in his words, unavoidable consequences of major importance to his family and the achievement of his charitable objectives. He points out that his children, who are now at the ages of 72, 70 and 67, are above the age of normal retirement. So he says he needs to step up the pace of his gifts to their three foundations during his lifetime so that they can give more of the money away now while they're in their primes. One caveat to this, of course. Buffett adds that he doesn't want to give away too many of the Class A Berkshire shares until shareholders are just as comfortable with Abel at the helm as they were with he and with Charlie. Basically, that's to fend off any activist shareholder action or takeover attempts. But he does say that that comfort level with Able he expects to happen sooner rather than later. He also goes through. And Buffett goes on to say that the acceleration of his lifetime gifts to his children's foundations are not a reflect of a change in his views about Berkshire's prospects under Greg Abel's leadership. Here's how he says it. He says, I can't think of a CEO, a management consultant, an academic, a member of the government, you name it, that I would select over Greg to handle your savings and mine. Buffett adds that he hopes Abel remains a CEO for several decades and that Berkshire's businesses have moderately better than average prospects, at least in his opinion of things. And Buffett offers some words of wisdom at the end of this letter. He says that he's happy to say that he feels better about the second half of his life than the first. And he actually challenges others to learn from their mistakes. He says it's never too late to improve. And, of course, from a man with a net worth of around $150 billion, he says that there is much more to life than money. Here's a quote from him. He says, greatness does not come about through accumulating great amounts of money, great amounts of publicity, or great power in government. When you help someone in any thousands of ways, you help the world. Kindness is costless, but also priceless. Whether you are religious or not, it's hard to beat that golden rule as a guide to behavior. And, Scott, he says he will continue to write this, but he's not going to be writing the annual letter in May that Greg Abel will be writing for the first time this year.

B (31:49)

Yeah, really, I feel, you know, we're all richer, of course, anytime we hear from Mr. Buffett. Let me. Let me just come back to you with one thing because I think it's speaks to which you know better than everybody. The, the thought process or the way that you know, they, they've thought about the investments that they've made over the many years that, that Warren has been running Berkshire Hathaway where he says in Agra. I'm quoting from the letter. In aggregate, Berkshire's businesses have moderately better than average prospects led by a few non correlated and sizable gems. However, a decade or two from now there will be many companies that have been done better than Berkshire. Our size takes its toll. Berkshire has less chance of a devastating disaster than any business I know. And Berkshire has a more shareholder conscious management and board than almost any company which with I am familiar and I have seen a lot. Can you just speak to that through, through the lens that you've had for all these years?

G (32:43)

Yeah, I mean he and Charlie Munger for years at this point actually for as long as I've been covering them over 80, 18 years or so have talked about how it's much harder to make those outsized gains. It's the law of big numbers. Right. Once you're bigger, it's harder to make those outsized gains. And that's certainly been the case with Berkshire Hathaway. But he also points out that he thinks it's really safe, it's a safe guardian for your investments. And that's how he and Charlie always thought of the partnership. How Warren Buffett himself, when he started that family partnership with his friends and family thought of the whole thing and they have carried that over to this day. Even despite the company having such a large market capitalization at this point. I think he's trying to be straightforward in his views about the company. That yes, Greg Abel he thinks has a very good read of any potential risks when it comes to insurance with reinsurance, with any of the major businesses. And he happens to be a much more hands on operator than Warren Buffett ever was just in terms of, of checking in with each of those businesses along the way. So I think he's got a lot of faith in it, wants to make sure people realize he has faith in Greg Abel running all of these things. But because it's such a large company, you're not going to see it outperform the S and P the way a technology stock might. But he also thinks it's a lot safer for many blow ups along the way.

B (33:57)

Yeah, well put Becky. Thank you. That's Becky Quick. The, the latest annual letter, that so called Thanksgiving letter from, from Warren Buffett you, you, you too, on the stock, which, by the way, hasn't traded well since he made the announcement about Able taking over anyway. I mean, you can see if you back it out a little bit more, you can see the fact that the stock just has not traded well since that period of time of which Warren Buffett addresses as well in this letter, seemingly anyway, where he says, quote, our stock price will move capriciously, occasionally falling 50% or so, as has happened three times in six, 60 years under present management. Don't despair. America will come back and so will Berkshire share. So he's speaking to shareholders like you guys.

E (34:39)

Yeah, look, he's a class act. Everybody should strive to live as principled and magnanimous of a life as Warren Buffett has. And I think he's just such a contrast to a lot of sort of the behaviors we're seeing from CEOs and other people today. So, so I think, you know, we're going to miss it hearing from him on a more regular basis. But Berkshire is a defensive holding. It's a holding that you want to have when things go wrong rather than when things go right. So in a very up market, it's going to underperform, but that's okay. Each stock and portfolio has different roles and you just have to know what you're investing for, I think.

B (35:20)

And that's the message he is trying to convey today. Let's get at the headlines now with Christina Partos. Hi, Christina.

G (35:26)

Hi, Scott. Well, the Trump administration renewed its bid today for the Supreme Court to intervene to keep full SNAP food aid payments frozen during the government shutdown. Lower courts have ruled the government must keep the payments flowing. Some 42 million Americans rely on these SNAP benefits. President Trump is meeting with Syrian President Ahmed Al Shara today, marking the first ever visit by a Syrian president to the White House. It comes just days after the US Removed the former al Qaeda member's designation as a, quote, specially designated global terrorist. Al Sharah took power last year after the overthrowing of former President Bashara al Assad. And President Trump threatened to sue the BBC for $1 billion over the editing of one of his speeches. The British network's Panama Panorama, I should say program spliced together two, two sections of Trump's speech before the January 6 Capitol attack, but did not include the part where he told supporters to protest peacefully. A lawyer for President Trump says the program defamed him. Two top BBC officials resigned over this. Halftime is back right after this short break.

B (36:32)

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B (37:16)

Edu welcome back to the Halftime Report. I'm Dominic Chu with your ETF Edge. Thematic ETF investing has gained a lot of popularity over the last few years, and of course artificial intelligence has been a huge driver of those flows. But is AI the only game in town? Joining me now is Ryan O'. Connor. He's the CEO of Global X ETFs. They do a lot of thematic investing. So, Ryan, an interesting point about just how big the AI trade is is how big has it been for you at Global X and just how strong is that dynamic and momentum for artificial intelligence?

F (37:49)

Great question. It's been a big trade. It's been a very interesting time for us.

A (37:52)

Look, to take a step back.

F (37:53)

Global ETFs now is approaching a $75 billion asset manager. Of that $75 billion in assets, roughly 20 go towards our thematic lineup. Right. So a big component of what we do.

A (38:03)

But there's so much more than just thematic.

F (38:05)

And I, I'd say as it relates to that trade, things are broadening. Not just about our flagship AI fund, it's about really getting more targeted exposure either through data centers, through energy to fuel that boom, through uranium and clean energy or even lng. So liquid natural, natural gas as well.

B (38:21)

Just how much, by the way, are investors segmenting out that kind of nuance within thematic air trade? Now it's data centers. It could be energy around it. How is that demand going to develop?

F (38:32)

Look, that demand is going to continue to grow. We've seen it grow on a year to date basis. Last week, even with some of the headlines around AI, we saw that continue to accelerate, extend. You know, one component we've seen folks get more granular is around defense technology. Right? So SHIELD has been a really big fund for us this year. Over $3 billion in net new funds something that we see as NATO countries are defending themselves and arming up is going to be a trend that we see continue.

B (38:53)

All right, Ryan, thank you very much for that conversation. We're going to continue this conversation over at ETF edge.cnbc.com Ryan is going to be joined by Mike Aikens, the founding partner over at ETF Action. Scott. So a big conversation about thematic investing. I'll send things back over to you guys. I appreciate that. Don Chu, thank you very much. Up next, Bill Baruch joins us once again. We mentioned bitcoin fighting its way back today. He has a new move and we don't want you to miss it. We'll do it next. We're watching bitcoin today, of course, it's trying to bounce after posting its fourth weekly loss in five. It is above 105,000, up about 1%. Bill Baruch, your move is that you bought more Coinbase because you said the bitcoin slide is over.

F (39:37)

I think there's a lot of support at the $100,000 level. But we're also seeing data right now that's telling us that that crypto is becoming a real asset or a diversifier in portfolios. Those were the flows. And we wanted to add Coinbase. We started the 1% position ahead of earnings this morning. We added another 50 basis points. The the earnings were tremendous. I mean 44% year over year growth in stablecoin revenues. The earnings themselves grew over 400%. And I think the interesting thing is with the government shutdown looking to end, it opens the door to SEC activity and meeting crypto rulings. And Brian Armstrong, he's been spending quite a bit of time in D.C. so it came off the 200 day moving average on Friday. A lot of support down there. And I think we could see this thing higher here at the end of year.

B (40:21)

All right, good stuff. Thanks for sticking around too. I wanted our viewers to hear from you on that. So I appreciate you doing that. That's Bill Baruch. We'll see on the desk. I want to give you a story too. In related news, the famed short seller Jim Chanos, he has unwound his short position in the crypto treasury company strategy run by Michael Saylor. He told clients in a letter, quote, while we believe there is more room for net asset value compression, the thesis is largely played out. We talked to him, if you recall, at the SON conference about this short. What do think you think about crypto treasury stocks?

C (40:53)

You know, I just think that when you have no intrinsic value underlying this, that's very difficult to short because you've got to wait for that moment in time. Jim was successful in this one, but others that have tried to short this or well, Etoro is well off. Its highest one was an ipo. I just think it's very difficult to do it. It's some it's a cult like Tesla, even though Tesla has always been overvalued and the fundamentals deteriorate. If you're short, you've lost a lot of money.

B (41:20)

Yeah.

C (41:21)

So it's best not to do sometimes. What is the obvious?

B (41:25)

I mean, you can see the chart has certainly worked in Jim.

C (41:28)

It was a great call. I mean, you took company and basically you've just turned into into a crypto vehicle with lots of leverage. So you just don't want to be leveraged assets.

B (41:39)

All right. So we'll take a break. When we come back, yet another another sports betting scandal, this time in Major League Baseball. Our Contessa Brewer following that developing story. She'll bring us the very latest next. We are back today and following another sports betting bombshell, our Contessa Brewer joins us now with this still developing story.

G (41:56)

Contessa yeah, Scott, so federal prosecutors have indicted two Cleveland Guardians pitchers. Emmanuel Clause and Luis Ortiz are accused of rigging their pitches to let bettors profit in a scheme worth nearly half a million dollars. Now Close is a star closer and Ortiz is a starting pitcher, both from the Dominican Republic, both facing a slew of federal charges. Prosecutors say over the last two years, the players telegraphed their pitches to conspirators who then bet and profited on those pitches, sharing the winnings with Clause and Ortiz. For example, in this game against the Red Sox in June 2023, prosecutors say Clause arranged to throw a ball with a pitch slower than 95 miles an hour. And then they included this image in the indictment, the ball hitting the dirt, you can see it there in the box. They say the betters won $58,000 here. Similar accusations against Ortiz. He was arrested in Boston yesterday and is scheduled for federal court there today. His lawyer says Luis Ortiz is innocent of the charges related to the two pitches he threw. He has never and would never improperly influence a game, not for anyone and not for anything. Clause is not in US Custody, although authorities did not explain his whereabouts. His attorney told us Emmanuel Clause has devoted his life to baseball and is doing everything in his power to help his team win. Emanuel is innocent of all charges and looks forward to clearing his name in court. The MLB and the Cleveland Guardians are investigating and cooperating with investigators. The Players association won't comment. And the US Attorney said that these players defrauded the online betting platforms where the bets were placed that they betrayed America's pastime. Scott?

B (43:42)

All right, Contessa, thank you very much for the update. Contessa. Brewer, we'll do finals after this break. Big move in the Nasdaq today. We're up almost 2%. Tom Lee is on Closing Bell with me. He told you to stay with those stocks. We'll see what he thinks about these markets now for the final stretch of the year. 3:00 clock Eastern on the bell. Surat, Seti, final trade. What do you got?

D (44:05)

Morgan Stanley, I think capital markets opening up, wealth management business. You want to stay with this one?

B (44:09)

All right, thank you very much. Farmer.

A (44:11)

Jim, Cisco Systems. I don't normally take a final trade right in front of earnings, but I have to respect the momentum here. For the last month as the market swooned, this has given twice the return of the S&P 500. Sentiment is clearly positive and I think the fundamentals justify it.

B (44:27)

You feel like living dangerously today?

C (44:30)

Look at what he's wearing.

B (44:31)

Obviously, I like the new gym guy has a Red Bull on Friday. Today picks a stock right into earnings.

A (44:38)

Okay, I'm with you for my friend, I'm here for you, Scott.

E (44:41)

Amy, Alumina. I use this as my final trade. Last time I was on and had a big pop on earnings, but I think there's more to go.

C (44:48)

Weiss FTA, it's correct, about 15% with the market, nothing fundamental. I think it's a good opportunity to pick some up.

B (44:54)

All right, so as I said, Nasdaq is good for almost 2%. So a nice snapback in those stocks. There it is just about there. We will see where it is over the final stretch today on Closing Bell. You've been listening to CNBC Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

A (45:16)

CNBC.

G (45:22)

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full halftime report disclaimer, please visit cnbc.com forward/halftimereportdisclaimer your commute day.

B (46:02)

In and day out. The same old route, but also the perfect time to hear what's new in blockchain and crypto. Level up your commute and join Ripple for conversations with some of the best in the business on how institutions around the globe are being reshaped and revolutionized with blockchain and crypto. From digital asset infrastructure to payments, custody, and even our stablecoin rlusd. Listen to special commuter editions of blockstars, the podcast hosted by David Schwartz. It's happening with Ripple.