← Money Rehab with Nicole Lapin
Money Rehab with Nicole Lapin
Who Is Winning the Trade War? With Michael Batnick (Ritholtz Wealth Management)
00:50:22
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- [00:00]
Nicole Lapin
If you take only one thing away from today's episode, Money Rehabbers let it be this. In my not so humble opinion, Public is the best brokerage for investing in bonds, stocks, ETFs, options and even crypto. You can try it out for yourself and see why I love it so much. @Public.com MoneyRehab Public is legit, the only platform I use to buy bonds. Before public, I used to buy government bonds the hard way. Slow websites, confusing interfaces, website designs straight.
- [00:26]
Michael Batnik
Out of the early 2000s.
- [00:28]
Nicole Lapin
Just picture where fun goes to die.
- [00:30]
Michael Batnik
That was it.
- [00:31]
Nicole Lapin
And then I found Public about five years ago and I have not looked back. I can now finally buy bonds without wanting to rip my hair out. Public makes it so easy to buy bonds. Whether you're into Treasuries or corporate bonds, you can browse thousands of options right from your phone. But like I said, Public isn't just all about bonds. You can also find stocks and ETFs and they offer a high yield cash account with a 4.1% APY, which is higher than the national average. They even have retirement accounts. You can now open a traditional or Roth IRA or both right on public so your future self covered. And for a limited time you can earn a 1% match on all your IRA deposits, IRA transfers and 401k rollovers. If you want an investing experience that's both smart and simple, head to public.com money rehab one more time. Public.com money rehab this is a paid endorsement for Public Investing. Full disclosures and conditions can be found in the podcast description. So one of my girlfriends fell in love with this house and she was.
- [01:32]
Michael Batnik
Sure she could afford it.
- [01:33]
Nicole Lapin
She had the down payment, she had the income. But when it came to pull her credit for her mortgage, oh, it was.
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Michael Batnik
A brutal wake up call.
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Nicole Lapin
It sounds so obvious, but it hadn't really hit her until that moment. Her day to day spending habits weren't just keeping up with the Joneses, they were affecting her future. So she came over, we talked about.
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Michael Batnik
It, we did some credit hygiene and.
- [01:56]
Nicole Lapin
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- [02:39]
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- [02:53]
Nicole Lapin
I'm Nicole Lapin, the only financial expert. You don't need a dictionary to understand it' for some Money Rehab. Yesterday I gave you a pulse check on the economy. Today I'm giving you a pulse check on the markets. And to do that I'm joined by Michael Batnik, managing partner at Ritholtz Wealth Management and co host of the Compound and Friends podcast.
- [03:18]
Michael Batnik
Michael's co host, by the way, is.
- [03:20]
Nicole Lapin
A Money Rehab homie, Josh Brown. Today we talk about whether the negative outcomes of the Trump tariffs and the so called taco trade are over and where interest rates are headed. We also play bullish or bearish. And Michael tells me his take on some of the buzziest stocks of the day. From Palantir to American Eagle. Let's get into it.
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Michael Batnik
Michael Batnik, welcome to Money Rehab.
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Josh Brown
Thank you so much for having me. I'm excited to do this. I just spilled the seltzer, so forgive me, I'm just drying my seltzer, but go ahead. Very excited.
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Michael Batnik
I was wondering what you were doing with like a pink blanket, a pink baby blanket. What is.
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Josh Brown
Don't ask.
- [03:59]
Michael Batnik
Okay. You're also in the middle of moving, so that's stressful. Thank you for taking the time.
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Josh Brown
Of course. Thank you. Very well.
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Michael Batnik
You're moving from a 3% mortgage to a 6% mortgage.
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Josh Brown
I'm trying to stimulate the economy. There's a lot of bad articles. I'm trying to do my part.
- [04:15]
Michael Batnik
That's rough. How does that feel?
- [04:17]
Josh Brown
Well, it feels good because interest. Yeah, A lot more in interest. And I am very proud of myself that I am able to make this decision because on paper and the vacuum of money, it makes no sense to give up this 3% mortgage. But I'm doing it because I want to be in a house on the water. And so.
- [04:38]
Michael Batnik
Oh, that's what it is. Okay, these are, these are high class problems. Well, moving over to the water with a higher mortgage means that you're doing really well on Wall street, clearly. So let's start with just a pulse check of what's going on. How are you feeling about the markets right now?
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Josh Brown
All right, how am I feeling? Let me do this. So a lot of conversations around the stock market are where is it going? What does this mean? What's going to happen next? I have an opinion like everybody else, but they're worthless because nobody can consistently see the future. Spoiler alert.
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Michael Batnik
But it doesn't stop us from wanting to know.
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Josh Brown
Spoiler alert. But here's what I'll do. I will describe what's happening today because I think I'm pretty good at that. And then we can try and unpack and interpret the meaning of the market today. So right now it's a bull market today.
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Michael Batnik
We should say we're talking on Tuesday. Today the market is a bit down.
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Josh Brown
It's Tuesday, August 5th and we are a shred below the all time high that has ever been printed in the history of the galaxy. So things are pretty good. People are feeling excited. There is a lot of speculation, whether you listen to the earnings calls of Robinhood or cma, which is where a lot of the futures and derivative contracts are traded, or you listen to Goldman or whoever in terms of like what their clients are doing. They're all saying the same thing. It's money making season and people are getting excited and they're speculating with shorter and shorter time horizons. Even Ark is rejoining the party. Cathy Woods, Cathie Wood's famous Arkk, which was the poster child of the 2020 euphoria. She had a record setting inflow the other day. I think it was $800 million or whatever it was, was a lot of money. And how long this lasts, of course nobody knows. But you know, there's there's some, some yellow signs flashing, right?
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Michael Batnik
How, how long does that last? Because everybody thinks they're a genius when the market is up. And by the way, we should mention that the market hits a new high, what every 19 days. So when you hear it's like a new high in the galaxy or intergalactically or whatever, you know, right now we're at all, all time highs, but markets hit all time highs all the time, all the time.
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Josh Brown
So I think there is the human tendency to get nervous at all time highs because we remember some of the bad times and we think like, is this as good as it's going to get, should I sell now? But what we also know is that if you were to invest at an all time high, on average one year later, one, three and five years later, in fact the returns are higher than on average for investing at any other random day. And I think that's counterintuitive. But when you think about why stocks are hitting all time highs, not always, maybe not today, but generally it's because things are pretty good. And things don't generally turn from pretty good to holy shit, the world's ending overnight. Now of course, sometimes it does, sometimes you hit an all time high and then look out below. But generally the market is not that dumb that it's, that it's making all time highs for no reason. But then of course, like, like any, any other time, something can come off and hit us off our axis. And by definition, that's what risk is. And it's ever present, it never goes away. And again, by definition, we can't know what that is because it's unknowable.
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Michael Batnik
Because we're not psychic. Let me tell you a funny story. So when my now husband first told me he loved me, I, the first thing I said back was, I think there's going to be an earthquake. Oh my God, I'm such a weirdo, right? Because I thought, oh my gosh, something bad is about to happen. Like, it can't be this good.
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Josh Brown
Are you in California?
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Michael Batnik
Yes.
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Josh Brown
Okay.
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Michael Batnik
And I remember earthquakes. And so I'm like, no, no, no, it's too good. Like something, the other shoe is going to drop. Like something bad is going to happen. Which is kind of what you're talking about with the markets right now. Like if we look back to earlier this year and you know the time, if you're listening to the show by the Big Dip, a lot of people did, but now money is waiting on the sidelines for that to potentially happen again. Because the market being at all time highs means the market's really expensive too. So what would you say to somebody who's waiting with their shackles on the sideline for something to go on sale again?
- [09:03]
Josh Brown
Okay, that is hard advice to give, but I would say you need to have some semblance of a plan. It doesn't need to be the best plan or you know, rocket science with all these fancy equations. But if you're like, if you are sitting at too much cash and you feel like a dum dum and maybe you're feeling a little bit of anxiety or fomo, take a beat right like the, the. The market always gives you another opportunity to get in. But I would say that, like, just blindly waiting for a pullback is horrific, a horrific thing to do, because what if it's 1995 and we just don't get that opportunity and the market is 20% higher a year from now and you only had a 3% pullback and you're like, like, now what do I do? All right, so we can't control where the market's going to go. So just maybe like something as, as rudimentary as this every month or every other month for the next year, I will put in one quarter of how much I ultimately want to invest and just stick to it. Or there are programs out there where you can dollar cost average or you can automate the investments. I am always on the side of automating. Automate, automate, automate, because I get scared like everybody else. I get fearful when others are fearful. Nobody doesn't feel those emotions. Like, we are all human beings and we all get scared together, and we all get very excited together. And so the best thing that you can do to sever that part of your brain from your wallet is to automate your investments.
- [10:34]
Michael Batnik
You know what I've been doing that actually your homie Josh Brown told me about, and he wrote about, I think, in his book, was to do limit orders, love, on things that you feel like you want, but they're too expensive. And so when the limit orders hit, that means market's down. Sometimes I know the market's down when some of these limit orders of ridiculous things that I've put, like, I would buy, you know, whatever. I'm just saying hypothetically, Nvidia, if it was 140 or something like that. So when these hit, it means the market is dropping. But also it means, like, I'm getting these things that I thought I missed out on.
- [11:11]
Josh Brown
I love that. I love that. Yeah, Josh is a big proponent of that, and I think it's a great approach. You put in these ridiculously low bids, and if they get hit, wonderful.
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Michael Batnik
So you're basically saying that if we're in 1995, flashback, holy cow, things could continue to go up. And every time you're not putting money to work, if they're not in limit orders, which I did argue with him, that's not putting money to work. That's still waiting on the sidelines. And if that does. Those don't hit, then that's not great either. So fundamentals, we're still adding jobs fewer than expected. Let's get into the jobs hoopla. So 73,000 jobs were added. The bigger issue here is all these revisions. So the numbers from May, the numbers from June were revised wildly weaker than originally reported. I think it was 132 in May to 40 42. That was the downward revision. And then 179 in June to 11,000. Like that's a swing of 250,000 jobs. That's the two largest downward revisions since the pandemic. What's going on? And then President Trump kicked out the bls, the Bureau of Labor Statistics commissioner because of it.
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Josh Brown
We are in the perfect storm of Wall street narratives right now because simultaneously we, we had those job numbers and a generally softening economy which isn't, which isn't in and of itself the end of the world. The economy can slow down and then it can re. Accelerate. Just because you slow down doesn't mean that we're going to crash or anything like that. It's cyclical, it's noisy. But we had that really big job downward revision as you mentioned. We also, the labor market is softening and 70% of the economy relies on consumer spending. So there's the push and pull of what's happening with the economy and spending versus well, what matters to the stock market right now it's all about hyperscalers and how much they're spending on CapEx. And the contribution to GDP of what they're doing was actually more than the increase in consumer spending. So that is the big question today is can the stock market survive a slowing consumer and is it enough? Like, can the weight of the stock market world rest on the shoulders of Microsoft and Amazon and Metta and Google and how much money they're spending and buying from Nvidia. And that is the, you know, $4 trillion question.
- [13:47]
Michael Batnik
And what do you think?
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Josh Brown
I don't, I mean, this is boring. I genuinely don't know. I am very excited to see. I think that some of the numbers are starting to get a little crazy. So Nvidia, for example, is about to cross the entire market capitalization of the industrial sector. And these are not small companies like Caterpillar, Honeywell, ge, whatever. These are not small companies as well as health care. All of health care. Every single Pfizer and Bristol Myers and Merck and whatever, whatever, all of them. Now the market isn't dumb. The market doesn't just give away money or ascribe multiples that make no sense. If we are, and I should forget about if we are on the precipice of A insane technological revolution. And I think people are, are too quick to think back to the last time this happened. They think about the Internet bubble, they think about this ending badly. And are there like similarities? Yeah, sure, I mean it's not crazy but is it going to go the same way where these companies are going to lose 90% of their market cap because we over invested and we discounted too far into the future? People like to talk about like Cisco really did grow 20% a year for 20 years after the dot com bubble burst but the stock still got killed because the market was pricing in whatever 40% growth into, into infinity. I think people over index too much on the recent past but this is, this is it. This is the only thing that matters like really and truly because outside the mag seven names earnings aren't growing that quickly. And the stock market, the price of the stock market, it does follow earnings. It's not alchemy, it's not rocket science. The at the end of the day these businesses and the price follows the business.
- [15:48]
Michael Batnik
Yeah. So much pressure for seven companies. What about the 493 others? And if you're saying that they contribute to GDP, let's talk nerdy data for a second. If there's so much downward revision from the Bureau of Labor Statistics like how do we believe any data that's coming out there? How do we believe the GDP print?
- [16:11]
Josh Brown
Okay, so a lot of this stuff is based on survey. There are a bazillion inputs and there was a guy who responded to Chamath. I think his name was Andrew cone but I'm not positive. And he's like listen dude, there are hundreds of economists who work here. They are not trying to lose their job. They are trying to get the data accurate. And this is a 30 trillion dollar economy and they're trying to get it right. And revisions are nothing new. And I do think is it a very dangerous precedent of I don't like what the data says, let's get somebody else in charge. I think that is not a good thing for the fabric of our society for sure.
- [16:55]
Michael Batnik
They're constantly and chronically underfunded. Right. So even if you get someone else in there, how is it going to be different?
- [17:03]
Josh Brown
Oh I don't, I have no idea. I don't know what the plan is but I'll tell you this. I have a suspicion that we're going to do that. Non farm payrolls, what were they were 73,000 in August. I'm suspecting that the data is going to get better.
- [17:14]
Michael Batnik
I mean these Revisions are crazy. Like this is their one job. Why are these revisions such a huge swing? Like I get the margin of error and the revisions and all that stuff and we've had this forever as long as they've existed.
- [17:26]
Josh Brown
So this point aggressive, this person that I'm referencing, he did a study looking into the distribution of revisions just to make sure that they're not biased one way or the other either to the upside. They're chronically over optimistic or pessimistic. And it looks like a normal bell curve where it really does wash out. It is noisy, but yeah, it is. I don't, I don't have great insights as to why there's not like real time data. Maybe all of the data needs to move to the blockchain. I have no idea. Honestly. That's like above my pay garden.
- [18:04]
Nicole Lapin
Hold onto your wallets. Money rehab will be right back. And now for some more money rehab.
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Michael Batnik
A big story now coming out was the Fed's decision to keep rates steady. Do you think all of the craziness going on with the BLS could impact the Fed to cut more? Is that really the underlying story here?
- [18:33]
Josh Brown
Well, I don't think Powell will be bothered by what President Trump decides to deal with these commissioners, but the market is pricing in more rate cuts, which is probably a combination of the fact that Powell's term is almost over. And also in my opinion, and I'm not an economist, I think the Fed should be cutting. I think that one of the key pillars of this economy is the housing market. And the housing market is absolutely frozen. If you look at existing home sales, they're just, there's no activity going on because people are stuck. They can't afford to move. They're stuck in their mortgage. And that's a huge part of the economy. And so we're very like you, right?
- [19:13]
Michael Batnik
Going from a 3% mortgage to a 6% mortgage.
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Josh Brown
So I think rates should be lower. I think the economy is also slowing down the two year significantly below Fed funds rates. I think all indications are that we are a little bit too restrictive. And I think that people would tell. Michael, what are you talking about, dumbass? Look at fart coin and all this other like speculation that is on the margin. And that is not, I hate to break it to you, that is not what the Fed is looking at to determine the appropriate level of interest rates.
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Michael Batnik
Yeah, I cannot imagine Jay Powell looking at fart coin as one of his important indicators.
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Josh Brown
No, it's not an input belief.
- [19:45]
Michael Batnik
But you know, like you and I have seen A lot of, you know, earthquakes is not our first rodeo at, you know, the ups and downs of the market. When you cut rates to rock bottom levels, you know, the nostalgia that people have for that, it worries me because when rates were that low, like the economy was hanging by a thread, like those were emergency measures. It's not funsies to just take rates all the way down so that, you know, we can stimulate an already healthy economy. When you do stuff like that, the economy is weak, it's sick, it's not healthy.
- [20:21]
Josh Brown
Wait, what's funsies? I don't know what that word is for funsies. Yeah, I don't know what the right level is. I don't know if it's three and a half percent or three and a quarter, whatever, but I think we're too tight and I totally agree with you. A lot of the behavior that we saw in the ZIRP era of zero interest rates were pretty gnarly and dangerous. There was a lot of economic distortions. I think the consumer benefited a lot from it because Silicon Valley and a lot of these venture backed funds were funding a lot of non profitable ventures like Uber being one of them and Tesla, not Tesla, a lot of others that like the consumer was a huge beneficiary of. And that is, that's big. It is off. And I think that's probably for the.
- [21:01]
Michael Batnik
Best agreeing on that. You guys had an episode last week talking about Wall street basically saying that Trump is winning the trade war, the taco trade is over. If somebody again is sitting on the sidelines with some cash thinking that we're going to see another dip with the uptick in tariffs again, what do you think is going to happen there? Can you talk me through the case that Trump is winning and the taco, Trump always chickens out.
- [21:30]
Josh Brown
So I think the, the talk last week, and honestly, like I don't know about you, I'm sort of over tariffs just in terms of like, not that they're not over, not that they don't matter at all and they absolutely matter to a lot of small businesses. I'm not trying to minimize it, I just mean in the general discourse, like I personally am tired of talking about what is he going to do? Will he or won't he? Once a lot of these measures and levels are actually there and we have some data that we can revise and revise again and then get to the bottom of it, like then I will be curious to see what the impacts are. But it seems like so far the market is looking past it because what is driving the market earnings and certainly the narrative. It's not anybody who's reliant on steel or, or whatever other imports are going to be tariffed. It's, it's mag seven and that's it. That's all the market cares about right now. And it won't be that way forever, guarantee it. But for right now, that's what matters.
- [22:27]
Michael Batnik
But closing these trade deficits is bringing in trillions of dollars to the U.S. it is for funsies for free.
- [22:36]
Josh Brown
Okay, maybe it is.
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Michael Batnik
Is that a stimulus? That's not a stimulus check.
- [22:41]
Josh Brown
Okay, so the, the federal deficit, these are taxes. It's, it's a tax on consumer. And so the more liquidity that you take out of consumers pockets, like I don't know how that's stimulative. And so the deficit goes from whatever trillion to a little bit fewer billions. Like I don't, I don't know. I, I am not one of those people that are particularly concerned about the deficit. I think a lot of that is fear mongering or a misunderstood basic misunderstanding of like how the economy works. We've almost always had a deficit and it almost always has never mattered.
- [23:12]
Michael Batnik
Okay, so why are you over tariffs? Even though, you know, pharma tariffs could now go up to 250%. Like all of this is a big deal and has ramifications on.
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Josh Brown
Oh, it is a big deal. I'm gonna say for me personally, personally as somebody that is commenting on the market, I don't care that much because I am not an expert on what the levels are going to be, what the ramifications are going to be. Like that is just not my beat and I just don't care to talk about it that much. It's not that like I don't think it matters. Of course it matters.
- [23:39]
Michael Batnik
Okay, what do you want to talk about then? Like what if we, what if we not focused on. Is there something that has been overshadowed by all the tariff news, by all the data data news? What should we be focusing on and taking a closer look at what is capturing your heart and attention.
- [23:54]
Josh Brown
All right, let me give you an answer, a non answer. My non answer is nothing is overshadowed. There is so much noise out there that if there is a story it will be reported on. One of the things that's been popping up lately is like there's just too much money. The upper class has too much money. Airport lounges are full. 3 million is the new 1 million. Whatever it is. I think one of the stories that is perhaps a little Bit uncovered because I don't. Just don't know that's like that sexy or exciting. First time home buyers are getting royally. If you were saving money because you used to think that a house that you wanted cost $600,000 and you were working for years with your partner to put away $150,000 to get into the house, and now all of a sudden you have to put away $250,000 and the mortgage payment is out of reach. I think those people got a super duper raw deal. And that is maybe not spoken about enough, but I think that the distortions of the housing market are seriously sending shit haywire.
- [25:04]
Michael Batnik
So, meaning what? What does that mean? Let's like pull the thread on it.
- [25:07]
Josh Brown
All right. One of the, one of the things that we've been talking about, and I don't know how to quantify this because the stock market is so large that these dollars that I'm talking about are a drop in the bucket. But we have gotten a lot of emails from people that are tired of sending in a money market fund for a house that they're never going to be able to afford and are tired of watching the S&P 500 compound at 15% while they do that. And so a lot of these people are taking money out of what would be a very conservative bucket and putting into the stock market.
- [25:41]
Michael Batnik
But what's wrong with that? What if they're then renting and then they're making more returns in the market than they would have with their house?
- [25:49]
Josh Brown
Well, so that is. That is a good question. What is wrong with that? Nothing. In fact, I think it's phenomenal that somebody's like, this is the best thing ever. I had $150,000 that was sitting in cash. That would have been 151,000, and now it's 195,000. I love that. I think that's incredible. But a house is not an investment. It's where you live, it's where you raise your family 100. And if you are getting frozen out of that opportunity because you can't afford to, I think that stinks. And I really feel for those people who are tired of being in a 900 square foot apartment with a baby who might want a second and can't afford to do so because their parents don't have a $200,000 check for them. Like, I feel for those people big time. And I don't know how many of them there are, but there's 70 million millennials, whatever the number is, and I don't know what portion of those people are waiting to get into a house, but it's, like, not a small number.
- [26:45]
Michael Batnik
You can also rent a house, and it doesn't mean that if you're renting an apartment or a house, that it's.
- [26:51]
Josh Brown
Not a home, depending on where you are. True. Like, on the south shore of Long island, which is the most desirable place to live. I'm kidding. There's, like. There's no homes for rent in my town. Like, there might be one. So depending on where you. Listen, if you could rent a house. I am not one of these people who thinks that renting is throwing away money. Renting is putting a roof over your head, and that's totally fine.
- [27:13]
Michael Batnik
Yeah.
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Josh Brown
So I am. I am not one of those people who are like, you need to buy a house or you're pissing money away to the landlord. Like, I do not ascribe to that view at all. I have a funny story. Can I tell you a quick story?
- [27:23]
Michael Batnik
Always.
- [27:24]
Josh Brown
So I was at the bank today depositing a check, which is something I do very rarely.
- [27:28]
Michael Batnik
Such a important rich dude.
- [27:30]
Josh Brown
Stop. So I deposit.
- [27:31]
Michael Batnik
How much was the check?
- [27:32]
Josh Brown
It was $1,500.
- [27:33]
Michael Batnik
Okay.
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Josh Brown
And I wrote it out to cash.
- [27:35]
Michael Batnik
You don't have a mobile deposit.
- [27:38]
Josh Brown
This is. All right. So I. So we have a family cabin, and it is not glamorous. It is disgusting. It is a hunting cabin that my stepdad bought in the 90s. It is gross. And so I have a joint account with my two stepbrothers, and I needed to put some money into the. Into the account. So I went in there, I wrote out a check for fifteen hundred dollars, wrote it out to cash. And the guy's looking at me, and I'm looking at him, I'm like, yes. He said, you have the cash? I said, yeah, got the cash. And he's, like, looking at me. We're saying each other. He said, sir, do you have a. Do you have a check for me? And I'm like, oh, my bad. So I just. I just filled the deposit slip, and I was like, here, I want fifteen hundred dollars in my account. He's like, buddy, I need some money.
- [28:21]
Michael Batnik
How it works?
- [28:21]
Josh Brown
Like, yeah, my. My bank skills have atrophy big time.
- [28:26]
Michael Batnik
I mean, it's kind of impressive that you, like, actually went to the bank and filled out a deposit slip. I fell back to 1995. Let's go. Let's do some nostalgia. All right, our game. Ready?
- [28:39]
Josh Brown
Yes. Let's go.
- [28:40]
Nicole Lapin
Bullish or bearish?
- [28:41]
Josh Brown
Okay.
- [28:42]
Michael Batnik
I Need to explain the rules to you.
- [28:44]
Josh Brown
Stop it. I need to explain to the audience it's not investment advice. I am registered. I can't be giving advice. But let's have fun.
- [28:49]
Michael Batnik
Understand this is for educational purposes only.
- [28:51]
Josh Brown
For funsies.
- [28:52]
Michael Batnik
Let's go for funsies.
- [28:53]
Josh Brown
UnitedHealth okay, so I don't know that I've ever seen a dow stock lose 2/3 of its value in a straight line while the market was at an all time high.
- [29:06]
Michael Batnik
Have you ever seen a Dow CEO get shot on the street?
- [29:10]
Josh Brown
No, I have not seen that either. This is very unusual. So without knowing anything, anything about the company, if I. What do we. So what are you talking about? Like the next 20% higher or lower or hold for a year, Sell for a year? What do we think?
- [29:21]
Michael Batnik
Are you bullish or bearish on the stock? Like buyer is. Yeah, Remember you didn't want the rules.
- [29:27]
Josh Brown
But that's what the rules buy with a tight stop. How about that? Around what Recent lows? So I would, if I had to pick one thing, I would buy it here and I would put a stop at like 230tesla. I would never sell. I would never like doubt Elon or his shareholder base. I think one of his superpowers among many is getting people to believe whatever he says. And I think that the pay package, having a cloud over the stock is behind them, which is definitely good. Instills confidence. I do not own the stock. I never have owned the stock. But I would be more bullish than bearish on Tesla.
- [30:04]
Michael Batnik
More bullish than bears on Tesla. I mean, the Grok integration, it's pretty cool.
- [30:08]
Josh Brown
Pretty cool. So how about this? All of the bad news, as far as the car company is concerned, nobody gives a shit at all. It's all about autonomous and robots and whatever. And it looks like if anybody could do it, maybe it could be him.
- [30:21]
Michael Batnik
So they're licensing out the, the auto driving capability to other car companies. The taxi thing is going to happen soon. My husband's excited about that. Some passive income for us to use.
- [30:36]
Josh Brown
A dad joke. He's got the Midas touch.
- [30:39]
Michael Batnik
Is it a dad joke if a woman says it or is it a mom joke?
- [30:42]
Josh Brown
No, it's a dad joke.
- [30:44]
Michael Batnik
Honestly, I agree.
- [30:45]
Josh Brown
Pfizer, what a piece of shit this is.
- [30:47]
Michael Batnik
Oh, tell me how you really feel.
- [30:48]
Josh Brown
It's looking less piece of shitty. Maybe, maybe that's the bottom. Maybe that. Maybe that is the bottom. Yeah, I guess you can own this. It is that. So I am looking at the charts. I am a technically inclined person. I Know, a lot of people think technical analysis is voodoo. It's not. It's supply and demand. You are measuring the appetite of buyers and sellers. And I think that I'm, I'm very happy to see technical analysis getting less shit in the mainstream media than it used to be. Like, people used to laugh about it. I don't think they are anymore. Anyway, enough thought clearing.
- [31:17]
Michael Batnik
So like a technical analysis, basically you're looking at charts, fundamental analysis, you're looking at, you know, info from the company and earnings and revenue and so fundamental.
- [31:26]
Josh Brown
Analysis used to be like a serious business. Like I am a businessman and I look at the fundamentals. All right, I get it.
- [31:30]
Michael Batnik
Technical is heads and shoulders. You're like looking at charts. You're seeing resistance levels, you're.
- [31:36]
Josh Brown
Yes, yes, yes, yes. All right, Bullish, let's go. Pfizer bottom is in Palantir. I was funny you mentioned this. Well, they reported earnings.
- [31:43]
Michael Batnik
I'm hilarious.
- [31:44]
Josh Brown
Yes, you are. You are very funny. Earnings reported last night. So this is good timing. I was listening to the call. I know nothing about Palantir. I know that it's AI and defense, AI and government contracts and whatever, whatever. I was listening to the call last night and I get the appeal. They have a similar shareholder base that is seemingly willing to pay whatever multiple. They just crossed a billion dollars in, in quarterly revenue, which is impressive. They're growing very quickly. But holy. The stock is like a 400 billion dollar market cap. So talk about like maybe excess and discounted too much. And listen, I am not like a Palantir expert and relax. I know there's a lot of people that feel very passionate about the company. I would not be, I would not buy it here and I definitely wouldn't short it here. But this is super duper duper duper extended on any time frame. So if you want to get into Palantir, I would just maybe let it breathe for a little to pull back.
- [32:36]
Michael Batnik
Because shares were up 7% to an all time high.
- [32:40]
Josh Brown
The stock was 65 at the lows in April and it's now 170. I mean, kudos to them, an incredible run. But this is a volatile stock and if you are bullish and you don't own it, you will probably, probably, maybe have a chance to buy back lower or buy it lower. I would not be chasing this today.
- [32:54]
Michael Batnik
It is super extended, which is what some people are saying about figma.
- [33:01]
Josh Brown
So I saw. Oh wow. The stock is now crashing to. All right, so Figma came public. On what day did it come public?
- [33:09]
Michael Batnik
On Thursday was last Thursday.
- [33:11]
Josh Brown
Opened at 85. Thing was priced at 33. Whoops.
- [33:14]
Michael Batnik
Yeah.
- [33:14]
Josh Brown
Ran all the way to 10140 and now it's back down at 85. So nice little round trip there. I saw somebody tweet that Figment is the most highly valued on a forward earnings projection basis of any of the largest, like 600 tech companies. I don't, I, I don't buy stocks that have traded for three days. That's just not my jam.
- [33:37]
Michael Batnik
What about IPOs in general?
- [33:39]
Josh Brown
I don't buy. I don't buy IPOs.
- [33:42]
Michael Batnik
Oh, excuse me. Okay.
- [33:45]
Josh Brown
It's just, it's just not what I do. No shade.
- [33:48]
Michael Batnik
I mean, I did quite well with my Reddit and my core weave just.
- [33:52]
Josh Brown
Oh, good for core weave was phenomenal. Good for you so much at core.
- [33:56]
Michael Batnik
We've kind of got overshadowed because the market was, you know, in the OR with the tariff stuff.
- [34:04]
Nicole Lapin
Okay.
- [34:05]
Michael Batnik
DraftKings.
- [34:06]
Josh Brown
All right, so I am psychotically bullish on the de genification of everyone. But DraftKings is in a very competitive space between them. What's the big. Who owns fanduels at Flutter? What's that ticker? So I don't know who the winner is going to be, but let's just say. Oh yeah, Flutter's at an all time high. Let's just say that, like I am bullish on the space. I don't know if they're. Yeah. Why can't there be multiple winners? I would say, you know what? Bullish. Fuck it. Why am I. Clear my throat. Bullish.
- [34:41]
Michael Batnik
Meme stocks.
- [34:42]
Josh Brown
You don't do any of this, do you?
- [34:44]
Michael Batnik
No. Out of mind. Yeah, I'm not. I'm the moderator. I'm not playing this game.
- [34:50]
Josh Brown
So I believe.
- [34:52]
Michael Batnik
What's the latest one? Open door.
- [34:54]
Josh Brown
Open. Open door. I know Eric doesn't like it being called the meme stock, but tough nuggies.
- [34:59]
Michael Batnik
What does he want to call it?
- [35:00]
Josh Brown
He. Eric is. Eric is genuinely, and I believe he's sincere. Like he's earnestly sincere. That is earnestly sincere. That's redundant.
- [35:08]
Michael Batnik
Yeah.
- [35:09]
Josh Brown
He thinks that this is a business that is highly undervalued and the fundamentals might or might not bear that out. We'll see. But just the meme St stocks in general. I think the quote, dumb money is not that dumb. I think that these people are sophisticated. I don't think that they get enough credit. I think that no doubt there are, there is some dumb money. But what I think it is is that people are. And I'm generalizing here they're recklessly or they're responsibly reckless. Like, I think that people are eating their meat and vegetables in their 401k and they're doing all of like the slow, steady compound, you know, 8 to 10%. Yeah.
- [35:50]
Michael Batnik
And like, but that's boring but consistent and important.
- [35:54]
Josh Brown
Yeah. And you should do that. And I ascribe to that. Like, that is the way. But it's also okay to have fun. And if you want to light a couple of bucks on fire or you give yourself a budget and listen, maybe it works. Like there are people that are making money. So I don't want to say, like, it's impossible, but just if you're listening now, you need my advice. But just be a little bit careful, especially right now when everything seems to be going up.
- [36:17]
Michael Batnik
So dumb money. You're referring to the movie that was based off GameStop and the Reddit folks and the WallStreetBets bros and all that stuff.
- [36:28]
Josh Brown
I don't think they're done.
- [36:29]
Michael Batnik
I don't either. And I mean, they had hedge funds like running for the hills. So, like, kudos to people.
- [36:37]
Josh Brown
Bitcoin, all right, I am a, what they call a tradfi dude, meaning I work in traditional finance. I am and have been bullish on bitcoin. I don't ascribe to the ideas behind it, some of the ideology. It's not my cup of tea. The dollar is worthless and crashing and have fun staying poor. Like, I don't like all that. I hate. In fact, I hate it. And. And I hate it so much that that's why I bought bitcoin, because I'm a very spiteful and very petty person. And if they were right and I didn't participate financially, I would have jumped out the window. So I bought Bitcoin in 2020. I've bought more of it. And the way that I have always thought about it and the way that I continue to think about it is, again, I don't care about the inflation hedge, the debasement hedge, like, whatever, maybe it is good. Good for you. I think that there is more. In fact, I shouldn't. Why do I keep saying I think there is more demand than supply? And that's all I care about. There are more people that want to buy it than want to sell it. And I don't know at what point that will change, at what point price will find an equilibrium. But the ETF in the month of July brought in an average of $600 million a day. And that is a lot of money. And now there are treasuries buying it. And again, fundamentally, I don't care why they're doing it, but they are. And so I am and have been bullish on bitcoin, but I do not want anybody to listen to me and then go buy bitcoin for the first time. It is a very volatile asset class and you have got to be have a super strong stomach because it is, it is quite a ride.
- [38:19]
Michael Batnik
But what you're saying is what we've talked about a lot on the show is allocate maybe 1% of your net worth. That's what you can afford to lose, but you kind of can't afford, quote unquote, to lose out on the mega growth if you know it continues to rip like the last 10 years. The top 10 investments, what was number one?
- [38:41]
Josh Brown
Bitcoin.
- [38:42]
Michael Batnik
Bitcoin, 80%. You know, where, where was the S&P 500 number six? 13%. All right, call me back, Call me back.
- [38:51]
Josh Brown
Michael, I know this is an audio podcast. We're just making faces at each other, but yeah, no, it did that.
- [39:02]
Nicole Lapin
Hold on to your wallets. Money rehab will be right back. And now for some more money Rehab.
- [39:15]
Michael Batnik
All right, Broadcom.
- [39:16]
Josh Brown
All right, so let me go to the chart because I am ignorant into this name. I mean, obviously I know it's like a giant trillion dollar company, but I don't, I'm not a fundamental boracom knower, but holy fns, this stock has done extremely well. My lord. All right, so I would put this like in the Palantir camp in terms of like super duper extended, maybe you want to wait for a pullback. But also does earnings next week or in two weeks and Nvidia's earnings coming up in a few weeks. And that is going to certainly determine the short term direction of the market. So. But yeah, no, this is a winner for sure.
- [39:49]
Michael Batnik
Yeah, I put them in the same bucket I bought a few years ago. Palantir, Broadcom, ServiceNow, Palo Alto Networks. Like those types of cats are all.
- [40:01]
Josh Brown
Together, they're winning cats. Good for you.
- [40:04]
Michael Batnik
American Eagle.
- [40:05]
Josh Brown
All right, so what in the world like was. Was the Sydney Sweeney? I mean, I guess it was a surprise to everybody. I don't know how nuts is this like the idea that a company and what are what the market cap of this stock is? But I'm guessing it's not like tiny, tiny, tiny, is it a billion dollars can move to this degree? Because listen, I get it. She attracts eyeballs. 2 Billion Dollar Market cap. I don't know, I mean, this, this is a meme stock.
- [40:33]
Michael Batnik
That's right. I, I thought you were gonna say that for sure. But the sweeneygate stuff is wild. You just saw Trump in a presser talk about how she's registered as a Republican and he likes the ad. I mean, this is so we know the CMO of American eagle, like CMOs don't last very long. The 10 years short. I think this guy just extended his tenure.
- [40:56]
Josh Brown
I love it. Good for him. I love, I love seeing stocks go up. But I would suspect that this comes back. I mean, this stock has been, as Trump would say, a dirty dog for a long time.
- [41:06]
Michael Batnik
I was like, that wasn't bad.
- [41:08]
Josh Brown
Thank you. But yeah, no, listen, it's popping. That's that type of market. Everything's popping.
- [41:12]
Michael Batnik
Everything is popping. Everybody looks so smart.
- [41:14]
Nicole Lapin
Starbucks.
- [41:15]
Josh Brown
I own Starbucks. I am a twice daily customer. The turnaround is not turning around. So they brought in Brian Nichols, who famously killed it at Chipotle. And the difference between the performance of the two stocks since he left is quite stark. Chipotle is getting its. Chipotle has diarrhea, forgive me. And Starbucks. Starbucks is not doing too great either. Like the, the same store sales are still down, but I guess Wall street is kind of giving him the benefit of the doubt because the stock, the stock like was up 7% or 6% after the earnest call. And people are like, why is it up? This makes no sense. Fundamentals suck. It opened at the highs of the day, closed on the lows of the day, and it's just rebound. I know this is all like short term noise, but I, I still think that Starbucks is like the corner store type of routine place. I don't think that Luckin is going to. I said, there's an article in the Journal the other day about, about Luckin opening in Manhattan. I think I'm a believer.
- [42:12]
Michael Batnik
So Starbucks, you're bullish. How does it continue to grow, though?
- [42:15]
Josh Brown
Well, that's the quote. I mean, the thing is, it's literally not.
- [42:17]
Michael Batnik
If it's on the corner store, if.
- [42:19]
Josh Brown
It'S on every other block, it's literally not. So they did a lot of things during the pandemic that pissed people off. They diluted the menu, they raised prices way too far like a lot of other companies. So they're trying to get back to basics. And listen, the stock is a no man's end. Like it is literally in the middle of absolutely nowhere. So, yeah, I don't know. I don't know. It's a, that's A very tepid. That is a lukewarm bullish, huh?
- [42:40]
Michael Batnik
Super, super lukewarm. Yeah, Yeah, I didn't, I didn't burn my tongue on that one. But Chipotle, it sounds like with the diarrhea comment, you're, you're bearish.
- [42:50]
Josh Brown
Listen, Chipotle, it got too expensive. Like, I don't want to pay $15 for a bowl of burritos. And I like Chipotle, but there's just too much competition now. I don't think the stock will ever make a new all time high. How about that?
- [43:04]
Michael Batnik
Okay, yeah. Xx is cheaper. Ups.
- [43:07]
Josh Brown
This is the cleanest downtrend I've ever seen. I was, I'm talking about the stock with Josh later today, actually, we're doing a segment called like To Catch a Fallen Knife. Would you or wouldn't you? I would not. This, this is like textbook bear bearish. It's nothing but low, a lower series of highs. So it starts here, it falls, it bounces, but not as high to the previous one. It falls more, bounces lower, and it just is down and down and down and down and down. So, no, I would not buy the stock. Fundamentally, I have no idea what's going on. I guess this is like an Amazon story. It's. And it's also like a digital transformation story. Like everything that we get is delivered to us electronically. I mean, I know our clothes aren't, but everything else, it's in our inbox. And this is like a, this is a 20th century stock.
- [43:51]
Michael Batnik
So you're describing like a dead cat bounce situation.
- [43:54]
Josh Brown
The cats. Yeah, yeah, it's gross. I would not buy the stock.
- [43:58]
Michael Batnik
I mean, when they did their earnings call, they didn't even provide full year guidance for revenues or operating profit because.
- [44:04]
Josh Brown
Yeah, that's not.
- [44:05]
Michael Batnik
But they're saying ongoing macro uncertainty.
- [44:07]
Josh Brown
Yeah, that's code for we're getting our, our asses kicked.
- [44:11]
Michael Batnik
What stock are you bullish on right now that we didn't mention?
- [44:14]
Josh Brown
Okay, I'll give you two. And I own these both.
- [44:18]
Michael Batnik
Thank you for the disclosure.
- [44:19]
Josh Brown
Yep, I'm very bullish on imax.
- [44:23]
Michael Batnik
Huh. That feels like a meme stock.
- [44:25]
Josh Brown
No. How dare you? This is a very serious business. So IMAX is not just big, it's not ANSI.
- [44:33]
Michael Batnik
Okay.
- [44:33]
Josh Brown
It's not AMC. IMAX has less than 1% of global screens and they do 3 1/2% ish of global box office revenue. And if you think about the tent pole movies that people go to see, Oppenheimer, Superman, things like that, in some cases they have 20% of the global box office. And now you are seeing IMAX on posters like it is as big as Tom Cruise in the Mission Impossible movies. They announced a couple of weeks ago they pre released sales for the Odyssey, which doesn't come out for a year. I'm like, what the fuck are they doing? Like, this is so bizarre. It sold out in Manhattan in under three minutes. So IMAX is like the ultimate experience type of event. People don't go to the movies the same way that they used to. Obviously the box office is just not, has not rebounded, has not retaken its 2019 highs. But when people are going to out to the movies, they're going to see imax.
- [45:32]
Michael Batnik
So that's one I did. I went to go see Superman, the new Superman. I saw it in IMAX and honestly I hated it because it was with the glasses, the 3D glasses.
- [45:44]
Josh Brown
Oh, I don't do that.
- [45:45]
Michael Batnik
Maybe I'm in my old age. I don't know. Everything blurry and weird.
- [45:48]
Josh Brown
I don't like that.
- [45:49]
Michael Batnik
It wasn't like the, the 3D movies that, you know, I remember as a kid where stuff was like flying at you. It was just like a little bit different. But honestly, worse.
- [46:00]
Josh Brown
I agree. I am not a 3D viewer myself. Okay, the other stock is Rocket Mortgage. The ticker is rkt. I don't own enough of this stock. It is, it is breaking out and I don't own enough. Well, that's a shame.
- [46:12]
Michael Batnik
What does breaking out mean? Breaking technical stuff.
- [46:15]
Josh Brown
All right, so breaking out means that it is at the highest level that it has been in X number of time. Whether it's depends on your time for three months, a year, whatever. In this case, it's at the highest point that it's been since October 2024. But more importantly, there was previous resistance. And this is not voodoo. All that it means is that at some level sellers step in and in this case they say, okay, at 16, I'm out. It came back down, went back up. More sellers came in at 16. That was called resistance. It couldn't get through 16 and then it finally punched above and it's staying above and there's nothing but blue skies ahead of it. Meaning there are no, there are no sellers. It's only buyers on the way up. So that's what's happening in Rocket now. Why? I think this is very simple. This is the purest play on mortgage origination refinancing. And this stock is not waiting for the federal rates. It is anticipating that the Fed will lower rates whether It's September or later, there will be a refi boom. Supply will get unlocked as mortgage rates come down. And this will be the biggest beneficiary.
- [47:21]
Michael Batnik
So it's still a buy.
- [47:22]
Josh Brown
I think so, yes.
- [47:24]
Michael Batnik
All right. We end our episodes as you know, because you are a longtime listener, first time caller by asking all of our guests for a tip. Listeners can take straight to the bank.
- [47:33]
Josh Brown
I'll give to and this is very easy and basic and no shit, Sherlock, but just automates like automate as much as you can. Of course. Automate your spending, automate your saving. Like auto pay anything that you can automate. Do it. Duh. Credit card points. I was with somebody at the beach yesterday who's hoarding his credit card points. I said, dude, what the are you doing with 700,000chase points? These like, these are like, these are, these are inflationary. Like they, they the value to 6 degrees over time. Do not hoard your hoard your points. They decrease in value over time. I'm like, is this ocd? What are you doing? What are you doing?
- [48:13]
Michael Batnik
Coming up for like the one trip to the Ritz in Paris, I no.
- [48:17]
Josh Brown
No, he was not. He is not going to the Ritz in Paris. I have no idea what he was doing. And then the last thing is I think people need to ask more. Have a little bit of what we call in the South Shore chutzpah. If you don't ask, you don't get. And nobody is going to ask for anything on your behalf. So ask. If you don't ask, you don't get.
- [48:44]
Michael Batnik
You promised you. He gave us three. How lucky are we?
- [48:49]
Josh Brown
There you go.
- [48:50]
Michael Batnik
Thanks.
- [48:50]
Josh Brown
This was fun. Thank you for having me.
- [48:55]
Nicole Lapin
Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money Rehab? And let's be honest, we all do. So email us your money questions moneyrehaboneynewsnetwork.com to potentially have your questions answered on the show or even have a one on one intervention with me. And follow us on Instagram, MoneyNews and TikTokoneyNewsNetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.