Brian Belski Returns!

Summary

The Compound and Friends

Episode: Brian Belski Returns!

Date: July 3, 2026
Guests: Brian Belsky (Humilis Investment Strategies), Downtown Josh Brown, Michael Batnik

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Episode Overview

In this engaging episode, fan-favorite Brian Belsky returns to The Compound and Friends to catch up on his market calls from November, share insights on the current state of the equities market, and discuss themes like the broadening of market leadership, the performance of SMID (small/mid cap) stocks, sector shifts, the future of work, and stock-specific debates (Meta, Netflix, banks, software, and more). The hosts and Belsky keep the tone light, witty, and direct, balancing deep market insights with signature banter.

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Key Discussion Points & Insights

1. Brian Belsky’s Track Record & Current View

Timestamps: 00:26–01:09, 16:49–18:24

• Recap of Belsky’s successful calls: bullish on S&P 7,000 for 2025, skepticism on AI bubble, call for market broadening, and regional bank M&A.
• Belsky describes his approach: "Well, shocker. We're still bullish. But I think the headline would be beware of the second derivative less positive." (16:49)
• He cautions that while earnings have fueled the rally, the pace of growth is likely to slow: "Chances are earnings are gonna slow down a little bit for big cap stocks...I think it's gonna be choppier than most people think." (17:41)
• Call remains for higher prices into year-end, but with more volatility and less outsized returns.

2. The Future of Work & Organizational Structure

Timestamps: 05:12–10:13

• Discussion on distributed teams and talent: Belsky runs Humilis with staff spread across the country ("Everyone works from home." 05:17).
• Reflection on changing work culture, hybrid work, and generational differences:
  • "I believe that everyone's gonna go back to work in the following fiscal year. And I got absolutely ripped in the comments." (06:51)
  • 4-day in-office weeks on Wall Street predicted to eventually become standard.
  • Need for in-person collaboration for some roles, but more latitude for remote or flexible work.

3. AI, Markets, and Earnings Dynamics

Timestamps: 18:24–23:17, 29:44–31:22

• Ongoing rotation from Mega Cap (Mag7) into smaller names and companies benefiting from AI infrastructure (data center suppliers, SaaS, etc.).
• Belsky and hosts debate the sustainability of the hyperscaler-driven earnings: "They have been steadfastly committed to higher and higher and higher spend. So do you think that's going to reverse?" (21:09, Josh Brown)
  • Belsky: "It has to slow down." (21:25)
• Skepticism about Meta's cloud ambitions: "I'm not a believer." (23:28, Belsky)

4. Market Breadth, SMID, and Sector Opportunities

Timestamps: 29:44–35:09 , 43:26–46:43

• Shift from narrow Mag7-led market to broader participation highlighted by SMID outperformance:
  • "If you take a look at the S&P 1000 [relative] to the Mag7, same kind of thing. So our call has been... you always want to skate to where the puck is going." (30:23, Belsky)
  • "From a fundamental perspective ... small cap market SML versus the S&P 500. Amazing." (31:09)
• Focus on financials, especially consolidation among regional banks ("The really big guys and the really small guys are going to benefit." 32:54).
• Insurance companies (Unum) and exchanges (Schwab, CME) discussed as interesting value plays.

5. Software and the SaaS “Apocalypse”

Timestamps: 54:33–58:12

• Discussing potential rebound in depressed software names:
  • "Could this be the start of something more meaningful? Are we going to bring these stocks back to life from the dead?" (55:15, Michael Batnik)
  • Belsky: "I hope so. Oracle's not going in our direction." (56:06)
• Guggenheim analyst note sparks sector rally, but hosts debate whether the issue is AI disruption or simply normalization of high valuations.
  • "Maybe there's too many of these companies and maybe we're going to see some consolidation there." (57:07, Belsky)

6. Stock Spotlights: Meta, Netflix, Charter, and More

Timestamps: 24:21–28:40, 59:47–68:45

• Ongoing skepticism towards Meta's strategic shifts; preference for Google as a pick in the space.
• Deep-dive debate on Netflix:
  • "Cash, content and consolidation. This is what that whole sector is about. ... Netflix is going to be the winner." (60:21, Belsky)
  • Tension between Netflix’s transition from growth to value, competitive dynamics with YouTube, and the need to refresh growth narratives.
• Dismissal of Charter Communications as an investable value pick due to high debt and secular decline:
  • "Too much debt, too much secular decline. Just. No, no. At no price." (65:57, Belsky)

7. Market Structure, Breadth, and the Bull Cycle

Timestamps: 37:56–54:28

• Discussion of market concentration (top 25 stocks = 54% of S&P 500).
• Debate on the duration and potential volatility of the bull cycle:
  • "I'm still on board with my 25-year secular bull. I'm still on board. I think we have seven to 10 years left." (37:15, Belsky)
  • Year four of bull cycles often see more volatility; expectations for choppiness as growth normalizes.

8. The Value of Stock-Picking and “Unknown” Winners

Timestamps: 69:02–72:18

• Belsky underscores the opportunity in less-followed SMID stocks, citing examples like Acuity (makes data center tiles), FNB (regional bank), and Ventas.
  • "We got the greatest companies in the world right here...all these amazing stories that people don't even know about." (71:19, Belsky)
• Hosts reflect on the benefits of digging into lesser-known names for genuine alpha.

9. Building Humilis and Belsky’s Business Model

Timestamps: 72:57–75:52

• Humilis offers model portfolios to RIAs and brokerages, allowing ultimate customization:
  • "We provide XYZ brokerage firm... with our model." (73:03, Belsky)
  • Approach designed not to compete with but empower advisors.
• Firm is nearing $500M in AUM less than a year from launch.
• Belsky expresses personal fulfillment: "It's mine. And it's kind of like that line from Braveheart...it's my island. It's mine." (75:26, Belsky)

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Notable Quotes & Moments

• On the importance of humility:
  "I am a collective of all this fantastic team that I have, so I always say, thanks for having us." (01:30, Belsky)

• On future-of-work skepticism:
  “I believe that everyone's gonna go back to work in the following fiscal year. And I got absolutely ripped in the comments.” (06:51, Belsky)

• On sector leadership and stock picking:
  “We're going to have more stock picking, more differentiation.” (26:40, Belsky)
  "Stock market is a market of stocks. That's the way that it works." (50:58, Belsky)

• On market dynamics and concentration:
  "The SMID category...all publicly traded companies in the US that are SMID...add up to the weight of Apple." (43:26, Belsky)

• On investing philosophy:
  “You don't have to be a hero to try to time the market. I think stocks are higher. How about this? Stocks are at all time highs at year end. I think in between there we got some fun.” (18:11, Belsky)

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Timestamps for Key Segments

• 00:26–01:09 – Belsky recaps market calls and humility in analysis
• 05:12–10:13 – The future of the workplace; remote/hybrid, generational change
• 16:49–18:24 – Big picture market outlook for second half of 2026
• 31:28–34:39 – The case for small banks and regional bank consolidation
• 43:26–46:43 – Market breadth: SMID vs. large caps, a sector or size story?
• 54:33–58:12 – Software selloff, potential SaaS comeback, sector rotation
• 59:47–68:45 – Netflix, Cable/Communications sector debates
• 69:02–72:18 – SMID/lesser-known stock opportunities, the value of digging deeper
• 72:57–75:52 – Humilis’ model portfolio business and Belsky's entrepreneurial journey

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Tone and Style

• Candid, sharp, and conversational; heavy on real-market talk and light banter.
• Frequent “inside baseball” on stock debates; self-deprecating jokes and bold opinions.
• Intense focus on actionable ideas, market structure, and the importance of differentiated analysis for active managers and advisors.

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Closing Thoughts

Belsky remains broadly bullish, but with a strong note of tactical caution on future earnings growth and a steady drumbeat for moving beyond the headlines and megacap “narratives” toward smaller, less-followed companies and value/contrarian ideas. The episode is a masterclass in market strategy, equity sector analysis, and the evolving art of professional investing. The hosts’ mix of levity and rigor ensures it’s both highly informative and entertaining for anyone with a stake in markets or a passion for serious investing.

Transcript

[Josh Brown]

We're on the record now.

[Brian Belsky]

We're on the record now. We're on the record.

[Josh Brown]

So, Brian.

[Brian Belsky]

Yeah.

[Josh Brown]

The last time you're here was November. Feels like a long time ago.

[Brian Belsky]

It was three. It was. It was three days after I launched Humilis.

[Michael Batnik]

Come on.

[Brian Belsky]

Yeah, man.

[Michael Batnik]

Yeah.

[Brian Belsky]

You guys did a special live thing with me at noon on.

[Josh Brown]

Well, you can't. You can't have as long of a career as you've had without being right a few times. You got to get some things right, and you have got to get some things right.

[Brian Belsky]

You get a lot of stuff wrong.

[Josh Brown]

So check this out. So Belsky calls.

[Brian Belsky]

Yeah.

[Josh Brown]

Reiterated his 2025 S&P target of 7,000. But whatever. More importantly, pushes back on the AI bubble label on MAG7. Increasingly uncorrelated earnings reactions among the group. You saw dispersion there. You expected the performance to broaden out beyond Mega Cap into AI, into value dividend, growth in small and mid.

[Michael Batnik]

Great call, Brian.

[Josh Brown]

And you saw regional bank M and A as midsize banks. So whatever. You favored a barbell. Sean said he actually nailed it.

[Michael Batnik]

Yeah.

[Josh Brown]

Like, he. Oh, Sean.

[Michael Batnik]

Mr. You nailed it, which is important.

[Josh Brown]

You really did. That was good stuff.

[Brian Belsky]

Thank you. Thank you.

[Josh Brown]

It's good stuff.

[Brian Belsky]

It's. Do you want to thank.

[Michael Batnik]

Do you want to thank anyone?

[Brian Belsky]

You know, every time I say something on there's still. And I try my best now when I'm on the show, they don't say, thanks for having us. I don't say that anymore because I got so much crap from Wapner. And why boil us? Well, because he said, thanks for having me.

[Josh Brown]

Yeah.

[Brian Belsky]

Well, no, but I am a collective of all this fantastic team that I have, so I always say, thanks for having us.

[Michael Batnik]

Oh, thanks for having us. Like, thanks for having our brother.

[Josh Brown]

I know you mean. It sounds weird, but you mean you're a nice guy. You don't mean it to be. You don't mean to be a douche. When you say it, it sounds.

[Brian Belsky]

No, no, no. I don't mean to be a douche. I don't mean to be a douche. So, you know, despite the tan, dude, I had to. I went to Minnesota. I went to Minnesota the Friday of Memorial Day weekend, and I'm like, I. I had a change of life, and I moved downtown in 2019. So then I, I. In 2020, I was there for the George Floyd stuff. And then that really shook Minneapolis, and it was fun to live downtown Minneapolis for that. And then even the last six or eight months, things have changed.

[Josh Brown]

There man, are they getting better?

[Brian Belsky]

No.

[Josh Brown]

So I was there in 2023, I think, when the Giants beat the Vikings in the playoffs. And it was. I stayed downtown, honestly, and it was

[Brian Belsky]

like I came in here and said, you're welcome for cat.

[Josh Brown]

Well, they did. They did. Yeah.

[Brian Belsky]

It was.

[Josh Brown]

It was very depressing.

[Brian Belsky]

It's depressing.

[Josh Brown]

Yeah, it was tough.

[Brian Belsky]

So I think I got to do something.

[Michael Batnik]

Well, Minneapolis sort of became like ground zero for the culture wars.

[Brian Belsky]

Yep.

[Michael Batnik]

Like, both sides are growing increasingly. I don't want to say violent, but, like, aggressive. You have people.

[Josh Brown]

Another word for violence.

[Michael Batnik]

You have, like, citizen journalists exposing the daycare centers. You have, like, all the protesters are still out in the streets. It's just an unexpected place to be the ground zero for the culture wars. But that's what's.

[Brian Belsky]

Yeah, but if you. So I grew up there and I love history. We're hopefully, Bill, to talk about one of the books I'm reading right now, later in the broadcast here. But Minnesota has always been a place for kind of off the wall politics, like Eugene McCarthy. You guys are too young to remember 1968, Jesse Ventura was a pro wrestler and he became governor.

[Michael Batnik]

Yeah.

[Brian Belsky]

And so they've always been kind of goofy on the political side, but it's gone way too far. And there's a lot of people leaving Minnesota. I mean, part of that was I didn't. I love my Twins. I go to the Twins games. I'm not feeling great walking back to my condo from the Twins game. So I'm like, I'm gonna spend more time in Florida. Plus, it's a thousand degrees. It's 1,000 degrees everywhere. It's hot here in New York, it's 105 in Minnesota. Where would you rather be? Naples, Florida, 100 degrees, or Minneapolis, 100 degrees.

[Michael Batnik]

Oh, so you're. All right. So you're gonna be in Naples, but then you need, like a summer place to live.

[Brian Belsky]

Yeah. Because a couple things. It is super hot in Naples. The flights are prohibitive. Like when I. I'm in Naples right now because I need to get out of Minneapolis for a little bit and hang out. But to fly up here, two Delta flights, one at 7am and one at 7pm that doesn't work for me. And so I fly United mostly, but the flights are very prohibitive. And if I want to go west, anywhere west of Alabama, you're connecting through Atlanta or through Houston or something, and that's.

[Josh Brown]

Is it Fort Myers Airport or where.

[Brian Belsky]

Fort Myers. So if you think about it, it's an hour from my place in North Naples, it's an hour and 45 minutes to Fort Lauderdale. Fort Lauderdale, great airport. So if you think about it, like, it's going to take me an hour and a half to get to Newark after this. Right. So I mean, think about the relative basis. But still, every time you got to go to Fort Lauderdale.

[Michael Batnik]

So professionally, where would it make sense for you? Is it Chicago or is it like New York?

[Brian Belsky]

New York?

[Michael Batnik]

Okay.

[Brian Belsky]

At some point, I mean, let's, you know, baby steps.

[Michael Batnik]

That's such a huge deal to like set up in New York. Well, this is an impossible place to live. I don't know if you know that.

[Brian Belsky]

I think, I think the company's always going to be incorporated, Delaware Corporation, and then headquartered in Naples.

[Michael Batnik]

But you need talent. So where are those people going to be?

[Brian Belsky]

All over the place. I mean, we're distributed. Everyone works from home.

[Michael Batnik]

Okay.

[Brian Belsky]

So I have two people in New York, one in Seattle, one in Florida.

[Michael Batnik]

Okay. And this is by virtue of. These are the people that you want and they happen to be in those places.

[Brian Belsky]

Very much so.

[Michael Batnik]

So we built our firm the same exact way. And then somewhere along the line, the thing that we realized is that in certain capacities, some workers are better off independent. Like just work from home or in a. We work whatever based on their role and their personality. And then in some cases it's like, you know what? We actually need to cluster a few places where we can get multiple people together. And we. So we have both. But we built Chicago's 16 people. They come in every day. And the, and the roles that they have at the firm, it actually makes sense for them.

[Brian Belsky]

Are they down together?

[Michael Batnik]

They're in the salt shed, which is. Do you know?

[Brian Belsky]

Yeah, I know it's not too far.

[Michael Batnik]

So. But it made sense for. Based on the role. Chicago is an operations hub for us. If you're just. If you're just working at all day, task after task after task, and you have very little in person interaction, that's not the same as being an advisor and talking to clients. Like, I feel like the operations people, a lot of them would prefer to be together. So that's like one example. And then Charlotte, we started to cluster. We're opening a new office in August in Charlotte. So we're always gonna look like what you described for the most part. But then we're gonna have like, hubs.

[Brian Belsky]

Well, you know what's interesting?

[Michael Batnik]

I think that's how it's gonna go for everyone.

[Brian Belsky]

I think one of the first times I was on compound, I Said something controversial. Shocking that I believe that everyone's gonna go back to work in the, in the following fiscal year. And I got absolutely ripped in the comments. And I never read the comments.

[Michael Batnik]

Why? Because like the health issue.

[Brian Belsky]

Yeah, it's just people weren't back to, we weren't back to work in Wall Street. I think we were like two or three days then. And then it was in, I think I said within, within 12 months we're gonna be back to work. Everyone's gonna be back to work. And my son actually is the one that said, dad, you gotta look at the, these comments on you on the YouTube.

[Michael Batnik]

People never do that.

[Brian Belsky]

No, don't do that. No, don't do that.

[Michael Batnik]

So anyway, well, I do think that we're going to get some big corporations who kick off the four day workweek. I think it's like inevitable and I think it's actually going to surprise people. But Wall street could be one of the first areas where they basically say, unless you're in a client facing role specifically and need to be in the office, we're not expecting you on Fridays. Wait, hold on.

[Josh Brown]

Four day work week or four day work week or in person?

[Michael Batnik]

Four day, in person work week on Wall Street, I think it's coming.

[Josh Brown]

But work on Friday, just not from home.

[Michael Batnik]

I mean, just work, I think.

[Brian Belsky]

So four days in the office.

[Michael Batnik]

Yeah. No, I don't mean don't. I shouldn't have phrased it the way I think. You're working five days. The thing is, on Wall street, people are working seven days a week because nobody ever doesn't answer an email or return a call. So it almost doesn't matter. But I do think companies are tired of fighting their employees over Fridays, especially in the summer. And it's almost pointless because all of these companies are more profitable than ever and giving their employees more, giving their employees more latitude than ever. So it's just ultimately, as the next generation takes over, eventually someone's going to say, okay, you know what, don't worry about coming in Fridays. Just make sure you're hitting your numbers.

[Brian Belsky]

Yeah, I think everybody works different. I think some of us, especially Gen Xers, have to learn that the next two generations, they learn different than we did and they work different than we did. But I do believe that the next two generations, the millennials and the Gen Z's, they have a harder time with interpersonal skills.

[Michael Batnik]

Yes.

[Brian Belsky]

And you know, when you're growing up in the business in the 80s and 90s like I did, you had to learn when people were Lying to you. Because you could tell by the. But you could tell by the questions that you're asking by the answer they were giving. And look in their eyes. And I think where analysts have all become lemmings, no disrespect. And they all kind of drop their earnings all at once, right? Or right. They drop their earnings all at once. They're all. You know, because of Spitzer in 2000, everyone forgets all this stuff. The good old fashioned days of sitting down with a CFO or CEO and talking about their numbers. I don't think that people do that anymore. Or they do it over screens.

[Michael Batnik]

Nobody has time to do it. So they do it on Zoom or they don't do it at all. And they were lying on spreadsheets and models and looking at what other people are doing. I don't know that we're even gonna notice this change. I think it's just gonna be this gradual thing and then all of a sudden we'll all notice it. Like. But it's. I can't imagine it not coming.

[Josh Brown]

I still feel like I'm cheating when I'm home. And I'm home a lot. I'm home most days. I still feel like somebody's gonna tap me on the shoulder and be like, this isn't like, get back to the real world. But this is it. It's not going back.

[Brian Belsky]

My goal is once I have a certain asset level, I'm gonna. I'll have an office. And I want people in the office. Cause I just think you need collegial, especially with a small group. But I mean, when you own your own business. I'm working eight days a week.

[Michael Batnik]

Yeah, right.

[Brian Belsky]

25 hours a day. Doesn't matter. So. And I don't expect my people. I've never expected my people to work like me, even when I was at big firms. Don't be like me. Please don't be like me. But it's just the nature of the beast that we're in.

[Michael Batnik]

Would you set up in New York or you're not sure yet?

[Brian Belsky]

I probably would if I get the right asset number that I'm looking for.

[Michael Batnik]

Okay. Which is one trillion, I hope.

[Josh Brown]

Let's go, Nicole.

[Michael Batnik]

Ladies and gentlemen.

[Josh Brown]

Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor.

[Michael Batnik]

Today's episode is sponsored by WisdomTree. You've probably heard the comparisons between quantum computing and the early days of AI. Big potential, lots of uncertainty, and technology that could fundamentally change how industries operate. But here's something that caught our attention. The U.S. government recently invested in several quantum focused companies, adding momentum to this emerging technology. For investors interested in the space, WisdomTree offers the WisdomTree Quantum Computing Fund ticker WQTM, which provides pure play exposure to companies that it believes are driving innovation across the quantum ecosystem. Click the link in the show notes to learn more. Before investing, carefully consider a fund's investment objectives, risks, charges and expenses, along with other information contained in in the Prospectus available at wisdomtree.com investments. Read it carefully. Welcome to the compound and friends. All opinions expressed by Josh Brown, Michael

[Josh Brown]

Batnik and their castmates are solely their

[Michael Batnik]

own opinions and do not reflect the opinion of Redholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain

[Josh Brown]

positions in the securities discussed in this podcast.

[Brian Belsky]

249.

[Michael Batnik]

249. On the 250th birthday of the United States of America. What do you think about that?

[Brian Belsky]

I think it's amazing.

[Michael Batnik]

Brian, a lot of people think you're secretly Canadian. Do we want to clear that up today?

[Brian Belsky]

I am an American with a capital A.

[Josh Brown]

That's.

[Michael Batnik]

That's right.

[Brian Belsky]

All right.

[Michael Batnik]

People think that because you're from the north and you worked for a Canadian bank for a long time.

[Brian Belsky]

Yep, I did.

[Michael Batnik]

Okay. But that. That. That should go away now.

[Brian Belsky]

That chapter's over.

[Josh Brown]

All right.

[Michael Batnik]

All right. We're so happy to have you back.

[Brian Belsky]

Thank you.

[Michael Batnik]

You guys are in for a treat. Fan favorite, host favorite. One of my favorite people on Wall street, and he kills it here every time. We're so excited to have him back. Ladies and gentlemen, please welcome Brian Belsky.

[Brian Belsky]

Wow. Thank you so much.

[Michael Batnik]

Brian is the founder, CEO and CIO of Humilis Investment Strategies. Humilis Investment Strategies is an independent portfolio advisory firm built on the principles of conviction, humility, and disciplined strategy. Brian has held roles at firms including BMO, Oppenheimer Company, Merrill Lynch, Piper Jaffrey, Dane Bosworth, and William O'. Neill. This is his 36th year on Wall Street. Unbelievable. We got the shot. All right.

[Brian Belsky]

You got the shot.

[Michael Batnik]

Hey, dude, thank you for being here. We appreciate it.

[Brian Belsky]

Thank you so much.

[Michael Batnik]

Why are you tanner than me? I'm actively working on my tan. Is it just coming natural to you or how are we doing this?

[Brian Belsky]

Jeans.

[Michael Batnik]

Okay, Good jeans. Those Minneapolis. Yeah.

[Brian Belsky]

Minneapolis jeans. Those Irish and Polish jeans? No, I've been spending a lot Naples. The last couple of weeks, it's been hot in Minnesota. So where would you rather be in Naples by the water, by pool or In Minnesota.

[Michael Batnik]

I'm going to Boca. Two days.

[Brian Belsky]

Yeah.

[Michael Batnik]

So I'll be there for fourth.

[Brian Belsky]

July.

[Michael Batnik]

I love.

[Brian Belsky]

You guys are down there for. For a show.

[Michael Batnik]

Yeah.

[Brian Belsky]

Was that May when you were there?

[Michael Batnik]

Yeah, March.

[Brian Belsky]

March.

[Michael Batnik]

Yeah.

[Brian Belsky]

So right during the peak.

[Michael Batnik]

Oh, when we came to Naples.

[Brian Belsky]

Yeah.

[Michael Batnik]

February.

[Josh Brown]

February.

[Michael Batnik]

Yeah. Of last year.

[Brian Belsky]

I get excited when I. When I pull into my parking lot, my condo, and there's three cars in the parking lot.

[Michael Batnik]

Oh, it's fantastic.

[Brian Belsky]

I can get. I live in North Naples, so kind of South Bonita, I like to call it. I'm not in the bougie part of Naples. I can't afford that. But I go downtown in like 12 minutes.

[Michael Batnik]

Yeah. Do you go to the Blue Martini?

[Brian Belsky]

No.

[Michael Batnik]

Why not? Come on. That's my. That's our favorite place.

[Josh Brown]

You took us there.

[Brian Belsky]

I did.

[Michael Batnik]

That's my new favorite place in the world.

[Brian Belsky]

You know the place across from the Cava Lounge that you don't remember. I don't remember.

[Michael Batnik]

I want to say one thing about. About Naples that I observed. People there are having a lot more fun than in other places in Florida. Like, Miami is very. A lot of obviously partying, but away from that, it's like, very serious. A lot of business.

[Brian Belsky]

Yep.

[Michael Batnik]

West Palm now looks more like Wall street than. Than anywhere else in Florida. Where I am in Boca, it's not a party atmosphere. It's more relaxing. Naples is fun. Like, the people that I witnessed that live there at least part time, they seem like they're really enjoying life.

[Brian Belsky]

You know, I principally fly into Fort Myers, and when I hit that exit to drive by, seat to table, and then to my house, I take this deep breath. It's so relaxed. It's my happy place. I had a change of life six and a half years ago and. And I moved to Naples. I've been going down to Naples for 20 plus years and working at Merrill lynch for so long. We used to do all activities and big conferences at Ritz Carlton property. So going there and then the Twins play in Fort Myers. Minnesota Twins. So I've been going there for a long time. To live there is completely different. And so tonight, when I get home, I'm gonna walk to the Gulf of America and put my feet in the water and just breathe.

[Josh Brown]

This is way too much geography. Can we talk stocks?

[Brian Belsky]

Yep.

[Michael Batnik]

What's that main drag called? Fifth Avenue.

[Brian Belsky]

Yeah. Fifth Avenue.

[Michael Batnik]

Yeah. All right. What a. What a cool place. All right, we're going to start with, first of all, just a little bit. Michael did the recap of all of the calls that you had made, which turn out remarkably well. Where do you think we stand heading into the second half in the equities market? Like what is the big picture opening line you're giving to clients to kind of give them an idea of what you're thinking right now?

[Brian Belsky]

Well, shocker. We're still bullish. But I think the headline would be beware of the second derivative less positive.

[Michael Batnik]

So tell us what that means.

[Brian Belsky]

Well, we've had this amazing earnings growth ride, better than everybody thought. But what goes up must come down. And this, don't take this for me to be negative because our work shows that in an earnings driven market, when the market is driven by earnings versus multiple expansion or momentum, typical returns on an annual basis or something like 10 to 12%, much less so than what we've seen the last couple years, which has really been more about momentum and PE driven. But if you're looking at 20 to 25% growth for the S&P 500, whatever number you want to look at might be different tomorrow. Are we going to be 25% for the next four months? Probably not. I mean it would be fantastic, don't get me wrong with the AI revolution and all of that. But the chances are earnings are gonna slow down a little bit for big cap stocks, for large cap stocks. And I think people, given the fact that we're so innately focused on every little data point, if there's any kind of slowdown, people are gonna sell. But I think that ultimately drives what our broader trade is, which is the broadening out trade and more normalization and all this kind of stuff. So I think it's gonna be choppier than most people think. I think personally there's too many bulls out there. But it's funny because you have the bold. Everyone's calling for a correction too. It's not a correction. Well, always it's constant. And so you don't have to be a hero to try to time the market. I think stocks are higher. How about this? Stocks are at all time highs at year end. I think in between there we got some fun.

[Michael Batnik]

This year we had a handoff from kind of mag 7 centric market where people wanted to own the data centers and the hyperscalers. And now they seem to be more. They seem to be more attracted to the companies who are selling products and services to the data center build out. And they've been less excited about owning the hyperscalers themselves. I know this week there was a nice bounce for a lot of the Max 7, but generally speaking those stocks are mid teens to mid 20% off of their highs. They haven't really participated. They've actually been a net detractor up until the last couple of days from the S&P's year to date.

[Brian Belsky]

Oh, I know.

[Michael Batnik]

So we have this handoff. So the question is, it sounds like you think the handoff will continue, but the choppiness comes in because these things don't happen in a straight line.

[Brian Belsky]

Yeah, nothing's linear. And I do think that first of all, you don't have to own everything. Right. You don't have to own everything. I think that you're going to see some rebalancing back into Microsoft. Microsoft's the one that I'm kind of focused on. You think? 34% return on equity, $78 billion in the balance sheet, 25% earnings growth quarter after quarter consistent. So that one to me doesn't make sense in terms of being down 23 or 24% year to date. It does from.

[Josh Brown]

Well, and then got stuck in the narrative. It's the biggest software stock in the world.

[Brian Belsky]

Yeah, well, exactly. So like full disclosure, I was telling you when we were walking in, people are teasing me. Belsky underperformed in June by 1%.

[Michael Batnik]

Well, I don't know.

[Brian Belsky]

Micron, I mean if you come on, that's pretty good.

[Michael Batnik]

Right?

[Josh Brown]

Anyway, by the way, Micron is now down 21% from its high a couple of days ago.

[Brian Belsky]

So you talk about it didn't take long. So you think about, we were talking earlier about never look at the comments. Right. So I was on closing bell last week and the day that Micron came out with earnings and they asked me and I'm like, you know, full disclosure, I don't own the stock. But I pulled the nothing's linear for long and this, this is way overdone. Stock went up a little bit. It was in straight down since then. But if you read the comments was wrong. I mean, you know, I don't own the stock. I mean, so, so anyway, so for

[Josh Brown]

somebody who never reads the comments, sounds like he spent a lot of time reading.

[Michael Batnik]

He glances at the comments.

[Brian Belsky]

Well, someone told me again, you got to read them.

[Josh Brown]

It was your son. It was your son. But let me ask you this. You said that you expect earnings to the growth to not be as strong. Obviously you're not expecting negative earnings.

[Brian Belsky]

No, no, no, no. If it goes, Michael, if it goes from 25 to 20, people are gonna go, whoa. Right, right.

[Josh Brown]

Well, let me. Okay, so let me put it to you this way. The earnings growth is in large part being driven by the hyperscalers willing to go to zero on their free cash flow.

[Brian Belsky]

Right.

[Josh Brown]

Like that is powering a large part of the earnings because their spend is micron and AMD's and everybody else's earnings, they have been steadfastly committed to higher and higher and higher spend. So do you think that's going to reverse itself or where do you think it's going to?

[Brian Belsky]

It has to slow down. It has to slow down.

[Michael Batnik]

It has to.

[Brian Belsky]

It has to.

[Michael Batnik]

They say it's not, but.

[Josh Brown]

Yeah, they're telling you no.

[Brian Belsky]

Okay, well, of course they are, because they want to go to the marketplace. Right. If they're going to go to cash flow to zero, they're going to have to go and get money in the marketplace. Why do you think Oracle's been.

[Michael Batnik]

Well, why raise money though, if you were going to slow down? So why would Google be selling stock after 15 years of, 10 years of buybacks if they're not going to accelerate spending? What would be the reason?

[Brian Belsky]

I don't know.

[Michael Batnik]

Okay.

[Brian Belsky]

I actually don't know.

[Michael Batnik]

But you know, one of my favorites too. No matter what, these companies are going to have to slow down.

[Brian Belsky]

They have to slow down.

[Josh Brown]

What the hell is happening with Oracle? I know we have a lot to discuss in the doc, but it's like going straight down. I know.

[Brian Belsky]

That's another one of my. This is problem child.

[Josh Brown]

This doesn't look like the other ones. I mean, it's going straight down.

[Brian Belsky]

I just. Yeah, I'm still sticking with Oracle. I'm sticking with Microsoft. I'm sticking with Palantir.

[Josh Brown]

Do you think Oracle is trading? Because I think in the, in this, in the late winter, early spring, when everything else was going down, it made a lot of sense. It was linear. It was. Wait, what did Sam Altman just say to. On the, on that podcast? Everybody's antennas went up and he was acting very defensive. And Oracle just said, like investors said, there's no way that five year, $300 billion contract is money. Good. No way.

[Michael Batnik]

And that or the OpenAI business, and

[Josh Brown]

that announcement was responsible for Oracle's 30% gain in September 2025 or whatever. So do you think it's still trading on AI fears?

[Brian Belsky]

Okay, I do, I do. So you think about too, them going out in the public marketplace and taking all that money. But do you think about how Oracle was a value stock in tech for a long time and they were early adopters into investing in the AI, and so then all of a sudden, all the relationship with OpenAI and the stock took off. So I think that's unjustly being punished. So I'm sticking with Oracle and, and Microsoft. I am.

[Michael Batnik]

What do you. What do you think about whether or not the Meta news this week where they're now going to be like an outsourced cloud for other players. The market rallied the stock and then gave almost all of it back.

[Brian Belsky]

I'm not a believer. I'm not a believer.

[Michael Batnik]

Does that even make sense if you're a Meta shareholder, Is that what you would want to see them investing in?

[Josh Brown]

How is there excess compute? I don't understand. I thought all we heard about is just shortage.

[Michael Batnik]

Right.

[Josh Brown]

They're going to start renting out their excess.

[Michael Batnik]

Look how fast that gain went away.

[Josh Brown]

Yeah, two seconds. Two seconds.

[Michael Batnik]

Like, like 24 hours later, people are like, what are they doing?

[Brian Belsky]

Wait a minute. This is the same. I think the. I think the market has said, well, wait a minute. Aren't these the same guys that were doing like sunglasses and stuff a little bit?

[Josh Brown]

And now prediction markets, they seem very. Just very not focused.

[Michael Batnik]

They call it flailing.

[Brian Belsky]

Yeah.

[Michael Batnik]

They meta now. I don't know shit. And I could be totally wrong and they could surprise everyone. Meta. Just the way like, I think about it, they're the best user of AI on earth to generate revenue. Like because of the ads ban the product is. You cannot put your phone down anymore. If you're. If you're on Instagram, you literally cannot put your phone down. It is just so good at holding people's attention.

[Josh Brown]

So good.

[Michael Batnik]

And getting people to send it to their friends and getting people to engage with it. They have perfected reels. It is completely addictive. Nobody saw me on TikTok anymore.

[Josh Brown]

And I have a physical device, it's called a brick, where I literally have to stop myself. I have to lock myself out of my phone because I am addicted to Instagram. I tap on and I tap off and I try and leave it tapped off.

[Michael Batnik]

Right. So it's hard. So that's AI. AI enabled them to not only make the world's most addictive products, but that's not nicotine. But also the monetization of it. It's perfect. So they have this thing, it's the best in the world and it spins off a ton of cash. But I don't think people would look at the way that they reinvest that cash and say that they are any good at that. Seems to be really bad at it. Actually.

[Brian Belsky]

I have a sordid past with Meta.

[Michael Batnik]

Say More how sorted?

[Brian Belsky]

Well, in the fourth quarter of 2018, I sold the stock. I blew the stock out completely. That's when they changed the name of

[Michael Batnik]

the company to Meta.

[Brian Belsky]

To Meta.

[Josh Brown]

Was that long ago?

[Brian Belsky]

We're going into the Metaverse and we're going to push aside WhatsApp and Instagram and Facebook and we're still going to own it, but we're going to try to go in this other direction. I'm like, they don't know what they're going to do. And I took all my Meta position, put it into Google, haven't owned it since. Now Belsky doesn't know. He's talking about.

[Michael Batnik]

Do you know what the ROI was on that? They spent $80 billion and lost $80 billion. It's the most amazing.

[Brian Belsky]

See, there you go. So then. So I'm like, okay. Then during the vid, they came out and said, wait a minute, we're going to come back. We need to focus on our core competencies.

[Michael Batnik]

Good idea.

[Brian Belsky]

Which are WhatsApp, Instagram and Facebook. Now they're doing this, so.

[Michael Batnik]

And now they're going to build the Neo cloud.

[Brian Belsky]

Yeah. So I think the pick to click is Google. I still think Google. And if you look historically, except for the, you know, since really historically,

[Josh Brown]

Google

[Brian Belsky]

and Meta, from a price performance basis, they're very correlated. Right. But I think they're going to. Something that we talked about when we were here last year. We're going to have more stock picking, more differentiation.

[Michael Batnik]

Yeah.

[Brian Belsky]

And look at communication services in particular. Terrible performing sector year to date, you know, at and T. But Verizon, they're crashing. Verizon, Netflix.

[Josh Brown]

One thing on that, on Meta, before we get off this topic, it seems to me, and I could be totally making this up, that in between every quarter we talk about what a bad job Meta is doing and they're doing all this bullshit and they're not focused. And then every 90 days we say, holy shit, they made how much money?

[Michael Batnik]

And the stock rallies because they. They have the best advertising business in the world. That's not.

[Josh Brown]

I really feel like every 90 days we're like, wow, this is the best business in the world. And then in between.

[Michael Batnik]

Yeah, how he's gonna. How's he gonna light that cash flow on fire this month?

[Brian Belsky]

Yeah, maybe. I mean, full disclosure, I was looking at this stock hard because we've talked about it on the show. You're talking about Nike and about how I like to buy companies in my value portfolio.

[Josh Brown]

Sorry, Brian. That's met on Google over the last year.

[Brian Belsky]

Yeah.

[Josh Brown]

Holy shit. I didn't realize it was that bad.

[Brian Belsky]

Yeah. So this was really simple.

[Josh Brown]

Meta's down 18, Google's up 100.

[Brian Belsky]

Yeah, yeah. Since Liberate. You're right.

[Josh Brown]

My God.

[Brian Belsky]

Anyway, so in my value portfolio, I love to buy companies that operationally have tripped. Nike for a while, bought Starbucks a couple years ago. Netflix is in there now. Lulu's in there now. I'm like, man, should I buy what? Meta Is it time to buy Meta?

[Michael Batnik]

16 times earnings.

[Josh Brown]

It probably is.

[Brian Belsky]

It probably is. But let's see how.

[Michael Batnik]

How cheap is the stock?

[Josh Brown]

It's like 16, 17.

[Brian Belsky]

I think it got a little bit.

[Josh Brown]

Yeah, it was about. That's too cheap. Who cares? Nobody likes Facebook.

[Brian Belsky]

No Facebook, no Insta ever. I'm not on.

[Michael Batnik]

Well, if you were, you would be as addicted as everyone else. They're really good at what they do. The problem is these initiatives in AI make no sense to anyone. They're gonna build open model LLM. Nobody wants it. Okay, fine. Now we're gonna build productivity tools for the workplace. Is anyone asking for Meta at work? Like on the planet? No way. Nobody trusts them.

[Josh Brown]

No. It's interesting about this, though. So yesterday met a pop 10%. Oh.

[Michael Batnik]

So. So now the new thing is we're going to build a data center and rent out Compute because we saw Elon Musk do it with X AI and they got appreciated, like, maybe will be appreciated as a company that could deliver this. It took Alphabet and Amazon, like, 15 years to build these businesses.

[Brian Belsky]

Yeah.

[Michael Batnik]

Met is going to spin it up to get the stock price to go up.

[Josh Brown]

But so listen to this. A Meta was up 10% yesterday in the news. Core, we've got killed. Naturally. Meta is giving back a lot of the gain today. And core weave is still going down today.

[Michael Batnik]

And Oracle is going down, which, I mean, so the market is saying, like,

[Josh Brown]

we don't really like any of this.

[Michael Batnik]

Yeah. Anyway, all right, what's this. What's this chart on Smidge? Can we move to, like, where?

[Josh Brown]

Anyway, what's this bullshit?

[Michael Batnik]

No, no, no, no, no. Let's. Let's get.

[Brian Belsky]

What are you spitting here on? Smid? What does SMID stand for?

[Michael Batnik]

Let's get into the Belsky charts. Let's go. All right, this is the first one. Smid, for people who are unfamiliar, is small and mid cap combined. That's how you think about that market?

[Brian Belsky]

I do. Okay, so the s and P 1500 is the S&P 500, the S&P 400, mid cap and the S&P 600 small cap. So we run money call a SMID portfolio relative to the S&P 1000. And so if you take a look at the S&P 1000 with respect to performance in June was, was they. They flip flop. They've completely gone off. But what's interesting, if you take a look at the S and p weighted versus the mag7, same kind of thing. So our call all along has been that you always want to go to where you always want to skate to where the puck is going. Everybody.

[Josh Brown]

Wow, you're a genius.

[Michael Batnik]

It's a good idea. I like to skate to where the puck was 10 minutes ago and wait for it to come back.

[Brian Belsky]

Or you can, you know, or you can stick handle. Yeah, yeah, you can stick handle and then get your ass kicked because you have your head down. Right.

[Michael Batnik]

Anyway, this is why they think you're Canadian. All these hockey.

[Brian Belsky]

Minnesota, Gordon Bombay, more like a Hanson brother who by the way are from Minnesota. Anyway.

[Michael Batnik]

Believable.

[Brian Belsky]

Believable, right. So we've said all along that, that from a fundamental perspective, if you take a look at earnings growth, price to free cash flow and actually next 12 months earnings, you look at the small cap market SML versus the S&P 500. Amazing. Amazing.

[Michael Batnik]

Is it?

[Brian Belsky]

Yes.

[Michael Batnik]

What's the, what's the expectation for small cap?

[Brian Belsky]

28%, something like that.

[Michael Batnik]

Earnings growth for when? The next 12 months.

[Brian Belsky]

Yeah.

[Michael Batnik]

And what is it for large cap?

[Brian Belsky]

23, 24 or something like that?

[Michael Batnik]

That's small or SMID.

[Brian Belsky]

Small SML.

[Michael Batnik]

Okay.

[Josh Brown]

What is, what is driving. I don't mean like the narrative like oh, rates, whatever. Like literally at the sector level, where are the earnings?

[Brian Belsky]

Where are their financials? There's a lot of big finance. There's a lot. There's a big financial presence in there. There's consumer discretionary in their tech.

[Josh Brown]

So why regional banks? Because you spoke about this last time. They're on fire. Like what's the story?

[Brian Belsky]

Well, our theme for financials and regional banks has been in the regional bank side of things, consolidation. I really think consolidation is coming and we've had some decent consolidation from that. But the theme is the big and the small. The really big guys and the really small guys are going to benefit. Small guys are going to benefit because of the relationship side of the business. And oh by the way, the smaller banks in regions of the country that are growing, like let's say Montana or Wyoming or Idaho or the Southeast growing,

[Michael Batnik]

meaning people are moving there, people are

[Brian Belsky]

leaving or moving there and companies are moving there as well. Because the Tax advantage or whatever, those companies are winning business away from the big banks. Okay, so whether or not it's Glacier Bancorp, which we own, is winning business from Chase, let's call it in Bozeman, Montana, or we own this company called Synovus that got bought out by Pinnacle. They're in the southeast of the U.S. right? So we're moving to the southeast, we're moving to Alabama, we're moving to Georgia because of cheap taxes and all that kind of stuff and cheaper payrolls. So those banks are winning business from the really big, big guys. From a relationship standpoint, they're having a beer, they're playing cribbage on a Friday night, all that kind of stuff where the regional banks don't have the capacity to be able to take on the big banks and they don't have the relationship power to take on the small banks.

[Michael Batnik]

They're in the middle, but they're becoming super regionals.

[Brian Belsky]

Well, they're going to have more. I think they're going to become, I think they're going to have some super combos, are going to see some consolidation.

[Michael Batnik]

PNC is aggressive now Citizens is aggressive.

[Josh Brown]

What's regional? Like a big small truest like when

[Michael Batnik]

true like when two regionals merge and all of a sudden they start to get some of those benefits of scale, but they're not quite bank of America, so they don't have capital markets business, let's say, but they become powerhouses in middle market lending and, and commercial banking. So I'm in Citizens Financial. They're the number one he lock bank, I think in the country or something like that's their specialty. And they are a conglomeration of a bunch of smaller banks. And I would argue it's not really a regional anymore. It's like a super regional. And you don't think that's a sweet spot though, because they're stuck in the middle. You like the smaller and the bigger.

[Brian Belsky]

I like the smaller and the bigger. Just from a fundamental perspective, the scale of the scale of the large ones makes sense to me. The small ones make sense just from the fundamental side of things. And if you look at balance sheets too, and cash flow for that, you have to kind of roll up your sleeves and do the work and look at some of these banks balance sheets to make sure to see what their loan quality is. I think, and I don't build strategies around consolidation, but I think you're going to have some super consolidations like just throw it out there. Truist.

[Michael Batnik]

The White House is allowing it, all of it.

[Brian Belsky]

Truist buys US bank or they combine, something like that. I don't know anything but you're going to have more Midwest banks combined. I really think you are.

[Michael Batnik]

Who is truest is M and T bought Comerica.

[Brian Belsky]

I I no, it was SunTrust and bank out of North Carolina.

[Michael Batnik]

Okay. Not, not, not important. But like that, that's the kind of thing that you think we'll see.

[Brian Belsky]

Yeah.

[Michael Batnik]

Okay. Away from banks but within financials. What else looks good to you right now?

[Brian Belsky]

Like some insurance companies like Unum is an is an interesting company. I don't. I want to like Blackstone again. I want to go back into that. My contrarian hat wants me to go back in there.

[Michael Batnik]

But the headlines are not going to be good for a while.

[Brian Belsky]

No, I can't do it.

[Josh Brown]

But Blue Owl rallied a little bit today on less bad than expected redemptions. Redemptions were 19 instead of 25 last quarter. Whatever it was.

[Brian Belsky]

Well, okay, let's think about this. Why not just buy Oracle?

[Michael Batnik]

What do you mean? Well, instead of buying a troubled financial

[Josh Brown]

one, because financials are trading on software. Distress too are perceived. Yeah, that makes sense.

[Brian Belsky]

Right? Right.

[Josh Brown]

What about any take on. So I bought CME today. These stocks have cme, cbo, the nasdaq, ice.

[Michael Batnik]

They're all down huge.

[Josh Brown]

A little bit different, a little bit away. But S and P and Moody's also got crushed. But what do you think about like the exchanges?

[Brian Belsky]

Schwab, Schwab looks interesting. I like the exchanges. I think they're cheap.

[Josh Brown]

I think they sold off. I'm not even kidding. On like Cal Sheep Perpetual Listing News. And fine, it may be a threat, but are they that big of a threat to suddenly start crashing?

[Brian Belsky]

No.

[Michael Batnik]

Let's do this. Earnings chart, chart 3.

[Brian Belsky]

Chart 3.

[Michael Batnik]

The first quarter reporting season was historically strong. I'd also point out I think this was the best quarter ever for the stock market. Did I read that wrong?

[Josh Brown]

No way.

[Michael Batnik]

Or one of the best. What did I read?

[Josh Brown]

It was very good.

[Michael Batnik]

I read something. Maybe it was the best earnings quarter ever.

[Brian Belsky]

I think it was earnings.

[Michael Batnik]

Okay.

[Josh Brown]

All right.

[Michael Batnik]

So that's what you show. You're showing.

[Josh Brown]

It was the most fun quarter ever between the Knicks and the men's national team.

[Brian Belsky]

It really was fun. The Knicks really took off the top.

[Michael Batnik]

So when most people look at this chart, they say, all right, when does it mean revert? Like when does. When do we give all this back? Or how many quarters worth of earnings growth are we pulling forward to get this result? What do you think when you look at a chart like this.

[Brian Belsky]

I look at the big. I look at the big bottoms and tops, right. I look how bullish you should have been in 2020 when. When the, when the bottom fell out. And then you had a little bit of a. You had a little recession in 2022, but man, earnings came back. But look at how the recovery from 2022. It's been pretty steady. And then I'm, you know, you could see 80%. You could see that. You could see that number. What if I'm wrong?

[Michael Batnik]

Right.

[Brian Belsky]

What if I'm wrong and you see 30% growth?

[Michael Batnik]

Yeah.

[Brian Belsky]

Then I could be wrong.

[Michael Batnik]

What if you underestimate it?

[Josh Brown]

Then the S And P is 10,000 next year.

[Brian Belsky]

Yes.

[Michael Batnik]

Yeah, you could. Looking at a Dow 75,000. S&P, 10,000.

[Brian Belsky]

I'm still on board with my 25 year secular bull. I'm still on board. I think we have seven to 10 years left.

[Josh Brown]

Let me ask you this. I'm glad you mentioned that. A lot of people think about the stock market. We use analogies for shorthand. What inning is it? What time is it? What if. Or what do you think about this? The AI powered revolution, the economy that we're coming towards. It can be the top of the second inning. We don't have robots. We're still very early. Basically, nobody's using it. It could be the top of the second inning as far as this whole thing is concerned. But what if the stock market's in the eighth inning? And how do we know and it wasn't that too dissimilar in like 99 where the. It was still early for the Internet?

[Brian Belsky]

I understand what you're saying, but the

[Josh Brown]

stock market had already discounted all of it. So the Internet was in inning one, the stock market was in inning 11.

[Brian Belsky]

Could be, because I think so, man. I'm sounding bearish. I think we're gonna have a recession.

[Michael Batnik]

You're sounding nuanced.

[Brian Belsky]

Whoa, whoa, whoa.

[Josh Brown]

What did you just say?

[Brian Belsky]

I think we're gonna have a recession at some point.

[Josh Brown]

Oh, okay. And at some point.

[Michael Batnik]

Me too.

[Josh Brown]

I thought you were gonna give us more than that.

[Brian Belsky]

Think about it. So let's say we're in the second or third inning of the AIA Revolution and market's getting a little tippy. We haven't had a normal recession, for all intents and purposes, since 2001. Really?

[Michael Batnik]

What do you mean?

[Brian Belsky]

Like a normal two quarter?

[Michael Batnik]

Like a run in the mill, plain vanilla recession?

[Brian Belsky]

Yep.

[Michael Batnik]

Okay. Are we still capable of having that where manufacturers get over their skis on inventory, the inventory stops selling. All of a sudden they stop ordering.

[Josh Brown]

No, it's different economy.

[Michael Batnik]

And we just, and we just sort of have like a slowdown as that gets worked through.

[Brian Belsky]

Could we have a. Could we.

[Michael Batnik]

I don't know. Was that what 2001 was about?

[Brian Belsky]

Well, 2001, like what you're describing sounds

[Michael Batnik]

like something that would happen in the 80s.

[Brian Belsky]

2001 had overcapacity of technology, right?

[Michael Batnik]

Well, we had a pull forward. So everyone had machines that they upgraded at the same time because they literally thought the planes were going to fall out of the sky. That's the Y2K effect.

[Josh Brown]

All right. Are we not doing that now? Is there too many data centers?

[Michael Batnik]

So that's my point. The question, the question might not, might be what happens when these capex trends go into reverse? What does that do to corporate earnings for all the companies that are feasting on this spending today?

[Josh Brown]

Nukes it.

[Michael Batnik]

Yeah, I think. And then it hits multiples at the same time.

[Josh Brown]

Could be horrible.

[Michael Batnik]

And then what is the externality of a stock market in reverse? We know what the wealth effect is when the stock market is hitting highs. What does it look like when it's down 20, 30%? Is everyone paying Delta for the Delta one? Is everyone paying Netflix for the ad free experience? Is everyone still spending the way they were when the market was going higher? So for me that seems plausible. That seems like it would be the bear case.

[Brian Belsky]

So when could that happen if as

[Josh Brown]

long as the labor market is good, they'll keep spending?

[Michael Batnik]

But the reason it's not going to happen is because we are seeing the demand for AI rise as quickly as they can build it. I don't. Maybe that stops. The number one thing is the cost of a token. The cost of a token is declining rapidly, like 90% over the last, which is great news. The problem is token usage is like growing 5x more quickly. The adoption, the spend until the adoption stops. It's hard to understand why all of a sudden this capex will like stop on a dime. I know people think that's how it's going to end. Maybe they'll be right. But now it's tied to revenue. Now it's companies that are like, this is AI revenue. So I just, I don't know, I feel better about it than maybe I did again.

[Josh Brown]

Did you just get bullish again? I just saw a twinkle in your eye.

[Michael Batnik]

I think you.

[Brian Belsky]

Well, demand, demand, demand, demand. Scarcity. Scarcity. Scarcity. Scarcity. Never doubt scarcity. Always trade on scarcity. Always buy scarcity. And if, if there's that demand there and there's a scarcity for many or for memory and there's that still scarcity on the AI if we're still it's compute, then then this thing's going a lot higher.

[Michael Batnik]

And the thing, we are at 10,000. And the thing is the token, the token economics are being rationalized right now. Companies are looking at their bills and yeah, the bills are expensive, but then they're looking at the amount of demand and they're saying like, well we, we're now like reorganizing ourselves around this technology. We can't not buy it, we can't not use it because it's doing X, it's doing Y, it's doing Z, it's doing all these things for. So I know like the bears are like any minute now, this whole Jenga tower, someone's going to pull the wrong piece and the whole thing.

[Brian Belsky]

I don't believe that for one second.

[Michael Batnik]

Okay.

[Brian Belsky]

I don't believe that.

[Michael Batnik]

I like hearing you say that.

[Brian Belsky]

I don't. The thing that bothers me is as being a sector analyst for a long time and a strategist that what do the indices look like in four years? Are we gonna be 50% technology in the S&P 500 and then do we

[Michael Batnik]

would look more like the rest of the world if that happened? Because most countries are dominated by one industry.

[Brian Belsky]

Well, look at Canada has got dominated by three. But let's take this back. I actually think within two to three years that Russell S&P MSCI are gonna break apart the technology sector again.

[Michael Batnik]

Again.

[Brian Belsky]

Yep.

[Michael Batnik]

Cause they did it already.

[Josh Brown]

Into what? Semis. Assembly's gonna have its own. Maybe they should be their own sector at this point.

[Brian Belsky]

Hardware, software.

[Michael Batnik]

Ooh, that would be interesting if. So if software got its own. If software got its own sector, will it still be big enough?

[Josh Brown]

It's like seven.

[Michael Batnik]

Will there be enough market cap left in the software sector?

[Josh Brown]

Brian, look at this. So this is the top 25 stocks.

[Brian Belsky]

Yeah.

[Josh Brown]

All right. So we spent a lot of time talking about the max 7%. It goes. It's so much bigger than that now. The top 25 stocks were 35% of the index when this series starts in 1997. And it was like around there. A little bit higher, a little bit lower. For the next 20 years it went from 35 to 54.

[Michael Batnik]

And 25 stocks are half the US stock market.

[Brian Belsky]

I know. Wild.

[Michael Batnik]

And if you don't own them.

[Brian Belsky]

Well, that's the thing about smid. Let's Go right, right. The SMID category. If you take a look at all publicly traded companies in the US that are SMID small and mid cap, they add up to the weight of Apple

[Michael Batnik]

put up chart 6 stand S&P 500 CTR has been top heavy which is worth CTR.

[Josh Brown]

Okay, got it. Contribution to total return.

[Brian Belsky]

Correct.

[Michael Batnik]

Which has worried some investors. So the question based on this chart is like can you outperform in SMID for longer than a quarter? Like just the nature of the market over the last 15 years has been like, all right, you'll get that annual small cap rally, knock yourself out, have fun and then before you know it, meta, Apple, Microsoft, they start going up again and erasing all that outperformance.

[Brian Belsky]

This is a nice, this is a nice shot. I don't think it's different this time. We've had a heck of a June and second quarter for small mid cap. But this is also at more elevated 10 year treasuries. If you get 10 year treasuries to go down then Smith's really going to rock it and it's going to be helped along by the banks.

[Michael Batnik]

So you can outperform for the rest of this year in this SMID trade.

[Brian Belsky]

I think you can. I think you can. The other thing too is that if you look at the Russell 2000 versus the SML or the Mid Russell 2000 outperformed both those. But there's a lot of companies in the Russell 2000 Josh, that they're not making any money. So you have a lot of fuel in there, a lot of beta and that's where a lot of the returns came from. You strip those out. That's why I go back to if you take a look at price to free cash flow and just earnings discernibility and consistency within the small SML and the mid, it's much better than the Russell overall.

[Josh Brown]

You know what's so interesting about what's happening right now? I would expect if you know that the Russell 2000 is outperforming the large, then you would expect looking inside of the S and P itself that it would look similar. That smaller stocks in the S and P are outperforming what you just showed. It's the exact opposite. It literally is the top decile. Forget about the hyperscalers, it's Micron and Sandisk. Probably not, no, it's not top decile intel probably. But it's the gigantic stocks in the S and P that are driving the index. And yet the Russell 2000 is kicking the crap out of the equal weight S and P. So it's not a size thing, it's a sector thing.

[Brian Belsky]

Could be a sector thing and could be a fundamental thing. Ooh, right. Interesting. You know what just came to mind? I remember back when I was a young strategist. 1998, 99, something like that. And I was on a marketing trip to Boston and I was visiting one of the portfolio managers at Fidelity. And he was literally having like a breakdown. He's like, Belsky. I gotta. He was small cap manager at Fidelity.

[Michael Batnik]

This is an audio medium. I don't know if you know what we're doing here.

[Brian Belsky]

Oh, really?

[Josh Brown]

Okay.

[Brian Belsky]

Okay, here we go. Like Ricky Bobby. What do I do with my hands? Anyway, so I'm in Boston.

[Michael Batnik]

You're welcome, John. John was about to get up from

[Brian Belsky]

his chair and so he was literally like bell skating on what to do. I'm a small cap manager. I'm massively underperforming. I'm buying Microsoft.

[Michael Batnik]

Oh, my God. Like that was the answer.

[Brian Belsky]

Yeah. So I was talking to some people that run small. They're completely gone. Remember, there's no value managers anymore. There's no small cap managers anymore. There's no dividend growth managers anymore.

[Michael Batnik]

They're knocked out of there.

[Brian Belsky]

They're all gone. They're all gone.

[Michael Batnik]

Okay, so I like that setup. Let me Do Chart 8. This is the broadening. The chart on the right. Figure 5. The number of year over year gainers has risen, which runs contra to trends before prior drawdowns. Explain what you mean by that and why should we take note of that?

[Brian Belsky]

Well, more companies, more companies are actually seeing a year over year price gain over the average. And look at that number beginning to go up. And especially coming out of the bear market, it's really interesting. It's still very, very early. And so again, you're saying this is good. This is good.

[Michael Batnik]

Okay.

[Brian Belsky]

This is good.

[Michael Batnik]

Okay. You don't have a market top as it's broadening. We are another way to phrase.

[Brian Belsky]

You don't have a market top as a broad.

[Josh Brown]

So so long as we did in 2021.

[Michael Batnik]

Silence. So as long as we literally did. I know. Asterisk. As long as we see that broadening though, it's a go ahead.

[Brian Belsky]

Yeah, but look at. Dude, look at, look at the spike though.

[Josh Brown]

Yeah, that means no. I know, it's crazy.

[Brian Belsky]

Very consistent. When it was the same thing with that prior earnings chart. Just chug a chug a chugga, chugga, chug. When you see something linear like that, 2021 was was.

[Josh Brown]

We've never seen anything like that.

[Michael Batnik]

That was just the government giving people money.

[Josh Brown]

Every single stock was up year over year.

[Brian Belsky]

Right. That's the same thing like people saying about inflation. They're, they're, they're comparing inflation now to 2021. Completely different.

[Michael Batnik]

Right?

[Brian Belsky]

20, 20. Completely different.

[Josh Brown]

No, this is healthy. So when people say it's only this market, it's just not true. You have almost 350 stocks are up year over year.

[Michael Batnik]

Can I have the next one? Dan? When segmented by market cap, about half the index has delivered double digit gains. This is super bullish to me too.

[Brian Belsky]

Yep.

[Michael Batnik]

It means that people are making money everywhere. Not in every stock, but all over the place.

[Brian Belsky]

Per Michael's point though, look at the 10th one.

[Josh Brown]

I know, this is so bizarre. I'm having trouble squaring the circle. How is the bottom decile the worst performer and yet the small cap stocks are winning? It has to be a sector thing because otherwise you would expect this to look opposite. You would expect a smaller deciles to be outperforming. And they're not. Not even close.

[Michael Batnik]

Well, go to 10. Go to, go to chart 10. Many market cap segments have a significant number of outperforming stocks. That's the answer. It's like the AI winners in each sector. I don't know what's like take industrials, you got tons of stocks in there that are not going up right now. But so many that are. And the ones that are all have one major thing in common.

[Brian Belsky]

AI.

[Michael Batnik]

They're selling something or making something for AI.

[Josh Brown]

But this is saying the same thing because there's no information on this chart. It basically says that half the stocks in every sector, in every decile for the most part are outperforming. Which tells you nothing.

[Michael Batnik]

No, but the point is. Well, which are those stocks?

[Josh Brown]

Fine, dude, but it's half. So go to decile five. It's literally half. Half for outperforming, half for underperforming. My point is, look at Bar 10. Only 18% of the smallest 50 stocks are outperforming. What the hell is in that group?

[Brian Belsky]

And I'm sorry, I apologize, I don't know those.

[Josh Brown]

It's got to be software. No, it's got to be. No, seriously, it's got to be into it.

[Brian Belsky]

I think I'll get to the bottom of this. Maybe it could be a homebuilder. Maybe it could be a consumer discretionary stock. Maybe it could be a consumer staple stock that have not done very well. Yeah, that's what I'm kind of thinking, I don't know.

[Michael Batnik]

But there, and there's a lot of one offs. There's a lot of weird companies that

[Brian Belsky]

are a lot of weird companies.

[Michael Batnik]

There was a company up until recently called Dover. You know what they did?

[Brian Belsky]

Yeah, Dover. I owned it when I was at Merrill Lynch.

[Michael Batnik]

They made harnesses for horseback riding. Yeah, it's a public company making, making literally, literally horse, horse equipment. Like there are a lot of one off cases. We, we shouldn't get bogged down in the 18% that are outperforming in that last decile. We should just think people are making money in almost every sector right now

[Josh Brown]

except for these pieces of shit.

[Brian Belsky]

Here we go.

[Josh Brown]

The, the trade desk. Molson cores.

[Michael Batnik]

These are specific problems.

[Josh Brown]

Yeah, Domino's. What else is name branded here that's getting beat up? Oh, Paramount, Shake Shack, Godaddy. There's a lot of. Yeah, a lot of. I mean whatever. No, there's no theme that I could see just eyeballing it.

[Brian Belsky]

Specific. Isn't that what this is all about? Anyway? Stock market is a market of stocks. That, that's the way that it works.

[Michael Batnik]

That's what we try to say.

[Josh Brown]

And then also almost maybe by definition the bottom decile in the S and P. It's always got to be the lousiest performances. Otherwise they wouldn't be in the bottom decile.

[Brian Belsky]

Well then they get kicked out and they go to mid cap.

[Michael Batnik]

Pull up the small cap chart. Daniel, can I please have chart 14 small caps had an explosive first half of 2026. I mean this not just because we changed the color to red for that last bar but to really make you notice it. But you would notice it. You could see the smatter space. Wow. This is a really big deal for this part of the market. It's been a very long time since they've been able to party this hard. I wonder though, is it even possible? I mean you seem to think it could continue. What's, what's the longest small cap rally versus large caps we've seen in the last 10 years? Yeah, it is six months.

[Josh Brown]

It's been a most.

[Brian Belsky]

Three, three to six months at the most in the last 10 years. No, it's been, it's really been the 90s.

[Josh Brown]

So it's a sector thing. It's 20% healthcare, 19% financials, 15% industrials and then 15% technology.

[Brian Belsky]

Yep. There's not a lot of consumer stocks in small Midland. There's not very small communication services sector. Healthcare is where the biotechs. Because biotechs have some pretty good growth numbers. And it's the financials.

[Michael Batnik]

I was going to say they're tiny amount of materials in there.

[Brian Belsky]

Tiny amount of materials.

[Michael Batnik]

Okay, can we talk about the bull cycle itself? You say year four of the current bull cycle, likely to be the most volatile. Chart 15. What do you tell people about. Not. It's year four, how many more years will be left? But we know you're thinking about this as a much bigger, longer secular story. So year four, if we get more volatility, it wouldn't surprise you, in other words?

[Brian Belsky]

No, not at all. And I think.

[Michael Batnik]

What is it about the fourth year?

[Josh Brown]

Well, four, Josh is big at the golf these days.

[Brian Belsky]

It was really supposed to be three, but I think given everything that we saw last year with Liberation Day and the goofiness of the market, and that was kind of manufactured, quite frankly. And this year is more kind of. We had the war in the Middle east and everything like that, but I think the market's been pretty resilient through the war. I mean, let's be honest. I think if you go back historically, year three is usually the most volatile. I think we just gotta push it ahead one year and the dominance of earnings. Right. So again, going back to. Earnings driven markets are more volatile than momentum multiple driven markets. And that's why. Cause I do think the second derivative's gonna freak people out. Doesn't matter. If you go from 25% earnings to 23% earnings, they're still going to.

[Michael Batnik]

Oh, still coming off the high.

[Brian Belsky]

Yep.

[Michael Batnik]

People don't like that.

[Brian Belsky]

People don't like that.

[Michael Batnik]

Okay. And understandably, because as the estimates come off the high, you start to think about worst case scenarios. What if they keep going? What if they keep. What if. What if they keep dropping and they don't have to. That's sufficient to scare people.

[Brian Belsky]

All right.

[Michael Batnik]

I totally get that.

[Josh Brown]

The summer is pretty typically a quiet period for. For the stock market.

[Brian Belsky]

It is. The other thing too, is that. Is that traditionally technology companies seasonality from the earnings perspective, that third quarter is usually a little bit slower too. So who knows?

[Michael Batnik]

Okay, here's another question.

[Brian Belsky]

Yep.

[Michael Batnik]

What if there is no SaaS apocalypse? What if we just. What if we just call it off? Let me set this up. There's an analyst at Guggenheim. Do you know this guy? Did you read this?

[Brian Belsky]

No.

[Michael Batnik]

It's an analyst at Guggenheim who wrote. I think he saved the sector this week. Guggenheim analyst. This is Barron's. John De Fucci.

[Brian Belsky]

Cool name.

[Michael Batnik]

Yeah, totally. Says they're. Where was I? Okay. Guggenheim analyst John DeFuci says now is the time for Wall street to take advantage of the deep software sell off despite those AI fears historically low valuation. You could write that thing with yourself. Quote. We believe traditional software companies will at least persist if not continue to grow at reasonable rates in many instances. But they're trading as if they will not making one of the best opportunities for patient investors in our careers. We view AI's technology paradigm shift. The leaders of the new paradigm are typically not the leaders of the last one. At the same time, there's significant staying power in enterprise software. He upgrades. What are the upgrades? ServiceNow maybe work, I want to say workforce. I know there's a whole bunch of upgrades that came with that. The IGV is up 11% off its lows from last week. I think outpacing the bounce in the Mag 7 and obviously going in the opposite direction as the semi nai trade which has been negative. Could this be the start of something more meaningful? Are we going to bring these stocks back to life from the dead? What do you think?

[Brian Belsky]

I hope so. Oracle's not going in our direction.

[Michael Batnik]

Besides Oracle, which of these.

[Brian Belsky]

Which of these? I don't know what the other ones. I don't own ServiceNow. I don't own a workday. I worry that the feasibility of Salesforce and Adobe going forward. Do you need that stuff? And the answer is I don't think so.

[Josh Brown]

I think Salesforce, Workday and ServiceNow in my mind anyway. The three big, big, big SaaS teams that trade together. Adobe's a little bit different but same idea. But Salesforce, I don't know man.

[Michael Batnik]

Well, here are those discounts. ServiceNow 22.9 times earnings expected over the next 12 months.

[Brian Belsky]

You can get that. We get Microsoft.

[Josh Brown]

We just had the exact same reaction. How is discount?

[Michael Batnik]

The five year average had been.

[Josh Brown]

It's a different five years.

[Michael Batnik]

The five year average had been 55 times. Salesforce, 11 times forward. The five year average had been 30 times. So how about this? What if this has nothing to do with the SAS apocalypse due to AI? It was just a reminder to people that they were paying too high multiples for these businesses. And that's the thing that's getting normalized.

[Brian Belsky]

Maybe there's too many of these companies too. Maybe there's too many of these companies and maybe we're going to see some consolidation there.

[Michael Batnik]

Yes. Oh right. If growth for a decent number of software companies starts to stabilize and then perhaps accelerate into the end of 26 and 27, Salesforce growth will not accelerate. Then the AI death knell will not be as loud. Even if it doesn't go away. We expect names currently trading as if they'll decline into perpetuity to start to trade as if they'll at least be stagnant, if not grow modestly. It's not going to end well from a lot of these stocks.

[Brian Belsky]

What about, do you think? Are you hearing anything about money? Maybe some of the accelerated downtrends in Microsoft, because it's easy to trade on Microsoft, because of liquidity, because they're chasing. Chasing Micron, chasing Intel. Don't you think that could be some of that?

[Josh Brown]

Totally. Josh is a big. Money comes out of things, goes into other things guy. Oh.

[Michael Batnik]

Anytime I see something going up, my

[Josh Brown]

first instinct, where'd the money come from?

[Michael Batnik]

What did they sell? That's just the way my mind works.

[Brian Belsky]

Well, you have to.

[Michael Batnik]

And vice versa. When I see something selling off, where's that money going? I just. I know it doesn't work that way, but I think that way. No, I understand conceptually. The money could literally do anything.

[Brian Belsky]

Right.

[Michael Batnik]

It could go to pay the plumbing bill. I'm just saying I think that way about when I see everybody piling out of software. Of course the semis went up. What were they going to do? They're going to go buy regional banks.

[Josh Brown]

He's right. This 26 is binary. And the best hedge for. If you're worried about the AI trade, buy software as much as you want.

[Michael Batnik]

Oh, if you're worried. Right.

[Josh Brown]

Because anytime the AI trade has a hiccup, and I'm talking about the narrative, the price, whatever, software rallies every time now. Software is rallying less and less and falling more each time the trade reverses.

[Brian Belsky]

Yep.

[Michael Batnik]

But what do you do with Netflix now? I'm in this. I'm in this stock. Hold on my average cost. 93.

[Josh Brown]

Let me set this up. This actually happened this week. I swear to God, I'm not making any of this up. All right. I said to Josh and Ben, Netflix, Netflix, Netflix. So Josh and I both own Netflix.

[Michael Batnik]

Did you get to reveal my private slacks?

[Josh Brown]

No, it's mine. It's mine, it's mine. So I bought more when it was up 5%. I sold it the next day. So a day later fell 3%. I said, I'm taking my other half off.

[Michael Batnik]

Good trade.

[Josh Brown]

And I'm going to buy it back if it rallies 3% tomorrow. The next day, playing it like Buffett. And I swear to God I did. I added more. I said, nevermind, I'm selling. And I Added back. And now I'm back. Full position. Let's go. It's the bottom.

[Michael Batnik]

Do you want to hire Michael as a trader?

[Brian Belsky]

Yes.

[Josh Brown]

Listen, when I'm wrong, I admit it. And I could be wrong.

[Brian Belsky]

I like it. It's about being able. I own it.

[Michael Batnik]

What do we do with this thing?

[Brian Belsky]

I hold it.

[Michael Batnik]

I'm holding it, too.

[Brian Belsky]

I hold it.

[Josh Brown]

Cowards. You buy after it goes up and you sell after it goes down. Do I have to teach you guys everything?

[Brian Belsky]

We own it in three portfolios, four portfolios. We've owned it all the way up and all the way down. We added to value two months ago

[Michael Batnik]

because I think this stock gets killed every four years.

[Brian Belsky]

Yep.

[Michael Batnik]

This is just one of those times. It always comes back better. Could that. Well, that. Could that be different this time?

[Brian Belsky]

Cash, content and consolidation. Cash, content and consolidation. This is what that whole sector is about. And I think now, given what Comcast is doing and spin out, I think there's going to be more. I think there's more consolidation in the next couple of years, and Netflix is going to be the winner.

[Josh Brown]

Oh, wait, it already won. This is. This is different. The threat this time is way different.

[Michael Batnik]

Think that they won because they think this HBO combined with Paramount is a more. Plus sports rights is way more formidable than anything Netflix is facing.

[Josh Brown]

Netflix won. If you look at the viewing time, nothing is close, YouTube aside. So in 2022, when the stock got killed, subscriber growth went negative and they had a very easy lever to pull, which was, okay, let's just make people

[Michael Batnik]

actually pay for their subscription ad support, plus password sharing.

[Josh Brown]

Okay, they did that and it worked. But now is like the dragon. Like, YouTube is the final dragon. And I don't know how they beat YouTube. So I own the stock. But I think the challenge this time is way harder than any previous overhang the stock has ever gone through because they already did win like they are. They did win content. So they like HBO and Apple. Give me a break.

[Brian Belsky]

I don't think they beat you.

[Josh Brown]

Nobody watches Amazon.

[Brian Belsky]

They're not going to beat YouTube.

[Josh Brown]

But YouTube is the one.

[Michael Batnik]

When they made the bid for Warner, all of a sudden the narrative around Netflix having won the streaming war changed to. Wait, why did they think they needed to do that? Because they're not an acquisitive company. There's a billion. There's a million different film libraries that have been floating around out there. Netflix never bought anybody. So now all of a sudden, they're gonna do a massive. One of the biggest media deals ever And I think people said, why do they even think they need to do this? The stock falls, then they lose the bidding war or they pull out of the bidding war. It just gets too intense. Warner's gonna win anyway cuz Ellison is best friends with Trump, blah blah, blah, blah, blah. So they pull out, the stock bounces.

[Josh Brown]

Yep.

[Michael Batnik]

And everyone says, myself included, because I'm another asshole. Finally they pulled out of that dumb deal that they should never have been involved in in the first place. Stock bottomed, had a furious rally and then that whole rally falls apart. Because I talk about second derivatives. I think there was a later reckoning on the part because nothing fundamentally has changed with Netflix. This is all sentiment. There was a later reckoning where people said, oh shit, they lost Warner. Now they're facing Paramount, Warner plus YouTube plus Disney. And what are they. And what are they going to do for. For growth? What are they going to do? I think the street will react differently when they make a run at NBC Universal, which they will. I think the street likes the idea of Netflix getting into parks. It's a great business for comcat. Great business. And that film library is top three film libraries on earth. And there's a lot of things that Netflix can do to extend those brands within it. So I actually think the stock could rally if they make a bid. And it looks like they're gonna win,

[Josh Brown]

but they're not gonna grow subscribers. So that phase of the life is over.

[Michael Batnik]

And Netflix, I'm sorry, the peacock subscribers,

[Josh Brown]

but this is a messy. This is what happens. The investor base is transitioning from growth to value to people like me who buy it and sell it and buy and sell it. At 5, you're the new investor base. But that's what's happening. The story is changing and it's a new investor base and yeah, the stock is like cheap, but because it's not

[Michael Batnik]

going to grow the way it's going to be owned. In your value portfolio. Yeah, okay.

[Brian Belsky]

Yeah, I added it.

[Michael Batnik]

Is that where you first bought it or transitioned into value? So it's Michael's right? That's the process.

[Brian Belsky]

No, we own it in our tactical, our focus portfolio. And then we also, we added it a brand new position in our value.

[Michael Batnik]

One of the other issues with it, it's too big to get bought by anyone else. So it has to be an acquirer anyway.

[Josh Brown]

Brian, I know you don't care about this. J.C. would look at that false breakdown. Hopefully.

[Michael Batnik]

Yeah, hopefully see how false it was.

[Brian Belsky]

I just think, I think communication services are going to be a Surprise sector. The second half of the year, I really do.

[Josh Brown]

But which ones? Netflix @&t. Nobody likes Disney.

[Brian Belsky]

Nobody. Spotify. I love Spotify. It's a great product, too, but it's the same thing.

[Josh Brown]

It's YouTube.

[Michael Batnik]

Spotify and Netflix have a very similar chart. They tend to trend in the same direction. They're both great businesses with huge subscriber bases.

[Brian Belsky]

Do you think Google breaks up and YouTube on its own never.

[Josh Brown]

No.

[Michael Batnik]

Why would they? No. There's a better chance that they spin out Waymo. They're not going to spin out YouTube.

[Brian Belsky]

It's a cash cow.

[Michael Batnik]

It's just Waymo. Waymo should have its own board of directors, its own CEO, its own share, its own capitalization. But what, what they'll do with Waymo, which will be really smart, is they'll bundle it with Google Maps for the consumer.

[Josh Brown]

Oh, I like that.

[Michael Batnik]

So that. Yeah, yeah. So because Google Maps, I'm guessing it has a billion users. I don't know.

[Josh Brown]

Let me ask you this, Mr. Belsman, Mr. Worst Stock in the world. So in your value portfolio, would you ever.

[Michael Batnik]

Nike's the worst stock in the world.

[Josh Brown]

No. No, it's not. Charter Communications.

[Brian Belsky]

Oh.

[Josh Brown]

So Charter bounced. Charter had a very good bounce the other day when Comcast announced that they're doing what they're doing and the stock gave it all back four days later. And this is a stock that isn't. I mean, obviously, obviously, the cord cutting, it's in a secular decline business.

[Brian Belsky]

Right.

[Michael Batnik]

What is the future? What is the best possible future for Charter?

[Josh Brown]

There's no bottom. So you're shaking your head now. You are. Wouldn't do it.

[Brian Belsky]

No, no.

[Josh Brown]

Too much debt, too much secular decline. Just.

[Brian Belsky]

No, no.

[Josh Brown]

At no price.

[Brian Belsky]

No price. It reminds me of.

[Josh Brown]

This is the worst stock in the world.

[Brian Belsky]

It reminds me of Boise Cascade.

[Michael Batnik]

Oh, I remember that.

[Brian Belsky]

In the early 90s.

[Josh Brown]

What is that?

[Brian Belsky]

Oh, it's just a shitty chemical.

[Michael Batnik]

Ended up. Ended up shitty.

[Josh Brown]

Yeah.

[Michael Batnik]

Yeah. Why does it remind you of that? I just, I'm.

[Brian Belsky]

What's it going to do? I mean, I, I. In a value portfolio, you can look at. Okay. Debt to equity below 1, earnings below the mark.

[Josh Brown]

Lot of debt.

[Brian Belsky]

Right, yeah, that's gone.

[Josh Brown]

So there's no PE to the rescue.

[Brian Belsky]

Yep. No PE to the rescue. Where can they operationally turn this thing around and then demonstrate operationally that they can turn it around? They can blow up. Management come in, say, you know, we're gonna focus on broadband. We're gonna do this. We're gonna go, I don't see that coming from them, I don't think they're smart enough. I don't think they have the right product. I don't. It's.

[Josh Brown]

And the people running these businesses, well,

[Michael Batnik]

the hyperscalers are buying the satellite providers and all of this is going to come from space. And if Starlink in two years is offering broadband from space at competitive prices, that's the last nail in the coffin for all the companies that quote unquote used to own the last mile.

[Josh Brown]

But know what's interesting about these names and not to twist. You could twist your head in a pretzel. Somebody's buying these stocks. I mean somebody has to own them. They're not going to happen.

[Brian Belsky]

I mean you think about this. So what's going to happen with T Mobile, AT&T. Comcast and the new Comcast. Right. And Verizon? What's gonna happen?

[Josh Brown]

Look at, AT and T. What the hell just happened?

[Michael Batnik]

Somebody will eventually let there be more mergers, but it could be a real. There might have to be a lot of damage first.

[Brian Belsky]

A lot of damage.

[Michael Batnik]

T Mobile was eventually allowed to buy Sprint.

[Josh Brown]

Yep.

[Michael Batnik]

And the regulators stopped that for a decade. And then finally they realized either of these companies merge or they won't make it and you're going to end up with a duopoly anyway. That's, I mean that's where we're going.

[Brian Belsky]

And maybe that's what our airlines going that way too.

[Michael Batnik]

They sort of have.

[Josh Brown]

It's Delta, United and you got American

[Brian Belsky]

left Americans a great. We, we own American in our small mid cap because I think, well they.

[Michael Batnik]

So this is what's funny about the airlines. They stopped JetBlue from acquiring or merging with Spirit.

[Brian Belsky]

Then it went out.

[Michael Batnik]

Then Spirit just goes away. And you know what happens?

[Josh Brown]

Delta.

[Michael Batnik]

Delta takes all the routes. So what did you accomplish by stopping? I don't even understand the logic. So you don't have an extra airline that didn't. That's not what happened. No, what happened is those routes went to a bigger player. Brilliant. Great, great practice of antitrust law. So I mean at a certain point, if these, if these cable companies shrink, the users shrink.

[Josh Brown]

Yeah.

[Michael Batnik]

I guess they'll all be allowed to merge and then somebody might want to be the buyer of one big fat cable company.

[Josh Brown]

Maybe John Malone.

[Michael Batnik]

Yeah. All right.

[Josh Brown]

Nobody wants these sucks.

[Brian Belsky]

Yep.

[Michael Batnik]

Any stock. All right, so before we. In conclusion, in conclusion, what opportunities did we miss? What else are you excited about for the second half of the year? What names have you been buying lately? Tell us what you like.

[Brian Belsky]

You know the. You're not supposed to have a favorite child, but I've got one at. I love the SMID because you can play themes and play fun kind of stories. Like. I own this company called Acuity. Acuity makes the tiles.

[Michael Batnik]

Hang on. Michael just bought and sold it.

[Brian Belsky]

That's right. For data centers.

[Michael Batnik]

Well done.

[Brian Belsky]

So they make the. On the, on the ceiling. Between the ceiling and the very top of the. Of, of the. Of the building. That's where the wires are. Okay.

[Michael Batnik]

Wow.

[Brian Belsky]

Okay, so the Acuity makes the tiles that keep everything cool. So your wires don't.

[Michael Batnik]

The wires are in the ceiling.

[Brian Belsky]

Yeah.

[Michael Batnik]

And Acuity is cooling them.

[Brian Belsky]

Yeah. From the tiles.

[Michael Batnik]

Oh, okay. Yeah, there's stuff like. There's a lot of stuff like that.

[Brian Belsky]

Cool stuff like that.

[Michael Batnik]

Just.

[Brian Belsky]

I mean thematically or like this, this. We bought this small cap bank in western Pennsylvania called fnb. Another regional thing that, you know, takes advantage of where people are moving to. Right?

[Michael Batnik]

Yeah.

[Brian Belsky]

Names like that.

[Michael Batnik]

So we do this column for CNBC called the Best Stocks in the Market.

[Brian Belsky]

I heard of it.

[Michael Batnik]

They might have mentioned it a few times. But one of the things that I love so much about it is it forces me to look at names like what you're describing I would never come across because other people on TV don't talk about them. Their charts look great, which is how they end up on my radar. And then as part of doing the column, Sean and I dive into the story and it's like, oh, shit. There's a company that actually makes that.

[Josh Brown]

What was the company that made janitor suits or something like that? Custodial suits.

[Michael Batnik]

Oh, Ventas. There are businesses. There are like businesses that do things that you're like, that's a public company.

[Josh Brown]

Holy shit. All time high vtr.

[Michael Batnik]

Yeah. Amphenol is one of the biggest winners of the year. Aphrodite. I would never have heard of that if I weren't writing it up last summer. It's like a signals company that had so many lives before AI was even invented. I think it's like a hundred year old company.

[Josh Brown]

Wait, hold on. Give me some credit. When's the last time, first time you spoke about this? This Ventas?

[Michael Batnik]

A year ago, dude. That's all I.

[Josh Brown]

That. Is that wild?

[Michael Batnik]

That's my poor. And these are SMIDs.

[Josh Brown]

There's information. There's information in price, a lot of it.

[Brian Belsky]

So, Michael, how many public traded companies now in the United States?

[Josh Brown]

3,500, 3,800.

[Brian Belsky]

Okay, so when we're basically talking about five or ten all the time, think about the others. This is where. Right. This is like we're talking stories. That's how I grew up in this business. Stock market is the market of stocks is the greatest country in the world. We got the greatest companies in the world right here. All these amazing stories that people don't even know about. And so that's what I'm excited about. Still being bullish about the United States and bullish about the markets. And there's different things. But yeah, we have to address what's happening in large cap land, but we also have to think about dividend growth investing and value investing and small cap investing. Because I do want to think differently and I want to be positioned where people are not. But you're not going to be different or contrarian to be an asshole. You can be contrarian if the analysis backs it up. So that's why if you take a look at these stories or these companies or these themes or the regions that they are, I don't think people think like that anymore because we're so focused on Nvidia.

[Michael Batnik]

Yeah, yeah.

[Brian Belsky]

All the time. Which.

[Michael Batnik]

Which is in an 18% drawdown. It's high.

[Brian Belsky]

Thanks.

[Michael Batnik]

So I'm long life.

[Brian Belsky]

I am too. I am too. I'm there.

[Michael Batnik]

Belsky, did you have fun on the show today?

[Brian Belsky]

No, it was terrible.

[Michael Batnik]

I mean, I'm sorry.

[Brian Belsky]

It's terrible. Every time I come here, it's terrible.

[Michael Batnik]

You know.

[Brian Belsky]

Fantastic. Thank you so much for the support, you guys.

[Josh Brown]

How do advisors find you if they want to look?

[Michael Batnik]

Yeah. So I want to sell your. I want to sell. Sell your. I want to sell your stuff now. So tell. Catch yourself because we had you on as you. Day three. It's amazing. And it's been eight months. You guys are launching things, announcing things. I'm so excited for you. Tell the audience if they want your research, your products, your asset management. How does it all work together?

[Brian Belsky]

So what we do is. Is different than everybody else. We are a model provider to where

[Michael Batnik]

the puck is going.

[Brian Belsky]

Exactly.

[Michael Batnik]

Now we know.

[Brian Belsky]

Thank you. Thank you so much. Just like Whopper gives me shit about humilis Humble. Anyway, so we provide a model. We. We do not compete with our clients. Meaning we don't compete with XYZ brokerage firm. We provide XYZ brokerage firm or XYZ RIA with our model on the focus portfolio.

[Josh Brown]

And they trade it.

[Brian Belsky]

And they trade it.

[Michael Batnik]

They trade it themselves. You give them the buys and sells.

[Josh Brown]

Correct.

[Michael Batnik]

And they enact it.

[Brian Belsky]

Correct. And if they say it's a great business, I don't agree with your 2.5% position in Spotify. I'm not gonna buy it.

[Michael Batnik]

Oh, so they can customize their.

[Brian Belsky]

They have ultimate discretion.

[Michael Batnik]

All right.

[Brian Belsky]

Okay. And so we've got great partners in Canada where we have three North American ETFs and one mutual fund. And then we have three North American portfolios in Canada. Basically they're combined the US and Canada. In the US we run five stocks separate SMAs a US focus, which is 46 stocks to beat the S&P 500. We also have an ETF under that too ticker symbol. His. And we have a US large cap value. We have a US dividend growth, US SMID and then an all cap which is the best of the 1500. So the best Focus and the best Smid.

[Michael Batnik]

So it's mostly models and then a couple of ETFs where people that are not in the models.

[Brian Belsky]

Yep. One ETF in the US and three in Canada. And we'll have more coming in the US as we continue to grow. We're very blessed and fortunate. We have. I think we're going to have. We're going to be close to 500 million AUM. And then we've got. You know the funny thing about running

[Michael Batnik]

that in under a year.

[Brian Belsky]

Yeah, but you know the funny thing is you always want. You're talking to these people. I'm going to give you 100 million 200.

[Josh Brown]

Okay.

[Michael Batnik]

Yeah. No, they're not.

[Brian Belsky]

Yeah, no, they're not. I mean, come on. That's why you wake up at three.

[Michael Batnik]

You need a three year track. You know what you do.

[Brian Belsky]

I know, I know, I know.

[Michael Batnik]

It's a long, It's a long game.

[Brian Belsky]

Chugga, chugga, chugga, chugga. But we, I've got an amazing team.

[Michael Batnik]

But you have fans at brokerage firms and at RAAs all over Canada, all over the United States. And they have been waiting.

[Brian Belsky]

They've been waiting because.

[Michael Batnik]

For, for the Belsky model.

[Brian Belsky]

Yeah, because I was in. I was at BMO for 13 years and I was in. But I was a strategist and analyst in the United States for 23 years before I went to BMO. So they kind of kept me under tight corners at, at, at bmo. So we've been really excited to be out in the US Marketplace.

[Michael Batnik]

Are you having fun?

[Brian Belsky]

Yeah.

[Michael Batnik]

Okay.

[Brian Belsky]

It's fan. I mean, it's.

[Michael Batnik]

Cause you're building your own thing now.

[Brian Belsky]

It's mine. And it's kind of like that line from Braveheart when the guy, the Irish guy goes, yeah, it's my island. It's mine.

[Michael Batnik]

Yeah. Yeah.

[Brian Belsky]

It's part exciting and excruciating. You wake up at 2 o' clock in the morning. Am I gonna make payroll?

[Michael Batnik]

You don't have to tell me. Look at me.

[Brian Belsky]

I mean, come on. When you were naming it, when you were saying my bio cio, founder, CEO, like I'm chief bottle washer too, you

[Michael Batnik]

know, you don't know. You're everything. But not forever.

[Brian Belsky]

Yeah, it's amazing. And I have a great team and we've got some great platform partners here in the US and Canada and we're really starting to climb on on the assets and performance is helping.

[Michael Batnik]

So we're so proud of you.

[Josh Brown]

Thank you.

[Michael Batnik]

So happy for you. Ladies and gentlemen, Brian Belsky. Thank you guys so much for listening. Thank you for watching. Have an awesome weekend. Will see soon.

[Brian Belsky]

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