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The Compound and Friends
Million Dollar Payout, Oracle Earnings Preview, Risk On, the Case for Salesforce
01:07:29
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- [00:00]
A
Ladies and gentlemen, welcome to the Compound and Friends. Tonight's episode is brought to you by Public, the investing platform for people who take it seriously. If you want to learn more, go to public.com w a y t as in what are your thoughts? And that's what we're doing tonight on the show. It's Michael and I. We do an Oracle earnings preview. Some of the big storylines that everybody on Wall street is watching for when they report tomorrow. After the close, we get into some stuff about whether or not we're in a risk on environment in the markets in general, which Michael and I actually disagree on. We have a great chart from PIMCO in here. We're doing some stuff about whether or not you would want to take a million dollars lump sum or $1,000 weekly for life, and how you would even go about figuring out the answer to that question, both financially and emotionally and so much more. I also want to let you guys know if you're not sure what to get the person in your life who also loves the Compound and Friends, or what are your thoughts or any of the stuff we do here on the channel Animal Spirits, we have a store and the URL to go to the merch store is idontshop.com idontshop.com so we have shirts, we have hoodies. I think we have a coffee mug. There's hats, there's lots of cool stuff there. And you guys have been buying stuff all year and we love seeing you out in public, rocking it. And by all means, check out idonshop.com for the latest in compound fashion. All right, that's it from me. I'm gonna send you right into the show. Have a blast and we'll talk to you soon.
- [01:52]
Welcome to the Compound and friends. All opinions expressed by Josh Brown, Michael Batnik and their castmates are solely their own opinions and do not reflect the opinion of Ritholtz 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 positions in the securities discussed in this podcast.
- [02:28]
Okay, can everyone hear and see me? Raise your hands.
- [02:35]
All right, so one person. All right, Wi fi issues today in multiple locations. Not my favorite day of the year, but it's five o' clock eastern and we have a show to do. So I want to welcome everybody to an all new edition of what are your thoughts? My name is downtown Josh Brown. My co host is here. As always, Mr. Michael Batnik. Michael, say hi.
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B
Gosh, damn right I'm here, as always. How you doing?
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A
That's right. And look at this monster I got behind me in the, in the guest bedroom. Can you see?
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B
No. What is that?
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A
You see the puppet? You can't see it?
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B
What is that? Is that.
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A
It's a. It's a. It's a puppet named Richard.
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B
Okay.
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A
When my, when my kids were younger, there were many puppet shows. All right, guys, tonight's a big show. We. I think we have tons of topics in the doc that we want to get to. I want to. Just before we shout out the sponsor, I just want to say hello to a few people who have joined us live in the chat. Really appreciate you as always. Suzanne Newman is here. She says hi, everyone. Hi, Suzanne. Thanks for joining us. Jeff H. Says, greetings from a snowstorm in Minnesota. Sorry to hear that. John Mellot's here. Chris Hayes, D. Snyder. Magnus is back. All the, all the gangsters are here in the chat. We got a fan named Random Trends calling coming in from Portugal. That's super fly. We love it. That's so hot. All right, guys, thank you for being here. We appreciate it. Tonight's show is brought to you by Public. Michael, what's the story with Public?
- [04:10]
B
That's right, Josh. And Public is, as you all know, the investing platform who takes it seriously. On Public, you can build a multi asset portfolio of stocks, bonds, options, crypto. And now, now this is good stuff. Generated assets, which allows you to turn any idea into an investable index. With aoi, it all starts with a prompt from renewable. From renewable energy companies with high free cash flow to semiconductor suppliers. Growing revenue over 20 year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S and P. Then you can invest in just a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable based on your thesis, not somebody else's. Go to public.comwat and earn an uncapped 1% bonus when you transfer your portfolio. That's public.comwat paid for by Public Investing. Full disclosure in podcast description.
- [05:15]
A
That's a pretty good offer. I like it. I think people should take them up on that. All right, this week we're going to get a. We get a heat check on the AI trade because Oracle has earnings tomorrow night. And I want to start off by sharing something that the trading desk at bank of America put out in an email blast. They said probably the most systematically important print for the AI trade this week, this week. This is an opportunity for management to speak on the infrastructure buildout, address investor concerns on the timing of free cash flow, capex revenue recognition, et cetera. I think the analyst meant systemically important print. Not systematically important I hope.
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B
Gosh, I hope not.
- [06:09]
A
But I think that's what. It's not systematically important. It's systemically important like a systemically important financial institution. I think they, I think they use the wrong word. This, this is a big one. Do you agree?
- [06:24]
B
I sure do.
- [06:27]
A
Say more.
- [06:28]
B
Okay, I will say more. So when we were in the last time that Oracle reported the stock was up as much as 43 on the day it closed up like 36. Throw this wall Street Journal cover up. We were in, we were in future proof. We were in California when this came out. So we obviously saw the headlines but I, I didn't dive into the report. So in preparation for the show and chart off please. And as a shareholder myself, I said, you know what, maybe I should get smart on this call. What did they say last time? Because in fact what was interesting about the call last time is the numbers were actually not even great. So the Wall Street Journal said the bright revenue prospects, this was on September 9th when they reported last time overshadowed an otherwise mixed performance. So revenue was up 12. But they missed expectations, they missed top line. It didn't matter because what mattered was what they said, which was this. The cloud infrastructure revenue is on Track to grow 77% this year to $18 billion. The CEO said. Then she said it's expected to reach 32 billion, then 73 billion, that 114 billion and finally 144 billion in four fiscal years that follow. So obviously ex. Whatever happened in the most recent quarter, who cares? It's all about expectations. So here's why the stock jumps so much. Obviously there's what she said as well as the, the Ford multi billion dollar deals that they said. But I was listening to the man, Larry Ellison talk about the quarter. Here's what he said. This is what got people excited. He said AI will change and give, give me a minute just to get through this. AI will change everything. But right now AI is fundamentally transforming Oracle into and the rest of the computer industry. Though not everyone fully grasps the extent of the tsunami that is approaching, some things are undeniably evident. Several world class AI companies have chosen Oracle to build large scale GPU centric data centers to train their AI models. That's because Oracle builds gigawatt scale data centers that are faster and More cost efficient at training AI models to than anyone else in the world. Training AI models is a gigantic multi trillion dollar market. It's hard to conceive of a technology market as large as that one but if you look close you can find one that's even larger and it's the market for AI inferencing. So he goes on and on to talk about this but this is how they opened the call and this blew people away. This made him, he gained $100 billion like overnight. This was the thing that it fundamentally changed the story of Oracle. Now we know what, what's happened in the since then. Obviously Sam Altman spoke, the stock closed the gap, etc. Etc. But it was a massive quarter and now obviously expectations have been reset, investors have sobered up. But yeah, it is a very, very important report and I'm staying long to the print. I, I hope I'm right. We'll see.
- [09:21]
A
They, so they lost all of that market cap gain. So that was in September.
- [09:28]
B
Yep, that's right.
- [09:30]
A
Okay, so by like the end of November the bloom was off, that rose gone and I think the entirety of that gain just left nastiest gap fill.
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B
I mean in recent memory.
- [09:43]
A
Okay, so I want to share some of the storylines going into why this, not just the numbers themselves but like the call because people, people are genuinely concerned with some of these issues like revenue recognition and the, the, the long term accounting value of a GPU, etc. Etc. So these are, these are some of the, these are some of the highlights. First of all, the street is looking for earnings of A$64 on 16.2 billion in revenue. And if they hit that number that's 15% year over year growth, which is damn good.
- [10:24]
Analysts are talking about a metric called rpo, remaining performance obligations. And so this is about the backlog and the big deals that they're announcing. The bookings are continuing to accelerate because obviously if you're long the stock, that's what you need to hear to justify buying it.
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You do have a bunch of analysts that have gotten out ahead of the call and have been positive on the stock, which I would hope so because they were all positive at the top. So I would certainly hope they still, they still like it. But then you've got analysts that are saying wait a minute, all this heavy capex, all this leverage.
- [11:08]
You know how much of the backlog actually turns into revenue at some point. So it's an interesting battleground stock at this point. Customer concentration risk is another big storyline. So that sounded like A strength in September when Larry talked about multibillion dollar whatever. But now that's sort of been turned into oh, you have all your eggs in just a few baskets. And what happens if Meta pulls back and what happens if, if this customer, that customer. So that's, that's one of the storylines here.
- [11:43]
The capital intensive nature of the build out. Lots of questions on how much pressure that will put on free cash flow in, in terms of like depreciation, which we've been talking about for a while. What is the interest expense on the debt? So you'll get questions about that.
- [11:58]
B
Wait, the risk is that it's not, it's not Meta or any of those customers pulling back. It's. Wait a minute, the five year $300 billion deal that you announced with OpenAI. Are they going to be able to pay you? Because that is obviously in question and that's what rocked the stock.
- [12:14]
A
Well, but I do think like follow on things like the Meta issue like Metal letting it be known via the tech press that they're considering using Google's TPU's. That to me is in direct competition with the idea that all of these in video powered data center build outs make sense economically in a, in a world where there is a potentially cheaper option. That's what spooked a lot of the investor base. So yes, I agree with you. The open AI issue is 100% important, maybe the most important, but it's not mutually exclusive from some of these other potential nits that people are going to want to pick. So there's a lot, there's a lot of, there's a lot of different storylines. We have some charts. Why don't, why don't we roll through these and Michael, you can narrate what we're looking at.
- [13:09]
B
Let's go. Chart on. All right. This is not particularly important to me. Matter of fact what this show is. We're looking at earnings per share over the next, over the last 12 months. It's flat. It's been, it's been flat. This, this, what's done is done. Everybody's looking forward. So this chart to me is not particularly relevant. What's the next one?
- [13:26]
Revenue? Okay, not nothing up 28, 50.
- [13:31]
A
50, 59 billion annualized. And it's the, the, the pre chat GPT moment. That number was like more like 40. Yeah, you definitely seem like a dramatic rise on this chart, but it's a big deal.
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B
No, you see the inflection for sure. Next chart, what do we got? All right, this is it. I mean this is obviously going to be a big one. How are you paying for this? How much debt do you plan on taking? What does the interest expense look like and is the revenue going to be there to fund these obligations? So this is, this is a big one for sure. I don't. This, the stock is not going to meander tomorrow. I think it's going to be either up 10 or down 15%.
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A
Oh, I wanted to ask you that. So you don't think that there is any chance of this being a ho hum reaction?
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B
There's always a chance, but no, I think it's, I think it's a relatively small chance. I don't know. I would guess under, I would, under 15%. I don't know. Making that up. I think, I think it is much more likely that the Stock either gains 15 or loses 15 and obviously I hope it gains 15 for my sake and for the sake of the market.
- [14:34]
A
Where are you? Where are you in this name? I bought average price.
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B
I bought the bottom. Not to brag, I will tell you, I can make a rabbit, but I bought it. I bought it like down near the bottom.
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A
Like two, like, like 212 bottom. Which bottom.
- [14:49]
B
Please?
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A
I'm impressed by that.
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Your, your call is important to us.
- [14:55]
B
Yeah, let's see.
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Don't know about where I bought it. I'm up, I'm up 3%. So my average price is oh.
- [15:08]
215. So I, I bought and then I bought more. So I don't know where my first buy was, but 215.
- [15:14]
A
Okay, look, I, I'm rooting for a positive outcome here. I'm not one of these people that you know is looking for drama or looking for like news just for the sake of news. I would love to see the company come out with a good report and affirm all of the spending and all of the necessity for the spending that the bulls want to hear. And I'd love to see the stock bounce a little bit and continue higher. I'm not currently long and I have to be honest with you, I'm sort of worried. I'm sort of worried. I think there, it might be a situation where almost no matter what they say, it won't be good enough. But maybe that's not the case. And we're all, we're all going to find out and it's not going to take very long. We're going to find out this time tomorrow.
- [16:06]
B
Let the record show that my first, my first, my first buy was November 14th, so not the bottom. In fact. Yeah, I did not buy the bottom. What do I think?
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A
What, what do you think? What area of the market do you think is most at risk of a not great outlook or a not great report? I think it's the chips on the.
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B
Heels of this, like if they miss what's, what's in trouble, not if they.
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A
Miss, let's say they be, let's say they beat but they don't give strong enough guidance or the tone of the call isn't positive enough because the chips, the semis just made a record high like today or yesterday.
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B
What is the highest beta, the name that's high, most highly levered to the chip story? Is it core weave? I don't know.
- [16:51]
A
Yeah, be interesting. I wonder if, I wonder if all those power providers and that whole electricity trade can hold up if Oracle falls because they, they're sort of like one of the biggest customers for all of the like AI data center components and the electricity. So look, I, I, I, I'm worried, but I also don't think that any of these companies could jeopardize all the spending they've done already by giving anyone the impression that they, that, that they're not going to follow through with it.
- [17:25]
B
I'm less worried about the report case, I'm not worried about the report itself. I would be surprised if they're like, oh guys, what we told you in September didn't pan out. Like, I just, but I think the, I think the warrior would be that the market doesn't care. Sort of like it did with Nvidia. In the short term the market just wants to sell it anyway.
- [17:42]
A
All right. Does Michael Burry get on the call and ask a question in the Q and A?
- [17:50]
B
You're joking.
- [17:53]
A
No, I'm asking.
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B
No.
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A
Is that a thing that could happen?
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B
No, cannot, no.
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A
Okay.
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B
No.
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A
All right. Would they let him through?
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B
No, these are tried. No, these are sell side analysts. He's not on the call.
- [18:05]
A
I'm just asking, could he get on the call?
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B
No.
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A
Is it possible you've never heard a buy, you've never heard a buy side firm get on a call and ask a question? Hey, one man, Green Light Capital has done it.
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B
He's a one man operation. He's not getting at the call.
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A
All right, all right. Just, just, just curious. All right, so we're rooting for you. We're rooting. We're rooting for you, Michael.
- [18:26]
B
Listen, if I, if I lose, this.
- [18:27]
A
Is a big deal.
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B
If I lose money, it will not be the first time. So it's okay. Whatever happens, I'LL be okay.
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A
Well, we know. All right. All right.
- [18:36]
B
Okay.
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Okay. This next segment is brought to you by Pimco. To learn more about their suite of ETFs, visit pimco.com ETFs I've got a chart for you. I believe this is from. Oh, it says it right there on the bottom. There's some Goldman. Check this out. Not new, but. Nope, nope, nope. There we go. All right. The 10 largest companies.
- [19:00]
Represent 41 of the market cap of the index and 32% of the earnings. So this is hardly breaking news to say that everything hinges on the top 10. Right. That's it. That's the story. I was very surprised by this next chart.
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Here we go. This is a value composite. And the reason why I was surprised, I'm like, wait a minute. So what this is showing you for the listener, whatever value composite you're creating, multi factor, just one of, of price of sales, price of book, E to ebit, whatever, whatever it is, they all look like. This obviously went nuclear in 2000 and in 2020. But what I, what surprised me was the extent to which these names came in, the value spreads came in. Reason why is this is a global value composite. Josh, did you know that international value stocks are absolutely. Did I delete this? Maybe I did. Are absolutely beating the pants off of the index like S and P. And global international value stocks are up like 35. So I was talking about this with Ben today. Completely underreported, I think maybe because it's only been a year and if you, like, zoom out, it's like a glitch. Not a glitch. It's, it's a, it's a blip. It doesn't register at all. If these value international stocks and value stocks continue to work, international value in 2026 is going to start to make headlines.
- [20:35]
A
I think one of the reasons it's been so under underreported, and I know Ben shared that chart with us where Italy, like the country's stock market, beat the S and P over the last, what was it, three years? One year? I forget what it was.
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B
I think it's three.
- [20:50]
A
Right. I think one of the reasons it's been so little remarked upon is because nobody owns those stocks. You know, if you're doing stories at the Wall Street Journal, you go to an editor and either you have an idea or they assign something to you. And, and they're not assigning articles about international value stocks because who is the reader.
- [21:11]
B
Yeah.
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A
Who's clicking that other than me? You Meb Faber and like nine other losers. Nobody else cares. We care because we're, we have nothing better to pay attention to. Okay, so that's one of the reasons why this is not being reported on. And then it's the stocks themselves. Like, you, you look at what's in these indices. You know, like, Canada is up 31% this year. Why? Because gold went up. Like, and banks. Italy, the story is banks and a little bit of auto. But you go country by country and you realize it's really boring companies that people just don't care about. So like, we, we pay attention because we're invested in national value stocks.
- [21:57]
B
Put that chart back on.
- [21:58]
A
Put.
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B
My point. I guess another point is this. In 20, 21 and 22, as these value metrics were getting to or past where you were in 2000, this was widely reported, right? Like a lot, a lot, a lot, a lot. And now that they've come down, nobody cares anymore.
- [22:18]
A
Yep. If only they did more AI.
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B
All right. Anyway, I wanted to.
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A
What's the next one?
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B
I have a good chart for you. So did you know the S and P value index looks an awful lot like the S and P. Throw up this table. So these are the, the top three weights in the S P value. ETF is Apple what Microsoft and Amazon. Did you know this?
- [22:44]
A
Do words have no meaning anymore? These are val. Apple is a value stock. On what basis? On what, on what metric? Amazon. What are they valued at? What are they value them based on?
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B
All right, so look at this next chart. So I honestly, I didn't look under the hood into the methodology for this, but the chart on the, the chart on the left shows you.
- [23:08]
A
Yeah.
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B
The S P on the X axis. Okay. The weight. And yeah, I've. Which is the S P value on the left. So it doesn't own Nvidia. Interestingly, it doesn't own Google or Meta. But if you look at Microsoft, it's basically in line. Apple and Amazon, basically in line. So I don't know what they're using, but look at.
- [23:31]
A
So What's. What is MF? What is MFUS mult. The multifactor ETF.
- [23:36]
B
This is PIMCO's RAFI product.
- [23:39]
A
Okay, got it.
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B
So they similarly are very underweight, but just. It looks nothing like the chart on the left. Like, this is actually giving you valuish exposure.
- [23:53]
A
Okay. So your. The returns should be wildly different and they are. Or divergent enough where it makes sense.
- [24:00]
B
So obviously the S and P value, which is. It's. It's S and P has destroyed anything else with a actual value bend.
- [24:10]
A
Right, so are we saying that the S and P value is not actually a value, is not actually a value fund right now?
- [24:17]
B
That's what I'm saying. Given the top holding, the top three holdings are. What is it? Amazon, Apple and Microsoft. Yeah, in what universe? In what universe is Apple a value stock?
- [24:27]
A
Okay, so if that, if the value factor actually works from here, works like outperforms the market, then an active value manager has a pretty good shot at doing better than the value index itself.
- [24:42]
B
So there's also something. Yes, there's also something called pure value. Like S P has a pure value index. So the S p value, the IV has like $50 billion in assets. The pure value, which is not Apple, Amazon and Microsoft. Nobody wants like there's like a billion dollars in there.
- [24:58]
What?
- [24:58]
A
Wait, what's in that? What's in that? That like screens out anything that's over a certain valuation.
- [25:03]
B
Or there's, there's. I don't know the methodology, but that's actual. Like you look at the top 10 names, you're like, yeah, I get why this is a billion dollars. It's the actual value stocks that nobody wants.
- [25:13]
A
Right.
- [25:15]
Look, I think it's like, it's just hard to envision a scenario where you get like multi year outperformance from a pure value.
- [25:24]
B
No, it's not. It's absolutely not. If the, if the AOI trade goes. Dude, if the trade goes south, of course, values.
- [25:32]
A
No, I agree. That's what it would take. It would take a bit. It would take a bear market for, for the AI stocks. You'd have to be bearish on the AI stocks.
- [25:40]
B
Dude, open AI has, has a trillion dollar valuation. It's very easy to conceive a scenario in which value outperforms.
- [25:47]
A
Yeah, I think it's half a trillion. But your point is well taken. All right, Duncan, give me my, give me my thing on the screen.
- [26:00]
Okay. Do we have like the wording or. No, anyway, it's, it almost doesn't matter. So this was a post where a 20 year old lottery winner was offered a million dollars or $1,000 a week forever. Right? So let's say she lives to 180 years of $1,000 a week, something like that. Or lives to 80. Right. 60 years of a. And she chose the thousand dollars a week. And I looked at the comments and it's amazing, but like as many comments as there were, oh, she made the right decision. She did the right thing. There were as many comments saying this Idiot doesn't understand inflation. And I sort of feel like the right answer to this. I know there's a right answer to this. Financially, of course, there's a calculation, but then there's also like a right answer that's lifestyle driven or just like based on how somebody wants to live their life. So before we get to the right answer, I was curious what your answer would be. You're not 20, you're 40.
- [27:10]
You win the lottery tonight and they say, we'll give you a million dollars now, or we'll give you $1,000 a week forever. What do you do?
- [27:19]
B
Well, you nailed it, Josh. I'm not 20, I'm 40 right now. Give me a million dollars. And it's no hesitation because there is a time value of money. There is a financial calculation. Like if you were to just plus in a spreadsheet and forget about taxes, it gets really complicated. The thousand dollars a week will never catch up. It just, it just won't. If you compound that whatever percent on $1,000 or whatever percent on a million dollars, the thousand dollars will never catch up. However, as a 20 year old, here's a few things that you give yourself. If you're doing $1,000 a week, you give yourself peace of mind. You give yourself flexibility. Forget about time value, money, inflation. I think we all understand the math part of it, but guess what? Who's to say that a 20 year old would be able to properly handle $1 million windfall even if it's cut in half after taxes? What if you blow it? What if you make a few bad decisions? So if I'm 20, I probably take the thousand dollars. Now that I'm a grown up, I'm happy to take the million dollars.
- [28:14]
A
Okay, I think that's my answer too. And I'm older than 40.
- [28:19]
So $1,000 a week is less meaningful. But also it's a function of where you're at in your, in your life.
- [28:24]
B
Yeah, that's it.
- [28:25]
A
Because if you say this to, you say this to a billionaire, what the hell do they want to bother with $1,000 a week? A week check for what? What is, what is even the meaning of that? Probably making $1 million a month in interest so that there's a, there's a component to this where it's like, who are you? Not just how old are you, but what's your current financial situation where one answer makes more sense than another. And the thing about being a billionaire and taking a million dollars is not gonna change your tax bracket.
- [28:56]
For her, it Might take, change her tax bracket. If she takes a million dollars, the IRS is gonna look at that like she made a million dollars this year and she'll be in the 37% federal tax bracket immediately. And we don't know what state, and we're not gonna get involved with state and local taxes. So instantly that decision does have an impact. Whereas $1,000 a week will not jump her up to a higher tax bracket. So that's, that's the first thing. So I don't know if she'd lose half in taxes, but it'd be close enough. The actual calculation on how long it would take for that weekly payment to get to a million is 19 years. So for her, she'll be 30, she'll be 39 years old by the time that starts to look smart. And lifetime, that gets to like 3 million. Like assuming she makes it to, I think the number was 80.
- [29:47]
B
So, but, but hold on. But you, you, she's going to invest the money, so you have to assume some growth.
- [29:54]
A
Well, that's, so that's my next question. Are you more likely to invest the money if you get $1 million lump sum or you more likely to invest the money if you're getting a thousand a week? Because in my opinion, what's more likely to happen with $1,000 a week you'll spend it is you're just going to raise your living standards.
- [30:10]
B
Right.
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A
And you'll add expenses that you can quote, unquote, handle because you have the money coming in.
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B
But it's.
- [30:16]
A
So I actually think the million dollar lump sum more likely to be invested.
- [30:19]
B
And, but, and Also, if you're 20 years old and you get a million dollars, guess what, you're buying yourself a few things. Right?
- [30:26]
So. Yeah, but listen, I think, I think, I think this young lady did the right thing for her. I'm sure she thought a lot about it. And a thousand dollars a week for life is not bad, despite what the math says. It's, it's okay. It's not the worst choice in the world.
- [30:38]
A
One comment, one comment said, you're all wrong. The right answer is take the million dollars and buy a million more lottery tickets. Which I thought that.
- [30:48]
I thought that wasn't bad.
- [30:50]
B
You know what else? Like windfalls are not good psychologically and mentally for people's well being. Everybody comes out of the woodwork, right? Obviously, hey, lend me some money.
- [30:58]
A
Yeah.
- [30:58]
B
You make a bad decision or two, like it's not healthy. It is not normal to inherit such a large sum out of absolutely nowhere. It's one thing if you grew up in this lifestyle and you grew up with money and you got an inheritance that already knew was coming and it was planned for and accounted for, that's one thing. But to just have a half a million dollars just land on your head, you're probably going to do something foolish. I would.
- [31:20]
A
At 20, you're going on a big trip and you're buying a really nice car.
- [31:24]
B
Yeah, yeah. It's the money. The money's not.
- [31:26]
A
You might also do something really nice for you. You might also do something really nice for your parents. And maybe it's like, all right, yeah, I'm not investing it. I'm doing something that makes me feel good instead. And I want to buy my parents a house. And for the next 50 years, that's my investment. I get to see them grow old in a house that I bought for them.
- [31:45]
B
Great.
- [31:46]
A
I don't know what the return on that is. That's what I just. That's what I decided to do. So there's a. There's somebody in the chat. JB buys a BMW MZ, John Suarez younger. To buy an M300, you definitely would.
- [31:58]
B
Have bought an M3.
- [32:00]
A
How many pairs of sneakers is. Am I playing with? A million dollar windfall? This is. But I bring this up, and we can move on after this, because there are things in finance, in investing in personal finance, that the mathematical answer and the right answer are not always aligned, depending on who you are and what it is about yourself that's important. So there's a lot of things where it's like, oh, I'll just take. Get a calculator, I'll get a spreadsheet. There's a lot of things where, okay, the numbers are the numbers. And we could sit here and. Oh, and like, we could sit here and do inflation calculations. Like, what is $1,000 a week really going to be? What kind of buying power is that going to have in 20 years? Probably way less than it does today. Like, we could do all that stuff, too, but, like, sometimes the right answer is person dependent. And I think it's something that we lose sight of.
- [32:55]
B
You know, it doesn't show up in the spreadsheet. Not to belabor the point I just made, but your friends asking you for money, like, everyone you ever met that doesn't show up in the spreadsheet. Like, so you're 100% right. All right. Anything else?
- [33:10]
A
No. I was curious what you would say, and you actually gave me the answer that I thought you'd give And. And I agree with it. So, okay, we can. We can move on.
- [33:19]
B
Let's talk about the stock market. I know I keep referencing, like the show we did a few weeks ago with Warren after the Nvidia earnings. I just can't believe that we're here again. I mean, I guess I can, but it's just. It's wild how the market just does what it does. We are fully in. I don't know if you know this. I mean, I know you know this. We are fully in risk on mode in the stock market right now.
- [33:38]
A
Maybe. Maybe.
- [33:40]
B
No, no.
- [33:40]
A
Make the case.
- [33:41]
B
No case.
- [33:42]
A
I'm not sure I agree, but.
- [33:45]
We.
- [33:45]
B
Are not in risk on mode. Okay, I'll make the case. Technology. Technology stocks are up 11 days in a row. This is fairly rare. In fact, going back to the turn of the century, it's happened two other times. I would think that's risk on. But wait, there's more. It's not just technology. It is. I don't know if you've paid attention to this, the Russell 2000, the micro cap index, which has gone nowhere for years, and the equal weight index are all at or breaking out to new highs. And how about the risk sniffer? Need I remind you of the risk sniffer? Can you smell that, Josh?
- [34:25]
A
Oh, my God. This is my favorite. This is my favorite thing.
- [34:27]
B
All right, this is from Risk Sniffer. This is from our friend at Duality Research showing the high yield credit spreads, discretionary versus staples, high beta versus low volatility. He says listening to the best risk sniffers in the market suggests this rebound is getting all the confirmation it needs. Grant Hawkridge at Stock Market TV has a risk on, risk off ratio. And in the risk on bucket you have copper, high yield bonds, the Aussie dollar, semiconductors and high beta stocks. And the risk off, you've got gold, treasuries, yen, utilities and staples. So this is a ratio chart and it's at the highest levels of 2025. I don't know how you could make the case, make any other case that today, this is no commentary on where we'll open tomorrow or next week, but right now this is emphatically. This is not my opinion, this is a risk on market, but I'd love to hear the other side of it.
- [35:22]
A
All right, I agree with you that based on all of those data points, it's obviously risk on. Even Bitcoin seems to be showing signs that it wants to get off the mat. And that's another risk sniffer item that I think is worth Us keeping tabs on that, that's, it's not quite a springboard off of 85,000. But I think it's sort of important to see that moving with the markets given the fact that a lot of people were saying Bitcoin liquidity issues were spilling into weakness in the nasdaq. Okay, I don't know if that's true or not. That's the thing that people were saying not long ago, eight days ago. So, okay, so that being up is another feather in your cap. I want to point out that headline risk can very quickly take us right back into risk off mode, like within minutes. And let me show you something that popped up today.
- [36:16]
B
Of course I agree with you. These things aren't, aren't at odds with each other. If Oracle reports a bomb tomorrow.
- [36:24]
A
Yes, I know you're saying, I know what you're not saying. But my point is in true risk on mode, we laugh at negative headlines.
- [36:34]
Okay, we're not doing that. Yeah, chart on. Give it. All right, this is JP Morgan absolutely rolling on a rand. I know. Well, I was on TV while it happened. You were absolutely rolling. I was sniffing risk while you were still on your second dream this morning.
- [36:57]
B
Holy shit. I didn't see. Yeah, this is an ugly candle. My God.
- [37:00]
A
Yeah, holy shit is right. So this is. All right, so J.P. morgan is cruising along in risk on mode as you say, all day. And then at 12:38 a headline from a conference in New York hits the tape. And this thing just fucking rolled. And look at it. It was, it was almost 319 this morning. Closed almost below 300. Okay, and that is, and is it a trillion dollar market cap?
- [37:28]
B
No, but whatever.
- [37:29]
A
Is it 800 billion? Yeah, whatever. I mean it's a, this is a blue chip Dow component hundred year old financial that, that fell out of the sky intraday like a 6,7% loss on a comment from a conference. Do you want to hear what the comment was?
- [37:47]
B
Sure, I'd love to.
- [37:48]
A
Pretty. Pretty innocuous. This is a woman named Marianne Lake who is a very high ranking executive at JP Morgan and she used the word quote fragile to describe the consumer. And after that the Dow Jones spent the rest of the day rolling over. Here's what the Journal said. JPMorgan Chase's stock fell more than 4% Tuesday after the bank told investors it will spend billions of dollars more in expenses next year. At the Goldman Sachs conference in New York, consumer chief Marianne Lake told investors the bank had just completed budgeting for next year and is planning 105 billion. Largely because of higher costs in her division. The bank is expecting expenses this year to be 95.9 billion. And analysts had anticipated 101 billion of expenses next year. So let me catch you up on this.
- [38:44]
The street thought it would be like 101 billion in expenses next year. She just said more like 105. The disparity of 4 billion, it's big, but it's not that big in the context of J.P. morgan's business. But it's where she sits in the bank that mattered to the market because she's on the consumer side. So when we hear about a $4 billion uptick in expenses, what we're all saying is, wait a minute. More expenses on the consumer side sounds like charge offs. Sounds like credit card shit or mortgage shit or car loan shit or whatever, the stuff that she oversees. And that is why I think the market got spooked. Not just JP Morgan. Look at an intraday chart of the Dow. The whole thing started rolling in the minute she opened her mouth and didn't stop. So my point is, if we were truly in risk on mode, this would not have gotten anyone's attention. We would not have seen the price action that we saw. So in like a very, in a real risk on moment, we laugh at danger. Danger is our middle name. And this market, I. She said the consumer's fragile. Look how fragile stock prices were as a result of that. And it was to the minute that it started. So that's why I can't fully agree with you, even though you have the ratios on your side and the ratio charts and the risk on the risk sniffer indicators on your side. I'm looking at, I'm looking at price action on headline risk. And I'm saying, nah, we're not, we're not. Right back. This is a more fragile market than it was in October, November. And you. Now I know because Jamie Dimon was also talking in October and people were laughing. He was doing his, he was doing his, like, you know, risk stuff also, and nobody paid attention. And now they are. So that's, that's my, my slight divergence from, from what you're saying.
- [40:41]
B
Do you remember Carlos Danger?
- [40:45]
A
You're damn right I do.
- [40:47]
B
Was that the wildest ever? That was what. That was. The skinny governor was. What was that guy's name?
- [40:52]
A
Oh, that was wild. The, the, the, the sex pest from New York. He had a, he had an alias.
- [41:00]
B
That was the greatest thing ever. Who was it?
- [41:03]
A
Jewish guy. Anthony Weiner in this.
- [41:06]
B
How can we forget? Thank you. Chat I guess.
- [41:11]
A
Where is that guy now?
- [41:12]
B
I don't know. We could use some more. Carlos Danger. No, it's a fair point. I agree. I, I, I don't disagree with anything you said. Let's keep it moving.
- [41:22]
A
All right. When alts go.
- [41:24]
B
Oh, wait, wait. I'm sorry, I'm sorry, I'm sorry, I'm sorry. The one thing before alts. So we do have a, we do have a Fed meeting tomorrow and I want to show a chart. This is interesting. So it, it appears that the S P. I'm sorry, that the Fed is going to cut rates.
- [41:41]
And Subu Trade has a great chart showing what happens after the Fed cuts rates while the S p is within 1% of an all time high. It's not that rare. So a lot of overlapping periods, but 1985, 86, 89, 90, 91, 95, 96, 1924, I mean it's happened and short term, very mixed. Very, very mixed.
- [42:11]
One year later.
- [42:12]
A
Why would the.
- [42:15]
So what we, what is it? One year later, what's the, what's the typical other. All green.
- [42:19]
B
All green.
- [42:20]
A
Okay, they're all green. So every time the Fed has cut rates within 1% of an S&P 500 high, the stock market and it looks.
- [42:29]
B
Like, look how sick the chart is on the bottom. The chart on the bottom shows one year later and it shows the average forward return. Now obviously this is an average and it's never, it's not going to follow this path. Nobody's saying that. But just the point is the visual tells a very good story. Very choppy in the short term. Like not even short, short to intermediate term, but give it, give it, give it. Nine months and 15%.
- [42:53]
A
The average return a year later.
- [42:55]
B
Yeah.
- [42:56]
A
Is 15%.
- [42:57]
B
Yeah.
- [42:58]
A
Wow. Wow. And we chart back on. I love this chart. I really do. Look at all the drawdowns though, on the way.
- [43:07]
B
Yeah, dude, the first.
- [43:08]
A
To me, that's the thing.
- [43:09]
B
The first six months have been choppy as shit.
- [43:11]
A
Anything can happen. Anything can happen. Look at that. This as much red as there is green one month later. It's like half and half.
- [43:19]
B
Yeah.
- [43:20]
A
So slow your roll, everybody.
- [43:22]
B
Okay.
- [43:23]
A
All right.
- [43:25]
All right, let's do this. When alts go wrong. So I don't bring this, I don't bring this up because I'm trying to scare people out of alternative investments or trying to paint every alternative investment with a, with a brush and say that they're all problematic. But there are and there always have been my entire career, some very prominent examples of really bad Situations with all with alternatives. There's a lot of reasons for why. The first being the public has no idea what the hell they're buying. The second being that information asymmetry attracts bad actors into the industry or people who only say that they care about risk that but really don't. Or even people who don't know what they're doing and get lucky and manage to raise a lot more money than they should have. So sometimes investments go bad and nobody did anything wrong. It's just investments go bad but the less information the public has, the higher the likelihood that that's going to be an outcome. So that's one thing with with alts. Another thing is obviously the higher the fees, the higher the hurdle rate. To actually make money like you have to, you buy something that's extremely high fee like you first have to earn back what you just paid in fees before you could even get to the point where you're in the black. And then the third issue is the economy has an outsized impact on non traded investments where people like need liquidity no matter what and prices get crazy as a result of having a lack of price discovery. So alts, when they go wrong, can go really wrong. And I want to share this story and I wanted to get your reaction to it. There was a company called Yield street that has so thoroughly wrecked its reputation that they had to change its name. It's now called Willow Wealth. But unfortunately the investments that have gone bad still have to report because they still exist. Because this is part of being an alt. It's not like a hedge fund that goes bad. They just liquidate the fund and close it.
- [45:34]
CNBC.com is reporting that they continue to report losses to investor clients long after the name change. A new round of $41 million in losses from real estate deals that are now in default. Yield street launched 10 years ago and their stated mission was to widen access to alternative investments to Main Street. Anytime you hear that as the pitch, you should grab your wallet. Nobody wants to democratize anything to anyone in real life. So anytime you hear oh, we're doing this for Main street. Lol.
- [46:11]
Here's a quote. As Yield street tries to distance itself from Iraqi Pass with a new name and ad campaign, its customers are dealing with a present reality that is increasingly dire. They lost money in real estate projects in Houston. In Nashville, they had an $89 million wipeout in Marine loans. Are those boats? I don't even. What do you think that is?
- [46:35]
B
Individual investors should not be investing in marine loans. Whatever. In the world, that is.
- [46:42]
A
All right, so, $89 million in loans disclosed in September, 78 million lost in a report in August. In total, according to CNBC, Willow wealth investors have lost $208 million. So this YieldStreet was a FINRA, registered broker, dealer, and registered investment advisor. So it's a hybrid with 1.86 billion in client assets, and they build itself on the website as the leading alternative investments platform.
- [47:13]
And it's just. It's one of these things where people put money in. It's illiquid. We're not even in a recession, and these loans are going bad at a rapid rate. Now they've changed the name. They're trying to start over, but it's not so simple.
- [47:26]
B
So these were real estate. The. The. The loans that went bad or the investments that went bad were in real estate, which absolutely was in recession. Not excusing the fact.
- [47:35]
A
Yeah.
- [47:36]
B
Did you see their rebrand? Do you know about Hampton Dumpty? You know about Hampton Dumpty?
- [47:41]
A
No. Okay, I want to know.
- [47:43]
B
You do?
- [47:43]
A
What is this?
- [47:44]
B
Daniel, let's just play this, please. You got to see.
- [47:49]
A
The name's Hampton.
- [47:51]
B
I know, I know.
- [47:52]
A
I look a lot more put together, right? But, hey, I've come a long way.
- [47:55]
B
From my humpty days. This is bad.
- [47:59]
A
See, I've learned a thing or two about crashes and falls. Oh, on fire. Turns out you shouldn't put all your eggs in one basket. Oh, tempting.
- [48:08]
B
That's why I invest with Willow Wealth.
- [48:10]
A
Their online platform makes it simple to diversify my portfolio with private markets. I get exposure to everything from fine art and real estate. Evocative, right? Still got two. Sports and entertainment. Whoa, easy there. Plus, portfolios, including private markets, have outperformed traditional ones for the past 20 years. Not that it's a complicated position. Diversify your portfolio to help rise above public market volatility and level up your game.
- [48:40]
B
Like me.
- [48:41]
A
Those who know.
- [48:42]
B
No, literally, Hampton Dumpty. Can you even.
- [48:46]
A
No, that's not AI. That's actually their commercial. That's like. Is this a joke? Seriously, who is. Who is that? Somebody said Wolf of Wall street coded 100%.
- [49:03]
The. The chat is going.
- [49:04]
B
The chat is just losing its mind.
- [49:06]
A
Humpty D's.
- [49:08]
B
As for CNBC's reporting on the new real estate defaults and rising tally of losses, the Willow wealth sports perks spokeswoman called it, quote, a rehash of news on investments from five years ago. Like, why are you rehashing old losses? Like, just so what they were doing stuck in it. What they were doing as I understand it, is they were making their own investments. I don't, I'm not sure of anything. I don't know if there was a third party source or involved in these real estate deals. I have no idea. But what they are doing now, they have pivoted to working with established brands like Carlisle and Goldman at Stepson are on their website. So whatever they were doing, they stopped doing that for obvious reasons and are now doing something different. But here's what irks me amongst the many things is they have a chart on their website. Show this please. John Daniel. Excuse me. Daniel's in the house tonight. Growth of $100,000. All right, so here's the problem. They show $128,000 over the past 10 years versus a private markets portfolio. And when you view the disclosures, because I'm such a sleuth, Josh, what I found was the private markets portfolio is 40% private equity from, from Prequin, 30% private credit and 30% private real estate. No beef with that. Here's a problem. You can invest in these indexes, number one and number two.
- [50:30]
Financial indices assume the reinvestments of dividends and here's the coup de grace, do not reflect the impact of fees. Well, excuse me, excuse me. Because according to CNBC's including according to CNBC's reporting, those firms also charge their own fees. So talking about the other ones that I mentioned, leading to all in annual costs ranging from about 3.3% to 6.7% per fund. Guess what? The numbers don't look as good as they did with fees included. This much I can tell you. Thank you for your attention to this matter.
- [51:07]
A
I mean, what isn't. Is that le. Can you run that? Can you. Is that legal? Just because you put a little, a little link that says see disclosures and then, and then it's like a complete lie. That seems ins. That seems absolutely insane to me.
- [51:23]
B
It's disclosed. It says you can't invest in the index and it discloses it. I don't know if it's legal or whatever. I'm sure, I'm guessing it's legal.
- [51:29]
A
I don't know.
- [51:30]
B
I'm not a compliance.
- [51:30]
A
All right, so what they're doing now is taking a 1.4% fee and they're thank God, giving the money to people that actually know how to invest.
- [51:39]
B
Yes.
- [51:40]
A
Goldman Sachs, Carlyle, Stepstone Group. Not that that's a guarantee of anything, of course.
- [51:45]
B
Well, they're, they're not going to lose. Was it. Did CBC report A third of the real estate loans are, are either in default.
- [51:55]
A
Right, Whatever. Carlisle are probably not going to default by one third. But.
- [52:00]
B
So I don't think so.
- [52:01]
A
All right, so, so now, so those, so now they're taking a 1.4% fee because they, they're great at marketing with Humpty Dumpty commercials. Hampton Dumpty take your money, right? And they take your money and they give it to these other funds that are charging themselves 3.3 to 6.7% per fund. So how does anyone ever make money here? I think it's obvious how you lose money. Just, just wait a while. But how do you even ever make money? It's all right. So again, this is not, this is not. Let's just bash alts. I'm sure there's, I'm sure there are better versions of this. I'm just making the point. If you don't know, then you don't know. And this is the kind of thing that has happened to other people. And you could lose money in the public stock market really easily. People do all the time lose money in publicly traded bonds. People lose money in public REITs 100%. But it's different to have like defaults and wipeouts and be, be, be charged up the ass while you wait for that potentiality. That's a whole different dimension of risk. That is very different from losing money in public markets. And I think, look, it's, it's, it's not to say oh, this is every alt. It's just to show people what a really bad like worst case scenario could be.
- [53:24]
B
Yeah. So that's unfortunate.
- [53:27]
A
So it's bad. All right. We are up to make the case time. We're coming into the home stretch.
- [53:33]
I'm excited to talk to you about this because we haven't talked about it in a while. Let's put up a long term chart of Salesforce. This is 10 years. Stocks in no man's land right now sort of in the middle of the range, although inflecting slightly higher in the last week, which I'll tell you why in a moment. Here's a one year technical chart. You would not buy this stock with your money or anyone else's money if you could help. It doesn't mean you can't go up.
- [54:01]
B
I don't think it's that bad of a chart. I mean it's not great. It's not. We've seen way worse.
- [54:04]
A
Certainly. Let me guess, you like these bounces off of 225.
- [54:09]
B
I don't own the stock. But I'm saying, dude, we've seen way worse stocks.
- [54:14]
A
I guess what I'm saying is if you're going to buy the stock, it's not because of the chart. Is that fair?
- [54:20]
Right. That's not a, that's not a. That's not a.
- [54:24]
A green light in and of itself.
- [54:28]
The reason why the stock starting to bounce here looks like it could bounce here. Value Act Capital, which is one of the most successful activist hedge funds ever, just added $25 million worth of stock this week. So they now have. They bought, I think they bought 96,000 shares, adding to an existing war chest of stock. They now own 2.994 million shares, which is not in the scope of the, of the size of Salesforce. That's not that big of a position, but it is a big position in, in. In dollar terms. They have a lot of money in, in Salesforce and they're adding to it. And the reason why this is notable is that the last time Value act came into the name in size, they actually got someone on the board and the Stock had almost 100% rally inside of a year as a result of changes that they forced at Salesforce. So Value act is not one of these activists that comes in and starts like looking for press attention and saying horrible things about the CEO. They tend to come in and want to work with the board and work with the company. They try to point things out that they think can be fixed. And that's, that's their, that's their, that's their M.O. and it's been successful. They've had a ton of big hits, but they've been buying the stock back, it looks like since. So the. Let. The. The last time they came in was late 2022, which was also a bottom for the tech market. And early 2023, they revealed their stake. In January of 2023, Value Acts Co CEO CIO Mason Morphitt was added to the board. And in June, they bought even more. They bought 428,000 shares, $100 million worth. And that was at $233 a share. They got up to almost 4 million shares and the stock spent. The stock had rallied huge in 23 and they, I guess trying to make it happen again. This time it hasn't happened. And so they're adding to it. They're buying more. But you did get an 85% rally the first time, the first go round. The other thing that's notable, Michael, is like last time, this time there are other activists coming into the stock at the same time, Starboard Value, which was also in it for that last go round. They are, they have just increased their stake by 50% stay on 1.3 million shares as of June 30 and maybe that number's gone higher since. So Starboard is back Value ACT is adding they have board representation. The last time they got aggressive in buying into the stock, they were able to help the thing almost double. And I think it's notable they've come back to the name. What are your thoughts?
- [57:33]
B
Did you buy the stock?
- [57:35]
A
No, I just bought Adobe. I can't have two of these pieces of shit on the books at the same time. Same story though.
- [57:43]
People think Salesforce is being disrupted by AI or about to be disrupted by AI and maybe it will be. But a lot of times these are overstated risks that these companies find a solution to.
- [57:58]
B
Yeah, not always.
- [57:59]
A
It could be Polaroid. I'm just, I'm just saying it's usually not Polaroid.
- [58:03]
B
It's not usually.
- [58:04]
A
Not Codex, not Polaroids.
- [58:05]
B
All right, so Salesforce has obviously been been just de risked. The recent bounce notwithstanding, nobody's bullish on this. Salesforce is not Polaroid. But I do think that their business model is certainly under pressure and it's not going to, it's not going to go away. Whereas a company like Adobe.
- [58:30]
I was talking to somebody this week actually who about this, who's a big Adobe user. I think that Adobe has a much better chance of integrating AI into their workflows. Whereas I think that Salesforce is going to be under assault by AI solutions that do Salesforce Solutions better than they do.
- [58:47]
A
Okay, so Adobe story is that they're going to sit on top of the AI and give their paying professional users access to the best possible versions of how AI can assist them in their workflows.
- [59:02]
B
Correct.
- [59:02]
A
That's their story. I don't know if the street is buying it, but the stock seems to have stopped going down.
- [59:07]
B
Well, they report tomorrow.
- [59:08]
A
They report why I bought it.
- [59:09]
B
They report tomorrow as well.
- [59:10]
A
That's right.
- [59:11]
B
So.
- [59:11]
A
That's right.
- [59:12]
B
We're long.
- [59:13]
A
We didn't have time. We didn't have time to do a whole deep dive preview into that. And I don't know the company well enough. I can tell you I have a stop loss in and if they actually report AI negative impact or they guide lower or whatever, I'll get stopped out. I'll lose money. But I'm not married to Adobe. The story on Adobe is buybacks and shrinking the float and the stock having been Substantially de risked. It's in a 50% drawdown from its high.
- [59:39]
B
Yeah.
- [59:41]
A
Salesforce, look, what's here's funny about this when value act and starboard. And by the way, what's Dan Loeb's fund called? Third point.
- [59:52]
B
Third point.
- [59:53]
A
Third point. They were all in Salesforce in late 20 to early 23. And the story was that Salesforce was spending like a drunken sailor. They were like, they just had too many. Too much bureaucracy, too many employees, too much corporate bloat.
- [60:10]
And. And that was like the way to fix it. And they bought into that whole year of efficiency thing. Like they, like Benioff followed Zuckerberg's example and it worked. That ain't gonna fix it this time.
- [60:21]
B
Right.
- [60:21]
A
I don't think the street is selling. I don't think the street has gotten bearish on Salesforce because of expense management. I think they pulled that lever already. No, it's the business fix this time. Right. The fix this time is more difficult.
- [60:33]
B
Yeah.
- [60:34]
A
Because it's innovation and obsolescence risk. I mean, it's like not the same as cost cutting.
- [60:41]
B
We're talking to companies in our space that are doing a lot of the automation workflows with better technology. That's not going away. Just started.
- [60:50]
A
Right? No, I guess the question is, does Salesforce.
- [60:54]
Is Salesforce able to hold on to its customers and maybe even potentially charge more because they become the AI provider?
- [61:03]
B
Certainly.
- [61:03]
A
Because they get better margins because they're using AI.
- [61:07]
B
Certainly conceivable. Would not be shocked if that's the world that we're living in where they just. They just use AI to make their shit better. All right, I have a mystery.
- [61:15]
A
Sort of didn't make. I sort of didn't make the case. But what I did, I think is I'm putting this name on people's radar for two reasons. One, the pessimism about their strategy and the threat from AI maybe overstated. It's not like the stock is at its high. So that's. That's one, I think the market is very well aware of that risk. And then two, this is a tax loss selling candidate where people are just unloading it into year end. And oftentimes those are great bounce candidates in January. But you got to get positioned early because you don't know when the sellers are done. It's early. What is December 9th?
- [61:56]
B
That's right.
- [61:56]
A
So I'm putting this name on your radar December 9, because you might get to a point where the tax loss related selling becomes exhausted. And then you get this air pocket where the stock could lift. Yeah, not saying it will. I'm just saying it's very possible with a name like this. This is a very big company and still financially very successful.
- [62:17]
B
And there is a big gap at 4:30 just waiting to be filled. So at 433 either way. Okay.
- [62:25]
A
Anyway, on your radar.
- [62:26]
B
I have a mystery chart for you. This is in a sector that is.
- [62:34]
Was strong to quite strong. I'm probably gonna give this away. This sector was the weakest, had a sick run and just really rolled hard the last couple of sessions. And I'm not sure why. I don't pay much attention to it. This is a stock in the sector that I don't know if you still own or not. We haven't talked about the stock in a while. But you did own it at one point. Try it on, please. This is a long term view. That's a 200 day moving average. The price is above it, but obviously that's not pretty. It's the last three years.
- [63:04]
A
I'm sorry, this is, this is not the sector.
- [63:06]
B
This is a stock.
- [63:07]
A
Actual stock.
- [63:07]
B
This is a stock. Next chart. Zoom in a little bit. Not so bad, not so bad. The. I see higher lows. Higher. That's what I see. What stock is this, Josh?
- [63:20]
A
$26 stock. The chat is guessing Pfizer. And I think that would be the only one that would make sense.
- [63:26]
B
The chat is right. Phone your friends. Great job, chat.
- [63:32]
A
Love you chat. Much love to the chat. All right, dude, what's.
- [63:36]
B
What's up with health care? Healthcare is rolling hard. The last 10 sessions. It's very bizarre.
- [63:42]
A
They rotate in, they rotate out.
- [63:44]
B
I know, but it's actually.
- [63:45]
A
I would not have got, I wouldn't not have guessed Pfizer. I threw in the towel on this name very early this year. So it's been a long time. I don't, I don't follow it anymore. I don't really care for it. They made this massive inve. They made this massive bet, huge M and A deal and they just, they have nothing to show for it a year later. And it was kind of like a bet, the company proposition. It was like a huge dollar value. And the idea was that it would strengthen the company's pipeline. And maybe it is and maybe it will, but the street is not giving it any credit. And there are huge winners in this sector and there are GLP1 names and there are oncology names and there are like, there are lots of great biotech stocks this year and this is just not one of them. In fact, it's one of the worst. And you know, I don't, I'm not a value investor. I don't really do that. It's not my discipline, number one. It doesn't suit my personality. I'm not patient.
- [64:46]
B
Me either.
- [64:47]
A
I, I, I just, I despise being completely on the other side of everybody I know for, for prolonged periods of time. I do tend to believe there's wisdom in crowds, and I think stocks that are going up are a better source of finding stocks that will go up. So I, that is not my discipline. And sometimes when I, when I, when I, when I become a dilettante in, in that area and I kind of dance in and do a little value investment, sometimes it might pay off, but like, not systematically. It will not pay. So, like, I, I was bullish Warner Brothers at $6 and I, I sold it too early. It's $30. It's 27 right now. Like, that was a quote unquote value investment in that time. But for every one of those that I could cite that, I would have been right on or whatever. Like, there's many more Pfizers where I would have been wrong.
- [65:41]
B
Yeah.
- [65:41]
A
So. Nice, nice, Nice mystery chart. All right, guys, we're gonna wrap up for tonight. Thank you so much for rocking with us to the live chat. We love you. Huge part of the show. We love seeing you show up for the live. Thank you for continuing to do that. I think we had a huge crowd tonight. Lots of comments, and you guys are the best. So shout out to all the gangsters in the chat. To those of you listening to us, in Spotify land, a rating and review goes a long way. If you love the show and you want to tell other people that it's of value to you, that's the, that's the right way to do it. Apple podcast to. Tomorrow is Wednesday, which means you're getting an all new edition of Animal Spirits of Michael and Ben. We'll have an ask the Compound with Ben and Duncan and then Michael and I will be back with a massive.
- [66:30]
B
It is massive. It is massive talking wealth. You have a big, you have a big episode dropping tomorrow. For advisors that are listening. Check it out.
- [66:36]
A
Shit. You know what? If, if that's right, if you're a financial advisor and you like the Compound, you're going to love talking wealth. And, and we're dropping a bombshell tomorrow. We had some research that we did internally and I can't wait for you to, to hear what we have to say. All right, that's it. We love you. We'll see you soon. Thanks again. Have a great night.
- [67:14]
B
Hey, Ryan Reynolds here for Mint Mobile. You know, one of the perks about having four kids that you know about is actually getting a direct line to the big man up north. And this year he wants you to know the best gift that you can give someone is the gift of Mint Mobile's Unlimited Wireless for $15 a month. Now you don't even need to wrap it. Give it a try@mintmobile.com Switch upfront payment of $45 for three month plan equivalent to 15 per month. Required new customer offer for first three months only. Speed slow after 35 GB if network's.
- [67:42]
A
Busy, taxes and fees extra.
- [67:43]
B
See mint mobile.com.