← The Compound and Friends
Loading summary
Transcript216 lines
- [00:18]
A
All right, here we are. I'm furiously typing away. It looks like my daughter just got an internship.
- [00:25]
B
Hell, yeah.
- [00:26]
A
So it's only February 3rd. I mean, if you don't get these things by like, December for the. For the following summer, you're kind of screwed, as insane as that sounds. That's the. That's how it works. So. All right. Hi, everyone. Welcome to a new edition of what are your thoughts? My name is downtown Josh Brown. With me as always, my host, Mr. Michael Batnik. Michael, say hello to the folks.
- [00:50]
B
What's up, everybody? How we doing?
- [00:52]
A
All right. Well, they can't answer, so I know it's rhetorical, but I think they're doing well. The chat is packed. John Suarez is here. Tom Dula, Billy Paul. Matthew is here. Three. Three first names. Always dangerous. Always. They'll never play billiards with a man with three first names. Joe Altamoro says. Hey, pounders. Hey back, Joe. Good to see you. Jay Conway in the house. Sodak, Jason. Matt Stavic. Cliff is here. Mike Russo. Rebecca Farrell. Hi, Rebecca. What the hell happened with PE today? We're gonna talk about it. Don't worry. We got you, Becky. All right, guys, welcome to the show. For those of you who are new here, Michael and I, every week right around this time, Tuesday, 5pm East coast talk about the biggest stories, moving markets. We have a sponsor. Tonight's show is sponsored by Tukrium. Looking to diversify your portfolio beyond stocks and bonds? Commodities are getting more and more attention as we enter 2026. Tukrium's agricultural ETFs offer a way to access the futures prices of essential crops. These funds may help manage inflation risk and add diversification to your portfolio. Ask your financial advisor or explore Tukwi ETFs on your own. Visit to Crim. That's T E U C R I U M dot com. Click the link in show notes for more. All right, thank you to Cream. Mike. Do you want to start?
- [02:27]
B
I do.
- [02:28]
A
All right, let's go.
- [02:31]
B
One of the things that we've been discussing over the past couple of weeks and months is. Listen, it's not Michael and Josh that are bullish. We're in a bull market. Okay? What do you want me to tell you? At some point, it'll stop. It'll change. Things will happen. We. We might be in a changing environment today. In fact, let me not caveat that we aren't in a changing environment today. Whether or not the sell off goes more or even begins like things are, things are beginning to change. Okay? Chart on please. This is what happened to the market today. A lot of red and a lot of former fan favorites. Nvidia. Boom. Microsoft. Like all of the names that we name were deeply red. And this is not the Max 7 market anymore. Next chart please, John. So this is from Dow Jones S and P. Dow Jones. And it is an incredible chart. Kudos to them. I've never seen it broken out this way. Here's what we're looking at. If you're listening. We are looking at the market performance from the end of 2024 through November 2025. Okay, that's the blue line. And from November 2024 to 2025, the top 100 names. So the mega cap names were responsible for 88% of the market's return. The bottom 400, just 12. It was all mega cap stocks. And since November 3rd to today, the opposite is true. Only 24 of the return has come from the top 176 of the return has come from the bottom 400. So I was. Chart off please. I was looking at the market today and I'm looking at all of these bombed out names like stocks that are really getting the shipping out of them. We're about to go through some of them and then I'm looking at the RSP and the RSP is like flat down a little bit. It's 30 basis points off an all time high. And I'm saying to myself, hey, you know what? We spent so much time wondering, worrying about the 35 of the Max 7, what would happen to the index when they fell? Well, guess what? 65 is bigger than 35 last time I checked. And I think we all just took for granted that when the 35 fell, the 65 would fall harder. And literally the opposite is happening. And I find it fascinating.
- [04:42]
A
You're not giving us enough credit. We said this would happen.
- [04:47]
B
Well, we said it could.
- [04:49]
A
I think you and I both were pretty vociferously making the case that people selling those stocks are buying different stocks. And there was a lot of room in the other 65% of the market. Lot of capacity for new dollars. And that's. Can you put up the first chart real quick? The heat map. Look what went up today. Not just up a little, a lot a lot. Look what went up today. JP Morgan, 2%, Berkshire 1.6, Walmart, the. These aren't like weird bullshit stocks. These are mega market caps. They just don't happen to be tech, Exxon, Chevron, huge up days. And that's not in a vacuum. These are up Days coming after these stocks have already been trending higher in some cases the energy stocks in particular. So this idea that like all, you know, we talked about why the Mag 7 and the, the NASDAQ mega caps became so important to the market because a lot of the expected earnings growth is in those stocks, but not all of it. Not all of it. So I think, I think you and I were way ahead to this idea because you forget how strenuously people were arguing like as goes the Mag 7, so goes the rest of the market. Wrong.
- [06:10]
B
No, next chart. So for a lot of the past couple of years it was a thin market. And this is the number of constituents in the S P outperforming over the past three months. If we were to like zoom this out to over 12 months, you would see that for a lot of the last couple of years it was low. But look at the last three months. Holy mackerel. Basically the most amount of stocks that have been outperforming over a three month period really since like the dot com bubble busting. Now we've had a few of these instances but the, the, so many stocks are beating the index and you love to see it.
- [06:45]
A
Yeah. The other thing that we were right about, the only way the AI capex boom wasn't a bubble is if the benefits accrue to the S&P493. That's the only way. Otherwise yeah, it was a bubble. But when we're seeing rallies in all of these other sectors and we're seeing the benefits of AI start to be talked about as companies give earnings guidance, all the efficiencies they're finding and all the ways they're using AI to improve their businesses. And now we're seeing this outsized reaction in software stocks getting murdered because those companies customers are going to be able to do what they do but without paying huge license fees, it really tells you that it wasn't a capex bubble and that the AI impact on the stock market may not be what we all thought it would be. For three years it was up NASDAQ stocks. Now the AI impact on the market is sort of turning into a new story nobody wants. Well, people are starting to think about the buyers of AI services being able to get rid of the application layer of their, of their software stack and that, and that is the thing that had to happen in order to validate this whole AI theme. You had to get the customers had to have a benefit.
- [08:07]
B
Right.
- [08:08]
A
And now that's the new worry on Wall street is that wait a Minute. This might be happening faster than we thought.
- [08:13]
B
All right, here's one part of the market. So you love to see stocks outperforming the index. Here's one part that I don't like. Next chart please. All right, this is a, this is a favorite of ours. A go to, if you will. We're looking at discretionary versus Staples. And the dollar dark blue one on the bottom is the cap weight because xly is like 40Amazon and Tesla and the light blue line is the equal weight. And they're both going in the direction that you don't want them going. You saw like Coca Cola today went straight up xlp. Staples is going vertical. You don't love to see that. Like this is, this is defensive names taking the baton from the leadership groups. The more risk on names. And this I, I won't like hedge it. This is, this is not good. I don't like seeing this.
- [09:00]
A
The Staples are going to be AI beneficiaries. What do you think about that?
- [09:04]
B
Ooh, say more.
- [09:05]
A
Well, these are incredibly. How should I put this? We talk about asset light business models being this coveted thing and high margin growth companies. The Staples are the opposite of all of that. Very little growth, tiny margins and huge heavy assets both occupying space on their balance sheets and acting as giant cost centers. The introduction of an AI layer into these Fortune 500 consumer staples companies can only mean margin improvement won't make more people drink Pepsi, but it'll certainly help the company streamline the delivery of Pepsi. Pepsi went up 5% today, by the way. And Coca Cola over the last year, total return 22%. So, you know, I don't know. I guess what I'm trying to tell you is I get it. Discretionary versus Staples as like a signal of the economy. We tried that with utilities two years ago and it was wrong. The rally in the Utilities did not signal a problem with the economy. The economy actually ended up accelerating. Sometimes what buyers and sellers are doing in these industry groups and sectors is not what you think it is at first blush. There is a world in which the 30 or 50 or whatever consumer products companies that we call Staples are able to get on earnings calls and tell you how much better their businesses are running because of AI. And we start thinking of them as AI beneficiaries. And look no further than Walmart which joined the $1 trillion club today. Walmart is. Michael, say it for everyone. What sector is it in?
- [10:54]
B
Staples. All right, Discretionary. Staples. Staples, right, Staples.
- [10:58]
A
So I just want people to expand their minds and understand even Stories that we've told ourselves for 100 years about the Dow transports or the utilities or defensive versus growth. Everything needs to be rethought in the age of eugenic AI.
- [11:15]
B
I love it so much. That was vintage Josh Brown, one of your finest takes. Kudos, friend.
- [11:21]
A
That was really all I wanted to say.
- [11:23]
B
That was really, really, really good. All right, you've got a clip that you want to play from John Gray.
- [11:28]
A
Yes, John, can you hit it?
- [11:30]
C
Everyone's focused on these bubble risks. I think the biggest risk is actually the disruption risk. What happens when industries change overnight? Like what we saw in to the yellow Pages back in the 90s when the Internet came along or what happened to Uber when Uber and Lyft came to the taxi business 10 years ago. In the last two weeks we saw JP Morgan say they're going to stop using proxy advisors and use AI instead. We heard Lemonade say that if you use your AI powered self driving Tesla during those miles, we're going to cut rates by 50%. What does that mean for insurance companies? What does that mean for collision repair companies? And so we're spending tons of time thinking about rules based businesses, accounting, legal.
- [12:17]
A
If I can just jump in, what about on the portfolio company side? Are there companies or industries that you're rethinking or wouldn't touch or wouldn't put new money into because of the fear of disruption?
- [12:28]
C
There's definitely more risk in certain industries. There's no question that you have to think about some of the lower value IT services businesses, some of the businesses that are intermediaries where you may have these agentic agents, these agentic commerce happening which could change the way we do things. I do think looking at each business is really relevant. And when you think about things like software for instance, is it a vertical software that is sort of the system of record for our business that is very hard to rip out or is it some low level horizontal software where it's easy to change and therefore the AI could lead to a big erosion in your business. And so every deal that we're doing today in the first two pages of the memo we're saying what is the risk?
- [13:19]
A
So that's John Gray very eloquently talking about exactly what you and I just, just touched on, which is we spent so much time over the last two years worrying about is this a bubble? And maybe not worrying enough about how quickly this was going to be upending all of these software companies and a lot of like a lot of businesses that up until now had looked Just absolutely bulletproof. And so maybe the real concern here is not bubble, it's disruption at a pace that we were not ready for. And that's what, that's what's. Look, tomorrow could be a totally different day, but that's what's playing out on our screens right now.
- [14:04]
B
The irony with that. And by the way, that was an awesome clip. Good find is John Gray at Blackstone. The stock got murdered today. And not just them, a lot of private equity alternative asset managers got killed. Guess what? In 2025, Blackstone and Vista Equity Partners bought a company called Smartsheet for $8.4 billion. Smartsheet. I went to the website. There's a smarter way for your organization to work. It's. It's a SaaS company. And a lot of these private equity companies, guess who they either bought or lent a lot of money to? Because it seemed predictable. The SaaS businesses, these are enterprise contracts. They're. They're in good shape. Oh, yeah. Oh, yeah. They're in. They're like, they're in it right now. And a big reason why these names are under pressure is because they have either acquired or lent money to a lot of the software names. And look at the equities of these companies. They're getting bombed out.
- [14:57]
A
I was gonna. So right when John was done talking and that was a Bloomberg clip, I think, from last week. So he was. It's not like he's on TV today reacting to what's going on today, but I was gonna jump right on the end of what he was saying and says and say and says. I says and said. Spoken like a man who's just become the largest capex capital supplier to the entire data center business, which is what Blackstone is.
- [15:25]
B
Yeah.
- [15:26]
A
Anyway, but I thought he phrased it correctly. Like, we. Are we ready for a world in. In which the price of all of these things drops for corporations and they no longer need to pay for all these applications and all these, all these enterprise licenses. Like the stock market today looks like it was sort of thinking about it and then all at once everyone decided, oh, it's here. Yeah, it's not in 2027, it's. It's 2026.
- [15:56]
B
Yeah.
- [15:57]
A
So.
- [15:57]
B
All right, let's do some more bombed out stuff. So Oracle tweeted, you never want to see this. The Nvidia open AI deal has zero impact on our financial relationship with Open AI. We remain highly confident in Open AI's ability to raise funds and meet its commitments. Oh, yeah, the market said, hold my. I don't know.
- [16:17]
A
I had, like, I. I had, like, very little exposure to this, to this particular aspect of what was going on today. It was something like, there's a problem with Nvidia chips, and OpenAI doesn't want to take an investment capital from that. What is this bullshit?
- [16:36]
B
I haven't read the story.
- [16:37]
A
You understand it.
- [16:38]
B
I haven't. I saw the headlines. I read the story yet. But yeah, you're not. Not something that you want to see if you're. If you're a shareholder. Don't worry, we're good. I swear to God we're not.
- [16:46]
A
So I saw Nvidia say, what? This is a lie.
- [16:50]
B
Okay?
- [16:50]
A
Like, I saw it refuted before. In other words, I didn't have a chance to panic about it yet because I already saw the refutation. But tomorrow, Tomorrow, tomorrow, it was, it was something to the extent of like, OpenAI is having problems with Nvidia's chips. Therefore, the investment that Nvidia said they were making an OpenAI might not happen, which is what hit Oracle. But I didn't understand the exact rationale for why people were saying it.
- [17:19]
B
Well, it sounds like you know a lot more than I do. All right, two more charts. Spotify, Netflix continue to be the exact same chart for the most part. And new fresh lows. And I gotta tell you, I know, like I'm about to do something I shouldn't do. I'm just circling. I'm just circling Netflix mentally. I haven't done anything. I'm waiting. I'm stalking to you.
- [17:40]
A
Let them go up for two days in a row first.
- [17:43]
B
I know, I'm stalking.
- [17:44]
A
Two green days.
- [17:45]
B
Listen, Netflix will not be disrupted by AI. All right, next chart. Microsoft Fresh lows. Liberation day type sell off down 24%. Nvidia not quite to the same extent at all, but it's Nvidia's. Nvidia is just technically not looking too healthy.
- [18:02]
A
AMD reported tonight. I think it was a. I think it was a double. A double beat. And well, guess what? Not much in the stock.
- [18:10]
B
AMD looks like a double top. The stock is down, I don't know, a couple percent in the after hours.
- [18:13]
A
All right, let's keep down one and a half percent today. Another seven and a half percent post earnings. And that's on quote, unquote, good news.
- [18:20]
B
Okay, yeah, double beat.
- [18:22]
A
I don't know if we.
- [18:24]
B
On a double beat is not what you want to see. All right, lastly, some of the sales for some of the work. Oh, geez. Some of the sales software. Damn it. Sorry. Software stocks we've been talking about for the last couple of months. New fresh lows. The just the, the trap, the door just keeps getting worse. The trapdoor, whatever. Adobe down 41 at lazy and down 68. Service now 47 Workday 42 Salesforce 43. These are all below their 52 week high. It's not like a three year return. So with that.
- [18:53]
A
This is one of the most violent. This is one of the most violent RE ratings for any sector I have ever seen. Would you co sign that number one for me?
- [19:05]
B
I've never. Yeah I guess I haven't been around that long. I've never seen an industry group in my mind maybe, maybe like coal and things like that but something like this large. This is a huge economy, right.
- [19:20]
A
It's the dollar amounts involved. It's not just the prices and it's not just the, the steepness of the, of the decline or the compressed window of time. It's the dollar amounts involved. Like I've seen sector RE ratings. Like I saw the coal stocks go to zero. I saw the steel stocks go to zero. Like I've seen, I've definitely seen some shit but like they were tiny and.
- [19:44]
B
There wasn't that many of them. And we've seen, we've seen RE ratings in like utilities in the ZURP era. Right. Where it was like macro factors and investor preference but nothing like this. Where it's like all of these names. You're. You're going to be worth a lot less in the future than you are today.
- [19:59]
A
You imagine? Can you imagine a venture capital fund where there's like 20 names in the portfolio and 16 of them are sass.
- [20:08]
B
Yeah. And guess what? The portfolio has been marked up. Yeah, you haven't. You've got one exit but the portfolio is marked up three times. Nope, not anymore. Really brutal.
- [20:16]
A
And like also in the portfolio they have like two robotic stocks and two defense. Two robotics startups and two defense startups and they're like clinging to good news from those with like for dear life because otherwise they have nothing to tell their LPs. Like like we were talking IPOs three months ago. We're not IPOing software companies anymore. I don't think that's, that's on, that's on pause right now.
- [20:41]
B
Yeah.
- [20:42]
A
So it's being pointed out in the chat situation, 0p e owns lots of mid market software. Right. Like those done. Those are the types of investments a lot of like hyper specific vertical stuff like oh we are the leading provider of software for rental car Agencies like stuff like that where somebody in the IT department is just going to be like, yo, I just wrote a program that lets us rip this thing out of here.
- [21:12]
B
Scary. It is scary.
- [21:14]
A
Okay, so I'm calling this IGV, which is the software ETF, the iShares product IGV. Nuclear Armageddon. That's what I'm calling this particular sell off. Let's do this first, this first daily chart book thing.
- [21:33]
B
For yours. Adam Parker. Nailed it. So. All right. Adam says many software companies have been revising their expectations for future revenue and earnings down. In fact, we haven't seen this much downward revision to the median software company sales estimates relative to the broader tech sector since the 2009 financial crisis. Chart off. This is. It all makes sense. It's not just investors are like changing their mind. The companies are aggressively lowering their guidance. It is bad. The PEs are coming down, the ease are coming down, the prices are coming down. Where this bottoms, like, it is scary, man.
- [22:14]
A
I, I think, yeah. So I think what happened last year, I mean, I'm just, I'm like gen overgeneralizing. And obviously this isn't the case for every one of these companies, but I think there was like this moment of like suspended disbelief last year where a lot of, a lot of like ctos were just like, let's wait and see. Like, in other words, before we recommit to the same license, the same number of seats we were paying for in 2025, before we recommit to that in 2026 or whenever the contract is up, let's like, let's just take a pause, let's take a beat and see what's going on out there because there might be new solutions. And then you have like Google and you have Microsoft and you have Amazon Web Services. Whoever at your company is interacting with the reps there, they're screaming at you, you don't need to buy any of this shit. Like our models, just tell it what you want and the model will build you exactly whatever point solution you want. So they're hearing from their cloud provider like, don't buy anything, just hang out, because we have a whole new story to tell. And so I think people just like paused. And now this year you're seeing like the reality of that start to dawn on, on everyone, which it's like, it's.
- [23:42]
B
A financial crisis for software companies.
- [23:44]
A
Like, the buyers have. Now the buyers can go back and say, what do you mean, $80 a head? How about $50 ahead? Or we'll look at Something else like they haven't been able to ever do that. You want to run a business, you need software.
- [23:58]
B
It was the opposite. It was the opposite. These companies were raising our fees every year. Yeah, every single year. By the way, I just want to point out that my, my flu game take when I said I actually think that software semis bottoms is the. I hope it's my worst take of all time. I just hope that.
- [24:15]
A
What is that?
- [24:16]
B
What was the member I said I actually think that a lot of the software names that are getting bombed out are going to end up being a beneficiary of AI like Adobe and Salesforce are going to take AI, integrate it and then have a better output. Some will maybe, but anyway, it's just hilarious. It was the worst time to call that I could personally remember for myself in a long time. Hopefully the worst ever.
- [24:36]
A
All right. Anthropic launched a legal tool today which if you listen to the financial media was the thing that set off today's sell off.
- [24:47]
B
And.
- [24:49]
A
So it just completely hammered the sector like it, just like everyone, everyone lost their mind over it. So this is Bloomberg. Once again artificial intelligence is dominating investors attention in the stock market these days however, the focus is turning more toward companies that may get disrupted rather than those who stand to profit from it. A Goldman SACHS Basket of U.S. software stocks sank 6% Tuesday. Biggest one day decline since April's tariff fueled sell off as a new automation tool from Anthropic. Heightened concerns about the business prospect, blah blah blah blah. It's a legal and data services technology with and so anyone that even touches that space peripherally. Nuclear Armageddon and I don't even fully understand. Anthropic launched new capabilities for its cowork to the legal space, heightening competition within the space. Says Morgan Stanley. We view this as a sign of intensifying competition and thus a potential negative. Blue owl fell 13% on that news. I don't specifically know why Blue Owl ARES got killed, TPG got killed, Apollo got killed, Blackstone got killed. I suppose they would be the types of firms that have made investments in areas Blue Owl own.
- [26:12]
B
Like do they invest in that company, Harvey? Like why would they fall 13%?
- [26:16]
A
They're not long before Anthropics plug in startups including Lagora and Harvey I were flooding the legal industry with tools. They say we'll save lawyers from grunt work.
- [26:26]
B
Why? Let me ask, let me ask Claude why Blue Alpha? By the way, I am. Yeah, what are you asking for? All of a sudden I am in love with Claude, I started using it seriously on Sunday night and it is so much better than chat GPT. It's unbelievable.
- [26:42]
A
Well now you are part of the problem. All right, Software tech.
- [26:49]
B
Hold on. Before you do that. It's saying software tech exposure business BDCS fell on Monday as concerns over the group. Yeah, it's software legal troubles is a class action lawsuit. All right, so it's. It. Yeah. All right. You know what's interesting about this is this the anti bubble. So not. It's not like the AI names are going to the moon. Look at Microsoft which is the way to get exposure I guess Nvidia too. These stocks are not mooning, they're not bubbling. But the stock. But the companies that are being displaced by AI are getting nuked. It's like an anti bubble.
- [27:22]
A
Yes, but it's like because it's, it's. But the, but the reason the Russell was green today and the reason why 270s and P stocks were green with the index down is because what I started out saying, what we started out talking about which is now we're talking about the benefits of all this AI accruing to the customers, to the users in the form of hopefully. What a story. Here's the igv. So this is like just a big picture of the whole software sector. You can see that we have now round trip the entire recovery from liberation day almost a year ago, nine months ago and and guns in my head we're gonna break lower because the AI situation then was not as advanced as it is now and the fears were not as specific as they are. So I can't wait to see the.
- [28:18]
B
13 Fs like there's. I think there's going to be some buyers in size. Yeah. Some of this is some of these bottom out into some of these stocks.
- [28:25]
A
Are too, are too low. We agree. We agree. And by the way the alternative asset managers are now going to be facing a situation for the first time in a long time where there might be some publicly traded targets in this space that are a better price than what they have been paying on the private market. That's all you could have take privates happen in the IGV names and nobody's ready for that. Okay, Thomson Reuters. So this directly touches the legal and data, the legal and data area that Anthropic is coming in to disrupt. Like this is the company that sells information and sells software for law firms, large corporations, research outfits, etc. This thing annihilated today. Just absolutely taken out behind the woodshed and look at it from the high. It's in more than a 50% drawdown. This is a boring business. This is Tri Thompson, Reuters Legal Zoom. Holy shit. Look at this candle.
- [29:30]
B
Oh, yeah, yeah, right.
- [29:34]
A
This is a $7 stock. Now kiss it good night. You think that 650 support from Liberation Day holds? No, I don't. FactSet. Hey, shout out to our friend. I know, shout to our friends at facts that we like these guys and we love their products. But I mean, this is because how many things did you go to FactSet for that you now don't have to on the. I mean, you're the director of research at the firm. You're talking about higher. You're talking about code right now.
- [30:07]
B
Okay, Fire from that title. But point was still in the room and no, I'm not. And fact said again, like every. Like every other company, they. They just. They just kept taking more, more and more. Oh, you want to use this more? Everything was more and more and more. Do you have S and P in there, by the way? Spgi I.
- [30:29]
A
It's. I know it's bad.
- [30:30]
B
I might down 11%.
- [30:32]
A
S thing. Same thing. Check this one out. Varisc Analytics. This name last year was on the best stocks in the market list. It hasn't been on for a while. This thing. If I pulled back the chart and showed you like 10 years just up into the right relentlessly and is now fallen vrsk from that looks like 3:30 ish down to 193. Today's candle is just an absolute puke. There's. There's literally nobody pulling pulling the trigger on sales in that stock. That's not absolutely terrified.
- [31:08]
B
I'm on the website because I'm not familiar with this company powering better insurance decisions. The risk connects the global insurance industry through proprietary data and technology to deliver the insights that real people depend on every day. Guess who else delivers real insights. Yeah, at a fraction of the price.
- [31:24]
A
I hope your data is super proprietary, my friends. All right. Atlassian. The this is team. This has always been a terrible, terrible stock. But more.
- [31:34]
B
It was hot years ago. Like years and years ago.
- [31:36]
A
All right, it was 300 a year ago. It's 100. This stock had split three for one enforced. We used to call these market enforced splits. It's not an actual split. They just took 2/3 of the price off. This is annihilated. I don't know what the market cap is or care. I don't know. Like, is this the. See, the thing to me is like I'd rather buy Microsoft. I don't think I'll get the biggest bounce. I just.
- [32:04]
B
It ain't going to zero.
- [32:06]
A
I'll feel less stupid if it doesn't bounce. So like the risk management way to play this, this, this nuclear Armageddon and the software stocks to me is not timing, it's more like selection. Like, like I'll feel less dumb if I buy Microsoft and it pukes up another 12%. Yeah, who cares if I buy team 100 and it goes to 80, I'll be suicidal because I know better.
- [32:31]
B
So. All right, take it easy. At Lazen had a market cap in 2021 during the bubble of $116 billion. And then last year it had a market cap. And when I say last year, ladies and gentlemen, I'm talking about February. Like literally a year ago it peaked at $85 billion in market cap and it's now 27 on its way to what, 10? I don't know.
- [32:54]
A
Holy shit. Imagine you own this. Imagine you have an S block against this. Like you, like you borrowed money against this security because you're an executive and you bought a house and the thing, the thing pancakes in one year drops 70% a year.
- [33:11]
B
All right, so I students. It's. It's not funny. It's sad. So, so the bubble years aside, it's stabilized in 2023-2025. It went sideways and maybe this is the wrong metric, but whatever, who cares? It went sideways at like 11 times sales. You know, like something like that. Even last year at the peak, it was 15 times sales, 17 times. It's now five on its way to two. What are these names going to trade at if the earnings aren't sustainable, if the sales aren't sustainable? There's no, there's no floor.
- [33:39]
A
The thing is that I don't know that we're seeing like huge drop offs for, for these companies in sales yet.
- [33:47]
B
Not yet. Market's not waiting.
- [33:50]
A
That has. The market is just anticipating either problems with raising prices or problems with churn or just like outright contract cancellation. The market is like pricing in the absolute worst case scenario indiscriminately for all of them. I couldn't find a software company that was able to escape this. And I know some of that is algorithms and baskets and, and ETF stuff, but like the market is. Even the cyber names, they came for the cyber names today. Like, you know, I'm a long term shareholder in crowd. They crushed it. The stock's down $150 from a tie.
- [34:34]
B
So on at Lazy in particular. I don't know anything about this business, but the revenue, it's up. I'm looking now. It's up until the right dude. Like, they're still growing at 20% year over year. And the market's just saying, I don't believe you. Like, I don't care.
- [34:45]
A
I'm not valuing or congratulations on your past revenue.
- [34:49]
B
Great. It's not sustainable.
- [34:51]
A
Yeah, that's it. That's what it is. All right. Palantir reported last night they did it again. Earnings up 78%. Revenue up 70%. And the business, now that it's larger than it was a year ago, is actually accelerating. They're growing faster. And, you know, it's remarkable, the commercial part of Palantir, which is what everyone cares. In other words, the government contracts are great. And yes, in the multiple, they do get some credit for that. But defense contractors notoriously don't, like, earn a really high multiple on those revenue. On those revenues. They're, like, highly dependable and everyone loves it. But it's not the thing that gets people excited. So it's the commercial part of the business where all the. Where a lot of. I shouldn't say all. A lot of the growth is. So put that back up just so I could explain it. The quarterly revenue is nuts, dude.
- [35:50]
B
Insane.
- [35:51]
A
Commercial revenue surged 137% year over year to chart off to 507 million. The estimate was 474. So it's a huge beat. Government revenue grew 66% to 570 million. So the company now is basically in balance. It's 50% military stuff and spy stuff, and then it's 50% commercial business. And most of it is in the United States. Not all, but I do think that there are companies and countries that are a little bit hesitant to open up all their data to Palantir, just given how tied in they are with the US Government. You could understand that. Which might put a ceiling over how big this company can get. Morgan Stanley's analyst With 2026 guidance targeting growth of 61% plus, Palantir is on course to reach 10 billion in revenue at the fastest growth rate and highest margins, perhaps in software history. Underscoring its status as a clear AI winner, Palantir delivered its fastest revenue growth as a public company. Equally impressive is the margin performance. The midpoint of the 26 outlook calls for operating margins of 56%, which topped consensus, looking for 50 for full year 26. Palantir said revenue in a range of 7.18 billion to 7.2 billion. And prior to today, analysts were looking for 6 to 9. 5 billion. So it's a beat, It's a raise. It's faster revenue growth, faster earnings, better news on the commercial front. The government business is also growing fast. It's like, if you're a tech investor, this has to be on your sheets.
- [37:41]
B
Yeah, you can yet. And yet, not the greatest reaction.
- [37:46]
A
Look at the environment.
- [37:48]
B
I know. I'm saying. I'm saying the market's changing. It's not. It's not. It's not January anymore. It's February.
- [37:56]
A
Here's a guy from William Blair, Louis De Palma said in his research report, our research tracker suggests that the US Department of War is going all in on Palantir for its mission critical data analytics platform. I forgot that they renamed the Defense Department the. The Department of War. I forgot that Trump did that last year. They also. The company is holding $7 billion in cash on its balance sheet. So it's just. It's just a remarkable report from a remarkable company. And I know the company's controversial, and I know there are political overtones and people. Not everyone agrees to that. They want to celebrate Palantir, but just from a purely investor standpoint. Holy shit. Are these guys delivering?
- [38:48]
B
Yeah. Yeah. All right, let's. Let's pivot to.
- [38:53]
A
What's this quote? Oh, is this your. Did you.
- [38:56]
B
I almost got.
- [38:58]
A
It's a goodie.
- [38:59]
B
Okay, this is. This is so emblematic of the entire conversation we're having tonight. And we're going to have more of it, so stick around. Josh, I'm glad that you flagged this. Thank you. All right, this is. We've said this before. It's so goddamn good. From Steve Mandel, the founder of Lone Pine Capital. I don't need an analyst to tell me when a 10 PE stock is cheap. I need an analyst to tell me when a 40 PE stock is cheap.
- [39:20]
A
Well, right. And that's very apropos of today.
- [39:24]
B
And PayPal on the.
- [39:25]
A
On the surface, looked expensive. Turned out it was cheap. PayPal on the surface, looked cheap. Turned out it was expensive.
- [39:31]
B
Exactly. All right, so we're seeing fewer positive surprises in the market. Earning surprises, that is. And you're seeing them being less rewarded, which. Chart on, please. Won't be a popular take. And, like, I feel like I'm being like a Debbie Downer for this. I think it's really good that the bar is getting raised and it's getting harder for the stock market to keep going up uninterrupted because another 30 up year where you just have a free for all more margin expansion that is not good for everybody who is listening. Ultimately that sets us up for a major fall and I would much rather this where we're getting the beat in the raise and stocks are having a muted reaction. Good. Let expectations catch up. You agree?
- [40:15]
A
Well, it's. Right. It's, it's, it's preferable to, it's preferable to I think having a situation where every stock goes vertical at once and then gets killed all at once. It just, it sort of feels like people are getting used to the dispersion and some sectors doing well, others not doing as well. I just, I think that's like a normal market. Today didn't feel normal though today.
- [40:39]
B
No, today was ugly. Today was, today was a risk off day.
- [40:41]
A
Yeah, for sure.
- [40:42]
B
No, no, no.
- [40:43]
A
Even though we had a lot of big stocks like JP Morgan Green today just today felt like something substantial about the market. Psychology has changed when it comes to AI and they don't want to hear about tech for a while. Yeah, people want to go. They want to hear about anything but tech.
- [41:04]
B
All right, last.
- [41:05]
A
Hold on. In the chat, what happened to Service Titan? It went down, Jack. What do you think happened to it? It's a software, It's a software company Toast is down to also.
- [41:16]
B
Oh, what are you getting excited about?
- [41:18]
A
Well, anyone else, anyone else in the chat want to shout out any other stock that I might have. Have. Have a red day.
- [41:26]
B
All right, all right. Stocks go down too. Okay, so. Oh, Chipotle. All right, so here's the point. Here's the, the, the, the topic for today is avoid the garbage. And I have been guilty of this a million times. I will continue at some point to bang my head against the wall. We all want to make money in the stock market. If we're buying individual stocks, it is a lot easier to make money for the stocks that are already going up. I am tempted by 52 week lows as much as anybody else here. And I've, I've learned my lesson the hard time a million ways. It's much harder to make money this way. Okay. It just is. So let's talk about Chipotle. Chipotle reported after hour knee jerk reaction down 11 immediately. I don't know where it is trading right now, but I went to the report and I told you I listened to this guy's call last time and I just didn't like what I was hearing. I didn't like his voice. It just.
- [42:24]
A
The new CEO.
- [42:25]
B
The new. Yeah. Scott Boatwright. So here's what Scott Boatwright said today or in the report. Okay. He said this on the report. Through our proven business model, prudent investments in operational excellence, and the support of a strong balance sheet, 2025 was a year of progress and resilience for Chipotle against a dynamic consumer backdrop. We opened a record number of restaurants globally. Okay. And grew Q4 and full year revenue. Really? Okay, let's look at the numbers. Scott. Comp. Store sales decreased two and a half billion. I'm sorry. Decreased two and a half percent. Is that good? No, it's bad. Operating margin was 14.1%, a decrease from 14.6%. Restaurant level operating margin was 23.4%, a decrease from 24.8%. So, yes, revenue increased 4.9%. That's what happens when you open more stores. But inside the stores, Jack, things aren't doing so great. And don't tell me about the consumer backdrop. Nobody wants this shit. It's enough already. So, chart on. Look at Chipotle, the stock. Two forward, please. Or one forward. Yeah. Here we go. Thanks, John. Listen, the stock's in a downtrend.
- [43:38]
A
Did they do a split in 24?
- [43:40]
B
Yeah, a while ago. I think so.
- [43:42]
A
I remember the stock trading in, like, the threes and four hundreds. Yeah, they did a ten for one split.
- [43:48]
B
That sound right? Yeah, somewhere along the way. Yeah. This was. This was a $900 stock, I think, at some point. So. All right, here's the deal. With stocks like this, it's so tempting. It's Chipotle, it's a brand name, it's cheap, blah, blah, blah. So that chart back on, let's say that you were so smart to buy it a couple of weeks ago, a couple months ago, at the bottom. All right, you got in. Now, fairness, the stock stabilized, right? So it gapped down to 32 bucks, and it spent the next couple of weeks going sideways. And then it accelerated. And guess what? There was a nice trade there. It went from $30 all the way up to 40. Okay, so you had a 25% return in just a couple of weeks. You're feeling yourself, you're feeling good. What do you do now? I mean, here's another example.
- [44:29]
A
Depends on why you bought it, I guess.
- [44:31]
B
Lululemon, same story.
- [44:32]
A
Bought it for a trade. You're not. You're. You're out of it.
- [44:34]
B
So all of these stocks. Yeah, they could bounce. Lulu had a great balance. We spoke about this. When. When the Economist has Lulu on the COVID You just shut up. And buy. And guess what? It worked. The Stock went from 160 to 210. What if you didn't take profits?
- [44:52]
A
Yeah, I, so I. Do you take on, like, I know you're not, you don't, like, bet a lot of games or maybe you used to when you were younger, but, like, do you, do you find yourself taking dogs?
- [45:02]
B
Never.
- [45:04]
A
So, so then why do you have that temptation of stock market? Isn't it sort of the same thing?
- [45:09]
B
That's such a good point.
- [45:11]
A
Like, to me, it's the same thing. It's like, like, obviously nobody thinks the Patriots are going to win. It's a very weird super bowl result. Like, how we got here. And now the golden boy is probably secretly injured and, like, just whatever. Maybe, maybe, maybe I'm, like, being too pessimistic. But I think it's gonna be a blowout.
- [45:29]
B
So how about this? You're right.
- [45:31]
A
But wait a minute. If, if you, if you have, if you have the kind of personality where you're like, no, taking the Patriots, I'll take the points. I'm taking the Patriots, then it makes sense. If you're bottom fishing in Lulu because you're like, it's Lululemon, they'll be fine. I, I just, I don't have that attitude. I, I, maybe I'm like a front runner. I don't know. I'm just much more likely to look at whatever's doing great right now and assume it'll continue.
- [45:59]
B
Yeah.
- [45:59]
A
And constantly be looking for reverses.
- [46:01]
B
It's interesting that you mentioned that, because, like, I would if I was to tease the game. Now, I unintentionally have a lot of money on the Patriots because I did this stupid bet in week 16 where I bet a lot of money, gets to see how it says, oh, yeah, free 40% return. But if I was, if I was going coming in straight to this game, now the Seahawks are a better team, full stop. Like, period. I don't care what happens in the game. This Patriots can win. It doesn't change the fact that the Seahawks are the better team. Hard stop. Would I be more likely to take to tease the Patriots up to, like, 12 and a half than the Seahawks down to, like, plus two and a half? I think I might, and I don't know what's wrong with me, but I.
- [46:37]
A
Want to take it further. They're not just the better team because, like, objectively they are, but then they have more momentum. Like, the Patriots are winning these games in snowstorms, blizzards, like these very bizarre games. That are not going to look anything like what's going to happen in the Super Bowl. So they might be better at, like, sloppy conditions football. And. And some of those games could have easily gone any other way. I don't think the Seahawks are amazing. I just think they're winning these standard games.
- [47:06]
B
They're killing teams. Besides the Lambs. They're killing teams.
- [47:08]
A
Yeah, they have, like, moment. It's not the best team I've ever seen, but they have momentum. So it's a combination of being better on paper and sort of gliding into the, into the Super Bowl. The Patriots, like, tripped over and fell backwards into it.
- [47:22]
B
Right, right, right, right.
- [47:23]
A
So it's Great point. It's multiple things. It's not just good team, bad team, good company, bad company. It's like, what are the immediate conditions around the stock or around the team? And that's. I don't know. I. I do a lot of stupid, but I'm allergic to stocks that look like Chipotle. Yeah, they don't attract me at all. They don't attract me at all.
- [47:43]
B
So on the PayPal print consensus, if.
- [47:45]
A
I'm going to lose money, I want to lose money in toast.
- [47:48]
B
So don't take it personal. Consensus media tweeted. Well, it was only 9 1/2 times forward earnings going to the print. PayPal a first lesson in value traps for many. So, yeah, you could play this game. You're not gonna make money. I mean, maybe by accident, sometimes you will, but it's hard. The market is smart.
- [48:06]
A
We flirted with PayPal over the years, each of us.
- [48:09]
B
I definitely, I definitely bought it and lost my. But you know, what we do, that's really. Well, at least what I do. I don't lose a lot of money in these stocks. If I'm wrong, I'm out. I don't care. I lost 4% in Adobe. I'm out. Whatever. It doesn't matter. I'm getting married to these names and downtrends.
- [48:21]
A
So PayPal had a. PayPal had a promising story. They brought this guy, Alex Christine, who had succeeded at Intuit, and he had a strategy and the stock was reacting to him, you know, coming. And he had a few quarters and the shine wore off and people no longer believed in him. And I think they just. I think you just stepped down today.
- [48:42]
B
Yeah.
- [48:43]
A
Box after this. No, but it's like, you know, the story changes is part of it. And then the thing with the lesson from PayPal is when Apple decides they're going to destroy a company, listen, it'll probably, it'll probably work because they own the device. So you might have the best app, but they own the device. And if they're launching a competing app, I'll give you a really great example of this where I have learned my lesson. The Life 360 story is so incredibly compelling. And any parent who's listening to this or watching us right now is probably familiar with Life360. Even if you don't use it, there's a good chance like families you know of in the neighborhood are using it. So the company came public, they had like a really great growth story where they would, like, explain like how sticky the app is. And once a family is fully uploaded on it, they keep it forever and blah, blah, blah, they keep paying. And the one question they can't ever answer on their calls is, what happens if Apple just decides to make this a feature? In other words, picture a family. Two kids in elementary school or junior high. They have phones, both parents have phones. What if Apple just rolls out an interface where you can see your whole family on a map? Who is paying for Life360 ever again? It becomes completely redundant and they can't answer that question. I saw her be interviewed and somebody asked for that. She can't answer it. The CEO. If Apple decides they're getting into your business, nothing will. Nothing will save you if your business's primary entree for the user is via an Apple device.
- [50:25]
B
It's such a great. That's such a good story. Do we like this is the world we live in? Tough shit. It doesn't matter if we like it or not. I don't. I don't love this. Who does like that? I mean, you know, likes it. Apple shareholder likes it.
- [50:36]
A
I know, but it's. It's what it is. So. No, because you got. I mean, if you look at a chart of light360, you look at this thing just absolutely exploded in 2021. And everyone like discovered, oh, like this is a new growth story. And it ran to, I don't know, 34. Now it's 20. I mean, I'm not saying it's going back to two bucks, but I don't what happens to a stock like this. I almost don't. I almost don't. I don't know what to tell people. So wait, where is it?
- [51:11]
B
No Life. It's at $61.
- [51:13]
A
I don't have the wrong. The wrong ticker in front of me. My bad. I just, I think that. I think that people. I think that people need to Be reminded in certain businesses, like anything tech related, if Apple says we're going to compete you out of business, you should. You should probably expect it and not be bottom fishing there. I don't know if Chipotle is the same story as that. I'm just. I'm making the point. There are different reasons that should keep you from catching falling knives. Is that. That's the way to say it?
- [51:43]
B
Totally.
- [51:44]
A
Okay.
- [51:44]
B
Yeah. It's a good point. Okay. Was that it? That was it for me, I think. Yeah. Do you want to do Kevin Washington? Do you want to skip it?
- [51:52]
A
Are we doing this on. Are we doing this on? We're going to do this on the Compound and friends this week.
- [51:56]
B
Okay, let's go.
- [51:57]
A
So let's skip it. Can we end with good news?
- [52:01]
B
Love good news.
- [52:02]
A
All right. The housing market, which has been something people have been complaining about for, I don't know, seven years, it's becoming a buyer's market again. And the rental market, too. And this is objectively good news for people who have been screaming about the affordability crisis. We've had this hysteria over the housing market and not unfounded, completely legitimately founded. This is the Journal. The housing market is swinging toward buyers. Let me see this chart. Nearly two thirds of home buyers last year purchased at a discount to the original listing price, the Highest proportion since 2019. Good news.
- [52:46]
B
Yes.
- [52:47]
A
Okay. Many home shoppers have given up, but 62% of buyers purchased below the original price last year, according to Redfin. And the average discount for the homes that sold below their original listing price was 8%, which is the largest since 2012.
- [53:04]
B
The prices are still too high. This is trending in the right direction, but if you look at, like average days on market, it's slow. It's very. It keeps going higher because the prices are still too high. So, yes, they're coming down. Yes, we're going in the right direction. But like, they're still doing.
- [53:16]
A
Wait a minute. But wait a minute. People are. The average discount to listing is 8%. In 2022, people were paying like 10% above.
- [53:28]
B
Yeah.
- [53:28]
A
Ask.
- [53:29]
B
Yeah.
- [53:29]
A
So it's a big difference. It might not have sunken in. It might not be enough, but it's something. This is Bill McBride of Calculated Risk writing about rentals. So I'm reading about home prices and I'm curious, what about the rental situation? Because that's been a really problematic thing for CPI and the inflation story. According to apartment list asking, rent growth is down 1.4% year over year. Rents are down 0.2% month over month, one and a half percent, year over year. It's not like, catastrophic for the seller, for the landlords, and it's glacially slow, but it's, again, it's in the right direction. That's nationally. So don't go in the chat and tell me about the block you live on. I'm sure it's. I'm sure it doesn't barely line up. Give me this chart, though. This is a visual. This is month over month rent growth, which is now negative for. Oh, I don't know, is that six months? It's. I feel like that's. That's a positive development. The national multifamily rate vacancy rate is also higher. 7.3%. Apartment vacancy at a record high. Back to 2017. You want me to tell you what's causing that?
- [54:47]
B
I would love you to.
- [54:48]
A
Immigration. That's who's filling. That's who's filling the rest of the apartments. And we are deporting immigrants at a very high rate and keeping new immigrants from coming. And that's where that record high vacancy rate comes from, 29 consecutive months over year over year. Decline in rents is another stat worth talking about. The median asking rent across the 50 largest US metro areas was $1,689, which is down 0.7% from December 2024.
- [55:22]
B
So.
- [55:23]
A
So slowly but surely it's not a miracle drop for the housing affordability situation, but it is improving. Any thoughts?
- [55:31]
B
Good. No, it's. It's the. I think it's hard to quantify the vast majority of the people in this nation that are upset, it's because they can't afford to live. And the biggest portion that is driving that is where they live. Just period, like, that's it. It's rent. It's house prices. It's a huge, huge national emergency. So I like that it's. I like that it's backing up a little bit.
- [56:00]
A
All right, make the case. So, because I'm a front runner, we're going to talk about energy. Energy is the best sector in the S&P 500 year to date, up 11.9%, followed by Materials, followed by staples. Do you know what all three of those sectors have in common? Energy, materials and staples. You cannot replace what they sell with anthropic or chatgpt. If you need industrial chemicals, typing something into a computer is not going to help you. If you need a Hershey bar, there's no answer coming to you from perplexity. And if you need a barrel of oil and you need to drive somewhere. Unfortunately you ain't getting anything from OpenAI. I'm not saying that's the only reason. Those are the three leading sectors. I'm just saying pay attention when the market's speaking. This is a map from S and P. Dow Jones Global through January. So it's just, it's a month but like take a look, take, take a gander. Energy all the way on the left. So it's the reverse mirror image of last year where energy was, I think the worst sets out right. Was that the year before?
- [57:18]
B
I think it's the year before. By the way. Three months too. Not just one month leading.
- [57:21]
A
Not just one month leading for three months. Put up the next one. This is industry group. Look at this. Best industry. Better than metals and mining, believe it or not. Month to date. Oil and gas equipment 20.74% not oil and gas services. Oil and gas equipment. Like literally the pipes that they stick into. I don't know how it works. So it should not come as a surprise that we have a lot of these types of stocks on our best stocks in the market list. And I want to show you a few. We I pitched Exxon on this show at about 118. The stock's down 144. Has gone absolutely vertical, up 4% today. Chevron looks great to the past earnings report. Highest annual upstream production in over 40 years. Record refinery throughput. Full year earnings 28.8 billion would be 30.1 billion unless you exclude some, some small Items. But a 20% CAGR back to 2019. These stocks were sitting there for, look at this chart years and years and years and nobody wanted them. And then all of a sudden this is why. Technical analysis. Do you see what, do you see what went on here since the start of this year?
- [58:43]
B
Bigger than base, higher in space.
- [58:44]
A
But you had this retest of the 50 and enacted as a springboard and this stock never looked back. So you have an all time high in December right at the end of the year which is when we started talking about it here on the show. Then it falls to start the year. We test the 50. The buyers come in like hungry hippos. It never looks back. And then they beat earnings raise guidance and it's just off to the races. We I pitched Devon Energy on TV today and I bought the stock also natural gas and exploration company, 2 1/2% dividend yield. The last time they reported earnings returned 400 million to shareholders. Between dividends and buybacks they retired half a billion dollars worth of Debt ahead of schedule and they have shrunk their share count by 13% over the last five years. Here's a very very simple situation as Sean outlined for our readers at CNBC Pro. Their break even level to produce is 45 bucks and WTI is 63. You don't really have to know a lot, a lot about business to understand why the situation has changed. And I bring this stock up because it's been in a downtrend since 2022. So this is basically, this is one of these stocks that nobody wanted. Just like Exxon for years and years just in this steady grind lower and then one day it stopped going down. And then all of a sudden the buyers were validated because the earnings started coming in stronger than expected. So they're going to report in two weeks. I don't know what's, I don't know what's in the report. I don't, I don't know how it'll be reacted to. But I'm long the name with the stop loss to trade. It's not a long term investment. But higher, higher lows on down days will be your tell that the trend is intact would be the way I'd think about it a couple more. Here's Targa Resources. This is pipeline, this pipeline. So this is not exploration. This is less to do with the price of natural gas. It's more about the demand. And any time we get a really tough winter obviously demand goes up and the pipeline and transmission companies do better. Only a 2% dividend yield here. It's not a great income play. It was an MLP 10 years ago. They converted to a C Corp. So no more K1s. They're talking about 22% EBITDA growth for the coming quarter. They report in two weeks as well. Put the chart back up. We wrote this up as very simple. Your 50 day is your trailing stop. That's about 183ish. It's as plain as day. You don't want to be loan the stock below there. It doesn't mean you can't ever buy it again. It just means you have to wait for it to set back up again. That's a pretty well defined risk reward. Sure is, yeah. Slightly overbought because the sector's in favor. RSI73. All right, so you want to give it a minute, let it cool off. But like these are the stocks people are going into as they sell Oracle. I'm gonna show you Granger. They sell tools and equipment. I don't really care they returned a billion and a half dollars to shareholders last year via dividends and share repurchases. I don't care. Because the only thing worth saying on this is AI doesn't replace shovels or whatever it is. So they reported today, stock had a huge rally, up 6%. Is it a little bit overbought? Short term, sure. But again, these are the stocks that are in favor this year.
- [62:22]
B
This is why the market is so much fun. Imagine 12 months ago, we're like, okay, in a year we're going to be talking about the fact that people want anything but AI stocks.
- [62:31]
A
We were complaining about it. Yeah, we were yelling about it.
- [62:34]
B
It was boring. It was boring. It was like. It was. There was nothing else to talk about.
- [62:38]
A
Last one. Wait. Wait till I tell you this one. Cortiva ctva. If memory serves me, this was spun out of a big chemical company or maybe Monsanto. This is, this might be the spun out seed business of Monsanto. Anyway, here's the deal. This is like half pesticide, half seeds. So it's an agriculture play. They just raised their, their guidance. They're talking about 6% growth for 2026. So it's not like explosive. It's seeds.
- [63:15]
B
You know, I'm a seed investor. I like. Enough said.
- [63:18]
A
Chart back on. They took out the 200 day moving average around 68 and it never looked back. And so where's the next breakout? Look at it. Look at the chart. At 70 above 75 on good volume. Are there any sellers left? Probably not in the best stocks in the market list. Michael, I have 13 total energy tickers. Baker Hughes, ConocoPhillips, Chevron, Devon Energy, Fang, Hal, KMI, PSX, SLB, Targa, which we just did. Valero, which we've talked about a million times. Williams, Exxon Mobil, which we just talked about. I'm not saying like flip the whole book into energy. I'm just saying like if you're around with Atlassian right now, like that's not what's. That's not what's poppin in the streets. So anyway, that's my make the case. What do you think?
- [64:11]
B
I love it. Well done. Really good, good stuff. Okay.
- [64:15]
A
Are you buying Cortez?
- [64:17]
B
It's just math, Josh. I am not ready to reveal it yet. I'm not buying individual names right now. I'm not about that life. I'm letting. I'm letting the work do, do the work for me. Okay, I've got a mystery chart. Not saying shit. Jesus.
- [64:34]
A
This huge decline at the end of 22 tells me it's like it was a. It was a pandemic, darling. That broke. I don't know. Docusign.
- [64:45]
B
We spoke about it today.
- [64:47]
A
Oh, we did?
- [64:49]
B
Yeah.
- [64:51]
A
Did I say nice things about it? Oh, it's PayPal.
- [64:54]
B
Yeah. There you go.
- [64:55]
A
All right, well, I got a little assist from the chat, to be honest. The chat. Who. Who said? Michael Mariste gave me PayPal. Jay Minter, Biff Grebels gave me PayPal. Taking care of this.
- [65:11]
B
Yeah.
- [65:12]
A
Thank you, guys. That's my secret weapon. Love you, Chad.
- [65:15]
B
This whole time. This whole time.
- [65:17]
A
Put the chart back up. This is now on my list of the worst stocks I've ever met. Do you know I have that list I informally keep? Do you know that?
- [65:26]
B
No. I love it, though. We should talk more about it.
- [65:28]
A
The worst stocks I've ever met. So it can't just be like, oh, here's a stock that went to zero. It has to be a stop. That I have become acquainted with over the years. Do you understand? To be. This is one of the worst stocks I've ever met. Like, top. Easily top 20. And I'm doing this for 30 years. It is so bad, just bad for so many reasons. But we don't have time today. All right, guys, that's it. Animal Spirits tomorrow morning with Michael and Ben. All new Ask the Compound. Later that day on Friday, we have another. Another edition of the Compound and friends with a new friend, someone we've never talked to before. Super excited about it and we appreciate everybody who joined us for the live. Once again, shout out to the chat. Thanks to everyone for listening. We'll talk to you soon.
- [66:42]
D
Ritholtz Wealth Management is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Ritholtz Wealth Management and its representatives are properly licensed or exempt from licensure. Nothing on this podcast should be construed as and may not be used in connection with an offer to sell or solicitation of an offer to buy or hold an interest in any security or investment product. Past performance is no guarantee of future results. Investing involves risk and possible loss of principal capital. No advice may be rendered by Ritholtz Wealth Management unless a client service agreement is in place.