Trading the Election

Summary

The Compound and Friends - Episode: Trading the Election
Release Date: November 1, 2024

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Overview

In this engaging and insightful episode of The Compound and Friends, hosts Downtown Josh Brown, Michael Batnick, and Jack Rains delve into the multifaceted dynamics of the upcoming election, its impact on financial markets, and the evolving landscape of social media platforms. The conversation spans a wide array of topics, including election prediction markets, corporate earnings reactions, MicroStrategy's aggressive Bitcoin investment strategy, the rise of Reddit as a dominant social media force, and the strategic moves of major financial institutions like Robinhood and Sherwood.

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Election Prediction Markets and Betting Trends

The episode kicks off with a lively discussion about the surge in election-related betting markets. Michael Batnick highlights Robinhood's launch of presidential election event contracts ahead of the November 5th general election, noting the enthusiasm among users to trade based on election outcomes.

• Michael Batnik [20:10]: "We had a good call. I'll fill you in after."

• Jack Rains [20:30]: "It's a binary bet on the election, Matthew Tuttle, CEO of investment fund Tuttle Capital Management, told Yahoo Finance. Listen to this one... I think the trajectory of shares hinges on a buy the rumor sell the fact trading strategy."

Jack Rains elaborates on platforms like Kalshi and Polymarket, observing a significant skew toward betting on Trump, possibly influenced by a higher proportion of conservative bettors and recent momentum in his favor.

• Jack Rains [20:55]: "There's a little bit like a slightly higher percentage of people that are actually betting on this probably lean conservative. So that's going to skew it a little bit."

The hosts contemplate the implications of these betting markets on voter behavior and election outcomes, pondering whether early predictions might dissuade voter turnout.

• Michael Batnik [21:19]: "So I would tend to believe that the prediction market is the real thing when it comes to, like, the stock market."

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Corporate Earnings and Stock Market Reactions

Transitioning to corporate earnings, the hosts analyze recent performances of major tech giants amid a challenging market environment. Notably, Microsoft and Meta experienced significant stock declines despite solid earnings reports.

• Josh Brown [07:52]: "There's a lot of dispersion in the Mag 7. So Microsoft, Nvidia are bright red. Meta's down almost four."

• Jack Rains [14:16]: "What about the total, you know, Gen AI future? Is this a bubble today or not?"

The conversation underscores a shift from an initial optimistic earnings season to a more cautious sentiment, with even traditionally high-performing stocks facing sell-offs.

• Josh Brown [16:30]: "It's interesting seeing how bullish investors are on the stock market compared with how like people feel about the economy..."

Jack Rains attributes this dichotomy to personal portfolio gains contrasting with pessimistic economic news, suggesting a segmented perception among investors.

• Jack Rains [18:34]: "But my take on this is most people's personal portfolios are up because most people are invested in index funds or something like that."

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MicroStrategy's Bitcoin Strategy: A Risky Gamble

A substantial portion of the episode focuses on MicroStrategy's bold strategy under CEO Michael Saylor, who has been aggressively purchasing Bitcoin to leverage corporate growth. The hosts dissect the sustainability and risks associated with this approach.

• Josh Brown [50:03]: "MicroStrategy has stock to sell, so if you want to understand, like, really what's going on, read Matt Levine."

• Jack Rains [53:29]: "They make $100 million in revenue below $400 million. So relative to the size of the bitcoin holdings, you're paying a 3x. But it doesn't matter."

The discussion highlights the company's exponential increase in Bitcoin holdings—from 133,000 to 252,000 Bitcoins—and the corresponding rise in value from $2.2 billion to $18 billion. However, concerns are raised about the potential for margin calls and the sustainability of continually issuing debt to fund further Bitcoin acquisitions.

• Michael Batnik [55:37]: "This is a wild story though. He's like the bitcoin Fed..."

• Jack Rains [54:07]: "If bitcoin had a like 85% drawdown, he could get margin called and then have to sell some of his bitcoin to pay back creditors."

The hosts debate the long-term viability of MicroStrategy's strategy, contemplating scenarios where significant Bitcoin price drops could jeopardize the company's financial stability.

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The Rise of Reddit: Outpacing Twitter in Engagement

Shifting focus to social media, the hosts commend Reddit's remarkable performance post-IPO, contrasting it with Twitter's struggles under Elon Musk's leadership. Reddit's user base has surged, with daily active users up by 47% year-over-year and revenue soaring by 68%.

• Jack Rains [34:23]: "Reddit absolutely crushed earnings. Their revenue was up 68% year over year, which is nuts."

Reddit's strategic partnership with Google to enhance AI-driven translation tools has expanded its global reach, making it a formidable competitor in the social media landscape.

• Jack Rains [35:01]: "They've been using machine learning to build out better translation tools... so it opens up a bigger international market."

The conversation also touches on the evolved nature of communities like WallStreetBets on Reddit, noting a shift from sophisticated trading strategies to more meme-driven interactions as the community has grown.

• Jack Rains [42:13]: "It's bigger than ever, but it's like, it's one of those things where the bigger it gets, you lose that..."

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Washington Post's Subscriber Decline and Political Neutrality

Addressing media influences, the hosts critique Jeff Bezos's decision to refrain from endorsing presidential candidates in The Washington Post, citing a resultant 10% loss in subscribers. They argue that the timing of this decision, amidst impending elections, undermines trust in the publication's claimed neutrality.

• Josh Brown [29:26]: "Jeff Bezos saying that the newspaper will not endorse a candidate... it's kind of weird effing timing considering the elections on Tuesday."

• Michael Batnik [30:09]: "It's because Blue Origin relies on government contracts... it's not like none of this is news that this is now a really big factor."

The discussion emphasizes skepticism toward Bezos's motivations, suggesting that such decisions are strategically timed to favor his other business interests, thereby eroding credibility.

• Jack Rains [32:28]: "As soon as you come out and say that none of that happened, it shows that you were thinking about people thinking that that happened."

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Robinhood and Sherwood's Evolution

Jack Rains shares insights into Robinhood's expansion beyond retail trading, highlighting Sherwood's growth and the platform's increasing sophistication. The integration of retirement accounts and advanced trading suites marks Robinhood's transition into a more comprehensive financial service provider, appealing to a broader audience.

• Michael Batnik [60:24]: "Robinhood has like a very favorable retirement match... they're offering a lot more."

• Jack Rains [61:07]: "Robinhood's growing up and they're offering a lot more... we're launching like Vlad announced two weeks ago, a full trading suite desktop version."

The hosts commend the strategic moves of Robinhood and Sherwood in capturing a larger share of the financial market, positioning them competitively against traditional brokerage firms.

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Concluding Remarks and Favorites

As the episode wraps up, the hosts share their personal favorites and recommendations:

• Josh Brown recommends Matt Levine's coverage for deeper insights into financial intricacies like MicroStrategy.

• Michael Batnik praises Steven Pressfield's daily motivational book for creators and entrepreneurs.

• Jack Rains highlights his co-hosted podcast Snacks Mix and encourages listeners to follow his blog, YoungMoney.com.

The episode concludes with light-hearted banter and a reaffirmation of the hosts' commitment to delivering valuable financial insights.

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Notable Quotes

• Josh Brown [14:05]: "It's just like I'm looking at a chart of MSFT divided by SPY and it's where it was in October 21st. So how is that even possible?"

• Jack Rains [26:13]: "It's a binary bet on the election..."

• Michael Batnik [25:01]: "I would tend to believe that the prediction market is the real thing when it comes to, like, the stock market."

• Jack Rains [34:23]: "Reddit absolutely crushed earnings. Their revenue was up 68% year over year, which is nuts."

• Michael Batnik [21:19]: "So I would tend to believe that the prediction market is the real thing when it comes to, like, the stock market."

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Key Takeaways

• Election Betting Markets: There's a significant surge in trading election outcomes, with platforms like Robinhood enabling users to bet on presidential results. This trend raises questions about the potential impact on voter behavior and market perceptions.

• Stock Market Volatility: Despite solid earnings reports, major tech stocks like Microsoft and Meta are experiencing notable declines, indicating a shift in investor sentiment towards seeking higher-than-expected performance.

• MicroStrategy's Risky Bitcoin Bet: MicroStrategy's aggressive acquisition of Bitcoin through leveraging debt poses substantial financial risks, especially if Bitcoin's value drops significantly.

• Reddit's Dominance: Reddit is outperforming other social media platforms like Twitter, thanks to strategic partnerships and a focus on community-driven content, making it a powerful tool for information sharing and engagement.

• Media Trust Issues: Jeff Bezos's decision to avoid endorsing political candidates in The Washington Post has led to a loss of subscribers, highlighting the importance of perceived neutrality in media ownership.

• Robinhood's Growth: Robinhood, through Sherwood, is expanding its services beyond retail trading to include retirement accounts and advanced trading tools, positioning itself as a comprehensive financial platform.

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This episode of The Compound and Friends offers a deep dive into the intersections of politics, finance, and social media, providing listeners with a nuanced understanding of current market trends and their broader societal implications.

Transcript

[Josh Brown]

So I'm Napoleon Dynamite sensei. Who are you?

[Michael Batnik]

I'm like, I don't know. We're all this.

[Jack Rains]

And we're all just somebody from.

[Josh Brown]

Let's take down a buffalo after.

[Jack Rains]

We could be right. We could. We could also be Talladega Knights. The.

[Michael Batnik]

I forgot what.

[Jack Rains]

They're Ricky Bobby and whatever. Dale.

[Michael Batnik]

Oh, God. Dale.

[Josh Brown]

So, no, I need to know, like, were you, like, where'd this come from in your brain? Nicole, were you involved in this?

[Jack Rains]

Yes. Hey, can we. I was sent links and I ordered.

[Michael Batnik]

Nicole's denying involvement.

[Josh Brown]

Seriously? She's like, what's nothing to do with this?

[Michael Batnik]

I love it.

[Jack Rains]

Jack said he's got the price tag. Honestly, we could leave that on if we want to. Honestly, it kind of makes it leave.

[Michael Batnik]

The price tag is hip hop.

[Jack Rains]

That's what. That's what they do in the culture now. So what you're saying is Minnie Pearl.

[Michael Batnik]

Was the original rapper who did that?

[Jack Rains]

I don't know who that is.

[Michael Batnik]

Jack, you want both of these?

[Josh Brown]

No, no, just the special scissors.

[Michael Batnik]

She was on a show called oh.

[Josh Brown]

We're Not Connected to tv and she wore a hat.

[Michael Batnik]

No, I can't connect to tv.

[Jack Rains]

It was like, the whole thing. Like the baseball hat.

[Michael Batnik]

Why you want to show this?

[Josh Brown]

I just want. How funny is that?

[Michael Batnik]

Let's assume everyone in the country has seen this.

[Josh Brown]

No, but the tag.

[Michael Batnik]

What is the tag?

[Josh Brown]

Read it, read it, read it, read it.

[Michael Batnik]

Hold on. Citadel securities. When you put in your market orders, the funniest one I saw was when my kid brings home Twix bars on Halloween.

[Josh Brown]

I have been going nuts this week with kids candy. It's not good. So we have, like, the mint.

[Jack Rains]

Are you eating it or just, like.

[Michael Batnik]

Getting high on your own supply?

[Josh Brown]

What else do you do with the kids candy?

[Jack Rains]

I don't know, man.

[Josh Brown]

I eat it. That's just me. I'm crazy. I eat it.

[Michael Batnik]

Wait, what are you guys giving out?

[Josh Brown]

The standard Twix, cocaine, Starburst.

[Michael Batnik]

Yeah, I might come. Trick or treat.

[Jack Rains]

Those cigarettes are kind of back. Like, they're. They're coming back. I don't hate it. I don't hate it. The kids are tired of vaping. Like, cigarettes are back.

[Michael Batnik]

They want the real. They want the real thing.

[Jack Rains]

Like, the fight. Like, you can smoke cigarettes on your fire escape. It's like, fair game. It's making a comeback in the culture anyway.

[Josh Brown]

Just eating lots of Twixes and Snickers.

[Michael Batnik]

So don't bring your kids by. Jack Rains crib. This week he's giving out Marlboro reds.

[Jack Rains]

That's right.

[Josh Brown]

So I didn't get to read this yet, but you guys just did a story on. On Blumhouse.

[Jack Rains]

Yes, I actually have not read it.

[Josh Brown]

Either, but I love that guy.

[Jack Rains]

I think it's really good because we were all talking about it. I myself have not read it yet, so I can't comment on it in good faith.

[Josh Brown]

So, Chris, we're about to start recording a podcast, but we just had a very exciting call that I will talk about it after. Okay.

[Jack Rains]

You had a what?

[Josh Brown]

We had a good call. I'll fill you in after.

[Jack Rains]

I wanna see the costume.

[Josh Brown]

I can't. Dude, fix your phone computer.

[Michael Batnik]

You'll see it on YouTube like the rest of America see me. Oh, there he is. All right, show me, though. Show me.

[Jack Rains]

Honestly.

[Josh Brown]

Yeah, I'm gonna walk outside like this. Although it is Halloween. Nobody would know.

[Jack Rains]

Josh should rock that outfit and walk in the house.

[Michael Batnik]

All right, get him. All right. Off screen.

[Jack Rains]

That's a new lingo that y'all can add to your lexicon. It's the word chat. You can use it like a. It's what the. My Gen alpha cousin, he's 13, gave me this. It's. You use it like a. Like a third person.

[Michael Batnik]

Yeah, chat. What do you think?

[Jack Rains]

Chat. Is this real?

[Michael Batnik]

Yeah.

[Josh Brown]

I'm too old to learn new words.

[Jack Rains]

But you should know, it's just, like, you can use it instead of y'all, essentially.

[Michael Batnik]

I don't hate. I don't hate that it came from.

[Jack Rains]

Like, Twitch streamers when they're like, chat. Like, asking the chat questions. But you can use it in the real world.

[Josh Brown]

I like it better than famous fam's.

[Jack Rains]

Pretty beat chats better.

[Josh Brown]

Yeah. There we go. This is Jen Alpha shit right here.

[Jack Rains]

That's right. We're getting going all the iPad babies.

[Josh Brown]

All right, Wait, can we at least do audio? Could we do audio?

[Michael Batnik]

Audio of what other thing I just got rid of of Masa.

[Jack Rains]

What do I need to be doing over here?

[Michael Batnik]

Wait, I don't. But I have to have the thing, though.

[Josh Brown]

It's in the link. Come on now. It's not my first rodeo.

[Michael Batnik]

Uh. Oh.

[Josh Brown]

Oh, it feels good. It feels good with the headphones on. Does it look good? You look good.

[Jack Rains]

Do I need to adjust anything?

[Josh Brown]

Just talking to the mic.

[Jack Rains]

Do I need to, like, pull it closer? Or is it, like, a video? Cool. This is pretty fancy.

[Michael Batnik]

Hold on. Before you play this, it's three minutes.

[Josh Brown]

No, no, just 30 seconds. But the dude is trying to interrupt so bad. Mas is like, talking about Nvidia. Undervalued. And the guy leading in, the guy who's doing the interview, like, wants to.

[Michael Batnik]

Go, this is in Saudi Arabia. This is the fii thing.

[Josh Brown]

I believe so.

[Michael Batnik]

All right, What?

[Jack Rains]

Undervalued on what basis? Because the future is much bigger. Nvidia is just one example.

[Josh Brown]

Right.

[Jack Rains]

What about the total, you know, Gen AI future?

[Michael Batnik]

What is the value of the future?

[Jack Rains]

Is this a bubble today or not?

[Josh Brown]

Okay.

[Jack Rains]

Some critics, the most negative guy says, oh, this Asia ASI in 10 years.

[Michael Batnik]

Oh, look at him. Maybe only 5% is actually useful or, you know, replacing. I can't say.

[Josh Brown]

So that's Master Son, who's the one.

[Michael Batnik]

I interviewing him, though.

[Josh Brown]

I don't know. One of the largest tech investors in history.

[Jack Rains]

He's the goat.

[Josh Brown]

One of the biggest bubble blowers. Also, in fairness, one of the biggest money make. Like, this guy is made in lost and made in lost fortunes. And that's him saying that Nvidia is undervalued in 2024.

[Michael Batnik]

Thank God somebody. Thank God somebody's saying it. He might be the only person that thinks it's undervalued right at this moment in time. I think there are people that think it's fairly valued.

[Josh Brown]

You know what? I think we need investors like that.

[Michael Batnik]

Yeah, like, for real one. You need one guy.

[Jack Rains]

He's done this three times. I wrote a piece on him a couple of weeks ago, and he. Back when the. When the dot com bubble popped, he set the record for losing more money than anybody had ever lost. Ever.

[Josh Brown]

Was it on Yahoo Killing the game.

[Jack Rains]

It was like just all the tech companies he yoloed lost it. And then he basically yoloed Alibaba again and then lost it all in wework. And then he yoloed ARM and then made it all back again.

[Josh Brown]

Legend.

[Jack Rains]

It's only fitting for him to go all in on Nvidia somehow. Nvidia be a fraud. Him lose it all again and then make it back on.

[Josh Brown]

Like he has one more turn. How much money did he make from arm? Like, people were like, laughing.

[Michael Batnik]

He almost sold it to Nvidia before it came public.

[Jack Rains]

Yeah, didn't that one get blocked by regulators? So he. They still own like 90% of it. I don't actually know how they'll be able to sell that because they own 90% of a publicly traded stock. But I think a couple of weeks ago, ARM was worth 145 billion.

[Josh Brown]

And how much do they own?

[Jack Rains]

You said he. 90%. So they have like $130 billion. Like most of Softbank is Goaded.

[Michael Batnik]

He has to create an alternate universe. Masayoshi Son to sell it to. That's the only way his investing strategy is drop a baby grand piano onto the buy button and do it again. Just in case the first time didn't take.

[Jack Rains]

He's like a better Bill Wang. Like he just hasn't gone to prison. But they both kind of do the same thing. I love it.

[Josh Brown]

I love it too.

[Michael Batnik]

He's killing it. All right. Today's a blood red day for the nasdaq. So we're going to, we're going to, we're going to get into that for sure. A lot of big earnings reactions and no, it's interesting.

[Josh Brown]

There's like a lot of dispersion in the Max 7. So Microsoft Nvidia are bright red. Meta 2. Apple's Apple is only down a percent of Google's down one and a half. That's it.

[Michael Batnik]

Apple will report tonight.

[Josh Brown]

Amazon too.

[Michael Batnik]

And Amazon too. So give that a minute. Yeah, it's a. You know what, it's a reversal of how earnings season started because the first two big tech names out of the shoot had great reactions. Tesla and Google. I was gonna say Netflix. Alphabet too. Netflix had a really big upside response after the earnings. All right, how we looking? We're good.

[Josh Brown]

We're good. All right.

[Michael Batnik]

All right, let's pod. All right.

[Josh Brown]

I just noticed your computer.

[Jack Rains]

What, the sheater sticker? Yeah, yeah, yeah. It's a cool looking dog.

[Josh Brown]

Whoa, whoa, whoa. Stop the clock. John, before you clap, here's a word from our sponsor.

[Michael Batnik]

Listen up, folks. Time could be running out to lock in a historic [e-mail] but you could.

[Josh Brown]

Lock in a 6% or higher yield with the bond account. Josh.

[Michael Batnik]

But here's the thing. The Federal Reserve just announced the big rate cut and the plan is for more rate cuts.

[Josh Brown]

I'm not so sure about that.

[Michael Batnik]

We're going to see at least one more, I think. But look, if you're looking to buy a home, that's good news. It might not be so great for the interest you're currently earning on your cash.

[Josh Brown]

So if you want to lock in a 6% or higher yield with a diversified portfolio of high yield and investment grade corporate bonds, we're talking Apple, Microsoft. You know who they are. You might want to act fast.

[Michael Batnik]

And the best news is it's fast. It's easy to set up an account and sign [e-mail] once you lock in your yield, you can earn regular interest payments even as rates decline. This has been brought to you by Public investing member FINRA and SIPC. As of 926 24, the average annualized yield to worst across the bond account is greater than 6%. Yield to worst is not guaranteed. Not an investment recommendation. All investing involves risk. Visit public.com disclosures Bond account for more info.

[Josh Brown]

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[Jack Rains]

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.

[Michael Batnik]

Ladies and gentlemen, episode 164 of the compound and Friends, My name is Downtown Josh Brown. Congratulations to first time listeners. You have just happened upon your new favorite investing podcast. For those of you who have been riding with us since day one, we love you. Make my music louder I feel like you're already fading me out Fade me.

[Josh Brown]

In don't be shy Fade me in.

[Michael Batnik]

Listen, this is a very special show. It's the Halloween edition. Even though you're gonna watch it or hear it on November 1, just like understand that it's Halloween right now as we're recording it so we look way less crazy. I'm here with my co host as always Mr. Michael Batnik. We got a full house here today. Daniel's Here. Rob Duncan is here. John, how's it going? Everything's good. All right. And of course, Nicole is here. And we have a very special guest, our friend, the living legend. It's amazing how young you are. You're already a legend. Jack Rains writes the Young Money blog, a finance focused blog covering markets, the economy and more. Jack is also an associate editor at Sherwood, covering business and market news. Prior to Sherwood, Jack spent two years as the editor of the financial newsletter Exec Sum. Jack Rains, welcome back to the show.

[Jack Rains]

Humbled and honored to be here. Also, this is. This is not a costume. This is just how we dress where I'm from.

[Michael Batnik]

I was going to say, for those of you who are listening, we are wearing the classic three wolf T shirts. Three wolves howling at the moon T shirts. What? You have a duck hunting hat on.

[Jack Rains]

Yeah, it's. Yeah, I think so.

[Michael Batnik]

I have Don't Tread on me.

[Jack Rains]

Let's go.

[Michael Batnik]

In camo, of course. Is there any other way to rock that? And Michael has the. What did you call it?

[Josh Brown]

Bow to your sensei. Yeah, I'm the Napoleon Dynamite dude.

[Michael Batnik]

Yeah, but Michael has the three wolves as well. And then we gave him an American flag. Shmata on his head.

[Josh Brown]

Love it.

[Michael Batnik]

So that's the story. Something. As soon as I put the shirt on, I want to start spreading conspiracy theories on Twitter. It should. It feels natural.

[Jack Rains]

That's all that people do on Twitter now. I mean, it's Halloween. It's election season. You're wearing a wolf shirt. Come on, throw something crazy.

[Michael Batnik]

As soon as I put on the three Wolves and the moon shirt, all I wanted to do was storm the capitol. I can't. I don't know how I'm going to keep myself.

[Jack Rains]

Where were you on January 6th?

[Josh Brown]

I heard that Kamala Harris actually died three years ago. And it's actually Tiffany Trump under there.

[Michael Batnik]

Wow.

[Jack Rains]

This is. They had that whole, like, conspiracy with Avril Lavigne, the skater boy singer. So I'm glad that.

[Michael Batnik]

Tell us what that is. We don't know the conspiracy.

[Jack Rains]

Oh, my God. So there's.

[Michael Batnik]

We know Avril.

[Jack Rains]

Yeah. Well, no, you don't. She's been dead for 11 years. According to the conspiracy. Somebody else came up with sk8r boy. Like, it's a whole body double thing.

[Michael Batnik]

So I can't imagine where that would have come from. All right, Reports today from Microsoft Meta Uber. All three selling off. I think one of the interesting things about the Microsoft result, it didn't seem very difficult. Different from what Alphabet had to say on cloud growth. But like today is just one of those days where good is not enough. People needed. Great. Or it's sell the news. The stock's been rallying all year. They would have sold it either way. What do you think?

[Josh Brown]

So I think it's the latter. I didn't have time to dig into the fundamentals, but this blew my face right off my body. Did you know that Microsoft has performed in line with the S&P 500 since October 2021?

[Michael Batnik]

That really?

[Jack Rains]

Wow.

[Josh Brown]

It's just like I'm looking at a chart of MSFT divided by SPY and it's where it was in October 21st. So how is that even possible? You tell me that in the last three years it hasn't outperformed that. Yeah, that's what I'm telling you.

[Michael Batnik]

I wouldn't have, I wouldn't have guessed that. It hasn't, I guess it was already so high in 2021, I don't know. I would not have guessed.

[Josh Brown]

But I mean technically the stock doesn't look great. I think like my knee jerk reaction to this is good. Not that I like to see anybody lose money, but like these stocks have been on fire. Heaven forbid we should have like a normal pullback. I think that's okay.

[Michael Batnik]

Are people trading the Mag 7 on Robinhood as much as they had been or are they bored with these names? I feel like people are bored with these companies other than Nvidia at this point.

[Jack Rains]

And probably Tesla. Right? Like Tesla's always fun. Yeah, yeah, here's, here's a fun one. Oracle is up 61% year to date and it's up 200% over the last five years. So Oracle has been outperforming, I think the entire MAG7 except for Nvidia.

[Michael Batnik]

Yeah. Oracle is like the fourth largest cloud provider. They only really became a cloud computing story like two or three years ago.

[Jack Rains]

Right.

[Michael Batnik]

So I think they can just take market share and that's probably what's fueling the gains. John, can we put this. Earnings reactions.

[Josh Brown]

Well before we do, real quick, real quick. So the Mag 7, there's a, there's a ticket for that round. Ticket for that. It hit an all time high yesterday. That also surprised me. Did you know that?

[Michael Batnik]

I did know. I did not know that. How is it weighted? Is the equal weight amongst.

[Josh Brown]

Probably. Yeah. So it's, it's, it's the big seven all time high yesterday.

[Michael Batnik]

So probably helped by Nvidia and Tesla.

[Jack Rains]

Yeah.

[Josh Brown]

Not, not, not Tesla. Not Tesla.

[Michael Batnik]

Let's put up, let's put this up. So just to run through the reactions to earnings. This is just one day reaction. So Netflix started, started us off on October 17th. It had a one day gain of 11.1%. Tesla 22%, one of its best days ever. Even Alphabet, which was not like a blow your face off report up 2.8%. Today is a different story. Microsoft off five and a half, Meta off almost four. Uber down 11 and change, which I'm long the stock, I think it's a, I think it's a weird reaction to what was a pretty good quarter and good guidance. But the sentiment shifted so fast on these because if you would have bet, oh, look how much they love Tesla, look how much they love Netflix. We're good this earnings season. It's just not really what you're getting right now.

[Josh Brown]

I would also point to year to day performance that I'm pulling up right now. Like these things, listen, they can't go up indefinitely, forever and ever without some sort of normal pullback. So I'm not trying to poo poo the reaction. I think it's interesting. But I also think that Microsoft was up 25% earlier in the year. What do we sell? What else is pulling back? Uber had been up. Uber was up 40% year to date as of a couple of weeks ago. So you know, is this, are we going to see some follow through to the downside? Obviously I have no idea. But what's interesting in conjunction with this is that there was a report from the conference board consumer confidence, expectation of stock price increases. So this report is old, it goes back to the 1980s and they ask people what is your expectation of stocks being higher one year from now in terms of like will they be higher, will they be lower? And it's at the highest. As far as this is from Jim BIANCO's chart, it's 51% of respondents expect the stock market to be higher next year. So yeah, okay, we got a little bit frothy.

[Michael Batnik]

People are excited. This is off the charts.

[Josh Brown]

Investors are horny. But it is interesting. Jack, I want to get your take on this. It is interesting seeing how bullish investors are on the stock market compared with how like people feel about the economy and how they feel about how the country is going. It's a weird dichotomy.

[Jack Rains]

Well, I think it's like just looking at this now, it seems like it keep like when stocks have been going up, people want it to still go up. Like is that 2022 where it's at the bottom right before this?

[Michael Batnik]

That's exactly how it works.

[Jack Rains]

That's like. I think that was around the last time I was on here, but it's like, that's. Everybody thought like, we were going to have a recession, the world was going to end, and the. And peas up a lot since then. So I don't know. It is weird that people think the financial markets are doing better than the economy. But my take on this is most people's personal portfolios are up because most people are invested in index funds or something like that. So everybody feels like the economy is bad because the news looks bad. And then you're seeing all these reports about inflation, this and that. But then their own personal investment accounts are probably up, like 20% or whatever this year. So it's almost like everybody's doing bad except for me, but my net worth is up, therefore I feel good about it. Like, it's like you're segmenting your situation from.

[Michael Batnik]

That's like when. That's like when they ask people, like, how do you feel about Congress? They despise Congress.

[Jack Rains]

Right.

[Michael Batnik]

How do you feel about your own congressperson? Oh, she's doing a good job.

[Jack Rains]

Right? Yeah.

[Josh Brown]

You know, I think there's, like, a virus going around and that. Virus that. Not Covid. It's, like, cool to complain. Like, complaining is very much in vogue these days.

[Jack Rains]

Yeah.

[Michael Batnik]

Well, let's talk about. Let's talk about the election, because it's. This is the last show, I think, before we actually get the result. If we get a result. First things first is I can't believe how many people want to bet with money on the election. You would think that. I think the last polls were. It's 47. 47 or whatever. Like, no, none of the polls.

[Josh Brown]

I don't know which polls you're looking at.

[Michael Batnik]

Yeah, none of the.

[Jack Rains]

None of the prediction market, none of.

[Michael Batnik]

The mainstream polls are so far apart that you would think, like, there's this, like, obvious winner just yet. I know in people's hearts there's an obvious one.

[Josh Brown]

Since when is betting about making money, sir?

[Michael Batnik]

I guess not. So Robinhood, which Sherwood is. Is connected with. This is directly from their release. Two weeks ago, we hosted hundreds of Robinhood customers in Miami at our inaugural Hood Summit. There we announced Robin Hood Legend and that index options and futures would be coming soon. Now, Robinhood is following up on this announcement with the launch of presidential election event contracts ahead of the November 5th general election. And other people have launched these also. People are really excited to be able to trade on the result of the election. Are you surprised by that at all.

[Jack Rains]

No people like betting on anything. This is like the biggest story. And honestly, because to your point, even though most of the prediction markets, like I'm looking at Kalshi and Polymarket now, and they both show Trump favored right around 60, 40, but most of the polls are still showing like a 50 50ish. So everybody thinks that they're right on this and it's essentially a double your money thing. If you're right, why do you think.

[Michael Batnik]

There'S such a big gap between the traditional polls versus the betting markets?

[Jack Rains]

I think it's a couple of things. The first is that I think a little bit like a slightly higher percentage of people that are actually betting on this probably lean conservative. So that's going to skew it a little bit. But the other thing is in the polls, Trump has had momentum over the last month or so. So he went from being down by 2% to it being about neck and.

[Michael Batnik]

Neck, which is momentum like a stock.

[Jack Rains]

Yes. And because in the polls, like what Nate Silver does, for example, you're polling what people's individual choices are, the prediction markets, people are betting on what they think the broader outcome is going to be. So if Trump's gaining momentum and you're betting on a binary outcome, not just a bunch of individual decisions, if it's a coin flip and he's been gaining momentum, more people are going to expect that to keep going. It's really not that different from stock.

[Michael Batnik]

This is not moved by individual people, like the count of individual people. This is moved by money.

[Josh Brown]

It's the market.

[Michael Batnik]

So wealthier people probably. And also maybe more people are betting on Trump and that's how you get that big dispersion.

[Jack Rains]

So Kalshi puts out they were the one who sued the cftc and won. And won. Yeah. So that's why them Robinhood Interactive brokers, they all have US markets for this now, but they distribute research reports of their numbers and more people on the platform are putting money on Trump. But the median bet size for Harris is bigger and there's more what I thought it was. So there's still more net betters on Trump, but there's a higher proportion of bigger batters on Harris, which I counterinsurgent.

[Michael Batnik]

Do we know? You might know this, you might not. Do we know how the rules work. So let's say it's a contested election, which I'm willing to bet. I'm willing to bet $1 million. It is in both directions, no matter who wins. Like who wins this bet. So is it who gets inaugurated.

[Jack Rains]

It depends on. So it depends on where you bet. So Poly Markets bets settle like on Wednesday, but cashes don't settle till.

[Michael Batnik]

No one's going to be happy with that.

[Jack Rains]

Couches don't settle till January. So there's like, depending on which plat. And I don't know when the Robin Hood would settle, but when, like if you, if you bet on Kalshi, you won't actually get your payout until like January 7th or whatever.

[Josh Brown]

Well, like Tim Draper, I have bet both candidates.

[Jack Rains]

Yeah, hold on.

[Michael Batnik]

But if you bet on Poly Market, you might not ever get paid because the odds of there being a resolution come Wednesday, in my personal opinion, not knowing anything more than anyone else are very slim.

[Jack Rains]

Yeah. I have no idea.

[Michael Batnik]

There's not going to be a concession phone call.

[Jack Rains]

No.

[Michael Batnik]

Okay. And why would there be? It's so tight or. We think it's so tight.

[Josh Brown]

Well, hang on. Talk about what Nicola said on your show, because I think that he's onto something in terms of what's getting the.

[Michael Batnik]

Momentum going for Trump on the betting markets. Yeah, well, Nick. So Nick made the point, which I think, look, I think we'll find out eventually if this is true. But he thinks that there are big bettors, specifically overseas that are off offsetting risk in one particular position by betting on one of the candidates. So, like, if you're making policy specific bets, one way to hedge might be to offset it with a bet on which candidate wins.

[Josh Brown]

Well, wait a minute. I think it's a little bit different than that. My interpretation was that this person or people are trying to get momentum for Trump not because they're political, but because they think that that's going to have implications for foreign currencies and commodities. And then they're using real money, like real, real money to buy the peso or palladium or whatever, whatever policies that Trump will enact that will impact foreign markets and international markets. That's the purpose of the money.

[Jack Rains]

But do you think they're like putting money on Poly Market or whatever to try to.

[Michael Batnik]

Like, this is a tiny market, 2 billion relative to the currency, and a.

[Jack Rains]

Lot of that's probably wash trading. I don't know if you saw the Fortune piece about how like a third of this is like wash trading volume. So it's probably like. Yeah, there's. It was a pretty wild piece that, I think Fortune put it out yesterday about how they said at least a third of polymarket's volume on the election market. And in general is like wash trading people just moving Money back and forth without taking.

[Michael Batnik]

You mean they're buying and selling and then rebuying and reselling? Oh, I believe that.

[Jack Rains]

Yeah. Yeah.

[Josh Brown]

I mean, it's crypto stuff, but, you know. You know what's interesting is that the tail is wagging the dog, because this is having, like, impact on how people are thinking about the outcome of the election.

[Jack Rains]

Well, it's because the average person doesn't, like, doesn't necessarily get the difference between a prediction market and a poll. So the polls, 50, 50 and a prediction market, 6139. Then they're like, oh, the prediction market's like the real thing. They aren't really measuring the same.

[Michael Batnik]

So I would tend to believe that the prediction market is the real thing when it comes to, like, the stock market.

[Jack Rains]

Yeah.

[Michael Batnik]

Not that the prediction is always right.

[Josh Brown]

It's not volume.

[Michael Batnik]

But I'm one of these people that believes good news happens to stocks that are already in uptrends.

[Jack Rains]

Yeah.

[Michael Batnik]

And bad news happens to stocks that are already in downtrends. Because I think the market is smart. I don't know if I would make the leap and say that I believe that the prediction market is leading what the actual election outcome will be. I don't think it's big enough.

[Jack Rains]

Right.

[Michael Batnik]

Here's the Fortune piece. The prediction market, poly market has skyrocketed into mainstream consciousness during the 2024 US elections, with the platform reporting that users have placed 2.7 billion in bets over whether Trump or Harris will be elected.

[Josh Brown]

That's a lot of money.

[Michael Batnik]

But analysts at two crypto research firms have found evidence of rampant watch trading, even as his odds have been shared widely across social media and mainstream media outlets. Donald Trump currently has a 67% chance of winning, according to the platform. So they're looking at people buying and selling these contracts to create a false impression of volume and activity. I would guess that that's probably happening.

[Jack Rains]

Yeah.

[Michael Batnik]

Okay. Are there bots doing this?

[Jack Rains]

I don't know.

[Michael Batnik]

Highly possible. It'll be interesting if, you know, one of the things they try to do on the news is not call an election too early because they don't want to stop people from going out to vote. But if you hear on TV that a state is, like, probably already done, and you live in that state, you might not go. If you see that same phenomenon start to play out in these betting markets. Maybe not this election, but next election, where three days before you can see, based on the prediction market where your candidate is, you might not even get up and go out and vote. You might say it's a waste of time, it's over.

[Jack Rains]

Yep.

[Michael Batnik]

Okay. That's an interesting thing. Are you pro prediction markets in general? Do you think there are any societal reasons why we should maybe police these a little bit better or.

[Jack Rains]

I just. So my take is I think people can put their money on whatever they want. If it's like a fair market you want to do that, that's like on you to do it. I do think that having prediction markets for just making it where you can bet on literally anything at any point is just a slippery slope and that like, it's just another thing people can get like addicted to and potentially lose money on. So like, yeah, from, from a, like, I don't necessarily know how it should be governed and I think people should be able to do what they want. I do think that there's going to be consequences of like people losing money or this Same thing as sports betting. I don't necessarily think it should be illegal, but I don't think it's necessarily a good thing either.

[Michael Batnik]

I just, on the Caesars app, I bet on Detroit Lions to win the Super Bowl.

[Jack Rains]

When?

[Michael Batnik]

This past week.

[Jack Rains]

Okay. I like that bet.

[Michael Batnik]

Plus 100 I looked at. I also bet on Tampa bay, which is plus 6,000.

[Jack Rains]

What about the Atlanta Falcons?

[Michael Batnik]

I just, I said Baker Mayfield, like it's plus 6,000. Literally, who cares? But the idea is like, I don't actually expect either of these to work, but if they do work, it cost me literally nothing and the payouts are enormous.

[Josh Brown]

That's how it starts, my friend.

[Michael Batnik]

Yeah, I understand. But I wouldn't make bets like, oh, so and so is going to win this game by four points. I don't, I don't do stuff like that.

[Jack Rains]

Put my kids college tuition on dogecoin.

[Michael Batnik]

Yeah. All I did was put my kids college tuition.

[Jack Rains]

Yeah, that's fine.

[Josh Brown]

The sports apps are getting as crazy as the ETF launches. Now you could bet, and you better believe I am. Who could score in the first three minutes of a basketball game. Right. Like it's Josh Harker to score in the first three minutes. Yeah, he is.

[Michael Batnik]

So that I won't do. Because it's not. I'm a long term gambler.

[Jack Rains]

Nice. It's like you're the, you're the, you're, you're only investing in blue chip bets like super bowl futures, not Josh Hart. Assist over blue chip guy.

[Michael Batnik]

So I just, I think it's like, I think there's a good enough probability that the Lions get there.

[Josh Brown]

Yeah.

[Michael Batnik]

And if they get there. It's anyone's game. We've seen tons of upsets in Super Bowls. So, like, from my perspective, I look at that differently as somebody saying, who's going to score the first two points in a basketball game?

[Josh Brown]

This is neither here nor there, but Lions happen to be a top two team right now, so they're not a long shot. Like, they could easily win.

[Michael Batnik]

They were, like, the fourth in the. In the. In the. Baltimore, Kansas, fourth highest.

[Jack Rains]

You should bet on the Falcons. Kirk Cousins looking good. He's got those boys, right? Oh, yeah. Okay, we're back.

[Josh Brown]

All right. I have money on my fantasy team. Nobody cares. All right, so the big story this week, and there's a lot of big stories, is the Washington Post losing about 10% of their subscriber base.

[Michael Batnik]

Yep.

[Josh Brown]

And this is on the back of Jeff Bezos saying that the newspaper will not endorse a candidate, which is kind of weird effing timing considering the elections on Tuesday.

[Jack Rains]

Yeah.

[Josh Brown]

So I thought Derek Thompson had a really good take on this. He said, I suppose it's possible that Bezos sincerely formed in his private thoughts the principle that presidential endorsements are bad. And the timing of this articulation just happened to coincide with this principle being obviously advantageous to his company, Blue Origin. It's possible. But as a general matter, if you come up with a personal principle at the very moment when that principle is most convenient, the price you pay for that convenience is that nobody will trust you, nor should they. And I won't read the rest of it, but it's like, come on, man. If he did this a year ago, two years ago, I think reasonable people.

[Michael Batnik]

Would have been like, well, here we don't endorse presidential candidates. It's a defensible position. Coming up with that principle during the editing process for a Harris endorsement days before your company is scheduled to meet with Donald Trump is not a decision whose timing deserves anybody's trust.

[Josh Brown]

Yeah. So Bezos wrote an op ed in the Post. It's like, dude, nobody believes you. Like, reasonable people can say, yeah, why would a newspaper endorse a candidate? You can't do that four days before the election. What? Are you insane? He's a business person. What did he think was gonna happen? First of all, yeah, trust gone. But just from the point of view of his business, that he's running with the Washington Post, maybe he cares, maybe he doesn't. What. What is that about?

[Jack Rains]

It's. I mean, the last paragraph saying that, like, his other company is meeting with Trump. I imagine Blue Origin. I'm assuming they're talking about Blue Origin.

[Josh Brown]

He tried to say that it was a coincidence that he didn't know that.

[Michael Batnik]

So Blue Origin relies on government contracts. Obviously they're dragging really heavy stuff into.

[Josh Brown]

Orbit and SpaceX beat them badly.

[Michael Batnik]

Yeah. And Elon is all in on Trump and there's already a lawsuit between Bezos and the government because in 2019 he thinks he was blocked from getting a contract because of his views on Trump. So this is not like none of this is news that this is now a really big factor. I think when he bought the Washington Post, it was during a time where it was seen to be smart, if you were a billionaire, to be a champion of liberal ideals. And that time has passed and you could almost argue now it's the opposite. Like, you almost get more credit these days for sticking up a middle finger to liberal ideals. And this is kind of like an in between. This is like, well, we're not gonna really endorse anyone. And everyone knows now at this point that the truth is he pulled it personally. So like that's come out. It's been reported. No one's in denial about that. They lost 250,000 subscribers. It may not be great to own businesses and also own a newspaper, it turns out.

[Jack Rains]

Well, he came out afterwards and said, I'm reading, I'm reading this quote here. I would also like to be clear that there's no quid pro quo of any kind at work here. Neither campaign nor candidate was consulted or informed at any level or any way about this decision. As soon as you come out and say that none of that happened, it shows that you were thinking about people thinking that that happened.

[Josh Brown]

It's insulting. How dumb do you think we are, Mr. Billionaire? Right? Like, and this is like part of the thing that people are pissed off about on both sides.

[Michael Batnik]

I think if you're going to be in the media business, you got to be all in and you got to kind of be Rupert Murdoch and just, I'm a conservative media company owner.

[Jack Rains]

Be a villain, be a villain. Lean into the villain arc.

[Josh Brown]

Speaking of villains. So the Wall Street Journal did a post on what's going on at X, formerly known as Twitter. And they said the Journal created accounts on the social media platform that only signaled an affinity for non political subjects. Nonpolitical. But a majority of the posts in their for you feed were partisan or related to the election. Kamala Harris campaign topped the list of Mosian accounts with one post mocking pro Trump hecklers at her rally in Wisconsin. Reaching all the Journals accounts, 10 of the other top 14 most leaned right, including Trump's. And overall, pro Trump content appeared about twice as frequently as pro Harris material. And I'm thinking about this, of course it's the election. But. But in the context of Reddit just smashed earnings.

[Jack Rains]

Oh, yeah, Reddit's. Reddit's bad.

[Josh Brown]

So Cook.

[Jack Rains]

Yeah, yeah, Reddit's great. Reddit's. I think the Reddit's.

[Michael Batnik]

Wait, you're saying Reddit is stealing Twitter thunder.

[Jack Rains]

Reddit is crushing right now.

[Josh Brown]

I'll give you the mic in one second. But I'm on Reddit for the first time in my entire life. I think a lot of it has to do with the partnership with Google, which I spoke about in the call that I listened to. But I'm now getting stuff and I'm going to Reddit for the. Reddit's been around for a long time. I've never been able to follow it. It's been too much for me. I'm going to Reddit and it is like the anti Twitter and so they're killing it. So Jack, talk more about what they're doing.

[Michael Batnik]

It's a top three search result on Google for almost everything that I put into the search box.

[Jack Rains]

Yeah. So there's, I read. So Reddit absolutely crushed earnings. Their revenue was up 68% year over year, which is nuts. Their daily active uniques, which is their like, measurement for like active users, was up 47% year over year.

[Josh Brown]

That's huge.

[Jack Rains]

The craziest like fact in here was that the sixth most googled word so far this year was the word Reddit. So people are typing in like whatever their question is putting Reddit and Google is very much a, like a search bar for Reddit.

[Josh Brown]

It's anti Twitter. Nobody wants to be mindful on Twitter. It's like, I just want sports or this or that don't feed me policy. People are like, I'm going elsewhere.

[Jack Rains]

Twitter search sucks. Like, you can't look up stuff on Twitter. It's broken. If you try to put in somebody's handle and look for a quote, like it can't do it. Right. Versus Reddit. It's. Reddit's been around for so long and there's so many people that are just sharing their random thoughts and anecdotes and just ideas on everything.

[Michael Batnik]

The last few times I hit Twitter, like just the homepage and my settings are now just like people I follow. Yeah, I don't, I don't, I don't, I don't know how like for you versus So I click on the for you thing to see what's going on.

[Jack Rains]

Wild.

[Michael Batnik]

The top post, all five, the last five times. The top host is Elon something. Elon Musk said. So he must have, like, arranged the algorithm so that no matter what, when you hit Twitter, you see whatever he's saying and then it's all politics.

[Jack Rains]

Yeah.

[Josh Brown]

So Reddit stock was up 42% yesterday. It successfully. It successfully IPO'd earlier in the year. And yeah, the stock's on fire. It's because the business on fire.

[Michael Batnik]

What's the market cap on Reddit now? This is now a big 40.

[Jack Rains]

I don't know.

[Josh Brown]

I'm making that up.

[Jack Rains]

It's only like 40 billion. So not like.

[Michael Batnik]

But this is happening, you think, as not a coincidence. You think this is happening as a direct result of how badly they up the Twitter experience?

[Jack Rains]

I think, I think that's part of it. But Reddit is also one of the biggest, like, winners so far with AI and social media. I was reading about how they have, like, they've basically been using machine learning to build out better translation tools. And part of the problem was most of Reddit was in English. Right. But now they have all these, like, you can just hit translate on pretty much any post and it pulls it up so it opens up a bigger international market where people from France or Brazil can now read all the, like, posts written by people from America. So, like, the market just gets way bigger when it's more collaborative and less siloed. So, like, the. They've done a very good job of leveraging.

[Michael Batnik]

The way I describe Reddit to people is it's ebay for information.

[Jack Rains]

Yeah.

[Michael Batnik]

So when you're on ebay, you're in, you're in, like, your own. You're in your own, like, lane of things that you care about. And that's what they're. So you search for something, they'll give you all the relevant results for that thing. So if you're somebody that collects, for example, like Yankee memorabilia, you're not gonna see like, Yankees, Yankees, Yankees, oh, here's Trump dancing.

[Jack Rains]

Right.

[Michael Batnik]

That's not gonna happen. You're basically being served things that are, that are things that you might actually buy. I think of Reddit as the same thing, but for information. So if you're really interested in Star wars and you're in the subreddits that are relevant to that, and they do a really good job at letting you stay there and not trying to push your attention to something else.

[Jack Rains]

So y'all. Both know my whole SPAC trading story. Whatever. Like yolo, my Roth ira, not everybody does.

[Josh Brown]

So real quick.

[Jack Rains]

Okay, so the very quick rundown is during the pandemic, I decided to start day trading my Roth IRA flipping SPACs. And I was just yoloing split after SPAC. I think Chamath is a horrible person, but he made me a lot of money. So to that I say thank you. Anyway, I at one point turned six grand into 400 grand, which I then turned. That was in about nine months. And I was 23 and I told my dad that I was. He told me to sell and I.

[Josh Brown]

Said, I'm the smartest man alive.

[Jack Rains]

Yeah. And I said, no, I'm up 6,000%. I'm 150% away from millionaire. Anyway, yeah. So then I turned 400k into 200k, which is pretty cool. Most of that happened one day.

[Michael Batnik]

Proud of you.

[Jack Rains]

But the Reddit. Thank you. The Reddit part of this is I had a burner Reddit account where I was one of the co founders of the SPACS subreddit, which now has like, I don't know, like 300,000 subscribers.

[Michael Batnik]

Were you modding?

[Jack Rains]

Yeah, I was a mod for a little bit and then it just, it got too big where it was just people posting random bs. So a core group of that made a discord server where we had like bots that were sending us push notifications whenever new spac filing came out. But I was very active in Reddit, like posting stuff all over the place in 2021. It is phenomenal. There's a lot of smart people on there and like, it's just. It's the only social media platform where you can really build a community within a platform, but you can't.

[Michael Batnik]

So people can follow subreddits for the things that they're interested in, which I have done. But you can't follow people in there specifically or you can.

[Jack Rains]

No, you can. My burner Reddit, the username is. It's barmelozanthony. And I have over a thousand followers.

[Josh Brown]

So the thing that you just said, like minded people, social media is not good because nobody wants to spend time with people that they disagree with. So, like, that's why Twitter just turned into a cesspool.

[Jack Rains]

Right.

[Josh Brown]

We're not meant to be with people who we think are idiots. And half the country thinks the other half are idiots.

[Jack Rains]

Yeah. And Twitter just puts them all together, yelling at each other.

[Josh Brown]

Yeah.

[Michael Batnik]

Well, I think there's another thing going on, which is that Elon believes Genuinely believe. I think he genuinely believes that the world needs a town square. And my belief is nothing could be further from the truth. We absolutely do not. In fact, it's absolutely poisonous for there to be a place where everyone is yelling at each other. And that's almost like a. You either believe that everyone should talk and the world will be a better place, or you think people should mind their own business, stay in their own lane, and the world would be a better place. I'm in the latter camp.

[Josh Brown]

It always goes toxic. Oh, you should hear people that disagree with you. Aren't you open minded? Yes, I get it on an individual one to one level, but when there's millions of people, it just always turns violent. It always does.

[Michael Batnik]

Or when it's most of the. Most of the biggest accounts on there are not in good faith.

[Josh Brown]

Right. It is interesting. Remember there used to be like a whole group of social media companies. Groupon, Zynga, Twitter, Facebook. None of that exists anymore. Because you know why? On the, on the conference call. These are ad platforms. Okay, and what do ad platforms want? They want people on the platform.

[Michael Batnik]

And you're not going to stay on a platform where every time you log in, you have a negative experience.

[Jack Rains]

Reddit, so cool though. It's like, to your point, like, it's not. Reddit is not a town square. But if you do want to dabble or like read about other views, you can just look at the siloed version of like, what do the American socialists think? Okay, interesting. Versus just like tweeting. And then all of a sudden you have an alt right guy and then a Bernie Sanders acolyte, like, screaming at each other.

[Michael Batnik]

Oh, you can go looking for those opinions.

[Josh Brown]

If you don't like it. If you don't like it, then I like that they don't have to stay there. You're just forcing it down your throat.

[Jack Rains]

Yeah, like, Reddit's the best way to actually find out. What, like, you can actually explore deferring opinions without, like, it's a much cleaner, better, like, healthier way to see what conspiracy theories exist. Yeah, exactly.

[Michael Batnik]

If you want to sample different conspiracy theories.

[Jack Rains]

Actually, I bet there's a conspiracy theory subreddit. Let's see.

[Josh Brown]

Bet what? Had this, probably, of course.

[Jack Rains]

Oh, wait, yeah, it's got 2.2 million conspiracies. Let's see. Kim Kardashian deletes her son's YouTube channel after he shares two anti Kamala Harris videos. Really makes you think they're on the sun in here.

[Michael Batnik]

He's six Duncan Are you on Reddit?

[Josh Brown]

I use it sometimes.

[Jack Rains]

Google searches film.

[Michael Batnik]

You land on it like I do from Reddit. Yeah.

[Josh Brown]

Looking for like F1 trivia or something. That's how I. That's how I stumbled upon Reddit.

[Michael Batnik]

But. So they have a deal in place with Google or this is just happening organically?

[Jack Rains]

Yeah, they signed, I think it was a $60 million deal where Google can now train some of its like, AI stuff on Reddit content. All the Reddit mods were like up in arms about it. I think that deal was signed around the time Reddit went public. Obviously everybody said they were going to leave Reddit. They didn't because of Reddit's users are up 47%. So it turns out nobody actually cares what happens to their data.

[Michael Batnik]

Is Wall street bets still like a big thing or has it cooled off? So, John, you're saying, yes, it's bigger.

[Jack Rains]

Than ever, but it's like, it's one of those things where the bigger it gets, you lose that. When it was like a few hundred thousand people, there were these edgy people just trying to figure out ways to lose millions of dollars on Robinhood. Now it's like, oh, look, I made money, I lost money. Here's a stupid meme. Like it's not. It's like IQ 90 when it used to be IQ 140 with a gambling addiction, which was so much more fun.

[Michael Batnik]

How did it become IQ90? Because it became like just a bigger common denominator of people.

[Jack Rains]

Yeah. Like when the GameStop thing happened a couple years ago, WallStreetBets was just like in the news and then so many people subscribed to it and signed up. It went from being this like weird shadowy corner of the Internet where people were trying to do these like weird option Iron Condors where they lost more money than God to people. Just post memes of Jerome Powell now.

[Michael Batnik]

Right. So I wonder if when you have that dispersed of a community, you still have the power to move stocks. They need like a new story. Are they doing DJT?

[Jack Rains]

They probably did at some point. DJT was worth more than X two days ago. It's down like 20% or something now. But they made 5 million in revenue and 300 million net loss. Yeah, it's worth more than X.

[Michael Batnik]

So for the listener, DJT is the Donald J. Trump, the Trump Media and Technology Corp. And basically people are using it as another way to gamble on whether or not Trump WINS.

[Josh Brown]

What is DJ T? I don't know.

[Michael Batnik]

It's nothing. And it's 4 million in revenue and a $4 billion market cap. And it's literally. They post some ads on Truth Social, which is where.

[Jack Rains]

What do you think the ads are?

[Michael Batnik]

Trump. Some sometimes tweets, but this thing is rocketing higher. When Trump has a good day in the polls or he does something really smart, or then if Kamala gives a big interview and gets a lot of attention, this thing falls. So it's acting as. I don't wanna say a mood ring. It's acting like an EKG for the Trump campaign, basically.

[Jack Rains]

Well, it's also cool because he's made more money from this. This Truth Social went public through his spac and it got held up forever. And now he's made more money from this than he did in his entire real estate career.

[Michael Batnik]

I think he has a $2 billion stake and he's vowed that he won't sell it.

[Josh Brown]

Yeah, I was about to say, has he cash out?

[Jack Rains]

I don't. I don't think so. It's. I remember reading through the first. Yeah, no. So I read through the whole prospectus on this, and he owns. I don't know if it was like, 50%.

[Michael Batnik]

He owns half.

[Jack Rains]

And he, like, gets more and more that. That, like, could vest over time. But the thing is, I don't remember the terms on his lockup period, but he's also the one who decides if he wants to change the lockup period. So he could say, oh, yeah, like.

[Michael Batnik]

It'S locked, locked up until I locked myself.

[Jack Rains]

The shares are locked until 2026. But he's the one who I determined.

[Josh Brown]

Did you pay a dividend?

[Jack Rains]

Not yet.

[Michael Batnik]

Let me. Let me read this to you. The oscillating of shares between highs and lows will likely continue as the election nears. One current investor warned that if Trump loses the election next week, shares of DJT could plunge to zero. Quote, it's a binary bet on the election, Matthew Tuttle, CEO of investment fund Tuttle Capital Management, told Yahoo Finance. Tuttle, who currently owns put options on the stock, said the trajectory of shares hinges on a buy the rumor sell the fact trading strategy. Listen to this one. Quote, I would imagine that the day after him winning, you'd see this come down. If he loses, I think it goes to zero.

[Josh Brown]

That's not a bad take.

[Michael Batnik]

So he's. So he owns, puts on it, which is probably. If I were trading this, that's probably what I would do.

[Jack Rains]

I wouldn't buy puts, though, because I was actually look at the options on this the other day. I also think it'll go Down. But the problem is the options are so expensive because everybody's betting on it going somewhere by like 50% or more.

[Josh Brown]

So you could be right. And still lose money.

[Jack Rains]

Right. Like once the volatility happens. Once the volatility, like the options. I don't. It depends on when he bought them. But the options are so expensive now.

[Michael Batnik]

It'S hard to make money. The stock just whipped in the last month, 60% higher.

[Jack Rains]

Right.

[Michael Batnik]

And now it's down 22% off the highs.

[Jack Rains]

Right.

[Michael Batnik]

And every. You never know what tomorrow's gonna bring. If there's like a Sienna poll or something that has Harris gaining momentum, this thing could be down 15 points.

[Jack Rains]

So my question is, why short that when you could just like buy Harris? Prediction market stuff. Like, I don't know if you're just betting on the election.

[Josh Brown]

Leverage. Leverage, bro.

[Michael Batnik]

What if you could get a girlfriend?

[Jack Rains]

That's true.

[Michael Batnik]

Like, can you imagine? Like what, what if you met a girl, took her out to dinner, maybe a movie? No, not at you personally?

[Jack Rains]

Not betting on this.

[Michael Batnik]

People that are involved. All right. The New York Stock Exchange just said they're going to extend trading hours. They're going to go here, let's go. I knew they would do this because of how much I hated it. The New York Stock Exchange on Friday announced plans to extend trading to 22 hours a day. Robinhood has had this 24. 5 trading. So they're open from 8pm Eastern on Sundays until 8pm Eastern on Fridays. And they've been doing that for over a year. Global cryptocurrency is 24 hours. Under the new plan, trading on the NYSE Arca electronic exchange would open at 1:30am and close at 11:30pm Eastern on weekdays, subject to regulatory approval. They currently have extended trading that starts at 4am and goes till 8pm so I don't know. Change anything? No.

[Josh Brown]

As long as we're not doing the.

[Jack Rains]

Weekends, like, I think it's. It'll be somebody professional.

[Michael Batnik]

Is your job now 22 hours a day?

[Josh Brown]

Depends what your job is.

[Michael Batnik]

Professional trader.

[Jack Rains]

It's not. It's not liquid enough. Like nobody, like, for like an institution is going to be trading at 11pm on like future. Sure. But like on stocks.

[Michael Batnik]

Counter, Counterpoint Taiwan Semi decides to put out a press release at 3:00am New York time. Wake up, wake the up.

[Josh Brown]

So a few times a year there will be. There will be market moving stuff that you can choose or choose not to participate in.

[Michael Batnik]

Will there be flash crashes overnight that we wake up to?

[Jack Rains]

Like, I probably just. Because, like it's not going to be that liquid because I've like, you know, I love trading robinhood stocks at 3:47 in the morning. Thank you, thank you.

[Michael Batnik]

Shout out to the flash crashes.

[Jack Rains]

Typically these like at least right now, most of these stocks, there's not that much liquidity that late. So like people are going to panic, buy, panic, sell, whatever. But I don't think that you're going to see like hundreds of thousands of shares trading hands in the middle of the night.

[Michael Batnik]

If you wrote a trading algorithm for a hedge fund, you would probably not want it active. No, but you would want of how weird the bid ask spreads.

[Jack Rains]

But there's a lot of money to be made from like retail investors who put in a market order instead of a limit order where you can just put a limit order at a really, really stupid price and you might get filled by somebody accidentally doing a market order. So you can, you can profit off stupidity on this for sure.

[Michael Batnik]

You can set things up so that people that are dumb enough to put in the wrong type of trade. Yeah, I guess you don't need to do that at 1am you could do that at 12 noon.

[Jack Rains]

Yeah, but like when it's at 12 noon, it's like if you put in a, like a market order, you're just going to get filled at like the right price. 3am you can make a lot of money from that.

[Michael Batnik]

So Howard Lindsey's big thing these days is the degenerate economy.

[Jack Rains]

Oh yeah.

[Michael Batnik]

Doesn't this like feed right into.

[Josh Brown]

Oh yeah.

[Jack Rains]

It's so perfect.

[Josh Brown]

That's why you got to own not an endorsement. Well, I own ice. That's the New York Stock Exchange.

[Jack Rains]

I was going to say DraftKings, but I don't know.

[Michael Batnik]

This is like, this is like what, what we just have young men doing now.

[Josh Brown]

There's not going back.

[Michael Batnik]

It's just like gambling all day long.

[Josh Brown]

So. But also let's like how many people are going to do this?

[Jack Rains]

Everybody? No.

[Josh Brown]

All right, let's move on to other other. And let's go from insane to insane on crack. So Michael saylor tweeted.

[Jack Rains]

Go.

[Josh Brown]

MicroStrategy announces $42 billion capital plan including $21 billion at the money equity offering and a target of raising $21 billion in fixed income securities. Why? My question, because they buy bitcoin. That's it. They're going to buy bitcoin. So at how much? $42 billion, dude. @ GoodAlexander tweeted this morning, MicroStrategy going green pre market after announcing 80% of its market cap and future dilution to buy Bitcoin suddenly sends a message. So MicroStrategy is basically like a closed end fund that's trading at a wild premium to its underlying holdings of bitcoin is up 69% on the year. Very, very nice. What is that, Jack?

[Jack Rains]

I said of course it is.

[Josh Brown]

Yeah, nice. MicroStrategy is up 290% on the year. So we at chart can make a great chart showing the number of bitcoin that has held, that is held by MicroStrategy. So it started at. Next chart please, John. It started at. What is this number? 133,000 in December 2022. They're now up to 252,000 Bitcoin. It's a 90% increase. But the, but, but, but the value of their Bitcoin is up 723% since they started it. So the, the value of the bitcoin that they held, that they hold went from $2.2 billion up to $18 billion. So you've got this coupled with the fact that it's trading at a large premium. Next chart, John, just makes for a wild story. And you could laugh and I have, and you could talk shit and I have, hold on. He's.

[Michael Batnik]

Explain this to me.

[Josh Brown]

He's won and he's made so much money it's insane.

[Michael Batnik]

So the, if you buy MicroStrategy, right now you're paying to own. You're paying three times what you would pay if you just bought the Bitcoin etf.

[Josh Brown]

Let's, let's assume that the underlying business has no value. And I'm not saying that, but let's just assume that it's pretty close to zero.

[Michael Batnik]

It's tiny. It's tiny.

[Jack Rains]

They make $100 million in revenue below $400 million.

[Josh Brown]

So there you go. So it is worth zero. So relative to the size of the bitcoin holdings, you're paying a 3x. But it doesn't matter.

[Michael Batnik]

Why would you do that?

[Josh Brown]

Because it's working.

[Michael Batnik]

All right, but seriously, why would you.

[Josh Brown]

No, I don't know the.

[Michael Batnik]

I know it has worked.

[Josh Brown]

No, I don't know why you would do it today. I don't know the fundamental reason. I don't know enough about like option Greek math and the deltas and all that sort of shit, but it's just, it's working. And it's kind of scary because what if Michael Saylor is, becomes like a top 10 richest person in the world?

[Jack Rains]

So I wrote a piece last month about how MicroStrategy has been historically bad at timing the market. And pretty much all of their like all of his bitcoin purchases or all of MicroStrategy's Bitcoin purchases have happened when bitcoin was like above around $40,000. When it dropped down to 16,000, he bought almost no bitcoin in that bear market of late 2022 through 2023. He keeps YOLOing around between 50 and 70 thousand dollars. But to answer your question on the I have no idea why it's trading at a fat premium either except the fact that it's good for bitcoin that they keep issuing equity and debt to buy more bitcoin because like it's great for bitcoin. Right.

[Josh Brown]

So like if they permanent bid, it's.

[Jack Rains]

Yeah, right.

[Michael Batnik]

He's doing like the buyback for bitcoin which is not a corporation but he's acting in that role where he's taking on debt, selling stock. Yes.

[Josh Brown]

And the market price isn't moving down. So it's just like free money. And it's just how does this not.

[Michael Batnik]

He is like single handedly willing Bitcoin to 100,000.

[Jack Rains]

Right?

[Michael Batnik]

Well, he's always there to buy.

[Josh Brown]

Yes. But bitcoin had like an $850 million inflow to the ETFs alone the other day. So it's not just him. But my God, what is. I don't know enough about the convertible debt offerings to really explain in plain English what the hell is happening here. It's wild.

[Jack Rains]

I would love for there to be a bitcoin bear market that ends up getting a margin called because most of the debt is very cheap debt because it's convertible notes. But I don't know if he still has any outstanding just long term debt. Basically his game has been issue convertible notes. The price goes up and people just convert that to equity so he doesn't have to pay it back. But they also keep issuing just senior secured notes at like 6 or 7%. They then refinance with new debts, then buy more bitcoin. If hypothetically bitcoin had a like 85% drawdown, he could get margin called and then have to sell some of his bitcoin to pay back creditors. It's like a legal spiral down.

[Josh Brown]

It's like a legal bitcoin.

[Michael Batnik]

Right. We haven't seen what it looks like. On the last.

[Jack Rains]

He came close. On the last bear market he came. Somebody calculated the like the margin call price for him high hypothetically would be like around $15,000.

[Josh Brown]

Where is it now?

[Jack Rains]

I don't know. But like bitcoin's around 70k. I don't know what price would have to hit for like him to have to sell assets. But Even with the ETFs, Bitcoin still isn't like the liquidity isn't super, super deep. And if one person like if MicroStrategy had to sell say 500 million Bitcoin, it could like take it further where right now he's been pumping the whole thing up. He could also single handedly spiral it down. I don't think that'll happen, but I.

[Michael Batnik]

Hope the only thing that can make him do that is if the price itself is already down a lot.

[Jack Rains]

Right, exactly.

[Michael Batnik]

Can't have a margin call until the price falls.

[Jack Rains]

Like it would have to fall, but if it fell far enough then he could send it back like 90.

[Michael Batnik]

Just by meeting with. Just by meeting. Margin call, yes. I don't know that we've ever seen anything like this outside of the early 80s when the hunt brothers tried to corner the market in silver. Like we have seen this type of activity before. But nobody alive who's heavily involved in bitcoin has that experience firsthand. So you can read books about, they used to do this with commodities, they used to set up these. It's almost like machinery where I'm going to keep cornering this market until anyone that's on the other side of me has to cry uncle and go bankrupt. And this was an investing strategy back in the day with commodities.

[Jack Rains]

How do you think this ends though? He wants to hypothetically buy forever, but at some point what percentage of all.

[Michael Batnik]

The bitcoin outstanding is he has?

[Josh Brown]

1%. Right.

[Jack Rains]

Only.

[Michael Batnik]

So that's, I have no idea. So he's, he's a whale. But in the grand scheme of bitcoin, he's not that big of a deal.

[Josh Brown]

Is this the line from Cocktail or is it everything ends poorly otherwise? Or is that Top Gun?

[Michael Batnik]

Oh, so he said. She says to him, Elizabeth Shue says to Tom Cruise, I don't, I don't want this to end badly. And he says everything ends badly otherwise it wouldn't end.

[Josh Brown]

Yeah, so that's sort of how I feel about this.

[Michael Batnik]

That's so real problem.

[Josh Brown]

I don't know, I probably would have said this like a year ago. So it's worked well. If you bought MicroStrategy, credit to you, you made a ton of money.

[Michael Batnik]

Bitcoin is also a bet on President Trump.

[Jack Rains]

You think?

[Michael Batnik]

Yeah, big time. I wrote about it over the summer. I think him becoming president, I think there's no longer any guardrails about any kind of crypto activity because the people who have helped get him here don't want that. So that'll come to an end. I don't want to say day one, but within the first 90 days you're going to have a very different attitude toward digital assets. I don't see any reason why we wouldn't see 100,000 bitcoin.

[Josh Brown]

I think the recent run is Trump momentum.

[Jack Rains]

Should we think we should buy some NFTs if Trump wins, like NFTs going to come back.

[Michael Batnik]

It's so funny how many like pro Trump trades there are and she doesn't have any. Maybe that's part of her problem.

[Josh Brown]

Well, they also, they also. I think Goldman made a chart or bank somebody did. I'm sorry, I remember who. The stocks, the companies that would be most exposed to tariff hikes relative to the S and P are crashing.

[Michael Batnik]

Meaning. Meaning what?

[Josh Brown]

Like it's being priced in that China.

[Jack Rains]

Stocks, like all that? Yeah.

[Josh Brown]

His victory is being priced into these stocks.

[Jack Rains]

Interesting.

[Josh Brown]

These tariff stocks.

[Michael Batnik]

This is, this is a wild story though. He's like the bitcoin Fed. Like he, like sailor, I need Matt. Yeah, he has a bit. He. Cause he basically like. Like the size of his balance sheet is now driving the price of the thing.

[Jack Rains]

You know, he was one of, I think the most poetic thing. This is going all the way back to our boy Softbank guy Macios. Yeah. So anyway, Saylor in the dot com bubble, he was one of the ones that like, I'm not gonna say he made the whole thing pop, but they had to like redo some of their accounting for micro. Like MicroStrategy was a company in the 90s and then it turned out they were falsifying revenue by accounting.

[Michael Batnik]

Like I was there, that happened real time.

[Josh Brown]

Was mas an investor in Microsoft?

[Jack Rains]

I don't know. That's a great question. But like he was like one of the big kind of accounting frauds, then tanked it. So it would be so beautiful if somehow Microstrategy, like screwed up Bitcoin. I don't think it'll happen, but I hope it does.

[Michael Batnik]

I think, I think one. Jason Zweig, who we had on the show last week, wrote about Michael Saylor at the outset of this strategy where he first started to say this stock is now a vehicle to accumulate Bitcoin. And Jason was pretty even handed about it. And I sent him an email, I said if this works. And he's right. Because he was talking about bitcoin. One million, whatever. I said, if this works, they're basically going to. They're going to say, he's one of the greatest investors ever. And Jason said, I don't disagree.

[Josh Brown]

Well, guess what? If it does work and it is working, what are you going to say?

[Michael Batnik]

He was. The money is the answer.

[Josh Brown]

He nailed it.

[Michael Batnik]

This is one of the best.

[Josh Brown]

Might not like it, but he nailed it.

[Jack Rains]

Love him or hate him, we watched.

[Josh Brown]

Yeah.

[Michael Batnik]

This is one of the best things about investing. The scoreboard is the scoreboard.

[Josh Brown]

Yeah.

[Michael Batnik]

And this is, like, one of the weird things. People will go on social media, say, I have an opinion on this stock. Or somebody goes on tv, I have an opinion on the stock. And someone's like, oh, you're wrong. Because A, B, C, it's like, dude, don't worry about it, because the scoreboard will tell us, maybe you are right, maybe I'm right. Maybe neither of us are right. But we will have closure on this issue. We will know definitively who ended up being right. I know things can change very quickly, but right now, he's right. And you may not like how he did it.

[Josh Brown]

I don't. But as somebody who owns probably more bitcoin than I should, thank you.

[Jack Rains]

Yep.

[Josh Brown]

Thank you.

[Jack Rains]

Doesn't have a use case. Doesn't need one. Doesn't need one.

[Michael Batnik]

Jack, how are things going at Sherwood, Robin Hood in general? You having fun?

[Jack Rains]

Oh, yeah.

[Michael Batnik]

I love your role there. I love your writing.

[Jack Rains]

Oh, dude, it's great. We actually launched a podcast a few weeks ago that I'm co hosting called Snacks Mix. So it's, like, cool to get to back to back days like before podcast now. No, it's been good. Our team's great. The entire or a big part of our team went down to Miami two weeks ago for our big, Like Robinhood conference down there. There are a lot of Robin Hood traders there, too. Very fun to talk to them, but it's been cool.

[Josh Brown]

And who is Sherwood endorsing for President?

[Jack Rains]

Rfk. I'm just kidding.

[Michael Batnik]

Give us a sense of how big this audience is. Because I think there's a tendency when people talk about Robinhood who haven't. Who don't really understand or they don't want to understand, people coming from traditional, more traditional brokerage firms. I think they. There's a tendency for them to think of Robinhood as a toy, because maybe that's how it started.

[Jack Rains]

Yeah.

[Michael Batnik]

I think from talking to Sam Rowe, you guys have one of the most engaged, one of the largest Audiences in all of financial media.

[Jack Rains]

Yeah.

[Michael Batnik]

So give us an idea of how big this audience is.

[Jack Rains]

I don't, I know that like, I know that like readership's in the millions. I don't know what the actual number.

[Michael Batnik]

On what, on the stuff that you're publishing.

[Jack Rains]

Like on our, between our newsletters and then our site. I don't know any of the specific numbers on that. I know that Robinhood has like, I think it's like 8, 18 or 19 million users on the like finance app. But it's like no, the, the, the brand still very much is retail traders and stuff. But like we, I don't know if it's already live, but we're launching like Vlad announced two weeks ago. We're launching like a full, basically trading suite desktop version. Like Robinhood has retirement accounts now and they have like a very favorable retirement match. So they've essentially like Robinhood's growing up and they're offering a lot more. But this is classic Schwab stuff.

[Michael Batnik]

This is classic, like Clay Christensen, Stu, somebody new comes into the market. They start at the low end, they pick at the low hanging fruit that nobody else wants and then they build capability and they start to work their way up and then the incumbents turn around like two, three years later and they're like, wait, who?

[Jack Rains]

Yeah.

[Michael Batnik]

And they almost can't believe it. So Robinhood going into retirement accounts is another step in that direction.

[Jack Rains]

Like my, my retirement stuff was always in TD Ameritrade and it's like, like I liked CD Ameritrade a lot and then Schwab acquired them and Schwab's user experience is like, in my opinion, trash. Like, it' just not, it's very clunky and I don't know, like I, I've been lazy about moving it over but like I'm probably going to transfer my retirement to Robinhood just because it's like I already look at stock prices on.

[Josh Brown]

Robinhood and that's 3:47am Baby.

[Jack Rains]

Yeah, I know. Why not? Yeah.

[Michael Batnik]

And you could. And you could.

[Josh Brown]

Your retirement is funny.

[Jack Rains]

Yolo. My retirement on the, on the presidential election. Bet I could.

[Michael Batnik]

Does the audience ever surprise you in the feedback that you get for what you're putting out, do you ever get surprised by like a growing level of maybe sophistication or people becoming more conservative than you thought?

[Jack Rains]

Yeah, it's like I think the people that are reading our stuff, it's pretty, it probably skews like younger ish, like around my age. But it's very Much not.

[Michael Batnik]

You're not 16 anymore.

[Jack Rains]

No. 27. You know, I think that's late 20s.

[Michael Batnik]

Yeah. No, but you. But like, around your age. The people are getting married at that age. It's not.

[Jack Rains]

Yeah, we're adults, right?

[Michael Batnik]

It's adults.

[Jack Rains]

Yeah. Except in New York.

[Josh Brown]

Jack, I love that you are not a native New Yorker and you just ride or.

[Jack Rains]

This place is awesome.

[Josh Brown]

It's, like, weird to, like. It's, like, cool to, like, hate New York City. I don't know when that happened, but this is, in my humble opinion, the greatest city in the world. And it sounds like you agree.

[Jack Rains]

Oh, for sure. 100%.

[Michael Batnik]

You wrote. You wrote this really great piece about why New York is now your home. I want to quote from it. Okay. The thing about New York is that it's tough to get. It's tough to get it until you've lived here for a few months. I visited a few times before moving here, and while I always had a blast, it was exhausted. Everyone was in a hurry at all times. The subway was impossible to navigate. I had no idea where to go for dinner and drinks because of an infinite number of viable options. And I probably spent most of my time at the not touristy spots where everyone visiting the city ends up when they're trying to avoid the touristy spots. Which I thought was a really funny observation, but now it's different that you're here full time. One thing that you said that was funny, I panic, researched where to go shopping to upgrade my Atlanta uniform of golf shirts, chinos, and sneakers. And I nearly died 12 times riding a city bike around Manhattan. But now that I'm more familiar with the city, I love New York. So you've been here 25, 26 months at this point, so I would say you're a New Yorker.

[Jack Rains]

Yeah, I'm like a New York. I'm a New Yorker.

[Michael Batnik]

I'll get this. Here.

[Jack Rains]

Yeah. Thank you.

[Michael Batnik]

Okay. I think once a New Yorker, always a New Yorker, too. Do you believe that?

[Jack Rains]

Yeah, I do.

[Michael Batnik]

Okay. So if you spend the next five or 10 years here and then you end up in California, you could still say, I'm a New Yorker.

[Josh Brown]

Yeah.

[Jack Rains]

I would have spent the, like, majority of the, like, first half of my adult life in New York at that point.

[Michael Batnik]

That's right. Okay, so where do you live? Like, what. What neighborhood of the city?

[Jack Rains]

Technically, soho. I thought I lived in the West Village, but it turns out I'm.

[Michael Batnik]

Somebody said you don't.

[Jack Rains]

Yes, that is exactly. I got corrected on that quickly. You know what the West Village kind of got too mainstream, so it was better. I live above 12 chairs, cast the best Israeli restaurant.

[Michael Batnik]

Okay. And now have you bought enough black clothing that you can pass as a New Yorker?

[Jack Rains]

Yeah, for sure. I mean, I actually like white T shirts more than black T shirts. I think they like compliment my stuff.

[Michael Batnik]

Not at night though.

[Jack Rains]

No, you can wear it at night.

[Michael Batnik]

You wear white T shirts.

[Jack Rains]

We're not in Berlin.

[Michael Batnik]

All right, fair. What is your favorite thing about not just living in New York, but working in New York?

[Jack Rains]

It's especially coming from living in Atlanta. And I say Atlanta is probably pretty representative of most other cities in the US Like a decent sized city with a lot of good companies, good jobs. There's just like, there's more touch points and opportunities in New York. Like I just, I rode a city bike up here to Yalls studio to come hang out today. If I was in Atlanta, that wasn't going to happen. Like everybody and every company is either in New York or has some presence in New York or comes here or comes and visits New York at some point. So it just, it provides way more like touch points and just surface area for opportunity than anywhere else.

[Michael Batnik]

So I fully agree with. I think you agree with that. Right? Right.

[Josh Brown]

Yeah. Optionality. That's the word you're looking for. Well, we finance podcasts.

[Jack Rains]

Yeah. Well, even. And even then, even if you're like fully locking in on a certain career path, the upside trajectory for pretty much everything is either the highest in New York or close. Like, okay, if you're working in like tech or venture capital or whatever, San Francisco is still probably the best, but New York's still very competitive. If you're in politics, like, I don't know, like Mayor Adams, you know, don't know what's going on with him, but he's on TV all the time.

[Josh Brown]

But it sounds like you are of the mind that New York's not for everyone. It's intimidating. There's a lot going on, but it's less crazy when you live here than when you visit.

[Jack Rains]

Yeah. And there's like a learning curve. Cause there's a lot going on. Like the first you try to. It just takes a while to both figure out where to go, what to do, what stuff you like, what you don't like, like where you wanna live. You can't come here for a week and a half and just know it, which is good.

[Michael Batnik]

But there's also a chicken and egg thing where people are like graduating school and they don't have a job lined up. It's like, oh, I can never come to New York because I couldn't afford to live there. Nobody could afford to live here.

[Jack Rains]

Right.

[Michael Batnik]

People that live here for 20 years can't afford to live here. But it's almost like, well, if you move there, though, you have the potential of making a lot more than where you're currently sitting. So the people that come here almost have to make a bet on themselves. Like Duncan.

[Jack Rains]

Well, I think, right, like you made.

[Michael Batnik]

A bet, you said, all right, I'll go there, I'll figure out a way to do it.

[Josh Brown]

Yeah.

[Michael Batnik]

And you did it. Technically, I'm in Connecticut now. All right, shut the up.

[Jack Rains]

I was gonna say one of the harder things about New York, especially if you're like in your 20s here, is there's a mixture of people who are like, scrappy, scraping by, people who do have like, well paying jobs, who can now afford it, and people who are being largely subsidized by their parents or whatever.

[Michael Batnik]

Well, that's a really big element of it.

[Jack Rains]

Yes. And so you'll go visit a friend's apartment and it's like super nice, decked out, like one bedroom. That's $4,500 a month. And it's like, how do you afford this at 26? Well, the answer is you don't. But everybody's in the same social bubble and you don't really know everybody's situation. But there's a lot of temptation to try to keep up with the people who have the best stuff. And I don't know, I feel like it would be very easy to go into credit card debt trying to keep up the lifestyle.

[Michael Batnik]

So I was gonna say, at your age, it's a pretty obvious, easy bet. When you meet somebody who's got like a ridiculous apartment, it's pretty obvious it's either a trust fund situation or they work on Wall Street. There's no third option.

[Jack Rains]

Right.

[Michael Batnik]

Because even if you're in medicine or in tech for the most part or something, at 25, you're not living like that. Even if no one's paying you W2.

[Jack Rains]

That way, even if you're on Wall street, like, say you, like, if you're like. A lot of my friends went into investment banking after business school. They make very good money, but they're still not making like.

[Michael Batnik]

Well, they don't have any time to spend.

[Jack Rains]

Right? They don't. And then you're still making like, like, like max salary, 200ish. And then you get a bonus that say you get a full 100% bonus. Like, say you make $400,000 in a really good year. That's a lot of money. But you're still not. Like, you take taxes, you're left with, like, 200k, basically. And then if you pay $5,000 a month in rent, like, there's not as much expendable income if you have a really nice spot.

[Josh Brown]

Well, also, if you're paying 5k in rent, what else are you spending money on? Everything.

[Jack Rains]

Yeah. So it's.

[Michael Batnik]

That's the other thing. The whole culture is about going.

[Jack Rains]

Yeah.

[Michael Batnik]

Like, people don't entertain at home.

[Jack Rains]

No. This is what's really lives in a shoebox. You gotta go.

[Michael Batnik]

Everybody lives in a shoebox. So you have to be out somewhere. And if you're out somewhere decent in New York, spending a ton of money.

[Jack Rains]

Yeah.

[Josh Brown]

So it's just like, I never experienced that. I never lived in Manhattan.

[Jack Rains]

Oh, it's.

[Michael Batnik]

Oh, you lived in Brooklyn.

[Josh Brown]

Dude, I was unemployed forever. I couldn't afford it.

[Jack Rains]

I will say Trader Joe's has been a lifesaver. I've started cooking a lot more now that I'm out of school, and I'm just in my apartment more. And Trader Joe's, I always thought before, like, I never shopped there before moving here. I just assumed it was, like, whole foods and a more expensive, like, premium plate. I can load up for, like, $80 and be good for a week.

[Michael Batnik]

And it's not really cooking. It's heating up.

[Jack Rains]

Oh, yeah.

[Michael Batnik]

Like a frozen thing. It's fine.

[Josh Brown]

I'll be fine.

[Jack Rains]

Yeah.

[Michael Batnik]

No, Joe's is awesome. No disrespect to Trader Joe's, but there's not. There's not a lot of cooking. It's more like, put this in a pan, put a lid on it. It'll be ready in five minutes. You're good to go. So. All right. Dude, we're so happy to have you as a New Yorker.

[Jack Rains]

Happy to be here.

[Michael Batnik]

You were an honorary New Yorker at first. Now you're an actual New Yorker. I think it's pretty great. How's your dating life? Everything good?

[Jack Rains]

Yeah. Good. Single in New York.

[Michael Batnik]

Where can young ladies reach out to you if they want to?

[Josh Brown]

Oh, my God. Sorry. I was about to say earlier, but I think somebody cut me off, that Matt Levine needs to write about MicroStrategy for us to better understand it? Boom. Money stuff. MicroStrategy has stock to sell, so if you want to understand, like, really what's going on, read Matt Levine.

[Michael Batnik]

All right. And, hey, we're going to close out with Favorites. And then Michael's going to go trick or treat with his kids. Jack, have you brought us anything that the audience should hear about?

[Jack Rains]

Anything the audience should hear about? Probably the Matt Levine right there that Michael was talking about. I actually did not do a great job of pulling favorite. I just do.

[Josh Brown]

I got you. I got help. Another mat. Matt Bellady, one of my favorite podcast hosts, the Town on the Ringer Network, which talks about the business of Hollywood. He had on the head of fx. This guy's name is John Langroff. It was a two part special on Silicon Valley's effect on Hollywood and what Netflix did to the business model. And it is. There's nothing that you don't know, but just to hear him laid out that way was fantastic. So highly recommend that.

[Michael Batnik]

All right, cool. Love it. I'm reading a new book by Steven Pressfield. Here's a new book. It came out last year. So it's basically a daily. You're supposed to read one page a day and each page is one paragraph. So of course I read half the book already. It doesn't matter how you consume it. But he pulls all these great things that he said in all these different books. And it's meant for creators and entrepreneurs and writers and people that are building things. And it's just a combination of like, really great technical advice for how to move your project forward, but then also, like motivation.

[Josh Brown]

That guy's a genius.

[Michael Batnik]

And Pressfield's the best.

[Josh Brown]

You must have read. Nobody wants to read your shit, right?

[Michael Batnik]

Yeah.

[Jack Rains]

No. Phenomenal book.

[Josh Brown]

Every young writer has read that.

[Michael Batnik]

So the book is called the Daily Press Field and can't recommend it enough. All right, we're gonna get out of here for this week. Thanks to the whole team. You guys did a great job. Special thanks to Jack. Jack Rains. Where could we follow you? You're tweeting.

[Jack Rains]

Follow me on Twitter. Follow me on LinkedIn.

[Josh Brown]

Jack Rains.

[Jack Rains]

Not on Reddit. Barmelo Anthony. Barmelo's Anthony with an S. Barmelo's Anthony. And read my blog, youngmoney. Co Not. Com.

[Michael Batnik]

We love you. Happy Halloween, everyone. We'll talk to you soon. All right, we got it. We did it.

[Jack Rains]

We're back.