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The Master Investor Podcast with Wilfred Frost
Dan Ives: How To Pick Generational Tech Winners
00:46:07
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- [00:00]
A
I'd say you can find AI in the spreadsheets. I think to some extent you have to. Valuation is important, but my whole view is like, if you focus just on valuation, you've missed every transformational growth stock the last 20 years. There is one chip in the world fueling the AI revolution. It's led by the godfather of AI. He's wearing a black leather jacket. His name's Jensen.
- [00:25]
B
He's badass.
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A
But it goes back to, like, first of all, Jensen, 2021, 2022, getting crushed. Why are you investing in AI? You're a gaming company. You bet on the innovators, you bet on the CEOs. And I think that's also very important. Like, in terms of how we pick stocks, retail has a huge seat at the table. I think what that's done is that, like, in April, they held stocks, institutional sold it. You can names like Tesla, Robinhood, I think at times, Nvidia, Palantir Retail's been head of institutional. The reality is, like, the biggest asset for Tesla is Musk. Tesla is Musk. Musk is Tesla. But this is the most important chapter, I think, ever in Tesla's growth story, the autonomous robotics future. And I think you're seeing a wartime CEO again. And that's why I think in the future, Tesla will be defined by what Musk does over the next 12 to 18 months.
- [01:39]
C
Welcome to the Master Investor Podcast with.
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B
Me, Wilfred Frost, where we celebrate and.
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C
Learn from the success of the greatest investors, business leaders and politicians in the.
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B
World, giving you, our listeners, the edge.
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C
The Master Investor Podcast is sponsored by Interactive Brokers. Please do remember, the views expressed in this podcast are for general informational purposes only. Nothing in the podcast constitutes a financial promotion, investment advice, or a personal recommendation. More on that in the show notes. My guest today, Dan Ives, is Managing.
- [02:14]
B
Director and Senior Equity Research Analyst at Wedbush securities. He's led the firm's tech coverage since. Since 2018.
- [02:21]
C
Since then, he has been unrelentingly bullish.
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B
Correctly, in particular on the AI theme, even more correctly.
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C
And he's done it by being unapologetically himself. Not just bold calls, but bold clothes.
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B
Albeit offset by his very gracious way, and in doing so, I would argue, has elevated a relatively small firm in Wedbush in the process. He's also the founder of Uncle Ives ETF and the chairman of Orbs, both of which we will get to as well.
- [02:51]
C
Dan, my friend, welcome to the Master Investor Podcast here.
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A
So excited to be with you.
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C
So excited.
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B
We've both been itching to start in the last 10 minutes as we've been framing up the cameras, you are dressed appropriately as ever, and I hadn't realized until prepping for this. You have your own clothing line now as well, which we're gonna get to and all of those details a little bit later. But it's great to see you. Great to see you in London and love the attire as always.
- [03:17]
C
As I mentioned there, you have been.
- [03:19]
B
Bullish on tech, your sector, pretty much throughout the period, well, totally throughout the period since I've known you. Have there been any moments in the last decade or nine years or whatever it's been at wedbush when you've paused.
- [03:35]
C
We talk about the sector as a.
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B
Whole and you've thought we need to really reevaluate our long term bull thesis on this, or has it been quite an easy call for you to stick to?
- [03:43]
A
I mean, look, covering tech stocks since like late 90s, right? I mean, so like you could say perma bullish and. But look, there have been dark moments, right? I mean obviously going through dot com bubble, financial crisis. But I think when I look back at the last few years, look Liberation Day in terms of the tariff issue, that was a huge white knuckle moment. And that was something like, for me, that was like a gut check moment because that was a fork in the road and, and it was gonna go one way or another. And obviously it went well.
- [04:15]
B
Let's just pause on that quickly because I remember listening to our friends Dan Nathan at Risk Reversal podcast, you went on that like a day or two after the tariffs were announced and you were really broken at the thought, not just about your calls on stocks, about what it could do to America as a whole. You just thought it was the wrong call.
- [04:34]
A
That was more as a US citizen than as an analyst. Because it's someone like myself that goes to Asia four times a year, covered tech my whole career. I understood like those tariffs, what potentially that could do that would have cut us tech off at the knees, went down DC four or five times during that period, meeting with many politicians trying to drill in. Like, look, I understand what you're trying to do here. This is not the right way to do it. And I think obviously it ended much cooler heads prevail. But that was a very like gut check moment. And look for us, it's like you can't call tech from the 25th floor of a New York City or London office building. You gotta be feet on the street. And I think that's why, look, three and a half million air miles the last 25 years, I've been able to do, I think that's been our advantage. And me and you know each other for a long time. I. I think there have been so many periods where it's very easy, you'll fire in a crowd theater. It's really our work that we do that's given us confidence.
- [05:39]
B
So in terms of the kind of more recent period of time since Wedbush 2018, when you joined there, I mean, have you had to ignore valuation? Maybe ignore is too strong a word, but I guess one of your successes perhaps has come from not weighting valuation as highly as many other equity analysts.
- [06:01]
A
Look, I was, yeah, I'd say you can find AI in the spreadsheets. I think to some extent you have to. Valuation's important. But my whole view is like, if you focus just on valuation, you've missed every transformational growth stock the last 20 years. You have to be able to look out three, four, five years to really build a thesis to where you think that's going. And I think that has probably been, you know, philosophically, our view is that you gotta focus on the tech and where ultimately sort of, we'll call it a bull case scenario could go. But also it's doing the work yourself CIOs in Asia to make sure and validate where it's like, you know what you can miss a quarter stock could go against you. But as opposed to so many sell siders, you know, where it's kind of like they all head for the elevators, downgrade stock, and it's kind of like steady hands when you have a sort of thesis.
- [06:57]
B
So you said something really interesting there. You said, you can't spot these winners in a spreadsheet. Do you have to spot them in your gut? Do you have to think this is the winner of the next five years? Or is there something more tangible than just that? Or is that very important?
- [07:11]
A
No, I think part of it is like, I bet on leaders, right? It's knowing Musk back a decade ago. It's. It's knowing Jensen. It's Lisa sue, it's Nadella, it's Car. I mean, I think Palantir is a good example. Like knowing Carp, Understanding palantir stocks, like 10 bucks or what? And I'm like, this is going to be a generational name now, people at that point, I mean, the hate mail was pretty insane. You got hate mail from that, from institutional investors. How could you bet on Palantir? This is one of the worst calls I've ever seen. But my View is like Palantir is going to change the world. From an enterprise perspective. It was betting on the leaders, but also it's understanding the culture, the technology, and it's doing the work yourself. And I think that's something where I think that that's probably been like. If I look back in our career from the Apple calls and Tesla and video and Microsoft and others, it's sometimes like going against the grain. Like, look, Nadella takes over Microsoft 2014, the view is like disaster. Like, how could you have an internal guy? But just knowing him and what he was going to do, I'm like, he's going to rip the carpet up.
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B
I want to talk about individual stocks. Maybe we'll come back to this, but I think he's underpriced. He's perhaps the best CEO there is.
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A
I mean, we're talking hall of Famer. Like, he's really almost to me, what he's done in Microsoft, it's for the history books especially understanding the red tape and what was at Microsoft before he took over and he was an internal guy. He basically like he rapidly changed that company. And I'd argue we're not at AI. We're not in the AI revolution. Of course, Jensen being the godfather of AI, if it's not for Nadella recognizing OpenAI back to early 2023 in terms.
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B
Of where it was heading, lots to get to in those specifics, which we'll dive into, but big picture, to kind of question the bullishness overall on the theme. Back in my CNBC days, I left three or four years ago, you always used to say, I don't think it's 1999, I think it's 1995, that we've still got quite a few years of the AI related expansion before you might get into bubble territory. What I find really interesting watching and listening to all your commentary. Now you've changed that slightly, but you say 1996, but we've had four years. So just I guess answer my skepticism there and that you could look at it another way and say since you said it was 1995, we're with three or four years. Isn't that closer to 99 now?
- [10:06]
A
Sure. And also I'd say for someone like myself that went through the tech bubble, as an analyst saw 98, 99. What's happening here is that if you think about almost like dog years, right. In terms of as it's playing out, only 3% of US companies have gone down the AI path. So the reason I say it's a 96 moment maybe I'm not calling like a 98 moment or 99. It's because only 3% of companies in the US have gone down. Europe 0, Asia ex, China 0. Sovereigns are just starting to go in terms of Middle east and for the first time in 30 years US is ahead of China when it comes to tech. And I think that's so important because it's Nvidia, it's the hyperscalers, it's the use cases. And we've said like this AI party started 9pm it's now 10:30pm party goes to 4am now again in that party DJ could stop playing music glass on the dance floor. Maybe cops come try to break up the party. But the bears will watch that party from the outside through the windows. Bulls and bears meet up at 6am Bulls how out Bear night and the bears.
- [11:20]
B
I haven't stayed up past 10pm for a long time. I'm afraid breakfast shows will do that to you. But I love the analogy. Let's talk about some of those hyperscalers maybe first. Clearly when it came to search Google winner takes all. If we talk about and I know there's other levels to it but the large language models, the way consumers are at the moment engaging with AI, is that going to be winner takes all? Who's in the lead at the moment? And do you worry again it might be one of the short term pullbacks about the value that has accreted across four or five of these companies with very little revenues to share between them?
- [12:00]
A
Yeah, I think when you demand from a hyperscale perspective. So let's just even set it less than 50% of workloads are in the cloud today. So it just shows you we're not into an AI less than 50% in the cloud. When you think about I only call it, you know we talk about 3% that have gone across the US when you look at these hyperscalers, they're still super early days now Microsoft, it's their backyard like the enterprise, like this is their game to lose. Google, Amazon, you say outside looking in but now significant closing the gap. Three trillion that's going to be spent. That's a lot to go around for everyone. But remember the hyperscalers think about like a stack foundation of a house. That's the foundation but the true winners too they're going to be on the use cases names like you know, Palantir, Snowflake, MongoDB, where's Oracle sit, Cybersecurity infrastructure, Core Weave, Nebius, Others Power plays. Look, the reality is that for every dollar spent on Nvidia chip, we estimate there's an $8 to $10 multiplier across the rest of the tech. So I do, I don't think it's a winner take all. I think this is one where like you're gonna have a lot of the second, third, fourth derivatives. But that's why we believe at least two more years left in this tech.
- [13:27]
B
Bull market when we see new models come out. Gemini 3 this or that. How closely do you watch that? Do you think, oh wow, they're now in the lead, I'm going to change my thinking or is it like as long as all of them keep improving, then we're okay? I guess another way of putting that is if OpenAI was listed on its own, forget the Microsoft partnership, would you be suddenly a little bit bearish relative to the gains the likes of Gemini are making?
- [13:52]
A
Yeah, I mean to me the whole reason we've been pounding the table on Google is the view that Gemini was going to be special. And I think it's one if you go back to earlier this year, the London cab driver is bearish on Google but what they've shown is Gemini is real. It's a game changer. But I don't view it. Look, some of the parts, you could argue it adds 56 hours a share to Google stock, but OpenAI I still believe OpenAI went public today. It's trillion dollar market because of the legitimate and the reason is that it's not just about ChatGPT, it's about the view that they're essentially going to build a full stack when it comes to AI. But I don't view it where Gemini comes through a huge super negative for all men. OpenAI I view it as for this revolution to take hold, you need many models, you need models in China. But miles are going to get cheaper and cheaper. The data continues to be, I think where a lot of that success going to be.
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B
What about on the other side of this massive bull run, Nvidia? Do they now for the first time have real genuine competition? Whether it's Google chips, Broadcom, AMD.
- [15:12]
A
Look, just getting back from Asia there three weeks for three weeks demand and supply is 12 to 1 for Nvidia chips. I mean look there, it's their world, everyone else paying rent. Now look, will there be a narrowing? Yeah, but look they're four or five years ahead of any major competitor. Now you look at like Google tpu, what's happened with Huawei amd others are going to benefit. But that's also why Nvidia needs access to the China market. Give him what? What I view is like you don't give them access to China. It just makes China stronger, makes Huawei, it makes domestic competition stronger. But there is one chip in the world fueling the AI revolution. It's led by the godfather of AI. He's wearing a black leather jacket. His name's Jensen.
- [16:04]
B
He's badass look.
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A
But the thing is, but it goes back to like first of all, Jensen, 2021, 2022, getting crushed. Why are you investing in AI? You're a gaming company and it goes back to like those are the same. Like if you go back historically, right? It's like 2008 iPhone just going to be a one year AT&T smartphone. 2014 Nadella. Why are you trying to turn Microsoft into a cloud player? 2013, 2014 Musk dude, there's no way electric vehicles are going to work. Look, it goes back to like you bet on the innovators, you bet on the CEOs. And I think that's also very important in terms of how we pick stocks.
- [17:00]
C
This podcast is sponsored by Interactive Brokers. Building wealth starts with the right broker. Interactive Brokers helps you reach your goals with powerful tools, global market access, low costs and unmatched financial strength. That's why the best informed investors choose IBKR. Learn more@ibkr.com MasterInvestor.
- [17:28]
B
I just want to pause on a couple of things with the stocks we mentioned so far. Which is what you know, pick out Google, Microsoft, Nvidia, Ford, P. What are they on in your numbers? Because again, some of the moments when we've used to chat, like there was some pretty terrifying PEs. They're not that bad anymore. I mean like Nvidia certainly has grown into its multiple. It's not a cheap multiple by typical metrics, but it's not that expensive. Right.
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A
And the streets underestimating true growth probably by about 25, 30% in terms of where numbers are really going to go.
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B
So what's your 12 month?
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A
The average tech company is trading at 27 times earnings in the bubble, 30 times revenue. So when I look at Nvidia 230 to 250 as I view as like base case.
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B
In terms of its. What's that put it on? What multiple.
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A
And I mean that would be. It's going to be like a high 20 multiple for basically a company that's the one chip fueling the AI revolution. And that's why it comes down to the view Idea is like a tech bubble. The best private companies haven't even gone public yet. These stocks, okay, are they expensive relative to historical? Yeah, but the growth is 4x. You have more growth over the next three years than you had in the last 10 years combined. So my view is just like there's two types of people. It'll be like 1950 is going to Vegas. I tell you, okay, we're gonna build the strip Vega. This is the future. Then there could be someone else be like it's desert, like you're not gonna have an airport here. You're not gonna be able to do so I'm just saying like I think that's really essentially you have to believe because my view is autonomous humanoid robotics. Those are some of the things that we see in the future.
- [19:32]
B
So I want to just touch off on a couple more of the ask you about a couple more of the bearish arguments that are out there. And one brings in meta as an example which is from a lot of the high profile, successful short hedge fund managers have been questioning in their accounts how long they're amortizing all of this AI investment over and whether in fact it's, it's artificially boosting their earnings because not so much that they're not building the right products, but they have to buy the next best Nvidia chips much sooner than, than they're advertising over. Is there truth to that I E Nvidia's innovation is so great that everyone's going to have to spend the same amount again every two years, not every four years again.
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A
We got to see, I guess it all plays out. I mean but also like the mathematical gymnastics that a lot of the shorts have done because maybe other you know, thesis of have not sort of panned out. I get it. But the reality is like for what's like a meta Zuck's wartime CEO now they have to aggressively spend no choice given how they're going to monetize their 3 billion users. When you start thinking about earnings and how that's going to is it overstated and how it's all doing player? I mean, well in my view like when you look out in the next three, four years when we look at NASDAQ 26,000, 28,000, like you know, I believe I can two more years left in this tech bull market at least. I just think a lot of that is short sighted relative to the massive growth opportunities. And again it goes back to some of the shorts that you talk about. It's, it's easy to Be a short from the 25th floor of a New York City office building. I want to see those shorts. If they're at fabs in Taiwan like we are and they see demand 12x over supply, that to me continues to be the thesis.
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B
Okay, one other bear case I've heard from someone who is plugged into this sort of stuff. I mean it's funny how you mentioned the percentage of compute that's in the cloud and there's still a long way to go. There's. What do you say to people who suggest that trend could turn that as we start to use AI more and we share much more of our private data that those people with deep pockets, businesses or wealthy individuals will want to keep that data on site and so the compute power instead will be at your home or in your office. And I guess linked to that is have we overbuilt some of this data center capacity which clearly is buying into the theme that everything is going to move to the cloud.
- [22:19]
A
Look, there's more data centers under construction today than active data centers. I feel like the ships left the station like in other words like that it's all heading down that path. I'm not saying you can't have private clouds and others that are on premise for like you know, specific use cases. But I just think the reality is like you're like I think we're not going to have enough data centers. You know, it's like I'm not of the belief that like you're going to over build data centers. It's a late 1990s, just like fiber and everything and the overbill with ether and everything like that. I don't view like that. I actually view it as. When you think about the future, 20% of cars being autonomous, humanoid, robotics, consumer from a health perspective, pharmaceutical. You look at biotech, you look at government, how they're going to. I mean it's just starting. It's not just about like ChatGPT. That's tip of the iceberg in terms of where it's all heading.
- [23:25]
B
Brings me on to my next big stock that we haven't touched on yet, which is Apple. You've been rightly again a long term bull and, and even including this year pushed people to buy it when it had a dip and it's bounced again. And obviously part of that's on the hope of iPhone sales. My question to you on that is in this world of AI empowered everything, is it fair to say that the actual smartphone handset is much less important compared to the AI software? That will power all of our devices. And with that, does that worry you about Apple or not?
- [24:03]
A
Yeah. And it's funny because me and you so many times over the years, Apple earnings is coming out and the stock could be down and it's very easy in those moments to be like is this. But it all comes down to like 2.4 billion iOS devices, 1.5 billion iPhones. It's the biggest install base in the world from a consumer perspective. Services itself over 100 billion a year. I think when you think about AI, that's me a huge monetization for Apple. But it all comes down to like what they've built that ecosystem, what, 99.3% always once you're in Apple, you stay within the Apple ecosystem. So I view it as still so very important. But for Apple, they've been on the outside looking in. That's also why they're changing up. While their AI leadership, they're ultimately, I believe Google Gemini are going to go head down that path in terms of exclusive partnership. They'll charge for models you look out in the next year or two. They're going to charge for models that will essentially be like an Apple exclusive model. You're going to have an AI app store. I mean, that's the future where it's heading for Apple. But it does still come down to, even though less important, it's about the install base.
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B
Did Tim Cook take his eye off the ball with AI?
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A
I think there's parts of Apple that have been run like a motor vehicle, like a municipality red tape. Guess what? Google was there too. I mean the beginning AI, that was Google's problem. They've significantly changed that. But for Apple innovation not doing acquisitions, it has to go through a certain. You could argue they had the wrong people in the wrong spots, which is why culture they've had riptoband. They'd have to make a lot of changes. And I think Cook and I still believe he'll be CEO through his 2027. He's not going to hand the keys to whoever takes over Apple, with an AI strategy blowing in the wind. This will be a defined one between Google as the partner Apple and leaders from the outside that could take this to the next level. And I think that's why they're doing everything right now ahead of what's going to be the big release next year.
- [26:26]
B
I think we've touched on six of the Mag 7, so let's hit the last one. Tesla and Elon in particular. Where do you rank him in terms of the Great innovators alive today. And is his focus back on all of the little business interests that are captured by that one publicly listed stock as opposed to whether it's politics or also, you know, non listed parts of his business empire?
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A
Yeah, I'd probably put him as number one.
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B
I mean ahead of Jensen.
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A
To me, the reason I put him ahead of Jensen is what Musk has done. Zach could argue like we're not here if it's not for Musk, I mean Jensen and I think if you ask Jensen who he thinks the biggest innovator is, like, I mean Musk is either one or up there top. Because what we've seen in terms of the change in mobility, what we've seen in terms of changes, not just electric vehicles, but really what's going to be the future in terms of autonomous and robotics? I think for Musk it was a dark period during, you know, when he was part of the Trump administration Doge. Not just brand issues, take an eye off the ball. We talked about, you know, sort of edicts that he needed to get back, the board needed to get him back. Because the reality is like the biggest asset for Tesla is Musk. Tesla is Musk. Musk is Tesla. But this is the most important chapter I think ever in Tesla's growth story, the autonomous robotics future. And I think you're seeing a wartime CEO again. That's why I think in the future Tesla will be defined by what Musk does over the next 12 to 18 months.
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B
A lot of pressure riding on some of those individuals, I guess. Just finally, in terms of what Jensen would say about great innovators, where do you think he would rank or where do you rank the founder of tsmc and how impressed are you? Tell people a little bit about how important TSMC is. Taiwan Semiconductor to all of these companies.
- [28:29]
A
They're the fab. It's funny when you think about Google with the TPU over the last few weeks, weeks, who makes that? Tsmc like TSMC is basically the hearts and lungs of the whole supply chain. It also speaks to, I think, a part where I think investors under appreciate how important they are. I mean we have our etf, the, I mean TSMC is obviously one of the key players because they're basically a winner.
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B
And you've visited their fabs, they're unbelievably impressive.
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A
Like when you see what they've built and obviously they'll be building some stuff in the US as well in Arizona, they're playing a different game than anyone else. And I think they, I Wouldn't call them monopolistic. But look, they've created something that is so rare and I think for many years did not get the due respect that they should have.
- [29:33]
B
Obviously there's a bit of a political risk to that stock but it's obviously a lot cheaper than a lot of US players.
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A
Look into that point when I speak at conferences and there's always questions from the audience. It's like, well, what happens if China invades Taiwan? When it comes down to you could live your whole life in these sort of I'm not going to go in the ocean because there could be a wave, I'm not going to get in a car. The reality is like is it a risk? Yeah, but I just believe that the world even itself's out and I think China truly understands that they play hundred year sort of views and they're not going to do anything in the near term around Taiwan. I think that's something where it's a risk, but I think it's a risk that it's a black swan risk that you have to take into. I think your broader investment thesis.
- [30:37]
B
I want to quickly touch on retail versus institutional. I know you're a big fan of retail investors and I guess if we rerun the clock 10, 15 years, all of the very educated sell side research only reached institutional investors. That's been opened up for all sorts of reasons over the last decade and now we've got AI too. And I guess my question on this is firstly, how well informed do you think retail investors are now? Is it in fact better informed than institutional? But is the opportunity to do this research and come up with better analysis going to very quickly be arbitraged out if AI is involved on this as well? Because essentially everybody could have at their fingertips by asking the right questions to their computer all the analysis that's taken hundreds of thousands of high paid people to do it in the past.
- [31:35]
A
I think retail, I mean I go doing this for so long retail up to like the last like let's say like you know, right around call pre Covid they were like at the Thanksgiving they were like at the kids table playing checkers. Now they have like an even hand as much as institutional. It's you look at information flow, how it's evened out, you look at the sophistication of retail, you look at so many of these, you know, conferences, future proof, a lot of other stuff. I mean like what I'm saying is like this around the world. I've been to ones in Asia, I mean Retail has a huge seat at the table. I think what that's done is that, like, in April, they held stocks, Institutional sold it. You can names like Tesla, Robinhood, I think at times, Nvidia Palantir Retail has been head of Institutional. Now in a. I don't view that it, like, changes like the arbitrage or whatever for retail. I mean, to some extent, you could go back to, like, last Fed meeting, you know, in terms of, you know, when you go back to, you know, in November, Powell, you know, not. Not going to cut rates potentially in December, market freaks out. There's no. That's information. But if you have an understanding of, like, beltway politics, ultimately, you know, Hassett's gonna get in there, you. And I think at one point it was like 20% chance that they're gonna cut rates. You're like, I'll bet there's a better chance of me playing the NBA than them not cutting rates. And now it's 90%. Like, I'm just trying to explain, like, you go through these scenarios where there's a lot of arbitrage.
- [33:31]
B
People can move exactly. Very quickly on those points of view. Let's talk about the Ives etf, the ticker being your surname. I've. You launched this in July.
- [33:41]
A
In June.
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B
In June. You just tell me it's nearly a billion.
- [33:44]
A
Yeah, it's over a billion.
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B
Yeah, it's over a billion.
- [33:47]
A
Yeah.
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B
Congrats, man.
- [33:48]
A
No, thanks.
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B
That's awesome.
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A
And look, I didn't, you know, I had a lot of confidence in the thesis, but you don't.
- [33:56]
B
What is the thesis? So this is 30 high conviction AI names.
- [34:00]
A
Yeah. So look, a lot of people, people that follow me from around the world, like, they know the way that I pick stocks. And it was basically me picking the 30, like the Ives AI. 30. 30 winners in different subcategories. Chips, software, cybersecurity, infrastructure and power and some other derivative areas. But four times a year, it's like, okay, this. There's some we could swap out, some we could swap in. But it was giving investors, whether in the UK or New Orleans, whether Institutional Australia or retail in Hawaii, a way to bet on the AI arms race. Now, again, when you do that, like, you don't know what reception's gonna be. And obviously it's been like, you know, super successful. And I'm humbled, but at the end of the day, I'm focused on just, like, giving investors the ability to make money.
- [34:55]
B
And in terms of the kind of valuation levels, I mean, do you have a blended P of what this is. I guess my point is I imagine it's quite if you're looking at traditional metrics an expensive multiple and would it be fair to say you think it's kind of fairly high beta if the market cracks it's going to fall quite a lot. But you think long term it's when.
- [35:17]
A
Market sells off like the risk off these it definitely sells up more in the market. I think so far it's obviously the performance significantly outperformed nasdaq. I think part of the view is just like I'm betting on the specific winner but it's also well it's also the derivative beneficiary. It's not just betting on big tech who are the second, third, fourth derivatives in AI. And I think that's very important and.
- [35:47]
B
I wanted to pick some of those out. So you shared all 30 and I've picked three. We just want a quick minute on each. That I have to admit. Well actually one of them I'd heard of but two of them I hadn't but they were smaller ones I thought we should touch on. So what is iron?
- [36:00]
A
So that's basically when it comes to you think about energy. They're going to be an energy player to fuel data centers. They always play in crypto mining, but that's something where the biggest constraint in the US is going to be power OCLO G Vernova Iron's on there and I view them as kind of like we call them diamond in the rough. But there's someone that's going to play a bigger and bigger role in terms of data center build outs.
- [36:24]
B
What's pegasystems?
- [36:25]
A
So that's an IT tools company. It's not like the highest growth company. But as companies build out their use cases, PEGA plays a huge role in terms of a lot of these build outs.
- [36:38]
B
And finally core weave.
- [36:39]
A
I mean a neo cloud just like Nebby is. But that's one where as this sort of infrastructure builds where you think about the stack and they play a huge role in terms of AI build out.
- [36:51]
B
A reminder to our listeners that nothing in the podcast should be considered direct financial advice. And of course Dan has positions in all of those stocks. Let's talk Dan, about the other tangential business you've done in the last year. Again, kudos and congratulations on it because it's been very successful. You listed it on the Nasdaq Just a few recently.
- [37:12]
A
Yeah. So that was in September.
- [37:16]
B
We're talking about orbs. Yep, orbs, orbs.
- [37:19]
A
What exactly is it so, you know, Ako is named the company Orbs Ticker and this is, you know, it started off as it's basically a Treasury company that invests in Worldcoin. You know, Sam Altman, we partner with Sam Altman, who is really the originator of this. The whole goal is that authentication in the future is not just going to be password, it's not just going to be traditional. You're going to need human proof authentication. Orbs is basically iris scanning technology. These are actually orbs, they're actually physical devices where you do iris scanning technology. There's almost 18 million on there. The big View is basically betting that we're going to be an enterprise play on human proof authentication.
- [38:09]
B
So this is again, just to go back a basic step, this is a cryptopay, it's a blockchain play. But specifically on using that technology to make the best way to authenticate who.
- [38:21]
A
People are going forward, human proof authentication.
- [38:24]
B
And this will be used across, you think, all of our tech or specifically in the financial services of, I believe.
- [38:32]
A
As the trillions of dollars being spent in terms of, you know, data center, GPUs, you're going to need human proof authentication. What we're doing at Orbs, it's building that all out. I mean obviously world has been foundational. I think they're years ahead of any competitor. And this, it started off as it's a Treasury company. I mean that's how Bitminer and some others, that's obviously been a big focus of investors. But we're different. We're really more of an AI tech company sort of meets crypto and I view it as just early days in terms of this build out.
- [39:07]
B
And obviously to be clear, again, clearly Dan has an interest in this company.
- [39:11]
A
As chairman.
- [39:12]
B
Yeah, as chairman. Refer people back to our episodes with Dan Morehead and our crypto episodes with Tom Lee and Cathie Wood. If you want to hear more about crypto treasury companies specifically whilst we're on that and crypto more broadly, Dan, clearly we've had a big pullback of late in all cryptocurrencies. Bitcoin, Ethereum in particular. One of the plus points, if we step back for Most of the 12 months before that pullback, was some of these digital asset treasury companies and the way in which they were kind of legitimizing the whole move.
- [39:47]
A
Sour and MicroStrategy.
- [39:48]
B
MicroStrategy. We had Tom Lee on Bitminer and obviously we've had Dan Moorhead on as well. Is it fair to say? Very simply, that then as prices start falling, these treasury companies are forcing the price down more. We don't even have to suggest it's leverage or anything's odd going on. But you had a guaranteed buyer becoming a guaranteed seller.
- [40:09]
A
No, I think there's no doubt like that's added to it. I also think there's a broader deleveraging that's happened, you know, across the board. But I think we look with the treasury companies, the big thing, whether it's M Nav or however these stocks trade, I think the thing is that more and more investors are trying to discriminate, to be like, okay, like who is a real business? What are the managing teams? Look, it's so different than when you think about like tech. You could have 10 companies in a space, maybe there's two winners. So I think you're starting to see a winners sort of play out in this scenario. But the reality is when it comes to crypto, and we've talked about it like it's a consolidation, it's been a deleveraging, but it's not a crypto winner. It's not the end. This, this bull market in crypto, is.
- [40:58]
B
There a day when bitcoin, if we use that as a focus example, no longer has 50% drawdowns?
- [41:06]
A
I do, I mean I met with a bunch of senators, Congress, along with Mike Sauer and Tom Lee and a few others trying to focus on the bitcoin reserve. Met with Ted Cruz and some other senators. I think what you're going to start to see, whether it's bitcoin reserve in terms of, in the US Government, you're seeing much more legitimization. You know, crypto was almost a four letter word, you know, in the, in the last administration. I think that, that, that was part of it. Right. So now you're seeing obviously a lot of deregulation. You're seeing, you know, obviously an SEC that's very pro crypto. But I think you're going to see less volatility as it plays out over the coming years. That, that sort of our view, certainly.
- [41:56]
B
The administration's tone has been a massive shift. Dan, as we wrap up a couple questions about you. And you know, you're not your classic Wall street guy, you know, in terms of mainly your style and the way you approach life, but your clothes is a great example of it. Were the clothes always embraced and your style always embraced as they are now, as in did you have tough years where you had to fight against the grain?
- [42:24]
A
Only of course, I mean, yeah, I mean there's, like, when, like, there are years, like, 20, 22, like, when tech stocks are getting crushed. I mean, hundreds of messages, like, every day, like, clown. Still wearing the green sports jacket. You know, clown, clown. This, like, the reality is, is that you have to have thick skin. If you are, I think, a little different, like, dress differently. And, you know, and you've known me for years. Like, I just, I don't take it personally. I just view it as kind of like, this is my style. It's what I'm comfortable wearing. You know, we obviously have a clothing line around it as well. And also, I think also it sent a signal to, like, a lot of people out there where, like, when things are tough, you don't, like, hide and be comfortable in your own skin.
- [43:19]
B
Well, I've always adored the way you're unapologetically yourself. And to your unbelievable credit, you've brought a lot of people around with you, which is no easy feat to change the kind of sentiment of the herd, as you said, Dan ivesclothing.com, i didn't even know that existed until researching this latest.
- [43:37]
A
And that's with a collab with Snowmelt, which is a Brooklyn designer.
- [43:41]
B
Do you do clothes in giant size?
- [43:44]
A
We do all. So, I mean, it's like this. This is custom, but it looks.
- [43:50]
B
I need some.
- [43:51]
A
But it's also one where there's a lot of men and we do women's clothes, you know, obviously. But there's a lot of men around the world. They'll be like, you know, I want to dress more color. I want to do this. The whole reason I did the clothing line, it's actually just to get more color out there for people to be like, hey, I don't want to go extreme to maybe Dan Ives level. But, like, maybe I want to take a little step into the color zone.
- [44:17]
B
Well, we need to get some master investor swag done, so maybe we'll do.
- [44:22]
A
For the next podcast we're doing.
- [44:23]
B
Let's do it. Just finally, the same question I finished with everyone on, which is obviously a lot of wannabe master investors listening, trying to train and improve themselves. What is your overriding piece of investment advice for our listeners?
- [44:39]
A
I think you have to have understand your risk profile and build out your investment profile and stick to it. In other words, you cannot let the macro, the nervousness, the social media, the haters get you off. You got to stick to that. And I think that's very important, especially in nervous times. Have your thesis, have your winners, have your process, but don't let the nervous periods get you off your process.
- [45:08]
B
Dan, it's been a pleasure as always. I've so enjoyed catching up so this has been great.
- [45:13]
A
I've been looking forward to this and thanks for having me.
- [45:16]
B
Dan Ives of Webbush securities with us and of course the Ives ETF and Orbs as well. Thanks for tuning in to the Master Investor Podcast and our thanks again to Dan Ives.
- [45:26]
A
Thanks for having me.
- [45:28]
C
The Master Investor Podcast is sponsored by Interactive Brokers. Please do remember the views expressed in this podcast are for general informational purposes only. Nothing in the podcast constitutes a financial promotion, investment advice or a personal recommendation. More on that in the show Notes this podcast is produced by Paradine Productions and Master Investor limited In association with Birdlime Media. If you've enjoyed the show, please do subscribe on YouTube or click follow on your podcast platform and you'll be automatically notified each time a new episode drops.