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- [00:00]
A
Welcome back to the Rundown interview edition. Today we are talking to a returning guest, Jason Ware. Jason is the chief Investment Officer at Albion Financial. And in today's episode we take a look back at Q1 and discuss the state of the markets heading into Q2. We covered a lot of topics on today's episode, including the Iran war, oil prices, the software sell off, and why Jason is still bullish on big tech going forward. I think you guys will really enjoy this one, so let's get into it. Jason Ware, welcome back to the Rundown.
- [00:33]
B
Good to be with you guys. Thanks for having me.
- [00:36]
A
Of course, man. You're a returning guest and you know, last time we talked I was just looking back at it, it was Christmas Eve of 2025, end of Q4, and I feel like that was like a forever ago because like back then the markets were you know, at all time highs. Everything was like more jolly. Now the vibes are a little bit different. I would say obviously there's like the war going on, oil prices at 4 year highs, tech stocks getting wrecked every day, but yet the S and P is like within 3% of all time highs. So really weird market dynamics right now. I'm just kind of curious, what do you make of what's happening right now?
- [01:15]
B
Yep. So there's, there's so much we could unpack. I mean that such a broad question, like what do we make of what's going on right now? Well, my goodness, like we don't have enough time to go over all that. But I think the way. Go ahead, go ahead. No, please.
- [01:27]
A
I was gonna ask you like, what do you make of the volatility or I guess in, in, in your career, have you like experienced this kind of chaos? When's the last time you've experienced this kind of chaos and volatility?
- [01:41]
B
One year ago we had tariffs, remember? I mean literally today is April 9th. This was the day that Trump backed off of Liberation Day and the market was up almost 10%. So you know, I mean this, this was, it wasn't that long ago that we experienced this kind of volatility. And volatility is just part of the journey when you invest in stocks. Sometimes it's more volatile, other times it's less volatile. But you know, bouncing around and having a bit of a bumpy ride is, is what one should expect. So look, you know, volatility is, we like to say that's, it's the, the toll, it's the cost, it's the price that investors have to pay to get premium returns. Over bonds and cash. And so, you know, it's why we get paid more in stocks. But to answer your question about the volatility we're experiencing so far this year, I think, you know, we can sum that up pretty cleanly in the war, right? I mean, I think stocks were largely behaving themselves up until the end of February. And since then we've had a lot of uncertainty because of the war in particular because of the impact on energy prices, fertilizer costs, helium, you name it. And so that position that, that, that posture going into the year you talked about, you and I had gotten together on Christmas Eve and things felt a lot more jolly, to use a festive term. And so everyone kind of came into 26 with this notion of like, the economy is good, earnings are good, the Fed's on our side, we're going to get a more dovish Fed chair coming in. What could possibly go wrong? And well, of course war in Iran is what went wrong and we've experienced volatility since. But I will say it's interesting. I mean, we're only two and a half percent off of the highs, right? We've had a pretty strong snapback over the last few days. And so, yeah, some volatility, but you know, it's not too bad.
- [03:31]
A
But even like before the war, right there was the main story before the war was like this rotation out of the max 7 rotation out of software and into more of like the, you know, the energy sector and things like that, you know, like harder. Like the energy sector was like the best performing sector even before the war. So I guess I'm kind of surprised. I think the convent conventional wisdom was if the Magnificent seven stocks take a hit, that's going to bring down the entire market with them. That didn't happen in, in fact, everything was fine until the war, which added increased volatility. Do you think that's going to continue in Q2?
- [04:10]
B
I will say it feels like the rotation and we talked about this, you know, the end of December. I feel like the rotation away from technology into other parts of the market, the broadening out, if you will, feels like it has more legs this time than it has in the past. But I don't think that means that the Mag 7 or the Splendid 6 as I call them, because we don't own Tesla. You can have Broadcom, we own Broadcom. So maybe we're Back to the Mag 7. I don't know. But I feel like that rotation away from tech has been more enduring. But we're Looking at some really interesting valuations now. I mean, I think the sell off in the MAG7, we got earnings going up for the MAG7, we have price going down. So now we have these really interesting valuations and PE multiples and that. I think, you know, starting with new money here today, I'm more bullish On Tech and Mag7 than I was at the end of December simply for the reason of valuation. So I wouldn't be surprised to see a bit of a catch up here in that tech trade.
- [05:07]
A
I mean one, one company that just seems to bleed every day is Microsoft. You know, I think it's what had had its worst quarter in Q1 since 2008. That's never a good company. And I just don't know, like, like why does the stock, why does the market hate Microsoft so much? I feel like the CEO Satya Nadella has lost his aura. The company is growing, but they're just not. The market is just, just rejecting whatever is coming out of there. What do you make of all that?
- [05:37]
B
Yeah, I think it's two things. A, I think they've been caught up in the software trade, which I don't agree with. We own Microsoft. I think that is over extrapolating throwing the baby out with the bathwater, whatever aphorism you want to use. But I think A, it's software and then B, I think what used to be an asset for them, which was this close relationship with Sam Altman and OpenAI has become kind of a liability. And so the stock is re rated based on those two things. If you look at the growth in Azure, the cloud business, which of course is very important, it's been tracking at a very impressive pace. But I think the acceleration of cloud investors want to see more there than they've. They've been able to deliver on. And, and I think when you look at valuation, the stock at the highs was trading 32, 33 times and that was just too high of a PE multiple relative to those two or three things that have investors a little bit more guarded.
- [06:34]
A
Yeah, I mean the, the relationship with open AI that just has not worked out. Right. And I think they know that now. I mean, I think they've started pivoting. I think they started to pivot what, two years ago whenever OpenAI had that drama with Sam Altman being removed and they never really, you know, they don't really have their own, own model co pilot. I don't know, like the numbers are probably fine.
- [06:55]
B
Yeah, right. Yeah. I mean it's just not well received and I think most folks in the enterprise are just saying it's sort of like a slop for the enterprise, you know.
- [07:05]
A
Yeah, you did mention software stocks, right? Software just, I mean, God, talk about a bloodbath here. Full on bear market I would say. Salesforce, ServiceNow, Adobe, you name it. All these are at 52 week lows. I guess there is a genuine freak out that AI is going to what result in less seats moving forward and like these enterprise clients are going to just start vibe coding their own CRMs.
- [07:28]
B
I mean, which is all just nonsense.
- [07:30]
A
Exactly. I just, it doesn't make any sense to me. I keep buying the dip, I get burned every day and now I've just kind of like, I'm just, I don't know what to do.
- [07:39]
B
You're just in them, you're. Now you got to do the whole like hodl. I guess that's like the equity markets version of crypto where like when you get, get whacked really hard, you just have to like double down on your conviction and say I'm in them forever. And, and I think there are some software stocks that are going to be disrupted and disintermediated. I think there are others that are going to be just fine. In fact this probably opens up and unlocks new TAM for them. So I think if, if you own software as a group, if you own IGV or whatever, I think you'll be fine. Long term you own some. It's just like the nature of diversification. You own some good ones, you own some bad ones. And when you add up the pluses and minuses directionally, I think software has a bright future despite the concerns about just ripping through software. And then I think as a stock picker, you know, you want to go through and make sure that the companies that you own have an established presence in, in the software markets in which they operate. And they have, you know, the data and the compliance tailwinds and the brand and you know, software is more than just code. We like to say there are certainly some, if you're running like a thin wrapper, you're like this, you know, application layer where it's just easy to kind of like come in and you know, use AI to not necessarily rip and replace but to augment it in a way where maybe the spend is less or economics are less favorable. Okay, fair enough. And there are certainly some software companies out there that, that fit that profile. But again I think the established ones like you know, we own Salesforce, we've owned Salesforce for some Time and we're still bullish on Salesforce. Microsoft's enterprise software is not going anywhere, despite how bad Copilot might be, despite how, you know, the narrative among, you know, analysts and investors on the street is that software is dead because of AI. Nobody's going to suddenly say, I'm going to Vibe code my way to a new Office 365. Like, that's never going to happen. We're not going to rip out our CRM like you talk to ctos. Nobody's, nobody's having these conversations. It's just these really, like, you know, wonky areas on the street where people like, oh, well, wow, Anthropic is so cool. And you know, cloud code and Open Claw and whatever clause you want to put in there, like, wow, you can just like, Vibe code a new, like, software stack. Well, you can't actually do that because the reality is all of the things that come with software when you buy a software seat can't be replaced just because you can code faster. And so I think that's been lost in the conversation around the software trade. But right now, investors are shooting first and asking questions later, and that probably continues for the short term, but at
- [09:59]
A
some point it'll bottom even the sexy names like Figma, right? I mean, you just, I mean, they're also just getting wrecked. That's still part of the same software story. And, and I think the vibe really shifted when, like, you know, back in like October of last year, November of last year, a press release would come out, right? And like, oh, OpenAI is partnering with Etsy. And then like, all the stocks would be up double digits and now Claude comes out with any sort of tool that like, has to do with an industry and that, and that industry just gets wiped out, like just bloodbath the next day.
- [10:27]
B
Well, well, Z. I will say one of the more ironic things, you know, when I look at like this whole idea of like, that Anthropic and Claude is going to wipe out software is if you look at Anthropic as a company, as an enterprise, they're using these tools, Right. They themselves have not Vibe coded Salesforce out of the stack or Microsoft out of their enterprise stack or like, I think when they did the presentation of three or four weeks ago, they were using Slack.
- [10:55]
A
Yeah.
- [10:56]
B
Like, yeah, okay, if, if, if, if Anthropic itself is not Vibe coding new software, then I don't think, you know, the small business down the street is going to start doing that. There's just no way, do you think
- [11:08]
A
it's just a, do you think it just comes down to like AI potentially reducing headcount at these companies? Right. Maybe that's what the fear is like, you know these companies are going to replace junior employees and you know, new hires with software which means less seats for you know, Microsoft down the line.
- [11:28]
B
Yeah, and I think that's fair. But that in my mind is firmly discounted when you look at Salesforce trading at 14 times earnings. This thing has never traded at a PE below 30 until we got in this whole like software is going to be eaten by AI narrative. And so yeah, okay, I, I, I take that at, at its face and say yeah, there's going to be a slowdown in some of the seat based economics. I think over time that's going to be overwhelmed by the hybrid approach that software companies are going to take. You know, some seat based sales and then some consumption based, I mean if you look at Taco mail book here though, if you look at Salesforce, I mean they, they've been out in front of this, you know, Agent Force. They've been doing that for a couple of years and they, Benioff's been pushing that since like the fall of 2024. And so you hear like some analysts say, well but the enterprise software companies that don't have an agentic strategy are going to be toasted maybe. But you know ServiceNow and Salesforce and a lot of these folks, they do have a strategy for agentic and they are pushing that and we are seeing growth like 300 growth the last quarter for Salesforce and Agent Force. So yeah, I think there's, there's some truth to the concern around software but I think if you're in the right space and if you own the companies that do have a strategy that's hybrid they can overcome that seat based pressure and make up for that with consumption over time and again at 14 times earnings. Like how much seat based compression is in that valuation? A ton. Way too much in my opinion.
- [12:53]
A
I agree, I, I agree with you and that's why I'm really curious to see what the earnings season is going to be like coming up because you know, how is the market going to react? These companies are going to put up massive numbers and if it still goes down like when stocks go down off of good news, that's when start when things get worrisome. For me, speaking of a company who's actually seen, looking, looking to balance back here is meta. I mean they, you know they, yeah this week they, they showed off their latest AI model. Was it called Muse Spark, used to
- [13:21]
B
be Avocado and now it's New Spark. Yeah, New Spark, right.
- [13:24]
A
And it's the first one to come out of their Super Intelligence Lab stock popped what, 6, 6% or something like that. And it's actually up 20 from its lows from a couple weeks ago following the, the court cases that they lost in California. So like, you know, like the street, it seemed, seeming to kind of, you know, come, come back on Meta here. How do you, how do you see Meta's AI strategy playing out?
- [13:47]
B
Yeah, I mean it's somewhat confusing because I will say that they're spending a ton of money, right? Like when Amazon spends a ton of money or Microsoft spends a ton of money or Google spends a ton of money. There's been this concern on the street for a couple of years now about ROI on AI. Say that fast like five times. And my pushback has always been we're seeing ROI in largest hyperscalers. Like when they spend a dollar on expanding their cloud capacity, that dollar shows up immediately in new AI workload demand. Meta's got a different situation because they're not a classic hyperscaler, right? They're building their own AI, LLM model, Super intelligence, whatever you want to call this thing. And in my mind it's like it's unclear why they're willing to spend hundreds of billions of dollars to sort of be a me too in the LLM space. Like I think they even said it when they launched New Spark. They said it's comparable with ChatGPT, it's com, it's on par with Claude and it's like spending a lot of money for an on par Me too LLM. And to what end? Because you're not a hyperscaler, you're not seeing like this immediate one to one demand in terms of revenue. And so in my mind it has to be about improving their, their ad product at the end of the day. But we're already seeing improvement in the ad product based on just like the algorithmic approach to AI at Meta. So I will say we are underweight Meta. We own it, we've owned it for some time, we're still bullish on it, but we actually carry a smaller weight in Meta relative to some of these other large cap tech companies for this very reason that the AI strategy is so much less clear to us. Their core business, which really matters more than anything else over the foreseeable future, the earnings that are coming from their ad business, we're seeing acceleration of growth there which makes us comfortable in owning the stock. It's trading, you know, it got down to, like, 17 times earnings. It's bounced over the last couple of weeks, as you noted. So now it's back to, like, the low 20s. So on a valuation basis, it looks attractive, but I'm not. I'm not clear how Muse Spark fits into the whole mix. And I think Wall Street, Most people on the street would agree with that. And that's why it doesn't have a 30 PE.
- [15:59]
A
I think it's a. It's a Zuck thing. Right. Like, he gets upset for something. Yeah. He just wants to win in this space, whatever that means. There's no clear strategy. We saw this with the Metaverse, changed
- [16:08]
B
his name of his company to, you know, and they lost $80 billion on that vertical and then just shut it down, so.
- [16:15]
A
Exactly. Same thing's happening here versus, like, I think Andy Jassy, CEO of Amazon, said something. Something like they see a return on all the money they spent on AI Capex. Like, he literally said that in. Recently, this week. But yet the. The Street. Maybe it's just Jassy that the, like, street doesn't like Jassy for some reason. I don't know. They're just like, yeah, I don't care, Amazon. We're not going to. We're not going to give you the benefit of the doubt here.
- [16:36]
B
Well, it's sort of like, I mean, you can't blame the Street. I like Jassy, but you can't. I have some sympathy for that view because, I mean, he's following Bezos. Right, right, right. So that's sort of like, you know, Michael Jordan retires from Chicago, and then, like, you know, Jalen Rose is next in line. It's like, who cares? Like, Jalen Rose is a great basketball player, but he's no Michael Jordan. And I think that Jassy's suffering from the same effect. He's a great operator. I guess you can make another analog with Tim Cook and Steve Jobs, but Tim Cook ended up producing a heck of a run in, like, you know, Apple's earnings and revenue. And, like, he. He's been around long enough to carry the Apple story forward in a way where investors finally said, okay, this guy, he's not a visionary, he's an operator. But we'll take that because look at their margins and look at the growth and. And Jassy's still trying to work his way through that. I think he's fairly new. He's still new. Ish. I don't remember when he took the helm. It's been only been a couple years. And so I think he's still trying to show the street that, like, he's a visionary and an operator and can provide, like, impressive returns for the stock. So we'll see how that goes. But no, I mean, we're overweight. Amazon, we're bullish. It was up 5% today. Still like the name.
- [17:45]
A
Yeah. I'm going to be curious to see how the especially Amazon and if Jassy and kind of communicate that story. And so again, earnings season coming up. Very interested to see what they say. I want to zoom out a little bit here because, you know, and cover some topics that not, not that many people are talking about anymore. One of them is tariffs. So from our conversation back in December, you said that the Supreme Court ruling on the IPA tariffs was going to be one of the key stories of Q1. It was for like, you know, like, like a day or two. Then the war happened and everyone kind of forgot about the tariff story.
- [18:16]
B
Do you.
- [18:17]
A
Are you still kind of, you know, thinking about the impact that this ruling is going to have on the markets moving forward? I know that the Trump administration is trying to replace Taipa tariffs with different tariffs, but that's still kind of, you know, that's still kind of like, you know, up in the air. How are you seeing the tariff story playing out? Or is the market just kind of ignoring it at this point?
- [18:36]
B
I just think it matters so much less now than it did six months ago. Certainly 12 months ago. We opened up the conversation talking about, you know, one year ago today, the market was up 10% because Trump backed off tariffs. We had a flash bear market down 21% over three weeks. So I think at this point, the market is pretty comfortable with the idea that Trump has largely moved on from the worst, his worst intuitions around tariffs. We're going to have to live with higher tariffs while Trump's in office. We may even have to live with higher tariffs after Trump leaves office. But I think what we've learned as investors, or at least we should have learned as investors, is that the markets adjust.
- [19:17]
A
Right.
- [19:18]
B
We went into Trump's second term with an effective tariff rate of like 3% here in the U.S. it's now depending on who you look at, like which model, it's between 12 and 15%. If Trump had applied his Liberation Day tariffs, it would have been like 40%. And that's why the market so violently responded to those with recession fears and a bear market. Like I said, A quick bear market. If we end up down the path, whether Trump can reconstitute that to 18% or whether it ends up being 10, 11, 12, which is where I think the consensus on the street is. I don't think that is enough to slow the economy in a way that's going to be meaningful to the stock market. And it's certainly not enough to impact the trajectory of corporate earnings, which is up and to the right. And so I just don't think it really matters unless he comes out with something really crazy from left field, where all of a sudden he tries to, like, you know, we know what the Supreme Court has said about iepa. He's trying to reconstitute, let's say he gets a, you know what up as you know what, and tries to reconstitute those in a way where we're looking at 20, 25, 30% tariffs, then I think the market's going to care. But I don't see a credible path to that. I don't see him wanting to do that. I think the issue in his mind is like, sort of like he's dealing with the tail. But largely, we've moved on to other things, like war in the Middle east, being energy prices. Energy prices, a midterm election that's coming later this year. And so I don't think that tariffs are going to be the thing that upsets the stock market. I think we've seen that play out. And so it's just not something that we're terribly concerned about in our companies that we own in our portfolio. And certainly the S P 500 writ large, again, they've demonstrated we can work through that. We're going to see if the consensus on the street is right. We're talking 16 earnings growth this year. One year, I'll remind you, Zade, one year ago from today, we were talking about Liberation Day, and we're gonna have 16 higher earnings growth. So it just doesn't matter.
- [21:09]
A
Yeah, I mean, the Liberation Day, just a fallout from the Liberation Day investors. What they took away from that was actually. Let me, let me, let me start that over again. So Liberation Day, like, you know, how quickly the markets bounced back. I think it impacted how investors reacted to the war. Right. I mean, everyone was wondering, like, hey, we're only down 5%, 6%, 7% from highs, despite the fact that there's a war. There's all this unpredictability. I mean, Strait of Hormuz, is it still closed? Is it open? I don't know. Despite all of that the market has not, you know, has not reacted as negatively as someone had thought. I think that's just all because of Liberation Day. Everyone just thought that this was all going to kind of, you know, Trump was going to back down, taco trade, whatever, you know, what may you. And that's what investors learned. And they just.
- [21:57]
B
No one wants to get 100. 100. You can't short this market and wake up the next day to a. We're not. We shouldn't call him a tweet. I, I always say tweet, but he doesn't.
- [22:08]
A
I always say truth.
- [22:09]
B
Or we call them truthers. I don't know. You can't wait. You can't short the market and wake up, you know, the next day to a truther that has the market up 1300 Dow points like it was yesterday. That's just, that's too big of a risk to bear if you, if you. And so you can't get too negative. And this is what I was talking to my team about this a couple days ago. So we, we put a little cash to work on most. Our most recent buy putting cash to work at Albion was on the 27th of March. So it turns out that was the bottom. It's better to be lucky than good.
- [22:41]
A
Nailed it.
- [22:41]
B
The way that we. Yeah, we nailed it, but the way we saw it was like, you know, for this particular situation, the war in Iran, pessimism, like, the market's gotten too extreme on pessimism. It's all, it's all surrounding, like, you know, war equals oil and fertilizer, which equals inflation, which equals recession, which equals stocks down to us. That directionally didn't make sense. In addition to that, to your point around Taco, I mean, this idea that there's a Trump put in the market, we were calling it a Trump put, and then the Financial Times came out with tac, which is way more like, fun to say, right? Yeah. But early on, we called it the Trump put. And so for us, when we were looking at the prices just a couple weeks ago, we're like, you know, we're at the point where I think Trump is probably starting to feel this. We had treasury yield. Let's not forget, it's not just stocks, it's yields. We had oil over 100. We had the market in an 8%, 9% correction. We had the NASDAQ in a 12, 13% correction. And we had treasury yields 4 1/2% on the 10 year, which had backed up from 4. And so I think, you know, for us, we looked at that and said, okay, the put's got to be somewhere close. Turns out like, again, we'll see what happens. We'll see if this holds. We think it will, but turns out that was a great day to put capital to work. But yeah, the Trump puts a real thing. And so whether it's on tariffs or whether it's on war in the Middle east or whether it's on, you know, you pick your macro risk that's still very much alive and well.
- [23:58]
A
Well, one of the macro risks now is what's going to happen to inflation. We're getting the CPI report tomorrow on Friday morning. And what, what is that going to do to the Fed's decision? So let's talk about that now because we have a new Fed chair coming up. Supposedly the confirmation is next week for Kevin Warsh. We'll see if that ends up happening next week. He's supposed to take over in May. So with the inflation fears. Right. Because of higher energy prices, I mean, the market is now pricing in very low odds of a rate cut this year. Now with Kevin Warsh coming in, he's, we'll see, we'll see what happens there. But how do you think the, how do you think the interest rate picture plays out with inflation and also Kevin Warsh coming in?
- [24:43]
B
Yeah, so I'm going to do a little victory lap here because you and I talked in December and we were talking about the Fed and we were talking about Warsh and we were talking about how the market was seeing like two or three cuts. Super dovish, because everything looks good and we have this new Fed chair that's going to be sympathetic to Trump. And I think you would ask me, like, you know, what our view was. And I said I'd take the under on two cuts. You did. Now, to be fair, to be fair, I also did not predict that we would bomb Iran. And let's be honest, like, obviously some of the cuts that have been taken out of the market are predicated on this idea that this is going to be somewhat more inflationary and therefore the Fed's going to have a harder time moving. But I still see the same setup that I saw three or four months ago when we spoke, which is, I think, you know, Warsh is obviously going to be the next venture. I think he's going to have no problem getting confirmed. Obviously there's some potential roadblocks there with this whole dog investigation with Powell, but I think that's, that's a distraction. That's noise. Warsh is going to be our next Fed chair. And I think Kevin is a hawk at heart. And given what. Yeah, right. And given what's happening in the Middle east and given where oil prices are, even if we reopen the straight of Hermuz tomorrow and the war ends tomorrow, it's not a light switch. I think we're probably looking at higher oil over the next few months than we were prior to the war, which was 60 something dollars a barrel. And so I think the Fed's going to be a little bit more patient on seeing how maybe $80 oil being the new normal for a little while, is going to flow through to the inflation calculus. And given Kevin's, you know, hawkish hawk more hawkish predisposition, I think the Fed's going to be pausing for a little bit here. I don't see them coming in. I don't see wars coming in and cutting immediately. We had a good jobs report last month, you know, 168,000 jobs or somewhere around there. And so I think this natural tension between what's happening in the labor market, what's happening with inflation puts the Fed on hold for the foreseeable future. And so I still think we're looking at zero to maybe one cut at the end of the year. We'll see how things go. Wow.
- [26:42]
A
I mean that's, that's a, that's a far cry from what the two, maybe three cuts that the market was expecting.
- [26:47]
B
It really is start of the year
- [26:48]
A
and now we're looking at potentially zero cuts. I'm really curious to see how Kevin Warsh is gonna, is gonna, you know, handle the pressure because obviously he's getting pressure from one end and then obviously the pressure from the other end.
- [26:59]
B
So really we have to remember Zade, it's a committee, right? And I think this gets overlooked a lot. Everyone just thinks like, oh, it's Warsh's decision to make. It's not. He has to come in and convince 11 other people if even if he wanted to cut, and obviously there's a couple that are sympathetic to, to rate cuts. So you really have to convince maybe like nine other FOMC members who are a lot more neutral or even leaning a bit hawkish, if you listen on the speaking circuit talk, he's going to have to do a fair amount of convincing. Even if he wanted to cut two, three, four times that that's the right move. I think that's a really tough position to argue right now.
- [27:36]
A
I'm really happy that you brought that up because I think you're Right. I think a lot of people assume that it's Kevin Warsh decision. Whatever he says goes. There's a committee of 13 plus people on the, on the, on the, on the Fed that makes that decision. So we'll see how that plays out. Okay, last question before we, before we wrap up here. One of the things that you said. So you were right about the, the Fed rate cuts you went under, you were right about the AIPA tariffs being struck down. One thing that you did say the last time we talked was you were bullish on the Max 7 versus the S P493. Obviously that hasn't worked out in Q1. Do you still, Are you sticking with that call for the remainder of the year?
- [28:11]
B
I. I am sticking with that call for the remainder of the year. A moment ago I kind of talked about, you know, the views on Mag7 versus the broader broadening out trade. I do think there's a broadening out trade that's going to happen regardless of what the Mag seven, how they perform. I, I do think the broadening out trade has more legs, I. E. The 493. But the question that you're asking is which one is going to run faster between now and year end. And I still think the Mag 7 have the better position there and I would argue even better still today given valuation. So I think we've seen the Correction in the mag 7 that we're going to get. I don't see any reason that Microsoft should trade it 15 times and that meta should go back to 15 or that, you know, Google's going to suddenly see a PE compression. Apple is basically a Treasury bond in the stock market. So like pitch me why I should believe that PE is going down. Amazon's cheap, like all Tesla's the only one that's not cheap. And we're setting aside Tesla for a moment. I think that when you look at the growth of this group and you look at the opportunity set over the next one, three and five years in AI and in technology, in cloud and digital advertising and autonomous driving, all the things that these big tech companies are benefiting from and then you juxtapose that with the valuation, the reset that we've now had, I think you're going to see money coming back in. I think people that had missed those names. Nvidia. I mean this thing's trading at what, like 19 times earnings at 70. This is nuts. And so while I don't think in my call on the Mag 7 all throughout last year, by the way, not Just with you guys, but in all the media I do. My call has been, if you're overweight, these guys, trim them back. Nvidia is not going 5x. Okay? That story has already happened. Nvidia is going to be a great performer over the next five years, but it's not going 5x. So I think taking some active share out and rebalancing and taking some profits makes sense. But I'm still bullish on the group and I still think it can outperform the 493, especially from the starting point today, which is these stocks are much cheaper and they have better earnings than the 493. So why not?
- [30:16]
A
I love it. You got me convinced. Jason, I really appreciate you coming on. We gotta do this every quarter because this was great. It was good.
- [30:22]
B
I'm down.
- [30:23]
A
Look back at Q1 or Q4 and maybe I'm excited to see what happens in Q2. So we'll call you back in a few months and if you. Why don't you tell the people if they want to, you know, research your work or, you know, read your work. What. What's the best place for them to find you? Oh, well, so we're.
- [30:38]
B
We're a buy. We're a buy side shop. We're an ria. So I don't publish my research. It's for internal use only. It's for clients of the firm. But I'm out in the media every week. I do. You and I work together. I'm out there all the time. LinkedIn. I'm on LinkedIn. Anything I'm doing. Yeah, anything I'm doing on LinkedIn, media wise, you'll find there. But as far as anything published, I don't do any of that. Maybe I should do a subs. What is it? The substack?
- [31:06]
A
That would be sick. Consider me subscribing if you know.
- [31:09]
B
Perfect. All right, I'll think about that. But until then, go to my LinkedIn, go to Albion's website, which is the firm I work for. We put all the media up there and, and I write. I. I write the econ and market section of the quarterly letter which we just published. So you can go see my thinking there. It's all on the website. So I would just say go to albionfinancialgroup.com or go to my LinkedIn.
- [31:29]
A
We'll, we'll do that. We'll put the link in the description as well. Jason, thank you again and we look forward to having you back on in a few months.
- [31:35]
B
Yep. Thank you. I appreciate you having me.
- [31:37]
A
Appreciate it. Well, all right guys, Hope you enjoyed that conversation with Jason Ware. You know, I like that Jason doubled down on his call from back in December and being bullish on the Max 7 over the broader market for the rest of the year. That's a pretty bold statement given how rough Q1 was. I was also glad to hear that Jason also thinks the SaaS sell off is overblown because that's been personally very painful for me in the next few weeks. Weeks should be very interesting as earning season kicks off. I'm looking forward to hearing what these big tech companies have to say, what the software companies have to say. Just as a heads up, if this is your first time listening to the podcast, we post a daily 10 minute market recap throughout the week and we're going to be breaking down earnings, talking about the Fed and everything else happening in the market. So it's a great time to get subscribed to the podcast and tune in every day to stay in the loop. Thank you guys again for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow. The Right window treatments change everything. Your sleep, your privacy, the way every room looks and feels. @blinds.com We've spent 30 years making it surprisingly simple to get exactly what your home needs. We've covered over 25 million windows and have 50,000 five star reviews to prove we deliver. Whether you DIY buy it or want a pro to handle everything from measure to install, we have you covered. Real design professionals, free samples. Zero pressure right now. Get up to 40% off site wide plus get a free professional measure. @blinds.com rules and restrictions apply. Been out here all morning. Not a single bite. Guess the fish finally figured it out. Just like hackers do when Cisco Duo's on guard With Duo's end to end fishing resistance, every login, every device, every user stays protected. No hooks, no catches, no bites. Cisco Duo fishing season is over. Learn more@duo.com.