← Trends with Friends
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A
Foreign.
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B
I am Howard Linton. We are here with another episode of House of Howard's Glasses. Trends With Friends.
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C
Trends with friends in 3D.
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B
Listen. 1, 2, 3, 4. Four out of five people here are old enough to be wearing glasses. And welcome, everybody, to the show Trends With Friends. We are live as we always do it. We will edit this and post it up tomorrow. We've got Phil Pearlman, our host with the most, who squeezed himself into another hoodie today. I think it's the same hoodie. Do you wash that, Phil?
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C
Periodically.
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B
And my idea, Phil, is to make you a dual pair of monocles. Not just one monocle like Colonel Klenk two. So that you're chasing them down. I'll show them bumping your forehead into the mic. Michael Parech agrees.
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D
That's Hogan's Heroes, the young ones.
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C
On Stock Twitch, who get that we're not.
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B
Here to explain things to the young meme coiners. And then we have JC who popped in. He was trading meme coins. Hair parted upward to the right, so all is safe. It's kind of like the. The gopher, when if the gopher pops, doesn't pop his head up. The bull market is still in progress.
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E
I think that's a gopher.
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B
Oh, what is it again?
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C
It's a chipmunk.
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B
No, no, no.
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E
It's a groundhog, bro.
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B
Groundhog. Yeah, yeah, it's. Thank you. Always. JC Knows stupid minutiae better than anybody here because he's young and has his full, full brain cell.
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E
It's a great move. Groundhog Day.
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C
Great, Phil.
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B
Come on. It's our first fight. Okay, guys, I think ratings go up when Michael gets mad, so let me say it. Early meme coins. Moon.
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D
Michael, meme coins.
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B
And.
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Everybody. Meme coins. Everybody should be trading meme coins. Don't. Risk management is not necessary at all. Just do it. Right. Tell them, Michael. They're fundamentally sound investments. Grandma's participate, please. Right, Michael, tell them.
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C
Yeah, life savings.
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B
Not just grandmas.
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D
I'm just Grandma.
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B
While watching Jeopardy, they should be trading these and Wheel of Forge coins. Okay? And so we've got J.C. cuban missile crisis. And then we have our AI whisperer, who maybe we'll get to some AI today, but maybe not. Michael, practice a big week. Quantum, quantum, Quantum. New meme coin launched by Google. I think they launched a quantum Meme Coin straight to the moon and Mars. And special guests this week that we. That we tend to do on Trends with Friends. We have a huge week in the entertainment slash, retail slash, bowling slash. They'll Explain it better than me. The Bolero team, we've got Lev Exeter and Bobby Levan this week. Big transition that we're going to be rolling out across all of stocktwits as well is the switch from Bolero B O W L the ticker to Luck L U C K. It's a great name change, bold name change. We love to see it. And multi billion dollar company. We've had Axons, you know, we have great company presidents and CEOs on the program and today's no different with Lev and Bobby. Lev and Bobby, welcome. And the big name change to Lucky Strike. So we'll get right into that.
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D
Awesome name, awesome name. The biggest brand in America in the 1940s because I'm the, I'm the boomer so I get to explain the historical context.
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B
And you were born in Mike.
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D
Yeah. 1892. 1892.
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B
So, so how old is the brand? Let's just quickly talk Bolero and what made the change either Bobby or Lab. Take it away.
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F
Well, the brand started with one bowling alley in New York City in 1997 with our founder and CEO Tom Shannon who took a rundown bowling alley in Union Square, New York and created this business that we find ourselves in which is entertainment, by just making a better product layering on top of a historic pastime of bowling and making it better. And today we've grown to 360 locations publicly traded for a number of years now under the Ticker Bowl Bolero Corporation. And this Thursday we take this company, it's nearly 30 years old and we transform it to Lucky Strike Entertainment under the Ticker Luck on the New York Stock Exchange. So, you know, we'd love to tell you all about that or we'll continue to roast up gc.
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B
No, let's keep talking about it. So the COVID probably changed so many businesses, but especially retail. Let's walk through the big changes post Covid and what you guys are doing with roll ups and cash flow and how you guys are seeing the world.
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A
Yeah. So there's been a trend, you know, really for the past, I'd say 10, 15 years where people want more experiences, they want less goods. Right. So they want to go out with their families. You know, people still can't, you know, afford to go to Disney World every weekend. And so the, the demand for out of home entertainment drive to entertainment accelerated during COVID Obviously we had a break when we went into lockdown, but post that break you were like, you know, they looked, you know, they saw Their lives sort of flash in front of them. And they said, how do I spend more time with my friends, my family? And so we saw a significant pickup in demand, particularly in this sort of the Friday, Saturday peak times where, you know, post Covid, you know, most of our centers were on two to four hour waits because people just wanted to have that experience. And we are a premium experience, right? You walk into our centers or locations and the lights are tailored, the music is tailored, the food is tailored, like very specific. This isn't your grandpa's bowling alley, right? This is a like beautiful experience where, you know, we're the Disney world of location based entertainment.
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D
What's the average ticket price or an experience?
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A
Ticket price is about, you know, for somebody who walks in, it's about 35 to $40 a. If you book an event or you book online or you want sort of premium lanes or premium food, you know, that does go up, you know, to about, you know, 80 to 100. Unlike a premium, premium experience if you walk into, you know, the two biggest bowling alleys in the world, Times Square, Chelsea Piers, but on average it's about 40.
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F
You know, to your question, since COVID you know, we, we've really been diversifying in terms of the verticals that we find ourselves in. Location based entertainment. I think really that's the point of this name change is we were Bolero, we were known as the bowling operator. But along the way, these last few years, we've been picking up family entertainment centers, water parks. And so come Thursday, we want to be the leader in the entire location based entertainment market, which is $100 billion TAM versus bowling, which is $4 billion. And that's what this really signifies is our diversification.
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B
What's fascinating about bowling to me is as a kid in Toronto, we had five pin bowling, which was so Canadian, right? Like, let's not be mean to 10 pins. Let's just go five pins. And it was like, it was a popular game, stupid. But the adult game was, you know, we always were, you know, kids parties were at the five pin and then we were at a ten pin. Now we've evolved to this entertainment venue. So you just open one in Beverly Hills under the lucky str. So what, what is, what, what does a new one look like today versus, you know, the old. What we think about, of a dirty, you know, as a kid's party. This is more like an adult college experience.
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F
Well, so our company's always been very design forward and interested in, in the experience and the environment that we give Our guests. But Beverly Hills just takes it to a different level when you walk in there. I don't think there's a comparable facility in any vertical in entertainment across the country. We're in the heart of Beverly Hills. Ground level, the Beverly Center. Approximately 30,000 square feet, 22 lanes of modern bowling, huge arcade, elevated food and beverage menu, huge beautiful bar, a redemption store for prizes. We call the prize Vault. But the level of detail there is like old Hollywood meets art deco, modern glam. It's. It's just a spectacular location. I don't think there's anything like it in the country.
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C
We visited in. We went. We went to the old one in Union Square in like 2003, and it was like, sick. It was nothing. It was so totally new and innovative. I mean, you think of a bowling alley, you think of like old school, old guys yelling in the back and smoking butts and drinking pitchers of beer. And then we go to this place. It was like a birthday party or something. And again, this goes back 20 years. And it was like, oh, my God, it's a party.
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F
It was fantastic that that location kicked all of this off. But the way you describe traditional bowling alleys, that's how Tom Shannon found it. He found it in that. In that kind of condition and. And changed it to where we are today. That was. That was the.
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B
So. So there's 12,000. I mean, this is an amazing stat about the company. Is Brunswick make the most bowling balls quickly? Is that still like the. Is that still the brand? Like, give me some brands in this space, not just you guys. Like, if I were to go buy a bowling ball, where do I go buy a bowling ball? Do I buy it at the lanes or. It's like the bowlers interest me because I don't think people know this. I think on YouTube. Lev and you and I are good friends, so everybody should know that. Full disclosure. And you've been a long time LP of ours and we go way back talking marketing and you're a genius marketer and Bobby, we're just meeting you. But where do I go? Like, if I want yoga, I go to Lulu, right? If I want to be a bowler, where do I get my equipment?
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F
So a number of our locations actually have pro shops in the locations where you can purchase the ball, have a drill sized for you, you can buy various equipment. There's. But there's big brands in the space, endemic brands. You mentioned Brunswick. There's a brand called Storm. There's a brand called Motive. You can find all of those online but these are big companies and growing. Look, we have at our locations alone nearly 300,000 league bowlers. These are competitive bowlers that have a multitude of bowling balls. But I don't know if you know, but our company also owns the PBA Professional Bowlers Association. So you find us in the real, the true media space. Yeah. So we have a media rights deal with Fox. Our upcoming season starts in January. But it's the professional league for bowling. And those three companies that I just mentioned are all strong supporters and sponsors of the PBA.
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C
What's the best event PBA event within, you know, 50 to 100 mile radius of NYC in 2025?
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F
Well, you'll have to go to PBA.com, you'll see our full schedule. But it's a traveling tour.
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A
Right.
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F
So we hit various locations. How we're heading to Reno next season. You might want to stop by that event.
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B
Yeah, that's. That's where my new house is. To avoid taxes. So it's a really good spot. You know, avoid taxes and bowl the. All right, so Reno. So Michael will chime in a quite a better couple. So 12,000 employees, 13,000 bowling lanes. You own the PBA. I don't think people know this, but on YouTube, I think one of the most watched videos of all time. I don't know if we can queue it up here. My mind is screwed up. But we'll queue it up on Thursday when we launch. Is. I remember watching this live on Wide World of Sports. So is it a bowling video that's one of the most watched videos?
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F
Absolutely. It'll be the. Who do you think you are? I am clip of Pete Weber. And I think it's. It's arguably the most iconic sports clip. Like Patrick Mahomes wins his first Super Bowl. His first tweet after winning the Super Bowl. Is that clip. It's iconic. The Cleveland Browns, they released their schedule for this season. They recorded it in one of our bowling alleys in AMF location. And Pete Weber was featured in that video. Went viral. But it just shows you the crossover appeal cultural phenomenon that is bowling, which is arguably again the number one participatory sport in our country. 70 million American.
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B
Here it is. This is Great. We got 43 seconds. We got to run this. Okay. Strike to claim it. A strike to claim it.
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C
And you got it.
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B
So this is you every time we do a trend with her.
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F
Are you kidding me?
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C
That's right.
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Who do you think you are? I am.
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B
This is fin twit every day. This is literally fin every day. This is everybody.
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F
All right, so you want, I'll give you a fun fact, you'll never forget it. You know who he's screaming at when he's saying that? Who do you think you are? In, in the audience there was a 10 year old that was, that was.
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A
Heckling him, trolling him.
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B
He's getting trolled by.
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F
He was yelling at a 10 year old.
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B
This is what we do. We're yelling at 10 year old meme pointers all day here on on trends with friends, talking smack to JC. JC's in with the crowd. They're all after Mikey, they're all after Michael. So this is a fun brand. This is a major American company. Bowling is Americana, middle America, but also it's invaded the coast. Like the Beverly Hills place is going to be ridiculous. The Manhattan places will be ridiculous.
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A
Go ahead, Phil.
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C
What's your biggest growth opportunity aside from bowling? So you guys give us ending the brand catalyst. What do you, what are you guys like, you know, really excited about?
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A
I mean we're still going to grow bowling. So you know, we acquire, you know, and build new centers, will build 10 to 20 and by 10, 20 a year. So we'll continue to grow bowling. Right. But what we see is as a big opportunity is to really start adding water parks and family entertainment centers. Think mini golf, go kart, bumper boats, arcade, where rain or shine, you know, we can sort of provide, you know, the family of four a great outing during the day at date night. Right. So it's like nothing is, you know, more America than bowling. But you know, next is mini golf, go karts or both. And ultimately it creates this flywheel for the consumer where they want to trust these brands. They trust Lucky Stripe, they trust amf. We just recently acquired Boomers. So Boomers has five locations in California, one in Boca Raton, One Boca Raton is amazing, like high density demographic and you know, it hasn't been invested in for a long time. And so we're going to buy these family entertainment centers, upgrade them, let's team manages sort of arcade. And so we're going to bring the most modern arcade games to all these centers. And it's just going to be a place where people go to have great experiences.
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F
Phil, same playbook, right? Roll up, do it better, invest the capex, operate it better. Right. But we're not a bowling company anymore. We're a location based entertainment that spans a lot of verticals.
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B
Yeah. And we talk about this a lot because of our, you know, I'm wearing my hat, my team hat. Hat tricks in the grass league. And Love's been very helpful with in thinking through that league for the team. And this is an era of marketing. I think classic marketers like Lev just straight out classic marketing growth and marketing is back in Vogue. Just as 20 years of people went to engineering degrees, now we realize we suffer from a lack of marketers. And Bobby and Lev bring that to the company. Mike, you had a question? Go ahead. And then one more question.
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C
Sure.
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D
I just wanted to say I'm a big fan of this tying of experience to location.
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G
And the shifting demographics are totally in the favor of what you guys are doing. I've been a long time early investor in Airbnb, and Brian Chesky has been talking, even for a long time, about how location and places to stay, short or long term, is an experience. And so he's been very focused on experience, and they're very fixate. He talks a lot about how AI is going to fundamentally transform the experience business in the next two or three years for Airbnb, I kind of see the same kind of opportunity sets for what you guys seem to be doing. And it's very, very interesting what you guys are doing with the brand change. So I just wanted to echo that piece.
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D
And then since most people on the show think that I don't like crypto and meme coins, I just want to ask, what is your crypto mean coin strategy for Lucky Strike? Because it's. It's just, you know, match made in heaven.
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B
Can I open? Take my first shot at tequila. Mike is asking a crypto question.
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F
You know, I think our stock was moving a few months ago, and I was like, wow, this is great. And then you look at, like, the conversations on Twitter, and I think there was a meme coin called Bowl. It was like a dog of, like a. Like a dog. So I think that. I think it confused some people. I don't know if we'll have the same benefit with luck. But like you said, we're a fun company. But don't lose sight of the 1.2 billion that we do in annual revenue. And we're growing, we're getting stronger. We're investing in our properties, we're investing in technology. We're tooling up the team. I've been here 11 years. Bobby joined nearly two years ago. Huge boost for our company. We just added a chief procurement officer. We're really fortifying the people piece of our business and ready for that next stage of growth.
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A
Yeah, I think going to your question, we are probably the second or third Largest arcade in the country. You know, arcades are, for us, it's a hundred plus million revenue business. And really you think about not all arcades are driving games. There's those redemption games. You know, redemptions is a probability based sort of thing. So there's, you know, I don't think crypto today is necessarily something we're going to take at the counter, but over time, you know, as crypto is adopted, why wouldn't it be part of sort of that redemption system from an AI perspective? You know, we are using AI in two perspectives right now. So one, we use, you know, a lambda model to project revenue by day, by hour, by center, right? And that allows us to sort of be dynamic with pricing, be dynamic with marketing, where if we are projecting revenue and we see that this weekend is gonna be slower to center, we'll ramp up marketing dollars. And so that that model has really helped us. So there's a second one. Sorry.
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B
No, no, keep on, keep on.
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A
There's a second AI function which is really interesting is that in about 64 centers today we have a gamification app where we use AI to figure out what your score should be. And we will bet against you if you can score a hundred.
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B
Okay, I love you.
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A
In states that it's legal.
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B
Okay, that's a home run. Can we bet? Okay, so this is, this is where again, I'm all about catalysts. You're only going to get the ticket chain's great stock. Twitter is going to love it. The world will love it. I think people need to understand because Lev is marketer, just like we had. And I introduced Lev to Josh Isner from Axon too. We got to put marketers together in this world. But in a world without network effects. The only network effects I see outside meme coins is gambling. Right? The only shareable thing that I see in this world because people aren't downloading apps, is I got 50 bucks on Jim. He's going to break 100. Is that legal to go viral? So, so for example, is there some kind of lucky stripe app out there in the future? Again, this is more speculation than anything that it says I can share with my bet. We're going live, Frank. Odds are Frank's never broken 110. We've got 50 bucks and we can watch this guy ball. Like we take the pressure. It's kind of like the Grassley where like amateurs become, you know, get the spotlight. They're great amateurs. So many great amateur bowlers because so few bowlers can make the pba so can you bring that kind of excitement in some form to the. To the game?
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A
Yeah, I mean, we have an app live called Money bowl. In states where online gambling is legal. We can bet we're all over this right now.
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B
JC is downloading it.
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A
Well, I previously was a CFO of a gambling company. So this is, this is, you know, hits home. But what we.
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D
The.
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A
The real goal, right, and this is a technology we're investing in is where every center is going to be wins, right? And on Saturday night, we're going to have a popup on the screens and we have these beautiful projectors and screens at the end of the lanes that show movies. But it's going to pop up and say next person, the bowl of 710 split wins a Ford F150 progressive jackpot.
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F
That you can scale across the location. We can do the same thing with amusements, right? Who has the most redemption points accumulated in the last 30 days. But at our scale, this becomes very interesting.
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B
This is my thesis that tech is now ever present. So you don't have to build a tech company, you build a business and tech becomes, what do you call it, a garnish of every business as fantasy and gambling become a garnish of every bit. So that's the play. I can't wait to watch the news as it evolves in the luck stream. Bill, any more questions before I let him go? I mean, stay on guys, because we talk about AI and all the stuff that we talk about, but you're.
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C
We're going to move into J. We're going to move on to JC but just around my question I asked before about the PBA Tour. JC Bethlehem, Pennsylvania PBA Tour Finals June 2025 Bro, stop it.
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D
We're go.
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C
Dude, we're going. We're preg.
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B
And then we're going live Trends with Friends and Phil. You're gonna wax. You're gonna wax the.
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C
I'll wax my eyebrows, whatever.
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E
Are you breaking balls or is this true?
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C
No, this is real. June 2025 PBA Tour Finals Steel City Bowling Brews Bethlehem, Pennsylvania it's fucking sick, dude.
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E
We're going.
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D
We're going.
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B
We're still going.
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C
It's not even funny.
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D
Can I come too?
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E
Can you guys hook us up? Can we get hooked?
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C
We're going, man. We're going to. We're going to go and we're going to get loud.
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F
It's a beautifully independently owned facility where we're hosting that event. I will make sure there's a Trends with Friends section in the front row. We can make some bowling jerseys for you guys.
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B
Our section will be trolling. Our section will be the guy that bowlers will be pointing at just going.
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C
Dude, I'm getting bowling shoes just to.
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E
Get like a jersey. Is there like a bowler jersey that I need to be rocking like so.
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B
Is there a brand? So guys, the next question for, for the millennial, is there like a, a collaboration? Is there a brand that people wear? Bowling?
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F
You have a number of jersey sponsors. One is High five. Cool Wick. There's a company called KR Strike Force. I think as the sport continues to grow, I think you're going to see more brands. I think Reebok needs to get into this space. Right. I'd like to see a Reebok bowling shoot too. But again, bowling's not going anywhere. In fact, I think it's growing. I think it's having this kind of renaissance moment right now and I think we're getting mass attention. You know, I'll tell you very quickly, one of our top bowlers, he's a two handed bowler out of Australia, Jason Belmonte. He was featured earlier this year in GQ magazine. Another top bowler, Anthony Simonson, featured in Rolling Stone. So when you start hitting mass media like that, I think the brands.
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B
Listen, if JC was a bowler, look at him. If JC was a bowler, he'd have millions of followers for sure. And what's the most interesting about bowlers you were telling me the other day is in making a show that you're working on is bowlers. Bowlers are like golf. They have to go, they're carrying 30 balls. Like a professional bowler can't get on a plane with £400 of bowling balls. So these guys are living city to city out of the back of their cars pretty much. And what's that?
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F
What's up? We call them road warriors because again, like bowling, there's actually a lot of science. It's, they don't come with one bowling ball and bowl. These guys show up with 10 and various portions in the competition, they'll use a different ball. There's degradation of the oil on the lanes, right? So these guys drive around with 10, 20 bowling balls in their trunk. You really can't fly with that. They're, they're true road warriors now. They're not staying in a car, they're getting Airbnbs and hotels and RVs and so on. But the tour itself for them is a really interesting experience.
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B
In my biggest year on the tour is when I carried around my prince bowling ball. It was £75 and I just had to get it going and then they banned it in the 80s and I go back to my real job of trading stocks. But it is great to have you here, guys. I'm excited for the takeover. And listen, the idea of running a public company, as I've told so many, I mean, it's 17 years into running stocks. As I was just a little kid, it seemed like explaining to companies that when they're public, they have two products. They have the company that they're running and Bobby and Lev and. And the team at Lucky knows how to run 12,000 employees and 13,000. But then there's the ticker and the stock which is a completely separate crazy. Right. Mike, you ran Goldman IPOs. You saw this happening. We sat in rooms like, why did you do this?
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F
Why?
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B
That ticker made no sense. I've had these arguments with marketing people before. This is a genius move. You can't, you can't just expect people. People like stories, right. That's why meme coins work. Stories need to understand and connect with the brand outside of the financials. If anything about 20, we know that you may not like it, but Palantir trades at what sometimes because he's a phenomenal storyteller. Alex Carp. Now he's putting extreme pressure on his company by telling the story so well because the financials now have to catch up to the story. But hey, investors are, you know, are going to be on their own. They've got to. It's up to a company to. To market both products. Go ahead, Mike.
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D
We've got to get it in front of Elon Musk because forget about last year's cage fight. Elon Musk and Mark Zuckerberg.
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B
It would be funny.
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D
They got to do a bowling match. This is, this is more exciting than mma.
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B
I'm watching.
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F
I think, I think if stock twits Community is going to really appreciate it. Luck. I think the story is there. It's a fun, exciting brand. But don't lose sight of like industry leading margins.
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B
Yeah.
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F
You know, produce them, throw off a lot of cash. So I think we have the other characteristics.
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B
Yeah, listen, the AI and the T sheet. I was going to talk about OpenTable and the T shirt. We'll have you guys back. But I think the software is a big part of this with AI and making sure that you get the maximum use per lane and then obviously the fantasy and there's a lot of ways to juice. I guess it's revenue per lane or is that what you call it? What's the Key word in your industry as an insider breath pal.
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A
Revenue per Lane.
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B
Yeah, see, there you go. All right boys, hang on here. We're gonna go to the markets, talk about when you guys can chime in on stuff. Go ahead though.
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C
Yeah, hang around, hang around fellas and just talk smack. And if you have a chance to mark Howie, please do.
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B
Mock period. Coming up.
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C
Charts baby. So let's, let's go to the charts. Charts for days as usual. You had a great chart that you threw up the other day around the junior miners. Oh well, there's bitcoin. Just talk to us about bitcoin a little bit.
- [29:32]
E
I mean I can just tell you about it. Just sprinkle a few things that are on my mind and you guys could tell me what you want to lean in on. You know we had some volatility over the last week in crypto. Volatility is a feature, not a bug. So this is pretty normal. I thought it was interesting that bitcoin was only down like 3% but the average altcoin was down 15%. That was quite the dispersion in returns there. So that, that caught my attention. Some of the rotation that we're seeing into the companies around gold mining and silver mining, these things have been massive underperformers for quite some time. I added a couple interesting charts there on the deck. So this shows the ratio of the silver mining stocks relative to silver itself. As you can see, just massive downtrend over the last decade or so. Really potentially turning the corner now, making a new 52 week high as far as the miners are concerned. If you look at the next two charts this zooms out so you can see really the difference. Look at gold making all time highs and the gold mining stocks going nowhere this entire period. And you're seeing similar underperformance from silver on the next chart where silver as making new 10 year highs, not as strong as gold but nevertheless doing its thing. And the silver miners really struggle, struggle city. And then if you want to skip over to the high beta, low volatility, that's the big story to me. So technology has been a massive underperformer this year. Small cap technology has been a massive underperformer for over 18 months. So like tech has been one of the worst areas to be and for most of this year on the large cap basis, consumer discretionary until this summer was one of the worst places to be. This entire bull market, which was really, really interesting. So we stepped in this summer, you know, buying Amazon, buying Tesla, buying consumer discretionary looking for rotation into those areas because this is a bull market and that's what happens. So that's exactly what we're seeing. So with that same idea in mind, you'd think the exact same thing in technology, that money would rotate back into tech. And I think you're seeing it. I think that's exactly what we're seeing.
- [31:37]
B
Tesla 400. No one's talking about it. Right.
- [31:40]
E
We're pounding the table on the show, you guys, you know, right.
- [31:43]
B
You remember, look at Michael. Michael and I were like, no, I have to say, Duzio, shout out to Duzio on stock totes. He bought me Tesla. I just, instead of me buying it, I just allocated Duzio some capital and he just went to work for me because I just couldn't pull the trigger myself. What is that? Tula? Here's Michael. He's turned off his lights in shame and he's holding up a bitcoin to.
- [32:06]
E
Remind everybody that he hasn't studied the tulip bubble.
- [32:11]
B
And okay, so what else do we got, J.C. but I think you're right. We, we got Google running. Everybody said Google was dead. We have Facebook at all time high meta. We got, well, meta. Amazon at all time high communication stock.
- [32:25]
E
So they're in there with Netflix and they're kind of like their own animal. They've actually been doing really well, holding up much better than discretionary and technology. So that has really been leadership for quite some time. Time. But the rotation into discretionary from this summer has been off the charts. Reiterates, it's a bull market. And I think the same thing for technology. If you study every bull market over the last hundred years, you're going to find that technology is a leader and an outperformer in almost every single one of them. So if you're betting against technology here, you're saying that's it, bull market canceled and this is over. But on an equally weighted basis, technology is making new all time highs. And then on a relative basis, you're starting to, to see that rotation again, sector rotation is the lifeblood of a bull market. I think that's exactly what this is.
- [33:08]
C
Okay, so you're stripping out, you're stripping out the mega caps here to some degree when you're looking at equal weighted technology. But you're leaving in the high beta. Is that what you're saying here?
- [33:19]
E
Well, yeah, for sure. High beta, if you look at the high beta index, over 50% of that is technology and then another 14 is consumer discretionary. So you're getting two thirds of that index represented that way. This is equally weighted technology, which eliminates the factors of Apple, Microsoft and Nvidia as major components in that index. I will tell you that the recent changes that the indexes made makes those mega caps less egregious. Apple and Microsoft used to be 22% each of the technology index and then they flipped it and Nvidia was 22%. Now each of them are between 12 and 14%, believe it or not. Less egregiousness from those mega caps, which is interesting to know.
- [34:04]
C
And are you. And is the high beta play, is that also sort of flow through to potentially small caps in January and also the China play?
- [34:16]
E
Not, not directly. For me it's more of a sector rotation standpoint. But to your point, what you're seeing in small cap outperformance from a seasonal perspective, the rotation you're seeing into China is part of the general rotation in the markets specific to high beta. I don't know about so much, but yeah, certainly rotation breath expansion. Right. The participation is broadening, not weakening. That's what China ripping means, right?
- [34:43]
B
Yeah. So let's just talk about this. So people have this in context 100 years ago and even 10 years ago without JC here, you know, to pick his brain and the few people around the web like Michael, I can pick his brain and Phil from a shrinkology perspective. But there would be a time where just no matter what, I'd be out of this market. Not because I'm trying to time the market, just because I don't understand it. And part of being in the market is staying in the market. Right. And where you make your money on the edges. And there's no way I'd be in this market if I didn't understand that. I take my personal feelings out of where prices are and just follow the math and the money and there's going to be a time where JC wakes up, the hair is parted to the left and it won't again. You don't have to listen to jc, but you have to pull all these pieces together. Just like a public company has to have the company and then has to have the story. When you're investing money, the goal is to stay invested. So you really have to understand how the markets work. And right now there's every indication that things are silly. But at the same time, Apple all time highs. Tesla all time high. Amazon all time highs. Spotify all time high. So these are multiple industries, they're not just tech companies. If we could quickly pull up because I have this question For Bobby and Lev, because you piqued my interest. You know, I've been talking about this real time 2.0 and we've got Spotify and Netflix. If we could pull those up, and if not, they're both at all time highs. These companies were both hated because the world was judging them on how many subscribers they could get. And, and Bobby and Lev could deal with this too. How many lanes do I have? How much revenue can I squeeze per Lane? There was this TAM story that invaded people's brains. And in Web two, Mike, you and I saw this. Web two expanded network effects. Fred Wilson, Chris Dixon, Andreessen, yourself. Network effects, Network effects. No one could measure it. That was part of the exciting thing of that. Then we went through this period of like Covid and whatever, like network effects almost in reverse, like closing the world. We can't figure it out. Now we're back into this time shift where Netflix and Spotify, no one's talking about how many people there are in the world anymore because they can time shift, okay? And they can add all kinds of events, ticketing, all kinds of different revenue models to as we saw with Netflix bringing Tyson back, I think this plays for every vertical. And going back to Bobby and Lev, in a world of time shifting, should Lucky Strike have a media business much like Barstool? You already have the product. So the question is, in a world of like Spotify and Netflix and Reddit and Stocktwits and Twitter, shouldn't Lucky Stripe almost have a 24 hour podcast, slash TV network or sponsor some aspect of that for your audience that just loves bowling and the bowling life cycle bowling lifestyle?
- [37:31]
F
I think again, part of the name change to Lucky Strike is Lucky Strike just has phenomenal brand recognition. And based on that alone, we get like a list celebrities visiting our venues and frequency them and posting it. So we're getting a lot of natural, organic eyeballs that way. I think it's contingent on Bobby and I and our marketing team to just continue to grow the brand awareness and market this brand. And whether that's through conventional marketing or some sort of media play, that remains to be seen. We've been really focused on extending the media of the pba. And you mentioned that documentary that we're working on kind of like our Drive to Survive version for the PBA tour. I hope to get that into the market and put more eyeballs around bowling. But Lucky Strike is a really, really special brand. You know, we acquired it at 14 locations, but the brand recognition was twice as strong as bolero that had 350 locations. Right. So I think there's a lot we can do with this brand. We've only owned it for about a year and a half now. So let's see where we can go.
- [38:42]
A
And we want to be an entertainment platform. So you go to just the. Why, like Instagram is so good, right? Is people sharing experiences. So what we're working on right now is cameras at every lane so that when you hit a strike, video of you doing that is on the screen, but you can automatically upload it to your Instagram, share with your friends. Yeah.
- [39:07]
B
How much would I pay to troll my friends with three strikes in a row? I say this about our golf course where we have lights at grass clippings and because we have lights, we can install cameras. I'd pay 100 grand if I had a hole in one just to have the video of that.
- [39:23]
E
Right.
- [39:23]
B
With drones and whatever. Again, how much film do I got to run to get that? But that is a priceless moment that can be shared and shared and shared. Not just the PBA type stuff. Okay, so the markets are great. Jc, is there anything we're missing? We got commodities working well. We've got AI driven tech, we've got big tech, we've got media, we've got test consumer discretionary. With Tesla and Amazon breaking out, we have trends with no friends breaking out, stocks in Latin America. So again, meme coins, you got froth, you've got GME changing the board, you got everything going. You got Trump in the White House.
- [39:58]
E
The biggest thing is it's twofold. Number one interest rates and the dollar. Notice how you didn't mention any of that? You know why you didn't mention any of that?
- [40:07]
B
Because there's not really a factor right now.
- [40:10]
E
Nothing's happening there.
- [40:11]
B
Yeah.
- [40:11]
E
And you know what the market loves when there's nothing happening in those things.
- [40:16]
B
Yeah. I saying we were worried a few weeks ago with the bonds breaking out.
- [40:22]
E
Market loves.
- [40:22]
A
That's a mess.
- [40:23]
B
The market likes the mess and. Okay, all right, so let's move to tech. And Phil, what's next?
- [40:29]
C
So yesterday Google comes out with this announcing this new quantum chip and the stock doesn't really do much, but then Today it's up 6, 8 bucks in a flat to down market. And so Michael, first of all, just stupid question for me because I don't understand anything. What's the difference between quantum and AI?
- [40:53]
D
Great question. Quantum computing will fundamentally, I know we talk about this a lot. Will fundamentally change how we do computations as and when the technology is ready. We're using computation at the subatomic level to do this. It's a very tough technology. They've been working on it for decades. We will be working on it for decades more. Google yesterday announced a very. For geeks like me, quantum geeks like me, it was a big day. It was like Kitty Hawk. They've got the plane to fly, you know, a few feet and it dropped which long way from a Boeing 747. But what they did, they did two things. They did. They showed that they could do a calculation that would normally take as long as the entire age of the universe. 13.8 billion years. They did it in five minutes. That's good news. Bad news is quantum computing. It computes instead of zeros and ones on an exponential scale. They're called qubits. But there is a big error rate. What they showed yesterday is that they have a technique to bring the error rate down below a certain threshold, which scientists have been looking to do for decades. And they managed to show that they have figured out the methodology to do that. And that's a big deal because that allows scientists all over the world to go nuts and innovate and build better quantum computers. It will take decades, but as and when it happens, it fundamentally changes how we do computers, the way our computers work today. Just to give you a point, we work on transistors. This iPhone has 18 billion transistors. The Nvidia AI chip has over 120130 billion transistors. When we have quantum computers, we will have billions and trillions of qubits instead of transistors. And that will fundamentally change the kind of problems we can solve. But it'll be decades.
- [42:59]
C
So does this announcement affect Nvidia over the next, like three years?
- [43:04]
D
No. No, no, no. Zero. Having said that, Nvidia is helping with GPI computation on their infrastructure for quantum computations that the algorithms that can be used. So, no, but this, this is just saying that this field of quantum computing is. It's a little bit closer in terms of where we can actually go from science to maybe practical applications. It's still a long ways off, but it is an exciting development for the technology. But the actual impact in the real world of what we're talking for AI right now is not that germane. Google did have a very important announcement yesterday in the area of foundation model. They announced one called Genie 2 that takes texts and converts them into interactive worlds. That's another big thing that's going on this week. And I just wanted to Highlight that because Google is on the forefront of a lot of things and everyone thinks Google is a loser in AI. Google is actually, I've been contending it's lower on the valuations of the Max 7 and they are actually playing a strong game on AI and Quantum.
- [44:20]
C
And so like a month ago there were all kinds of talk about there being sort of this lull in AI development. Hey, we're reaching a lull, we're kind of bringing to a standstill and it just seems like, I mean OpenAI is charging and now they have a Super premium product. 12 days of shipments. This Google thing is insane. They were talking about the multiverse in their press release yesterday. Like the multiverse is real, which is hilarious. Amazon with their whole thing with the Trainium chips, I mean they're doing it. So there's like no, there's no lull.
- [44:58]
D
There is zero lull. I've written two part posts on this which we can put up. No, AI scaling is pretty much real. And it'll be going, it'll accelerate into next year. In the next three or four years Nvidia will sell tons of chips, memory chips, et cetera from Hynix and all these companies you're talking about. You're going to see a chock full of announcements from in the first quarter next year. And so it is going to be a very, very busy period. And we're seeing it right now. As you said, OpenAI has got 12 days of shipments. So they're putting out a whole bunch of releases almost every day. Each one is very, very important. This Sora video thing I just wrote about it yesterday is phenomenal. There's a 15 minute video by MKB. Please watch it, you'll understand it. You don't need to understand the technology, but you'll understand where this is going. You're going to take a photo and it's going to turn it into a movie in a few seconds. It's really extraordinary stuff that's about to happen for billions of people.
- [45:59]
C
Is that going to turn into the Bloomberg of AI where if you get a terminal you got to pay like a few thousand bucks a month for the terminal. It's very high end and Bloomberg is just cash cow out of that. I mean, I know it's a private company but they make gobs of money. Is that like a, is that the play there, Phil?
- [46:21]
D
Subscriptions are already a huge part of the software industry as you know, you know, software as a service. Microsoft basically transitioned over the last 10, 15 years from a selling you Office by, by, you know, every year to a subscription model. All these companies are going to sell you AI add ons dramatically over the next three or four years. So yes, OpenAI charging $200 for OpenAI or for ChatGPT Pro cheap for the, for the kind of, for the technical people who understand and know what to do with this. It is phenomenal what they just offered for $200. I know it's not for the regular person but yes, there is a, there is a subscription business that will put Bloomberg to shame for a lot of these companies is what I would say.
- [47:08]
B
Okay, and then are you guys at Bolera like letting the employees have open a, like paying for ChatGPT or is that something that they pay for on their own?
- [47:19]
A
I am using it to help with sort of write ups and we are using a lambda model on projections but we're not pushing it down to employees yet.
- [47:32]
B
Got it. Okay Phil, what, what do we got next?
- [47:36]
C
I just had one comment about psychology of markets and this news. And so we're seeing markets supposedly get less and less inefficient, right? And there's a technology efficiency that's being added to the market. But I just had one observation yesterday afternoon. CEO of Google comes out with this statement about this quantum chip. It was at 12:04 Eastern, right? So the market's open for four hours after this comment comes out and Google's up $0.80, $0.70, half a percent or less after the news comes out this morning. The stock's up, it's even up more than it's 650 pre market. It was up 8 and a half bucks the last time I looked. And everybody's going crazy about it. And so my point here is that no matter how incredible technology gets colocation super data center in Mawa, New Jersey for the NYSE or whatever, there's an inefficiency, a psychological and information processing inefficiency that's built into the market. Human beings, especially when something is so new and so unexpected and so hard to sort of grasp. Humans are much more like Commodore 64s. We're slow brain, you know, our brains are slow.
- [49:04]
D
We're cognitive misers.
- [49:06]
C
Cognitive misers. Well this is, this is called cognitive conservativism. The idea that we are conservative in our revision of estimates, that's sort of the research psychobabble about it. But it's just really interesting to see something that is, you know, cognitive psychology psychobabble play out in the real world. Nobody reacted. It was four hours to react to this news yesterday, nobody reacted. And then this morning, now that all, you know, everybody's like pounding the table and talking about it and Sam Altman is responding and Elon Musk is responding and saying, wow, this is incredible. Then all of a sudden, you know, 16 or 18 hours later, you're getting this response from the market and seeing Google get bit up.
- [49:52]
B
I think it's also a reminder, if you can hear me, it's also a reminder that the alpha has switched around a lot. Right? Like because everybody's indexed, a lot of people also feel they own Google, they're not going to act on it. And there is a market there for traders and investors now and real, maybe not long term investing, but there are some short term hiccups. With so much information out there, we're waiting for confirmation bias from Elon on Twitter and Sam Altman on Twitter and maybe our show or Michael Parak or, you know, so, so it is a. There's so much distributed alpha in this world. Whereas the, when we remember in the, in the, when we hated CNBC because let's just say Greenspan would come with a briefcase and everybody be watching one pipe, right? And Michael knows this from the, you know, everything was this Chinese wall I was on. We always made fun of the Chinese wall because we, we felt there was rigged, right? We felt that there was. The Chinese wall was a thing that protected Goldman from trading and kept the retail investors 20 minutes behind. Well, we got what we wanted. We've got real time information. And guess what happens with real time information? People are, are waiting to see the whales make a decision before they make a decision. So even though this information was open to everybody, you call it the behavioral term, which I agree with, there is a term for it. But guys like me were like, come on. Like we're emailing Michael right away and Michael's responding with say, yeah, this is pretty interesting, but it's 30 years away. Make your own decision. Anyways, that's the market. That's why these shows are popular. That's why media and Spotify and Netflix and real time web 2.0 is happening. That's why guys like JC have Alpha and Riley with Trends with no Friends. All right, let's. Phil, I think we have just enough time for Trends with no Friends.
- [51:35]
C
Yeah, we're going to do Trends with no Friends. Shout out Ward Edwards, 1968. Conservativism. Conservatism bias. You can look that up if you're more interested. Meanwhile, we got Riley Roseby here. Another killer trend this should be the most. This should arguably be the most popular feature on our show. And yet I don't think it is. Which is actually alpha right there in itself. Trends with no friends. Nobody cares about these stocks and yet all they do is go up and to the right. Riley, what's up, buddy? What do you got?
- [52:08]
H
First today, how we doing? So we actually have a fun one today. Today we're looking at the Costco of Latin America. So Price Smart is a $3 billion membership warehouse retailer that operates 54 locations across Latin America. This chart here is the daily chart and you can see yesterday's action. We closed at a fresh 52 week high. And then let's take a look at that three month chart, the next chart there. And you can really see the base that we're working with. So the all time high goes back to 2013 and we're starting to knock on the door of our 2021 highs. And then the next stop is at its 2013 highs. And I know JC likes to say the bigger the base, the higher in space in this chart right here.
- [52:51]
B
No, it's the bigger the bosom.
- [52:53]
H
The bigger the bosom.
- [52:54]
B
No, I don't know.
- [52:55]
H
I gotta update my note.
- [52:56]
E
Can I just give a shout out.
- [52:57]
B
Bigger the bosom, the bigger the bowling ball.
- [52:58]
E
Shout out to the quarterly candlesticks here. Don't think that goes unnoticed.
- [53:02]
B
I love quarterly candlesticks.
- [53:04]
D
Yeah.
- [53:05]
H
You know that the one month chart just didn't do it.
- [53:08]
A
Yeah.
- [53:09]
B
Less noise in the quarterlies.
- [53:10]
C
480 followers. So no, basically nobody's following this stock and it's doing what it's doing.
- [53:15]
E
What's an adr, Right.
- [53:17]
B
Maybe put some alleys in these places. Lucky Strike inside of Price Smarts membership gets you a free. Anyways, I'm here. Free advice. All right. Price Smart, I love that one. It's on my watch list.
- [53:31]
D
The one thing I'll add, Costco was Jeff Bezos inspiration to come up with Amazon prime, which is one of the four core businesses that Jeff Bezos has invented. AWS, Amazon prime, obviously, Amazon E Commerce and Amazon for third market.
- [53:48]
G
Market sellers.
- [53:48]
D
Those four businesses make Amazon today a $2.3 trillion business.
- [53:53]
G
Costco was his inspiration for the prime, which has over 600 million subscribers. And so if you have a Costco in Latin America, I'm all, I'm all over it.
- [54:03]
B
He also invented lose a half a trillion dollars to your wife. He invented that one. That was a big one. And then also he's got a few more coming. The. All right, so Riley. Good one. I think you know what I want to do next time, Riley, is have a trend with too many friends. Like a broken trend with too many friends. Because the opposite of trends with no friends is a trend with too many a broken trend with too many friends.
- [54:27]
D
It's called bitcoin.
- [54:29]
B
No, it's not broken.
- [54:30]
H
That's not broken yet. We can sure.
- [54:33]
B
That's the trend with no friends. Mike, relative to you, I think that's all we got. Bill, that's ticker.
- [54:40]
C
Psmt. Did you want to say something about death? Death by a thousand substacks and danks. Cool.
- [54:47]
B
It was a good show. Or on time maybe. Jason, you know my I love that price smart idea. Again, Trends with no friends. Thursday, a big ticker takeover on stock twitch. We're going to have luck.
- [54:59]
D
Lucky strike.
- [55:00]
B
We'll have them back. Talk about the story of the ticker. We're following 10 to 20 companies a year here that we have good relationships with, with the senior executives that have great stories and great companies that we've been in love with. So welcome boys, gentlemen, and good luck with the media tour and we will have you back soon. JC thank you and everybody thanks again.
- [55:32]
C
Bobby and Levin.
- [55:33]
D
Thank you everybod.
- [55:40]
A
It.