Chit Chat Stocks - Bond Market Collapse; Stocks Disrupted By AI; Michael Burry's New Big Short? Whacky Palantir Math $PLTR

Episode Date: May 23, 2025

The Investing Power Hour is live-streamed every Thursday on the Chit Chat Stocks Podcast YouTube channel at 5:00 PM EST. This week we discussed: (03:11) AI Disruption in Business (18:46) The Concept of Digital Lawn Mowers (26:11) Identifying Companies at Risk of Disruption (31:02) AI's Impact on Commoditized Supply (34:40) Match Group and Buyback Strategies (39:53) Palantir's Growth Potential and Market Positioning (47:27) Michael Burry's Investment Strategies and Market Predictions (50:43) CoreWeave's Business Model and Financial Viability (55:19) Bond Market Trends and Economic Implications ***************************************************** JOIN OUR NEWSLETTER AND CHAT COMMUNITY: https://chitchatstocks.substack.com/  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* FinChat.io is The Complete Stock Research Platform for fundamental investors. With its beautiful design and institutional-quality data, FinChat is incredibly powerful and easy to use. Use our LINK and get 15% off any premium plan: ⁠https://finchat.io/chitchat  ********************************************************************* Bluechippers Club is a tight-knit community of stock focused investors. Members share ideas, participate in weekly calls, and compete in portfolio competitions. To join, go to ⁠Blue Chippers and apply! Link: ⁠https://bluechippersclub.com/ ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Chit Chat Stocks. On this show, hosts Ryan Henderson and Brett Schaefer analyze businesses and riff on the world of investing. As a quick reminder, Chit Chat Stocks is a CCM Media Group podcast. Anything discussed on Chit Chat Stocks by Ryan, Brett, or any other podcast guest is not formal advice or recommendation. Now, please enjoy this episode. welcome to chit chat stocks this is our weekly power hour episode i'm one of your hosts ryan henderson and as always i am joined by brett schaefer we've got a lot to discuss digital lawnmowers brett have you ever heard this term not until this week ryan excited to explore this analogy i don't know you're gonna get into it it's it's a fun strat uh thought exercise

and it might seem weird to any listeners but i think it can help explore stocks to buy stocks to not buy fields that might be potentially good investment opportunities and areas that might be poor performing investments over a 10-year period so excited to discuss that and much more today yeah we're going to be digging into some of the businesses that we think are at the most at risk of being disrupted by ai little tease there and then i want to revisit match group are an old flame of ours uh i don't believe either of us own shares today but it's gotten increasingly interesting over the last call it quarter and then i have a segment called How Crazy is Palantir? And I'm putting some numbers behind it. So not just blank thoughts,

not just headline multiples. We're going to go through some of the numbers and scenarios to talk about it. And then you've got a whole bunch of notes on AI. So we're going to get into all of that. But before we do, we want to talk about our friends at Interactive Brokers. Interactive Brokers is a professional's gateway to the world's markets. Interactive Brokers offers commissions starting at zero dollars on us listed stocks and atfs with low commissions on other products and there are no added spreads ticket charges or account minimums clients in over 200 countries and territories trade stocks options futures currencies bonds funds and more on 160 global markets from a single unified platform clients earn interest rates up to 3.83 percent

on instantly available cash and pay margin rates up to 53 percent lower than the industry You can also earn extra income on your lendable shares, and IBKR's powerful award-winning platform helps every level investor succeed from beginner to advanced on mobile, web, and desktop. When placing your money with a broker, go with the broker you can trust. Make sure your broker is secure and can endure through good and bad times. We use IBKR here at Chit Chat Stocks because it is a phenomenal platform for international investing, and you can use them too by heading on over to IBKR.com. Interactive Brokers is a member of SIPC. Where do we want to start, Brett? Digital lawnmowers? Well, if we're going to do digital lawnmowers, do you think it'd be best to do the AI updates of all these companies first? Because then people can hopefully get a better understanding of what's

happening in this field, how it's really disrupting the computer programming space. And I think they are related. So you're nodding your head. I'll get right into it. We have three different companies, Alphabet, OpenAI, and Anthropic, which would be three of the leading AI companies in the world besides FinChat, right? They're number four. Actually powered by some of these companies, I think, but I guess you don't really need to disclose that. First, let's talk Alphabet or Google. We'll interchange them for their name. They had their annual Google I.O. event, there was a flurry of announcements. First, I would say that founder Sergey Brin was there. He crashed a talk. He said he's back, quote, torturing workers like Demir Hasibis, the guy

that runs DeepMind. I can't pronounce his name. He was actually helping with some of the product demos, working on it with people and really just embracing all of the AI work they're doing. Now, you're a shareholder, Ryan. Does that make you optimistic that Brin, one of the smartest people of the last century is back working with alphabet i like the idea that he was so excited by ai and what's going on that he felt encouraged to come back yeah i think that makes me up it makes me optimistic that they're treating this i don't think he'd come back as like a we need to fit to defend our mode or something type of like i don't think that's what inspires him to work So the fact that he wants to come back tells me he believes they have the ability to do something really great with the new technology.

Okay, and let's get in – yeah, I agree with you there, even though I don't own the stock at the moment. But let's get into some of the products because they, for better or worse, have a ton of products, and it's really hard to keep up with even as someone who's trying to analyze it from an investing perspective as a consumer. I can't keep up at all. Let's just go through them. They have a prototype product that is copied Meta's Ray-Ban glasses, essentially a very, very similar use case. They are bringing AI overviews on Google Search globally. Here's a quote from their product announcement. Google has announced a new AI subscription plan with access to the company's most advanced models, and it costs $250 per month.

The AI Ultra plan also offers the highest user's limits across Google AI apps, Gemini, Notebook LM, Wisk, and its new AI video generation tool, Flow. That's a lot of names for products, and they all don't actually relate to what they do. They just seem to be random names, so it's very, very hard to follow. I'd assume that this is solely for professionals where you are a company that's in either design or coding or what have you, you would pay for this subscription for one of your employees to kind of hopefully supercharge their work. Let's just go through the rest of the list. They are now doing auto-translate in Google Meet, which seems pretty cool. Here's a quote from the press release. This time last year, we were processing 9.7 trillion tokens

a month across our products and apis now we're processing over 480 trillion that's 50 times more so it seems like they've gotten 50x growth and usage i'm gonna be honest i still don't know what this token crap is for ai and i'm not sure ryan does either uh but let's move on they have a early research prototype called project mariner that is an early step forward in agents with computer use capabilities to interact with the web and get stuff done for you. Now, this seems cool. It can help with managing your calendar. It's kind of integrated within all of your software tools that Google hasn't. I could see there being use here. And I guess the way I would sum it up, and we didn't even talk about what's going to happen and integrate with their other

hardware like Google Pixel, which is competing, I guess, you know, with the iPhone and Samsung. Although Samsung on Android is a partner and a competitor. My question is, are they basically trying to compete with everyone? Yeah, I mean, I sometimes think it's a little counterproductive to have these events where you announce everything at once. Because it almost feels like there isn't one big takeaway. Whereas Meta, I think their last event, the big takeaway was the Ray-Bans glasses. like there's something to create some buzz when you have a million products you launch it doesn't really create any buzz around all of them they have enough distribution that i don't think they

need buzz from events but i like the idea of this i like the like high price point for some of the tools i know from what i've heard uh gemini and some of the ai capabilities from google are really well-liked in the development community. I agree with you. Don't know what the tokens means, to be honest, but nice to know that usage is going up. It sounds like usage. It seems, yeah, like usage is going up.

Here's what's weird, Ryan. I have the pro Gemini plan, $20 a month with this Google One thing that they offer that bundles stuff together, but I don't really use it. I've only had it for a month, so I guess I'm going to try it out more. am i just not getting it i i still go to google search and i like reading things from actual humans but maybe i'm just old school now yeah i'm i don't know it i have been using chat gpt more and more lately i suppose well you should be on google ryan

you're a google shareholder i know it's actually left me slightly concerned because there is just a there's a part of searches that just doesn't need to be filtering through articles and reading things um and sometimes chat gpt is really nice for that the but why not just use gemini ryan come on you got to be supporting your shareholder base i've gotten bad outcomes with them before uh and it kind of deterred me maybe it's gotten better but some of them have led me astray a couple times the i don't know i guess i could shift my behavior i really don't care which one i'm using my working assumption here is that they're all using the same available public information so how they pull it is i don't really care too much open ai illegally takes

alphabets data but that's a whole nother topic i'd say alphabet in this case has the most data because they're the only ones that has access to YouTube legally and all this other stuff, your Gmail and what have you. Yeah, other companies can maybe try to train on that if they want to, but technically they're not supposed to. I see. Yeah, I don't know. Nothing from this takeaway tells me I need to go buy something from Google.

The Google Meet auto-translate is nice. I think they've had this technology on the live translate on YouTube for quite a while so it makes sense that they're able to port this over what about open ai any big announcements from them well it seems like they are buying johnny ive they're actually buying his company for 6.5 billion dollars and then they made a strange introductory hype video with ivan altman at a bar in san francisco it was strange i don't know if you watched this it was almost like they were introducing like they were about to get married it was like oh you know we're launching our our wedding cup joint it did not feel corporate whatsoever which is not bad it's

just it's a bit strange to make a very nice looking documentary on a acquisition announcement now the company they're actually buying now this is open ai and they are buying an all-stock deal for 6.5 billion dollars a company called io which is run by johnny i've i think and probably some other designers. And it has 55 employees, Ryan, which I think maths out to over $100 million per employee. Those got to be some very valuable employees. Here's a quote from the Wall Street Journal around some sourcing on why they are doing this. OpenAI chief executive Sam Altman and Ives design firm LoveFrom have been working on a new device that will move consumers beyond screens according to people familiar with the matter they have been collaborating for two years

on a closely guarded project considering options including headphones and other devices with cameras the people said first i don't want more cameras filming me it just i hate it i don't like it the meta ray-ban glasses i want to take off someone said and turn them off because it's just that's a personal cry but from an investing perspective does all this get you concerned about apple the guy that designed the iphone like the physical part of it and i think the macbook some of the best products in apple's history has decided to leave the company and work for this startup i mean hasn't he's been he's been away from apple for a little while though no well yeah yeah yeah but he's been working this is just a next step in the relationship he's

been working with altman for years now along with other companies like airbnb i think it's more of a consulting service this along with all the stuff that google is adding to android it's not going to move the needle this year but over a 10-year period you have to factor this in apple seems dead in the water on all of this stuff yeah i mean it feels like all ai news we kind of turn and say this has got to be harmful to apple well i mean yeah that's what that's the logic but at the end of the day they are selling more iphones no they're not we're selling a flat amount of iphones selling a stable they're selling less every year and charging more for them yeah i guess revenue is stable but

i yeah i guess they're kind of being left left behind by these announcements i still am skeptical that any of these wearable like interactive hardware types are going to be the new form factor that really displace the popular hardware from today i don't know why i mean maybe it'd be more convenient to have smart glasses but it's just people continue to use phones you know we've been talking about all these different form factors like vr and all the headsets and all these new headphones for a while and there's yet to be anything that's really displaced the iphone or smartphone in general so they keep trying to yeah they keep trying to push it on consumers like us and when you had a product like the iphone or other smartphones not just that one

you didn't really need to try to convince people to use it they're like oh this is awesome i'm going to use this and we haven't seen anything like that since which should be good for apple i would say it's there's still not something out there where you're going oh this is obviously the next step and everyone's going to switch from smartphones however if that is correct apple is in serious trouble i'm just not sure and i think i agree with you that over the next five to ten years is that going to happen i just don't see anything out there like people talk about meta ray bans disrupting smartphones and i just don't see it yeah i'm very skeptical that that would be the case in general yes if something were to get you know become sort of mainstream

then yeah i think apple's the most at risk but there's other reasons that i think apple's a bad investment beyond that and frankly there's probably other reasons that i would care more about if i an apple shareholder than this stuff the thing i did find funny is apple just announced that they're planning some smart glasses launch of their own in 2026 that would be a concern to me is if they if you start to feel like they're just playing catch up and trying to replicate what everyone else is doing like if you have another absolute vr blunder like what they had with the apple what are they called vision pro the vision yeah i mean you don't want them to just keep trying what other people are doing and have zero success on the one hand though

it is okay if they're waiting to see some proof of concept or some proof of like success like if that's what they're waiting for they want to see that there's actually some traction here like you want to let meta spend billions on vr before you try it for yourself i i guess i'd be okay with that because hardware all in all i think their brand's going to typically win out and people will give it a try if they are experimenting with other form factors right yeah it's just the risk that and it's probably not there today that they fall behind technologically too far which you're not going to go you know if they said we only have the technology of the 2010 iphone today no one would buy it uh let's see we have a couple comments on this says uh do you guys think apple

should just sign a deal with google to use gemini as their ai tool probably because then that mitigates some of the tech risk and there might be the risk that the google search payment goes away so that could be a way to replace this uh let's see comment here says the eyeglasses aren't going to kill apple the pixel of gemini is going to kill apple i'd be skeptical on that on a short time horizon but on a longer time horizon maybe and it says all you need is one generation where pixel or samsung is clearly ahead of the iphone and the entire feedback loop flips they've been ahead technologically for a while and i think it really needs to be a bigger advantage the phones are better they have all these products that are announced at google io every year and it doesn't

matter it needs to be a very very large gap i would say yeah it's just a pain to switch operating systems i mean i don't think you're gonna get a unless iphone becomes unaffordable which at this point it's it's really not unaffordable you could save money obviously going to some of the android providers i don't really i don't think that's a thing because the google pixels are like the same price i just don't see a lot of people switching they they got to be way behind and i there has to be some product or group of services or whatever on there that makes your life so much easier and we just don't see it yet yeah there is a bunch of questions around china i think we should get to that uh in a sec i already know what your uh guess i can guess what you're gonna say but

i want to talk about this thing i saw this week digital lawnmowers and i actually thought this was a really cool term and apparently there was i guess anything else on the ai announcements from this week there's some new announcements from anthropic they have clawed for so many products but i didn't think anything crazy for them i guess they're doing 2.2 billion dollars in revenue they're going to charge it's more enterprise focused but i think it just illustrates maybe this will relate to your topic how the ai tools are disrupting computer software engineering it's about the extent of my knowledge of that as we know it and it's just a huge paradigm shift that may be applying to other industries all right let's talk digital lawnmowers so there

There is apparently this secretive, in air quotes, putting that in air quotes, long short fund called Scout Capital. I love when people make themselves like a secretive fund when – I don't know. You're just investing in securities. There's nothing like – it's not like you're building some disruption that you need to be in shadow mode for. It's not like you're Johnny Ive. Yeah, it also rounds in with my favorite. Well, he's one of the deepest thinkers I know. Okay.

Thank you. Whatever that means. So anyway, it's called Scout Capital. Apparently, they had really good returns. And someone published a snippet from, I believe, one of their investor letters on Twitter this week. And I'm going to read the full quote because I think it's really good. It says, in the fundamental equity camp, we are focused on the, quote, digital lawnmower. They also put in parentheses, this is a proprietary scout term.

an ugly process in which new digital habits email internet etc destroy the non-digital business models we believe there are still a host of large businesses out there in the world that have not yet fully felt the effects of this transition usually as a result of some kind of temporary delay or buffer effect we have focused on members of the set that combine operational leverage with some financial financial leverage this is more common than one might think as return seeking investors have layered debt onto companies whose growth rates have slowed not anticipating the potential quote-unquote tipping point at which slow growth turns into rapid shrinkage we are attempting to build on our success from prior shorts in the yellow pages and newspaper sectors

so to kind of summarize this a bit they use this mental model of digital businesses or digital habits disrupting non-digital habits as with the lawnmower like why what's what's lawnmower how does that relate i believe it's like the digital habits are kind of mowing over the the the past or like cutting the past non-digital habits okay uh i understand what you mean but yeah the lawnmower whatever but i think it's a fun concept so they use this as a way to identify good companies to short so it's usually those the newspapers are a perfect example local newspapers this is something that was obviously disrupted by the internet. But not only do you have these non-digital businesses that slowly get their customers taken away, but oftentimes they have operational leverage.

So as their revenue shrinks, their profits will shrink even more and financial leverage. So they've had a nice successful business model for a while. They've layered on some debt because they think it's very predictable or they want to juice returns. And now this digital business comes along and it really starts to crush them financially. A few examples I can think of, historical examples, would be the internet disrupting local newspapers, the internet disrupting phone books, Visa and MasterCard disrupting cash transactions and checks. So some of the companies that I think were affected by that are like, I don't know,

Maybe some of the brick-and-mortar bank branches, maybe like the Czech – who is that company, Matek Systems, I think, that did the Czech photo technology? Yeah. Look it up. Anyway, Spotify slash music streaming disrupting the CD business, something like that. I'm sure there's more that you can think of. What companies do you think are at risk of this today? are there any digital habits you can think of that are breaking some non-digital business models right now okay i'm going to say the ai ones because you have a follow-up there we actually

have a very good comment not actually we have smart audience i would say uh telcos could be an example of this lots of debt and mature i guess what he's saying is there could be disruption from the satellite internet providers and all that good stuff starlink project hyper that that is yeah potential there another example would be the cable bundle the legacy media players which have done quite terribly even the ones with good brands like disney compared to the video streaming services that have totally disrupted that market um what would i add here the remittance players digital money transfers such as wise and remitly look at western union stock it has done absolutely terrible i don't know it might be not a bad bet

today given that it's actually totally wiped down its dividends at 10 but who knows whether that dividend's sustainable but it actually has a market cap lower than remitly as of this moment and I think that's a clear example of this happening. You saw a lot of this with smartphones coming on and getting popular in countries around the world. Uber, another good example, versus the taxi networks, although I don't think there was any stock to invest in from taxi-wise. I think maybe today, and this one hasn't turned out too well, I don't think, but I don't follow the sector that closely is when you have online shopping, you have, you know, the infinite shelf space and you have a totally different game to play where back in the day, if you were a large

CPG company and you got the best shelf space at the grocery store or whatever place people were buying your products, and then you advertised on television, you almost built a monopoly that was very hard to break through. And now there's all of these upstart DTC brands that can try to disrupt and take market share this could be for not only you know consumer packaged good food but all the way over to apparel and i don't know if those those are the best industries to invest in but i think those are some good examples as well and then we're going to talk about ai i think there's some potentially other ones there as well yeah i'm not sure when the investor letter was written i would say at this point you've gotten to the it feels like most processes or human habits

have generally gone digital for the most part already so a lot of those non-digital business models have already sort of been broken like the yellow pages the local newspapers the cash transfers like i guess western union's still around but um those business models for the most part have really struggled i think we've gotten to the point now where we're even seeing more digitally savvy companies or in this case ai concepts um ai concepts ai businesses disrupt digital businesses as well what so this kind of poses the question i want to talk about what businesses do you think are at the highest risk of being disrupted by ai because we talk about the winners of ai and it's easy to speculate and all that this goes back i think to i think buffett

has given this analogy which is when the automotive boom occurred in america you could have bet on a whole bunch of automotive companies and you could have given this beautiful picture where it's like the whole country is going to have roads in the future there's going to be million cars driving on these roads in the future and automatically people would think well you know you got to invest in an automotive company but actually they didn't return they did not generate good returns for investors what you should have done he says is bet against the horse because the number of horses in america dropped drastically as autos became more popularized So who do you think is sort of the horses in the, I guess, AI, if we want to use those terms, revolution or the AI business models moving forward?

One concept with AI that I think makes sense is you are at risk if you have commoditized supply. I've heard this before. I think I may have heard it from an interview this week with the product lead at Spotify, where they've been thinking about how they have some commoditized supply and they have to figure out how to make themselves differentiated in an AI world. And the reason why I think this makes sense, where if we get more of these search, not search queries, basically conversational queries with agents, chatbots, what have you, and they go do a lot of tasks for you and return you results that are more comprehensive than a Google search is if you have commoditized supply, you have no pricing power and it doesn't matter what your UI is, your UX layout is. I think an example for me would be someone like Booking Holdings, where they've dominated through very, very strong execution versus the likes of Expedia and some of these other online travel agencies. But if I can query Gemini or whoever and say, look, find me, I have some specific details of where I want to stay and what I want to do on this vacation. Now go find me this hotel room at the cheapest price and come back to me. If you have commoditized supply, it doesn't matter where the agent goes if it's the same hotel room. But if you're someone like, I know people don't like this company, Airbnb, with unique supply, it might work a lot better.

Car rental companies, which have kind of already been disrupted, might be at risk here. I would say airline bookings could also be interesting, but they've done some things with their membership programs and credit cards to help mitigate that risk and try to make themselves differentiated. Although if y'all have credit card programs, that doesn't matter. And that's a little bit different than the AI world. I think possibly music and video streaming, but I still think people like listening to humans.

I don't. That's a little bit. There's something I'm not certain about there. It's hard, and I'm not. It's hard because if you can find these companies, you can make a lot of money, as Scout Capital has done. I have trouble coming up with specifics besides booking that came to mind, but I think commoditized supply is a good concept for what would struggle

during uh if ai goes mainstream and everyone uses it and replaces google search now that we don't google search you know they're trying to disrupt themselves but what do you think ryan yeah i like that theory that commoditized supply is going to get going to be the most at risk one example that comes to mind for me is chegg i had a friend who he's kind of in the perfect situation to look at this because we were we were in college when chag was probably at its peak and for anyone that doesn't know chag is basically just a community sourced answer machine to homework homework and yeah so you know if someone does the problem already you just copy it right and it's it's this repository of answers

when we were in college everyone i knew was either on shag or uh using it in some capacity whether they had their own subscription or were borrowing my buddy is going back to school and he said there is he his words shag is screwed it like ai has just become the answer machine using a lot of that answers out there? Yeah, we've known this. Stock's down 99%. Is it?

Yeah, yeah. I mean, JAG's been done for a while. I heard or I saw that they are suing Google because... They're desperate. It kind of makes sense is that they are using JAG answers in Gemini responses.

so maybe there's some validity to the lawsuit but yeah i could see how they've just been crushed by ai the other one that we've talked about a little bit enterprise software i think adobe is at risk we've talked about it on this show before and I wasn't really sure, but the more and more I think about it, AI seems to be kind of hurting them at the edges. Canva has really, I did not realize how big Canva was. And aside from the high-end customers, the ultra high-end enterprise customers, I think AI is going to do a lot of the heavy lifting for people that want images, people that want presentations, people that want, i don't know the the stuff that isn't like super detailed like you get at the enterprise level

so they'd be on that list for me as well maybe sales website builders traditional style maybe but i the it seems like the sas models from what i've seen the sas content management systems so wix squarespace shopify i think those are the biggest ones maybe i'm missing some have kind of become the best ai website generators so far maybe i just haven't looked deep enough but a lot of them have like really great ai build this website for me type tools yeah i think that is a good example of for anything that prior to now took i guess general computer science and software development, and coding, any of these companies are going to need to be proactive,

proactive, and just try to get ahead and know that there's going to be these AI tools that launch and we need to match them to retain our customer base. And I think it presents all of these enterprise software companies at risk. Okay, before we move on, I do want to talk about our friends at Blue Chippers Club. blue chippers club i was on a call yesterday got to talk to a bunch of listeners friends uh and here's some new stock ideas from them it is a club that was started by two friends of ours

with the goal of building a tight-knit community of stock-focused investors you can share break down your portfolio pitch stocks receive feedback participate in weekly calls if you'd like i really do like this idea and it's it's why we're promoting it here on the show and if you're interested in checking it out it's blue chippers club.com the link will be in the description i really recommend giving it a look that's blue chippers club.com speaking of unique supply match group that's the unique supply you don't think so i guess bumble has probably some of the similar supply but the dating apps in general i mean they have they aggregate supply that's It's somewhat unique to their niche, no?

Somewhat. Somewhat. Would you say Hinge's supply is unique? No. Oh, boy. All right. Christian Mingle, that kind of thing, that's got unique supply. Yeah, sure.

That's unique supply. Yeah. But that's small potatoes. Yeah. All right. But, well, speaking of Match Group, I wanted to talk about this because it came up kind of on a screener I ran for buyback yield. Match Group right now has bought back $833 million in stock over the last 12 months. That buyback pace is currently 11.4% of their market cap.

They have spent $274 million on stock-based compensation. Now, that was the one reaction I got was, okay, well, how much are they spending on stock-based comp? So still, even if you deduct the stock-based compensation, they are spending nearly $600 million net reducing share count. And shares outstanding over the last year dropped by roughly 8%. We have an ugly history with this company, or at least I do. Yeah, we bought it at a higher price and it didn't do well, I guess, put it in plain terms. Would you ever own Match Group again? And what would the catalyst need to be to get you to become a shareholder?

Yes, I would. I like the new CEO. I think Zillow, he worked at Zillow, I guess, and did well there in building that product and getting usage up. I would worry a bit about capital allocation, given what that stock has done. But I like what they said. I've read one of their transcripts where they said they're not going to go on an acquisition spree. It has hurt them in the past. So I like this new management team.

I would bet on them. The Raskoff, Spencer Raskoff is the new CEO's name. What I need to see, and I wish they would disclose this every quarter. Honestly, just give us monthly numbers and stuff like that. active users on tinder need to grow globally or at least stabilize because it just keeps going down and eventually the network effect is going to collapse so without that i'm out but do you that's the one thing do you think tinder users will be higher or lower in five years it depends what products they launch it there is a if the product doesn't change it'll be lower

but if they truly improve the product and understand what the both sides of the marketplace need and want out of not just one age group but all age groups that they're trying to serve and in all regions just much easier said than done then i think the users will grow so things i'd be looking for is just ways to get people of all age groups on there dividing between different types of relationships people are looking for uh catering to local markets catering to local languages and making sure the most important side of the marketplace the female one is actually enjoying their experience and actually messaging people and finding people to go on dates with because if you alienate the way these dating apps work we don't we

had other topics to get to but it essentially makes it so 70 of the guys on the platform get nothing and when that happens they can pay once but then they get frustrated so when that is happening you're just going to reduce the amount of supply because people are going to get sick of you and leave and it's kind of this not winner takes all but just this huge skew of who is successful and who enjoys using it and when that happens people are going to be upset so fixing all of these issues is not easy but if they work towards that i think tinder users could grow and the stock would definitely be a buy i i feel like just if i had to pick one tinder would have fewer users in five years if i had to yeah i agree i agree with

Okay, I wanted to talk Palantir. Do you want to get to any other topics first or should I just run through these numbers for you? I feel like we've already done this topic. Maybe, but I want to run through the best-case scenario and what it would mean for shareholders. Yeah, maybe I'm thinking – I write this thing for The Motley Fool all the time since it's a very hot stock. I guess I go through this math. Yeah, I guess we can go through this. Yeah, I just got some stuff, so maybe make it quick-ish.

Okay. Palantir is now the 25th largest company in the U.S. by market cap. I believe they are the largest pure B2B SaaS company in the world ahead of Salesforce. And so the price to sales is $91, but I actually want to put that into context. So to do that, if you're a Palantir shareholder, which I doubt that many Palantir shareholders actually listen to our show. But if you are, I'm going to compare them to Salesforce. The reason I'm comparing them to Salesforce is because Salesforce has had the best growth rate I could find for a semi-large business over the last 20 years. So if you wanted me to compare them to Amazon, the valuation would look even more insane for Palantir. If you want me to compare them to Microsoft, Google, it'd be even more insane. So Salesforce grew at a faster rate revenue-wise than all three of those businesses. Regardless of whatever you think of Salesforce today, for the last 20 years, they have been the absolute software darling.

These are the types of results you dream of as an investor, what you've gotten with Salesforce over the last 20 years. Those are dream returns. So let's imagine that Palantir has similar success from here. that would mean that palantir grows its revenue by 28 a year for the next 20 years so talk about like that would be a dream come true for palantir shareholders if they did that they would be earning 400 billion dollars in revenue in 2044 now let's imagine they had the same operating margin as salesforce this is where you could maybe you know give some wiggle room you could say they'd be a little higher than salesforce whatever but i think also 400 billion dollars

in revenue for people that don't know the context is like apple and not even microsoft apple amazon walmart alphabets close to that there's like three companies globally that do that yeah and there's no b2b software companies that do that the let's get to the operating income so imagine 20 operating margins and 400 billion dollars in revenue they would be earning 80 billion dollars in operating income in 2044 yes i'm modeling out to 2044 that is up 200x from what they are currently generating. So, and if you said in 2044, they traded at 15 times operating income,

which I know that sounds crazy from here, but it's really not that crazy for a business to trade at 15 times operating income. That would mean after a 200X in operating earnings, you would have generated, wait for it, a 7% annual return. are those the returns you would hope for if you are forecasting earnings to go from 400 million to 80 billion would you want a seven percent annual return yeah i mean i guess you're not

probably including capital returns to shareholders but look this stock is is a great short it it is it's not gonna work cisco 2000 shopify 2021 this puts shopify 2021 to shame sort of they're at 60 times sales this is 91 yeah i guess it's it's beating them uh snowflake at their ipo there's some others out there there's some of the cannabis names the 3d printing names although that was more of just uh shit co industry that was getting a lot of hype similar to the quantum and have you heard of the electric air taxi stocks too ryan yeah i've heard yeah that's the 3d printing of today don't worry it's going to revolutionize travel but back to palantir yeah it's not going to work it's not going to work it's going up 10x but it's not

going to work from here no matter if they could get the entire defense software budget it doesn't matter they could sign with every fortune 500 company for a 10 million dollar deal doesn't matter they're not going it's the stock's not going to work and you're not even including sbc yeah let's assume that's equal to cash return to shareholders if any look here look let me challenge any listener because i know there's some palantir lovers out there if you one if someone doesn't like a stock you like that's fine there's plenty of people that don't like the stocks i like i don't care i can still be friends with them but second i would be willing to make a nice bet loser donates to the charity of the other person's choice of say

300 for i don't know we're not that we don't have that much money a couple hundred bucks uh 10 years from now if palantir generates maybe positive returns going forward i don't even need this to match the market because i have high conviction like extremely high conviction this is not going to work over a 10-year period yeah i just want to run a quick screener to see how many companies have 80 billion dollars in operating income that would i believe make them the most maybe the most profitable company world no no microsoft is higher apple higher alphabet higher nvidia higher amazon no but probably shortly facebook i don't think so or meta tesla no it's close i don't get it like

the absolute best outcome is for the best yeah it's like you're flat over 10 years something like that and we have a comment here from patrick says what is even the tan for palantir how many customers can you really have great point good point it doesn't not have nearly i mean it's probably something similar to salesforce 80 billion dollars in revenue is going to be a huge stretch all right let's get to your topics they're maybe a little more optimistic than mine so we had to talk mike burry's portfolio uh what do you want to do first core weave earnings bond price collapse or michael burry's new short bet let's do michael burry okay well his 13f came out Remember, these portfolios don't include pure shorts or international stocks you buy outside of U.S. exchanges.

And it was as of the end of Q1 2025. And remember, Liberation Day, one of the best, one of the funniest days in U.S. history, was April 2nd. Now, according to 13F, which is two days before Liberation Day, he owned simply Estee Lauder as a stock. He had a large put position on NVIDIA as a large put position on Chinese stocks. And that's about it. So he was short NVIDIA and Chinese stocks. I have no idea how he traded it. Because if he just held, it probably wouldn't have done too well.

We don't know. But Burry seemed to be quite well positioned heading into Liberation Day. although nvidia i guess didn't do that badly um do you think he is making another macro bet due to the tariffs i don't know he's impossible to read like every single 13f is just 100 percent turnover so it's totally all new investments you don't know like what the put prices are the strikes are you don't know i don't know if he has a giant actual short position or international portfolio yeah yeah let's see what he got out of i should i should have pulled that up i think he just all on finchette uh it's a good time for us to plug finchette if you want

to follow super investors they're all on there that is true that is true what's weird here is that he was long a lot of the chinese stock adrs baba baidu pinduoduo and then he just sold and bought a bunch of puts on him he still owns pinduoduo though i don't think so i think that's incorrect oh is that a put that's a put um yeah he sold out of alibaba entirely baidu entirely jd.com entirely i don't know maybe he just keeps up with chinese maybe it's a bet on chinese macro yeah who knows he's bearish it was interesting to see that honestly it turns into clickbait something you can write a nice molly fool article big short investor you know he's telling the market something blah blah blah blah blah uh yeah but i don't know either

the man is not afraid to make a big bet though no obviously if the movie says anything obviously that's true the uh core weave huh now there's another ai related company i saw something this week that was a meme of like the nvidia investment in core weave and it was just like it's not always sunny you know this you know the surge protector like the uh oh yeah yeah it was just plugged into itself yeah very circular yeah it's uh anyone wants to understand some of these venture capital and ai deals and honestly a lot of economy in general watch that patty's dollars episode on always sunny but corey for people i don't know it's kind of an ai focused cloud provider They almost take on excess capacity from the cloud providers.

They just buy a bunch of NVIDIA advanced computer chips and try to help people match supply and demand, I think. Honestly, I don't know. But they buy up a lot of servers. They are investing a ton in CapEx. And you'll never guess it, but CoreWeave Management says that they delivered an, quote, outstanding start to 2025 on multiple fronts. I've seen companies that are about to go bankrupt say this in their press releases. it's it's ridiculous what the corporate speak is and it makes me just not even want to read conference call transcripts anymore let's look at the numbers though 981 million dollars in revenue

of 420 percent year over year so growing like gangbusters they have a slight operating loss 264 million dollars in interest expense because they took on they're taking on a lot of debt to buy up all or build all these data centers 1.3 billion in negative free cash flow 7.5 billion in negative free cash flow over the last 12 months. My question for you is, why does this company need to exist? And maybe more specifically, when supply catches up with demand from the cloud providers and they don't need to go to the Corby for extra services, why would they still go to them?

I just don't understand. I have zero grasp on the business model. So I couldn't tell you the, I will say it's like a competitor to AWS. I don't, yeah. Do they provide any like niche use cases that serve customers better than the major cloud providers?

Well, I couldn't tell you, but I would guess no. If they do, then maybe some customers stick around. I don't know. But what I will say that quote, you shared an outstanding start to 2025.

have on multiple fronts there is no more useless quote than the quote in the first quote you will read on a company's press release that is it is always the most meaningless word salad you'll ever read so i really encourage you to just never read it yeah yeah oh yeah there's a lot of yeah you gotta filter through a lot of corporate buzzwords on those earnings calls core weave is i guess turning into a battleground stock now ryan don't look it up but i want you to guess core weaves market cap 10 billion no no no sorry sorry 50 yeah just about right 48 billion this is either going to be a fantastic long or a fantastic short and i can't figure out which one it is yet i can't imagine it's a fantastic long there is yeah i think it could be a great short

a lot of free cash burn that's a lot it's wonderful to envision the companies like uber where they burned so much money pre-ipo that you kind of think well that's just a part of it that you know you'll see the operating leverage later on that does not apply to most businesses And the amount of companies that have tried to copy the operating losses of some of the winners that have actually just ended up going bankrupt is probably really high. So, yeah, anytime you see $7.5 billion in free cash outflow on a company doing, what, a billion in revenue, like red flags should go up everywhere. i agree especially when you're riding a let's say precarious roller coaster that is climbing and climbing you don't know whether the cycle is going to hit a downturn can we talk ryan bond prices sure there's been a lot of panic in bond price a lot of listeners

actually want us to talk about this um yields are rising which means prices are going down us three months 4.4 percent 10 year 4.6 three 30 year 5.1 percent uh the tlt brethren like myself not been a great week although honestly my cost base is like 80 in between 85 and 90 and i think it's at the this is the long-term treasury etf it's it's at like 84 so lost seven that bad but returns for bondholders since 2020 has been abysmal and now this is stolen from or shared from an anonymous account called jake at economic on twitter says long term zero coupon u.s treasuries are down 60 percent nominally since march 2020 now you add in 20 percent in cumulative inflation to the mix there and it has been a total wipe out for bond

holders now maybe it's time hey now is good time to add some i don't know could be fine if you want to have some kind of quote-unquote not cash and equivalents but a little bit different in your portfolio. Seems better. He actually gets some yield. Does any of this have to do with the Moody's downgrade on U.S. debt? That's what people are asking about. Yes, I think so. Hard to tell for certain. That's what a lot of the pundits are saying. I think the reaction, though, on the yield is correlated to the likelihood that this new spending bill passes. I think the fact that they're forecasting the deficits to continue in the United States the bond market is getting very weary about that and doesn't like it and that rising yields i guess

in most simplified terms means they just don't like what the spending bill is going to do it is uh so i saw for context for anyone that doesn't keep up with the bonds like myself the moody's downgraded u.s debt for uh their credit rating from triple a to like a one or whatever the like second tier is below down right yeah i think it's like a 27 tier rating system so it's one two down but it's like a huge deal because whatever it's been considered the risk-free rate for forever and has wonderful credit ratings now uh i think seven hours later the u.s white house released a statement that said we reject moody's credit rating did you know did you know that was an option

yeah that is funny then they just have a fleet of f-35s behind them i guess i didn't know you could just reject it a company should start trying to do that no we reject it that is funny i did not hear that um yeah that's well what a joke but in general though people hate there seems to be a lot of negative sentiment against long-term bonds and given where the deficit is i feel like they're gonna have to yields are gonna have to go up or uh sorry down which means prices are gonna go up That's all I feel, and combined with mortgage rates are back at, I think, 7%, combined with unaffordability of homes, I also think there is just a large incentive with the government debt and making homes more affordable for young people.

There's just going to be a large nationwide incentive to lower interest rates, and I think as a part of a portfolio, I guess short is more of just... cash and equivalents but 10 to 30 year bonds call me crazy seems like a fine time seems like a fine time to buy right now yeah i don't maybe it was what how would it why would it go if it gets worse we got way more worse things to worry about than our personal portfolios what's the yield right know 30 year 5.1 percent 10 year 4.6 percent that's yesterday so good you know what i think about a lot is when someone asked jim chanos what's the biggest mistake he ever made in investing and he said not going levered long 30-year bonds in what was it 1980 whenever the rates hit like 15 percent the uh yeah we're a long ways away from 15 percent but it's not mathematically possible

for bond for treasuries to get back there the country would hit it the hyperinflationist would be right i mean we would it would be bad news it's not going to happen and again as i say if it does happen call me macro doomer things are going very badly for the global economy what Well, let me ask you this. Do you think you can generate better than 5% returns annualized, maybe even call it 7% annualized if you get price appreciation too, than if you're investing outside of bonds? I don't know if that's a way to frame it. I think, I don't, uh, I don't know specifically to answer that, but the reason it can be part of a portfolio is generally, I still agree with this. And then there's some people that say this is over that, that correlations done for,

but if a recession hits interest, the federal reserve lowers interest rates and, um, you know, the bonds perform well, as has been the historical correlation, it can give you a counterbalancing effect to buy some cheap stocks. So that would be the reason to include it in a portfolio. You want dry powder in a downturn. And I think treasury bonds, even if you just do short term, which again, is just like cash and equivalents, that can give you a lot of flexibility. and given where the stock market's trading don't think it's an untrue move

all right i think that's just about time for us we didn't get a chance to mention it but we use finchat all the time here and if you want to use our code finchat.io slash chitchat you can get 15 off that's the place signing up i'm loving those commissions ton of people have signed up lately. I think people get a lot of value out of it. Honestly, it's like all the financial data you need as an equity investor. So recommend checking it out. But I think that's going to do it, Brett. Any other parting thoughts? Well, maybe we can save it next week, but Jamie Dimon is bearish. So it's been a bearish week, I guess. But thank you for everyone for joining. And Ryan, I guess I can hit the disclosure. We are not financial advisors.

Anything we say on the show is not formal advice or recommendation. Ryan and I are any podcast guests. May hold securities discussed in this podcast. May have held them in the past and may buy, sell, or hold them in the future. Thank you, everyone, for tuning in. These go live on our YouTube page, 5 p.m. Eastern time, every Thursday. And you can watch the replays on YouTube or listen to the replays wherever you get your podcasts. Thank you once again, and we'll see you next week.

We'll see you next time.