Chit Chat Stocks - Nu Bank's Territorial Expansion; LVMH + Stocks At Cheapest Valuations Ever; Fed Hikes Interest Rates

Episode Date: September 18, 2026

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: (00:00) Introduction (02:23) NuBank's US Market Entry (21:38) Stocks Trading Near Historic Lows (23:12) Valuations of Consumer and Retail Stocks (34:34) Interest Rate Outlook and Bond Market (41:02) AI Regulation and Industry Slowdown (50:12) Small Cap of the Week Performances (52:38) Listener Questions (01:00:02) Luxury Brands and Market Valuations ***************************************************** Subscribe to our newsletter and join our FREE chat community: emergingmoats.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.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* 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

Trade election, climate, and economic outcomes with IBCR prediction markets right alongside your stocks and options. Earn interest on your position and receive $1 per contract if you're right. Learn more at IBCR.com slash predictions. Welcome to Chit Chat Stocks, the podcast that helps you find your next great investment. I'm one of your hosts, Ryan Henderson, and I am joined today, as always, by the one and only Brett Schaefer. This week, well, we've got our investing power hour episode like every week.

We're doing it a little earlier than we typically do because I am traveling. And apologies for all the Internet troubles we've been having. We're still working on getting sorted out, but hopefully today it goes off without a hitch. We've got our power hour. We talk all things financial markets on these episodes. And I've got plenty of news this week. A lot of AI headlines, AI humanities extinction type headlines, which we can sift through a bit. We've got Remitly News slash Nube.

We've got a small cap of the week roundup. Shout out to Brett for a little research project there and a bunch of other news as well. Treasuries seems to be the hot topic. But I'll let you kind of kick things off, Brett. Where do we want to start? A lot of people wanted to talk about New Bank's launch. You mentioned it's a remitly news story. I called more of a New Bank news story, although I know that's a position in your portfolio.

New Bank, I guess, is moving into the United States. There's a lot of activity in the substack chat over this. Did you have any notes on the announcement? Because I actually wrote mostly a free article, a little extra this week, for emerging moats. If anyone wants to read that, can I get more detailed analysis? It might be something like 20, 30 paragraphs, nothing too lengthy. But I try to give potential winners and losers from the entrance to that market.

Ryan, did you look at the details or would you like me to summarize before we go into the discussion? I've looked a bit at the details, but feel free. Yeah, it seems like you've done some analysis on it already. So let's dig into what the announcement was. And there were, I guess, any other new bank news from the presentation and the potential impacts on the remittance market. All right. Well, they had an announcement. at, what is it called,

news stadium, something like that, at the Miami Stadium for the MLS team there. And they launched three products. Well, they launched two and announced that they are launching another one. The basic one, which I think is pretty straightforward, is a simple combination of a bank account plus a cashback credit card.

And if you just look at the bank account, they don't even separate from checking and savings, so they keep things super simple for the retail customer. You start out all deposits, 3.5% APY, obviously subject to change. And the cashback card is just a straight 1.5% in all cashback transactions. But if you combine both together and get direct deposit to your new bank account, it grows to 4.5% APY, compounded daily,

or paid daily. I don't know if it's compounded daily. and then the cashback goes to 2%. So pretty good value prop there. It's kind of going directly after the sofies of the world. And my initial thought was, yeah, you know, the sofies, the allies, you know, obviously the regional banks and the small credit unions and those things of those nature. Did you know there's 4,000 banks in the United States, Ryan? It's much too many.

They're probably at the threat here. But I kind of think SOFI should probably be tipping their cap and say, look, we were right. We are the ones that are going after a really strong product market, sorry, just a good customer value proposition here. And the fact that NewBank essentially copied us is a testament that we're on the right track and we're providing value here. So thoughts on that, I guess is the first entrance. And then we can talk about the new global after.

Yeah. My initial thought is there's another player in the industry. They are one of many. online banking like products that offer high APY, 3.5%. Again, this stuff's constantly changing, and with the recent Treasury news, it can change again. 3.5% is very competitive. But a lot of the other online banks, they also offer 3% plus. So it's right up there with them. It's a competitive offer to especially it's probably not going to capture the average American, but I think some of the maybe immigrant population, Latin Americans that have moved to, you know, anywhere in the states,

they probably have a better sense of the brand already, along with some of the other product announcements that they had. maybe this captures their interest. I think I have a hard time sort of understanding how big of a market this is going to be for new, really. Like, America is very competitive on the banking front. I imagine most of the customers, like, they really got a great start in Brazil by going after customers that were very underserved. and there were a lot of restrictions in Brazil around who can have a bank account and who had access to credit cards and all that. I don't think the bar is quite as high in the United States.

So they're going into a market that's probably already very active and competitive. So I wonder what kind of adoption this is going to have. Wait, let me jut in there. Wouldn't you have said the same thing about SOFI five years ago? And they went from one million members to 15. So I think if you build that better mouse trap with better rates because you have the better technological back end that leads to lower cost to serve, maybe. Maybe that's the opportunity here. I mean, look, stills are in the bucket.

I mean, 40 billion in deposits. Okay. Did you know that SOFI has more in deposits than NewBank does across its three Latin American markets? Yes. Yeah, okay. It's true. Yeah. Okay.

You're going to have higher value accounts here. That's a good point. Same with probably in Mexico over time, I would guess. You have higher value accounts than Brazil or Colombia. Yeah. I was recently comparing the SO-Fi to New Bank, and I noticed that, yeah, they're very similar. I think they're both close to around $45 billion in total deposits, if I'm not mistaken. But, like, I was looking at, I think a lot of people,

overestimate the market share that has been taken by both of these digital banks. Like Ittao, the largest Brazilian bank by deposits, and Banko-Brasil. Both of them, like, nominally, new bank over the last five years has gone from basically standing start, zero dollars in deposits, call it, to 45 billion. that's great. Bank of Brazil, Italo, they've both added more than 40 million deposits in that 40 billion in deposits over that same timeframe. It's like, I think a lot of people get carried away with some of the growth rates with new bank and obviously they are really strong, but also keep in mind like higher inflation rates as well. So it's probably context needed for some of those markets. Yeah. Yeah, this is true. I think it, you can look at a glass half empty, which I think you're doing a little bit there. You can look at a glass half full where, all right, that just means if new or some of these other players like SoFi have such a strong, you know, they're really, really good at acquiring new customers. There's a long runway to grow deposits per customer.

I think in general, though, okay, there's trillions of deposits in the United States. I think probably in consumer alone, I'm guessing there's over 10 trillion in deposits. Let's say, so far, right now, $45 billion. New Bank, zero. There's probably room for both to win to keep slowly taking market share. Because you talk about, okay, yeah, it's not totally, it's not as bad of a business from a customer value perspective in the United States

from the big banks versus Latin America, but you still get frustrated with my Bank of America checking account, which I keep not very much money in, pays nothing. And I think that hasn't changed, and that is where the flows will come. And they've gone to so fine.

I think they can just go to both over the long term. And I think it'll be a solid opportunity. Yeah. My only counter argument would be there are a lot of places and maybe it's the same in some in Brazil and Columbia and I just don't know about it. There are a lot of places in the States where you can earn a 3% APY.

What about 3 and a half? It's way better. Ally, there's not much besides SOFI. So there's. Check ally right now. I assume it's going to be pretty high. Allies three. I don't think they're ever going to be able to match because they can't be profitable enough.

They just are too, I use the word stodgy. They have too much tech debt. And you look at even someone like Wise who doesn't have a direct, I guess, banking license. And it's probably why they only offer 3.1, 3.15 to business customers, public. Yeah, I appreciate our old sponsor, but I believe they are subsidizing some of that, I believe. Or you're locking into treasuries. I mean, they have the high-yield cash account. I believe it's north of 3%.

I mean, again, I think the words subject to change do a lot of work with these introductory offers because you can start really high, run it sort of as a loss leader, and, you know. But new is not an introductory offer. This is what they're off. They don't change. There's no promotional. I thought the U.S. high yield account was new. And EW.

No, no. Well, there's no high yield account. There's one account. it's simple it pays the same rate to everyone on all deposits every day okay that's what i mean an account that an account that offers a high yield but yeah yeah yeah it i would just i would be a little surprised maybe i'm underestimating it i would be a little surprised if this was a massive needle mover for new bank but again i might just be underestimating how many uh latin americans there are in the states that want a product like this and don't have access to it.

Maybe I'm not aware of access barriers. I guess we should look up actual statistics on that. What about this, though, Ryan? They're launching this. This is the one I said that they're launching, they announced that they're launching sometime in the future, because if you actually look at the details, not everything is announced yet. It's New Global.

I'll read off the press release because it sounds impressive. New Global is a multi-currency digital account that gives. customers with international lifestyles a way to manage their money daily. All deposits are converted into digital dollars in the USDC or digital euros in EURC, stable coins paid to the US dollar in euro, earning a daily yield of 3.5% and 2.2% and 2.2% API, respectively, 2.2% will be euro. The offering is paired with a virtual master card that allows customers to spend anywhere in the world at competitive exchange rates with no markups.

Beyond daily money management with new global, customers can send and receive money across more than 35 countries with fast transfer fees, free of charge, starting with Europe and Latin America. Integrations with Brazil, Colombia, Mexico, and the U.S. are planned for the months ahead. The note here is that the three markets they operate in as a bank are Brazil, Colombia, Mexico, and the United States. So the actual core product here, we're going to have to wait to see when and how long it gets to be announced. But this is essentially trying to step on wise his toes. Remitly, yes, but a little bit less because there's a cash pay. out. It's less of a global digital account. And it seems what they're trying to pitch here is,

and I'm very, very curious of what the actual, you know, like you send this amount of dollars and how many pesos ends up into the receiver's account ends up because they're saying no markups free of charge. That means it's completely free. So you're making it all up and yield from the USDC, which you also have to share the union economics with with Circle. I'm a bit perplexed here. but I also think it illustrates that if you want to speed run, you know, for lack of a better term, your way to a global remittance platform, you can use stable coins, but you still have the off-ramp issues. Yeah, I don't.

So this is the headline that got my attention the most since I care a lot about remitly and wise. Wise and Remitly down this week. Yeah. Yeah. Yeah, I think Remitly was down, I want to say 15%. following this news. Wise is down, I think, like 8%. I even in a new bank to new bank transfer,

I don't see how they do anything but lose money in these transactions. I guess you could be flat on a new bank to new bank transfer, because you're just adjusting your own ledger. Yes, exactly. If it's all USDC, it's new bank to new bank. Like, yeah, but how many of those are there? Well, right now there's zero in the United States. Again, yeah, I think that is sort of a best case scenario.

On both sides of each transaction, it's a new bank account all over the world and you're transferring it. It's on your own ledger. If you want to pay for something later on, you know, there will still be the transaction costs there. But that's not happening in reality is what you would have is. a different bank account, most likely, two, or a new bank account to a different bank account, they will lose money on that transaction if they're offering it fee free. So there's kind of a couple different situations. One, they put sender limits, which I think is a likely possibility. Yeah, it's a possibility. Yeah, one of the big pitches wise where we admitly have is you can be

high value sender and a business customer, which is the vast majority of all transactions. For example, someone needs to, I was in Argentina. They have this example all the time. Apparently all real estate transactions are cash USD. The economy is complete nonsense. Why is this the case? I don't know, maybe because the currency depreciate so much. But you have to literally have enough cash in a bankroom.

You have to do the deal with all cash for the real estate transaction, for the most part. this is what I've heard. I didn't make any of these deals. But that is the type of transaction you're looking at. That is what the wisest remittlies and the traditional banks serve. And the new to new doesn't necessarily solve that. Although I will mention it maybe is a good marketing tactic to convince, say someone from Brazil that has, is either Brazilian, Mexican or Colombian immigrant in the United States or has family, is one of those, has one of those ancestries. You could use that as a good product market opportunity because the receiver could have a good or could have a new bank account in those home countries and then you could convince them to sign

up for a new bank account in the United States. But you look at Remitling-wise, I don't think that kills their existing business. That's a small sliver of their operations. Yeah, you look at the biggest corridor there for Remitly. It's U.S. to Mexico among those three. U.S. to Colombia, U.S. to Brazil, or U.S. to Mexico, U.S. to Mexico is the largest. I would guess, and I don't think this is broken out, but I would guess a large chunk of those transactions are either between separate bank accounts or they are separate banks or their cash pickups. I think that's a part that's kind of understated with a lot of the global remittance market is the receivable method. If I'm the mom and my son's in the U.S. and they're sending me money, I might still deal all the, lot in cash on a day to day. I might still be buying goods with pesos. Being able to get

cash delivery or cash pickup, which is what, for example, remitly offers, you don't have that in this New Bank scenario. So I would be shocked if it took a ton of volume. Again, I can totally be wrong here, but I don't think it's going to take a bunch of remittance volume because I don't see a world where New Bank can do this with high value senders. People are saying it's going to be a loss leader. It'll be a big loss leader if it's high value senders. And if it grows to a significant scale. Yeah.

So there's got to be a send limit. There's receivable. I don't even know if that's a word receipt issues potentially if you're going from digital to a cash method. And you're still losing money on all those transactions. And I think you're paying the interest or whatever to. to circle. I think it's probably overblown at the moment, and there will be hiccups with this,

would be my guess. So if I launched something like this, I think a year ago. No dent. Yeah, nothing. Meta, I think at one point, launched something like this. Remember they had their own stable coin

over five years ago. There's a lot of announced competition. Here's been other stable coin announcements. And I kind of, for any listeners that aren't familiar with the remittance market, we'll try to close things out here because we have a lot of other topics. We could talk about this all day. I can illustrate this by saying both wise and remitly could go to their customers and say, hey, if you want to send a wise to wise account or omitly to a remitly account, we can do that completely free. But there's no point because you need to have thousands of thousands. of thousands of receive endpoints. For new, they have a lot of customers in Latin America. So there could be a niche there,

but I don't think, like, I kind of look out of it as, it's a benefit for New Bank, but I don't think it hurts really much unless we're Milly and Wise kind of take all this sitting down. I mean, they're both trying to significantly reduce their take rates and their cost to serve

while serving the entire globe. It's a completely different bargain. And what we're looking at just a few corridors here when both companies serve thousands and thousands of corridors across dozens, hundreds of countries. World events unfold in real time and now you can trade them. With IBKR prediction markets, you can trade election, climate, and economic outcomes alongside stocks, options, and bonds, all in one integrated platform. These are simple yes or no contracts, price to reflect the market's

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While those things stayed in the 90s, one thing that hasn't is that fuzzy feeling you get when WestJet welcomes you on board. Here's to Westjetting since 96. Travel back in time with us and actually travel with us at westjet.com slash 30 years. Yeah, if studying wise and remotely has taught me anything is that people drastically underappreciate how complex global banking rules are and how unique every single different remittance corridor is. Like, it takes time to launch a new corridor. And you can kind of cheat it or shortcut it. But at the end of the day, you're still paying fees one way or another.

There will be a fee. Maybe it's on the off ramp. But yeah, we've gone a little long on this. So let's shift gears. I've got a little quick one for you. stocks trading near their cheapest valuations ever. I'm just going to rattle off a few. I know one of these was a customer suggestion so we can talk about that.

Listener, not a customer. Customer, listener. Advertisters. They're the customers. Sorry, listeners. Pool Corp. You know pool corp, right? Pools and pool maintenance?

Yeah, yeah. It's like pool supplies distributors. Rollins. Transdime. I think they're in their. largest drawdown since if you exclude 30 times earnings. Yeah, probably still expensive.

P.E. of 33. Casey's general stores. I have never seen a Casey's. Midwest special. Yeah. That and what is the other one in the Midwest? Is it Circle K? I think so.

Yeah, wow, they're in a massive drawdown. God, but they were still a high quality. I mean, P.E. of 28, EV to EBDA of 15 and a half. The depreciation is probably real. Evita sales of 1.3. I'm assuming your margins are slim. Yeah, gross margins of 24%. I mean, who was buying that?

Who's buying Casey's general stores at 40 times earnings? I don't get it. Yeah, I'm not sure. A lot of these were pitched as, it seems like the compounder stocks have been in a huge, period of multiple re-rating. Rawlins was one. Pool Corp was definitely one. Transdime, certainly.

Casey's for a long time was seen as these durable compounders. Wingstop, I'm just continuing to go down the list here. Wingstop. Windstop is in, this is, they're selling cheap chicken. Now they have some

perplexing ads in sporting events. Have you seen their ads? People dancing to really bad rap songs. All right, it's in a 77% drawdown, and it still trades at a P.E. of 24. This is like buying Chipoli. It's got crazy. Yeah. Chicken is very competitive.

Okay, these last four I actually find quite interesting. Dutch Bros. Which is, I think, founded out of Portland, if I'm not mistaken. Grands Fess. Very, farther south, but yeah. Yeah, very popular in the Northwest. grab holdings i think was also mentioned in the chat here coupang and then striker we've already talked about coupang and striker but grab and dutch bros any interest there grab i need to know

more about i know you did your video report on them or podcast report and it was interesting the stock keeps falling yeah i'd have to research more but of course i mean if it's growing quickly it has the ecosystem of services self-driving is i'm going to defeat them anytime soon. If we're looking at Southeast Asia, I think that's the last place that's going to go full self-driving. I've never been there, but there's kind of the anecdotes people say. FSD mopeds, Brett. Yeah, that would help with some dangers on the roads, I would say. Dutch bros, yeah, I like the concept. Do I love it? No, and I didn't like management at the IPO. but at the right price.

I don't know. We're still at, oh, I believe they have some... I think operating cash flow was the multiple I used that made the most sense. Because it's not CAPX,

like the franchise concept. It's a franchise concept. Their gross margin is 25%. Maybe that's incorrect. I mean, five-year revenue growth, 36%.

Evita sales of 4.8, EV to EBITDA 28, even to gross profit 19, still not cheap. I think the flow through from gross profit to gross profit, EV to operating cash flow is 19 times. So I think the flow through from gross profit to cash flow is quite narrow. Maybe this weird income statement or something. Yeah. I just, I can't understand how they are competitively different.

Like, why are they, in a world of a billion coffee shops, why is Dutch Bros the winner? Like, it's a tough market. They have gone from like 300 locations to 1,500 over the last five years, but it just, I would have a hard time finding any sort of sustainable advantage for Dutch Bros. I agree. Like McDonald's comes out with a lot of competitors. now kind of the drinks with energy drinks i think yeah if i was going to buy dutch bros i would have to expect for really nice growth and it's really low starting price because when you're nervous about the moat you just have to have higher for future growth expectations

let's i don't love any of it's how about this listener question from the the chat any thoughts on Transdine. Critical supplier of component parts for aviation defense aircraft currently at a 52 week low, up 50x since IPO in 2006, Chris Hohn type of play, established moat recurring business, a logoply market, high barrier to entry. It's Chris Hohn that I'm in. He's getting, can we officially move Hone to the overrated zone? He's getting a lot of love lately. I love his stuff.

Great investor, but, you know, let's, let's calm down. He's not, just because he buys something doesn't mean it's going up. There is, yeah, there does seem to be a sort of hone. Hone's like investing ethos seems to be getting a lot of draw lately. Infrastructure. This infreelts like. Real assets. Forever lasting infrastructure assets.

I like a lot of the business businesses that he's investing in. But yeah, it does seem to get a lot of love. What do you think of Transdine specifically? Looking at the financials now, I know people A lot of people pitch it as high moat, wide moat. Let's look at how much they're actually growing and how much like the stock is valued at. Revenue per share since let's go back as far as we can. Using our friends at Fiscal AI, use our link, fiscal.a.i slash chit chat, get 15% of any paid plan.

I've revenue per share over, let's do last 12 months, from March 2015 to last 12 months now. Actually, the chart's not working that well. All right. September 2015, it's grown at a 12.4% compound annual growth rate from, say, $477 a share to $173. Pretty darn good there. I'd also want to look at just margins, like how consistent are your profit margins? Look at the income statement.

I'm trying to pull this up here. I'm guessing it's been pretty good, but it's maybe less, yeah, okay. It's been 40% or so outside of the pandemic drawdown. So that's fantastic as well. And then I just look at the valuation. Let's do a quick look at that. and we can kind of go from there.

I would wonder why it's in the drawdown. Like, Ryan, do you have any idea? I haven't followed this closely whatsoever. Why don't we use EV to Ebit? My thinking. Straighting at 20, before you go, 20 times Eby to EBIT. Not bad.

Pretty good. No, and they have been a very good capital allocators from what I understand. Again, don't know the business super well. listener recommendation here. From what I remember, they run very levered, so operate with a lot of leverage

by these sort of critical suppliers in the airplane supply chain, essentially. My thinking, seeing it trading at its lowest multiple in five years and largest drawdown, would be that

they are levered to the airline cycle a bit. Like right now, travel, it's likely that travel will decline a little bit given the recent jump in fuel charges or fuel prices. But from a, I think it's wrong. I don't know why they're training at this. Our little friend, Gemini, here, Transdime is structurally insulated from the cycle of new airplane purchases and instead is highly levered to global flight hours and the aging of the existing aircraft fleet. Flight hours might fall.

Flight hours might fall. Maybe that's what people are pricing it. Are you really going to like this? It could be just one year down. TSA is TSA traffic's down. Yeah, I just, maybe we ought to do a research report on this, but my gut says this works from here.

I mean, maintenance expenses could, you know, probably shrink a little bit when you have TSA traffic down, but I would guess it's not like an exorbitant drop in maintenance cap X for these airlines. Like you can't. I agree. I agree.

Yeah, you got to, these are things you have to spend on and that's where the pricing power comes in. Yeah, I like it. I like it. I think it probably works. Okay. Other stuff. Ten year yield won about 5%. Mortgage rates are about to hit 7%.

And the Fed a couple minutes before we hit record, raise the Fed funds rate a quarter point to 4%. Ryan, time to sell all your stocks or do you not care? Well, I don't mean to brag, but I timed this actually exceptionally

well, at least in the short run. Talking to that mortgage? Taking out 30-year mortgage before the rate hike. No, it is interesting how for some reason 5% feels like a threshold

like people start to care more like really yeah it for me it starts to be a point where I am I start to think maybe fixed income should be

a higher percentage of my portfolio when you can lock in 5% over 10 years it's definitely flawed thinking but would you buy 10-year treasuries right now? Compared to what?

Compared to my portfolio? Would you make it a portion of your portfolio? Yeah, I have the longer-term bonds as a kind of an invoice correlation to the garpy stuff I like to own. In a drawdown, in a broad market drawdown, I believe my portfolio probably at least a good chunk of them will sink. and if it's a deflationary downturn, I believe the I shares, you know, basically the 20 plus year treasury bonds, long term bonds, you know, not 10 year would be somewhat like this. But I believe the price will probably go up and you'll get paid a good yield today of about 5% or higher, a little above 5%.

I don't think there's much pain left because, okay, past five years, they got cut in half. The price got cut in half and there's, you're just getting a little bit of yield there, especially in your cost basis when you bought five years ago was like 2%. And it's pretty ugly. I was talking about this with some people in the substack chat this week. I think anything that like, okay, if there's another 50% drawdown in TLT or long-term bonds,

I don't think that's possible outside of Armageddon. It's just not financially possible. for the United States and everything else related. So unless you think everything's going, but the United States is going to collapse, maybe you do. But I don't, I don't see how that,

this happens. And the Treasury is going to buy back. I like TLT here. I like TLT here. I'm not calling the bottom, but I think it's pretty damn near. Especially the AI boom is showing cracks. Because that's part of what's driving up yields.

Three years from now, do you think the 10-year treasury rate will be above or below 5%? 10-year? Yeah. Wait, five years from now. Three. Three below. Below. Okay, we're seeing temporary inflation from fuel prices, which is getting solved from North and South with American resources.

So the Middle East matters much, much less. But that's going to take some time to get online. Of course, Brazil. they're not a nice player. They like to be friends with everyone. So who knows how their production will be, but they produce a lot of oil barrels per day. You're also seeing the AI boom

take a lot of the electric power demand. I think that is going to normalize and that tailwind for inflation is going to go away. If you look at core CPI, it's heading back to 2%. So I think rates will be slightly lower, but 5% that's not overly

prohibitive as a cost of capital for an economy. Like someone told me I think it was on substack. Someone was like, oh, if something Euro-German bonds go to 3.3% and it was at, you know,

like what, I don't know, some complaint there. And I was just thinking, if you can't run an economy to 3.3% cost of capital, you don't deserve to be a country. Like, that can't be your hurdle rate to investment.

Yeah, I mean, we've gotten here as a country. We've gotten this far. And the average treasury rate's been above 5% throughout most of our history. I know it should come. You know, there's been a long-term trend downwards. Yeah. Aging population, I think, is deflationary as well. Right?

Yeah. Yeah. So I leaned or down, but I also think it's not necessarily a bet that bonds are going to be a positive performer. It's more the fact that in a stock, a bear market, where most of the time is deflationary. Remember, 2022 is inflationary. That's kind of the exception towards the rule. Most of the time, your bonds will be a nice hedge there.

And I am hoping that, okay, you get that yield for the time being. TLT is at 81. Let's say it jumps to 120, something like that in a deflationary bust. That is liquidity I can access in a downturn to buy high quality. talks without selling a bunch of equities. It's a nice way to, I think, have balanced performance through the market cycle. But would you put a giant portion of your portfolio into this? No, I don't think so.

Okay, let's shift to some hard-hitting topics. Katie Perry recently performed at Dreamforce today. I'm going to sign up for a CRM product now. Is this? That's great. Does this change the buying dynamics at enterprises? The, yeah, I've only kept up. with the headlines.

From the looks of it, it's a star-studied cast. Jetson Huang. Of course. Jensen was at the All-In Summit. I'm surprised you. We didn't get the invite. Where was our invite to the All-In Summit?

He has been... He's a jet setter. He's given me some red flags, and I like Jensen Huang, but he's given me some red flags. He's a pun... Okay. I listened to him on the Rogan podcast,

because I wanted to see how he talked. to us, the everyday folk, the broad, I guess mostly men, in America. And it was a little bumpy. It was a little bumpy.

That's who we is. That's who we is. He promises stuff. But he also delivers. Yeah. Yeah, yeah. The, Jim Kramer was in attendance

at Dreamforce as well. Katie Perry and Jim Kramer. Where are our invites? Where are invites to either Dreamforce and the All-In Summit? Come on. Yeah. Uh, no, in, in all seriousness, I did see this headline.

I think it's kind of interesting. Uh, slightly political news, but not, not the part I care about as much. Prime Minister Mark Carney said Tuesday, he's the Canadian prime minister, he wants private investors to take over operations at Canada's four largest airports in Toronto, Montreal, Calgary, and Vancouver. Speaking at a government-led investment summit in Toronto, he said the policy change, which would maintain the federal government's ownership over airport land and assets would allow Ottawa to shift spending on major airports operating costs towards smaller regional airports. That, he said, could reduce traveler costs at those destinations.

Under this model, investors could manage airports for set lease periods while regulation and oversight would remain with Transport Canada. I love it. I love it. These countries seem to do this. They're like, we're in a little pinch here. We need a little funds. why don't we just kind of reverse mortgage our airport assets and sell up to some people? Yeah. Yeah, no kidding.

Would you be at what price would you be an owner of the, I don't know if they'd all be separately traded entities or not, but let's say the Toronto airport at what price are you an owner? I'd have to look at traffic numbers. I'm guessing giving Canada's birth rate, I wouldn't be the largest fan. And the fact that the economic growth has been fairly stagnant, but at the right price, yeah. Like, okay, I'd honestly want it at a lower price, though, than the Mexican airports, because I think that has a larger growth engine. It's not like, all right, Mexico is not a developed economy.

It has a chance to take that path, similar to Poland, as we outlined a lot in the show. But Canada has already a developed economy. That means that you already have a lot of the disposable income going to travel. But I want more airport assets trading on the stock market. They don't know more opportunities to buy. Like, for example, I'd assume it's going to get trade like the New Zealand one, which is like a bond. If you were, if you, Brett Schaefer and Chichet Stocks were to launch any ETF, would it be the Global Airport ETF? Yeah, but I'd say we've got to give our guests from this week, Ian Bzek, the nod there to launch that.

Sure. Maybe. Yeah, it's a good point. Airports, maybe. They're good assets. I mean, they are good business. Yeah, they are exceptional assets. All right. Let's talk about the AI whistleblower, because this was kind of the biggest news. And frankly, some of the reactions were some of the funniest talking points of the week. Jacob Coxon, which I might be mispronouncing that last time, a former researcher at both OpenAI and Anthropic resigned and issued a viral warning estimating a 10% chance of AI causing human extinction within the next decade.

He publicly declared that Frontier Labs are racing towards self-improving super-intelligence and gambling with our lives. When's the biopic? Like, this guy dislikes attention. Come on. Yeah. Okay. I didn't even read this.

And I know. I shouldn't talk about it if I didn't read it. I fade this instantly. Yeah. If they actually thought. they would cause humans to go extinct, they would shut everything down. Everything.

Yeah, go touch grass. Go touch grass. In a surprising shift, top tech CEOs agreed on the need to decelerate. This is sort of in response to this. Dario Amode, CEO of Anthropic, published a widely discussed essay

explicitly calling for a slowdown in the pacing of AI capabilities. Tech figures like Sam Altman, Elon Musk and executives at Google and Microsoft have expressed alignment on the necessity of pacing frontier development. I think Google has been pacing for a long time time time. And I don't want to swear, has been garbage for the last year. It's getting worse and worse and worse. I'll mention I have an AI bot that I've tried out instinct.

That's quite good. I used it to actually test and buy a train ticket. Small train ticket. It actually did it for me. You know, it has my card information. But Ryan mentioned that it's like a one or small person team. Like, how are they making something better than Google? I do not understand.

But back to the topic of hand, Ryan, I think they just want an excuse to slow spending, right? Because these are all just cash burning machines. Yeah, this whole thing doesn't make sense to me. Thank you, co-pilot for slowing your innovation. I think people were getting worried there that Microsoft co-pilot was innovating too fast. The, a couple things don't make sense to me about this. One, it feels self-aggrandizing like, oh, no, we made tech too good. We're going to kill all humans.

By the way, raising an IPO. If you're interested, you know, looking to raise at a trillion dollar valuation. Yeah. The other part here is like, are you really going to stop? Are you really going to slow down? Like, you realize that. other companies not everyone's just going to agree to stop innovating like that's not a realistic possibility like globally that that's not going to happen yeah let me uh relay this to the everyday man

it reminds me of ah this is like 10 years ago in college football this sounds like a weird analogy but the as what actually happened the big 10 in the SEC were taking a lot of power so the pack 12 big 12 and acc made an alliance that they would help each other and invest in each other's conferences, play each other, and kind of slowed down the big money going into the game. Guess what? Didn't do anything. It was just, we're all an alliance. And yeah, whoever is the most money wins.

It's like, it's the same thing. It's like you're halfway into a marathon. And then the leader says, we should all walk from here. It's like, this isn't, I think it's unrealistic. it feels like sometimes they think again a little self-aggrandizing

and then every tech company has to like chime in which is just too funny yeah that's true our opinions on this what are your thoughts what are your thoughts I can't wait for analysts

to ask this on conference calls for McDonald's Zuckerberg came out today and he's like yeah of course which is slightly ironic but he's like, you guys weren't taking security into consideration before. He learned his lesson.

Yeah, he learned his lesson. Okay, two things. One, tinfoil hat on. I think they may, if I was going to be a little conspiracy theorist here, I would say that you're purposely using this as an excuse because they know their business models don't work. Second, I think these two companies specifically, Open AI and Anthropic, probably SpaceX as well, given we know that Musk seems to just operate kind of on a whim

on whatever the day is. They operate like startups with 10 employees and they are not anymore. They're like all the way to being big tech companies and they just, yeah, look, you got to get a little boring like alphabet and meta, a little bureaucracy. It's just the way it goes.

Like you got to be slow with developing these things. They announce something every day. And it's like, sure, yeah, we need to make sure the cybersecurity strong. All right. Duh. Yeah. Yeah.

Cybersecurity is always important. Yeah. All right. Yeah. No hot takes on us on whether I need to slow down or speed up. I'm slowing down. I will commit today to slowing down my development of artificial superintelligence. That's good.

Yeah. Do we want to move to other hard-hitting topics? The real headlines, Oscar Health's Investor Relations Day? sort of a small cap of the week kind of I think it may have been Not anymore, not anymore Ryan $10 billion market cap It's been doing well

Why don't we We'll save the Oscar Health one If we have time And I haven't watched it So maybe we can just hit it next week Well let's look at We had people asking It was a great listener question

Are compiling all the small cap of the weeks In history You don't have one this week But we'll have some of the future I did it in Google Sheets and I used it as a test to see if the Gemini integration can make these.

Turns out Gemini can't even look at its own Google Drive access. I had to copy all of the documents to Gemini. It's like a hundred or so, so not too long. And then it totally messed things out. It took probably as long as I would have taken for me to do this myself. I look at that and think, AGI. I'll be close or not. I'm not sure.

But I looked at it and I compiled. basically all the small cap of the weeks. We aren't looking at them as necessarily, oh, I'm interested in buying them now. It's more of, oh, I may be a little more interested later or something along those lines. And unsurprisingly, the portfolio IR, which is kind of taking the rate of return from the date of the podcast, is right around the long-term market average, 8.7%. The best performer on a total return basis would be, Dave. Dave stepping up. 827% here. Context Logic, aka Wish, actually 174%. Hamid manufacturing, 138%. Audio boom,

group 112% and Hape Group 100%. Hello, Cracker Robotics, and 95% is also done. Well, bad performers, Ryan. Parker Vision, Gen Restaurant, Verimobility, Owlet, Nerdy. Fredos, Peloton, a lot of losers there. Anything to learn here or is kind of fun to just keep tracking these? I don't know. I felt like I was split on most of these. Frankly, I was probably more optimistic on some of the losers in this list, which is concerning for me. The Dave, shout out to capital mindset.

They called that one, if I'm remembering correctly. hate group that was one we were actually both i believe pretty optimistic on uh our friend spencer sebelly pitched that on yep the pod evan wassar three years ago yeah devon lasar tobacco i almost also covers them pretty well uh on his invariant newsleter who we should we should have back on the show yeah i thought it was interesting but nothing crazy kind of a good good list of track though. I think it'll be easy. I'll just add, keep adding one each week we do and keep updating. I also need to update and do this for, what do we do? The year-long performance? Remember the competition we had ever won? Oh, that's right. Choices in? Maybe I won't have it pulled up, but I promise the

listeners, sometimes we're lazy on tracking things, but by the end of the year, we will have the numbers and see who won. And I guess, yeah, remember we promised a full newsletter subscription for a year. So, hey, we'll see who wins. Which business, which of the losers, the biggest losers from the small caps of the week that we've done, which are you the most surprised is on that list? And which are you the most like, yeah, I expected that to be a big loser. I'm not surprised any of these are on this list because they're small caps. can happen. They're flimsier business models, but I think the ones that interest me, Owlett, Kelly Partners Group,

um, turning point brands, maybe, that's about it. A lot of SPACs on this list. A lot of SPACs. A lot of SPACs. Wag Group, I think I kind of saw that one coming. That was the dog walking. Yeah.

Kelly Partners Group, that one kind of caught me off guard. and then I did not expect Vera mobility to be down so much. It seems like a pretty- Well, we had a bad timing. Remember, when down 70% the week after we covered it? That's right, because they lost one of the big rental car companies. Yeah, they lost a big contract. You know what's interesting?

I was doing this, and Gemini literally made up stocks for small cap of the week. It didn't tell me, it didn't have access. It just made up like, oh, you had this this week. And I was like, I don't think that's right. And I'm like, oh, yeah, I just made that up because I, thought that's what you would do. It's like, yeah? Take a guess. One out of ten thousand. Again, AGI.

We need to slow down. Yeah, I don't think it's, I don't think it's here. What about some listener questions, Ryan, unless we have any other serious? Yeah, let's take them. Okay. First one, what are, what other investing podcasts and YouTube channels do you follow and recommend?

Please also add any substacks or newsletters you digitally read or recommend or specific analyst. I will go first. We have our friends. Full disclosure. We do advertising partnership with the Motley Fool. That's not like a huge disclosure or anything or conflict of interest. But I will mention Motley Fool hidden gems for daily news,

especially for an individual investor, just getting into things. You don't like kind of the nitty-gritty of the deep topics. There's a lot of news coverage to say, like the hottest news from the day. Also investing unscripted. Jason and Jeff, I've been listening to them even more lately, which has been great. I've been loving some of their episodes. Other ones, the journal is nice for news, acquired. They just came out with a Home Depot one.

They had a nice fact, too. Since their IPO, best performing stock in the world, total return, 1981 to today. Wow. Yeah, pretty good. Do you have any other podcasts or YouTube, Ryan? A couple others that A ditto to most of the ones you listed there The other ones that I listen to sort of

Occasionally, it's really based on the company, would be, I like business breakdowns from the Colossus podcast group. That's Oshadish's podcast group where they just have good analysts on. And usually it'll be sort of ticker search and help with my research for episodes. And then I like the guys over at the intrinsic value podcast as well. I don't listen to that one. I'll have to add that.

They're part of the Investors podcast network. Similar format to us, stock research, basically. You saying they stole us? Stoll our idea, right? We should have patented stock research in video and podcast formats. The, yeah, the newsletters. I'll just rip through.

A lot of our guests. Honestly. We love getting guests that have newsletters we like. The newsletters I read the most, TSOH investing, Ian's inside a corner. I read Travis's, which is like, I think it's asymmetric investing. Buyback capital. Buyback capital, mostly borrowed ideas is good. And all these have usually some free, some paid or are all free. What others?

Gosh, I'm going to be. Best anchor stocks, Leandro that just came on. Drew Cohn, who's going to be on later. We just recorded with him earlier today. Tons of the ones that we look at. And yeah, look, again, if you're looking for introductory stuff, you're like a beginner. No better we're placing the Molly Fool for all that type of stuff.

They have like a newsletter as well for news for the day. If you're just getting into things, that's how really Ryan and I got into investing kind of the basics there. I also mentioned value after hours. I'm listening to them again. I think with a lot of podcasts. I go through phases. Yeah, you go, you phase in and out. I know people probably do this with us.

We talk about a lot of the similar things. We try to freshen it up every year. But we know for a few months, you might not listen, and you might get back in with us. Yeah, that's better. I hope people like it. We'll probably talk more on the substack chat because it's hard to look,

remember everything live. All right, other ones. How are you spending your Trump dividend, Brett? Yeah. Roth IRA deposit. I don't know. Yeah. Can we talk about how outrageous that is, to be honest?

Yeah, that is. I mean, my God. What is? What have we come here? There have been like four headlines in the last two weeks that 20 years ago would have been the news of the year. Yeah, that's true. It's just so, we're so desensitized to it. Let's talk this one, though.

you guys recently labeled LVMH as a falling knife stock, true, we did, which much to my portfolio's displeasure, I agree with, he says, Bloomberg reported today that they are set to fall out of the top 10 European companies by market cap. Is there any price at which you think it could become an interesting long-term play? They obviously still have an impressive brand portfolio, but has over supply been detrimental. Well, still think. that it's nice that Tiffany's is getting destroyed because of the lab-grown diamond market. We love that as men in the world. I guess in the Western world, the diamond rings are everywhere.

Yeah, diamond prices are going down. I think that that's not a large part of their business. I mean, what do the numbers even look like? I kind of just go, you know, you see headlines. Luxury stocks are kind of struggling. I always ask why. But in preparation, I did look up the earnings ratio is at 19, I'm trailing to P.E. Ford, P.E. of 17, EV to EBDA of 9.3.

I'm not going to call my shot, but I think this is finally time where you go. Yeah, I think forward returns can be solid here. If you still trust in that management team, there's been some, like, a little worrisome on the, what do you call it? The succession. They don't want it to turn into the TV show, and there's a little bit of that going on. I think it got tossed into the compounder group

because it was doing so well leading up to COVID and post-stimulus checks. Luxury boom. But it has always been in the too hard pile for me. It still is a peril, like a big chunk of, the portfolio is still apparel. Yeah, but I don't know.

You can't put a price on a dream, all right? He's going to spend $500 million in a Louis Vuitton store in Santa Monica or wherever. Yeah. You can't put a price. Come on. That'll get you to buy. You can't put a price on a dream. Well, they are.

And it's a lot. And it's expensive. I'm sorry to look at the, okay. I mean, it's, it's, it is apparel and it is physical. retail as well. Because it's Omni-Channel, which to me, like, both of those belong in the too hard pile. And especially, like, some retail businesses, like Ulta beauty, I like cosmetics. I think they're pretty durable and people want them in person.

They want to test fragrances or whatever. But, like, accessories and clothing, that is something that where physical footprint can become a little bit of baggage. Yeah, somewhat, maybe. I've been trying to look at this IRP team page and just give me quarterly results. I mean, my God, I'm trying to look at whether revenue growth is. This is the single, big as fiscal ad plug is get rid of the European investor relations pages. Yeah, let's see.

It seems okay. total revenue up 2% on organic, organically in the first half of 2026. He'd probably expect them to grow a little faster than inflation. So you have this low price, maybe they buy back, a little dividend,

forward returns I think could be solid. Let me put it this way. LVMH at 15 times earnings, 19 times earnings, or Hermes at 30, 35 times earnings. I like it. Yeah, I like Hermes at 30 a little bit more.

We had a question here about the S-tier type companies like Hermes. I think with those, okay, you have, there's like a balance between your expected IRA and how likely you think that IRA is achievable for one like Hermes. You can kind of pencil in, all right, I think my explanations here, or my analysis is going to be pretty darn close to right. Nothing's 100% but I think you're pretty confident. So you can kind of say, all right, I don't need any extra juice on there to make up for the risk. Something like LVMH, maybe a little bit more.

Something that's riskier, that's a small cap. You want really, really strong IRAs because or expected forward returns because the likelihood that it happens isn't as high. So that's kind of how I look at those S-tier companies. Yeah, I don't usually, and this can't change, I don't usually invest in some of those S-tier companies, which is may if you're looking at my returns I'm good in the last three years hey you've outperformed

you've outperformed the last three years from those like the S tier has not done well yeah I guess that's a good point the S tiers are great because they are predictable above all else people are willing to pay a premium because the growth is extremely predictable like Costco

for example like inflation plus two or inflation plus one whatever that's about what you're going to get in terms of top pipeline growth. The, that to me is not that exciting. And usually when a company is grouped into the S tier category, the story has already been told.

It's already been written. It's like they are looked at it as a business case study. We want future S tiers. I want emerging modes. There we go. Yeah. You want something where the business quality is like accelerating and, and. Generally, for me, that falls into smaller companies where there's a lot of debate around the quality, and I see it as higher quality than someone else.

Okay. We're at the hour. We're at the hour, but we have some bubble watch I want to look at. There was Open Door has been crashing, shockingly. Someone said, I'm curious your thoughts. Open AI goes public. Open Door is going to rise because of the ticker. What do you think?

Nice little... That's honestly not a bad thesis. That's probably a better thesis than anything fundamental for Open Door. Yeah. I'm not short Open Door, but if I would, I would cover going... If I was, I would cover going to the IPO.

All right, this is one... I will say, I am psychologically short. I can't stand that VC that's involved. Sorry. Yeah, it's tough. All right, I got a headline. Yeah, we'll go quick here, and we're at an hour. Leopold Ashen Brenner,

situational awareness is active in the options market again. Sources say, this is CNBC. His firm, situational awareness, has been buying options in positions, including AMD, Bloom Energy, CoreWeave, Scott S.K. I mean, Sandus, the Round Hill Memory ETF. Call options, Ryan. I guess you can't, unless you use leverage to buy your call options. I don't know if that's even possible.

I guess you technically can't go on margin here. but yeah this guy just can't quit he's got those Claude proceeds and he needs to put him somewhere Situational aware

alright I'm going to share this one on the screen for anyone this is Aunt Kathy you know Aunt Kathy Ryan Kathy Wood we still talk about her huh

well let's look at this and it's a very viral tweet 1.3 million views. She says, each starship launch could generate $1 billion in revenue. Elon is aiming for 10,000 flights

per year or $10 trillion in starship revenues by 2030. If Space X achieves this goal, its $1.75 trillion appeal would be considered in hindsight deep value. And Musk, as you can see here, which is the chairing on top,

he responds, not impossible. It's impossible. They haven't got one starship flight to work. Are you kidding? 10,000? They do like 100 a year of the Falcon 9. My favorite thing about this and the reason why it works when pandering to her audience is the numbers are perfectly round. One billion per launch, 10,000 launches, 10 trillion in revenue.

Boom. That's a good story. A story you can tell. Yeah, this is. We're back. You know what's crazy? For Elon, that's disingenuous. Yes.

He is... Maybe it is not literally impossible, but it's about as close as you can get. For Kathy, I think she might believe it. I know. I know. Which is a little concerning. Aunt Kathy.

Should we timestamp this? See where we're at in 2030? Starship launches? Yeah, Gemini. load it up, do it for me. Contact me in 2030. Yeah. Yeah, we'll see.

We'll see. We'll see. It feels just like 2020, 2020, 2021 again. Right? Gathy's back to our antics. We are, yeah. The bubble is humming at this moment. I think that's going to do it.

Thank you. Everyone for tuning in. Thank you for all the questions in the chat. We want to remind listeners that Brett and I are not financial advisors. Anything we say or discuss here on Chit Chat Stocks is not a formal advice. or a recommendation. We may buy, sell, or hold any of the securities discussed on this podcast. Thank you all again. We'll see you next time.