Chit Chat Stocks - Our 6 Favorite Growth Stocks Today; Soaring Gold And Silver; Taiwan Semi's Accelerating AI Growth

Episode Date: October 17, 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: (00:00) Introduction (02:02) Earnings Season Insights (05:49) Taiwan Semiconductor's Performance (11:45) Growth Stock Discussion Begins (18:02) Top Growth Stocks (41:41) Cash Levels and Market Sentiment (43:31) Interactive Brokers: A High-Margin Business (48:07) Gold and Silver: Trends and Considerations (53:09) JP Morgan's Strategic Investments (01:00:38) Bubble Watch: Fermi and Energy Stocks (01:03:01) Analyzing Ferrari's Growth Potential ***************************************************** 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.  ********************************************************************* 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

Welcome to Chit Chat Stocks, the podcast that helps you discover your next great investment. I am your host, Ryan Henderson, and I am joined as always by the one and only Brett Schaefer. This is our weekly Power Hour episode. We're on Investment Power Hour number 183. We've been doing this for three and a half years now, roughly, and people seem to love it. We do these shows live on YouTube on Thursdays at 5 p.m. Eastern time. If you want to ask us any questions, head on over to YouTube, look up Chitchat Stocks, and feel free to post in the comments as we are doing these shows. But on these episodes, we talk all things financial markets. Earnings season is back. It's that time of the quarter again. We've got Interactive

Brokers, ASML, Taiwan Semiconductor, trying to think of some other names, Charles Schwab, which had an interesting anecdote, anecdata, I should say, that we should talk about. Might be bubble talk for you and then we're also going to be doing our six favorite growth stocks for today going through alternating between brett and i and we've got plenty to discuss there without further ado welcome in brett how are you today well markets are down so my shorts are working today, which is not a bad feeling after it's been a tough month or so in that category. But I went to a baseball game last night where my team lost by 10 in the playoffs. So feeling a little down about that. But I am very excited about earnings season. I have a little bubble

watch for people and also a little talk on gold, silver and strategic investments by JP Morgan. that I think people will be excited about. If you've seen the charts of gold or silver, I think anyone that has invested in that is quite happy. But first, Ryan, what are we going to talk about? Little TSMC earnings? I think that feels like a great one to kick off earnings season with.

Yeah, let's do Taiwan Semiconductor, which had some interesting call-outs during the conference call. Maybe not call-outs, might be the wrong word, but it's always funny listening to their conference calls because it moves markets a bit and has huge signal and implications for other businesses. But the management teams are so like, that's not their intention. They're not trying to be promotional, but they'll casually mention insane statistics. So we'll talk about that. And then

maybe we can get into the meat and potatoes with our favorite growth stocks as well. But let's start with Taiwan Semiconductor. In US dollar terms, they grew revenue 41% compared to a year ago, which is pretty astounding given their size and scale and already being sort of the biggest player in the fab market. But $33.1 billion in revenue, they added $3 billion in revenue over the last quarter, although there's probably some seasonality in that business. So quarter over quarter comparisons aren't always perfect. But as we are moving into a time period where AI infrastructure spending is growing so quickly, I think these sequential and quarter over quarter changes are more important to pay attention to. Anyways, this one surprised me. They grew gross margins from last year, 57.8% to 59.5%. They themselves at the top under their guidance range was like 57% gross margins. Some of that might have been due to currency translations. So that might have helped because if you look at like their Taiwanese reported revenue growth, it was like 31% and their US revenue growth was like 40%. So that was probably helpful. Pricing power, Ryan. Do you want to hear some interesting – I think the listeners would like this too.

Some interesting facts. ASML operating margin, which is a supplier for TSMC, 35% operating margin. probably could go higher over the long term since they're investing a lot for growth. So 35% operating margin. If you look at TSMC itself, they have 50% operating margin. And then if you look at NVIDIA,

which TSMC is a supplier for, NVIDIA is a customer of TSMC. I believe they have over 50% operating margin. So you have three layers in the chain. Maybe we can add an AWS, 35% as well. So 35%, 50%, 50%, 35%, it's quite the lucrative industry, semiconductors and AI computing and cloud computing. Yeah, and I think you could argue there's pricing power at every stage there of that chain, maybe less so on the cloud side. Ask me in 2028, maybe.

2025, there is for sure. I think certainly for ASML and Taiwan Semiconductor, but NVIDIA as well at the moment. Anyways, let's keep going here. So 60% of their revenue now comes from their most advanced nodes. So five nanometer and lower. That's really the five nanometer and the three nanometer. But on top of that, I thought this was an interesting stat. I guess it was probably baked in.

People probably already saw it coming, but they're delivering more wafer shipments than they ever have. So not only are they delivering their most advanced node, but they're delivering more more of them than they ever have this is the first this is the largest wafer shipment quarter that they've in their history from at least going back 10 years so this is pricing power advanced chips increased capacity or productivity i should say and increased capacity this feels like quite the recipe for success for a taiwan semiconductor and i thought this quote from the conference call was interesting. So a quarter ago, they said that they thought they could grow their AI accelerator

revenue, which is quickly becoming the biggest part of their business. They thought they could grow it in the mid 40% annual growth rate range between 2024 and 2029. We talked about that here on the show and it was like, I thought that was insane. First of all, I was thinking, how do you have that much visibility five years out which maybe they do maybe they they book a lot of stuff like multiple years out or they contract it but the other part that threw me off is is that they are this is already a massive business for them so mid 40 percent cagger is is truly astounding well this quarter someone asked do you still believe that and they said so far it looks like we're going to be doing a little bit better than that uh so they're like

without saying it they kind of raised to that guidance and i just and then on top of it they're non-ai end markets because people forget that semiconductors if you stripped out ai is kind of in a recession it's still in a bit of a down cycle they they're saying that they're seeing recovery from their non-ai end markets as well it's funny listening to taiwan semiconductors management team because they're very like matter of fact not trying to be promotional not trying to be braggy like you might see with some other companies but that's sort of how it comes off they're like yeah actually we think we'll grow you know more than 40 annually for the next five years and yes we're already the biggest business in the world or biggest foundry

in the world so i don't see aside from the geopolitical risk which obviously that's the one that everyone kind of points at i don't see how this doesn't beat the market if they come anywhere near those guidance metrics they've said yeah well it's that's that's you just said it but it's they don't come close to that guidance metrics this isn't a management team that's like oh, I'm just going to throw out that guidance to bump the stock or be as promotional as possible. That's never been the culture at TSMC. Could you, and I guess if this happens, we talk about this on pretty much every show, but could you imagine in four years the AI accelerator demand falling off a cliff?

I mean, it's possible, right? and falling off a cliff i don't yeah i would be very surprised why i mean they're they're spending i've seen data out there that compared to the telecom bubble they're spending four times as much ahead of revenue as telecom was spending ahead of revenue and they're doing the same sort of circular deal so am i saying that's going to happen No, but is it possible? Oh, it's 100% possible. On the other hand, this is a fantastic business.

We have a comment here. I agree totally with this. I watched ASML, or excuse me, TSMC dominate for years, and I turned my nose up at a PE of 20 a couple of years ago. I'm kind of in the same boat. Probably should have just went fantastic business, 15 times earnings. Just add this one. I mean, it's almost a monopoly at this point.

Yeah, yeah. Huge moat, obviously. I don't know. I honestly could see AI demand and specifically 5 nanometer, 3 nanometer and anything below that they iterate on, improve on, innovate on. all those nodes i could see there being a lot taiwan semiconductor i could see them shipping a lot more volume of those nodes in four years sure yeah it's but when you say i cannot envision any scenario that this underperforms the market i'm not i'm not saying that uh they're well though i think those words may have oh listeners if they hit if they hit those metrics sure sure okay that's a good clarifier yeah i guess i can't envision a scenario which includes some geopolitical risk but if they hit those metrics it's hard to envision a scenario where this i mean that would be them trading at like five times earnings or something like that in for the stock to not move

well we're at 33 times earnings right now yeah i mean i think if they compound revenue 40 percent over the next four or five years the earnings multiple is going to come down pretty quick i imagine yeah but not i mean well it'll be 10 not not five if we're doing some math in our heads here it's still a great business would what i buy today no i don't think so but kudos to anyone that Saw the opportunity 2022, early 2023, and knew that this was a wide moat business, widening moat business, and really has a long runway to grow, even though the industry is cyclical, but sees growing demand over the long term. yeah i will this is one of those i'm actually i've been a taiwan semiconductor shareholder for i think like six months now i honestly don't even know how it's done but it's one of those companies it's just a tracker position it's done well has it yes it has look at the charts like

the gold chart i know it's just it's such a small position that i don't really notice it in my portfolio the but there's companies that i own where maybe it's just i feel like a share less i don't it's hard to describe i don't feel like talking about it as much because i'm not as knowledgeable of a shareholder as a lot of the other shareholders i imagine but it was almost like you read a great article about the company you read a great write-up and it's like sometimes i just take a little tracker position which i think is what i did six months ago and i'm trying to kind of get there by reading the conference calls and get a better understanding and maybe it's not that hard maybe it's just they're really good at manufacturing these things

these ones don't don't overthink it monopoly boom that's it that's it you just gotta i i feel like the key things is just to understand you don't want to get caught up in the peak of a cycle right where their trailing earnings ratio is 33 and we're at 50 operating margins so if they see a little bit of pricing pressure which could happen if demand growth in ai kind of slows down you might be buying today at a very expensive multiple but besides that i feel like understanding the wide moat nature of the business is it's something that's it's not not too bad if if uh you don't try to go well how do i say it hedge fund analyst looking at satellite data trying to understand all the intricacies of the factory and the cost of capital for the arizona build out

these are things you don't need to worry about do you think it truly doesn't matter when you bought it yeah no it truly doesn't matter the but like there's companies we're going to talk about some of the companies today i imagine on our favorite growth stocks but there's companies where it feels like it's an idea that i found or it's unique there's not as many shareholders and i feel like i like talking about it whereas with taiwan semiconductor it's like i'm kind of just along for the ride i don't need to be a vocal shareholder it doesn't matter you're waiting for some other people to yeah it's it's one where you can outsource a little bit to some of those sharp analysts out there uh last question on tsmc simon asked given today's earnings what market cap would

you buy TSMC at? I think I wouldn't necessarily frame it as what market cap I would buy, but maybe what multiple forward earnings I would buy versus maybe a normalized operating margin for a margin of safety where I would worry that their profit margin will come down when demand normalizes and you don't see pricing power across the industry, especially if that trickles down from Nvidia's insane pricing power that they've had the last few years. So maybe normalized to 40 to 50, 40 to 45% operating margin and a 15 to 20 times earnings is where I would buy. And that's maybe greedy, but look, the bull market can tell you things and it can make you think 30 to 35 times earnings is cheap and it's not even for a company growing like this so that's that's how i

look at it what about you ryan yeah i think forward multiples is always sort of a better way to look at it especially if you can kind of arrive at your own forward assumptions that are maybe different than the market but market cap specifically i wouldn't measure it by it looks like they're trading at basically a 1.2 trillion dollar market cap uh i'm seeing it here in taiwan or yeah taiwan dollars uh whatever the currency is there at 37 trillion taiwanese so 1.2 roughly usd if it were more in the low 20s on a forward earnings multiple i think i'd be interesting in adding shares yeah there's still definitely a risk here okay okay we can talk about real quick just to end this sort of

discussion the you are right there is a scenario where ai accelerator demand is lower in three or four years gotta factor that in gotta factor but what what happens you lose some money i think the opportunity i think the upside is a lot higher if they are right yeah i do compound revenue at 40 for the next four or five years you're getting probably a 3x 4x on the stock maybe not yeah we have we have tyler in the chat that says low 20s on ford multiple. I agree with that, but I'm normalizing maybe long-term operating margins for margin of safety. Responding to you, Ryan, is that possible? Yes, but I'm the type of investor that I don't want to be betting on things I think are a little uncertain. I would rather have the AI. I'm

comfortable not investing in TSMC. My portfolio is fine. I'm pretty much 100% invested plus more with a couple of shorts out there and I want to find things where I can wait for TSMC to either benefit from the AI bubble or boom and maybe it's not a bubble and it does fine and maybe the stock doubles over the next five years. I'm okay with not getting exposed to that but if the bubble pops and the stock goes down 60% I can buy then and maybe it stays on the watch list forever that's okay and i don't own it but i'm not too worried about that opportunity cost when i think i have great things in my portfolio where if the bubble does pop tsmc goes down a ton trades at 10 times trough earnings something like that i think that is a much better risk reward than than buying

today yeah yeah i think that's fair and tyler you are right it is actually it's a 24 times forward earnings here so again normalize those margins a little bit that's what i'm saying maybe that's unfair or fair that's what i would do yeah maybe i just got to take another look at it because i said low 20s forward multiple without actually knowing what the forward multiple was so yes let's shift gears though top are you good to do top six growth stocks i am you know i you made the rule here, 20% revenue growth. And I had a hard time finding stuff. There's not, I couldn't find three. Actually, there were three in my portfolio, but I wanted to add a fourth because we're doing six. So in case there's any overlap and you take one of mine. Coupon, didn't make

the list. 19% year over year growth, constant currency. So just missed it. Airbnb, no. I didn't want to put interactive brokers because it's expensive and we're actually going to talk earnings later but ryan i gave away the criteria but anything else you want to say before we get started here no i was trying to think of like what the criteria should be for a true growth stock and i basically just pegged it at is the top line for the business is revenue growing by more than 20 annually year over year on the based on the last quarter yeah and i was i don't know if i was surprised maybe a little disappointed honestly when i looked at my portfolio and realized how few companies actually invest in future growth stocks we stuff like portillo's uh airbnb nintendo

stuff that's going to accelerate revenue growth right yeah in in our optimistic scenarios yeah maybe but i i realized i own a ton of companies pretty much i think i would say 60 70 of my portfolio is companies that grow the top line in the 10 to 20 range yeah you're a durable gross guy that's what i would describe you as yeah i think that's the goal for most of my investments But anyways, let me just go through a little bit more of my criteria. So typically what I care about most, more than just current revenue growth – because you can get like comps that are favorable or certain currency headwinds depending on the company you're looking at. So I don't care are they growing fast now, but can they grow the top line by 10%, 15% plus for more than five years? Because that's really, I think, where you get a lot of true mispricings is when people can't guess how long they will be able to grow at a sustainably high rate.

So that's what I typically look for. And then the other thing, best case scenario for me is when you've got a company that you think can grow 15% plus for five years or whatever, and they're turning the corner to profitability. because i i feel like i tend to see a lot of mispricings with growth stocks when people underestimate how much they can actually earn or how or underestimate the growth yeah or or underestimate the growth i mean i think i have a tough time looking at a lot of businesses and projecting unless it's a tiny company and project oh well they're going to grow 20 to 30 for the next five years that's very hard to do because that is abnormal unless you have a company like TSMC, as we talked about earlier, that just has a massive tailwind at its back and is a

monopoly. But if you can get those 20 to 30% growers, that compound interest compared to 10 to 15% can add up very quickly over a five to 10 year period. And that's kind of why we wanted to do this exercise to take a look at watch list stocks, our own portfolios and see what companies we actually own that are growing revenue at over 20% per year. So Ryan, I'll let you go first. What is your first number one favorite growth stock in your portfolio or watch list today? If you are a regular listener to Chit Chat Stocks, then you've probably heard us talk about interactive brokers. Here are four reasons that interactive brokers is better than other brokerage platforms. Number one, they've got it all. Stocks, bonds, ETFs, options, crypto, you name it. 160

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called it out in the chat. He's already guessed it. It's from Mitley. I've talked about him a lot on this podcast it's i think it makes up let me check my portfolio right now i believe this is yeah about eight and a half percent position my second largest position i'm not 12 i got you beat and really the current drawdown it used to be used to be 15 for me uh but the current drawdown has not been number two kind yeah exactly the so quick pitch on them digital they're a digital remittance mobile app that are it's fast cheap convenient and like reliable for customers to send money across borders and as the world has been continuously shifting more and more towards digital remittances instead of physical remittances remittly is capturing a lot of new

customers and those customers seem to stick around with remittly so they they're they're in the right spot. They've built out a really nice user interface, user experience. They've got great brand notoriety, great marketing, just great tailwinds at their back. And they're trying to drive down costs for customers where possible. So trying to reduce the transfer fees for customers. And over the last six years, they have grown revenue by 56% annually. And right now they're still growing revenues by more than 30% annually. So this does check the plus more than 20% revenue growth category for me. It checks that box. But the other part I like is it's just, we just talked about this. It's just now turning the corner to profitability. And it seems like a

lot of people are both underestimating how long they can sustain their growth rate and how profitable they can be i think this could be easily a double double digit operating margin business yeah at scale probably 20 plus when we think out really long term i mean there's not a ton of like it's a high gross margin business it's digital it's not super costly to run other than tech talent for the most part in marketing so i think they're in a really good position that's the one i like the most and then also convenient in this case is that it's cheap on a valuation basis if you think those estimates long term are right i know fingers crossed i like this one a lot too i i feel like you know over a decade it has 10 bagger potential which

gets me quite excited to own the stock uh let me go to my second one i'm just going to take the one that Simon also stole from me. He pretty much predicted my whole list. It is The Real Brokerage. It's a company I just did a stock research report on. So if you go in our queue or on our sub-stacking, look at the full stock research report on them. It's a comprehensive, I think probably about an hour long episode and maybe a 10 to 15 page report that you can read in maybe 15 minutes. It's a cloud-based brokerage. It's someone that is taking kind of the legacy brokerage model where you partner with real estate agents, but reducing fees, making a digital only trimming costs, you know, kind of a modern solution, digital tools are launching things like financial

services or real estate agents. Essentially, it's your software and financial tool for a real estate agent or their team. And they're growing like a weed, taking market share. I mean, if for anyone that's listening, if you're someone that is getting, I don't want to, I'm not saying this disparagingly, like caught up in the open door management transition, and you like that story, Well, they're talking about a lot of things that sound like the real brokerages model right now. So if you like Opendoor, I'd take a look at the real brokerage because they've grown their revenue from under $10 million to $1.6 billion over the last 12 months. Last 12 month revenue, 72%, 2024 revenue, over 80%, 2023 revenue, over 80% again. So growing extremely quickly.

i'm very uncertain of what the uh long-term like bottom line margins will be but i'm taking a small position in this company i think it's three to four percent of my portfolio today which again is is small for me i would add over time i'd add if the stock goes higher and the business is doing quite well i i just i think it's a good growth opportunity it's one where i think revenue can grow at a very very quick rate is it going to decel a little bit on a percentage basis yes but it's one i like the long-term growth opportunity yeah that's one of those where when i think growth stock i think something like that where it genuinely does have 10 bagger potential if things go really well for them whereas the downsides may be a little higher

than if you look at some of these mature businesses that we both own so i think that's a good one definitely definitely could be a great return if if the business performs i'm gonna skip to my second one here or do we want to go snake draft uh go ahead i hopefully you're not gonna steal mine i think it's unlikely i'm going with grab holdings this i did a full research episode on them a couple months back so if you want to go find it go ahead just look up grab or scroll through our podcast feed and you'll find it but grab holdings is a true super app in southeast asia they are the market leader in ride sharing food delivery grocery delivery even in eight different countries throughout southeast asia and they also have sort of an emerging financial

services component to the app you can say it ryan super app super i said it dirty words good good yeah it uh and we actually just had an interview i'm not going to say who but a great uh a great investor that we both admire we subscribe to his sub stack we just had an interview we had him on the show i think that episode will be coming out in the next couple weeks and he lives in singapore and he mentioned i i asked him like what do you think of grab because he said he listened to that episode and he he said anecdotally everyone i know uses it so it did seem to have yeah did seem to have some real super app uh vibes i guess but it's it's a lot like an uber and a doordash combined and one of the great things about a business model like that and you see it with

uber today you even see it with doordash is there is that embedded network effect in the business model where once you get to scale, it becomes a lot easier to grow at a high rate and at a low incremental cost. And I think Grab's in that position now. They've grown revenue at a 54% annual rate over the last four years, although it's come down a bit lately. So still growing above 20%, but starting to see some operating leverage in there as well. So yeah, Grab is my second one i gotta double check the valuation not quite as cheap i don't think on forward basis as remitly but it's one i like all right that's an interesting choice now i'll take a little intermission here say uh tyler in the comments enjoyed or says they enjoyed the yelp podcast

report says a plus for it so kudos to uh ryan he's he's very happy with the research you did uh if you're wondering where to find that that is going to be the one right before this episode if you're new to the podcast, it is a full stock research report in video and audio format. Ryan goes through the whole business model with the help, the potential opportunity and why he added it to his portfolio. So go check that one out. But let me get to my second choice. This is one I think Ryan could have on his list, but one we both like the business and I don't think own it yet. Although I could definitely see myself owning it. I actually checked before recording this. The stock is in a little bit of a drawdown. It is New Holdings, the parent company of New

Bank, a very fast-growing bank and dominant bank now in Brazil, but fast-growing in Mexico and Colombia, going to expand into new markets shortly. The pitch is really, I guess if people know SoFi, it's kind of like a SoFi for these Latin American markets. It's a digital-only bank plus other solutions for personal finance. It's just simply better than the legacy players in Brazil or Mexico, which are significantly worse than the, say, legacy players you get in the United States. Like, you know, if you look at Bank of America or Chase, they're serviceable options, but they just offer way worse interest rates, buggy solutions compared to with SoFi or an ally or what have you. NewBank has maybe even a better product and the competition is worse.

So this is why they dominate. This is why they have over 100 million users. And I forgot to check the revenue growth, or if I were to write it down, but I checked beforehand. It's definitely above 20%. I think it's 29%. So I think great business, keeps growing, really strong management team. Am I buying? I'm not sure, but it's close to the top of my watch list.

Yeah, net interest income is currently growing 22% year over year. I mean, for a bank, revenue is like kind of a tough figure. They have a lot of fees, hey. They have non-interest, you know, interest income. If you use pure revenue as a standardized version, new would not qualify. Are you sure last quarter? Because you have to include the provision for loan losses. Well, let's look at what I saw, 29%.

I'm seeing 14. All right. let's pull it up either way either way i agree this was the number three on my list as well and it's nothing like from what i can tell there isn't anything crazy unique about the business model it's just the classic innovators dilemma like online bank versus a bunch of legacy branch banks they've got a better app they have lower costs so they can offer higher savings rates They can offer credit cards without fees, all the good stuff that you get from the disruptor. And they've done a really – I mean the usage speaks for itself.

Going from 3 million customers to 114 million in less than a decade, this is a viral app and one that should be very sticky with customers and earn more revenue from them over time. So, yeah, I think this is a clear winner. And whether or not they make it on the last quarter's revenue growth figures, it doesn't matter because when you go from 3 million customers – I pulled it up. USD 29%, FX neutral 40%. Don't worry. I'm qualifying with this company to the listeners. Yeah, I was going to say we're splitting hairs.

If they've gone from 3 million customers to 114 million in seven years, I think they're a growth stock. Okay. So that was my third one. No, no. What is your third one? That was initially in my list. Do you have a sub? Well, one of them honestly could be Taiwan Semiconductor, but we just talked about them.

So I've got some honorable mentions here. Interactive brokers? they would qualify too which they just had great earnings by the way two for you monday.com although admittedly i don't know like i don't know the competitive landscape as well there apparently it's just like a better strap essentially where it's become like a very good a very very good crm and all their customers rave about the product and you see that in a lot of the attachment numbers the revenue retention rates are really strong but the other one i'm going to take i think instead i'm going to go with addion i believe they still qualify but this is one where

i have never been able to get it at the right price that i'd like to get it at there's about two days where it was it was it was down after that weird guidance reaction yeah there's a 50 percent drawdown or something like that where maybe it wasn't 50 percent but i should have taken a swing on it but it's such a good if you can really be the payments processor and be sort of that backbone it's very tough to replace for businesses especially online businesses and they have the highest uh acceptance rates or i get i forget the term that's used in the payments landscape but they were able to process successfully the most payments whereas sometimes if you get some of these other processors you see them failing to have as much success and higher

decline rates where maybe it shouldn't be happening which is huge revenue lost for any sort of merchants i'm gonna hey i'm gonna let you have this one but i just checked on fiscal last quarter de-sell, 19%. This is in euros, and the euro is appreciated, so I'm betting FX neutral. They're above 20%. Let me see what you're looking at here. Total

revenue percent change, June 2025 quarter. I'm seeing plus 19. Are we looking at the same data? I said plus 19, yeah. That's under 20, right? Oh. I thought you said minus 19 for a second. All right.

Well, I guess I was i think fx neutral they probably clear i haven't looked at the press release but yeah all right well i guess that's why it's it'll remain an honorable mention i need to i would probably need to do some more digging before i felt really compelled to add it like i need a different stock price as well but i might want to understand the business and the nuances between them and stripe but like i'm familiar with stripe it is a phenomenal platform And from what I've heard, Adyen is just as good, if not better. And it has such a high retention rate.

There might be logo churn because merchants go out of business. But if you have a great payments processor, I doubt you're going to switch. Yeah. I don't think you need to do any more research. You got it there. Ford EBITDA, which actually, I think, translates fairly well to free cash flow for Adyen. it's only 24. That's according to fiscal. EV could be, do your own definition on that, but stock's getting a little cheaper. All right, folks, before we move on,

we need to tell you where we get our financial data. Fiscal.ai. Fiscal.ai is the complete stock research platform for fundamental investors. I use the platform pretty much every single day. You'll see the charts on our podcast, and you'll see it in our newsletter. This is our one-stop shop for stock research. They've got up to 20 years of financial data on all companies globally, including company-specific segment and KPI data. That means Amazon AWS revenue, SoFi's total members, Google's paid clicks growth, and literally millions of more data points. They've also got earnings call transcripts, ownership data, company-specific research reports, and much more. if you want complete financial data at your fingertips then you need to check out fiscal

ai and if you use our link fiscal.ai slash chit chat you will get 15 off any paid plan again that is fiscal.ai slash chit chat the link will be in the show notes do you have any others or we just hit our top six i think it's all i have i have my last one i'll make it quick because we have other topics it's the northern airports in mexico they're actually growing 24 year over year revenue and i think it will accelerate once they get this new contract in there so i'll leave it at that keep that one short monopoly business we've done i did a research report on them earlier this year i think a fantastic asset and they're getting a new contract coming in that should lead to a step change in revenue growth in 2026 so yeah i did not realize they were growing that fast part of it is

there do you remember the construction revenues yeah so if you exclude construction revenues which is kind of a loophole since that's like net net net zero margin it's just the one that get they get reimbursed for i believe from the government i can't remember exactly how it goes but excluding that still 17 so good but the loophole comes from that construction boost so we broke our rules a couple times but that's all right well hey that mine's not breaking the that's the revenue yeah i guess that's true all right uh quick stat for you we're shifting gears here charles schwab get this cash as a percentage of client assets so basically how much cash they're the schwab customers are holding on in their accounts is the lowest it's been since the

great financial crisis and it's lower than the peak of the spec bubble i'm looking at your chart here which maybe you can share or else people can just look it up themselves it's a nice i think a custom one did you make it on fiscal no this is a kpi this one they do yeah so basically for anyone that wants to know it's just cash divided by their total client assets so that just means like stocks people own all the customer not necessarily equity but the assets it was 11 at the bottom in what would that be june 2021 it says right around the peak of the spec meme electric vehicle covid bubble today sorry to spoil it for you ryan i noticed your stat nine percent markets are near all-time highs and there's this is like the lowest dry powder that's been on the

sidelines from schwab which is a probably a decent barometer for u.s investors generally because they have what is robin 35 million accounts yeah probably uh there's no dry powder i mean it feels aggressive this to me of all the bubble talk that we do and all the stuff we say about valuations hitting peaks and and every other indicator that you see having just nine percent cash on the sidelines the lowest since the gfc that to me is a real indicator of maybe it's time to get a little more conservative with my portfolio i agree keep a little cash position i guess i've been doing a little shorting um on some energy companies quote energy companies they're doing a lot of theoretical energy stuff but that is a good data point i think it lines

up with what people are feeling and that's always good where you go all right i i feel like market's getting a little frothy i don't want to go on margin or anything like that i don't want to do anything extreme in a time when over the next three to four years we could see terrible market returns not saying that guaranteed to happen but that is something that could happen yeah it's a good data point okay do we want to talk interactive brokers earnings let's do it do you did you see their profit margin it is the most insane operating mart i think it's the highest operating margin i've ever seen actually outside of some like water rights licensing company in texas or something like that for an operating business it's definitely the highest 79 operating margins

this quarter yep and it's expanding how is it expanding at this level already it's scale and automation. Let's look at what the stock's doing after hours. It is down. I don't know what's going to react to tomorrow when people are listening to this. But what I will say is that this is a company I have high confidence in their long term competitive advantage. I feel like I bought at a right price in the spring today. The stock is a bit expensive, especially when you consider the potential cyclicality of earnings when they're tied to the potential bubble forming. But there are a few things I just look at every quarter to just track how the business is doing. And I honestly just go to sleep and don't even, I don't care what happens.

They're going to go, the stock will probably go down 30% if the market craters. That's fine. I'm just going to keep holding through the long term. And as they add more customers, things will be good. So what I look at is total customer accounts grew 32% to 4.1 million. Customer equity increased 40% to $758 billion. So commission revenue, trading revenue on stocks and options both grew. Net interest income increased 21% to $967 million. That may see a headwind if interest rates fall, but there's also growth in margin lending. There's also growth in total accounts. So even if there's a headwind on the net interest income or the net interest margin, the spread

they can earn or so, however you want to define it, if they grow their customer accounts, that number should grow the long-term as well. And then as Ryan mentioned, pre-tax profit margin for the quarter was 79%. That's not adjusted. So they're reported and adjusted for that one. Last quarter, a year ago, it was 67%, but they had, I think, some one-time fees of $88 million according to some legal legal matters yeah it's a fantastic business i think it's going to generate a lot of cash over the long term conservative balance sheet

that's it that's it they have for a brokerage platform that has been operating for what 40 years they have 20x their total account so since 2012 it's like this like a growth just a massive growth phase out of nowhere they've gone from like 200 000 accounts to more than 4 million it's it's one of the most under discussed growth stories i'd argue of the last decade it surprises me that most people don't talk about this as one of those wonderful compounders my friend said that they since they advertise on the show which i will say free advertisement i do use the platform you're going to hear the ad on this episode i would definitely consider switching uh my friend says the fact that we talk about it on

the show that it's an advertiser that i'm a shareholder and that i use the platform it's too uh self-reinforcing and uh but could be yeah technically yes i am talking my own book when it's an advertiser but i'm one of 4.1 million clients and a small one at that so am i impacting the business no but i'd like to see him grow and it's a great platform i'd like to see people to switch to it and even if like let's say the market tanked dropped 30 percent whatever and you had a recession maybe they'll generate 50 operating margins maybe the the the non-interest income portion would come down like the commissions and fees like you'd see less trading most likely but and it's a buying opportunity yeah this is one where if there's a recession if there's a bear

market it's just a buying opportunity for me if as long as those kpis i mentioned customer accounts client equity um and and i guess margin is is more or less determined as ryan mentioned by the market cycle a bit but if they keep growing customer accounts i'm totally fine yeah all right let's do we want to talk gold and silver we had people asking about this not a typical conversation but we're not metals guys no but people like to uh invest in these i'd say nothing wrong with it and as long as it's not your entire portfolio and they've done quite well year to date. It has been a good year, a good two to three years if you've owned gold and silver and a really good last few months. Gold is up to $4,300 an ounce. It's up 60% in the last

12 months to an all time high. Silver is up to $53. This is as of our recording on October 16th and it has a very similar looking chart. People ask why? Maybe it's fear out there of inflation acceleration. Maybe there's the dollar depreciation in there. I think that's probably part of it. I also think this is a type of market, gold and silver, that there is a lot of momentum and reflexivity. People like gold. They want to get in on the trade. It's something that you can ask anyone, oh, have you seen the price of gold? Oh, I want to get on that. It's up 50% in the last year. This is why, if you look historically, I hate to be a Debbie Downer, but precious metals have extremely quick historically blow off tops and then they collapse

not saying i'm not saying that's happening tomorrow but this is how i would look at it it that maybe helps with the base rate of the situation that's a weird way to say it that's quite that was a stupid way to say that but if you're someone i think this is maybe the smart way to look about gold. I know there's a guy out there that I think we've had on the show before. Someone is an honest account online value stock geek. People have probably seen him. He has a portfolio where it's like 25% gold, 25% stocks, 25% some other things. And when you have it like that set at a percent allocation of your portfolio, that can be helpful because in a situation like this you're going to be forced to trim back and then add to some other stuff so yeah that's kind

of how i look at it so question for you because gold i i don't think you've ever invested in gold from what i never have i don't think it's for me would you rather if you were forced to put money in one or the other would you rather own crypto let's say bitcoin or gold oh god i think um gold because i don't think it's good zero but right now that's tough because it just went up like 100 in the last 12 months the yeah yeah that's a good point the do most people buy it through like an etf structure or are they buying futures and would theoretically have like an actual claim to physical gold

some i think it's both so someone i guess i think would just buy an etf something like that i'm sure there's one out there with a very very cheap fee but there are a lot of people that like physical and you can go and sell it at places that have some decently high fees but there are a lot of people that hold hold physical gold and silver and i know some of them yeah this is definitely one of those asset classes where price drives price drives further price price narrative which drives price which drives narrative which drives price exactly yeah it's kind of an endless loop i mean that's the reflexivity portion of it the and you see people talk about it so much and it's always in the news always in the headlines people always talk about the price of gold

and fox news yeah yeah and it's like that alone and part of it is because they're it's almost like meme stocks in a way if gold had to report earnings then it might have to you know what i mean like it might have to follow fundamentals well that's what makes it great there's never earnings the only thing to analyze aside from macroeconomic conditions which is too big to it's too big of a topic i think to be like if you're a gold investor being the person that is constantly predicting the macro environment as your price for gold seems like way too that's a herculean challenge yeah it's like astrology i've never seen anyone be accurate with that but if you want it to be a part of your portfolio i have nothing wrong with

that just don't make it 100 of your portfolio would you agree and 100 of your personality don't definitely don't make don't become the person that brings it up at the dinner table yeah that's fair that's fair that's good for any topics i do that with mexican airports have you guys heard about the monopoly in monterey that they've got have you heard any news on the concession what their rate's going to be yeah that's a great that's a great topic All right. Here's something that I think is maybe more interesting for some of our listeners, probably more interesting to Ryan. It is the announcement from JP Morgan that they are going to be doing $10 billion in direct investments into U.S. strategic sectors and are going to be doing, which I assume is facilitating, financing, helping with deals, IPOs and other investments is $1.5 trillion in total help. uh which as a bank that's a large number but in reality it's not that large of a number if they're

just helping other people invest it they're going to be doing 1.5 trillion dollars in facilitation and financing for strategic um industries and this is a 10-year plan i'm going to list off well here's the broad categories supply chain and advanced manufacturing defense and aerospace energy independence and resilience and frontier and strategic technologies a lot of listeners wanted us to talk about this i'm going to list off the 27 subcategories and every if i go i'm going to go through one and you just tell me one that you're actually interested in and you think when looking at like a potential investment you would have any interest in saying all right jp morgan the government just the u.s economy in general is

investing in this category and i think i could maybe find some stocks that are interesting just to be clear they're committing to one and a half trillion in total facilitation facilitation and financing it's like business as usual i know that's that's what banks do well well they are committing they actually originally according to their press release had committed one one trillion dollars over the next 10 years that was their goal and now they're upping their goal to 1.5 trillion dollars so it's fair it's it's it's like okay this is our priority over the next 10 years this is our goal to hit this number of financing and they're going to do 10 billion dollars in direct investments so yeah the 10 billion i say whatever that's kind of a

drop in the bucket for them but we're not thinking about jp morgan let's think about the industries that they can invest in i'm gonna go through the list tell me anything you might be interested in advanced bulk materials nanomaterials microelectronics critical minerals mining and processing that's what people have been talking about a bunch with stocks like mp materials you know the the rare earth metals that have been in the news lately pharmaceuticals precursors advanced manufacturing mission critical real estate ship building autonomous mobile robots and then if we go into defense and aerospace we have command and control tech critical components spacecraft space launch unmanned systems munitions missiles and hypersonics 6g hey we graduated from

5g secure communications mesh networks and then energy independence we have nuclear grid resilience distributed energy battery storage solar and then strategic technologies cyber security psi quantum computing artificial intelligence edge computing and sensor hardware anything interest you here ryan i think one this is going to help crack on robotics i should say that i just a company i did uh i think a pod i think it was the last podcast i did on fascinating company that we did we did a show on uh sometime this year anything here catch your eye in toronto every arrival is a statement and nothing says it better than this cadillac optic was the number one selling luxury ev in canada for 2025 find your rhythm across a seamless 33 inch display and an immersive

19 speaker akg surround audio system this city demands agility and optic delivers with precision to make every drive extraordinary let's take the cadillac find out more at cadillac canada.ca luxury sales claim based on s&p global mobility canadian new vehicle total registrations for calendar year 2025 for the cadillac definition of luxury no honestly you hate deep tech so i well yeah so it's i mean on the one hand it's like yeah it makes all the sense in the world for one of the leading banks globally and in the u.s to be helping facilitate finance invest in these categories because they seem critical for american security most of them i should say but i'm not investing in any companies in any of these categories solely

on the principle that they'll have jp morgan's help yeah or the government's hell i mean a lot of listeners have asked about this it's been a big theme of like oh what's the government gonna back next which that's not how you run a nice free market economy but that's a different discussion i think one thing for me is defense in aerospace not that a lot of these stocks are cheap right now but anything connected to the supply chain or is making stuff again kraken robotics is an example for modern defense solutions, autonomous, uh, stuff, you know, military or commercial Waymo as an example, but that's under alphabet, uh, ship building, and then spacecraft space launch. I think that is a multi-decade tailwind. There's a lot of potential there. You can look

at probably a lot of niche contractors out there, not just the Lockheed Martins of the world, and there's going to be financing for these companies available. And then you can maybe find some interesting opportunities such as you know maybe not kraken robotics today but a couple years ago kraken robotics is at 50 cents now it's at almost a 10 bagger since then right yeah it is a 10 maybe very very close to a 10 bagger since then there could be some opportunities there but if we look at quantum energy nuclear ai i don't know if there's much of a the ai do they need i know it's already it's already there there's already a lot of investment

there where are you going to find any edge stuff that video needs you now they need your financing it's uh i think of everything in here the areas that i'd maybe feel the most inclined to invest are like the defense industry is is nice because it's easy to analyze and a lot of the contracts are very predictable and the businesses are run pretty well and they're fairly shareholder friendly the the rest of these feel pretty outside my circle of confidence i've always wanted to be an investor in shipbuilders and like transportation and logistics companies i don't know why i've just always thought that they the massive freight haulers shippers have a moat i i just kind of always felt like people are not dying to get a massive ship like

that and move it across the world like well there's barriers to entry yeah there's capital intensity which is quite the big barrier to entry so i've always wanted to do that but it feels like a very unpredictable industry and it seems like there's a new geopolitical crisis that hurts these companies every six months or something like that so yeah i think right now this defense tech stuff is a little bit trendy but if we go through a pullback maybe that's where you can find some opportunities who knows all right you you want to look at related to this a little another energy bubble stock i potentially found sure let's do it bubble bubble watch of the week what do you have all right this is a air quotes energy stock they seem to multiply like wildfire

um they're coming out of the woodwork it's a company called fermi just went public tickers f r m i actually run or chaired by there's a relationship to rick perry who is the old energy secretary of the united states market gap 17 billion this is what they say they do fermi america is pioneering the development of the next generation private grids that deliver highly redundant power at gigawatt scale required to create next generation artificial intelligence now that sounds great but can you guess how much revenue they have either a minuscule amount or zero they've never generated any revenue yeah sometimes you'll see like them record like a thousand dollars in revenue from some like

or they do fake revenue yeah it is amazing like whoever sold i assume the founder once the lockup's over is going to sell shares of this thing people are getting it reminds me of 2020 this is generational wealth they can earn generational wealth from these

from the sellout good well if you're willing to destroy your reputation and sell out good for you I guess if you can sleep at night this is the stuff that reminds me of the 2021-2022 SPAC bubble. On the one hand, I get frustrated and think it's not fair that these

people are building generational wealth without building value for anyone in society. But on the other side of things, if it introduces more private companies to public markets, and that's what it takes, and we have to go through these two-year bubble periods where all the crappy companies come public too, but you find a few more gems, I'm okay with that. Or just shorten to the lockup period.

Yeah, that too. Before we get out of here, people wanted us to talk Ferrari. They mentioned it two weeks in a row, so let me just go through the numbers. I know we've been kind of interested in them. Stock's in a 24% drawdown. They had their capital market state. People were asking, well, why? They're guiding for 5%

revenue growth. Unit volume is not going to grow. Let me just go through what they said quick. just before we get out of here. So active clients grew 20% since 2022. They're guiding for $2.75 billion in EBIT by 2030. The market cap after this drawdown is 75 billion euros. So that is 27 times 2030 EBIT. People were very confused that they were guiding for just 5% annual revenue growth. But I think that's because they are afraid of growing unit volume too much because they want to remain a true luxury company. I'll close things out here, Ryan.

What price would you buy Ferrari? And how do you compare it to Hermes, which is trading at 33 times trailing EBIT? Again, Ferrari is trading at 27 times 2030 EBIT. Yeah, I still don't like Ferrari here. Look, the Ferrari business model is really cool and it's very unique and it's very exclusive. And the fact that they sell cars on average for $450,000 a piece is great.

52% gross margins in the auto industry is unheard of. It's a luxury business. But there's a cap to growth. There's a cap to growth for a couple of reasons. One, they just can't grow volume. They've grown volume at, I think, 5% a year over the last five to seven years. They can't keep doing that. There aren't enough billionaires in the world.

and the more that you do grow volume the more it hurts the value of the people that are a part of that ferrari club so it eliminates some of the exclusivity so i would guess that you're gonna if it's five percent annual revenue growth it's probably all going to come from pricing and that's good that's good for durability of the long term it's good for margins too yeah but there's just a cap to growth with a business like this yep and and these items are even though it's like yeah they've got pricing power it's like an hermes bag is 10 grand 15 grand 20 grand this is a half a million dollar car some of these are two million dollar cars it's not something i think hermes can grow volume and pricing at the same time i don't know if you

can continue to see that for ferrari no i agree and i'd rather buy hermes at 33 times trailing I think it's growing faster, and it probably can grow faster. All right. That's it. We're going long. We've got some great interviews coming up on the show. We're always going to have the Power Hour. We're actually going to do a special AMA Power Hour prerecorded.

I'm going to figure out the best way to get the questions for that, but those are going to be more, hopefully, thoughtful questions from listeners, and we'll do in-depth, thoughtful responses that we prepare some notes and research for as opposed to the off-the-cuff stuff during the Power Hour. Yeah, interviews with stuff on Fairfax, India. We're going to do stuff on actually a new holdings update from someone. We're going to be doing something on the Argentinian economy and maybe stuff around what's going on there and some opportunities in Latin America and lots of other fun stuff.

So follow the show. Give us a review. Five stars, Spotify or Apple. And let's hit the disclosure and get out of here. We're not financial advisors. Anything we say on the show is not formal advice or recommendation. Ryan, I or 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 and we'll see you next week.