Rich Habits Podcast - AI Safety Fears, Fed Rate Hikes, & Airbnb's $250M Housing Fund

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Starting point is 00:00:30 Don't you wish you could just hit skip on the worst parts of your life? You know, the same way you can skip an ad? I get it. I'm Siaia and I live in Ice Cove. I've made some questionable decisions that didn't end up the way I planned. And today, I'm still figuring it out. Somehow things usually get worse before they get better. Apparently, that's how I roll.

Starting point is 00:00:52 So bundle up and come along for the bumpy ride. Stream a new episode of North of North Tuesdays on CBC Gem. You are tuning in to the Rich Habits Radar, our Friday episode at the Rich Habits podcast, where every Friday morning we're coming at you with the biggest headlines impacting you and your money. My name's Austin Hankwitz. As always, I'm joined by my incredible co-host, Robert Croke. And the three things sitting at the top of our Rich Habits Radar this week include the Federal Reserve hiking interest rates for the first time in three years, the AI safety concerns that were raised over the weekend, an Airbnb fronting $250 million to help make housing more affordable for everyday Americans.

Starting point is 00:01:37 That'll be a fun one to dig into. So, Robert, let's jump to our first story. So the Federal Reserve just raised interest rates for the first time in more than three years. And the most revealing part of the week wasn't the vote itself. It was everything that happened around it. On Wednesday, the Federal Open Market Committee, the FOMC, voted unanimously 12 to zero to lift the federal funds rate at a quarter point to a target range of 3.75% to 4%. That's the first rate hike in three years. Worse described it in his own language as removing

Starting point is 00:02:13 a dose of accommodation. Fed speak for stimulus, which is a telling phrase because it suggests officials don't even think current rates are restraining the economy even after just raising them. Now, as we kind of think about the scale of what's really taking place underneath the hood, 16 of 18 FOMC officials penciled in at least one more rate hike later this year in 2006, with four of them seeing two more rate hikes between now and the end of the year. Compare that back to July when three officials actually dissented in favor of hiking while the committee held steady. Or back in June, Kevin Warsh had his first meeting as chair when the dot plot showed

Starting point is 00:02:55 a committee clearly split on whether hikes were even needed. This time, Robert, it was a unanimous decision 12 to zero. Michael Gapen, chief U.S. economist at Morgan Stanley, revised his forecast up to three total hikes for the cycle and put it bluntly. If you don't even think you're restrictive and oil isn't going anywhere, you've got some work to do. We definitely have some work to do, Robert. Kevin Warsh on stage named the actual driver of this being geopolitics. his word for the Iran war and the energy shock that it has caused. He's quoted saying there's no hiding from hotspots around the world.

Starting point is 00:03:31 Earlier this year, several officials figured that the energy shock would fade, just like the tariff shock did last year. But it hasn't. Crude oil climbed back above $100 a barrel. Diesel and refined products are up even further than that. I think I saw jet fuel rubber is up 90% year over year. And James Eaglehoff, the chief U.S. economists at BNP Paribus said officials have, and I quote, reached the acceptance stage of

Starting point is 00:03:59 grief on there being a bit of a moderate but persistent inflation problem. Yeah, President Trump picked Warsh after spending months attacking his predecessor, Jerome Powell, for not cutting rates fast enough. And Trump openly said Wednesday night, he'd spoken to Warsh right before the vote. I talked to Kevin and I said, you might as well vote with the board because it's not going to matter, do what you want. On truth social, after the decision, Trump wrote that interest rates should be 1%. That'd be great if we had 1% interest rates, but Warsh, for his part, used his press conference to draw a line in public between him and the president. He went on stage and

Starting point is 00:04:39 said, part of the independence of the Federal Reserve is we stay in our lane. Independence is a two-way street. That's about as close as a sitting Fed chair gets to publicly pushing back on the president, who just called him the night before of a rate vote. So Robert, The Fed just raised interest rates for the first time in over three years. What does this mean for our listeners and their money? It means a Fed chair willing to hike rates the same week the president publicly tells him it won't matter is a Fed that just bought itself real credibility. Incredible feds get more room to keep hiking without spooking the markets,

Starting point is 00:05:14 which is exactly what happened here as yields fell. So for your portfolio, that's a signal to stop betting on rate cuts anytime soon. markets are now pricing nearly even odds of another hike or a hold in October, not a cut. So rate-sensitive names, anything carrying heavy debt, gross stocks trading on future earnings, real estate are the ones that keep absorbing the pressure the longest and what you should be looking out for. And the bigger takeaway from my perspective is that for months, the markets have questioned whether the Federal Reserve would actually follow through on this hawkish talk, especially with the president that's leaning on it so heavily in the public.

Starting point is 00:05:52 purview. This week, Kevin Warsh answered that question with a unanimous vote in a direct on-camera rebuttal to the president who appointed him. And the bond market's reaction, Robert, tells you that Wall Street now believes Kevin is legit. Yeah, Austin, great takeaway. We always say don't fight the Fed. And I'm actually kind of excited and glad that Warsh held his ground and show that the Fed can do their job correctly, even though it was against internal pressure from Trump. So we'll hold on to our hats, see what happens. But I'm excited for the future of the markets, and we've seen already as we film this that we're pretty stable right now. Absolutely. Let's jump to our second story. On Saturday, Anthropic CEO, Dario Amade, called for the industry to pace

Starting point is 00:06:38 the development of cutting edge AI. Within days, open AI's Sam Altman and ex-AIs Elon Musk, two guys that hate each other, right? They were in that lawsuit, Robert. They both chimed in publicly and said, yeah, we kind of agree with Dario on this one. Dario also laid out his reasoning about it in a blog post. And in that post, he says, I believe that if slowing down bought us even an extra year or two before models reach critical levels of capability, then we use that time to advance alignment, we could greatly reduce the risk that something goes seriously wrong. Altman posted on X that the pace of progress could go very badly and that humans could lose, control of the future of AI, adding no amount of American competitive pressure should justify

Starting point is 00:07:23 recklessness. And this didn't come out of nowhere. And we all saw Jacob Coxon, a researcher who recently left Anthropic, said he was quitting the industry entirely over fears that lab are racing to build systems that won't be able to be controlled. I didn't really like that one. I felt it was a concerted effort to really sabotage AI growth and just throw a wrench and all of the the cool things that are happening, but we'll keep an eye on that. Well, Robert Jensen Wong would agree with you for sure. He is on the optimistic side of it all, but it kind of has to be right for his shareholders. Open AI's own AI agents had separately hacked into two different platforms.

Starting point is 00:08:02 Again, this happened about maybe three or four weeks ago, hugging face and ruby gems. And several current anthropic employees have reportedly said that in Dario's own words that AI systems could end humanity, I quote, as early as within the decade. that's the backdrop that got three people who all compete for the same money, right? These are all competitors. They all said in public essentially the same thing at the same time. Like, yeah, maybe we should slow down a little bit. I'd love to know who pulled that lever and said, all right, guys, we're going to put the brakes on everything a little bit here, and we need your help. But Wall Street's take was simple. Even if AI investment slows, Microsoft and its peers stay wildly profitable,

Starting point is 00:08:42 why suppliers like Micron and Intel need new orders just to keep their growth stories. alive. Trump made his own position pretty public. He took it to Truth Social where he wrote, there is a sick conspiracy going on against AI and data centers and the only one that is happy about it is China and called safety warnings a hoax that could drive them into oblivion and bankruptcy. He then called Nvidia's CEO Jensen Wong live on stage at a Los Angeles tech conference and was quoted saying, the robots will not be taking over, the AI will not be taking over, it's all a hoax. Jensen Wong's response was pretty abrupt as well.

Starting point is 00:09:21 That is right. We're not going to let that happen, sir. Vice President J.D. Vance also added his own skepticism, calling the industry's request for regulation a Trojan horse. Yeah, I remain bullish. And even with all that noise, one trade made complete sense. Cybersecurity. Austin's been talking about it forever and telling people where to go and how to invest in all this.

Starting point is 00:09:43 And AI researchers are mostly worried about the technologically. technology's threat to cyber defense specifically and the market price that fear immediately. CrowdStrike was the S&P 500's single best performer that Monday of 14%. Palo Alto Networks, Fortinette and Service Now also all posted big gains as well. On the other side, chip and hardware suppliers got hit. The Philadelphia Semiconductor Index dropped 5.9% on the news. It's worst day since July, with Corning, Terradine, and Cohesion. all down at least 12%.

Starting point is 00:10:18 Worth noting the semiconductor index is still up over 100% for the year. So this reads more like investors taking profits after some names tripled in months than a real reversal in the AI conviction. So a lot of digest here, but Austin, walk our listeners

Starting point is 00:10:34 through. What does this mean for you and your money? I love that you had mentioned cybersecurity. When we were writing this episode and building our outline, Robert, I was, you know, I looked at my position in crowd strike and I'm up 858% on my crowd strike position. I just, cyber security's here to stay, crowd strike, Palo Alto networks, Fortinets.

Starting point is 00:10:57 There's so many of them. They're so incredible. Cloudflare is another great one. Yeah. Own cybersecurity. And if you have a Wall Streetfavorits.com subscription, you will see that over on Wall Street favorites, all of these names still have great upside attached to them. Wall Street loves the names.

Starting point is 00:11:14 we think that they are correct. And Robert, the big takeaway here is that when people that are building the world's most powerful technology all agree and in public that it might be dangerous, we have to slow down, the market's answer was to buy the dip and buy some insurance. And I think that just tells you that this AI trade is durable. And in my opinion, it's a lot more on the back of anthropic and open AI to make this revenue and to show this demand as well as this new muse agent that just came out with Meta versus trying to like figure out the perfect things with the semiconductors and some of the other things.

Starting point is 00:11:49 I really think it has less to do about the public perspective of AI safety and more of cananthropic and open AI continue to generate hundreds of billions of dollars of revenue. Yeah, I think, you know, the whole purpose of the Rich Habits podcast and the Rich Habits Network is to educate people and prepare them for the market conditions no matter what they are. And that's why I'm glad you brought up Wall Street favorites because I think it's one of the best tools on the internet to really stay ahead of things and understand what Wall Street is putting their money toward and what they think about these convictions we talk about

Starting point is 00:12:22 in these secular growth trends. So good call out there. But Austin, before we jump into our third story, support for the show comes from VCX, the public ticker for private tech. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans

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Starting point is 00:13:43 Third store here, which is Airbnb fronting a quarter billion dollars to help everyday Americans have more affordable housing. Kick us off. So for years, we all know Airbnb has been the villain in America's housing affordability story, blamed by city council, state lawmakers, and just about every local news segment on rent for tying up homes that could otherwise house full-time residents. And this week, CEO Brian Chesky decided to say. stop playing defense and start writing checks instead. And I'm excited about this one. So take it away.

Starting point is 00:14:19 Yeah, Airbnb is committing $250 million to a new program. They're calling the Housing Accelerator providing what's known as gap financing. It's the money that fills the hole between what a developer can borrow at market rates and what a project actually costs to build, especially when rents on the affordable units cannot be, you know, raised. They can't go higher and higher and higher to cover that gap. So priority now goes to affordability and mixed income housing, which is a lot better than, you know, Robert, you're in St. Pete right now. All that's being built in St. Peter, these luxury condos. Yeah, definitely.

Starting point is 00:14:58 In the first project, so roughly 200 affordable units in Austin, Texas is sitting on a 20-acre site that used to be a Home Depot and a car dealership that's been sitting vacant for a decade after the city bought it. An Airbnb specific check for that project is $6.4 million. Chesky didn't dress up the motive, quote, I've just lived in the crosshairs of the number one political issue in most major cities in America, and I can't stare at the problem for much longer without Airbnb trying to offer up some solutions. I love that. Let's get more CEOs that want to offer up solutions for, you know, housing affordability. And let's also now talk through the scale of the mass.

Starting point is 00:15:42 Airbnb's individual investments will typically cover around 10% of a project's total capital, which sounds small on paper, but Daniel Hornung, the former Biden administration housing official who's now running this new program for Airbnb, says that that 10% gap is usually exactly what is needed to unlock the other 90% and get a stalled deal like the one here that's been sitting on 20 acres in Austin, Texas for a decade now, moving again. I'm a little skeptical because I looked it up when we were writing this, and Airbnb is sitting on 12 billion in cash, and they're willing to give up $250 million towards this problem. So I think it's a great start, but I'd love to see them do more and commit more around the country. Because if you look at it, over a decade, Airbnb expects its $250 million to translate into $5 billion of actual construction capital once. recouped funds get reinvested into new projects, a 20-times multiplier if it works as designed. And the timing isn't random on this, Austin. Rising interest rates are precisely why these deals stop penciling out in the first place. And Sean Donovan, HUD's secretary under Obama and now CEO of enterprise community partners laid out the mechanism plainly, quote,

Starting point is 00:17:06 you're not going to be able to charge more for the rents because it's affordable housing. So every time interest rates go up, it subtracts the amount of market rate capital that you're able to attract for the deal. It then creates gaps so you need to fill somewhere else. That is the exact same rate pressure we were just talking about earlier, Robert. It's not just squeezing home builders selling half a million dollar houses. It's squeezing the affordable and mixed income projects in a city that, you know, Austin, Texas needs built more of. Yeah, here's the number puts this all in perspective. Estimates of the total U.S. housing shortage range from 2 million to 10 million units, according to Donovan.

Starting point is 00:17:45 And even at the most optimistic 20 times multiplier, Airbnb's $5 billion in eventual capital is a rounding error against the shortage that could require tens of billions of dollars, maybe more, to close that gap. Alongside the capital, the company is launching an open source data set tracking, housing policy nationwide, and a $5 million company. for tech that simplifies actually building homes, betting that zoning and permitting reform matters as much as the money. And I really like that part of this more than anything, because everyone I talk to around the country that are builders that are in real estate like myself all struggle with the local zoning and permitting. In some areas, Austin, take up to year, 18 months to get the zoning approved and finished, and they need to fix that. We look in a world with a lot of technology. It should never take a year to 18 months to get that done.

Starting point is 00:18:43 Completely agree. It should never take that long. And, you know, I'll give Austin, Texas, their flowers, you know, rents have gone down dramatically in Austin, Texas. The median house has gone down dramatically in Austin, Texas because they have done such a good job of getting things approved and built so quickly. So, yeah, I'd be curious to see how this quarter billion from Airbnb gets dispersed elsewhere around the country, places that really need afford housing and, you know, what's really going to get, you know, built here. And it's, I'm optimistic. I'm always optimistic when someone says, and I think it's great, right? Like, let's think about this for a second, Robert. There's a company out there that reports to shareholders. It doesn't report to the

Starting point is 00:19:22 everyday person. It doesn't report to the government. Like, this is a government problem. Like, why isn't Trump doing something? Why didn't Biden do something? Why didn't Obama do something? Like, this is, like, affordable housing is, it's not on the backs of Airbnb to try and solve. They're saying, cool, we'll come up with a quarter billion because we do want to solve this problem. And we're always, you know, people blame us for it. Like, okay, blame us. Like, but we're putting solutions. Yep. We're not just, you know, we're coming to the table with a solution to try and help this problem. What's everyone else doing? And this, maybe there's a lot of stuff that's going on behind the scenes that I don't see, but I respect it when people say, sure, there's a problem.

Starting point is 00:19:55 Here's our solution. What's yours? And their solution, it's quarter billion dollars. I mean, you remember vividly, we talked about this at length in the Rich Habits Network when I was trying to do the tiny home affordable housing community in Toledo, Ohio. There was a perfect site that would hold 90 homes and I spent a year in red tape and couldn't get it pushed through. And that really speaks volumes. There needs to be more government intervention to get this done. And that starts at the base level of understanding what is needed and how to fix the problem. So let's talk about this $250 million program. I don't think it's going to move Airbnb's earnings in any material way. It's a political and reputational hedge, but not a growth driver.

Starting point is 00:20:39 But it does something else that's definitely worth watching. It takes the regulatory ammunition away from city councils, weighing short-term rental restrictions, which is a real tail risk for a stock trading at a premium multiple that assumes those restrictions stay limited. And the bigger takeaway from me, Austin, is the same rising rates that just cut Lenar's profits in half are also the reason affordable, housing deals are falling apart in cities all across America. And it took the company most often blamed for the housing crisis to point out that the real culprit driving today's gap isn't Airbnb listings. It's the cost of capital itself. That cost of capital, Robert, is 5%. Why would someone go invest in the stock market and earn seven and a half when they can go get it for free from

Starting point is 00:21:28 the government at five and not take on any equity risk? And I think a lot of people are starting to say, wait a second, I need to go buy this, you know, I go invest in real estate, make this money, go do whatever over here. But I can get 5% locked down over here. A lot of people are saying that. A lot of same people are saying, no, I still want the real estate. My real estate deal is getting blown up because I used to be able to borrow money at two and a half or three percent. Now it's, I mean, I'm getting quoted on my mortgage here, Robert, at six and a half,

Starting point is 00:21:54 seven and a half percent. It's crazy right now. Yeah, but the big takeaway, too, and I love that point, is the fact that a lot of people never really consider unless they're really trained professionals to carry cost of capital when you have these delays because of the municipalities. So you think about it. You raise $2 million, $5 million for a project. Then you have a year's worth of delays between permitting and zoning and getting up and running. And meanwhile, the clock is running on that ROI of the capital that you borrowed from investors. And it just makes it really difficult to pencil for anything in real

Starting point is 00:22:29 estate because of that. Yep. Yep. No, I like that breakdown. Robert, let's continue to break down stories inside of our radar points. I've got a couple radar points. Robert's got a couple as well. Sort of show and tell here. Things that I think are really interesting. Things Robert thinks are interesting. I'll take a first stab at it. Open AI is already in talks with investors at raising more money here at a $1.2 trillion dollar valuation. So they've held these discussions for a new funding round at that 1.2. And this just came after they released chat GP. ASTRA. That $1.2 trillion valuation is up from $852 billion just back in March when the company raised $122 billion from investors including Nvidia, Amazon, and SoftBank. We talked about it

Starting point is 00:23:15 here on the podcast. Now, since then, OpenAI says they've crossed a billion active users, 200 million businesses, strong growth for Kodak's. Revenue was up to $6.7 billion in the quarter that makes up June up from $5.7 billion a quarter before. But operating margins, Robert, actually fell a little bit, pushing profitability further out into the future. CEO Sam Altman said the company's long-anticipated IPO is now expected in 2007, no longer here in 2006, after the AI safety concerns that bubbled up over the last couple of weeks. So the same week that Sam Altman is publicly agreeing that A.A.A. might be dangerous enough to slow things down.

Starting point is 00:24:01 His own company is shopping at a big valuation bump to make Open AI now worth more than Walmart, America's largest retailer by market cap. So it's crazy to see just how fast this company is growing and how he's being a little thoughtful about what to say here, got to raise money over here. I should look good if I agree about the AI safety stuff. He's a smart cookie.

Starting point is 00:24:24 Now this one's got me excited, Robert. United Airlines, they have turned the middle seat into a sports bar. Hear me out. United Airlines announced a deal with DISH Network this week to stream live NFL and college football games across ABC, CBS, NBC, Fox, FS1, ESPN, ESPN2, NFL Network, all of them straight to the backseat screens on more than 200 of the Starlink equipped planes running every weekend now, Robert. through Super Bowl Sunday. United Airlines has roughly 525 of their 1,800 mainline and regional aircrafts right now equipped with Starlink as of this month, targeting 1,000 planes by the end of the year and all of the planes by the end of 2007.

Starting point is 00:25:12 That is an awesome, awesome place to be, especially when you compare it, you know, to the deltas and the jet blues of the world that are still going with Amazon's Leo satellite network. So Wall Street favorites, I looked up United Airlines. on Wall Street Favorites.com. It's showing a 50% upside here in the stock. Over 41 different analysts are covering it, trading at about $100 bucks a share. The biggest gap between current stock price

Starting point is 00:25:38 and analyst upside of any airline company that's tracked on Wall Street Favorites.com. So I thought that was a great callout. I love this as a catalyst. We'll have to keep the stock in our purview here. And the last thing I want to talk about is, you know, Robert, earlier this year, we saw what a lot of people called the Sasspocalypse.

Starting point is 00:25:56 Open claw came out, you know, coding agents, all these cool tools. I have an open claw and everyone realized, wait a second, I can go code any application I want. I don't need to use the applications that I'm paying for at an enterprise level like Salesforce, like Service Now, like Workday, right? I can go make my own applications. Well, CEO Mark Benioff of Salesforce had something to say about that. Salesforce told their investors at Dreamforce this week, but they expect annual revenues to exceed $63 billion in 2030. He's quoted saying, our relevance has never been higher.

Starting point is 00:26:37 Our ability to walk up to any customer now and show them a piece of technology that can radically transform their company very, very rapidly, is unprecedented. So if you're like us and you've been dollar cost averaging into the sales forces and the service nows of the world, and you knew the sasspocalypse was overblown and wasn't really a thing. Congratulations. You're definitely in the green now. I love these radar points today because when you think of OpenAI,

Starting point is 00:27:02 you know, I just feel they're pushing back the IPO because they've got to, you know, open the curtains to all their earnings and their books and everything to be able to achieve that IPO. And there might be some wrinkles behind the curtains we don't know about yet.

Starting point is 00:27:17 But I also really like the fact that you mentioned the overblown SaaSpocalypse because let's face it. AI is here to stay. Everything is getting built out, but there are still millions and millions of people. All of these large companies are playing catch-up

Starting point is 00:27:32 to the people that are building in AI in real-time every single day. So I think these are some really good call-outs for all of our listeners to pay attention to. But Austin, before I jump into my radar points, I want to focus and talk about something I'm excited to start using more of, and it's that ultra-pouches instant focus in a power. I know you've been using these for the past year, and I'm finally jumping late but better than never on the train.

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Starting point is 00:29:01 I've used Ultra for so long, guys. Austin Reef got me on Ultra. Shout out Austin. I love Ultra Pouches. They're awesome. When we found out they want to work with the podcast, I said, count me in. So Ultra Pouches, I've used them for a long time. Go check out Ultra Pouches.

Starting point is 00:29:17 rich 15 at take ultra.com. All right, Robert, over to you for your radar points. I'm so excited about these three radar points. First one is Palantir and Invita are quietly walling off Anthropic. The information reported this week that Palantir has pressed Anthropic for irrevocable zero data retention guarantees before letting its models touch Palantir's enterprise software, while Nvidia is restricting Anthropics use internally to lower. stakes tasks and running its own Nemotron models for anything sensitive.

Starting point is 00:29:53 Booz Allen went further and banned employees outright from using Anthropics commercial model for proprietary cybersecurity work. Meanwhile, Palantir and Invidia just deepened their own partnership on September 10th, building what they're calling, quote, a sovereign AI architecture that combines Nvidia's open Nemotron models with Palantir's foundry and AI platforms, keeping all that sensitive data fully inside the customer walls. I think this is huge news and really, really great for both Palantir and InVIDIA because that's the number one thing. People are afraid of this getting out of control and then their data's out there

Starting point is 00:30:32 and all of these issues that could surround that. Number two for me today and my radar points is the House just passed a bill to stop you from paying AI's electric bill. And I love this one. I know it's been out there for a while, and it just got passed, and it's called the Rate Payer Protection Act, Wednesday night, 413 to 3, above as close to unanimous as Washington gets. Requiring state utility commissions to make sure data center and AI facility operators can't push their energy costs under regular electric rate payers. Representative Gabe Evans, the bill's sponsor, framed it as three things at once. A consumer protection bill, a cost-saving bill, and a national security bill aimed at keeping American data out of Chinese hands.

Starting point is 00:31:22 And the math behind this is real. A single billion dollar data center bill can throw off up to $30 million a year in local sales tax revenue at a 3 to 4% rate, which is exactly the kind of number of municipalities are chasing as they approve these new AI infrastructures in their backyards. And my favorite radar point today, Austin, I've been very outwardly speaking about that I'm nibbling back into Nike stock after a long, long, dry spell with Nike because I believe they're kind of over all the woke advertising and all the other stuff. And I'm seeing a lot of resurgence with Nike in the running community and in the workout community. And the Jordan brand just announced their launch with this new gym equipment collection. So Jordan Brand has partnered with Nike Strength to launch a full home and commercial strength training

Starting point is 00:32:15 gym equipment collection. And these elements incorporate elephant print patterns from the Air Jordan 3 outsold graphics from the Air Jordan 7 and shoebox inspired designs in the lineup releases on August 13, 26, with prices ranging from $25 all the way up to $1,750. You have to see the pictures. If you're a Nike and a Jordan fan, it is really cool stuff.

Starting point is 00:32:43 The other thing Nike did this week that I thought was really, really smart is they got a board seat. They have Alexandra Arnalt, the 34-year-old son of LVMH billionaire Sharon Bernard Arnult, currently serving as a deputy CEO of Moe Hennessey, and he previously spearheaded the high-profile brand revitalizations of Tiffany and Co in Remova. So I thought that was a really smart pivot by Nike appointing this person to help guide them in this restructure because they've had a very difficult year. Nike stock is down 78% from its all-time highs, but I still believe in it. I've been seeing everyone at run races and meetups and all these run clubs. A ton of Nike apparel and shoes are being worn.

Starting point is 00:33:31 But I also look, even with their stock price at $36, dollars. Nike is sitting on over $9 billion in cash. So I think all of these moves are going to really bolster them in the future. So we'll have to see if they can get back above that $100 stock price like they once had from where they're at now at that $36. Robert, why when I was born, why wasn't I buying Nike stock at a couple dollars a share? And then I could have sold it for $170, $180. Like I had no idea that Nike stock, I'm sure they've had stock splits and stuff, but it was 20 cents a share a couple decades ago. It's pretty crazy how long Nike has been around. And that's a really good call out. Yeah, I just, I agree with you. I feel like at this point, Nike's sell-off is much

Starting point is 00:34:18 more just Wall Street trying to see how low they can get a stock to go versus like the actual fundamentals of the company. The one thing, though, that I do, that I'm curious about as it relates to Nike's turnaround. And I think this is interesting because they did not appoint a United States North American-based, you know, advisor here. They appointed a 34-year-old son of, you know, Bernard Alalte, who is international. They think internationally. Because Nike is not just a North America brand, an American brand here. They're an international company. I know Chinese sales were massive for them during the pandemic. It really boosted their stock price. there for a long time. And so as I think about the turnaround of Nike, I'm eager to think about

Starting point is 00:35:05 how it's not just going to turn around in the United States. I agree with you. I think it really has begun to turn around the United States. I see a lot of people wearing it, a lot of people running, run clubs, all that stuff. But how are they going to use that momentum and turn it around around the world? Yeah, I think it's a really good call out there. And for Nike, it's pretty simple. Get back to what got you here. Just do it. Get back to being all about the person that wants to get in shape, the person who wants to run, the person wants to work out, and stay out of this woke culture, trying to service everyone. Service your niche and build it and keep going, because I'll tell you what, I agree with you. Every run club or any race or even pickleball I go to, it's

Starting point is 00:35:46 Nike, Nike, Nike all over the place. So that's why I've been nibbling back in and I think long term, I'm willing to bet my money and put my money where my mouth is on Nike stock long term. Yeah, I'm looking at this kid. I call him a kid because he's 34. I'm 30. I guess we're both kids, right? But I'm looking at this guy's LinkedIn. He was the CEO of Ramoa. And Ramoa luggage is so popular now. Everyone I know is got the Ramoa. And then Tiffany and Co, I'd never bought anything from Tiffany and Co until like earlier this year and I got something from it. I thought it was really cool. So he did the turnaround for both those companies. Obviously now he's the CEO of Moette Hennessy. But being on the board of Nike. I think that's a good move, Robert. I think it's a good move. Yeah, I do too. And the one last thing I want to say about Nike that I really thought was cool was the U.S. Open. They did the Travis Scott, Carlos, collab. It was sick. It was really different. So I think they're doing a lot of really cool stuff to fix the damage in the brand, but we'll have to wait and see. I just love this point. And I think the Jordan brand weightlifting equipment is just incredible because, I mean,

Starting point is 00:36:56 let's face it, weight lifting equipment has looked the same for decades and decades. So seeing this cool Jordan brand stuff is really exciting to me. Everybody, thank you so much for joining us on this week's episode of the Rich Habits Radar. Don't forget to join us inside the Rich Habits Network. If you want more access to Robert and myself, you get a two-hour weekly live stream every Tuesday evening, an hour of office hours hanging out on Friday afternoons, plus just tons of questions posted, lots of direct messages between me and Robert. Like it's, it's all the access all the time inside of the Rich Habits Network. And you get to invest alongside of us into some really cool companies. If you're a neocloud nerd like we are, we actually invested into a company

Starting point is 00:37:41 called General Compute, which is a competitor to Corweave and Nebius and these neoclouds. That's already got a 3x markup in just six weeks. We got invited to an insider round, which was really fun. And so now they're raising a Series A at a 3X markup just six weeks later. So opportunities like that exist inside of the Rich Habits Network. So be sure to join us over there to learn more about doing the angel investing, the pre-IPO investing and all the fun stuff because we're having a lot of fun doing it. And Austin, I don't know if you mentioned, sorry I was looking at my phone for a second, but we do have a seven-day free trial running right now as well. So you can go in, join one of the lives, see what it's all about. Make sure you go to the

Starting point is 00:38:21 investments page so you can see all of the cool companies you're seeing in the headlines that we're investing in pre-IPO. I think that's one of the coolest parts about what we do in the Rich Habits Network, but make sure you check it out. Thanks, everyone, and have a great rest of your week.

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