The Compound and Friends - Are We in a Bear Market?

Episode Date: March 20, 2026

On episode 234 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠���⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by Jim Lebenthal to discuss: stock market volatility, who's winning the AI race, risks and opportunities in private credit, Jim's favorite stocks, and much more! This episode is sponsored by Betterment Advisor Solutions and Janus Henderson Investors. Learn more at: https://betterment.com/advisors Learn more at https://www.janushenderson.com/ Sign up for The Compound Newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Gallagher's is going to slap tonight. You know, I went to a steakhouse last night, but I didn't eat steak. What's wrong with you? I went to Hendricks, and I got not steak. It's not really a steakhouse. I mean, did you get lamb chops or did you get like swordfish? There's a big difference. You would like, you would like Hendricks.

It's fantastic. Hendricks used to be called the George Washington Tavern, and legend has it. It's where he stayed before crossing or just the Battle of Brooklyn actually took place on Long Island. This guy, am I right? No, no. They didn't have a name for Long Island yet. It was basically, it was just like, oh, that's Brooklyn. And George Washington stayed at this tavern.

It's a historic landmark. And there's a restaurant group called the Paul Brothers on Long Island. They own the best restaurants. All the best. And they took this place over. It used to be these blue-haired old women. That's who ate at the George Washington town. I mean, I'm feeling a little dated here like you think I'm from the Revolutionary.

No, no, no. I'm just saying. I'm just saying it's kind of a cool place because. Like, I didn't actually know. Washington back in the day on the floor? You guys started together? Did the Labenthal family raise municipal bond money during the Revolutionary War?

Oh, we shared a field. We shared a real chat. That's what you got. You know what's good at, you know what's good at Hendricks? The bone marrow is an appetizer. We got the hot dogs, and never had those before.

Unreal. Not my thing. So the book is called How to Ride the Subway. Famously, this guy will not ride the subway. Donald. Do you know... Seriously? He gets mobbed by fans. Do you know I've been walking around Manhattan with a stick in my bag?

It's called a... I'm not making this up. Michael, we'll tell you that it's real. And he has one in his car. It's a tire thumper. Okay. You know what that is? Not really, but...

It's like a short baton that truck drivers thump a tire with to make sure that it's... Inflated. So on the days where I know I have to take the subway, because I have to do some impossible thing to, like, get to Tribeca, or whatever from Midtown, I will have my tire thumper in my backpack. I'm not fucking around here. So this is the essence of your book.

Every other... How to be a man of the people with a tire thumber. Every other post on my Instagram, it's either New York Post or somebody showing me a slashing... Show him. Jimmy, is this guy... Show Jimmy my stick!

Psycho. What are you laughing? Do you not want me to stay alive in New York City? You're like... Six foot three, nobody's going to mess with you. I have to tell you. I'll tell you, I was like, I stopped carrying it because I was getting upset that nobody tried me.

Like I almost wish, I almost wish somebody would. No, no, no. But all I see is people being pushed on the tracks. People being like stabbed, slashed. No, we have both stabbings and slashing in New York City. You still take the subway? Every time to go down to the chain. Do you have a stick?

I do not have a stick. I don't you see this problem? I have some rules. I'm going to get him a fire thump. I have some rules though. If you're on a subway car and somebody starts acting crazy, like I just get off. Oh, do you? Wow, it's moving.

What do you, it's too late. You're already dead. Statistically, you're finished. They're lighting people on fire on the train. They're literally setting fire to other people. It is, it's a zoo. And there's no cages. You can see the parallel to dangerous investing, right?

Yeah, here's my parallel. I already halfway moved to Florida. I'm almost one foot out of the state. Josh is auditioning for an appearance on other podcasts. All right. So if that's the parallel, the way I invest subway style, like I'm like the Black Swan investor.

Like I'm looking for the, what are those funds called? Black Swan funds. That they literally call them that. Anyway, Jimmy, how are you doing? I'm good, Mike. How are you? Josh and I can write a sequel.

It'll be how to ride in your Maybach. Yeah, seriously. Yeah. You know what my book is called? How to Nesson. ever get on a subway as long as you live by Josh Brown. You know those are your subway simmons. I know.

Josh's salt of the Mercedes. Oh, right. Let's have some fun today. When we won last? Was it a year ago? Year ago? I think it was a year ago. Thank you guys for having me on.

That was so much fun. I've really been looking forward to it. That was an awesome episode. And you know what? Today's going to be even better. We have so much that the market is so strange. Yeah. This is one of the weirdest things I've ever seen.

A good thing is you and I are on the show, at least from my perspective, enough that I know where your head is. I hope you kind of know where my head is. But it is weird. I mean, the market... You're in cash, right? I have a little bit of cash. Not yet.

But no, the index's off 5%, but every stock feels like it's just getting taken to the woodshed. I'm surprised by how many big, notable companies have a share price that's in a 15% or greater decline. Let's not do the show before the show. Come on, John. Let's go. Calpon and Friends, episode 2, 34. Whoa, whoa, whoa, stop the clock. Here's a word from our sponsor.

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Always working in perfect harmony to find the right investment opportunities, Janice Henderson investors investing in a brighter future together. visit janice henderson.com welcome to the compound and friends all opinions expressed by josh brown michael batnik and their castmates are solely their own opinions and do not reflect the opinion of redholts wealth management this podcast is for informational purposes only and should not be relied upon for any investment decisions clients of ridholt's wealth management may maintain positions in the securities discussed in this podcast 234 jimmy episode 234 it's a lot right

I'd like that for one of my stockplaces. Ladies and gentlemen, welcome to an all-new edition of the compound and friends. I'm your host, downtown Josh Brown. You like my drop? All right. With me as always my co-host, Michael Batnik. Hello, hello. This is the best investing podcast in the world.

And today, we have a returning champion, one of my buddies, one of my favorite people I've ever met on the street. He knows I feel that way. Mr. Jim Labanthal is the chief market strategist and a partner at Serity Partners. He has over 25 years of experience managing investment portfolios and is a regular contributor on CNBC. And Jim is one of my castmates for the best show on CNBC, the halftime report. Give it up for Jim Labenthal. Let's hear it.

The audience is going absolutely nuts right now. Welcome back. How have you been? Terrific. Delighted to be here. Thank you for having me back. Of course. Being on your team on the halftime report is one of the funest things.

We have made it a lot of fun. And you and I, we started when the show was taped in Jersey. Remember those days? I do. Remember getting in a black car in Midtown and riding 45 minutes across the George Washington Bridge? How many times would you say you did that? I think I did it like a thousand times. You've been doing it longer than I have.

But I've been doing this since 2013. And I think I've done something like 1,500 episodes. Holy child. I mean, you've got to be like $2,500 or something. What have I done with my life? A lot, Josh. I know, but I'm much. Be proud of yourself.

I'm proud of you. I think I'm getting, I don't know. I'm 49 years old. Josh is like Howard Stern. Every six months, he's like, how much longer? How much longer can I do this? No, kidding. We love, we love the show.

All right. Hey, I, I have positioned this opening segment as the weirdest stock market ever. There are so many things about it that we can get into. But I would just love your high-level take on what we're living through right now in the investment world? You know, I entered this year seeing the thing I say every year. Hey, it's going to be a good year, but it's going to be a volatile year. Well, guess what? This year actually is volatile. For real. For real. And a lot of different things. The risks are real. The opportunities are there. But I think the reason it feels weird is so many people just got used to,

you get a down draft, you come back quickly, like a year ago. The V-shaped recoveries. The post-liberation day. Hey, stocks are a great buy. And then we're off to the races. this is more like the market is actually digesting real stuff, Straits of Hormuz being closed, concerns about private credit, artificial intelligence, is it a bubble? Is it going to eat everybody's lunch? These are real things. By the way, I think the market will work its way through this.

I still think this is going to be a very good year, but we've got to work our way through it. There are so many things. This is the problem. Like last year, it was tariffs. Yeah. Like, I don't remember really anything else. Fed was sort of like not really that big of a factor.

Earnings were great. Quarter after quarter, upside surprises. I think the city economic surprise indicators spent most of the year trying to catch up with, you know, so, and it was year one of a presidential term. So Trump was doing a lot of pro-economy things. This year, it's like a carousel of nightmares. If we're not worried about inflation one day, the next day we're worried about, like, literally bombs dropping.

and oil rallying. And it's just like one thing after another. And then I taking our jobs. And then the AI software thing, it's almost, it feels like existential for the labor force. This is like such a different environment. So I'm glad you went there and what you just said, Michael, too, because a lot of what we're talking about is perspective. Now, bombs are actually dropping in the Persian Gulf.

That's real. That's present time. But, you know, we had that, it's a Trinity research article. I hesitate to call it a research article. It was more, you know, sort of a fictional creative writing. He said it was science fiction. Yeah. Okay. I just love the part where he said it, you know, first line is this is not Doom Porn, which is like a red alert. He also said this is not our base case or our forecast, but nobody paid attention to that.

Well, I don't mean to beat up on it so much. My point is, is that's all perspectives. That was, that was, hey, what might happen in 20208. And with private credit, a lot of what we're talking about is the fears of what could happen to the software companies in the future. not happening right now. There are definitely some defaults, but those defaults are fraudulent in nature. It's an indication of bad underwriting as opposed to, hey, the business cycle is turning down, companies aren't earning their cost of capital, that sort of stuff. A lot of the fears are perspective. And actually, I was looking forward to talking to you guys because something that's been driving me more and more crazy, maybe I'm just getting older and crankier, is why is everything that happens compared to 2008? Like, why can't this just be, hey, there's some problems,

Instead of... Availability bias. It's the thing that's in the front of everyone's mind still. Still. Yeah. 18 years. But everything has looked at as this Minsky moment of we are just going over the edge. Well, if they don't do 2008, they do 2000.

It's always going to be... 10 years ago, everything was 1987. And that's... And that's sort of like shifted to the background because it's too far away. Yeah. So we grasp at these two things that occurred in the last 25 years. They're just easy to recollect. Let me ask you guys this.

Why isn't the market just flushing already? Like, so we're finally in a 5% correction first time since liberation days. And it's not hard to believe. We've been within 5% of an ultim high for over a year. But why won't people just sell already? Like, why won't we just get the flush? And here's a question that I want to post to you. Markets never underreact almost, right?

Like markets almost always overshoot. They almost always instantaneously overreact. Oh, never mind. Like, let's, you know, shoot first, ask questions later. They're not shooting first. I disagree. So the market's a 5% drawdown. Software stocks are underreacting.

No, okay. You are saying something that I didn't say. I didn't say software stocks aren't overreacting. Okay. The market. Why is Michael not on the halftime report? This is my only show. Because you've, I mean, when I retire, I'm sliding them right in.

The market is only the stock market of S&P 500 stocks. Yeah. It's 5% from an alt-high. That's it. Yeah, but all the various sectors have gone through their own. corrections, they've just been kind of phased. It's sort of the same thing with, why haven't we gone through a recession? Well, manufacturing has gone through a recession. Housing has gone through a recession. Software stocks, I mean, they're getting their faces rearranged. All right, but credit

spreads are like not blowing out too bad. The VIX got to 35 for a second. That's a good healthy VIX level. That's a good, like, let's reset the market. For a second. First, where's it now? 24? I mean, are you kidding me? That's it? What? So you're, you're, you're, You're saying like, why aren't people more panicky in general, not just in the individual stock level? Where's the flush? This is a good question because go back to August of 2024. Remember the yen carry unwind? Of course.

And what did the Vick spike to in that period of time? I think it was even higher than that. I think it was over 60, maybe even been 80. And that was the mother of all overreaction. So I don't know. Is the market maybe just kind of wising up that not every scare is a Lehman Brothers moment? So I said this on TV the other day. Santoli didn't like it.

Oh, I heard that. I just said, like, the modern investor is not logging into their 401k to, like, go to cash. Like, the modern investor has seen this happen a million times at this point. And they just, they're not as easily rattled. Now, down 10%? Maybe that changes. Down 20%. But, like, I just, people are selling individual stocks, of course.

but this idea that people are going to take their portfolios flat, I just don't think they're going to do it. And people are expecting it. Yeah, that was a good segment with you and Mike. I watched it. I wasn't on the show that day. But what I thought was Mike's talking about the institutional investor. Yeah.

You know, those are the guys who are like, hey, we're in and out like in a moment's notice. And it could be the hedge funds, could be quantitative hedge funds, all that sort of stuff. But I completely agree with you. We're living in the same world of the retail investor, whether they're high net worth, ultra high net worth, whatever it is. Generally speaking, the advisors are talking to them and we're saying, yeah, this is a really bad time, but don't sell your stocks. Sure.

There are some people who 10 months ago post-liberation day sold everything and moved to Europe. We didn't advise that. I'd be surprised if you advised that. I mean, I know you didn't. But that was the minority. Let's say you're the person that did that. Yeah.

Or you watched somebody you know did that. You're just a regular investor. You're never doing that again. Right. because it's so stupid. Right. Well, but also, so I think, I think the market's going to break. Like, I don't think it's going to hold these levels.

I think it's, I think it's swalling over. So I do suspect, unless, but here's, here's the other thing. This could all end with the tweet. Right. I understand the things that are going on in the straight-of-homoo's, like the actual fundamentals will take maybe perhaps years to work through. But investor sentiment could change on a dime. If he just says, that's it, we're done, we're pulling out, mission accomplished.

Well, Jim, Jim said that. This is, I'm going to quote you. So maybe that's why people aren't getting. I'm going to quote you to yourself. If traffic can start flowing through the straight of Hormuz soon by the end of March, the damage from high energy prices need not be lasting. Those positive forces will come back and play. But we're still dealing with daily headlines about bombing oil terminals in April, businesses and consumer confidence will start to take hits. And unlike the past five years, those hits could lead to layoffs and consumption declines purely from higher oil prices or like a consumer sentiment hit.

It's the consumer sentiment. It's the business sentiment. I mean, we know there's been really no firing, but there's been no hiring. And if you add firing to it, if businesses say, hey, maybe we better hunkered down raw material costs, energy, supply chain disruptions, all this sort of stuff. I think if we go too long with oil where it is, businesses will say maybe we better pull in. But, Mike, to your question of why aren't things worse than they are, we can cite a number of reasons, but profits are growing. Yeah. So as long as profits are growing, we all know, we're businessmen.

If profits are growing, we're going to lean into it. We're going to expand. We're going to hire. But if profits start coming down on the back of higher energy prices or supply chain disruptions, it's a different story. Jay Powell said yesterday there's been effectively zero job creation this year. That shows up in the numbers, doesn't it? Isn't that good for profits?

What's that? Isn't that good for profits? And I'm like, I'm not being facetious. No, I certainly could be. John chart one. The only problem is then, you know, it doesn't put top line. It's top line pressure if you don't have people who are employed by your stuff. So this is from SOCGen.

pre-shock fundamental signals were firm and improving. Even now, earnings revisions remain net positive with both the NASDAQ 100 and the S&P 500, staying in upgrade territory since last May. The U.S. continues to outperform the world on the broadening of the EPS cycle. So I actually love this setup, even though the market is heavy right now,

and even though invest in sentiment sucks shit right now, and we'll get into some of that stuff, John, though I'm chart two, please. This is from duality research. So he is breaking down the S&P 500 returns by sectors, and he's looking at the price return, the EPS growth, and then, of course, the multiples. And it's all multiple contraction.

Earnings are strong and people are souring on maybe, I don't even think it's the potential of future earnings growth. There's just a lot of headwinds right now. And so we are building a wall of worry. There is a lot of people that are getting out of the market. And I don't like to lose money. Nobody does. But you need this.

I totally agree. This is a reset from which we can grow higher. We all came into the year, observing where the S&P 500 multiple was, 22 times forward earnings. Hey, isn't that too expensive? The mag 7 are up towards 30. We've had a nice little reset, as long as these earnings revisions that you're properly pointing out don't start coming in. I think that's where some of your skepticism may come from us. How could these earnings not be being revised down already? And the answer is, as long as oil comes back pretty quickly. You know, look, if we start the straits open again, comes back to where, like in the 60s, 60s, which it probably will because there's a heck of a lot of oil. I mean, we knew this. There was like a two million dollar, a two million barrel a day surplus before this

Iran conflict started. And that was a lot of surplus. So that will be there when the streets open up again. What? So, all right, so this is an impossible thing, though, for investors to know if and when the straight will reopen. It's an impossible thing. There's no, nobody has an edge on this. I'm even looking at Polly markets, and I get no signal from Polly markets. You know, you get a lot of bets there that are like 31% that it opens by April 15th. I don't know what to do that. Oh, I have a bet on there that Tim Salomey will reopen the Strait of Hormuz. What's the probability there? I think it's a nine cents per contract. You guys both mention something that's obviously true that a lot of stocks are getting whacked. In fact, John Chard 3,

please, one in three stocks in the S&P are down, more than one in three, are down. down, oh, this is updated. So yesterday was one and three. Now it's 203 stocks are in a bare market. That's almost half the market. That's 40%. That is a lot of bare markets. Yeah. And, you know, the immediate question that I think many people watching this will come to mind is how can the market itself only be off 5%. The answer to which is the peaks from which those stocks are coming down happened at different times in the past. But there's no, I think that's healthy. I really think this stat is healthy, that 40% of the S&P 500 is, is, is, it's, you is in a bare market. I don't think we can complain about valuation being too high in that set

of circumstances. What we can say is it's a reflection that maybe earnings are more uncertain the further we go on in this conflict with Iran. The problem is which which two hundred and three stocks. I'm so glad to ask Josh. To me, that's because I always look beyond the internals like the headline internals. Well, tell me which stocks. If you tell me the 50 week low list is littered with profitless or barely profitable biotechs and, you know, a lot of software companies that have disruption risk. I'm like, all right, I sort of understand it. But we're talking about credit card companies, regional banks.

And that's not what we want to say. 61% of tech stocks are in a bare market. 57% of discretionary stocks. We were talking the other day about Starbucks, McDonald's. Where's financials on here? 39% of financials. All of these lower end consumer, the fast food names, higher gasoline prices. guess what you're pulling back on. Right. Although before we do the K-shaped economy and maybe,

you know, the consumer who's driving a range rovers can still afford an oatmeal glate, let's focus on tech because I think this is where sentiment really lies, right? Microsoft's off, I'm not going to do it. I mean, we can, it's, it's only, 27. 20, 28 percent. Right. Meta, you know, the big companies, a lot of these companies are down a lot, a lot. And that weighs on investor sentiment. And that's why I think a lot of people feel this market is a lot more. more lousy than it is. A lot of people are saying, are we in a bare market? What with the S&P 500 off 5%.

NASDAQ, I'm not going to look right now, but probably 8%. Statistically, no, but there are many prominent, important stocks that are in their own individual bare market. I think of you. People own these a lot. I'm sorry, Mike. There's good news for the bad news. Oh, Robin just texted me, Kobe bombed this test.

Great. What is the test that they give to his age group? It was about consumer sentiment. We don't need to get into it right now. Is it like, can you make a popsicle stick picture frames? It's fractions. It's tough. All right, John, chart five, please.

So maybe I'm grasping for stress here, and I am. But people are bearish. And Jimmy, I think you're 100% right. The people in the AIAI survey, guess what they own? They own Microsoft. They own meta. All these names are getting bombed out. Yes.

And we are, so Chart Kipp broke it down by Desiles in terms of what is the forward return one year later based on how both. bullish or bearish the sentiment is. And the good news is, obviously, the more bearish, the sentiment is the better the returns are a year forward. Now, the bad news is, obviously, there's no guarantee here. But it's, it's like statistically significant. I think it's 16% higher a year later.

He should have done that in green, not red. That's right. That bar. That's right. For the three of us who are experienced in the markets, we love this. We know what that says. We know the high hit probability when sentiment against this negative as far as forward returns go.

And the flip side is is when you're over here on the left side and you're more bullish and everybody's just buying buying and, you know, President Kennedy or maybe it was father talking about the shooshine kid telling them a stock pick, you know you're in trouble. We're nowhere near that. We're at the, as you're pointing out here, we're all the way at this end. It's good. It's what we need. The difficulty with sentiment for me has always been. I don't believe that people are actually answering the question about what they're asking. I think when they do these kinds of polls, I think we all agree the AA.

AII poll is like older, mostly gentlemen in their pajamas. And they're somewhat crankier than the overall investor population. This guy's taking a tire thumper to the AI people. No, I just, all right, so who's picking up the phone and answering this survey in real life? And oftentimes they're saying things, they're negative on like the political situation. They love Trump, they hate Trump, they hate Mamdani, they hate, like. whatever that is. So they're negative.

But they're not really answering the question about the stock market. They think they are. They just like don't like the times that we live in. And so... Well, be that as it may. When they are just negative, phone returns are way higher than normal. Okay.

All right. That's just a fact. Josh, you're correct about, you know, consumer sentiment surveys, small business, CEO confidence service. And they've been terrible for years. Yeah. The Bull Bear surveys,

and I don't know who, I actually don't know who's answering them. But they have been pretty consistent. consistently a contraindicator, even to the current day. Okay. No, I would agree, but when they were at extremes, is that an, are we at an extreme? No, no, no, we're not yet. Not even close.

Not even close. So you open the show saying this is a weird stock market, and it really is. John, chart six, please. This is from Adam Parker. Adam shows the number of stocks up or down 15% in a quarter. Yeah. And he's looking at the top 900 U.S. equities. That's just volatility in either direction.

So this is the highest that it's been since, I don't know, 2022 when inflation was spiking. Like, stocks are getting murdered and stocks are going straight up like the memory stocks, sandisk and micron. Oil stocks. Refiners. There are stocks that are working. It's just not the stocks that you want to see. So chart eight, please.

All right. This is not great. Next one. Actually, you know, let's do this one. This is some Grant Hockridge. So this is a short term in nature. but all of the risk off stuff is rolling. All of the stuff that you want to see in a good market looks like shit.

So we're looking at charts of high beta versus low volatility rolling over. Cyclicals versus defensive rolling. Equal way consumer discretionary versus staples. Crashing. Dollar, bad. Advanced decline line. Bad. High-yield bonds versus treasures.

Everything risk off is flashing. They even hit gold. I know. Gold is below its 50-day moving average for the first time this year. You know, I'm thinking about the answer to. to this chart in the context of what you said earlier, do we, are we going to get a capitulation? And I'm not sure that we will because of the proverbial tweet

that could come in at any point in time or just the, you know, somebody posting that there is a tanker flowing, you know, sailing through the Straits of Hormuz and it's got an American flag. Oh, what is that tweet? No, it's a tweet from the president. But saying what? We won. We won.

We won. We're leaving. But we're leaving might be the tweet. I'm not sure we need capitulation, especially when I look at the upper level. left here, high beta versus low vault. I love that you said that. I think people are always waiting in a bare market.

With bare market, we're 5% of all the highs. Exactly. But people are always way to like wait for capitulation. Why? You don't think we need it either. I don't think you need it. You may get it, but I don't think you need it. I totally agree.

It might happen. But look, 40% of stocks are in a bare market. Things are washed out. So Mike, if you look at the high beta versus low volatility, when I look at that, all I think of is Palantir or App Levin or any of those stocks that, There's no, and Josh, you know, there's no way I could ever own those stocks. But when they were at- While you're not American?

Yeah. You got a problem with America. When they were at 100 times- You're sorry. Go on. When they were at 100 times earnings and I was saying they're too expensive, guess what? They go to 200, right?

And at some point, that's got to correct. Corrections are, I know the three of us agree, I know. Correct. Correct. Fair market stink. And I don't think we're going into. one. I mean, there's a lot of good things going on, stimulus from the budget bill, deregulation, blah, blah, blah. But corrections are healthy because they set up for the next leg higher. What would

change your mind that what we're experiencing now is more meaningful than a correction? Would you need to see the earnings revisions go lower for the overall market? Would that be the thing? That is one of the things, but those weekly jobless claims. I mean, we get them every week. If we all of a sudden see those spiking, I think we got to pay attention. What's the number? It's 250. It's around 200 right now, just over 200. It's a low. 250 is. the spike where you're like, we rarely come back from that. Yeah, 250 is where you start to get nervous. And if you start to approach 300. So for the listen, it's 250,000 people in one week filing for unemployment. That's like what people say is the trigger or the point of no return. Now, it's all,

it's all keyed off of where it is now. In an absolute level, 300,000 on initial weekly jobless claims, I mean, we would do that routinely in the 1990s. But going from 200 to 300 is a way of saying there's a problem. Yeah, yeah, yeah, because it's the delta between the current state and where it gets to. On the, on the earnings part, problem is, I know we all know this, by the time we see them actually come down, it's too late. You're already in the bear market. I think, I think you're right. And look, this upcoming earnings season, I'm so surprised we haven't had more pre-announcements. Like, everybody's got carte blanche right now to say, up, our freight costs went up, our oil prices, you know, our gasoline, our diesel costs. I'm surprised we're not seeing more pre-announcements.

As long as the AI story is intact, and I'm not talking about the shares, prices of meta and Microsoft, because they look terrible. Yeah. But as long as the spending is there. And nobody is saying, nobody's the first to say, hey, we're pulling back. Yep. I think that and the potential of a tweet, I really think it's hard to get too bearish. You're not going to have to worry about pre-announcements. We're about to not even have to report earnings anymore.

So I want to get back to this Etrini thing and the software apocalypse, because in my view, before this war started, we already had a big market-wide problem. And I think if you get that tweet that you're talking about, like, hey, there's a truce conversation with Iran. We've done enough damage. We're going to now talk about reopening the straight, something like that, right? So let's assume oil falls $8 a barrel on that day. I don't know if it stays down, but we still have to contend with the bigger story, which is there might still be a lot of disrupted market cap that is meaningful. to the S&P 500, meaningful in terms of like spending from people that work at these companies and the corporate spending itself.

If you see a lot of investment in the software arena dry up, we don't, we've never seen it. So there's no way to know like what that does to the economy. Regionally, I would imagine it's a problem in NorCal. But like, to me, like, that's the story that that remains. But that happened. What do you mean that happened? So Salesforce went from 350 billion. to $180.

I'm not saying that I can't go to 100. But a lot of that story, we did that about it. Here's what you said. Elaborate on this. Not on board with the Satrini thesis. Yes, there will be job destruction, but it's likely to be another chapter in mankind's long history of creative destruction.

Jobs will be created too. Look at the last 30 years. Talk about the NYSE, where you and I sit and we are surrounded by literally dozens of, of floor traders. Right. Right. It's the reality. Right. And the New York Stock Exchange has never been financially healthier. It's just it takes less people to run the floor operations. So this is, I'm kind of passionate about this concept. And you guys can tear it up all you want.

But yes. So in 1998, that was actually the first time I was on the floor of the stock exchange. Path to the Gills. The joint was jumping. And it was jumping, you know, they had these extra rooms, entire trading floors that are now walled off and their condominiums, by the way. I don't know if you knew that, but yeah. So now those are walled off and there's literally less than 10% of the population that was there 30 years ago. It's a few hundred daily people on the floor. And it was. It was over 5,000. Yeah. It was over 5,000. So, you know, all those runners that were going between the phones on the wall to the specialist stations, the specialists stations, the specialists themselves really aren't there anymore. A couple of thoughts about this.

Number one, price discovery is much better in the digital age than using the handset signals, I can't even do them, but you know, I buy 2000 or whatever, fill or kill us, all that sort of stuff. Price discovery is much better using computers than human beings. And we've had this massive decline, not just on the New York Stock Exchange, but think about all those exchanges that I struggle to remember even exist. The American Stock Exchange. Remember the curb? That was the thing people paid attention to was all oil stocks, right? Now, I'm burying the punchline, so I'm going to bring it out here. In the last 30 years, financial industry, employees, has gone from 5.7 million to 6.7 million, roughly a 20% increase. So jobs have been destroyed,

but jobs have been created. Where if they've been created? I remember roughly 2003 visiting a friend of mine at Getco, which was one of the first high-frequency trading companies. I don't know who Citadel bought them or something. But you'd walk into a room and you'd see these giant cages that look like weightlifting racks, you know, like you're doing squats. Mike, I know you know I do a lot of squats. Yes. Filled with screens. And I remember looking and saying,

what the hell is this? But that was the future. That was where, you know, floor brokers lose their job. But if you're a high frequency trader with a dozen screens around you, that's a new job creation.

Yeah. So you think that, but do you believe that as consumers and employees of corporations increasingly start utilizing AI, that we're, all of a sudden going to magically create these replacement jobs within a year? Or could it, like, be five years before a lot of these people find something new to do

that someone's willing to pay them for? Yeah, I think that's what I'm worried about. That's the risk, as I see it, is that it's not a, you know, it's not Indiana Jones and the Temple of Doom taking the statue off in one hand and put in the bag of sand. Yeah, yeah. This is not cars replacing horses and in all of the obvious jobs that came from the car industry. I will make this observation, even. even if it's just totally personal.

Like, there is a lot of training that I need to do on using AI. And I see what it's doing. I see Claude putting together these presentations, like, in 10 minutes, if less, or less. And I'm like, okay, I need to learn how to interact with Claude. You need to learn how to get a close out of the mic, my friend. Oh, geez. Please. I'm sorry.

I'm having such a relaxed time here. I'm just kicking back. So one of the interesting things about this and the thing that I worry about as the father of two college age kids, or I have a kid in high school that's going to be applying to colleges in the fall and I have a sophomore. And I don't know what this job market's going to look like for a 22 year old.

Who the hell needs a 22 year old right now? Because all of the things that Claude and chat cheap ETs seem to be excelling at are the exact things that you would hand to a recent graduate to work on like a presentation deck or go find the answer to this question or Excel stuff or it just, it seems very obvious that they are going to all become a socialist. Like that entire generate, because it's already happening. Right.

It's already in progress. And they're just going to say, what the hell is this? Like one out of ten of my friends came out of university and can't get a job because nobody wants another body in a seat. Why would they, why would they, you know. And so this is like a near and dear issue for me. because I know a lot of people who have recently graduated kids, and they can't even get internships.

Now, a lot of this is anecdotal, but here's the data. The recent college graduate defined this 22 to 27 years old unemployment rate is 6% and the overall is 4%. And it's going higher. And it's, we have never seen this before. That number that I just quoted to you has been growing three years straight for recent college graduate unemployment.

I don't know what the externality is for the S&P 500's earnings next year. I don't know how to marry those two things. I just know it's bad. So I have a 25-year-old and a 23-year-old. So when you talk about that unemployment rate and I've watched them come out of school and look for jobs, I can attest that you are correct. It is difficult. I don't really know.

Harder than when you were that age? Has to be. I don't know. I came out in 1990. Things were, look, 1990 things were pretty good, good enough that I decided to heck with it. I'm going to go into the Navy. 1991, though, had a little mini recession and people were having a tough time again. This feels very different from that because we're not in a recession.

I hear you on that. And that's what I was thinking as you were saying that is, I don't know if what you just described is the normal evolution of a young person. They start out on the left. And as they grow older, generally speaking, not always, but generally speaking, they move to the right. Or if this is something more systemic, more demographic, we know, right, that young people are having a tough. time finding homes that they can afford, and they're pissed off at the boomers because of it. I am in a little bit of a different boat than you fellas. So forgive me for typing.

According to Elon Musk, the kids, your kids' age won't even need jobs. So my nine-year-old, I don't think Kobe needs fractions. I told my nine-year-old. What's you going to do with that? He said, I suck at fractions. Don't worry about it. I said, so when we tell you you need to study, you have to listen. I will help you.

You don't suck. I love you and I'm proud of you. But I don't like studying. Oh, well, best of love. How do you feel about prompting, Kobe? Oh, unbelievable. See, I look at that, leaving Kobe aside, and Kobe's your son, he'll be trained just fine, okay? If what you're pointing to there is, hey, mankind is learning less how to think, how to critically think,

what I think about is for the people listening to this podcast, for our children, man, the competitive environment just got easier. If the vast majority of people are just going to rely on AI to solve problems for them, imagine if you have an innate problem-solving capability. But I don't believe that part of it. I think I feel myself my knowledge expanding so rapidly from AI. I don't view it as a shortcut that people's brains are going to turn to mush. I think it's the opposite.

I think people are going to be so much better equipped. And yeah, the job displacement is a huge fucking problem. Like, I do believe that the younger people, it's not going to get it any easier. So it's a problem. And this is obviously going to have massive political ramifications. Yeah. It will. By the way, I don't know how this is going to turn out. I'm hoping that it's the Indiana Jones thing, but it could well be. I was making that reference to the digital age and finance. Let's not forget the 2000 to 2003 was a pretty terrible time in the markets. There were a lot of job losses. Maybe I'm mixing apples and oranges there, but the handoff can go poorly. I do think, though, that even if that happens, even if we had some three-year bare market that on the other side of that, humanity, America, our kids are going to be just fine. I just can't tell you, Mike, what those new jobs are going to be.

I know there's a job for somebody to teach me how to actually use AI, how to interact with Claude. Somebody that's, oh, you would hire somebody to help you get good at AI? That's probably a consultant, not an employee. But the bigger issue, what's on the college graduate unemployment,

really ripping higher versus overall. And this is before the robots even show up, which is probably three to four years from now, the amount of investment going into all, autonomous trucking. And I mean, two million people in this country, their list their occupation as driver. Now, I'm not saying that goes to zero,

but if it goes to 1.5, we have a huge amount of displacement. And this is among people that are not interested in getting clawed jobs. Yeah, there's not going to be enough new jobs. That's the problem. Now, again, maybe that shows up as a net positive for S&P 500 earnings,

which is a sick fucking joke in it of itself. But maybe that's actually bullet. fine, be that as it may. I know it's not great for sentiment. It's definitely not great for consumer sentiment. And it may be problematic for a lot of business sentiment too. Yeah, I think futurists might go take this conversation in the direction of global population. You know, are we approaching a point where we really don't need to be above the replacement rate? I don't, I don't want to go there. It's a little bit apocalyptic. It's a little bit. It's a little bit. It's a little bit. Yeah. But what I would say is that,

It's not the first time that we've had conversations like this. I already used that example. Think about farming, right? I mean, in the 19th century, families were big because you needed a lot of kids to farm. And frankly, not all of them would make it to adult stage where they could ably farm. Talk about replacement value. You needed like eight kids to end up with five kids. And now you got like two people farming the entire country.

All right, John, chart 13. It's enough of this talk. Let's back to the stock market. That was a little depressing. We got a little dark. We're going to, we're going to lighten it up a little bit with, uh, all right, with some market. So let's get back to the incoming bear market. So really Delwish has a great chart.

It's obvious, but it's true. He said bulls continue to stream towards the exits with the AAI bull bear spread dropping this week to its lowest level since June. All the net gains for the S&P 500 over the past decade have come with the bull bear spread above 20%. Without bowls, it's hard to have a bull market. Circular but true. You need people to be bullish. What's the takeaway from this? The takeaway is that you need bowls in a bull market.

I know it's obvious and it sounds cute, but it's true. So the point is that when this spread of bowls and bears is less than 20%, that's not the type of thing that you see in a bull market. But that's counter to what we were saying before, which I do believe is you need sentiment to be low for which the bulls can come in and start blowing up the market. They need to come back. Yeah. They need to come back.

Yeah, I mean, if the implication is the bulls are gone and they're never coming back, I disagree. We need the bulls come back. Here's more bare news. Chart 12. We are expecting. Do we get to a drink on this show at all? This is just a fact. And a lot of this is from the Daily Chart Book, which does daily charts, as I say.

All right, Colin Morgan, Goldman Sachs. Buyout blackout. We are expecting the next blackout window to begin this week. Oh, for fuck sake. 45% of the SEP 500 to be in a blackout. by that point. Assuming entry six weeks prior to earnings, we expect blackout to run through the end of April.

Meaning what, they stop buying that, their stock ahead of the next earner. And this is a big source of buying. So absent, you know, absent a tweet. And you know, here's the real, not a nightmare scenario, but here's like, here would be the real, uh-oh. This would make me nervous. We get a tweet, we leave, and the market fizzles out,

pops 3% and closes in the red. That's how you know we're going to go into it. We get an Iran surrender's tweet or choose talks. If that happens and the rally fizzles, that's how you know we're going lower. Well, so what you're saying, of course, makes sense that you want more demand for stocks. That's just microeconomics. But I think we would all agree that when you're looking at the prices of stocks, there are times where it jumps promptly.

That's what we're talking about, whether it's April 9th, you know, that buy stocks today, I'm pausing the tariffs. Or if we get whatever proverbial tweet that ends the war in Iran, that it's not so much volume comes in. It's that the price resets instantly higher. I remember, I think it was April 9th, I might have it wrong. But I remember everybody on my floor were in an open, you know, an open floor plan. Like everybody stood up and looked over everybody's cubicle saying, what the heck just happened?

Yeah. Yeah. Oh, because. It was instant. Instant. You were up 6% in an instant. The speed of that gap was crazy. Yeah.

Like people just, people just like completely changed their mind. This is, you know, what you're pointing to here, Mike, is obviously. a negative. It's a normal flow. It's short term. It's short term. So you like individual stocks. Yeah.

So do I. This chart 11 makes me never want to buy an individual stock ever again. This is so crazy. And I'm not going to do it because I'm in it for the love of the game. But for the last five years, Microsoft, which over this period of time has done, I'm making this up $70 billion in profits, maybe quarterly. I mean, it has done everything it had to do. It has been the leader in every category.

it is at the forefront of every invention, blah, blah, blah, blah, blah. It's underperformed the S&P 500 for the last five years. Yeah. So what is the message, is the message in that if you bought it at the four and a half year mark, you basically bought peak multiple or one of the highest multiples? If you bought it a year ago, if you bought it six months ago, you bought it peak multiples. But, you know, look, no stock is a forever stock. Microsoft often gets labeled like that.

And I have it in my portfolio, but one of the things that I like to do, I do think this adds a little bit of alpha is when it gets too high, you trim it. And I don't want to sound like, oh, that's obvious. But what is too high mean? I'm not being here. So in Mike, no, not at all. But in Microsoft's case, same with Apple. You know, it trades at around mid-30s as a multiple, as a forward multiple. That's generally been a high point.

Now, right now, it's at roughly 22 times forward earnings. I went into this year at half the market weighting of Microsoft. So 3% versus 6%. A couple of weeks ago. I said, all right, you know, it can go lower. It can always go lower. But now is the time to load up. So you just gave, you just gave such a great professional answer.

Like when it, when do I have to trim it? And you're talking about where the multiple typically peaks for the stock. So many individual investors would answer that question differently. Michael would say, when do you know it's time to trim a stock? They'd say, well, when it gets to be 5% of my portfolio or when I'm up 100% in the stock, I trim it. Right, right, right. Like, that's, I think right there is such a great example of the dichotomy.

Like, how do individuals think about when to sell versus when the pros think about when to sell? There's a background thesis here. And I know the investors that you have had on, you've had some legendary investors. And I see the books that you have on the wall behind you. If you think about just Warren Buffett as an example, right? He has not been on the show yet. Fan favorite. He killed it last time.

Well, Warren, can you come on? I mean, you can take my spot, Warren. Yeah. You know, what guys like that will say, and I will say, and I think you will say as well, if you get the opportunity to get great companies at good prices, go for it, all right? And that's Microsoft at 25 to 30 times. If right now you have an opportunity to get a great company, I will submit to you that Microsoft is, whether it's Azure, whether it's the operating systems, you know, whether it's the investment in OpenAI.

If you get an opportunity to get a great company at a great price, you just leap into it. Now, 22 times, somebody watching, somebody listening may be saying, I think, that stinks. Okay. I mean, you guys know me. Because they're anchored to 20 years ago. They think they're going to get it at 14. Right. It's not going to happen. Well, let me ask you this. So Microsoft, the stock got killed. All right. It had a little baby bounce. And there are clearly, so obviously, way more people that want to sell than want to buy, right? Now, that could change. And it probably will change. I think that Microsoft is probably a screaming buy at some point. If it's not today or temp so low, I have no idea. But this is a massive secular winner. It's

earnings keep, I think Azure did 20% a year, a year for the last 39. 30 quarters or something. 39% of the last quarter. But how do you, what's your thought on? The sentiment on this, I don't even know if open AI is good or bad for the Microsoft story anymore. Well, the markets tell you it's bad. So the sellers, my point is this or my question is this, the sellers are so obviously

in control of the stock right now. How do you know, and I know you sort of can't, but how do you know, like, what's a good price when the sellers are done? I mean, you gave the answer. I don't have the answer to your question. And so that's one of the, the reason I phrase things, the way that I do, it can always go lower is, look, when I buy, I'm not saying that this is the moment that the sellers are done and the buyers are stepping in.

I'm just saying this is a price that I think two years from now, I'm going to look back and say, man, that was a steal. But this does worry me, at least in the short term. It does worry me. It's a heavy market. It can't even bounce for a second. It can't even bounce for a second. I'll give you two ways to know.

the first is good new uh bad news and the stock goes up yeah the second is an rsi washout you're at 36 rsi for microsoft it is very rare to see the stock this technically weak on relative strength and how you see how much of a time catalyst is that or lack there if you see a 25 rSI on Microsoft like if you see the stock that oversold i'm not saying it's the buy of a lifetime and it's going straight up but you'll get 10% out of it right because you always do right again great company. I mean, that's a hill I'll die on, at least today. And you're now getting it at a great price. Whether it's the 36, you know, I mean, you've forgotten more about RSIs than I will ever know. But that strikes me as very low. Will it go to 25? I don't know. Well, it, so, so let me give you,

let me give you the, let me give you the history. I think this is, I mean, you have not, you have not seen this be an oversold stock in the last three years. You have not seen Microsoft at a, at a, at a more washed out place than where it is, just on that one singular measure. You know what? And it is, it, it, it genuinely looks like it's going to get more oversawed than we've seen the last three years right now. When there was blood in the streets and a name like this, I'll say you have to buy, but don't ever quote, quote Warren Buffett.

Why? If you're not, if you're not willing to buy a name like this right now. Exactly. Now, you, you guys love RSI. I have learned to love it. I've learned a lot from you. I think you know that my favorite metric to use is the PEG ratio, price to earnings over the growth ratio.

Yeah. Now, if I look and I'm trying to do this on the fly, you guys may have it up right now. Roughly 22 times earnings, next year's growth rate. And of course, I've got facts that wasn't loaded. So this is going to take a second. But let's just take a look at what the Microsoft earnings growth rate. It's a June fiscal year. So if we just take June 26, 16.

I just said Claude. Yeah. It says 1.4. The peg ratio. Well, he's going through us all his imagination. Actually, it says, wait, it says, no, this, okay, 0.87. Are you kidding me? That was pretty fun.

It's less than one? Yeah. Yeah. So this year's earnings 1648. Last year's earnings 1364. And it's growing over 20%. Right. Yeah, it's an absolute steel.

Right. You guys like RSI? But, but it's going lower. Maybe. No, I'm saying literally, it is going lower. Oh, okay. I'm not saying that it's going to keep going low forever, but the price is going down right now, and that's a fact.

And everyone is aware of that peg ratio. Right, that's not an edge. That's true. Right. But you know what the edge is? If that's on an edge, and obviously it's not, the ratio is never an edge. Patience, I suppose. I don't think you're going to have to be that patient is the point I'm making.

What I'm trying to say is, I think it's recent downturn like the last couple of weeks is reflective of the market, not the stock. I mean, there's been no news on the stock. Yeah, I agree. That's sellers in QQQQQQ. Exactly. And spiders, which is sick. Yeah, I'm with you on that.

All the Mag 7 names don't look the same. And this one in particular, meta 2 looks like absolute dog shit. Just technically. That's a technical term, Jim. So I don't know what, because the open AI, is that the thing you think? Is that the overhang? No. I think it's the spending without a clear investor embraced strategy for how that's going to turn into enough ROI to justify it.

And I think meta and Microsoft uniquely have that. I think you're right. Satya is, in my opinion, the CEO of the hyperscalators that you just hear him, the way that he talks. He and Sunday, but I think Satya in particular is so committed to the spend. He is all the way in. The problem is that nobody believes that what meta has been spending on is paying off in any way beyond reels. Nobody thinks that all these hires they've made, paying guys a billion dollars to acquire their companies, just to high. hire them. Nobody believes that that is doing anything for the meta shareholder in 2026. So the insiders, whether it's Satya, whether it's Sundar, whether it's Brad Gersner,

you know, all of these insiders are saying a couple of things. One, that they just don't have enough supply to meet demand. You like that. If you're a business owner, you're like, bring more demand on. And that every increment of compute is profitable. Very different. You and I've had this conversation a bunch of times. And Mike, you know this too, than the fiber option. of the late 1990s, which I just remember being downtown one New York Plaza, every week they were ripping up the street there and putting more fiber optics down. They'd pave over doing the next thing. It turned out that like 95% of that was unused.

That was ridiculous. It's not what we've got here. It's the opposite. Exactly. And, you know, the other thing that's been labeled on these companies is all the debt spending. Now, leave Oracle aside for a second. Most of these companies have a net cash position.

I'm looking at Microsoft right now. it ended last year with net cash on the balance sheet. So yeah, they're spending a lot, but it's not like they're putting, you know, it's not like they're turning their balance sheet into an airline balance. I had Nick Colis on the show and he said, actually, they're spending 100% of their cash flow on CAPX this year. Okay. All of them.

So. Including Amazon, all of them. So. And like the, the, the, the, the, what makes that problematic is a lot of the thesis for why you should own those stocks and why you should pay 30 times earnings to buy them. is the degree to which they were asset light. And that story's over. It's a different story and not everybody is on board.

So we've all been through those periods of time where there's all this free cash flow and the company starts spitting it out to shareholders, right? Increase the dividend, increase the share of buybacks. A lot of times people say to those companies, really, you couldn't find something more productive to do? Yeah. At this exact moment in time, I don't think AI is a bubble.

You know, the spending, as we've said, is profitable. There's no signs to the point you brought up, Mike, that anybody's backing off of it. Is the spend in a bubble? Because the prices obviously are. The share prices aren't. Is the spending in a bubble? Let's rephrase the question. Will it be a bubble? Of course it will. Of course it will. We all know that because we're old enough and we've seen enough bubbles. We know that this will end in the mother of all bubbles. But I just don't think it's even close. In my opinion, the bubble is in the venture-backed startup world once again. None of those companies that make any money. There are going to be five companies that make money from selling AI and compute. And

three of them are property public. When does that bubble pop? Who does it hurt? It hurts. It hurts the venture capital ecosystem. It doesn't matter. It's the average person. When bubbles pop, everybody gets hurt.

But here's another point that I think is important. We're talking about the narrative right now and the fundamentals. We all know that it's the price that drives the narratives. Very true. So if the bull, if and when the bulls do come back, their narrative will change. It doesn't mean that the story has changed, but the way that we talk about it will change because prices will change. And if prices turn higher, the bulls come back in two freaking seconds. Yep. I think you're a fan of Chris Verone. I am too. A strategist. He was just on.

I mean, yeah, he's terrific. So, yeah, it is that simple. And I'm sorry, I can't tell you when the bulls come back. Yeah. Nobody. The story changes based on what price does. I want to move along. We got to talk about the other catastrophe that's slowly unfolding right before our eyes. This is a fun one because it's sort of a panic that you can't see because there are no prices. The private credit thing that got rolling this year, we've talked about it a bunch, obviously, over the last few weeks. I think it overlaps with the software, the SaaS apocalypse story to some extent. And then to some extent, it's kind of its own thing.

But I'd just love to hear what your thoughts are, whether we're talking about Apollap. Ares, Cliffwater, Blue Owl. The commonality is you got a lot of new unsophisticated money that have come into these products. The funds were all too happy to take that new money. All of them have ballooned in size. The asset class has been around forever, but it's only really become something that's been accessible by retail investors in the last three years. And this is the first test of that.

And not all of these funds will have a bad outcome. Not all these funds did anything wrong, blah, blah, blah. We'll say all the nice things. I'm friends with all these people. But it's probably too much. And we might have done ourselves a favor having this little mini panic before these funds wound up in every 401K in America. What do you think? So let me state what I think is the most obvious that the gates that have been put up this quarter are likely to continue through the rest of the year.

that we've seen this before with some of the non-public reits, it's highly likely that the rest of the year we're going to be talking about gates. Not to be pedantic, but the term is important here. Yeah. Because the 5% quarterly withdrawal limit, it's not like they just decide that they impose that. No, we're going to gate people. That is the limit that's in the prospectus. Everybody knows that ahead of time.

I love that you went there because it's obligatory for any advisor who is putting their clients in these to educate them. Not just that there's a theoretical gate, but that it could well be hit. And the purpose of the gate is to try to match liabilities and assets. This is no longer banks taking in deposits and lending them to companies. Good. That was done, well, because of systemic risk is why you say good. Yes.

Okay. So that was done 18 years ago. These companies have come up to take that place. If they don't gate, it's worse. Absolutely. Because then you have companies that are forced sellers of assets in the market and those assets become toxic. Exactly. So much worse. So, and by the way, I want to make full disclosure here. Serity partners, my firm, does invest clients in some of the private credit funds. We think we do a very

good due diligence job of finding the ones that are doing the good underwriting and most importantly, managing risk properly. You know, again, we said this earlier. Also, your advisors are equipped to explain to clients. Absolutely. Like, this is the pros. Yeah. This is the cons. The pros is way higher returns than you get in regular bonds. Yeah, that's not free lunch. But let me give you another. But then this is the cost of those returns. Here's another pro.

You know, we're all public equity investors here, and this may surprise you. We often kind of jokingly or sassily say, geez, I wish I could mark my book to whatever I want like the private equity guys do. I would submit to you that the private equity guys are probably getting it more right than the public equity markets. The public equity markets all over the place. Take your baby in Vidia. I mean, you know, it's where of it is, $183 right now.

Now, a year ago, little more than a year ago, after Deep Seek, it was 93, then it went up to 215, then it went back. You know, none of those price movements make any sense. Now, do some private- Because of the speed or the, because of the oscillation from highs to lows. Exactly. The value of these companies don't change by hundreds of billions of dollars. But those are stocks, so let's not do apples and oranges.

Publicly traded bonds versus privately held loans. Yeah. So I just, I wanted to point out that the fact that there is. much less transparency, isn't necessarily a bad thing. But in the wrong people's hands, absolutely it's the wrong thing. Or allocated to the wrong person's portfolio who actually needs to liquid. And that absolutely. You cannot put this in a portfolio and say that it's going to be liquid.

You're going to get all your money out, you know, whenever you want it. Problem is, it's like prisoner's dilemma because a lot of these funds, these semi-liquid funds, it's all wealth clients. It's not like there's institutions that are in these same products. now in some case, not all. But in some cases, these interval funds are purely wealth management interval funds. So I actually, you know, I don't know everything. Surprise.

I don't know which funds those are, I believe you. The funds that we invest in have institutional as well as private clients. Okay. And, you know, by the way, there are still gross flows going into these funds as of right now. There will be. Well, I don't know, right now. I think the second half that activity disappears. Okay.

But it may well be institutions. And, you know, there are hedge funds. out there like Boaz Weinstein, Sabah, who are out there making kind of, I think, predatory offers. But, hey, the market is the market, all right? So 70 cents on the dollar for some of these funds. In a weird way, that puts a floor to the value of these funds. And the floor is not 70 cents because they're not offering to buy these at 70 cents because they think that's what it's worth.

Right. They think it's worth 90 cents on the dollar or more point. So you could get this wave of like new private credit secondary funds coming along to try to do the Weinstein trade. I mean, you could. I'm not, that's not central to my thesis. But what I am saying is that if we go to the core, the fears are prospective fears. They're fears about the SaaSpocalypse, the Citrini article, AI eats everybody's lunch and there's

no money to pay back the bonds. So the private capital funds have lent a lot of money to the software industry. And the software industry is being heavily scrutinized because the sentiment right now is that not all these software companies are going to make it. Right. We only have publicly traded proxies to go by. And they're not good. And they're not good.

So if you think Salesforce is under pressure, what the fuck do you think a mid-tier privately held software company's situation is right now? I feel like it's noon and we're down at the stock exchange. But that's what invest. That's why the redemption requests are coming in. I got you. But you could say, listen, I think a lot of the fear is overblown and will prove to be overblown. given the passive time.

But I don't want to be the last one out the door. Well, that's the problem. Understandable human reaction. You sell today, you get the NAV today. If you start selling in six months, you don't know how many markdowns have happened between now and then. A little quick math on this. Like one of the funds that were invested in has a four-year average maturity.

Now, that means on average, 25% of the fund is maturing every year. And 5% gates times four quarters is 20%. That's the reason for that. the gates is to try to better match the assets and liability so that you don't have to do. So a loan matures, the fund gets the cash back from the company that the company had borrowed, and that will fund whatever redemption requests may or may not come. Let me make another apocalyptic comment here. You know, for private credit to go bad on mass, you know, it's got to go bad first.

The whole shit now. The equity is, and I'm using, I think this is Chris Verone's numbers, but no, it's Jason Trenton's numbers at Stigas. Private equity invested right now, 8.9 trillion. Private credit, 2.5 trillion. You got to burn through a lot of private equity before you. Before bonds don't get paid that. This is so important because these are, for all the fear, I will push back.

These are senior secured loans. So the equity has to get wiped clean. The cash flows have to run dry. And yes, guess what? In some cases, they will. But you guys are missing the real problem. The problem is not the faults. The problem is for the financial advisor who is relatively unsophisticated himself or herself,

they have to contend with probably a year of headline risk that creates a relationship problem between them and their clients. That's the bottom line. That is the problem is not that loans are blowing up because they aren't. It doesn't matter. They are not. And Josh, you're 100% right, which is why I led this discussion with, expect the year, 2006 to have gates every quarter because of exactly what you're talking about. Now, why are those equities selling off if the loans aren't blowing up?

Well, so because of that problem, I think it's going to chill fundraising for the next six months. And that in and of itself can become systematically, systematically problematic because somebody has to, most of these companies are not done borrowing. They have to roll the loan, refinance the loan. if the asset class is shrinking because of investor apathy, that does create a problem. It's a bigger problem for the whole economy. There's less money for these types of loans. It is a problem.

I'm not sure how big a problem. I honestly, I don't think it's systemic. Is it a problem for Blue Owl, which were positive on their actual funds? But the stock has a dividend yield right now of 10.3%. What's that telling? Nobody believes it. Right. Yeah.

And, you know, we are. all know you cut a dividend and your stock's in the penalty box for years. Especially if you're a financial. Yeah. Financial is almost. Honestly, any company. Right. But we're not talking about the blue owl of BDC that's probably trading.

We're talking about the equity of the company. Now, I do own in portfolios Apollo. A few reasons for that. One, the ratio of institutional to retail is like way, way higher. So the phenomenon that you aptly pointed out of just human sentiment, whether you're an advisor or client saying, get me out is not going to be. The pension funds are not panicking. Right. Right. Exactly. And then Apollo has the theme, the captive insurance, which is its own fund. I totally agree with.

The pension funds and insurance companies that historically have been the right investors in these in these asset classes, they know before they get it and they understand it. I don't know that every financial advisor who was flown to Manhattan taken to a steakhouse and then a Yankee game and then flew back to Kansas and started allocating their clients to private credit. I just, I don't think that their clients fully understand this. Of course they don't. And this was part of the story. A lot of the distributions from private equity or lack thereof was causing fundraising from institutional investors to private credit to pull back and through the wealth channel. Like, that's exactly what happened. I'm not saying that it's like criminal at all, but that is the story.

Listen, what you're both saying has a lot of truth to it, especially the, you know, Let's take somebody to the Capitol Grill and, you know, wine and dine. Oh, no, no. For me to allocate to this shit, I need way better than Capitol Grill. I purposely choosing the Capitol. Capital Grill is fine for me. I'm salt to the, I ride the subway. But I don't think the whole-

I need like Jean-George. I don't think, I don't-for-sure. I don't think the whole asset class is bullshit. But these headlines are going to continue. Yeah. And the conversations are going to be harder and harder. But if you can stay in, you're likely to have the good returns that are uncorrelated with. I wanted to ask you.

I wanted to ask you is the silver lining that you might get a tightening up of the way that some of the stuff is underwritten. You might get stronger covenants. You might even get a better interest rate across a whole portfolio. And maybe now is the time for somebody that has not allocated to private credit, take a second look. Well, what are you crazy? No, here's a silver lining.

Here's a silver lining. Assuming private credit can get through this. And I think they will. I think that in X year's time, we'll look back and say, okay, they will never, and nobody will ever be able to say again, they've never been through a cycle. There's never been any stress. All the loans are bullshit. No, they're in it right now.

And assuming they come out of it, they can point to this and say, can you put this on screen? We survive. I can't, John Ken. John, Morgan Stanley sees private credit default rates hitting 8%. Drives me a little crazy, though. Now, Morgan Stanley's selling a lot of this stuff to their wealth clients. I just, I have to say that out loud.

Because, and look, this is just me. This is the problem I have with this, a Trinity article, is that I hate when people just lick their fingers, stick it in the wind and say 8%. Back it up. Now, I don't have the- Well, they are. They're showing that during the height of COVID. The default rate hit 8%. Dude, 8% is bad.

I know. Well, I mean, there were dolphins swimming in the canals of Venice because there was no boat traffic and it was clean. Yeah. I mean, right, that's a very, it's an extreme situation. Again, it's this Minsky moment. Everything is like a- So why are Morgan Stanley research people putting this, putting this fear into the market?

Do you think they really believe this? So they're saying, this is how bad it could get. Because this reads, this chart reads like it's a forecast. Yeah, but you know what? This is a Bloomberg headline in fairness. We don't know what Morgan Stanley actually said. They might have said in the worst case. Right.

Right. I didn't read the research piece. I'm not being sarcastic. Research analysts have a job to do, and it's to put stuff out every day. We do a little like, so we can close this topic out. Yeah. We do a little mini lightning round on private credit. Go. Okay.

I am very unsophisticated when it comes to this subject. So I'm genuinely asking, do you think there are financial advisors right now taking a new meeting with Cliffwater or with Blue Owl or any of the other purveyors of wealth management? Do you think that that activity has. completely chilled. Like, you know what, dude, how about this? Let's not have lunch. Why don't you fix your shit? Because I'm reading a different Wall Street Journal article about you motherfuckers every day. And I'm not talking to my clients about your funds. That's what I think we have to get to. I don't know if we're there yet. I'm curious what you think. Yeah, I think we have to get there. I will tell you that at Serity Partners, 1600 people, 30,000 clients. You guys are a gigantic firm.

We've gotten pretty big. And I know, you know, you guys have done. amazingly, and you've done it 100% employee ownership, which is something to be proud of, very proud of. Thank you, Jim. Yeah. No, I know how important that is. But to answer your question, there are still people, advisors and clients of my firm, who are saying on the Monday morning investment call, should we be leaning in?

Now, I think it's a little early. There may be some marks to come. I think you can wait. I don't think if they're like rushing right now. Okay. Should all private credit be considered? for a wealth management product? Or are we learning that maybe direct loans, for example,

aren't the right fit? Or maybe what was the fund I read about this week, Stone Ridge, where they have a gigantic fund that's taking loans from fintechs, packaging them and creating a fund? Like, are there certain types of things that the wealth management industry should just say no thank you?

Yeah, structured finance type stuff. Yeah, the answer is, of course. And I think you really want to be with the best of the best of the best in this asset class. And I think you want to bet the jockey. I think you want to very strongly consider the brand that's bringing you a product. Right. Okay. I'm with you on that.

Look, I've had small meetings with Doug Ostrover. That's the CEO or the co-founder of Blue Al. And we're all at an age where we can recognize garbage people like people you can't trust. This is the opposite. And Doug is garbage. No. No, no, no. I'm sorry.

That was a terrible oratorial set up. No, Doug is genuine. You know what? They should have Doug on the calls instead of Mark. That's my suggestion. You're on a first name basis with the fucking... I listen to the calls. They're partners and co-founders together.

Look, he thought, and the whole team there thought they were doing the right thing by giving 30% back instead of 5%. I can't believe they thought that was a good idea. I mean, they honestly thought, and I think he's telling me the truth. No, I was a good idea. So I was on a webinar and I heard them say that and I said, do you have any idea how human beings work? You really thought that they weren't going to be memed into the Stone Age?

It's the classic Leslie Neal saying, nothing to see here. Like, dude. All right. I had this idea that what could potentially put a stop to the panic is a really big acquisition of one of these. There are 10 publicly traded private equity, private credit, specialty finance companies. These are some of the best brands on Wall Street, Blackstone, KKR, Apollo, like these are, Carlisle, these are storied companies that have decades of experience. I don't think that it's like this 2008 weed ducks thing.

That's not my belief. I'm not that, I'm not that cynical. What if some giant European or Chinese or even American bank takes a look at, let's just use Blue Owl and says, you know what? The market is way too panicky and overreactive. we could fix this company just by virtue of our balance sheet. Like our credit rating, we could fix this whole situation in two seconds. That kind of happened with B-Reed.

If that happens... That's where I was going. If that happens, I think that puts an end to this panic, like stops it in its tracks. And then the redemptions cool off and everybody calms down. I would love to see that.

What do you think? I think you need, as Mike just alluded to, I think you need that investment into the funds themselves. So Calpers did that. It was, University of California. Oh, so not the acquisition of one of the companies. But let's make sure that everybody listening knows what we're talking about.

B. Reet was having the same problem, gating investors who were all getting out because of the commercial mortgage-backed tsunami that was coming. By the way, I mean, step back for a second. Remember how much press that guy? Yeah. And like the regional banks are doing fine. Blackstone's doing fine. Okay. But back to the point, University of California came in and made a preferred deal with them. It wasn't preferred shares. It was big. Yeah. But it was big and it There's a vote of confidence. That's what I think you need to see. Is somebody coming in saying, I'm in, you know, the blue owl corporate credit.

Almost like in 20, people forget, in 2011, Bank of America went to like $6. And Morgan Stanley or $10, Morgan Stanley went to $8. Three years after 2008 during the European financial crisis, all the U.S. Investment Bank stocks went back to single digits because everybody said, here we go again. And that's when Berkshire stepped in and did. did some of those preferred deals. Yeah. People think they lump it together.

They think that happened in 08 and it didn't. Though that era where Berkshire stepped in. Yep. I think they did the Bank of America preferred deal. With a 10% coupon. Yeah. So I agree that that would be meaningful. I don't want to,

I don't want to not get a chance to do this. I asked you for some of your favorite stocks for this year. Yes. So I have one that I feel strongly about, but I want to hear what you're thinking for this year. Okay. So I think the one you may be alluding to is Amazon. I know you're,

I know you're bullish on it and I am too. I was much later to this. Piece of shit. Why does the stock act like ass every single day that I wake up? It's probably what you guys are talking about before. Is it because I'm Jewish? No. I know.

Are you Jewish? Yeah, sort of. Wait, what does it do with anything? No, I don't know. Why does the market hate me so much? Every time I buy the stock, it's like an intermediate term top. It just, it just sucks. It just sucks.

Why I want to break out? It just sucks. All right. Duncan, what are you laughing at? It's going to fall on every's chair. What do you like about Amazon? Why won't this stock make me money? It will.

It will. I mean, look, we see what's going on with Amazon Web Services. Again, same thing. Andrew Jassy is saying that he has more demand that he can meet. So everybody's saying, well, they're spending too much. Well, they're spending for profitable compute that they're bringing online. There's obviously the retail business. We know that there's all different levers that they're pulling here.

I mean, we don't even talk anymore about the ad business, which when it started not that long ago was brand new, logistics business. It's the third largest advertising business in the world. Yeah, nobody cares. Nobody cares. They will. I think they're doing everything right on the AWS side.

I think the strategic partnership with Anthropic was genius. They did that so early. And now they're in business with Open AI, $50 billion worth of business with ChatGPT. They're almost like cooking Microsoft with an open AI. And the stock gets no credit. Maybe they both should be doing well. No credit. Okay.

I want to talk about Apple for a second. Go. Did you see the journal today? I thought I did what was on Apple today. Okay. Apple is way behind an AI and still making a fortune from it. You've heard me talk about this. Basically, we've seen $300-something billion in gross revenue from the generative AI

apps, which is perplexity, Claude, chat, GPT. Okay? Apple's collecting a $900 million commission on that activity. They are literally, I think, in the poll position to be the biggest beneficiary of all this AI. And they haven't even launched the new Siri yet. Okay, let me read this to you. Apple Siri chatbot is still weak by modern AI standards. What Apple does have that the other AI players don't is a dominant position making devices.

However fancy, open AI. Google, Anthropic, and X-AI make their chatbots, iPhones are still the primary way to deliver them to consumers. That means they typically pay the App Store tax, roughly 30% of subscription fees in year one, and 15% a year thereafter. Generative AI apps pay to Apple nearly 900 million in App Store fees in 2025. So the better, the more adoption, those apps get. from the consumer, the more money Apple makes.

And they have no CAPEX increase. Apple's CAPX is lower last year than it was the year before. They're laughing at everybody. So, like, to me, that explains why Apple is close to its 52-week high. I think it's in a 14% drawdown, which is not bad compared to the others. I really think Apple is still going to be the stealth AI winner. And they might get there being the latest with their own product. So I did mention Apple in pretty much the same breath as Microsoft when we were talking about it earlier.

And just a few months ago, it was around 33 times forward earnings. Now it's around 26. I may be waiting 28 times, rather. I may be waiting too long. I have half the market weight in Apple, which some people would say, okay, then you're short Apple if you're benchmarked to the SB 500. I want to add that extra bit of Apple back to bring it to market weight. I'm going to wait a little longer. I mean, we've just seen with every stock in the Mag 7 that at some point they come down to the low 20s.

I may be waiting too long. I just can't buy it at 28 times. Everything you said sounds smart as hell. I mean, I'm sitting there and saying, why aren't I buying it? You're just going to have to indulge me on this one. I'm going to wait a little longer. I think what's going to happen is we're going to get the Agentic Siri announcement this year. I don't know when it'll come.

But the idea that every app in the app store has to be interoperable with Agenic Siri so that the user can give agentic Siri commands to go do things on the apps. Yep. And that, to me, that'll be the moment when the whole world wakes up and realizes, oh, you know what the most important feature of AI is, that it works, that it like can actually do things on your phone for you while you're, and I think that moment comes this year. As you've been going through the list of positives for Apple, the one thing you left off, which I'm astounded by, is that they somehow have access to Gem and

on the iPhone for $20 billion a year. Yeah. I mean, that's a steal. And Google is going to be the tech provider to a Gentic Siri, which was already announced. Google's giving it away. Yeah. Why do you say that? That sounds like a lot of money.

Not for the size of these companies. I mean, if you think about alphabet, how much they've put into Gemini and how much they've spent on it, they need. And this is the mother load. This is the mother load of how you distribute that. And you're giving it away for $20 billion. You're kind of setting a ceiling. on where your revenue is going to be.

What other stocks are you excited about for this year? What do you got? Citigroup. Still cheap. Why? They've got this Banamex C IPO coming up later this year. That's the Mexican subsidiary. That's the Mexican subsidiary.

It's the final piece of the puzzle to get. To spin it out, get rid of it. Get rid of it. In the meantime, Jane Frazier and Company have done a great job of increasing profitability. Trade the book value. It's got like a two and a half percent dividend yield. I just think that's easy. Okay.

Yeah. That's the easy button for investors. Okay. Got any more? Well, the not so easy button as Oracle. I mean, if you believe that AI is not a bubble, then Oracle is the coiled spring that you just want to sit on and wait for it to take off and send you to the move. How far below it's 52-week-high is his stock now? 55.

55%. It's over 50%. Here, let me give you. What's the best case scenario for Oracle? Like, what could happen here that that turns to the thing? Well, nobody believes that Open AI can pay them that contract. Mike, you went right to it. Okay, so that's exactly why the stock came down from 350 to wherever it is right now,

160 and change or 150 in change. Oh, gross. This is so unbelievable. But the rally was equally stupid. Open AI just raised $100, $110 billion, right? They're going to go public sometime later this year, most likely, raise a few more $100 billion. They've got contracts starting to come in. Absolutely, the market doesn't think that Open AI is good for the money,

but they don't have to be good for all of it. They just have to be good for some of it. And with the contracts and the fundraising that OpenAI is doing, there's enough here that earnings should flow through to Oracle. So you like it right here? I do. All right. Can we talk about the book?

Yeah. All right. I want everybody to buy this book. Obviously, you know Jim Labenthal is an absolute mensch. He's a wonderful guy. He's also very bright, as you have just learned, if you didn't know that already. But you can write. Have you always?

Not as good as you guys. You always wanted to do a book? I have always wanted to do a book. Okay. Why? Because there's an idea that's been just rattling around in my head. That there's things that I believe in. Not everybody's going to believe in them, but I'd like people to know about it and maybe

get some advantage of it. Now, if I just wrote a book of, hey, here's what I believe. People would be like, whatever. Who cares? So what I tried to do with this book is take something that I am peculiarly excited about, which is the New York City subway system. Crazy? I don't know.

I'm worried about you. I don't want you down there without me. I really wish you guys had known my father. I said this last time. I mean, he would have loved you guys. You would have loved him. He was a showman. He was an advertiser.

He would love what you guys have done. Legendary. And he was a municipal financier who would do ads from the subways, from the sewer systems. Like saying, you want to remember this, but there were TV commercials. And it was like, it was like a thing. Like, Leibnthol was known as, that's where you buy Mutie Bonds. So I remember. Yeah.

It was like the Frank. Purdue of municipal bonds. I don't know if you know. That's what I was going. Purdue, Purdue chicken. I would have gone with like Tom Carvel, but even that would go. I was going to go there next. He's very young. He's very young. So anyway, my dad would take me on the subways all the time and I just got a kick out of it. And I still do. We were talking about earlier that I take the subway from Midtown down to the stock exchange every time I'm on the show. And I'll tell you the truth, every time I go in the subway, I just get a thrill. I do. I don't know what it is.

Little boys like trains, something like that. So what I've done in this book, is use the subway as a metaphor for investing lessons. And now I went a little further, and this might be a little bit conceded of me, but just personal beliefs I have of how you should carry yourself in the business world. That may be a little bit more than some people want to read. Some people may find it's sanctimonious, but I think it's useful. And learning basic investing concepts, patience. Can I ask for a teaser?

Yes. Like, let's give us like a life lesson. What do you believe makes people successful in life? So I'll give you a couple. I was just going on one. One is being patient. Obviously, I'm more of a value investor. You've got to be patient.

You've got to let things play out. City Group, we were just talking about. How long did I have to wait for that? You made a hilarious comment once on the show. You said, Jimmy, you've been in that, like, since I was bar mitzvah. I think you've been in this office more than 10 years. And it's worked over that time frame. But patience, you can't just get thrown off the train or like get off.

You know, the train hasn't come, so I'm going to walk. That's not going to work. Another thing that I pretty strongly believe is we're all in this together. It's not a zero-sum game. We're all trying to use the subway to get to where we're going. You might be more of a technical analyst, you know, using RSI. I might be using more fundamental peg, whatever. We're all trying to get to the same place.

You don't have to succeed by my failing and vice versa. And I think that's a lesson. I love that. I think it's great that there are so many people with so many different disciplines in the market. I think that's like, I think that's why you have a healthy market. Totally agree. People should not have to agree with each other in order to respect each other's work. Absolutely.

It's not a zero-sum game. Where you guys are, where we are right now, Brian Square, you could, if you wanted to go down to the stock exchange, walk west to take the two, three, to get to Wall Street. You could walk east to take the four or five. Now I just showing off. Yeah, yeah. I'll do. Showing off weird stuff.

showing off that I'm a weirdo, Mike. Thanks. All right. So you used to, because CNBC sends me like a suburban. Yeah. And it has to be late model, like 23 or after. Well, imagine the headline. But you still take the subway.

Stop. CNBC star Josh Brown thumps somebody to death on the subway with a tire. No, I don't. It's a tire thumber. I don't walk around with a tire. Don't distort it. Don't distort the already distorted things that I do. So you go down to the subway,

reminds you of your dad. It does. I love that so much. Almost every time. Oh, dude, that's awesome. Well, I'm proud of you, and I hope a lot of people buy the book, and we will absolutely link to it. The book is called How to Ride the Subway by Jimmy Labenthal.

Congratulations. Thank you, brother. Thank you both. All right. We do have to point out that the compound and friends, the logo, are the New York City subway. It's true. The New York City subway is iconic and also life-threatening. All right, guys, thank you so much for watching.

Thank you for listening. special thanks to James Labenthal, my buddy, and congrats on the book. We will talk to you soon. Thanks again, everyone. Thank you, guys. That was good. Thank you so much. You got to take a tip, kid.

All right.