The Compound and Friends - Best Stock of the Year, Holy Amazon!, JPM and BlackRock Report, Semis Explode

Episode Date: April 14, 2026

Join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for another episode of What Are Your Thoughts and see what they have to say about: financials, stock market bottoms, Amazon, technical analysis, SBC's and more. This episode is s sponsored by Betterment Advisor Solutions and ClearBridge Investments. Learn more at http://Betterment.com/advisors Companies with physical assets, predictable cash flows and durable moats are well-positioned in a volatile, high‑valuation market. Learn more at https://www.clearbridge.com/  Sign up for ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Compound Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and never miss out! Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.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

That's right. No, make it louder. What are we doing? Duncan, don't make me call John. Welcome to an all new edition of what are your thoughts. We are back. We are live. Super excited to see all my pounders in the chat.

With me tonight is my co-host Michael Batnik. Michael say hello. Hello, hello. All right. Welcome. It's your first time watching. This is the very best investing live stream. Happens every week right here on YouTube at 5 p.m.

Eastern on Tuesdays, and most of the time we are live. And I'm super excited to see you guys. I want to just say a couple of quick. Hello is Matt Evans in the chat says, we need the Andoril IPO. I know, right? I think that's a 2027 IPO. That's going to be a very big deal.

People are going to go nuts for it. Wessel's 1980, Michael. He says, time to whack off. You know why he's saying that? I know. No, no, no, no, no, no, no, no, no, it's whack on. We're in whack on, we're in whack on mode. Oh, the market is whacking on right now.

That's good. Wack on, whack on, whack off. We really have to stop you from saying that if it's at all possible. I wasn't going to go there. And I don't know, and I don't know if it is. Anyway, we have all kinds of live action happening in the chat. Thank you guys so much for being here. We appreciate you.

We have a sponsor tonight. Let's let people know about betterment. What do we have to say about betterment? Listen up. What growth strategies are leading RAs using that most firms don't segmentation? Hello, duh. Some clients' needs are sophisticated and require deep, ongoing planning. And some clients need are simple, like those in the wealth accumulation stage.

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advisor solutions. Your biggest regret will be not doing it sooner. What a read. Thank you. What a read. 10 out of 10. This episode is brought to you by Tell us Online Security. Oh, tag season is the worst. You mean hack season? Sorry, what? Yeah, cybercriminals love tax forms, but I've got Tellus online security. It helps protect against identity theft and financial fraud, so I can stress less during tax season, or any season. Plans start at just $12 a month. Learn more at tellus.com slash online security. No one can prevent all cybercrime or identity theft. Conditions apply. All right, listen up, guys. We have a lot to get to. It's an action-pack show. We are in the very early innings of earning season.

So far, some interesting stuff to talk about. And we're going to get to so much more tonight. But first. Oh, what are we doing first? But first creator of Halo, Josh Brad. Yeah, yeah. We uncovered that the reason why everybody is ripping you off is because in your blog post, say more.

This is the best thing ever. So Josh coined the term of the year, which you've been doing this a long time, first time, cool. Josh wrote, this emerging theme does not currently have a name, which I am going to fix right now. I hereby give you express permission to use it and teach others what it means and why it's working. So you, that's, you got, you got me? No, I didn't get you. I don't, that's, I hearby, I hearby give others permission to use the term. And they did. Not use it for money-making activities that don't involve me. Well, then you should have specified that as your lawyer. You should have specified that.

I'm not a, I'm not a, I'm not looking at, no, no, no, no, no, no. I just, I need a taste. I just want to wet my beak. Right. That's what I want to do. Yeah, I don't believe you. No, uh, a very large private equity firm is holding not one, but two webinars, both with Halo in the title.

But dude, don't you see every time? Somehow I'm not getting a cut of that sweet webinar money. Every time the halo name is dropped, the Josh Brown legend grows. The star shines brighter, my friend. It's true. I'll take it. All right. Financial started reporting today.

We have JP Morgan. I think Goldman. Goldman was yesterday. Okay. JP Morgan is my Super Bowl for this segment of the market. It's the one that I care the most about out of the banks. And we can start there. A couple of things.

They asked Jamie Diamond, is private credit going to create a systemic problem? And the good news is he says no. And let me share with you what he said, and then I want to get your reaction. This is Jamie. While you address, oh, I guess I forget who asked him, maybe Erica Najarian at UBS. Yeah. So he goes, no, will not. I mean, I was quite clear.

I don't think so. I gave them big numbers. Private credit, leverage lending is like $1.7 trillion. High-yield bonds are something like $1.7 trillion. Bank syndicated leverage loans are like $1.7 trillion investment. grade debt is 13 trillion. Mortgage debt is 13 trillion. There will be a credit cycle one day.

I think when there's a credit cycle, losses will be worse than people expect. Relative to the scenario, I don't think it's systemic. It almost can't be systemic at that size relative to anything else. And then he goes on to, look, he says there's going to be losses, but he's not saying cockroaches. He's not saying there's like the whole space is ripped. with fraud. He's saying there's risk, and then he gets into the year 2000 and some other stuff.

Later on in the call, though, an analyst asks Jamie Diamond and Jeremy Barnum, who's the CFO, to quantify what J.P. Morgan's exposure is to private credit. It's like $50 billion. It's not much. Leverage loans. $50 billion in the context of like a $7 trillion business. And I know the Wells Fargo guy was asked on. TV, the same question today about their private credit exposure and the number was like 70 billion.

These are, and when we say 70 billion, we're not saying, oh, that's not a lot of money. What we're saying is it's not like it's going to be 70 billion in losses. It's going to be like three or four percent in a worst case scenario of that 50 or 70. But reframe the entire conversation. If we're worried about the top of the stack, like if that's the part that comes crumbling down, guess what? it's over already. Yeah.

That will be the least thing that matter. That would be the thing that matters the least as the private credit. I think what we're not. If you burn through the equity and everything else, and that's what that's where the problems are, where are we post? I'll give you a different scenario. I think that's not what, what,

what people are, what they mean when they ask Jamie and others that question. What people are trying to figure out is, will the losses be big enough? These are not, we're not to have 100% losses in private credit. We're mostly talking about like the they're carrying it at 95 cents and then they have to write it down to 85 cents, which in fixed income is like catastrophic. And if that were to happen, would it trigger the need for capital to come from elsewhere and set off some sort of chain reaction?

We're not talking about private equity backed companies going to zero in large numbers. There will be some. But like mostly what we're talking is like, shit. stress in the system. And the answer to that question was an unambiguous. No. No, this is not going to be a systemic problem at a $1.7 trillion number. It does not compare to mortgages. Now let me ask you this. So much more systemic. Jamie is not shy. He's also very intelligent. So last time, I don't know if it was on a call. He was on a call when he talked about the cockroaches. Do you think that he very deliberately chose to not.

go there again because there's already enough anxiety? Or do you think that he's that he's not even thinking about public perception that he that he wouldn't be afraid to say it again? I actually think what he's doing is drawing a distinction between stressed balance sheets of private lenders and outright frauds. And what everyone forgets, you probably didn't forget, but what everyone else forgets is that cockroach comment happened last fall when it came out that there were two auto industry-related outright frauds. That's when he used that term cockroaches. He is not describing the borrowers at J.P. Morgan in the corporate lending, in the, in the leveraged loan segment of the bank as being cockroaches.

That's not what he's saying at all. So I think that's, I'm glad you asked that question. I don't think that he equates the two things as being the same type of problem. Well, it is, it is. You're right. It is nice to see some of the alternative asset managers bouncing for a minute. And maybe we could stop talking about this every single freaking show. Yeah.

I agree. The other thing that I thought was interesting, they did it again. Of course. There's always an analyst that needs a heat check on the state of the consumer. I mean, of course. Like, who else would you ask? I loved. I loved the answer from Jeremy.

Great answer. So the CFO, and we've heard him actually preface the, entirety of a conference call, like getting it out of the way. They are so fucking sick of answering this question. They almost want to say, like, when we have something to say, we'll tell you, please stop asking. Okay. So, I don't know who asked this. Good morning, Jeremy. You have one of the best views on the U.S. consumer. You mentioned the economy's resilient. The consumer is healthy. Give us more color. He said, it's the right question. It's a question we get a lot. And I sort of struggle to say something new and interesting every quarter.

There really is not anything new or interesting to say this quarter. We've looked at it through every angle, you know, early roll rates, delinquency rates, cash buffer spend, discretionary spend, non-discretionary spend. It all looks consistent with prior trends. Fundamentally, it is healthy. Then he gets into some oil and some energy stuff. Much higher energy prices or other problems that sort of do eventually track what has been, I think, for many people's perspective, surprisingly,

resilient, U.S. consumer. So he's basically saying right now, in the end, the story remains the same. The consumer's doing fine despite higher gas prices. I would just add really getting fine-tuned here. It is being helped right now by higher tax refunds. And, you know, again, if nothing happens to the labor market, gas prices are not going to be the thing that's going to tip that over. I know it's pissing everyone off. I know people fill up at the palm. and they look to the left and right, and they're like, are you seeing this? Like, why aren't people freaking out about this? As much as it sucks, it's mostly negatively affecting the bottom quintile of the income

distribution, as it always does. It is not stopping the majority of people from anything they were doing when gas prices were 25% lower. I don't have this in the dock, but Goldman reported yesterday morning, the stock gaped down 4% pre-market. It was a beat on the top and the bottom line. Things looked good. Um, what did they report? Uh, the stock doesn't look good. Uh, no, it looks fine now. It looks totally. It got down and it got back up, but it didn't get back to the prior highs yet. Yes, it did. Yeah, no, it literally did. It closed out a new, it closed out a multi-week high today.

So it gap down 4% took it all back and it's up today. It looks great. Better than I thought. Looks great. Um, okay, let's, let's do Black Rock. Because Goldman did have a ton to a ton of interesting to say. It was a lot of the same stuff on the private stuff. All right, BlackRock. These numbers are just, they're amazing. I don't really know how to describe them. Chart on please or a table on or screenshot on.

$130 billion of quarterly, quarterly total net inflows, led by a record first quarter for eye shares. Dude, that's crazy. All right. $744 billion. $744 freaking billion dollars over the last 12 months. 27% increase in revenue year over year, 22% growth in technological services and subscription revenue,

66% increasing gap out of breeding income. I mean, just monster numbers. Of course, they were asked about private assets. They are making the push of all put. You can take this off, please. They're making the push of all pushes. They bought Prequin. They bought GIP.

They can't turn back. They bought HPS. Yeah, no way. They're all the way in. they saw, they've seen already in April, we're two weeks into the quarter, into the month, so halfway through the month, this really shocked me because I would have assumed,

and I would have been wrong, that money into HLand, which is the Interval Fund for Advisors, I would have assumed that flow is just turned off, $150 million in April. Well, not to brag. My insight was these large RIAs, wealth management firms that are centrally managing the investments, meaning you talk to an advisor,

the advisor is doing mostly financial planning work with you. And then they're bringing your financial plan to a centralized CIO of some sort, and they're getting an asset allocation instruction. And these centralized CIOs, and especially at the wirehouses, they're not like yanking this stuff out of their asset allocation. So when you see these flows, a lot of this is just on autopilot. You're right. And these are the flows come from the gigantic mega RAs,

and they're not on a whim or even in a period of stress changing their asset allocation overnight. They can't because it looks stupid. It looks stupid. So they said last year, our core asset allocation for clients is 50% stocks, 30% bonds or maybe 40% bonds. And then there's this 10% sleeve that's going to ALTS. And $7 of that $10 is allocated to private equity and $3 to private credit.

And so, you know, if you raise $10 billion in the course of a year at one of these RIAs, which is not crazy given all the acquisitions, 300 million, you know, three billion, excuse me, 300 million of that is going to go to the same private equity fund. that they've already been allocating to unless there's some sort of like mega scandal. Well, so the money's going. Yes. And also, I don't know that HLend represents the entirety of the industry. I think BlackRock is BlackRock.

I would suspect that flows into Blue Owl, given all of the smoke, are probably being misdirected. We'll find out. But I think you were absolutely right. Let's know this table on. This is their current. You have anything else? Oh, so you're saying, you're saying it is pot.

I think this is right. An RIA that maybe was directing money to Cliffwater and Blue Owl has gotten nervous and the beneficiary is H-Land. They won't back away from the asset class, but they will upgrade the size of the counterparty that they're using to get access to it. I think they could be something to that. But I definitely do not think that Blue Owl and Cliffwater are equivalent at all. I think Cliffwater is the beta. Not I think. Cliffwater is the beta.

Yes, but Cliffwater is not BlackRock. Correct. Okay. I think there could be something to that. All right. So anyway, current quarter component changes by private markets. Check this out. So private credit was $145 billion in December at the end of the year.

Net inflows of 6.6 bill. Outflows of 3.9 bill. Market change. So some write downs. the end of the quarter. So up, up a little bit from 145 to 146. I think it'll be just fine. Yeah.

And again, to your point, they're all in. You can't do billions of dollars worth of acquisitions and then decide, oh, that was just a fad. All right. You have to power through. So Larry said, Larry Fink said, the Department of Labor's proposed rule is a major development towards a framework to include private assets and target date funds. BlackRock will be at the forefront of this opportunity.

This is in the prepared remarks. And of course, they were asked about it. We have a $600 billion life path target date franchise. I mean, the scale of these products are just unbelievable. Where we saw $15 billion of net influence in the quarter, that included $4 billion into Life Path Dynamic, our active solution. And you better believe that private assets are going into those targeted funds. They just are.

It's coming. Yeah, I feel bad for people that are just getting auto-allocated into this stuff. It's not that I don't think they can make any money. It's just that you better understand the time horizon and the tradeoff of liquidity. And it's not going to be appropriate for everyone. I think for 401Ks, it's actually, right, that's money that's going to be decades sitting in these funds. It'll be fine. Listen, on the one hand, I understand why people are hemming and hung, nobody is choosing to go into these products.

They are higher fee. They are great for the bank. They are great for BlackRock, obviously. So I understand the cynic, skeptic, skeptic, neetric reaction is nobody. asked for this. But and also another thing can be true. It doesn't mean that somebody's retirement is going to blow up because they have a 4% sleep for private credit. So I think we need to pump the brakes there. All right. They spoke a lot about the wealth channel, obviously. And we, you know, this is very much our day job. They spoke about $13 billion coming into a perio. 13 billion dollars of I think

that's the direct indexing platform that Black Rock owns. So I believe they said that there's $15 billion coming to their SMAs, and 13 of it was into a perio. They said, I'd call out that's nine consecutive quarters of retail net inflows. Let me comment on just two areas that I think are worth highlighting. The first is that growth in this channel is being driven by demand for a whole portfolio services, the move from brokerage to advisory, two places where BlackRock is an industry leader. It's also put a big focus on after-tax investing.

This is important. I think for a long time, the language of the industry was sort of. of pre-tax returns or asset class level returns. The fact is our clients pay for college. They pay for health care. They pay for mortgages. They ultimately pay with those things with after-tax dollars. So they said a pyramid inflows.

Question from the comments. Biff Grebel's, what is Appurio? So BlackRock bought Appurio. It is their custom indexing platform. So at Redholz wealth, we use a different one. We work with Canvas is the name of the product. O'Shaughnessy asset management developed it. And Franklin Templeton acquired that.

There are probably five or six major custom indexing platforms serving wealth. Black Rock Superior is obviously one of the large ones. Parametric is the other gigantic one. That was born from Morgan Stanley. Morgan Stanley owns that. All right. So, Apparel net inflows were record for a fifth straight year. They said, okay, here it is.

In that $13 billion of direct indexing flows, about $9 billion was long only. $4 billion was in long short. That has continued to grow rapidly. And he said, this is important. we continue to believe that long, short, direct indexing with option overlays, they have a company called Spider-Rock, is going to be a great growth area, and we hope to double, triple that business over the near term. Everyone's going to triple that business except for fidelity, who seems to not want it. I mean, this is, so guys, for those of you who do not have a financial advisor or know anything about what's going on in wealth management, this is one of the hottest categories in asset allocations because these are, the 1 3030 funds, and there are obviously other versions, and then being able to do this on a

custom index level and having basically a product that helps you harvest your losses, because again, the focus is now on post-tax returns. This is what wealthy people are most concerned with, and as a result, the industry has reacted to it. So, yeah, directing indexing is a huge category, and part of the problem, to the extent that one exist with just a straight up direct index if you own the S&P 500, for example, at some point in time, there's no more losses. You run out of losses.

Or you harvest 90% of them in the first four years, whatever it is. So these 130, 30 things or 150, 50, whatever it is. So you give the manager a dollar. They buy a $1.30 worth of stock. They short $30 worth of stock. So you're left with a beta or a market neutral, not market neutral, a market beta of one. The loans in the shorts, more or less cancel each other out.

And they are just hovering, hovering up assets. So, all right. Hoovering. Hovering. Like a vac, no. It's like a vacuum plane. I know. I know.

They are hovering over us and hoovering up the assets. You won't change my mind, even though you're 100% right. You could trust me. Okay. So I put this in the dock, I guess late last week, what bottoms look like. And we're still going to go through it, but a lot has changed since then. Okay. So I was going to start by.

Same direction. No, same direction, though. Well, yes. But I was going to start by acknowledging that the weird market environment that we have seen in 2027, 6, has continued since the lows, where you saw this like tons of dispersion. So throw up this chart from duality research. And he asked was Monday the peak, and this was a week ago, look at that dispersion for technology stocks. The spread of winners versus losers even with it. in the same sector.

Holy shit. I mean, that's the hardware versus software divide for people that aren't following that closely. Correct. And more to come in a second on that. So this was interesting, probably stale at this point, but still, this is from applying the breakaway, this is from turning point market research, applying the breakaway momentum indicator, popularized by Walter Deemer, we isolate periods when the index gained

at least seven and a quarter percent over eight sessions, while the 10-day advance. decline ratio remains subdued. So it wasn't like it was a full-blown breadth thrust where 90% of stocks were up. Like that didn't happen. And he shows that, and this is still relevant, show this chart. It really only happens in bare markets, like all the way on the way down and washouts, obviously the Great Depression forget about it. But it happens in bare markets or at market bottoms.

So it's sort of like this weird binary thing. and this looks like a bottom. I, so I, I never really, until recently, I never really heard people talk about dispersion as a way of measuring when a market gets washed out. Now, and what your chart showed me is that I was right

to not think of it that way, unless it's like a real bottom. But I guess that's not the thing anymore because we get like so oversold, so fast. and we have such fast freakouts that you don't need to be at the bottom of a 10% correction. You could be at the bottom of a 3% correction if enough stocks beneath the surface are down way, way, way, way more. And that's what really happened this year. So the rotations are crazy.

Yesterday was lots. They're like 24-hour phenomena, these rotations where you'll have like a sector, a software sector, a great example. Like bleed money for 10 days and then go up every single stock in the sector, go up 4 or 5% in one shot. Yesterday was everybody like, all right, guys, it's time to cover your software shorts. Like, it just boom. I mean, this is not for the faint of heart. I wanted to add something to the contrarian signal list of whether or not we have a bottom. I'm not sure how to take this.

So I wanted to get your take on it. Chart on. This is Deutsche Bank. equity positioning is bracing for a sharp earning slowdown, but recent data are undermining that story. If the gloom fades, risk appetite may rebound fast and lift stocks. So this is my favorite word positioning versus consensus earnings expectations. And so normally these two lines track each other very nicely. As earnings growth expectations fall, so too does positioning. Of course.

In stock, like, obviously, right? This time, the consensus estimates just kept on going up for, for S&P 500 earnings growth and positioning fell off a cliff. What the hell is that about? This was the setup. Yeah. This is, right? Like, we were talking about. Offside.

They call this off sides. But this is a very extreme variation. Once the tailwinds of higher crude, the war in the Middle East, like, once that abated. Like once that abated, Bulls came back real fast. Yeah. So, all right. Anyway, what's at the bottom? It was the bottom.

You know how I know? Because it was the bottom. Not for every stock. Chart on, please. So the NASDAQ 100. What an unbelievable rip. Down less than 1.5% of the year. S&P 500, basically new all-time highs.

And I had chart kids show us what really worked off of the, March 30 flows. This is nuts. Semiconductors are up 24%. Wait, stop. This is in, this is in two weeks. That's it.

What the fuck? Semiconductor's up 24% as a sector in two weeks, and they weren't even down. Like, it's, in other words, these are not SaaS software stocks. These didn't even go down. That is a face.

It's nuts. Media entertainment. Google's up 22%. Meta's up 24%. Netflix up 14. Netflix is up from 70 to 100. Paramount, up 24%. Just wild stuff.

What's next? Consumer discretionary. I mean, Amazon, holy shit. What else is in here? Carvana's up 30%. I didn't realize that. eBay up 14. Williams and I'm up 10.

Decker's up 14. Garmin up 17. Yeah. How man are you? chart back on how mad are you if you're in these consumer staples in size? What's going on there? You got nothing.

You got nothing. So. You got nothing. Yeah, but they, you know, they did well earlier than this season. They went risk off and they got the real risk. All right. So let me ask you this.

So, so, you know, what happens from here, nobody knows, but the wartime bottom is in. Yeah. Okay, it's over. But the next phase of this is, are we so back? Chart on.

D-Gendau. Oh, boy. We had a 16% rip. Introduce what this is for the people that are relatively- The D-Gend-Dow is the names that the meme traders know and love. What's in here? Archer, AMC, Applovin. Junk.

Coinbase, Carvana, Draft Kings, Flutter, GameStop. Rock. SoundCloud. Like a lot of, you know, a lot of, there's some obviously legitimate companies here Robin Hood, for example, but there's a lot of dog shit in here. And open door, Acklo, exactly what you think is in the DGN Dow is in it. But we had, so it's been, it's been a minute, honestly, since these stocks participated in any full weight upside. And Ionic was up 20% today. Rigotone was up 12%.

It's not a cell. It's not a cell signal. Why? I don't know. Dude, we're at all time highs. What do you expect? We keep on having the same conversation. At all time highs, the shit goes up.

I should have, I should have bought Robin Hood in the hole. Can I tell you something better? I almost did, and I didn't. This is a true story. I bought Robin Hood on Friday. No, I bought on Thursday. I sold on a Friday. I swear to guys.

How'd you do? Made a couple shackles? No, dude. What? What? I bought Robin Hood on Thursday, and I sold that at Friday for a tiny loss. Why did you do that? Because I said that, it's not working.

I'm going to buy something else. Not working in 24 hours? Is that what we're doing now? Don't worry about what I'm doing. We need to talk about your holding. Don't worry about what I'm doing. All right. Give me my chart.

Surviving the Saspocalypse is up next. IGV. Here's one year. What a year. My God. Even with these sharp rap, these short, sharp rallies, this thing is still sucks. It got up above 80 today, and I think it faded out a little bit toward the close. Still below its 50 day.

It's still crashing. And people that get – I said on TV today – it's one day every week is IGV day. And I hope you bought it the day before, and I hope you sell it that afternoon. And I'm going to stand on that. We're going to get one day every week where these names rip out of nowhere, and you have five minutes to get out. And I've seen this so many times before with these types of controversial sectors. You always think, all right, this is, this is the most frustrating part of investing. All of these stocks have gotten cheaper, right?

Like statistically, not my opinion. All of them have gotten cheaper. All of them are quote unquote due. None of them could put together two days in a row of a rally. So it's just, it's getting worse and worse and worse. And I do not think it's over. Show me this SPY ripping with the IGV getting crushed. Oh, this is wild.

Here's the good news. Nobody gives a shit. This was Wednesday, Thursday, Friday. Yeah. Off the charts. So the S&P was up 3% software was down 7% of the same time. And yeah, to Josh's point, it ripped, it ripped. But let me just, let me just not take the other side, but just provide a little bit more context.

So from the low, chart off, please. From the lows, and by the way, I sold Robin and I bought it in Vida. All right, so not so bad. I said,

I want to be in a winner. Vidia is breaking out. So software puked and bottomed in February. And it had a very mild balance. It had a dead cat balance of 15% or so, gave it all back,

undercut the lows of the February lows, and then absolutely ripped in people's faces. So if you're short of the stock in the hole, holy cow, did you get punished? Now, for a day. For a day. However, this is kind of how bottoms happen.

And I'm not saying that these are now like going to retrace anything, okay? However, however, dude, if you didn't sell, if you did not sell the false breakdown last Friday, sell today. Sell today. No, no, no, no. Anybody who wanted to sell who was going to sell panicked on Friday. There's no more sellers. So I'm not suggesting that like these, that these are going to all of a sudden. and come back to where they were, this could be an L-shaped bottom, right?

Like, it could be, there could be no more sellers. I'm on the other side. I'm on the other side. Of what? We have not seen the ultimate low in the index and in a lot of these stocks. We have not. To be clear, I am not pounding the table that there is a low. You said, I know, but you said this is how bottoms happen.

Well, it kind of is. But I am also suggesting that this can be an L-shaped bottom. And listen, there will be tradable rips in here for people that are like, like to get tactical. but this could be an L-shaped bottom where these names just languish. Okay. UBS came out with a call on Monday morning. They said no, not a bottom.

Oh, well, well, if UBS said so. Well, I like their argument better than yours. So, to be honest with you, I think they put more thought into it than you did it. All right, they might be wrong, but I agree with every single thing they said. God. So the analysts covering,

the analysts do a regular survey with a group of 12 CIOs who are at big Fortune 500 companies. These are the customers for all the SaaS stuff that's under pressure right now. They said on half the calls, they heard this term containment, cost containment. So what that means is the CFOs are pushing back on budgets or the CTOs are pushing back on budgets for SaaS because they're redirecting their spend. They're not stopping spending on tech. They're redirecting their spend elsewhere.

So here are four things that they heard. Software spend rationalization, a more concerted rationalization means why are we spending this much. This is irrational. It's been less. More concerted rationalization of software spend, especially at the SAS layer, in reaction to, quote, excessive price increases and following an overinvestment phase. Two, AI crowding out. AI is beginning to crowd out other software spend in terms of the need to free up dollars. as well as hesitation slash deprioritization as CIOs and CTOs consider AI impacts.

You know what that is? That is hold off. Let's see if we can get Claude to do this. Okay. Three, a mixed shift within budgets with certain SaaS projects being deprioritized and budget dollars shifting to cloud infrastructure, cybersecurity, and even to open source solutions. In other words, why are we, okay, we'll spend the $10 billion. but why are we spending it on service now?

Four, cyclical, macro. While further down on the list than many might expect, CIOs and CTOs did highlight that macro uncertainty rate rates, consumer spend weakness, may have caused some incremental weakness that cascaded into software spending budgets.

If over half of their calls are people that have the power of these budgets saying we're going to contain costs, The problem there is none of these SaaS stocks we're talking about can raise prices next year. And you would be amazed at how much of the earnings growth for these companies over the last 10 years has come from the fact that they were the system of record. You couldn't say no to them. Your data was trapped. They say up 5% this year like clockwork, you're paying up 5%.

And 5% you got off easy. So it's a huge problem. They're calling this enter. enterprise software optimization, that's code for we don't need all 10 of these providers. Let's do eight. And by the way, we're never paying a budget increase again. We're never paying a price increase again. Listen to this.

Following discussions with two leading SaaS ops vendors, analysts reported that 21% of organizations cut their SaaS spend last year. A staggering 30% of existing licenses are sitting unused. The other thing that this AI stuff does to SaaS is it pulls its pants down and humiliates it. Because the way that they are billing for enterprise AI is usage, tokens. And the way SaaS is billing is headcount. Yeah, it sucks. And that is all going to change now.

And everybody is susceptible. Zoom, Teams, Slack, Salesforce, Adobe. They live in this world. of pre-AI, where it's per head, and companies are pushing back and saying, no, I don't think so. Talk to me about usage-based pricing. You can't tell me that's in these stocks. Let me ask. Oh, really?

You don't think that companies down 60, stocks down 60% are, that the fundamentals are deteriorating? No, because they're kicking and screaming. They're not going, they're not doing this per usage thing yet. Snowflake went from 280 to 120. You're telling me it's risky. No fucking shit, dude. Bad example. It went from 280 to 120 in five months.

That doesn't serve me. Throw that example out. Dude, hold on. So I'm not yet, no shit, dude. These names are in trouble. Obviously, all I'm suggesting is that there might be, it might be an L. I don't think we're disagree. I'm a pounded to people at the bottom.

Would you say is the most savvy software investor in the world? The most savvy software investor in the world. Investor in software companies. Why don't you just tell me? I'll give you a little bit of time on that, and I'll just get right to the answer. Toma Bravo. Hands down.

It may be Constellation, which is publicly traded, which is Canadian and odd. Toma Bravo is the best. Widely acknowledged. Is private equity firm they buy the whole company and they operate the company. This is this week. Toma Bravo is winding down its growth equity business

less than five years after the software-focused investing firm debuted it. Instead, it's focusing more on its core buyout strategy, which owns controlling interests in established firms. What happened to the old Josh Brown? Time. Mr. Creator of Hela?

Time. The money manager debuted growth equity in 2021 to take minority stakes in public and private software firms. These were constellation-esque businesses, tax and accounting automation, enterprise data intelligence, like car dealer software. Toma Bravo determined it could not bring its expertise as a majority owner to its growth equity investments because it has little say in their strategy or operations. That's the cover story.

This is a $183 billion firm, by the way. And they basically are now, they're going out of their way to say, oh, no, it's not about anthropic. Sorry, bullshit. Bullshit, I don't believe it. I don't believe it. So it's very difficult for me to look at things like what I'm pointing out, surveys of CTOs, some of the savvious players in the software investment game basically throwing in the towel here

or demanding containment of costs and say that all of that is in these stocks. I'm not saying none of it. I agree with you. There's a lot of damage here. I just don't think we've seen the bottom. Okay. It's very hard for me to think that. Listen, you're probably right.

So the reason why I... Wait, wait. So what's the takeaway for somebody that agrees with me? I'll tell you. I'll tell you. Here's what I'm going to stop doing. No more average downs. Stop.

No, no, no. That should have been... Listen, the reason why I sold Robin and so fast, I have no tolerance for losses when stocks are broken. Okay? All of these stocks are broken and busted. And these should either be either no... that you're playing a trade or that you are buying and bearing the pain because this is going to be a very

when stocks are down 60% they don't go straight back stop averaging down and stop averaging down in SaaS software i'm not saying get completely out or don't look to initiate new positions at some point i like to me in this environment don't do that the charts are broken i cannot agree more they're they're done um all right so this is from trans great. Enterprises are finding it challenging to connect AI agents to existing databases. There was a survey done with a few CIOs last month where you'll see on the, okay. Wait, we missed the, we missed the chart, though. This one's important. This one's, semis are now, Todd's chart. Semis are nearly, we didn't get to this yet. No. All right, but go

ahead. Keep going. Keep going. This is crazy. Crazy. Great chart. Shout to Todd. Semis are nearly 16% of the S&P 500. Actually, I'm sorry. We'll get there in a sec. I'm almost done. Okay. We'll get there in a sec. All right.

So the other side of this, and 90, I agree with almost everything you said, is that the number one barrier for transformation, agentic transformation and automated transformation, is the integrations. Nearly 50% of the CIOs say that connecting AI agents to existing systems, like their databases, their CRMs is in a challenge. And it's compounded by all. kinds of data quality issues. So, for example, I have tickets for the next playoffs. The tickets are outrageously expensive. So I said, you know what? What can I get for one of these games? I asked

Claude to find me what the lowest price is for the lower bowl for these tickets on StubHub or Tech Master or whatever. And here's what it said. Unfortunately, I can't. The ticket sites load their inventory dynamically via JavaScript. So when I fetch the page, I just get the shell HTML with without any actual ticket listings or prices. It's the same reason I can't scrape livestock prices from brokerage sites. Now, I don't want to get over my skills with the technical stuff, but I know that this is an issue. It's not that easy to just rip out something and replace with AI. It doesn't work that way.

That is true. And that's why we're not saying software is going to zero. What we're saying is no more earnings growth via raising prices on customers. Yeah, the net retention ratio is not going to be 120%. And by the way, these names aren't even that. cheap. Like on a gap basis, which we'll get to in a second, they're not like eight times at all, not even close. They're still like 20. Yeah. The next thing, the next thing and the next problem is, and that's just this year's problem. The next problem in 2027 is we get a wave of CFOs and CTOs

bragging about how great their AI investments are paying off. You think that's a positive or a negative for the SaaS software space. They can say, we cut our software costs by 15% by implementing all of this enterprise AI stuff that we've been spending money on. They actually, they almost have to do that because they have to prove that their AI spend is leading to ROI. How are they going to do it? Telling the world that they gave a middle finger to workday.

That's how they're going to do it. When service now goes from 240 to 80s. I think everybody knows there's risk. Their business are going to be disrupted. 240 to 87. So I want to go back to this S&P 500 weight because this is, to me, this is the most fascinating thing about this year.

Semis are 16% of the S&P 500 now, which by the way, as an aside, holy shit. But the role reversal with software, people don't understand this. Software, I think it's people, at its peak was like 12 or 13% of the S&P 500. A lot of that was Microsoft and recently Palantir.

We understand that. But like this role reversal, wait, one more time chart on, look how long these things moved in concert with each other. That's one. They're sized relative to the overall index. But number two, does this look to you like something that's long in the tooth or something that's just getting started? Oh, so I'm not saying put the trade.

I'm not saying go long SMH, go short IGV, and that's the trade. But like just conceptually, does this look like something that's like over? I don't know. Chat, tell us what you think about that while we move on. Intel, this is the stock of the year. I know it's April. Things could change. At given present trends, if this were to continue.

continue. This is the stock. This is one of the craziest most breakneck turnarounds I've seen in a long time. Intel is the epitome of a fallen angel tech stock. They kicked it out of the Dow. It was left for dead. The Intel versus Nvidia market cap charts that we were doing last year were insane. But they had, you know, they went through a few CEOs. One guy was sleeping with the girls at work for him. Another guy was an idiot, blah, blah, blah, blah, blah, blah. They finally, have like a visionary guy that everyone around the world and in Silicon Valley and in the White House respects. And they are figuring it out. They're doing all the right things. I want to just take people quickly through this turnaround. They had this guy,

Lipputan, who took the job in March of 2025. He's been there for a year and two weeks. The stock was $20. The foundry business, remember, they built their own mini TSM on U.S. soil. Nobody thought that was a good idea when they did it was hemorrhaging cash. And Wall Street was asking, is this like going to go out of business? Like literally, they had, they made no, they lost money last year. So just so people understand the extent of how bad things were. But they brought in this guy who built cadence design systems, which became a powerhouse. And he had a ton of credibility with engineers. And that was the first step. Before you get the investors back, you got to get the industry back. He did some surgical shit. He did.

He slashed operating costs from $11 billion to $4.5 billion in the first quarter he got there. He kitchen synced it, Mike. He cut head count like crazy. And he made two bets. He focused the whole company on two bets. One of them was restoring the foundry. The White House loved it. Trump heard we're going to make chips here in Arizona.

Do it. The next thing he did was say, we are going to be relevant in AI. We're not yet, but we will be. Started doing deals. Did an Nvidia CPU deal, a CPU combining Nvidia and Intel technology. A year before, Gelsinger never could have done it, the former CEO. That was big. To a loser.

Yeah. Then they launched Panther Lake. This is a process note. It's not worth explaining what that is. But it was important. Then they did a multi-billion-dollar foundry deal with AWS. who are becoming a chip powerhouse, Amazon. Then they did a Google Data Center partnership deal.

Then they bought back a fab that they had in Ireland from Apollo, which was shocking people. The stock is up 70% year-to-date going into today. It is up 240% from the lows, which was April 2025 right after this guy took over. That is a huge comeback. The analysts can't even catch up. The average analyst price target is 30% below where the stock is now.

So we haven't even seen like Wall Street getting enthusiastic enough. Give me the five-year performance. Backstreet's back. Look at where this price action has taken us. We are at the 2021 local highs. Give me Intel versus Nvidia. Holy shit. Smoking Nvidia.

up 217% over the last year, outperforming in Vida by 141%. Vida is only up 76% up 76%. And it is not often, we see a former blue chip stock fall to $20 a share, lose money for a full fiscal year, and then make a comeback like this, especially in tech, where they take out the trash.

this thing is this thing is in the game what are your thoughts i mean you just laid it out you want to buy it uh no i can't buy it that's how i know it's going higher yeah because i can't buy it either and that's exactly how you know that is exactly how you know what's going up yeah probably double it has to double because neither one of us we look at this chart neither one of us has any interest in pulling the trigger here it was red today This is your opportunity. This is your dip. Now, we own a lot of these other sister names in our other.

We do. We own a lot of these names. Thank God. That's a little teaser. All right. Peahouse was a great way to do it. Well done. Okay.

One last thing on this topic. Not chip, but the memory stuff. All right. So Round Hill launched an ETF called DRAM. Great take. I'm surprised that it was available. This is brand new. Okay.

I think it launched like two, three weeks ago. DRAM from Balchunas, 11th in flows yesterday. Among all ETSs with $265 million, now $680 million on the week, which is also top 20. And if we compare it to the 250 theme ETFs on market, it is already third in year-to-date flows, unprecedented stuff for a newborn theme. And the top holdings are SK Heinex. And this is concentrated. S.K. Hynex is 25% of the portfolio.

Micron is 24% Samsung. 23% and the rest is filler. Sandisk, Seagate, Western Didge. Look at the chart. Oh, by the way, Micron. Next chart. Micron fell 30% in three weeks. And I asked. After reporting a blowout earnings quarter.

And I asked two weeks ago, was this a fat pitch? And I didn't buy it. But it's up, uh, it felt 30% dude. Like straight. Yeah. So Micron is a great example. even if you get the fundamentals right, if you want to write a stock that goes up 2,000 percent,

you need balls of steel. It's vang in the chat, saying when people talk about a stock moving before their fundamentals, I NT say, 100%. If you're waiting for Intel to have a full year of profitability,

you could be watching a 500% move. Another great lesson. All right, hold on. Last thing before we move on. Last thing, Daniel, throw that Trump mic on back one time. Like Mr. Miyaki said, whack off, whack on. Oh, they whacked it on hard. Unbelievable.

Good. All right. Next. All right. We have to do Amazon. This could be, it's early. It hasn't done shit yet. But this could be the stock of the year, if I'm right about what I think we're witnessing.

I think this could be this year's Google. Just a total narrative show. Total narrative shift. Last year's narrative is, oh, my God, we're in the age of AI, and you want me to allocate to a fucking online grocery store with slowing cloud growth and open AI kicking their ass and blah, blah, blah, blah, blah, throw all that out. Because this year, the story is very different. They are in bed with Anthropic, deeply in bed, deeply in bed with Anthropic, the most important

player in AI to be in bed with that's not named Gemini. Anthropic is crushing it right now in every sense of the word. Give me the year-to-date performance. So I didn't have them make the candlesticks. And, oh, yeah, I did. Wait, we'll get back to that in a second. So just it's only up 8% year-to-date, but that's very deceptive. It's, it's, it's been paying its dues in this consolidation.

But it takes a lot to move a stock of this size. And I think it's going to break out and make a new record high finally. Give me Amazon versus the Mac 7. Best performing of the Mac 7 by far. Yep, yep. And not to mention arguably the most halo of the Mac 7 that's not in video. Maybe Apple's the most halo. Island reversal pattern in the chart.

Give me this. I could have done this in Y charts, but I didn't. You see this, all right, I want everybody, I want everyone to just look at 2006. Do you see this island that's been created by these isolated candles on either side of the gaps? I do. You have the gaps down. And then you have this island that's between $200 to $215, right?

The sellers who sold in that. that cluster are trapped sellers if they were short, wrong sellers if they were just straight up selling stock. The sellers are trapped between 200 and 214. They don't know what to do. You got the corresponding gap higher. This is what we call. And I zoomed in on it.

Give me the zoom in. This is what we call an island reversal, bullish island reversal. And the speed with which this company reclaimed, it's 50 day, and then it's 200. day instantly. So an island chart off, an island reversal represents a regime shift attempt. We don't know if it'll hold. But what we do know is that there was an almost overnight dramatic change in the supply and demand picture for shares of Amazon.

Buyers want to own it way more than sellers want to let them have it. That's all we're talking about. It's not witchcraft. One of the big reasons behind this is mythos. what are your thoughts on the whole mythos phenomenon over the last week or so i read michael sembliss post and it is terrifying terrifying it's wild this thing is like self-aware it's like out thinking the humans like they're trying to put guardrails on it it's like sneaking out like it's so it's it's a sociopath sneaking out of the window all right this is one of the most terrifying weeds i've

come across yet um assemblist uh wrote a really great piece on this for J.P. Morgan. The only reason we know about mythos in the first place is that there was a leak from Anthropics CMS, like the content management system. Like, they wrote mythos on a few things that nobody was supposed to see because they weren't ready to launch it yet. And so now they basically had to explain what it is and what it is is is terrifying. It is roughly twice as likely to lie, cheat, steal, act unethically, manipulate people, brag about defeating its controls, cut corners, conspire with human actors who are deliberately misusing it, and let it pursue its goals or pursue its own goals and override safety guardrails.

In an act of beneficence, anthropic, informed a pretty important handful of systemically important companies like J.P. Morgan and the Linux Foundation and I think Microsoft is on that list, that they were extremely vulnerable to hackers because they basically turned this thing loose, this mythos thing loose on all these company systems. And they found, quote, thousands of vulnerabilities. This is the software that's powering airlines. and banks and government concerns, and everywhere where privacy is important. And they basically were like, this is so dangerous. We actually are going to do this thing called Project Glass Wing.

And we're going to crowd strike. We're going to bring these companies in and show them all of these security flaws and let them fix it and hurry up before China is able to. to catch up to what we were just able to do. This is not a model that they're releasing three years after the last version of what they've launched. Like this is like rapid fire.

The last update was not years ago. This is like starting to feel like Terminator 2. Put the charts up. Here's a timeline model release date. Like Claude Opus 4.6 was in February. This Mythos preview is so much further advanced, and it's literally right after. On the right, you're seeing factuality and hallucination. This is an A.A. Omniscience benchmark where they measure all of the anthropic models.

And you want to pay attention to the gold bar, which is Claude Mythos preview, on how correct it is, its level of being unsure, and how incorrect it can be. And here's a quote. I pulled this. Anthropic reports that Mythos has detected thousands of high severity cyber vulnerabilities. Some of them created by chaining together multiple obscure software weaknesses. This is from Semmelist. The remarkable part is that Mythos, cyber hacking skills are emergent, meaning they're the byproduct of other goals.

They didn't set out to do this. It's terrifying. AI security expert Nicholas Carlini, who joined Anthropica a year ago, stated, quote, I found more bugs in the last couple of weeks than I found in the rest of my life combined. And then there's a whole list of the shit

that it was able to find, which we don't have time for. But suffice it to say, the rate of acceleration of these models and the things that these models are doing If it doesn't have your attention yet, I don't know what you're paying attention to. Not only is it was the model hiding some of the nefarious activities that it was doing. Covering its tracks.

It was covering its tracks. Sick. So, yeah, it's scary stuff. Did you, so we talk all the time about if open air were a stock, let's just say it's a combination of Microsoft and, and Oracle. Did you know that there's a public proxy for Open AI, I mean, for Anthropic? Zoom. No. What? Zoom. Pull up your, pull up your. Zoom has a huge chunk of anthropic. I'll tell you what is. It's a company called SK. Telecom. I don't own this. This is not

investment device at all. The ticker is SKM. Pull this up. South Korean. It's like South Korean Verizon. Have you seen this chart? Show me. I can't. Give it. Oh. No. I'm just saying it's, pull it up secretly. No, yeah. Yeah. It's gone vertical. It looks exactly what you would expect a chart of Anthropic to look like if we're publicly traded. It's the opposite of Open AI, right? Look at this thing. Oh, yeah, yeah. So just, yeah, wild, scary stuff.

And, of course, a lot more to say about that in the coming weeks. All right, let's skip everything else. Let's just go to make the case. Yeah, so I do want to do my last topic, but we'll do it on Thursday with our guest on the compound. Oh, I love it. I love it. I love it. Yeah.

All right, let's go to make the case. I'm going to pitch Netflix tonight. I'm sure I've done this before. I doubled my position in the stock this last, I want to say. last week? Maybe I did it on Monday. Earnings are tomorrow. So let me give you a rundown of the expectations. Revenue of $12.2 billion, which would be up 15.5% year over year.

Ebit of $4.1 billion, that's cash flow, up 17.9% year over year. Not bad. Earnings per share of 77 cents, which would be up 16% year over year. They're expecting to add revenue grew last year two and a half times. versus 2024 to over 1.5 billion. That is not a gigantic ad revenue number, which tells me there's a lot of room for growth there and for it to really become meaningful to the Netflix story.

I think this is the year that happens. For the full year of 2026, management is saying it'll double to $3 billion. Netflix has guided to full year 20206 revenue of $50.7 to $51.7 billion, which would be $4. 14% year-over-year growth, operating margin target of 31.5%. And they think they'll generate 11 billion of free cash flow. That's not really the story on the stock's comeback from 70 to 100.

That story is about the Warner Brothers deal going away, which would have been a debt bomb and would have taken three years to integrate and would have made every earnings call for the next three years super messy. The fact that that's off the table, I feel like this stock. should be back in the 120s. I doubled my position. I do think it's breaking out technically. Give me that chart. You see this stock now challenging,

challenging its 200-day moving average, which is downwardly sloping, so less important. You also see the level it was trading at before they announced their surprise deal to buy Warner Brothers. And if anything, this business has gotten better in the interim.

And I think it's super defensive in an AI world. Nobody is talking about SORA or, user-generated content being a real competitor. The big threat to Netflix is, has been, and it will always be YouTube. It's not a threat. They're competitors.

Well, the competitive threat to Netflix, not the existential threat, but like the company that you have to watch out for is YouTube buying up a lot of programming that sucks eyeballs away from Netflix. But last thing, Netflix raised prices last week. Yeah, nobody blinks. You know, Blink?

Nobody. I thought a truck by con. So I did buy the bottom of the stock, not to brag, and I sold it on the rip. And I re-bought it. I re-bought it, Josh, when it held that gap. So I bought it two weeks ago, and I think it's going back to all-time highs. Oh, I like that you bought the retest. I bought the retest.

I bought the retest. I really like that you did that. I just, if they, look, I have no edge on what they're going to report tomorrow. I just read you the consensus estimates. I don't know anything else. I do think they're the combination of all. the live programming they've added, all the sports, all the one-off, like, can't miss events, combined with their international presence and how sticky the service is.

It's almost like a utility. People don't cancel it. The stock will be back at all-time highs later in this year or next year, which is why you know it's going to fall 14% tomorrow and we're going to play the curb your enthusiasm musical. We are going to look so dumb if this is 95 tomorrow. We'll not be the first time. I'm willing to risk it.

Won't be the last time. All right, real quick. chart on this is a huge story in the market this is going to not make a break that's an exaggeration but it's going it's certainly it's certainly meaningful it moves markets we're looking at a ratio chart um one thing versus another one thing versus another would you buy would you buy this no no it's still in a downtrend i i want to see two consecutive three three consecutive weeks of higher closes when when you have a downtrend this pronounced all right so it is something. It is

a very broad group in one market cap realm versus uh, versus tech. Tech versus the S&P 500. Uh, you know, you basically nailed it. I gave you the wrong clue my bad, but you nailed it anyway. It's,

it's the cues versus the Mac versus the 493. I believe is what I grabbed. Yeah, there it is. I would not. I, this is a bet this is a bet against Netflix, which just broke out. which is about to make a new high and Apple getting its mojo back, I wouldn't want to make that bet. I really wouldn't. Wait, so this is the Mac 7 versus the 493. You don't think the Mac 7 is going back? Oh, no. I, wait, I don't know what's priced in what. It's the

max 7 is on top and the 493 is in the bottom. Oh. So if you think there's a downtrend, you're betting against the max 7. Yeah, you know what, though? The problem is like, the problem is half the mag seven is problematic. I don't know what business Tesla is in in the second half of this year. I know the cars don't matter, but I also know the robots and the taxis are two years away. But that's in the index. I can't forget about it. Well, it's one of seven.

Does Microsoft bounce this year? I don't know. And I think the tech stories is back. I think it's all in video, which I also do with meta. What do I do with meta? Hold. Okay. Hold on one sec.

the chat, wake the barbarian 4-577, Netflix is not a utility, J.B. is full of it. Okay. Tell me what, you tell me what percentage of Netflix users you think are going to cancel this year. Yeah, zero. It is a utility. Zero. It absolutely is utility. Like it. Now, it's stock is, it's not a utility, obviously. It's very, you know, it's a high beta stock or it can be a high beta stock. It's a utility. Net, net positive subscriber additions every year in every country around the world. The business is a utility. Okay. I mean, no offense. Anyway, but the final point, if Nvidia, if Nvidia is really going and it sure looks like it's going, it's the highest.

This thing has gone sideways since July of 2025. If Nvidia makes new all-time highs and it sure looks like it's going that way, the rest of tech is going with it. Okay. Listen, I think I think I'm not as sure in what I said, just looking at the chart now that you told me what it is. So you might have won me over. All right, guys, that's it from us. Tomorrow is Wednesday, which means an all-new. edition of Animal Spirits with Ben Carlson and Michael Batnik.

We'll do Ask the Compound later that day, live on YouTube. Same format as this. It's Ben and Duncan. They're asking your questions. And you can get one in by sending an email to Ask the Compound Show at gmail.com. If you want Compound merch, visit Idon'tshop.com. All new stuff in there for summer, 2026. And we'll be back at the end of the week with an all new edition of the compound.

and friends. Thank you so much. God bless. Good night. Ritholt's wealth management is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Rithold's wealth management and its representatives are properly licensed or exempt from licensure. Nothing on this podcast should be construed as and may not be used in connection with an offer to sell or solicitation of an offer to buy or hold an interest in any security or investment product. Past performance is no guarantee of future results. Investing involves risk and possible loss of principal capital. No advice may be rendered by Ridholt's wealth management unless a client

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