The Compound and Friends - Brian Belski Breaks Loose, Palantir Erupts, Stocks Getting Quietly Killed, Uber and Tost Report

Episode Date: November 5, 2025

On this TCAF Tuesday, Josh Brown and Michael Batnick are joined by Brian Belski, CEO and Chief Investment Officer at Humilis Investment Strategies to discuss: Brian’s new venture, the possibility of an AI bubble, choosing the right stocks at the right time, and more. Then at 38:14 hear an all-new episode of What Are Your Thoughts with ⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠! This episode is sponsored by KraneShares. Learn more at https://kraneshares.com/KOID Belski on YouTube: https://youtu.be/9L4sxWG1tds WAYT on YouTube: https://youtube.com/live/zT1pkNt8EUE   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

Ladies and gentlemen, welcome to the compound and friends. This episode is brought to you by our friends at crane shares. More on crane shares in a little while. I wanted to let you know that we are welcoming our friend Brian Belski back tonight. We had an awesome session with Belski right after he launched the new firm that is, I guess, the first company he's ever started on Wall Street. He's worked at some of the great giant banks and wanted to have an opportunity

to build something of his own, and here it is. So Brian's going to tell us all about it. We'll get into some of his big ideas for the stock market going into the end of the year. A lot of people forget a year ago, last November, he was putting out his year-end 2025 target, and he was at S&P 7,000,

and we are just shy of S&P 7,000. Here we are, Magic, about a year later. Belski has just been on top of this bull market for years and years, doing an incredible job as a strategist, and we got a chance to talk stocks for them, too. So I think you'll have a lot of fun listening to that. And then it's an all-new, supersized earnings edition of the compound and friends with me and Michael Batnik. Some of my favorite names have been reporting this week, Uber, Live Nation, Toast.

We get into the FISA blow up. We take a look at what I consider to be a quiet. bare market happening below the surface, although Michael disagrees with me. A lot of big name stocks getting absolutely slaughtered lately and starting to become alarming. But Michael says much to do about nothing. So we'll let you guys be the judge. Anyway, that's the show. Stay tuned.

Special thanks to Queen Chairs. I'll put you in there right now. Welcome to The Compound and Friends. All opinions expressed by Josh Brown. Batnik and their castmates are solely their own opinions and do not reflect the opinion of Ridholt's 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.

Hello and welcome to Live from the Compound. Who is Brian Belski? All right. Today we're going to have a lot of fun. You have a really big news to share with the audience. I want to set this up for a moment. Yeah. Guys, on the compound, we have our regular guests. And then we have our regular, regular, regular guests. The people that the crowd goes crazy for every time they're on, they make a huge impact, and people are always asking for more.

When are you going to have so-and-so back? One of our regular regulars is here announcing the launch of his own firm. We're super excited to have him back. It's a special edition of live from the compound. We're literally live, not on Zoom. and we're here with our friend, Brian Belski. Brian, welcome back to the show. How are you?

Thanks so much for having us. Okay. What will you be revealing today? We're revealing our new firm. Okay. It's called Humiless Investment Strategies. Humolous Investing Strategists. Investment Strategies.

Estrategies. Humolous investment strategies with the acronym H-I-S. And the way I think about it, it's all his anyway. And when I talk about investing, you have to have a lot of humility when you invest. period. And Humolus is Latin for humble. So a lot of people like, Belski, you're not humble. I mean, no, I actually am very much so. But we have a lot of conviction on how we talk about things. So our tagline is investing with conviction in humility. Because one of our less, one of our... Oh, so you have high conviction, but it's in the need to be humble. Correct. I got you. I like,

I like that. Yeah, I do. So how did I come up with this whole, this whole tagline. So do you remember Lewis Ruekeiser? Yes. So I remember our YouTube audience will remember him well. Yeah, look it up on the internet machine. They are the great grandchildren of his viewers. So they don't remember. So I remember you go to Owings Mills, Maryland, and it was Friday night, December of 2000. And I was so nervous, man. I was so nervous to be on. Las Lobarini was on with Mary Farrell and Lewis Ruckeiser. And I'm nervous and I'm like, what do I do? What do I do? How do I get through this? I started praying. And there's this really important scripture that I've always said right before I do any public speech. And it started that

night. It's it's Micah Six-A. It's from the Old Testament. It says, God asks you to do a lot of things, but you absolutely positively must act justly, love mercy, and walk humbly. To this day, I still quote that before I go on every single television show before I go up and do a speech. It just grounds me. So we're not going to be right all the time of this business. Well, that's the line that got you through that first big appear. For people that don't know, Lewis Rue Kaiser show, what was it called?

Wall Street Week. Wall Street Week. So it was every Friday night, it was like the market's closed. And then it would air on PBS. But it predates CNBC and for a fairly long period of time, it was the last word in who knew what they were talking about on Wall Street. Correct. Okay.

So that got you through there and you've maintained that idea. Yep. I maintain that. And that's what really got. So then as I started this process about, okay, you know, working for the man for all those years is fantastic when you work for great places like amazing time at BMO and then Oppenheimer for a couple years before that. Then my amazing time at Merrill Lynch, Piper, Dane. You meet amazing people and you go through a lot of great things and you learn a tremendous amount of things about a business and in this business in particular. But at the end of the day, this business is all about relationships. period. And we've been very blessed to have great relationships all along. So I wanted to capitalize on those relationships. And quite frankly, when you're doing three jobs, when you're doing institutional strategy for Canada, institutional strategy for the U.S. and portfolios, it's a lot. Yeah. It was time to kind of focus on one. And that's why we decided let's focus on portfolio strategy. Let's focus on our separately managed account business and running equities in both Canada, the United

States and we decided to pull the trigger. Okay. So now this is going to be the way you manage money going forward. It's your own firm. You'll have active strategies in the stock market. Yep. And you'll now be in a position to focus on that and not focus on the priorities of a much larger corporation that's doing a lot more things. Yeah, like say for instance. You're doubling down on doing stock market stuff for the people that trust you with their investments. So in the institutional strategy world, you have to publish all these great research reports. And one of the ones that we've done for years is called the chart book. We've published a chart book since 1996 or seven. And so on the institutional side, we've got a call from point 72 or millennium or something. Hey, Belski, can you walk me

through this return on equity model for industrials and how that works and where the signals, that takes a tremendous amount of energy and research to try to figure that out where it's not like we're not going to do that anymore, but we're not going to be that literally pointed in terms of institutional just to try to prove to people that we know how to do things with respect to calling the market. I've said for a long time that the stock market is a market of stocks. Too many people that do what I do are so focused on the index and make it the big market call all the time. And obviously, institutions want to try to figure out and make sure that you're a tool in

their tool belt in terms of how they're running their portfolios or what they're thinking about. But we just want to run portfolios. We just want to talk stocks. We're part of the, to quote the movie Stripes, we're the last of a lost generation. I mean, we like to tell stories and talk about companies and how they relate to your life. And that's one of my rules of investing. Investing is like life and life is like investing.

If you think about it, you know, why do you like to go to Costco? I mean, why do you like to buy Apple? Why do you buy Netflix? Think about how important these great American companies were during COVID, whether it's Netflix or Google or Zoom or think about that. We could not have gotten through COVID without these. great American companies. How many great American companies are you going to be owning in your model portfolios? What does this look like? Great question. So that's where the conviction comes in.

So again, rule number three of investing is, I don't know everything. In fact, I'm not the smartest person in this room. There's a lot more smarter people in this room than me. But I think I know a lot about the 50 companies we run in terms of our U.S. focused portfolio. I don't need to know a lot about the 450 companies that we don't own. But I think I know enough about the 50 companies. Typically, in large-cap money, we've proven through all this fancy back-testing, 50 is a pretty good number. And so from the U.S. focus portfolio, we're going to follow through with respect to what we're thinking on sectors and industries and our themes from a fundamental perspective. So we feel really comfortable with 50 companies as much of a 6% position and as small as 1%. In our small mid-cap

portfolio, which we've talked about on the show here is a lot. I mean, as a parent, you're not supposed to have a favorite child, but this is my favorite child, the smid, because you can play themes and stocks and stories and so around 65 to 75 because the risk the risk spectrum is a little different. So you own more stocks in that category. Yeah. I guess that makes sense. You would want to be more diversified as the cap size falls if you're trying to capture more of those individual stories. Right. So here's a great example. Or it's like a macro bet. Right. So if you're going to be, if you're loving like we doubled down on Google earlier this year and everybody thought no one was going to use search again, Right. Or Apple.

Say if we have a 6% position in Apple in a large-cap portfolio, we're still going to be kind of underweight, 6%. But in our smid-cap portfolio, we love this company Celsius. I've owned it for a long time. You think I'm going to have a 6% position of Celsius? Oh, the energy drink. They're killing. Delicious. Or a shake shack.

I mean, that doesn't make sense. You need more names because you're not going to take a 6% bet. Correct. Okay, got it. So where we think we're different is not just because of our approach of doing, you know, frankly, market strategy for all these years, but actually really live running money. We started in 2005 officially when we're at Merrill Lynch. And then, but I think that we put our, we've always proven that we put our money where

our mouth is. And because we were FINRA registered analyst, we had to write the research report first, then it was published to the world, and then all the, all the portfolios come out. But I think this, where we're differentiated now is we're not just tech, we're not just go-go momentum, we're not just large cap. we've always thought of the market holistically from an equity perspective. So whether or not it's smid, which we love, which we don't think people own enough of, but that's a whole other perspective. Value, we love value stocks here, like intrinsic fundamental value stocks. And then dividend growth

because of the income. We focus on those companies that grow the dividend over time and have a proven track record, not about yields, but dividend growth. So where we're going with the market, we think ultimately, is that the market, we've been talking about it, we meaning the collective market, people have been talking about broadening out for a long time. I think it's got to happen at some point. It is well happen. Yeah, it is happening. It is happening.

So I think what's going to happen is we're going to, not at the expense of Apple or Google, but I think we're just going to see a spreading out of performance, which will actually help benefit dividend growth philosophies, value philosophies, small midcap philosophies. And we're very well positioned for that. You mentioned the rally broadening out, and people are looking at a lot of the names

that are getting bombed out, and there are a lot. But if you look at the equal weight, S&P, the NASDAQ, and the Russell, the equal weight, all three of those are within 3% of their all-time high. Now, at the other end of the spectrum, you do have, I was looking at this this morning, there are 26 stocks that are down 40% or more from their 52-week high, not like they're all-time high. So 5% of stocks and the S&P are down more than 40%. 20% of the index, I'm sorry, a third of the index.

So one out of every three stocks are down 20% or more below their 52-week high. So in this market that we're in right now, where it's AI or nothing, you really do have to, for what you're doing, you have to be a good stock picker. Yes, and that's where it goes back to the stock market as market of stocks. And I remember when I was at Merrill, and we were actually very bearish in 2007, 2008, but there's always something to buy. There's always something to buy, even when you're negative. And on the AI side, on the tech side, not all stuff.

stocks are created equal, you have a lot of semiconductors in different kind of fundamental trends, the stocks that you talked about with respect to the uneweight, the equal weighted S&P. You know why we remain so bullish, Michael, is because if you looked at the earnings revision trends, okay, if you look at the fusion index of FY2 versus FY1, just lost everybody in math, but it's just math, if you take a look at that, they actually were improving a lot better and a lot faster than the big cap tech stocks or the top 10 companies. So that breadth and improvement of fundamentals, we think, is really what's led us to these new high. So it also proves that, you know, you want to focus more on stocks. Now, that also

increases your risk, but at the end of the day, you have to be able to have a process and a discipline that kind of helps diffuse some of that risk. There's an argument out there. Our mutual acquaintance, Adam Parker, wrote about this this week, where he's looking at the he's looking at the dispersion amongst the mag seven and he made the case like last earnings quarter meta was the best performer this quarter it was the worst he looked at invidia compared to the other mag sevens are they correlated or not all of these things all year just go in and out there's like no rhyme or reason behind good earnings uh responses in the stock price versus bad it just seems It's like it's this company's turn to outperform or underperform.

The case he's making is that the active bets that you should be making might be away from the mag seven and just have those be a market cap weight because there's really no way to know or understand why they're moving in the same direction or against each other. Whereas lower down and cap size, you could probably have less over an underweight but have an even bigger impact on your portfolio results. What do you think about that idea? I think that's 100% spot on. And we've been underweight the Mag 7 because we don't own a couple of those stocks in there.

And we've been overweight other areas of the Mag 7. That's kind of number one. Number two, look at last week, right? Look at last week on what meta did versus Google. So you're starting to see a differentiation with respect to fundamentals. Now, does it change next quarter and it's going to be another stock? Could be. But at the end of the day, that's why it makes sense to be more neutralize those and then overweight the rest.

Right. That's why, for instance, you know, we were very, very blessed, fortunate to own Oracle since 2014. Part of the reason why... Not in the Mag 7. Not in the Mag 7. Not in the Mag 7-esque performance. Yeah. So, but we bought that company because of the balance sheet and the cash.

And you really want to bet against Larry Ellison? No. I mean, the dude owns a Hawaiian island. I mean, come on. Yeah. But now what he's been able to do and what they've been able to do in Oracle last couple of years to really take advantage of what's happening in the AI side, that's an example of finding a stock that's not a Meg 7 that has done amazing. And Broadcoms come and gone from the Meg 7 if you keep looking, but we've been there for a long time too.

Our thing with owning 50 stocks goes back to, you don't have to be the smartest guy in the room, you don't need to know everything. You don't have to own everything. One of the things with institutional clients, I used to when I was last week talking to a institutional dividend growth portfolio measure. They want 250 stocks in their portfolio. How do you... The one strategy. Yeah, man. How do you make a difference in that? You have 20 basis points here, 15 base points. I'd rather make a bet and have a process in terms of looking at that particular discipline to really make a difference. And that's how we... Do you think there's like a pendulum,

though, where the market wants one thing and then another period of time where it wants another? Like, there's a moment where everybody wants to own everything, diversification. And then the pendulum swings and it's like the hottest products on Wall Street are concentrated. Earlier in the year, think about the after Liberation Day, when all of the names that were exposed to China and the AI trade got smoked. You know it didn't? At all? Berkshire.

And if you look at it, if you look at the full picture of year to date, Berkshire, the gap was so big in April between the S&P and Berkshire. And now it closed and went the other way because now all that anybody wants is AI. It's sucking all the oxygen out of the market. You know, I keep thinking about this. AI stuff, and the AI stock's now relative to everybody likes to make the comparison of 99,000. I think it's absolutely not that. It's not anywhere near that. Now, do the price performance stuff, the valuation? Sure. But if you were in the business back then, if you had a dot com on there,

it was going up. It was going up. It's not some version of that right now? There might be a little bit of it, Josh. But I mean, literally anything in technology, If you go back to look at also private wealth positions, equity positions in $99,000, okay, 90% of their total investment positions were stocks, okay, and 100% were tax stocks. Yeah. Why did they get, because they were too, they weren't diversified. Well, you had the money taken away from you if you weren't allocating to tech. We're not quite that extreme now.

We're not that quite extreme. And I'll even go back further. I remember in the very beginning of my career in 1990. back at William O'Nean Company, and we'd have all these famous dignitaries come through Peter Lynch and talk about mutual funds who you guys had the amazing fortune of seeing.

Oh, my gosh. Anyway, there used to be a 10-year track record. Then there was a five-year track record. Then there was a three-year track record. Quarterly. How did you do less quarter? Yeah. You know, what have you done for me lately, Janet Jackson?

But it actually did change in the late 90s to a one-year track record because of what was happening. because I's had to get paid. To me, I think the biggest difference between then and now is the margins on these companies and the moats and the growth and all that sort of stuff. So there's this company called Duality Research that does amazing work.

And they showed the forward PE, which everyone's talking about, hasn't been higher in 20, whatever it is, it's not cheap. He says, okay, but you have to look at profit margins because profit margins are also at an all-time high. So he adjusted the forward PE, and he says it comes to a 17.75 times, less than one standard deviation above its 20-year average of 16.2. Adjusted for profit margins, meaning comparing this to... Yeah.

So, he says, so yeah, if this is a bubble, it's probably the cheapest bubble in history. Yeah, I don't... Going back to the bubble thing, let's talk about profit margins first. Part of our process... I mean, sorry, sorry, but look at these forward profit margins. Why would stocks... Why would the multiples not be high in this type of environment? Correct.

But the second question to this is, how sustainable is the rate of that profit margin rising? Because it's not the absolute level of the profit margin. It's, does 14 and a half go to 16? Maybe the answer is yes. Oh, if that stalls us out, yeah. You're right. Yeah, maybe. That's really the question.

That's what puts an end to this is when that goes into reverse, if it does. Well, that's why, you know, part of our process for 30, you know, when we started publishing the chart book late 90s is that you look at valuation, you look at earnings grow, and then you look at operating performance. And we've been studying this for years and years and years, and you have to look at all of these things. I think too many people only look at earnings or only look at valuation or only look at price. And I think this is what a lot of people are missing.

But the term bubble, I think, is the most overused term in investments, just like dysfunctional family is in terms of how families are. By the way, all families are dysfunctional. In their own special way. Exactly. We'll see that in three weeks at Thanksgiving. Anyway, just because asset prices go up doesn't mean it's a bubble. You know what it's a bubble? When the man's making money.

Who's the man, everybody, financial services? If you think about this, think about $99,000, the IPO activity, the secondary activity, the M&A activity, you had all of these deals, not just one or two, but all of them done with stock that was meaningless. It had no value. And you had all-star analysts, you had rock star bankers, frothy, frothy, frothy, frothy, frothy, frivolous. We're nowhere near that. I was yelling about it this morning with Ben. To me, words matter, right?

People throng around their return bubble. To me, a bubble is, and I know it's shorthand for expense, if I get it, right? I always say to it. But a bubble, a real bubble, is one in which there is no roadmap. There is no possible scenario to which future cash flows can, and justifies today's prices. No way, it cannot happen. Like, impossible.

There's no model that you could show me. And that's not what this is. And then also part of the second part of that is that, and so therefore, asset prices must correct, and don't give me 50% because Amazon and Microsoft and Google felt 50% in 2022. Asset prices must correct by at least 50, 60, 70, and not rebound in two quarters or two years. They must go down and stay down.

So you could say stocks are expensive and we're going to have a bare market, sure. But a bubble to me is which there is no possible justification for today's prices. Go back to the moat thing, right? Because that's really important or whether or not it's from an operational perspective or a cash perspective. Let's go look back at two of the poster children, Lucent, WorldCom. I mean, they had nothing. I mean, that was part and parcel where we didn't have a 50%. We had a 90% pullback.

So we're going to have, I don't know. Yeah, but they were selling a lot of equipment right up until the end. It's not as though Lucent were masquerading as a company and didn't have a an operating business. The thing that, the thing that created the top was the orders started to be canceled because all of the equity offerings that were financing the purchase of that equipment stopped coming in. Right. So you have, it doesn't know that until it's too late. No, because they created, they created a capacity situation. So that's another big theme in, in investing over capacity. You want to buy the scarce asset and sell the sell the asset with

lots of capacity. So going back to the new firm, Humillist, we're trying to, humanist investment strategies, we're trying to create a scarcity proposal that we're going to have equity portfolios that aren't just one thing, but also provide for the market dynamic and then also overlay our years of experience. Do you think when people talk about where we are today, I feel like after listening to Microsoft and Amazon and Google, you can't say these stocks are in a bubble. I feel like most people would say they deserve what's happening. In one special way, though, people can say it. They don't like the circular financing of not only, the product sales, but the buildouts of facilities.

And I was listening to Gersner on his podcast, talked to Sacha and Sam Altman together over the weekend. And he asked the question flat out, how could a company doing $13 billion have $1.3 trillion worth of financial commitments? And he sort of asked it tongue in cheek because he wanted Sam to have a snappy comeback. And he did, starting with, we're doing way more than $13 billion in revenue. But he then subsequently dropped off the pod And said, gentlemen, I have to go So that fuels people's But when that stuff happens

He really did? He really did And Satya finished Satya finished the interview now For all we know And I haven't asked Brad about this For all we know it was planned And Sam said

Hey, I have 20 minutes for your show I can't do the full hour I have no idea But I'm just making the point People don't like the circular nature Of a lot of the deal making The overlapping we'll give you revenue for this,

you give us revenue for that. And that is what gives rise to the bubble talk. It's not just about valuation. It's about the structure of the dealmaking. And I think we could all agree any company that comes out and says we have a deal with Nvidia or deal with OpenAI, it's an automatic 10% pop in the share price.

Except self-s. I was just going to say exactly what you just did. That's not Apple, that's not Microsoft or Google. We're talking about Open AI and Anthropic. Which don't have. share prices. So Open AI, all right, so let's just say they're doing $20 billion in revenue, whatever it is. Okay, it's not 13, it's 20.

Maybe let's say it's 25. They're looking to go public at a trillion dollars. Guess what? They better grow into, they better get to $100 billion in revenue. Now, you might say, and I don't know anything about this, Michael, there's no roadmap for Open AI to get to $100 billion. Fine, maybe that's the bubble. But is it in the public market?

Yes, yes, because think of how many these companies are reliant. on OpenAI continuing to spend at the rate it's spending in order to keep reporting their numbers. And that's the part that people are saying we're not calling this a bubble because Microsoft's 100 times earnings. We're calling this a bubble

because the revenue growth is not sustainable if somebody kicks out one of these legs to the chair. I'm not suggesting I'll be the one to see it coming, but I don't dismiss the bubble concerns as easily as somebody who just compares PE ratio. Yeah, we're in the same boat. And I kind of go back to my O'Neill training as well. Stocks are rarely...

Shaquille? Yeah, Shaquil O'Neal taught you a long time. Will O'Neill. Bill O'Neill, the great Bill O'Neill. Stocks are rarely linear for long. So, you know, call me cynical, why Belski are you opening a firm at the top of the market? So my comeback would be, well, I don't think we have the top of the market. We still think we're in 205. It's funny that you said that upon your announcement. I think you're a little bit self-conscious about, oh, my God, what if it is the top? And I chose to launch my firm the same day. Well, I mean, you know, again, that comes back to the humility or self-deprecating. But, but I, you know, our call is, is that a 25-year secular bull market started in 2009.

I know, you and I've talked about maybe different. Maybe it started in 2011. Whatever. Close enough. 13. Yeah. 13. Potato, potato. But I think we have, I think we got another 10 years to go. But we are going to have a recession again. We are. We're going to have a bare market again. We are. Before this big secular bull. is done. And it maybe is one of these frothy people failing or really tripping. Small mid, a partial defense against the unwind of the AI bowl if and when it ever happens,

meaning market cap comes out of the oracles and out of the Microsofts and looks for a home in an area that's not reliant on open AI getting to a trillion? Like, is that a possible story? I think all three strategies are, meaning Diven and Grosophers. growth value in Smyd. You think they'll act as a counterweight in a portfolio of some extent? I do, depending on how bad it is. I think they could, yeah. I do because, again, if you go back into Smith in particular, I know a lot of people

have talked about, you know, the Russell 2000 aren't making any money. Well, you can't make a broader index thing. You've got to look at the companies. The S&P 600, it's got lots of cash in the companies. Some of them are paying dividends. The mid-cap index, the M-I-D within the S&P, looks really great as well. And you combine the two, there's a lot of great ideas. So if you think about like, you know, I already mentioned Celsius or Shake, Shack, or Chewy, these types of names that have

nothing really to do with AI. Or I love small cap financials like Glacier Bank Corp in Montana's amazing company. Or First Citizens is a roll up a lot of, I mean, these smaller banks, I think, are very well positioned from a, from a relationship standpoint, just like the big banks are. We love financials in general from the value perspective. But I think that that both those areas, meaning smit in value, excuse me, are going to be huge winners through this. And I do think, too, that there's not enough dividend growth investing either out there. So I think, I go back to when I was We don't like the taxes. No, we don't like the tax. Relative to the buyback. Well, just reinvest the dividend. Reinvest the dividend. No, no, no. We don't want to pay the taxes on the dividend.

No. I was not going to afford versus GM. Yeah. I don't know that there are huge differences between the two. I know Ford's got the best-selling truck. GM's got more high-end luxury SUVs, get that. But the really big difference seems to be GM's return of capital shareholders is almost all in the form of buybacks and Ford's is almost all in the form of dividends. I don't know. Like, I feel like that's a pretty, it's a pretty big difference. And I don't know what else is very different. I think that's right. If you go back to, like I go back as a young strategist in the late 90s, And I remember marketing in Boston, Fidelity. And I remember meeting with a portfolio manager there.

And he's like, Belski, he was a small cat manager. Yeah. He's like, Belski, I got to buy Microsoft to perform. I don't know if we're quite there yet on that. But the other thing, too, is I wonder if there's got to be some data out there, chart guy can figure it out or something. I wonder how many value managers there are now relative to 10 years ago. Way less.

How many left? Not many. How many left? And they have less money. Yeah, or dividend growth. It's like straight down. That actually is a contrarian signal, right? Now, you have to have the fundamental. Don't be contrarian just to be an asshole. Be contrarian if you have the analysis to back it up. Or why it will change. Or why it will change. And I think that, again, let's go back to the dynamics of the market. I think we're going to have broadening out. If you have broadening out, that obviously makes it for more cyclical areas in the market, more cyclical areas within consumer discretionary, with industrials, and certainly within finance. which we still believe, after all of this, are still under-owned. Which part of the financials, because there's a lot of different areas? Well, we think, we still think it's a bifurcated market, meaning the really bigger

are going to do well and the really small are going to do well. That's why I think the in-between, we're going to have a lot of, we're going to have mega-mergers of these regional banks because they can't compete with the big and they can't compete with a small. Yeah. That's coming. Just saw one. Who was it, like two weeks ago?

Fifth, third, and something was that, oh, yeah. someone else? Yeah. Oh, Comerica. They bought Comerica. But there's going to be more coming. There's going to be more coming. Because they can't compete with the really big. Now, honestly, too, take, here's some perspective. Think about the financial crisis, but even in the early 2000s, would you ever thought that Goldman Sachs would be talking about private wealth in the early 2000s? Yeah. No way. What do they talk about now all the time? Right. So I think that the big banks with the multidivisional assets of wealth, consumer, commercial, institutional, very well positioned, right? The medium-sized banks, what we used to call the regional

banks, it's going to be hard for them to compete. I think the brokerage business is still a great business because it's scalable. The asset management of business is scalable. But the small banks, these guys are cranking on earnings. And we think that they're going to continue to be a beneficiary, let's say a volatility in the market. You have a year-end price target on the S&P 500 at 7,000. I know you've consistently been more bullish than the pack in the last 10 years, in the last couple of years, you've sort of been still bullish, but like not quite as far ahead of the pack because everyone else is caught up to you. How do you think about just the idea of an S&P target? Do we even need to do that anymore, being more on the asset management

side versus the brokerage side? What are your thoughts on where we are? You know, it's a great because we we've written this piece called the year head piece and I think I've written like 26 of them in last year you do whatever you have to do it every year yeah I got to do every year are you done I don't I don't listen man that that thing is 40 I mean it's the smart guy piece I don't you know I it's more for institutions but we put our piece out earlier as we do usually following presidential election years because we wanted to give more guidance and so we put it out in early November right a week after the election in our bull case for 2025 was 7,000. So a year ago going into the, going into the election, where were you? 7,000 for the bull case for 2025. All right, so 6856 today? So we're here. We're here.

But I'm not saying that to do this. I'm just saying that. You did nail it. Well, I mean, but what we said is that a lot of things have to happen. Now, we put it out earlier, the good thing now that we're going to be a portfolio advisory, business we can watch all the other people kind of put theirs out and see what because in the past it was belski puts us out early and i'm not saying people i'm not saying people copied me or anything but we for a reason we put it out early um it's impossible for other strategists to not shade themselves

with things that their colleagues think or say publicly of course and i was we're all human right we're all human that's that's exactly right and when everything was going down in april we said very clearly that if you're an advisor man right and you're basing your business on a strategist target come on don't targets are an academic practice they're an academic practice and they're they're have to versus a get to um we get to put out of target going forward we don't have to put out of target and we will put out of target but what we said in april is we own and we own we own man we own and we didn't change anything and we were very very very lucky so you you uh you deserve the commendations, you were one of the few that did not come out in the heat of battle in April

and say everything we told you three months ago, throw it out, stuck to your guns. I think investors were well-served, paying more attention to you than anyone else. So congratulations on that. Thank you. Thank you for that. What are you, let's just close here. You're starting a business. It's the first business you'll ever be running. How excited are you?

how like what are what are some of the first things that you think the public will see as a result of you being in this new position well one of the interesting thing is i have an aura ring in my in every morning i wake up in about three out of the last four uh mornings it says you have major signs of a whatever because of the stress and you don't sleep and it's it's very exciting it's butterflies it's anxiety it's everything i'm telling you man i um on friday when we changed our lincoln and we sent out we put our website up live and we have people signing up for our research we'll have research and we'll have our portfolios up soon it was try not to be emotional it was it was overwhelming the response and when you're in the weeds man and you're working hard you have no

idea what you're doing and your impact on other people and is I've heard from people from William O'Neill Dane Bozworth early 90s from Piper a lot of people from Merrill like your fans come out of the woodwork and say I've been waiting for you to do this Yeah, yeah. Congratulations. And then my great partnership at BMO, I mean, the brokers and the advisors up there are just amazing and sending me great well wishes and everything. It's so gratifying. But I don't, I'm not doing that for that. I'm doing it because I wanted a new chapter in my life and I'm super excited about being off on my own and doing this and being able to do what I love. How excited are you for Brian on a scale of 10? 11. Yeah. So what are you going to be doing for people that want to learn more about? about your services? So we have our website up, Humilusinvestment Strategies.com.

Look it up. And we will be... Not everyone speaks Latin. H-U-M-I-L-I-S. I-L-S dot com? Nope, we can't do that, but humiless-I-N-V-com or humilessinvestment strategies.

com. Perfect. Okay. And we'll have our portfolios up and running soon. And we're hopeful to have B-M-O as a wonderful partner still in Canada. We're hopeful to have some great partners in the U.S. as well. And we're going

to be portfolio advisory delivery only. We're not going to compete for assets. We just want to help people and run the portfolios. And I don't know if you know this about me, but I'm kind of an old school guy. Like, I believe that this business is all about relationships. If an advisor trusts us or broker trusts us to help them run their equity, and they have some great clients, we will go out and meet that client. Because I think that's important. And I don't think a lot of people do that as much anymore. That's how I learned the business. And so I think we're kind of going back to that. Ladies and gentlemen, audience, a fan favorite, Michael and I, one of our favorite people we've ever met on Wall Street. We're so proud of you. We're so happy

for you. I'm proud. Listen, I could, you guys have been amazing. Like, seriously, amazing. Barry and team, the entire family here has been so supportive of me. Thank you. And it means the world to me for everything you've done for me. And we're going to be great partners going forward. Dude, so excited for you. You guys, check out humulus.com. Humulusinv.com. That's it. Let's subscribe to Brian's stuff. Let's get on the list. And my man, good luck to you. Wish you all the best. And I know we'll see you soon. Thank you, man. You ready? Absolutely.

Let's go. Ladies and gentlemen, boys and girls, children of all ages, welcome to an all-new edition of what are your thoughts? Are your thoughts? The longest-running show. show on our YouTube channel, The Compound YouTube channel, Michael and I have been at it since 2018 in this format. Some of you remember, there was a time we used to surprise each other with topics.

I forgot about that. Not our best content. I think, no, no big deal. We did it for four years. Guys, on this show, we, we talk about all of the most important things happening in the market, in the economy, in the. in the financial news. We stay in our lane.

We don't veer off into directions where we don't belong. I think we're doing the race today. We're not opening up with the race? What's the race? The mayoral race. I thought we were starting to show with it. No, we stay out of that.

I, for one, embrace our new socialist leadership. And I don't know. I'm out. I'm a lost forwards. All right. Anyway, we're going to stay in our lane. We're going to do stocks. We're going to do bonds, interest rates,

tech. all the stuff that you, you count on us for. I want to say hello to some people in the chat, but first, a word from our sponsor. Michael, tell us about the sponsor. Today's episode is brought to by Crane Shares. Morgan Stanley, ticker MS. Now that here, no there.

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It's an exciting time. I was saying to Michael before we came on when it's not earning season, I don't even know what we talk about because when it is earning season, there's almost too much to talk about. It's just a deluge, if you will. What do you think? But you know what? I'm here for it because

August in particular, sometimes it's just boring. There's nothing to talk about. Stocks go up 40 basis points every day, whatever, until you hear from the companies, and we're going to get into it today, like in between times and when there's nothing, when there's no macro news going on, really, like a little Fed stuff here and there. It's just boring. We're saying the same shit every week. So I'm here for it. I'm excited. There's new stories. There's news to talk about. Let's talk about it. I agree. Even the stuff that goes down that I own, at least it's like a little bit of variety because that rally from July into Yeran was sort of relentless, or year end, into the fall was sort of relentless. And now there's opportunities being created. Finally. Yeah, let's go. All right. So Palance here

is the big one. I can't believe it's the big one. Because like, comparably speaking, it's financials. It's not that big of a company. It's not small. They're on a run rate that's like four and a half to $5 billion in annual revenue, and they're growing faster than almost any company I could think of, maybe any company I could think of, not only growing but growing profitably, and a lot of knocks on the company about its lack of profitability when it came public, now look absurd in hindsight. This company is minting money. For a $500 billion company.

Now, obviously the question is, is that valuation justified, and, you know, we'll find out in due time. Yeah, it's $450, holy shit. That's the other thing. Dude, it was $500 billion. Yeah, it's huge. I mean, they've been, all right, so they're only public for two years, but they've been in business for 20. I think it's worth a point.

The company was found in 2003, so it might seem more absurd than it actually is, like how quickly this company got to a half a trill. But be that as it may, this is a huge business or a huge market cap and a fast-growing business would be the way I would phrase it. Do you think it's weird how defensive he is and combative he is? I do. I do. I don't think it's a great look. In particular, I think, I don't know if he's talking to Bury directly, but he's yelling at the shorts.

There are no shorts. I think we have a chart up. So the chart up of the shorts, there's like 2% of the flow to short. There are no shorts. There's nothing here. So I don't know who he's talking to. Now, to the, I think, you know what he's doing? He's galvanizing his base because his base are retail holders.

and even if the shorts are imaginary, they're not imaginary, because Barry just said he's shorted. It's like, fuck those guys. Like, we're in this together. We're saving America. We're making money.

Why would anybody be short this company? Now, I'm kind of sympathetic to like, why would you be short this great American company that is trying to defend our nation? It's doing all of these great things. Because it's not personal.

Because it's not personal. That's why you'd be shorted. I understand why people are short the name and I understand him as the leader of the company. If this was you, you maniac, you would be relentless. If there was anybody short of your stock, your company,

and you were the- All right, so that's, all right, I'm glad you said that. I do think when you're running a business for 20 years, something that you built with your bare hands, and you've had criticism the whole way up, not from the investor class, but from political people,

journalists who hate his message, his America first message, and I guess like a lot, so he considers himself to be center-left, In today's America, he's obviously not. But I do think he gets a ton of criticism from the left where he's a war profiteer and they're spying on everybody. And he's like almost too gleeful about helping the Pentagon drop bombs in other countries.

And there's just this like distrust on the left of the military. There always has been. This is nothing new. And he sort of became the face of that as the AI enabler of the U.S. military. For better or for worse, I would point out, he's doing a ton of work with militaries and governments all over the world, including in Europe. He sees himself as somebody who's helping to erect a bulwark of technology against the enemies of the allied countries, what we think of this traditionally. So he's kind of got that chip on his shoulder

where they've been giving him shit in the press, even before he was a public company. So I understand the aggravation, like, why do you guys keep anything? against me. I totally get that. But that's one side of it, right? It's the political angle. And then the other side of it are the professional investors. I'm using air quotes who think a stock is expensive. He's like, fuck you guys. You've been calling my stock expensive for the last 100%. And it has been. And meanwhile, and meanwhile, fine. And meanwhile, my investor base, the quote, dumb money, look how much money they're making. You arrogant pricks are talking shit about about us.

I also think it's really hard as a founder who's still the CEO to disentangle people's skepticism about your stock from being like skepticism about you. Yeah, it's him. It's his baby. It's his entire being. Right. So I think he like thinks of Palantir and himself as interchangeable. And obviously they are.

They are. Right. They're forever entwined. Where does the person end and then the company begin? there's no line because that's what it is to be an entrepreneur and to build something that's not, he wasn't a hired CEO. Well, and guess what? You're 100% right.

And the reason why you can't untangle the man from the company or from the stock is because part of the thesis for short of the company has nothing to do with the fundamentals. We're about to get into it. They are firing on all cylinders. The company is on fire. But the people that are short would say it is a great company. but it's not a $500 billion company this fast. And the reason why it's a $500 billion company

is because you are pumping the stock to retail investors. So that's a really great point. Like, Burry does all this cryptic shit. He's like Drake with the tweets. He like doesn't like actually come out and say what he wants to say or he drops hints that he might be long or short something. I wonder if you sat down with Michael Burry. Would he say exactly what you just said?

yeah of course the company's doing great like so i try to make that point on tv today the bears aren't saying this is a bad company just too expensive they're just saying like investors today are paying for like growth from 10 years from now like it's been pulled forward i don't hear anyone this is not all right well you know what this is not it's not valiant no okay it's a it's a really important distinction. Because in that case, if people were saying Alex Karp is a fraud, Palantir is bullshit, then his combativeness would be fully understandable. Like, how dare you say that? People are saying the opposite. They're saying investors are way too excited about this company despite the fact that things are going really well. Let's get to some of the

fundamentals. Pull up their first slide that talks about some of the growth. All right. U.S. revenue grew 77% year over year. I think the overall company revenue was up 63% was the number I heard. Dude, 20% quarter over quarter is wild. Right. Sequential. So this quarter versus the prior quarter, not last year, 20%. We got to the explosive.

But look at the, okay, so they closed 204 deals of at least a million dollars in revenue, 91 deals of at least $5 million in revenue, and 53 deals of at this 10%. at least $10 million from revenue. So this idea that it's just government spending, it's all government contracts, not true. Just not true. No, they're adding corporate customers, what they call commercial customers.

Here's the total contract value, TCV is the number they use, is $1.3 billion, up $342% year over year. I don't care what business you're in. If you're adding contract dollars at that rate, you are doing something very right. He obviously is the best version of a company helping other companies implement AI.

Hands down. And also, a lot of traditionally the highest growth companies are doing so because they're giving the store away, right? It's either negative value contracts or whatever. They're doing it with a margin rate that is off the charts. So they're obsessed about the rule of 40, which is a term in enterprise software that measures your, or how profitably you're growing.

So your growth rate and your profitability. And they're off the charts. John, throw some charts on. 10014%. Their rule of 40 score. This is them compared to enterprise software companies that have over a billion dollars in revenue. The next chart shows them compared to, I think, the top 25 companies around the world. Who's even close?

Who's next to them? Invidia. And who's underneath them? I can't, I can't make that out. It doesn't matter. The point is, they're off the charts. It looks like that is, uh, Rocky Mountain Chocolate Factory. That's exactly, I don't, dude, I don't know what that says.

L, I can't say it. L, L, L, is that Lily? Could be. It could be, right? Um, go back, but look at the prior. There's nobody. No, one more, one more back. No, this is the rule.

Oh, this is it. Oh, this is it. The rule of 80 frontier. So where, like the 80, the 80, the 80, The 80 comes from, or the rule of 40, the 40 comes from that combination of profit margins and revenue growth. So, like, what they're doing is not being done by anyone. And when he says that, he's not lying.

And it's accelerating. So we have one more chart. Look at this. Look at this. It's accelerating. It's at the point where every large company and every government around the world is going to be doing tens of millions, if not more, in palent. to your business.

If this continues, and he knows it. And so he's basically like, okay, let me get this straight of the 5,000, 3,000, 4,000 publicly traded companies in America, us and NVIDIA, that's who you want to be short. Like literally the two best companies on Earth. In the chat, people are pointing out. Barry talked about getting short the semiconductor stocks last year. not a great idea um short a new video at different times but it doesn't matter what he tweets because his we see his performance and this is a great lesson forget what they say all right

they could change their mind it doesn't what they're you look at the 13 fs it's in the past his performance has been kick ass he's been doing really well so don't worry about what he says ignore it what if he short right what if what if he bought puts two days ago and he covered him today the stock went down eight percent right he probably probably probably probably would have made money. So how do you know? That's one, too. Obviously, we've talked about this before, the dollar amount. People are calculating the notional value of what those options, contracts stand for. And they're saying, oh, it's half his fund is inputs. I very highly doubt that's the case. It's not how to calculate what his actual financial exposure is. Yeah,

it's leverage. It's because it's low. Okay. Look, I think. think there's room for both of these guys to be right. This stock could pull back 20%. I think not even violate. It's 200 day moving average. Dude, it's up. It's up still. We can make money and then it could rebound. What is it up year to date? I mean, it's, first of all, the pullback is, it's a baby to pullback. It's up 116% year to date. So, here's the other thing. A% of its highs, big deal. They're buying back stock. Really? Yeah. So if you're buying back stock, don't you want there to be short sellers? knocking the price down, you could just buy them out of their positions on the way back up.

He said he has $880 million left on an existing buyback authorization. Do you want to buy? Do you want to buy your stock at $200 or you want to buy it at $180? Yeah, I'm a $500 billion market cap. That's not, that's nothing. Understood, but I'm just, I'm making the point. He's buying, he was, they bought back stock last quarter. They didn't not buy back stock.

So if that's what you're doing. He's rallying the troops. That's all. That's what all the rhetoric is. I do think he is very wisely creating this retail army of people that he has made a lot of money for. I think you're right. He's galvanizing that base. And I'm seeing a lot of CEOs get religion on this.

Netflix just announced a 10-for-one split after a really long time of not doing splits. And then I saw the guy from Service Now on with Kramer, the CEO. And he was saying explicitly, we're doing this. split because we want to make it so that our fans in the retail investor audience can continue to fight with us and be on the team and buy more shares. I do think that that's now part of the playbook post GameStop, post 2020. I think technology CEOs in particular, but not only tech CEOs, recognize the value in having a vocal retail shareholder base to counteract some of the company.

of the narratives coming out of Wall Street and institutions. I think they like having a rabid army. You better deliver. There's not too many Alex Carps. I agree. Then there's not too many palanteurs. Well, the Service Now guy has made a lot of money for investors too. So, and obviously so is Netflix.

And I think deliberately like catering to that retail investor with a lower share price is part of the modern CEO playbook. Not dumb. I like it. We should split our stock. What do you think? Do a five for one? What's up?

A little five for one? All right. Let's see what else. Let's put up the price reaction. This is... Got back into the gap. I mean, it's actually nothing. It's down...

I mean, okay, stock's up 300% of the last year. It pulled back 8%. The point is it pulled back to the level it was trading that on October 29. Yeah. Who cares? It's nothing. It's nothing. Total return.

Give me it. Yeah. Next chart. So this is 160% since Christmas. Like, I think you can live through a couple of pullbacks. I would hope so. It'll work out. His opening statement on the conference call was as livid as what he did on CNBC after on Squawk.

It was a lot. So I just, I asked Sean to grab this. This is how he opened. opens the call. Greetings. By any normal or even reasonable standard, these are not normal results. These are not even strong results.

These aren't extraordinary results. These are arguably the best results that any software company has ever delivered. And that's not hyperbolic, despite what your analyst friends may want you to believe because they've been wrong at every price. They're wrong in every single round.

but of course their perspective and they're not investing their own money but a normal enterprise company should not have a rule of 40 above 100 he goes on i'm not going to read the whole thing but basically like his entire tirade at this is the beginning of the conference call not the end is like fuck everyone who doubts us and i do believe there's a certain component of the shareholder base that loves that yeah and he knows it exactly who he knows exactly uh joe out tomorrow in the chat saying he sounds like trump yes deliberately actually then diagram of maga trump stock market investors and palliore shareholders is probably 100% overlap well how about how about how about tussar shareholders

yeah what's what's what's elon going to do to catch up to carp at this point i feel like he's got to throw some punches too all right um it's an interesting story um yeah very very We had a video clip. I'm going to skip it. I don't think it's that important. Let's go into AI generally. You're on next. Yeah, before we get there, to set up some of the things that's been happening in

earnings season, the stocks that are beating, whatever, they already got rewarded, not shock. And we were talking about the setup going to earning season. The bar was high. But the stocks that are missing, oh, boy, it's ugly. So, misses have traded 5% lower on average the day after reporting, which is steeper than any other quarter in the history of our data, which goes back to, it looks like 2016. Yeah. Okay. Now, listen, so I love this.

I love a healthy reset. I love stocks falling, even as they beat. I don't like to see anybody lose money. I'm not bearish by any means. I don't celebrate this. But there is obviously a lot of optimist. baked into the market based on whatever you're looking at, option activity, sentiment, it's all saying the same thing.

A healthy reset, just blowing a little foam off the top of the beer, let's reset, let's everybody take a, take a beat. I like it. I like where we're headed. Oracle stock closed the gap after that 25% pop after the Open AI announcement or about to close the gap. Like a lot of the, holy shit, this is like scary, vertical price stuff, that's all gone.

So now we can move forward, hopefully, in a healthy way. All right. Anything else? We're getting a heads-up, AXon Enterprise, which is Taser and body cameras for law enforcement. Huge blow-up after hours. That stock had been rallying up until late summer. And then- Anything about that name?

It started. So it's like part of this, like, military-industrial complex, like, law and order, Trump trade kind of thing. They sell a lot of equipment for military, for police, for law enforcement. Stock had been doing really well until late summer. It broke down in September, technically, and I guess now we know why. It broke its 200 day three weeks ago, and after hours tonight, it's down $150 a share. It's down 21% on earnings. I haven't seen the earnings themselves, but not great.

So topic two is a bit steady. at this point. I put this in the dock, I guess, like a week ago. So whatever. There's an interesting thing going on in the market where you're going to see this for the next, I don't know, three years because the stock market is so concentrated, you're going to see a lot of very bizarre days, whether it's equal weight outperforming or underperforming, like in a dramatic way. So for example, last Wednesday, I believe it was, or Tuesday, it was a day last week, bespoke tweets, we did this, where they showed it was the worst breadth for an update ever for the S&P. So there were only 200, I guess there were 300 more stocks were down than up, which is off

the charts, to which you would say, oh my God, breath, it's ever, you know, the divergence is 2000 all over again. It's being lifted by a handful of stocks while the rest of the stocks are crashing. Not so fast. Next chart by duality research. So, okay, it was last Tuesday. see. But also, look at all the odd days in 2025. This is the opposite, okay? These are when you see a lot of stocks that are actually advancing, but the index isn't moving. Well, how could that

possibly happen? John, we could skip the next chart. Go to my Mag 7 chart. So here's the deal. This is wild. The Mag 7, the market cap of these stocks are equal to the bottom 400, 49 stocks in the S&P, which is stocks 52 through 500. Stocks 52 through 500 are as big as the Mag 7. So you're going to continue to see these really weird days inside the market where you could have a lot of stocks that are down, but the Max 7 is a great day and the index is up. Conversely, you could see the Mag 7 drag the index down with a lot of advances.

So not to throw out this breadth data, but just it needs context when you see it going forward, because we're going to continue to see it. Yeah, I see it differently. I think the market is secretly getting killed below the surface. And I think it's a function of a couple of things happening. Wait, hang on, hang on. I'm sorry to cut you off.

You can't, this is not, you think the market is secretly getting killed because there's data. The market is not secretly getting killed. If you look at the equal weight, NASDAQ 100, Russell 2000. Stop looking at that. Stop looking at the equal weight stocks. What do you mean? How should I look at it? How is the market is secretly getting killed?

Look at the internals. Okay. Those are internals. but what in totals are you talking about? 31% of the S&P 500 are 20% or more below their 52-week highs. Do we have that chart?

I have this data from chart Kim Madden-Shall? I have this chart too and I didn't put in the doc, you know why? Because there's nothing there. It's average. It's average. There's nothing there. No, your data is wrong.

Your data's wrong. It's 25% since 2018, so it's a valid average. Okay, no, it's not 30%. The 31% of the index is down what? 20%. You said 30. It's a big difference. 20% or more.

I have more. It's basically average. It's average. Six and a half percent of the S&P is now at a 52-week low, and I bet today it's worse. That's as of yesterday. That is the highest level of new 52-week lows since Liberation Day. The average is 2%. It's 6.5.

I know there's nothing there until there's something there. Bro. I had him chart this, and I didn't include it because there's nothing there. There's something there for me. It's nothing there for you. It doesn't. There's nothing on the chart. Keep going.

Okay. Median RSI in the S&P, not average. Median, it's 44. This is not consistent with bull markets. Median percentage of stocks below 52-week highs is 15%. Look, oh, this is the one, actually. This is the only one I care about because I keep this best stocks in the market list and it's shrinking. and 66% of the S&P 500 is actually down over the last month.

It's nothing to be alarmed about. Oh, my God. Nothing to be alarmed about, but it's also to your, the way you say it, it's also not nothing. We have a chart. Wait, hold, hold on. I'm just saying you said the stock market is secretly getting killed. Can we just secretly getting killed?

Okay. Dude, dude, Pinterest is blowing up right now after the close. I know Pinterest doesn't matter. I'm not saying it's not the. But, no, but words matter. You said, Pfizer of last week, UPS, Nike, the list of brand name stocks, while they're not important in dollar terms relative to Microsoft, the list of stocks that are important to other people that are breaking down slash crashing

slash making new lows for the year is alarming. It is. It's notable. Alarming? Well, we're different people. We have different biochemical situations. Notable. It's notable.

For me, it's alarming. Throw up the nearing historic extremes. The way that I see it, Josh, is that the stock market was max long complacent and max above its 200-day moving average. It was 13% above. So we're just getting a little reset, a little foam being blown off the top of the beer. And you're right. There are a lot of names. We can go down the list of Starbucks, of Nike.

There's a million of them. There's a million names that are getting leveled. My friend, you are in a kayak heading over Niagara Falls, talking about a little reset. Stocks are secretly getting killed. You're not, we're not experiencing it as a market-wide disruption yet because the stocks that really matter are holding up. Apple. Okay, but Josh, there's an index for this. It's called the equal weight.

This weights all of the stocks equally, dude. and it is down 2.4%. So shut the fuck up. This is the data. The median stock is down to, well, not that's not true. The media stock is not down 2.4%. The equal weighted stock market is down 2.4% from its all-time highs.

So when you say the stock market is secretly getting killed and it's alarming, you need to relax. I'm going to tell you the greatest thing about the show is we'll be back here next week. And then we'll see who wants to relax. I'm not making any predictions about where it's going to happen next week. Now, here's what I want to say that's constructive. We need it.

this to happen it got too easy people are walking around with their big giant balls and a wheelbarrow they're not afraid they're not afraid of they're not afraid of a goddamn thing investors we're definitely feeling themselves and then when you look at like the strategies of the world some of these um uh some of the smaller AI names and you look at like some of the things that people have made money in the Aklos I I don't think it's negative. I don't think it's negative to see 30, 40%, uh, strategy is down 200 points for 450 to 250 in like six weeks. I don't root for people to lose money. I just think like some of these types of things needed that correction for people to calm down. Like, like relax with the level of

risk that they're, that they're assuming is not risky. A healthy correction or, uh, what I say healthy pullbacks only look healthy in other people's stocks but but it is true in my estimation now again it's not a prediction of where we go from here but this is normal this is normal you can't go up every day forever and ever you can't have these pre-revenue companies at 30 billion out market caps up a thousand percent without any pullbacks it doesn't work like that so this is this is the way it works all right before we have a few more charts I just I want to call this one out I I did it with Ben on wait I'm not but I'm not but I'm not done do you know it went up today What?

Not a rhetorical question. Oh, Apollo went up 6%. They rallied financials. Home Depot went up. This is what gives me hope. They rallied the defensives, which, no, not looking for. Healthcare went up, consumer staples went up. But the financials were the best sector on the day.

Up a half of one percent, no big deal. But like, that tells me that we're not just throwing out the baby with the bathwater and giving up on the bull market. What we're doing is we're tamping down some of the more egregious, silly stuff. And then like Berkshire went up today. I should say, the Goldman Sachs went up today. Home Depot went up. Like there was some good stuff happening today that I like to see and I think it's healthy.

Healthcare. Rotation is, who said, is this JC rotations of the lifeblood of a bull market? I don't know. Somebody said it. It doesn't sound like a JC. Somebody said it. Is that Rafa Kampora? Who cares?

All right. So I got to share this chart because I blew my own face off with this. I had chart kid. Yeah. I think that was an Akapura, but maybe not. Okay. All right. So $4 trillion for Apple.

It's a lot of market cap. And I think it's easy to just look at like the numbers and not really appreciate the underlying businesses and how large they are. So I had Matt show me their, their segments broken down and compare that revenue to other giant companies. So let's start at the top, the iPhone, which is basically half of the revenue of the company. Over the last 12 months, the iPhone did more revenue than Bank of America, not a small company, and meta, also not a small company. Services, which is the crown jewel, it's the entire growth engine and the entire margin expansion engine of Apple. Services did more

revenue than Target, $107 billion. Wearables, which is the watch and the, and the, and the I, with the AirPods and home accessories, I don't know what that is. That did as much money as Starbucks almost and almost as much money as Salesforce. All right, now you're going down to the computers, the Mac. The Mac did more money than Schwab,

significantly more money than Schwab. And the iPad, which I can't believe this. I don't know, I guess I would have guessed, I don't know what I would have guessed. The iPad did $28 billion of the last 12 months. That's more revenue than AMD. Holy shit. So keep that chart up.

This is my takeaway. This is how crazy this is. AMD has a market value of $406 billion. Now, we know it's growing faster than iPad. But the fact that those two companies are revenue parity is bananas to me. You could say the same thing with Schwab. So just like just for people's context, Schwab has a market cap of $170 billion.

Mac, just Mac alone is a bigger business than Schwab. and obviously, you know, the example with Target, the example with, this is still the best business in the world. It's just not the fastest growing anymore, but it's still the best business in the – Apple is the best business in the world. They're making money in year 20 of a product, like an iPhone, where most consumer technology companies, at best, they've had like a three-year run, a five-year run. Think about Japanese companies selling VCRs.

like they have extended the lifespan of consumer technology devices and found a way to keep these things at 40, 50% profit margins. I guess the other two that I would say are competing and, you know, whatever, we're splitting hairs would probably be Microsoft and maybe Google. I think this is a better business than both. It's just, it's not growing as fast right now, but it's just bigger and it's better. And it's global and the margins are still. there. Yeah, it's wild. It's really impressive. And they just keep coming up with new things to

sell the same customers, keep charging the same customers more money for the same product, keep improving the products. They have this consumer lock-in. And people like, oh, why is Apple 35 times earnings? Because, because you know how hard it is to shock a company like Apple in, like, off its game? They just continue to deliver. And the buybacks. the dividends. Yeah, but I'm saying people look at it like a consumer staple. It's a consumer luxury slash consumer staple. Well, it's the same story as Costco.

Why are people paying 50 times earnings for Costco? I'm not saying it's justified. Because they know the customers are going to show up every week. It's consistent. It's, you know what you're getting. There's no downside surprises. People are paying up for that consistency, even if it's not fast growth. It is, it's going to be there tomorrow.

It's going to be there in the next day. People drop an iPhone. break it. They're not switching to another phone. They're locked in. And that's worth a lot to an equity investor. All right. We had one more thing in that, in that market secret to getting killed. We have the quotes from, no, I don't want to skip the next chart, a lot of charts. The thing from Sam Rowe or the thing about, you want to, let's save the Altman stuff for, for TCAF. All right, Sam Rowe. I woke up to see. almost every financial news Saturday

read feature essentially the same alarming headline. Here's a partial roundup. Goldman Sachs and Morgan Stanley CEOs warn of possible drawdown Wall Street Journal. Just seven more of those. Here's some quotes.

Quote, it's likely there'll be a 10 to 20% drawdown in equity markets sometime in the next 12th, 24 months. Oh my God. All right, Creskin. Things run and then they pull back so people can reassess. A 10 to 15% drawdown happens off.

even through positive market cycles. It's not something that changes your fundamental or structural belief as to how you want to allocate capital. It's David Solomon from Goldman. The Morgan Stanley CEO, Ted Pick, said, I think they were at the same event in Hong Kong. We should also welcome the possibility

that there would be drawdowns 10 to 15% that are not driven by some sort of macro cliff effect. We're the best thing ever. If we get a 10 to 15% pullback on no tariff nonsense, It's no, oh, no, the Fed is going to start hiking again. Like, if it's just like, hey, we were over our skis and let's just reassess. Wonderful. Let's set up for the next leg higher.

That's healthy. What's not healthy are no pullbacks. What's not healthy is up 25% every year with no. That's what leads to a crash, okay? You need pullbacks. You need doubt. We need the wall of worry to be rebuilt so that we can climb it. This is all good stuff.

Wall Street Journal, Bloomberg, CNBC, Reuters, Business Insider, and Fortune all wrote the same article based on those comments from the two, the two, the two Wall Street CEOs. Yeah, you're not going to not write it. I guess you have to write it. They must know better that they're basically saying nothing. They're saying water is wet. They must know that. Like the editors at least two are.

Yeah, I mean, but I guess. David Solomon, the stock market goes up and down. Write it. You know, it's an article. Ted Pick of Morgan Stanley. No correction in sight. That's an article. But, you know, that's not what happened.

These guys are, these guys are saying, look, it's a bull market, but so what? You know who's not, you know, what's Buffett's problem? Get involved. Get involved. Don't just sit there, do something. All right. Great segue.

Buffett is still a seller. Reported earnings like a gentleman on Saturday. No fanfare, no conference call. Just a almost like a handwritten note slipped onto the website. And we like it that way. Yeah, yeah. Berkshire was a net seller of stocks. They now have $380 billion in cash and cash equivalents or treasuries, and they bought back zero shares of Berkshire Hathaway during the quarter, and they're obviously still

not paying a dividend for the 70th consecutive year. Let's put this chart up. not huge sales. They did that already in 24 when they liquidated two-thirds of their Apple, but still selling. Now, we don't know

what they sold chart off because that will come out in the middle of November with the 13Fs, right? The quarter ended September 30th. They have 45 days. Typically, they nail it to the day. All of these big investors

will come out with their 13F filing in about a week and a half. Then we'll find out if they sold more Apple. Did they sell more financial stocks? What, if anything, did they net buy? They didn't sell anything. At least the net, the net is nothing. $380 billion.

I saw an analysis where it's like really $360 billion because of the way something's being calculated. It's like, dude, what are we doing here? Chart on, this is Berkshire versus the S&P. So, Josh, we were talking about this with Belski yesterday. Look at how wild Liberation Day was. Berkshire was flying high. The stock was up like 15% while the S&P was down about the same.

And this was like the anti-AI trade, right? And then and then Setsman flipped, big time. Yeah, Heather M.42 in the chat is saying BRKB is my cash equivalent. You know, it's sort of like a joke, but it sort of actually is. No, it actually isn't. Just stop. I know what she's saying. I know.

But it's, I'm saying the market cap is increasingly becoming dominated by this almost $400 billion in cash, and when the market dislocates and has an event, people understand the potential for Berkshire to actually turn that into an opportunity for itself. They haven't yet. If you are looking, they haven't yet, but they could. If you are like, oh, my God, just AI everything, I can't escape it. It's 40% of the index. This is the anti-AI.

If this is a bubble that pops, whatever, whatever, I think Berkshire will do just fine, better than just fine. They don't really own anything. They don't own enough of anything that requires this AI splurge to continue, although they are absolutely involved from the perspective of the utility. They are obviously supplying power to a lot of data centers. They don't mean to. That wasn't the idea when they bought up all these utilities,

but they're not not involved. They're just not directly involved. All right. We talk about some of the blowups from last week. Yep. So this is one of the reasons why I love earning season so much. You got to hear from the people in charge because I listened to some of the Chipotle call. And we spoke a couple of weeks ago.

And I can't remember what I said if I was like probably, I think it was probably like, yeah, Chipotle might be there might be some value here. I'm not touching that stock. I don't believe this guy. I just, I don't believe what he says. I think he's, I don't know that it's full of shit might be too strong. I just, I don't trust him. I don't like what he said on the call.

And I don't buy the turnaround. I'm not buying the stock. I don't care how low it goes. It's not a turnaround. Like, it's, like, statistically, this is not a turnaround. It's getting worse. So here's the story. The increase in total revenue, it was not a big increase, was driven by new restaurant

openings and a 0.3% increase in comp restaurant sales. Yuck. Due to a 1.1% increase in average, partially offset by lower transaction of 0.8%. Nobody wants to pay $14 for the ball anymore. 17. And this guy had the gall to say, he opened it with this.

Earlier this year, as consumer sentiment declined sharply, we saw a broad-based pullback and frequency across all income cohorts. Since then, the gap has widened with low-to-middle-income guests further reducing frequency. Okay, so all this might be true.

But then he's talking about like a particularly challenged cohort It's a 25 to 35 year old age group. It's like, dude, yeah, fine. There's some challenge here, but they don't want your slop anymore. They don't want it. There's no value there. And in terms of, like, their stories

and the metrics for what they're going to be doing to turn it to get people back to the store, I don't buy any of it. It's not going to work at all. And the stock is getting creamed. It's done a 54% drawdown. Throw this chart on. And the whole sector is falling.

It's not just them. So three years, throw the chart on. This is them versus their peer group. So the peer group's not doing great either. But nobody wants this. Who is this? This is a charter. Had a great chart, the slop-ball economy chart.

It shows the year-over-year comp store sales. So what this is measuring is like, all right, store X, how do they do one quarter to the next? Forget about new store openings. So sweet green, Chipotle, Kava, all of these slop balls. And I'm here for the stop. I don't mind the food. Nobody wants it anymore. Prefances are changing.

So don't tell me about the consumer. The nobody wants this. All right, so a few things are going on. Number one, the relentless price hikes are completely. completely out of control. I can't speak to Kava, a sweet green salad with like an extra protein or something. It's like a $20 meal in Midtown Manhattan. It's obscene. And it's a bowl of slop. It's not good. The ingredients are ice cold. It just, there's nothing appealing about it. I had coffee. It's good. Chippole. Everyone knows the food has gone downhill, but nobody can pinpoint

how they know it. I've never liked it. I've eaten it. I just, I never thought it was good. but now people that love it are my kid is a great example. He and his friends, they're off it. They just, they don't think it's good. It's by the time they serve it to you and you pay, which takes 30 seconds, it's already lukewarm, getting cold. They're banging you out for guacamole. That used to be cute.

Guacca's extra. In this economy, it's not cute anymore. Nobody wants to hear it. They're not in on the joke with you. And it's too much money for what it is. They over-expanded, perhaps. And now that's a timeette, we open 64 Chapote lanes.

What is that? The drive-thru's? That's the drive-through. Imagine eating this shit in your lap while you're driving. Are you fucking kidding me? So I'm not buying the turnaround either. If I want to bet on a turnaround in this space, I'm Starbucks. I'm not Chipotle.

Or there's a lot of opportunities. Starbucks for sure. Or Domino's. Like not this. Not this. All right. What are you? What do you think?

Is it going lower? I'm not buying it. Going lower? Is it just not going to go up? Chipotle. I have no interest. Yeah, I'm looking right now. So there's no balance.

Is this alleged turnaround artist buying any stock? What's his name? Scott Boatwright? Any insider buying to speak of or probably not, right? I doubt it. I don't like this guy's voice. I don't like what he's saying. I'm not buying what he said.

I'm not buying the stock. You know what? Honestly, if it went to like 20 bucks, I would just be like, all right, fine, this is an activist coming in. Here, a number of open market buys last three months, zero, but last 12 months, 24. Okay. 55 sells. No, no, hold on.

If it continues to get smashed and activists will get involved. Does Bill, is Bill Ackman still in this name? Taco Bill might have to ride again. I don't know if he's in it. Okay. If it, you know what, I'll buy it at 20. In fact, I would buy a lot of 20. But we'll see.

But for now, no, I'm not interested. All right, let's talk about FIServe. So FISERV is one of the biggest financial technology companies that you probably don't know what they do. They're in a lot of behind the scenes processing stuff. But one of the things that you do know what they do is the, you tap on the phone. So it's a Clover competitor. The stock absolutely. It is Clover.

It's a toast competitor. My bad. Okay. Cliver owns Clover. It's a point's called point of sale payment system and you see it in a lot of stores and restaurants. So Chartgoat. and he is a goat, made me a chart showing, so the stocks that are in the S&P 500 today, okay,

he went back to 2007. So when I say that this is a top 10 blowup since 2007, it's just that of the 500 names today, this is a top 10 blowup of the names that are in the index today. So, try it on, please. So AIG on a one day basis fell 61%, Josh. I know you remember that. Yeah, I remember almost all of these.

So a lot of these were from the GFC, of course. But look at FISA. You don't see this that often. And why did this happen? Because the results were an abomination. And what is hilarious to me, I mean, there's a lot of things that stood out. They repurchased 7.2 million shares in the quarter, returning a billion dollars to shareholders. Returning a, excuse me, excuse me, excuse me, excuse me.

you bought 7.2 million shares knowing full well that this is going to be an absolute annihilation catastrophe. What are you mental? This is the most irresponsible, reckless behavior I've seen from a company in a long time. This is nuts. The numbers were atrocious. The core business is challenged. The growth part of the business, which Clover is part of that, is challenged the payments. They had the CEO. basically running and gunning this thing with buybacks and bravado. Then he parachutes out. I don't know if he sold all his stock or I know he was able to.

He did. He did. He did. No, no, no. Didn't he do a tax free because he's now in the administration? And now, yeah, now the new guy who's running this has to deal with it. It was a disaster. The fundamentals are horrific. Right. I don't even know, like, I don't even know if this is a buy.

like it it's not a bank it's it's not a bank it's like a it's like a paper pusher it's like an information solution for financial companies so clover is the crown jewel of this business this was the growth engine and they kept stuffing fees and stuffing fees into it it matter of fact toast which is a stock that i own thanks to you got killed on the back of this because it just threw it to hold into question the whole economics of this business Toast, we found out, it's just fine. But they pissed off their customers so badly that it actually, I think, I think Toast is a big beneficiary of this blowup.

There's a great article this week. There was only one analyst who had a sell rating on FISERF before it blew up, and it's a 26-year-old kid that no one's ever heard of before. Great story. And I love the story. I'll just give people a little flavor of it. FISERV's only bear is a Bloomberg story. five serves only bear is a 26 year old analyst who beat wall street and then of course i hit a registration wall

and i am a bloomberg sub but i it doesn't matter the only the stock in the group that he really likes his toast which i like to say uh so we'll see if this kid is uh two for two um but wait you know it's hilarious look at throw up this chart so all right i get it no it's hard to see the future there's no sell ratings on wall street anyway whatever but look at the hold ratings I guess it went up a lot But like how are you still How are you still saying to your clients Why didn't these people cut it to a sell

Because you know why I know is that help Who does that help? In other words A lot of the buys became holds But none of the holds became sales Yeah Or how about this you cowards

If you were a hold If you were a hold If you were a hold in a stock falls 44% You better be up to a buy Unless I guess you say Now the story's completely changed But finally but then go to a sell the thing is you don't want to go to a buy because you don't want the salespeople at the brokerage firm

to start calling hedge fund clients and being like, hey, we're a buy on this today. Oh, really? Yeah. You can't really do that. Right. If you think that there are systemic problems at the company, you know this is like a three or four quarter penalty box. Yeah, this is a stand. So you don't want your salespeople taking a buy rating out to, right?

Because this is about trading activity on the desk. That's what they're paying you to cover. these companies for you don't want to encourage the institutional customers of your broker dealer to start buying this thing no i guess i get it i get going to a hold it's four days removed from that bomb and the stock has no bounce it's an it's another 52 week low it's so bad this gap this gap unless this gap will never get filled right i don't this is this becomes a stock that you just remove from your life basically just get rid of it just get rid of it just get rid of it just get rid of it actually josh but we've been to the fyser forum twice in milwaukee uh oh right they don't own

the stadium they just paid to name it yeah great investment great investment like ftx paid to uh paid to sponsor where uh the miami he'd play all right it's a shit show um thank god thank god uh toast reported and was uh a good report because this thing got lumped in with uh with that piece of shit. I bought more. I bought more toast on the day of that FISA report because I just wasn't buying that there was like systemic issues in the industry. I haven't had a chance to digest the toast numbers. But for people who are long term viewers of the show, I am an investor, not a trader. I've been accumulating stock in the mid 30s. I think it's going to 6570. And I think it's one of the most exciting opportunities in software because of the degree to which they can truly

own this Tam. Here was the report. Beat on Redmond. revenue, 1.63 billion versus 1.58 expected, slightly missed on earnings. They did 16 cents versus 24 cents. ARR, which is the most important number, annualized recurring revenue, was up 30% year of a year to $2 billion. So that ARR is almost like a newitized revenue, provided they don't have high churn and lose a lot of restaurant customers. That's the best kind of software business there is. You can budget based on that. You can build on that. You find other things to sell those same customers. They have a lot of different verticals that they've expanded into. It's not just payment processing. They're helping restaurant owners with staffing and what hours, which employees

are working, different software. They're helping the chefs order ingredients. They're making loans to restaurants in some cases, and that's a business now. And they are the most important provider of AI to the restaurant industry. Believe it or not, these companies are anxious to learn how AI can help them save money and toasts on the front lines of getting these companies data ready to be used in various AI strategies. So they own that customer and they added 7,500 more net locations. There are now 156,000 locations. There are now 156,000 locations. all over the world, and they partnered with Uber to help them expand that international Tam.

I think Uber's in 100 countries. So there's a partnership that was just announced yesterday where Uber Eats is going to pull in toast data and help the toast customer restaurants with their online ordering, and Uber's going to help push toast out to the rest of the world. So I love that partnership. I own bowl stocks. Put up the toast chart. Look, man, like this is volatile.

It always will be. And it trades on rumors and innuendo and they make a change to the pricing on their website. And people start dumping the stock because they think there's like weakness in the market. It's all stupid. My opinion is the long-term trend is for restaurants to use more digital technology, not less, in order to remain competitive. And this company has the industry on smash right now, especially if Clover is going to be fucked up for the next few quarters.

So I'm staying long here. Do Uber real quick. This is another name we've talked about, ad noisium on the show. My biggest position personally. Stock fell 4% or 5% today by the close. Had an amazing report. 22% year-over-year trip growth on the mobility side,

21% gross bookings growth, three and a half billion trips in the quarter, $50 billion in bookings, revenue was up 20% to $13.47 billion. Cross platform, which is the most important thing.

Uber eats people using rides and vice versa. Cross platform users spend three times as much as everyone else. What else did they say? monthly active platform consumers are now at 189 billion next quarter they could have 200 million monthly actives at this pace how many companies in the world have 200 million people using

their product or service every month it's a small list it is not a lot of people not a lot of companies have that level um they also announced the deal with invidia they're talking about having 100,000 autonomous cars on the road, Uber powering the rides part of that business, getting, connecting drivers with consumers, Nvidia providing the technology. And basically what Dara has been saying is they don't think owning the fleet is the opportunity. They think that's going to be a private equity business, much like real estate investment trusts own a lot of buildings. They think the cars will be owned in fleets by private equity,

and it'll be like an income play, and the actual growth and value will accrue to the software and the technology, not the cars. The cars are rolling toaster ovens. So they are not pursuing that ownership strategy of the cars. They're sticking to what they do better than anyone, which is connecting users with the services they want. Who's going to make the cars?

They have a deal with Lucid. So what they're doing is, making deals with AI, with the autonomous vehicle technology companies who are in turn making deals with OEMs. So like everybody's going to make, look, in five years, every car sold will be preloaded with this equipment to be level for autonomous. It'll be the ultimate commodity. It'll be like cup hold.

I can't wait. I can't wait. Yeah. You're looking at the end of drunk driving arrests and accidents. It's phenomenal. Um, phenomenal. So, uh, Uber is going to play a really big role there. And I think, uh, I think the stock belongs over 100.

If today were a better day in the market, I think it could be higher. Um, all right, uh, I was going to do live nation, but nobody cares. Okay, uh, let's do make the case. And then we'll do mystery chart. We'll get out of here. All right. I'm going to go fast. I, these are three companies that I own.

Um, there are. So for, for index investors, there's no opportunity yet, right? Like, if you own the queue, if you own the S&P cap-weighted, there's nothing there, right? Whatever. But, as we mentioned at the top of the show, albeit a little bit hyperbolic from Josh, there are a lot of names that are pulling back, a lot of really great names that are, I'm not talking about Nike and Chipotle and Lulu, like great businesses that are firing

on all cylinders that are getting whacked for various reasons. One of them is Blackstone, a stock that I own that I think is going to continue to work, is going to be a secular winner for the next decade. They are the premier name in private investments. The stock is in a 24% drawdown. I think they're getting caught up in some of the news over the last couple of weeks, which... I didn't even realize that. Yeah, dude, 24% not nothing.

I think that news is blowing over. In fact, not. I think I know it is, at least in the BDC land. All of those names have bounced pretty dramatically, but the private equity names and the private credit names, the asset managers have not. So I think there's a great opportunity in Blackstone. S&P is basically a monopoly. I don't know if the story there.

So that's only 11% off its highs. I don't know if the story there is a lot of these lower grade companies are getting rated by not the big three. So maybe that's hitting it a little bit. And then ICE, which is the listening business, New York Stock Exchange. I think maybe, Josh, I'd be curious to hear your take. I wonder if this is getting caught up in the prediction. market maybe taking some market share which i do not think is going to happen but either way there is ice just made a huge deal with shame copply at um polymarket at polymarket which is coming

back to the u.s think ice is like spreading its bets on the roulette table and if this is really going to be a big chunk of financial activity in the prediction markets they want to have a dance partner i don't i don't know that doesn't look like that severe of a pullback compared to it's 20% how much it's how much it's is it yeah which one are we looking at oh the orange one yeah it's it's not nothing so i think i gotta dig deeper into that then i don't know what's going on these names are down a lot um so i think this opportunity there uh i'm holding oliver ruff says it's a mom donnie crash yeah the new york stock exchange is now oh my god the new york stock exchange is now centrally located in the people's republic of new york city

All right. Well, if you believe that, it'll be a transaction tax. If you believe that's the story, then buy this with both hands. Josh, make the case. I'm sorry, mystery chart. What do you got? All right. I'm long this stock. We haven't talked about it in a while.

Let's go. What is it? Let's go. All right. Give you one clear. How about this? How about this? Market cap.

Is it over under $25 billion? Way over. Okay. Okay. All right. I need another clue. It's an ARR story. Okay.

This is as of today, basically? Yeah, look at the dates on the bottom. I'm not tricking you. I'm just, I'm not tricking you. All right, one more, one more clue. So it's an AR story. It's a large, very large stock. What else?

I own it basically since inception. I'm one of the first people to own the stock. And I have a four. Four or five X return. Okay. InVedia? No. Ooh.

Okay. Reveal. Go ahead. Too many clues. Reveal. Can't win them all, Michael. Crowdstrike. I should know that.

This thing hit 551 today. This is unbelievable. Good for you. I have a post-reveal chart I want to show you. Great winner. So the stock is up 852% since the IPO. That's a first. 42% annualized return.

Market cap is now $140 billion. And I have to tell you, I don't own enough of it to like really take a victory lap. I own a bunch. But like this was the most obvious bull market to have foreseen in advance. You didn't know that CrowdStrike would win. They obviously are amongst the winners.

That you couldn't have known. Yeah. But I think the takeaway here for me, for the future, when you see an obvious bull market and you're not sure, who's going to win. But like, take a shot because, like, you had to know that cybersecurity spending was going to be in a bull market for at least the next half decade to decade.

You had to know it. And if you knew it, me, I'm talking to myself, should have been way more aggressive. I should have owned five of these things and never sold. All credit to you. Can I ask you one thing before we head home? What's the next one? Please. I need it.

I'm doing. I don't know. The next thing I buy will probably get cut in half done. this is this is this is this is a great trade i'll credit to you not trade hold and uh shout to a friend of the show george kurtz and uh i know he listens and uh what an amazing job this guy has done not without hiccups and setbacks along the way but like man you talk about a company come public and just absolutely crush it for public shareholders this is and by the way in his spare time he he won the laman i don't know if you know that hey josh just literally won the race

So when was the massive outage hiccup? Was that last summer? Two years, two summers ago. I think it was summer 23. The stock is definitely double, maybe even tripled since then. And I remember you were on TV. You sounded like Alex Karp.

You were so mad at people selling the stock. Well, it's, well, so I, like, I guess I was just saying, like, okay, now you're going to sell it? Like, they made a mistake. They have to clean up the mistake. It'll be a financial fix. They'll call their customers. They'll apologize.

Maybe there'll be a fine. Life will go on. You're going to sell it today. You sell it 30, 40% in the hole. Oh, and you know what that outage actually should have taught you about the company? How important they are. Yeah. That glitch in a software update disrupted the entire planet.

So it was the summer of 2024. So the stock, it got as low as 200. The stocks of 532 today. So again, you nailed it. Good for you. I mean, I can't sell it now. I can't sell it. Like I,

look at that chart, but one more time with the chart. No, but this is why you're good, you're very good at, I know, I know it could pull, look at,

look at how severe some of these pullbacks have been. Yeah. So, but like so, so, so what? I'm not,

I'm not selling it. Not so wide, not so way. It went from 300 to 1 to 120 and you held it. I know. I know. Good for you.

What did I tell you about the wheelbarrow? All right, guys, we appreciate everybody who joined us for the live. We love you guys. Thank you so much. We miss you when we're not here.

I want to remind everybody tomorrow's Wednesday. It's an all-new edition of Animal Spirits with Michael and Ben Carlson. We'll do Ask the Compound later this week with Duncan and Ben. And then it's an all-new edition of The Compound and Friends. And boy, do we have a special guest on tap? You guys are going to love the show this Friday. I guarantee it. Thanks so much for being here.

We'll talk to you soon. You know,