The Compound and Friends - Midsummer’s Melt-Up, Robinhood, SpaceX and Palantir Report, Chips Rip, Leopold’s Margin Call

Episode Date: August 4, 2026

On this episode of What Are Your Thoughts, Join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ as they break down another massive week for the markets, including SpaceX's first public earnings report, Palantir's blockbuster quarter, and what strong Q2 earnings say about corporate America. They also discuss the recent semiconductor selloff, the rise and fall of hedge fund manager Leopold Aschenbrenner, Robinhood, the risks of leveraged investing, and Michael's bull case for Floor & Decor. Topics include: - SpaceX's first earnings report - Palantir's explosive earnings - Q2 corporate profits - The semiconductor selloff - Leopold Aschenbrenner's hedge fund collapse - Robinhood - Leveraged investing - Michael's bull case for Floor & Decor - Josh's mystery chart This episode sponsored by Janus Henderson Investors. Visit https://www.janushenderson.com/ for more information. 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

You're all right? Yeah. Oh, all right. Here we are. I'm sorry. I had a YouTube, I had a YouTube link open and I was looking at us on both. All right. Hey, guys, it's an all new edition of what of your thoughts.

It's 5 p.m. on a Tuesday night. So you know what's about to go down. It's Michael Batnik and myself and all of the biggest topics in the markets that you care about. We're super excited to have everybody who's here for the live chat. Can I give some shoutouts, Michael? Good. All right. Brian Grill asks, is that Kurt Russell?

It might be. Masterpiece says, What's Up, Pounders? Let's say, Sodak Jason has the bumblebees up for the Duncan Hive. Yep, Dunkin's here. John's here, too, by the way, guys. Let me say, Matt Evans need a game show version of the compound. How would that work? What would that be like?

I'm open to the, I'm open to the idea. What do you think? I'm great at Wheel of Fortune. Elite. All right. Some shoutouts to Nicole is in the chat, guys. Who else is here? Everyone's here.

And you know what? This has been an incredible turnaround between last week and this week. Like, what a difference. The tape feels a little different, doesn't it? What a difference, seven days and one gigantic market? And I'm a pretty excited for the show tonight. We do have a sponsor. Michael, who's sponsoring the show?

It's Janice Henderson. At Janice Henderson, investors, we believe working together is the way to work better. I believe that too. Like combining your portfolio plans and our in-depth strategy, your valued assets and our valuable insights, your mission and our vision, always working in perfect harmony to find the right investment opportunities. Janice Henderson investors investing in a brighter future together. All right.

Very nice. Nicely done, sir. Okay. I guess let's do the elephant in the room. SpaceX reported its first quarter as a public company about one hour ago and the conference call started 30 minutes ago. Were you tempted to jump into the conference call live or you want to experience it later? No, I'll do it later. I think I'm going to do it tonight, but not yet. Not until a few hours goes by. It's playing right the second right here right now. Yeah. So let's get to the expectations very quick. Let's get to the results very quickly. This was, I think, as good of a first quarterly report as you could have possibly asked for if you're along the stock. We'll talk about the, we'll talk about the reaction on price in a second. But I mean, this is what you want right out of the gates. They did $962 million in revenue versus $8.35 expect. The connectivity segment, which is Starlink, and the only profitable part of the business, did 4.29 billion versus 3.83 billion. So add that to the billion or so in space, and we're talking about some decent money. And then the AI segment, 2.56 billion versus 2.18 billion expected. So between space, connectivity, AI, all three were ahead of expectations. They lost a ton of.

of money, which we know. The operating loss for space was $542 million. The AI unit lost a billion and a quarter. And connectivity actually had operating income of $1.66 billion. There's a couple of other things in here that I thought were notable. Based on the IPO, they now have over $90 billion in cash. A hundred. Is it $100? $36.8 billion in debt and financial leases that they've committed to. And that's up from $22 billion. So the liabilities are up a lot, but they're sitting on a ton of cash. Starlink subscriber count, $12 million. And we know that they are now signing people up at a smaller dollar amount per user

because they're going from like military contracts to consumers and places like Brazil where you're just charging less. But average revenue per user is still $66, the same as last quarter. It was $85 a year ago, but that's been explained. It's not falling because people find it less valuable. Again, it's falling because the mix shift is changing over from professional users to regular consumers. What jumped out at you besides the things that I just mentioned? Well, right off the bat, whereas my doc, they said that they demonstrated the power of extreme vertical integration,

delivering revenue growth of 92% year, extreme vertical integration. Extreme vertical integration sounds a little bit sexual, does it not? I've never heard that time. Well, vertical integration is like... Extreme. Well, hear me out. Vertical integration is like farm to table. Like we grow our own ingredients and then we bring them into the kitchen and we make them.

In the case of SpaceX, they're launching their own payloads, which are the Starlink satellites. So this is actually a very key deal. difference between like what a, let's say Amazon Leo. So they want to do satellite phones also. The thing is, they rely on other people to launch those satellites into space. Whereas in the case of SpaceX, the Starlink satellites are going up on a SpaceX rocket. So that's extreme. And then the AI piece, which they're doing in-house. So that is the extreme vertical integration of which he speaks. Well said. Two things, Yahoo Finance grabbed this. Elon said on the call, it's not out of the question that at some point Starlink will deliver the majority of the world's internet. That is,

I suppose nothing's out of the question, but that is an extremely ambitious statement. Not surprising to hear him say that. He also said this. This is interesting. Going forward, we've decided to build exclusively exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture. We think it's the best AI computer. And the most expensive. Not good enough. The stock is at 116 after hours, down about 8% or so. Can I just make the point that it had its best day since the day it came public or something? Well, guess what? Took back all the gains of time.

No, I know, but like it was front run. Like, it's not like it was down 5% and then fell 9%. It went up 9% and gave it back. Okay. So I actually, I thought that there was a good chance that this thing would rip after the report. I'm not betting on it. I don't have any position here, but I thought they could rip it because it's such a tiny amount of shares outstanding. And you already have a lot of hedging in here, a lot of short selling, connected to the shareholder unlock.

Zero hedge, which we've talked about before. Zero hedge tweeted massive SPX, SPCX, excuse me, shorting ahead of earnings, 95% of SpaceX stock available to borrowers out on loan account amounted to 34% short interest as percent of the float wow um and Elon said i try to warn them but they just doubled down well but again i think that's people that know that they're about to have their shares unlocked and they're kind of hedging the the price falling any further they're locking in a price and i think there's a lot of professionals in the market that are involved in that particular aspect of the trade i don't think they're shorting the stock because they think the results were going to be bad i could be what some people could be we'll find out i

could be away off here when the unlocks happen. I don't think that people are going to be in a rush to dump the stock at $110.10. Yeah, you've said that. I don't think they're going to be in a rush to. I just think that people are going to try to get money out. And if the price is lower than they had hoped, so be it. Not everyone, of course. And if you're an employee there, you're probably more bullish than you've ever been, given how good the results are and how much they're growing. so those people will probably be able to hold it. But every other investor that was involved pre-IPO, are they all going to be like,

oh, no, I'll wait until it goes back to 120? I don't think so. I think people want liquidity. And if they couldn't get the top, so be it. So it'll be interesting. We're going to see that start within two days. So that's how the lockup expiry is written. It's two days after they report the quarter

starts the clock and then it's every five weeks there's another tranche of stock that's available until the first week of December. So I think it's just it's all year. It's going to be more stock, more stock. And we're talking about like a billion shares at a clip. Like we're talking about a crazy amount of stock. So even if only a small amount of people decide to transact in two days, I still think we're going to get a chance to see this thing under a hundred bucks. What do you think? Yeah, yeah. So do I. Okay. We should also do Palantir.

All right. Let me read this to you. This is from Ryan Taylor, the Chief Revenue Officer. Our Q2 results are unprecedented but entirely unsurprising. As the abrupt market shift in LMs that we've been warning you about for years is now here. We delivered 93% year-over-year revenue growth, our highest ever. Holy shit. The story of this quarter is, once again, our U.S. business, and now comprises over 81% of total revenue

and grew 150% year-over-year and 23% percent. our US commercial revenue growth accelerated to 149% year over year and 28% sequentially. Our US government revenue grew a remarkable 90% year over year and 18% sequentially. A rule of 40 score of 155, unbelievable. We closed 220 deals worth a million dollars or more, of which 98 deals were worth 5 million or more, and 73 deals were worth 10 million dollars and more. Record highs across the board. Holy shit.

Stock up 30%. Yeah, they have 650 something commercial, so non-government customers. And the whole narrative about like people are just going to hand over their business to Anthropic and other LLMs and try to harness the power of AI. Turn out not to have been true. Palantir is going to be one of the I think we could say this now with a lot of confidence Palantir is going to be one of the leading companies that help other companies

figure out what is my data actually worth and how can I make more money as a result of using AI like this is going to be this company you contrast this report with what IBM just told us it's very clear companies, corporations, and governments are going to Palantir and saying, help me. And they do not have a traditional sales force.

Alex Carp has gone out of its way to point out. They do not look like a traditional enterprise SaaS business with salespeople covering this person, covering that person. They've got a very non-traditional way of closing business, but it works. I also think that conyption he threw on the air the other day on Squawk Box. I think that resonated. What happened? I missed it.

So he went on squawk and just like through this shit fit about anthra-I. I think he said their names, Open AI and Anthropic. He's like, you're just going to give these people the alpha of your business and rely on them to not launch competing products? Like what do you?

And he said, I am speaking up for every CEO who's afraid to say this. But this is what they, they're all saying behind the scenes, we are not just handing over our business's alpha to the LLMs and waiting for them

to disrupt the shit out of us. And that was the gist of what he was saying. He said it in a very high-pitched, almost like, it was very disorderly, whatever he did. But the results

that Palantir just put up, I think, are a testament to this idea that that's, that is not what people want. They actually want help and they want Palantir under the tent and not necessarily anthropic. So I think that's notable. The stock is, the company, excuse me, has a $390 billion market cap.

Is it going to, is this a trillion dollar company one day? I think it's neck and neck with SpaceX in terms of price to revenue as the two most egregiously overvalued stocks in the market. But I mean, who's to say where this settles in? out there there are cases where a company can maintain an extraordinarily high valuation and have it grow into it have the earnings eventually catch up 67 times sales yeah I mean that's that's trailing but let's see but again what but why why is it 67 times sales because they're growing sales a hundred percent a year yeah the market's not dumb I don't laugh at I don't laugh at these numbers the

market's not stupid I listened to the call did you listen to the call today No. Okay. It's on my list. Dan Avs was the first call. I listened to the Q&A portion. Wait, what does he introduce himself from, the new firm that he's at, right? I think he had some technical difficulty, so I don't even know if he introduced himself.

Yorkshire lives. What is it called? I don't know. It was, it, if you're just listening to it and you don't know anything about the business, which I think is a lot of people, he didn't really talk about anything other than just galvanizing the troops, which he is very, you know, which he is very, you know, you know, he is very. talented at. Did you watch it or listen to it? I listened. Because they do this as a video.

But you heard him like you heard him like beating the pen onto the table. Yeah. Listen, I know he's very controversial and. Oh, he went after the DSA a million times and. Yeah. People get mad at him. They don't like him because he's like unapologetically. Pro West.

Pro America. Pro-American. pro-Israel, he's like, his attitude is like very staunchly saying like everyone's going to have this technology. I want American companies to have the best version so they win.

It's an us against the world mentality. Yeah. And our military should have the best AI and blah, blah, blah. And so, okay, it's not controversial for me, but I understand why it's controversial for others. And I don't, we don't go there. Let's talk more about the earnings season more broadly. What's sticking out to me, I think the first thing is the market's reaction to various earnings reports. I don't know that I've ever seen companies gain 30%, fall 30%, and not just a few. A lot of companies are making massive moves after reporting earnings.

Yeah. In both directions. Yeah. I agree. Roblox and Reddit. Roblox down 30, Reddit, down 20, pound here today up 30. Although, and I, I can't confirm this with data. Another thing that I'm noticing, though, in line with what you're saying, is that on day two, some of those extreme moves are being retraced. Google and meta. Microsoft. Amazon just gave back a whole bunch today.

Wait, did Microsoft give some back? No, Microsoft had a horrible reaction and then bounced. No, it did it? Yes, it did. No, it did it's up 7% the last week. Yes, it did. No, it didn't. Microsoft was up like 15% after earnings. Oh, no, I'm saying, I'm saying the wrong stock. Meta has come back. Meta came all the way back in two days after falling 7%. Yeah. And then, and then Amazon the other way. Like, they had an incredible response and then probably related to Jeff Bezo selling another $4 billion worth of stock. But that retraced some of its gain. So, you, you know, you. You're getting an extreme first day move, but not all these moves are, not all these moves are sticking.

All right. Got some charts. Got some charts. Chart kid. We have to do one more. We have to do toast. Right. Everybody is dying to hear what happened with toast. Well, it's down 5% after hours, but we have talked about the stock a lot on the show, so we should at least get into it. Top line beat, bottom line beat. Revenue, $1.9 billion versus $1.8 for the quarter. earnings were up 100%. Earnings per share. 26 cents versus 20 cents expected. 9,500 net new locations in the quarter.

They're at 180,000 restaurants are running on toast. That is a 22% year-over-year increase. GPV, which is like total payment volume on the system, 22% up year-over-year to $60.7 billion. um a r r up 25% year over year to 2.4 billion wow and they bought back 19 million shares for half a billion dollars year to date and um i so i took some of my toast off the table at 32 by the way the stock is flat after hours stock looks great yeah so i i bought a ton of it in the 20s after it got killed the last earnings report good for you it ran right back up into the low 30s i took some off

Not because I don't want to be in it because I still have a bunch, but I just saw, no, I just, I saw how easily one quarter could knock this thing down 40%. And I just said, you know what, there's other fish in the sea. And I think I'm going to have time to accumulate this. So I'm still long for people that care. I'm not going anywhere. It is an investment, but I don't need to own as much as I did. But when they killed this thing last quarter, I had to buy more in the 20s. And I'm glad I did it.

That was a good move. That was a good move. Yeah. Okay. Let's keep going. All right. So corporate profits, I mean, it's been an incredible, it's been an incredible earning season for a lot of companies. Throw this chart up, please.

We're looking at adjusted revenue growth and adjusted EPS growth. And, of course, they're going the same direction for most stocks. Looking pallet here in Micron. I mean, Micron, you know, broke the chart. So like it almost doesn't fit on the chart. Pretty good. All right. I don't know if you noticed chart off.

The stock market in an all-time high today. I know you noticed. And it's not just one or two stocks. It's a lot of stocks that are doing really well. It's a meltup. It's a meltup. You know what? We haven't said that phrase in a long time.

It's a midsummer meltup, the best kind of meltup. It has been a long time. It's not your traditional December, you know, Thanksgiving into Christmas run. This is something different. It's a midsummer meltup and I have very strong views on what that means for the balance of the year. We'll keep going.

I want to hear. Okay. This is my 29th. year on Wall Street. I got series seven license in 1997. I got a mind like a steel trap. I remember everything. As you know, every slight,

every horrible thing that's ever happened to me, every offhanded comment, people thought I didn't actually hear what they had to say, but I heard it. I store it all up. And my memory of market rallies is equally

powerful. I almost, if I close my eyes, I can re-experience some of these moments. And I'm going to tell you right now, this particular tape, I would say, is one of the healthiest tapes I have ever experienced. If I wrote down, if you gave me a legal pad and say, fill the first page, yellow, yellow pad, fill the first page with every characteristic you would want for a market rally in order to feel confident to stay long like write down all the things here's what I would write down okay earnings beats in every sector I think we have 10 out of 11 companies are are on average beating or

something like that so check rotations leadership stocks getting killed and other stocks becoming new leadership defensive rallying with cyclical growth rallying with value large cap rallying with small cap, revenue growth ahead of expectation, not just games with earnings or buybacks, but like actual sales growth ahead of what's being expected. Analysts raising their expectations for next quarter during this quarter across the entire S&P 500, which is what's going on. International stock support, lots of IPOs, but not too many IPOs. Like every single thing that I would write down on the pad to say healthy market, we have all of it. One more ingredient. Economist getting cautious?

Oh, yeah. Fuck them. That's perfect. I love that. Every minute that those people spend analyzing Kevin Warsh's suit and tie is another minute I have to make money in stocks. But literally, you couldn't script it better. Couldn't script it better. And you got Bitcoin falling.

Right? You got like you can't say it's a speculative mania because you have stocks that went up 100% and then fell 40%. How about the D-Jan Dow is in a 50% drawdown? Yeah. All the all the, I remember what we said. A healthy bull market takes out its own trash. It's own trash. Its own trash.

So we had all those 2x memory people knocked out of the box. We had Leopold Ashton Coucher, margin called into the Stone Age. Like all of that excess leverage in career. the Korean psychopaths, like that all cleaned itself up. And you know what the word was today out of the street? Is the bull market over? No, the bull market was reset. That momentum crash in July reset the bull market. It gave us a new foundation upon which to build future gains. We got a lot of leverage out, a lot of margin calls,

a lot of 24-year-old effeminate German boys trading stock for the first time. knocked out the box and now we're in a really good I think a really good position to enjoy the rest of the year this is a midsummer melt-up it's it's not it's not very common but when you get it I think it says a lot about people chasing the market into your end they really they're really gonna do it so I'm very happy you have me both all right here's another one from truest wealth earnings revisions look at this This is abnormal folks. The average year since 2000, you're looking at the calendar year earnings revisions.

And the longer the year goes on, analysts are usually too optimistic and they take their earnings revisions down. This is the exact opposite. The exact opposite. Yeah. I mean, how much are like we normalizing this by all the write-ups of private market assets? like Amazon and Alphabet, obviously had big write-ups in their positions and things like Anthropic, is what you're showing me just straight up operating earnings? I don't know, but I think operating earnings look just as good.

So there's obviously an asterisk here, but... Just as good, but not as extreme. It's all working. And it won't forever, obviously, but it's, you know, these are the good times. Enjoy them while they last, because they won't last forever. Yeah, Chargit Matt, as of Friday, so this is a little bit out of date, but directionally it's the same. 64% of companies have given results,

29% earnings growth for the second quarter. 137 S&P 500 companies will report this week. What's revenue growth? Do we have that? It's a 14.1% year over year, which is 200 basis points above the estimates at the beginning of the season. Why does NVIDE report in like three weeks?

It's like so anti-close. diplomatic at that point. I don't even know, is it late or is it early for next quarter? 10 of 11 sectors posting a year-over-year increase in profits, as I mentioned. Do we know which one was down? I'm curious. The lowest growth rates are healthcare staples and real estate. So let's assume one of those three is negative year-over-year. Real estate. But 11 of 11 sectors have beaten beginning of season growth estimates and put up the one-day reactions. So Palantir today

No The ChartKit Matt's thing Palantir today One Day price reactions to earnings from Select S&P 500 company Was by far the biggest To the upside

Followed by Zebra Tech Gartner M-Corps Lam Research Quana Garmin Micron And Microsoft

These are Monster moves Yeah, 29.5% for Palantir. So it's pretty notable. I do have some stuff from Nick and Jessica at Datatrack that I wanted to just run by you. 86% had beaten the consensus of Wall Street's analysts earnings estimates, which we know the 1-5-10-year averages are 80, 78, and 76. Like the long, long, long run average is like 76, 77%. And it always is that.

We're so far above. Healthcare, 100% beat. Do you hear me? 100% of health care reporters beat. Industrials 90%. Materials, 89%. The worst sector, consumer discretionary, was 75. So Nick and Jessica say the fact that more comprehensive,

companies than usual are beating expectations is an unalloyed positive in terms of signaling strong corporate fundamentals. And then he gets into some of the technicalities. But like just from a big picture standpoint, you can nitpick and you could find examples, but what about this? What about that? If I'm telling you that this is the overall environment, why nitpick? Why not just accept it's one of those moments in time where corporate America is shocking people left and right every sector every industry like why not just say yeah that's going on oh last thing hold hold on hold on before you move on this is very important if you're listening to us

and you're getting nervous because we sound overly bullish or whatever i understand that impulse like i get it you have to understand and remember that all-time highs are bullish statistically the one-year forward return at an all-time high is a above the average for all other days. Very counterintuitive. So you might want to fight it and say, oh, Josh and Michael so bullish, ding, ding, ding, I gotta get it.

Okay, fine, good luck. Statistically, right, statistically, these are not times to get afraid. What's your last point? S&P net margins, 14.7% in the second quarter, pulling out Amazon and Alphabet. Ridiculous. Ridiculous.

The five year average is 12.4. Dude, I remember when 10% was as good as it was gonna get, That was GMO's whole bearish thesis, which I understood at the time of- The Vervea version of profit margins. Right. No. No, no, no. Okay.

We're going to talk about some of the stuff in semiconductor blowout plan that I know, I know we want to get to Leopold later, so we don't need to go there. But let's start with this clip from the second podcast in 45 days or whatever, Patrick O'Shaughnessy and Gavin Baker. Have you met anyone in your travels out here that you had? would say is like way more bullish than you. And if so, what do they believe that you don't? I mean, essentially everyone out here is more bullish than me, man. You know, I read this thing that Dorcasch wrote, you know, forget my like Bayesian probability space of expected outcomes. That wasn't even in my considered but dismissed his totally unlikely outcomes. I look at what's happening in the

stock market and I feel like a foolish optimist. And then when I talk to people, whether it's people at the labs, whether anyone in this ecosystem, like I'm like bearish relative to essentially everyone, which is just a strange state of affairs. All right. So that was so great. So him and Patrick are talking about what's going on.

And Gavin Baker is like, the fundamentals have never been stronger. They're accelerating. Like I thought I was bullish on the East Coast to come out here and everybody's psychotically bullish. And he's trying to wrestle with like wire stocks going down so much. Obviously, we understand now, this is like probably eight days ago, so it was pre-finding out that there was a margin call. But the market looked past this because something really weird happened last week.

Let's stop the semis imploded chart, please. Skip the first one. So chart had made this. He showed the Russell 3000 drawdown when 88% of Russell 3,000 semiconductors are in a bare market. And most of the time, the market is in a bare market. Right? Most of the time, there's a complete watch out in semiconductors when the rest of the market is falling apart. And in the last week, this was happening when the market wasn't just a three and a half percent drawdown from its high. That dynamic had never happened before.

So investors, the rest of the market participants were correctly looking past the blowup. And they bought, shot off, please. And they bought the ever-living shit out of the dip. Let's use the first chart from Goldman Sachs. While the Sox, this is from Chris Lucas. While the Sox Index has faced one of its worst months of performance in nearly two decades, semiconductor ETFs are on track to have their best month of fund flow since the inception of SMH. That's that point buying.

One final one from Todd, from Todd's own. Check this out. Todd is showing that semis were down a good clip in July, yet the ETF flows, and this is unlevered exposure, we're content with adding on weakness. I mean, this is just what an outlier of a month. Like, we've never seen anything like that. And investors, rightly so, the buckle up buttercup crowd, who's going to get their comeuppets one day, they nailed it again.

Meaning, no, they just got their comeuppance. They're going to get their revenge one day. They got their comeuppance to themselves. Oh, whatever. You know what I meant. No, I know. I'm fixing it. Can I ask you a question about that second chart?

would an accurate way put put up the scatter plot one okay would an accurate way to explain this be that in normal times when a whole sector is selling off it's being driven by the index ETF or derivatives thereof no but but no no what this is showing is that so the the red dots is showing the 20-day sum of flows. And normally on the Y-axis, when you have a 30% decline, obviously people are selling the ETF. They're saying, get you to hell out of it.

You didn't let me ask my question. Hold on. Would a way of explaining this be in a normal sector or sell-off, like specific to the sector, you would see outflows from the ETF because people are selling off the ETF. But in this case,

the semiconductor sell-off was concentrated more in the individual names than in the ETF because it was being driven by a hedge fund margin call specifically. Yes. Okay. So that's what's different. And that's why you see them buying the ever-loving shit out of the dip and plowing into the ETFs because they weren't the people selling the stocks. The sellers of the stocks were very concentrated.

Although it wasn't the whole retail crowd selling semis. They never sold. No, they sold the stocks. This is such a, I'm glad you mentioned this. So Gungen tweeted last week. So this was on Tuesday of last week, which I think was the bottom. Data from Vanda Research, retail investors sold $285 million worth of individual stocks. Oh, wow.

Which was the largest outflow since I think Liberation Day. So individual stocks were sold a great. aggressively. Maybe they sold the stocks for tax loss and rolled into the ETF. Who knows? It doesn't matter, but both of those two things can be true. People capitulate on the stocks and they dove head first into the ETF. So it was an interesting dynamic. All right, this is very, very important. There has been a lot of 1999 comparisons over the years and I want to make a very important point. This is nothing. The stock market looks nothing like 2000, nothing at all. This chart is incredible.

How have we been saying we you and I have been saying that for three years now. I'm gonna say it louder. Nobody wants to hear us. It looks nothing like the dot-com bubble. The chart on the left is J.C.'s favorite and all technicians point to this chart. You had ample warning because on top is the S&P 500 advanced decline line and a lot of stocks peaked in 1998. Finanials, materials, industrials, like a lot of stocks peaked two years prior, to the tech book, to the actual index peaking and look at the chart on the right.

Do they look anything like at all? No, it's the opposite. It's the opposite. Everything is going up until the right. It's the opposite. The advanced decline line is making a record high. People are making money in biotechs. People are making money in retailers. And making money in health insurance companies, making money in reits.

it's oil stocks. It's a literal opposite of 1999. I know it didn't feel that way for a lot of last year. Excuse me, for a lot of 2024 when it felt like it was all Mag 7. And that was legitimate to talk about that content. But that was just the first phase of the AI bull market.

Now we're like in the third phase and you've got companies involved in the AI trade that are going going up, you have companies that have nothing to do with the AI trade also going up. Take a look at J.B. Hunt. Take a look at Insight, which I talked about on the air today on TV, Biogen Ideck. We don't call it that anymore. Biogen Inc.

They have nothing to do with it at all. And they're going straight up and to the right. We talked about on the show, Casey's General Store. It's fucking gas station pizza. in Nebraska, there are so many of those, hundreds of those, that I can off the top of my head, this idea that the 1999, oh, it's all, now I am sympathetic to people saying the rally in the financials is based on AI and its concentration

and it's 1999-esque. That part I will grant you, when I looked at the earnings reports from Morgan Stanley and read their commentary after, there are 10 trillion in assets, And they specifically on the wealth side, they added nine, I forget the number on the wealth side. It was some obscene number for the quarter. And they were saying, yeah, this is companies going public. And we have all their shareholders as wealth management clients.

And they said there's going to be more of this. So I am sympathetic to the argument that a lot of the market is rallying on the AI theme. I would not say that's not true. But I would just make the point, it's not one narrow group of stock. it is literally the opposite. The best case that I've seen or the best comparison that I've seen recently

to the dot-com bubble or just bubbles in general, I saw a chart from Bank of America Global Research that showed the prior manias. So the nifty-50, the dot-com bubble, Japan, and now AI,

all peaked at around 40% of market cap. And that's where we are today. So if you want to say that this is a bubble mania, that would be the chart. And is it possible? Of course,

possible we'll see um all right let's keep it moving can we like have one company miss earnings right right right so okay i know a md reported today after the close we're not gonna we're not we don't have time to do that one but like so josh we get one amd miss um before you share your thoughts on leopold i thought it was so funny listening to not ha ha just interesting listening to you gavin who is you know obviously on the forefront of this entire move he's he knows what he's talking about. And he was like stress testing all his ideas over the last couple of weeks. Like what the fuck am I missing?

Like everything that I'm hearing and like literally not just seeing from the earnings reports, everybody that I'm talking to, everything is accelerating. What am I missing? And he wasn't missing anything other than a margin call. And they were looking for signal and noise or noise in signal. Okay. So this is what I wanted to run by you. I like this kid.

He's got a chutzpah. Like I like that he like got fired from open. I didn't even know who this was until 10 minutes ago. So I'm not going to do a whole biography. But basically, he got fired from OpenAI allegedly for sharing information with people that worked in Anthropic. He's dating a girl that works directly for Dario and I think got married over the weekend to the chief of staff for Dario. at Anthropic and he spent a year or two inside of Open AI. That's after working at FTX, LOL.

So he went from FTX to Open AI and maybe there was one stop in between, but he's a child. He's 24 years old. So I give him tons of grace. He's not a Wall Street guy, he's a San Francisco guy, and this is not his world. And the problem with mocking him is that Even being wiped out on all of these public stock positions, he still somehow managed to blunder his way into a $5 billion position in Anthropic,

which could be one of the biggest IPOs of all time later this year. And the way he was able to raise money was not because he grew up with this person or his dad is a VP at this place. He wrote something that resonated with really smart people. He wrote a paper after getting fired called situational awareness. He stated his intention.

He's going to make a big all in bet on the companies that are going to benefit from his thesis. And he was right. He just didn't trade it well. The fundamental issue seems to be he was up a thousand percent and remained four times leveraged. The other problem is he doesn't know what a hedge fund is. So he had longs and shorts, but they all set. put the same trade.

So his longs got killed and the things he was betting against were the counterbalance to those and they went up and you can't have your shorts running up at the software stocks and your semiconductor longs going down simultaneously at 4x leverage. It was a one-sided trade. He doesn't know what he's doing. It's a one-sided trade with leverage. Right. She's a very smart person and he accurately, accurately called almost everything.

in the right direction. He just doesn't have to manage money. That part could be fixed. I bet you he's better, I bet you he's a better risk today than a lot of people running money that have not gone through this with fresh cash. And I bet you he could raise himself another $10 billion with his eyes closed. People say, oh, Leopold Ash and Brenner, I've heard that name. Yeah, I forgot why I know the name. Whatever. What, like, he's fine. People, mocking him he's a billionaire shut the fuck up he he didn't lose your money what are you mocking this kid for and he just learned the most important lesson there is to learn when it comes to managing money um don't take the knockout punch he's not going to do it again so i bet you he's going to

have a long and distinguished career going forward and by the way the last thing the people he lost money for are all themselves billionaires they're very fine. This is not like Madoff stealing from nurses and teachers. They're billionaires in Silicon Valley. They love this shit. They wear failure as a badge of honor

in where they're coming from. They probably think it's the most entertaining thing on earth. I'm sure they're not thrilled that they're down $100 million. But again, they're billionaires. And I don't think we've heard the last of this young

man. What are your thoughts? uh the fund is not shuttered he's not going away right all of his all of his levered positions got sold at a 10% discount and i'm sure he was down all of it on that level of position he still is uh yeah he's gonna be fine and i agree with you the impulse to like kick somebody when they're down especially like a 24 year old what does it say about our casino culture he just took the largest i think the largest trading loss in history on dollar on a dollar basis The fund peaked at $45 billion, and what was it after the wipeout? Whatever.

It's the anthropic stake. Six billion? Yeah. It's the anthropic stake, which could be worth $10 for all we know by the time it comes public. But it's the biggest trading loss in history, I think. Wow. And it happened in two weeks, and he's going to be fine. What is this say about the culture that we're in?

I mean, it's a great story. It's a juicy story, so obviously it deserves all the press that it's getting. Mark Rubinstein wrote a substack. He writes net interest. It's phenomenal. And he said, I forget who he was quoting, but somebody that allocates money said, the best investors have blown up once. Right?

Like, you blow up once like this. That's my point. Give him money now. You're never going to do it again. Because what do you think? So if you think this kid is smart and he did this like generational deep dive into the AI rabbit hole to come up with this thesis that once again, let me reiterate,

was exactly correct. What do you think he's going to do on risk management now? Well, you know what? It doesn't matter, dude, because Sandus is not going up another 1,800 percent. Tough fact to follow. I agree. I don't think having a little bit of situational awareness myself,

I don't think it's as target rich of an environment as it maybe was in 2024. But again, the question is not is he smart or is he not we know he's smart everybody's smart what does that matter well my point is if he spends 1% of the time learning how to structure trades and do risk management that he spent learning AI I'm pretty sure this would be a pretty good time to give somebody like that money if you were so so inclined um I don't like the comparisons to Bill Wang yes he was reckless but I feel like Bill Wang was running a scam.

Bill Wang was tricking the prime brokers. Tricking the prime brokers. This kid, I honestly think, just believed he was allocated correctly for what he thought was going to happen. He was not shopping prime brokers and pretending that this asset's not leveraged yet. Like Bill Wang was a fraud, like going to jail fraud. This is just a bad trader. Yeah. Okay.

So I don't love that. I don't love that. Wait, I want to share one thing with you. So I mentioned he's from the San Francisco world. There was a funny anecdote in the New York Times piece. I think he was Rob Copeland wrote it. When this star of San Francisco arrived in New York during his fundraising tour around last summer, he received a relatively cool reception according to three people from whom he tried to raise money.

They said they viewed him as a lightweight and a one-hit wonder. The asset management Colossus Blackstone passed on investing. One wealthy New York investor who did take the meeting welcomed him, gave him a grilling, and asked him, what's your plan if the AI revolution doesn't pan out quite as hoped? The hedge fund founder had no detailed response, the investor recalled. Mr. Ashenbrenner simply truly believed it would all work out. Yeah, that's my read. And I think it's interesting the difference between San Francisco risk-taking versus New York. New York is much more hand-to-hand combat.

San Francisco, I think they're a little bit more philosophical about taking losses and swinging big for the fences. I think some of that is cultural. And I think some of that is just like this kid speaks their language and doesn't speak ours. And that's probably why the primes wrapped them up in a box and threw them in the river. so quickly because they just they looked at each other and said we extending this credit another second no we're not and he had to go out and find a buyer and he did fortunately for him but again I still think he'll he'll be okay and if I were a betting man I would bet that he's going to get really good at risk management going forward all right let's talk about

Robin Hood this is pretty impressive they have 13 lines of business that are doing a hundred million dollars and more annualized revenue what are our businesses chart on uh options trading margin interest equities trading crypto trading i can't read the rest margin base securities lending cash sweep gold subscriptions which is like their top tier clients instant withdrawals i don't know how it's a business but okay i can't believe that's a hundred million markets holy shit What's Robin Hood? What's Robin Hood legend? That I don't know. Okay. I think that's like their top top tier. Okay. So next chart, their trading volumes, I mean, unbelievable. The equity notion is up 85% year

over year, 50% quarter over quarter. Options contracts up 50% year over year. Obviously, an incredibly lucrative business for them. Crypto, down bad. We'll get to that in the second. Next chart. This is so nuts, dude. 215. million dollars of the 389 from margin interest. Holy shit. Well, that's what the, that's what the clientele is doing. I mean, I know, I know we know. And guess how much, how much of this margin interest is in levered ETFs? Yeah, but that's not actually the right question. The right question is how much is Robin Hood doing culturally to encourage people to use margin? their brokerage accounts do it more I don't know what they're doing now I know there's no

regulation anymore I understand that and and um the pendulum will swing back though but what do you what do you mean I don't think they're doing anything to encourage people you don't what could they be doing we think Vlad's calling people no like making it available well it's way button it's prominent it's way cheaper than other places I don't think I don't think anybody really gives a shit what they're paying all right let's do a thought exercise you're the CEO of Robin Hood and I'm the chairman of the board And I come to you and say the board has met and we've decided it is not in the long term best interest of Robin Hood to have as much margin per account as our users have. We think it risks in a bare market.

It risks blowing us up for a year. So what I want you to do is encourage less margin going forward. And I want you to give me the results at the end of this quarter. what would you do? What would I do? Yeah. You would raise minimum account size that can use margin. You would raise requirements on certain securities.

You would take the button and instead of it being bright purple, you would bury it at the bottom of the page. I don't think they have a bright purple button. You understand what I mean. You can do things with the user interface to make it less apparent to people that margin is even available. My point is they're not doing that. So are they going the other way? Are they as soon as you open an account, sending you an email, hey, did you know rather than the $3,000 you put in, you could trade with six? I'm not saying they're doing that either.

No, so I am a Robin Hood power user. That is my app of choice for seeing what's happening in the stock market. I've got my list. Everything's on Robin Hood. And I don't feel like I'm being pushed to trade with margin. Okay. What also is super notable in here is they are doing, next chart please, actually, they're doing more revenue from events, contracts, $156 million in the most recent quarter, than they are from freaking crypto.

Hmm. Well, there's always a new bubble. And credit to Vlad, I told him to his face that said, I think you're drunk. Like, I think you guys are drunk on the prediction market events contract stuff. I said stipulating, I think it's going to be, I think it's going to grow. I think it's to be big. But I think that you're way overestimating how big the market is. And obviously, I was 100% wrong. Polly market just spoke about raising it a $20 billion valuation. People are eventing their ass off. Yeah, and it's extremely profitable. And I don't know if it's a bit-esque spread business, but like you could probably drive a truck through where the sellers are, where the buyers are. And it's almost completely unregulated. In fact, there are lawsuits and states all over the country. A lot of people, a lot of states are angry because it's a workaround. They have prohibitions on gambling on sports. And then you can just buy like, all right, I won't gamble on sports.

but will the Chicago will the Chicago Bears win 12 games this season or 10? It's a total workaround. The states make a lot of money from regulated betting entities like Draftings and Fanduel are paying 50% of the revenue

or something like that and cashie is paying nothing. I saw John Mellencamp last weekend and played Jones Beach. Speaking of betting. And he opened the show. If you ask,

Like, is John Mellencamp more likely to be a Democrat or a Republican? I don't, you know, he played at farm aid. He just fucking rocks. I don't know what his political calculations are. He just rocks, right, but he's like from Indiana, it's all about the heartland and rural America. So it's like, it's like not obvious that he's either one. Okay. Right?

He opened the show with a song I've never heard before. It might be an old folk song or something, or maybe it's something he wrote. But the chorus is, my, my, my, my. These are lawless times. And he put a big sign next to the stage. And that's what's going on right now. Like, oh, that's illegal. Well, what if I just technologically do it this way?

Then I have enough of a loophole that buys me time to get an equity position to Donald Trump, Jr. And then, all right, come after me now. I bet I bet you I can innovate myself into a loophole that you can't do anything about. in the time that it takes you to bring an attorney general to sue me. And that's the markets right now. Tark from Kalshi was on with Sorkin, I believe, talking about the affiliation with Donald Trump Jr. and Tark was like, he's always been very into technology.

And Andrew's like, he's a real estate guy. What are you talking about? He owns a stake in both Polly Market and Kalshi. Yeah, Diversify. Which is bulletproof. bulletproof bulletproofing both businesses basically for at least the next two years. And this prediction market stuff,

I think it's fascinating. I have a whole bunch of bets. I have a Kalshi account. I'm not anti, but I know, but I know like what I'm doing is like within reason. I'm not gonna blow my life up over it. I know if I were 18, the results would probably be different. Throw up this last chart.

June 2026 monthly metrics. I look at the bottom right. These are event contracts. Now, obviously, a lot of this is sports. It just is. There's World Cup in here, but whatever. There's a lot. I mean, that is a lot of volume.

Holy shit. People should be able to bet on the World Cup. People should. I don't understand the mentality of like, oh, you could bet on the price of oil 10 minutes from now, but you can't bet on a soccer game you want to watch. I'm pro. I like it. I think it's good.

Really? Since when? I what I don't love is that it's bundled in with a an investment account and I'm not I'm not saying like Robin Hood shouldn't be allowed to do it I just I don't think that that's healthy for a population of of predominantly young males yeah and I know they're trying to get women to get into prediction markets they're doing a lot of bets about like Bravo shows and the shit that young girls care about but most this activity is young boys and I don't like the bundling of the this is your investment portfolio, and then also, like, why don't you take a soccer game, out of the same pool of money. I just, I'm not saying like it's illegal or I want to prosecute it. I just don't think it's good. I think it's societally not great, but these are public companies.

They have shareholders. They have a profit motive, and they're going to do whatever they have to do and get away with whatever they can get away with for as long as they can. And we should not be naive about that. All right. It's what it's going to be. Can I show you one thing? Yeah, go ahead.

Give me my chart. All in on prediction markets. This is what I want to underline here. The event contracts in gray, so that's for the second quarter. Now, to your point, bigger than crypto. They flipped crypto. So let's say the stock and options trading is effectively going to be what it's going to be. In a bull market, you're going to see more of it, right?

In a bare market, you'll see less because people lose money and lose interest. But then they always have like this other layer, this like bubble layer, not bubble in price, bubble in activity, which sometimes comes along with bubble in price. They lost Bitcoin this year. I think it's the worst asset of the year. But they found something even better and maybe even more profitable. And that's why Robin Hood is $100 stock and not a $60 stock. And it does not look as bad as Coinbase looks,

which is not in these other markets at the same extent. Okay, we're going to skip the next topic and go straight to make the case. Okay. I thought I did this before, but apparently I haven't. So Flore and Decor, now I've spoken about the stock. Maybe I've did it with Ben. So this is a company that came on my radar from a guy Alex Morris, who has a substack called The Science of Fitting that I like to follow.

Alex was on TCAF a couple of years ago. And Alex is a value investor, an actual investor. How about that? I am no such thing. But I read his work because I like his ideas and I like his writing and whatever, whatever. So floor and decor is a company that is not where you want to be. They are in the home improvement category. And I don't know if you know this, but home activity is at zero.

It's a bare market. It's a nice age. Mortgage rates are at 7%. It's brutal. So let me tell you the story real quick. Chart on. This is from Alex. So I probably read this back in March or something.

This is when it came in my radar. So flooring decor has taken market share from Home Depot and from Lowe's because they specialize. They are all in on this one category, not just flooring, but any type of home improvement work. You can go right there. They have a much, much bigger warehouse. They dedicated a lot more square foot to these categories that Home Depot does. So this is becoming like the place of choice for people that are doing work. My mudroom, for example, my guy went to flooring decor.

Okay, chart off. The stock has gotten the shit. I knew this was mud. I knew this is mudroom related. Totally mud room related. Okay. So the stock, obviously, like a lot of other home related stocks, has gotten destroyed. The stock fell in almost 70% from its high in 2022.

And it's not, and the business is not really doing awesome. So they reported earnings the other day. And the CFO said, our outlook assumes that consumers will remain cautious. and project demand will continue to be influenced by the pace and sustainability of any improvement in housing market activity. Following our better-than-expected second-quarter earnings than they anticipated greater impact from the repurchase of common stock, we have increased our fiscal 2026 earnings per share outlook. So why am I presenting to the stock to you? A couple of things.

I know that this is like 101-type stuff. This is extremely basic. But as we are looking at stocks today, we are reacting to what's a lot of. the headlines, but that's not how actually, that's not how investing works. Stocks are looking forward. So Stanley Druck and Miller said, never ever invest in the present. It doesn't matter what a company's earning, what they have earned. Soros taught me that you have to visualize the situation 18 months from now, and whatever that is, that's where the price will be, but not where it is today, and too many people tend to look at the present. So look at their comparable sales growth. It's bad,

obviously the stock didn't fall 70% for no reason but it's getting a little bit less bad and the stock just broke violently above the 200-day moving average now listen that's the first that's the first thing you've shown me that I liked all right so now you have my attention I'm not done so obviously it's in a shitty shitty position the business is not doing well but that's why the stock was down 70% so all of the bad news all of the frozen housing activity it's all in the price now here's the final I will say. Obviously this has the the bears are still in control technically. I think they still have the benefit of the doubt because the 200-A moving average is firmly slipping downward. But I think this breakout is notable in spite of all the challenges and I am not selling.

I think I'm up 20% or so since I bought it and I'm sticking with it. All right. So the good news is you got the earnings already. So like that potential landmine is is out of the picture. So you have 90 days until they're going to report. I guess aren't there, there are a lot of stocks like this right now in the market that are waiting for this turnaround in housing volume and existing home sales to pick up and new home sales to pick up. Like this is one of many. And I don't think you need a massive turnaround for the stock to work.

It has already digested. All of the bad news is here. It just needs to get a little bit less catastrophic. Yeah, I was looking at one in the same category. Which one? Mohawk Industries just made a monster move. It went from 100 to 136 in the last two weeks. Wow, the stock was great.

Same thing. They didn't get a fundamental turnaround. I should buy this instead. This looks better than yours. They didn't get a fundamental turnaround. It's just to your point, it's like less bad. We had a conversation with, we had a conversation with what's his name

Ken uh Ken Fisher and he was saying we did most yeah well maybe you weren't part of the conversation it stuck with me as a long time ago he was saying

most of the money maybe that's not true anymore but historically most of the money is made on less bad because when you start making money on less bad not as bad

expected news that means you're buying things that have been so utterly sold out by everyone that it almost doesn't even matter you almost can't lose money anymore now that works against you when you have a company that's literally going to zero like a jc penny or a kmart or sears like there's a limit to that idea i don't think that's what this is no this company's not zero right so what you're saying is like we don't need a housing boom we just need to a little bit of a thought in the ice age and nobody's expecting anything good. Correct. And yeah, I think there's something to that I have to tell you it's the polar opposite

of the way that I invest because I've been caught in a lot of value trap situations or I'm going to get in ahead of the turn and I just don't have good luck with that. I did it recently with Rocket. Well, it's really hard most of the time it doesn't work out. Of course. I'm still in Rocket. It's still $13 a share. It might be $13 a share till I die.

Now, Rocket needs, that needs lower mortgage rates. Yeah. Like that is a levered bet on the housing store turning around. Right, but it's the same group of stocks. And then what will happen with Rocket is they're not going to, they're not going to grow like it's invidia, but like not as bad as expected, starts to turn into, okay, actually pretty good.

And then, wow, that's really good. And then by the time it gets to great. Sell it. But you could have a 400% return on a stock like that. The problem is, like one of the problems is the timing. When is that process start? So maybe that's already started with FND, based on that rally that you're showing me. So for that reason, I'm blessing the trade.

Thank you. Blessing the trade. I'll take it. All right. No mystery chart tonight, guys. We're running late. I did want to say thank you to everybody who joined us for the live. Comment section is rocking.

As always, we appreciate all of you. Thanks so much to those of you listening on Spotify. Apple Podcasts, please make sure leave a rating and review. It goes a long way. If you're watching us on YouTube, make sure you subscribe to the channel and we love you right back.

Tomorrow was Wednesday, which means you'll get an all-new animal spirits, every podcast platform under the sun, audio, video, Mike and Ben, what could be bad? We'll do Ask the Compound later this week, and then another all-new edition

of the Compound and Friends to close things out on Friday. Keep it locked. We'll talk to you soon. Thank you guys.