The Compound and Friends - Momentum Stock Slaughterhouse

Episode Date: February 6, 2026

On episode 228 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by John Mowrey to discuss: the free fall in software stocks, what makes a value stock, how to measure a bear market, the crypto crash, and much more! This episode is sponsored by WisdomTree and ClearBridge Investments.  Learn more about OPPJ and the broader suite of geopolitical opportunity ETFs at https://www.wisdomtree.com/geopolitical-opportunities International and emerging market stocks outperformed the U.S. in 2025. At ClearBridge, we believe this momentum can continue. Find out more at  https://www.clearbridge.com/ Sign up for The Compound Newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Software stocks, am I right? They are, well, they're looking soft. Oh, my God. They're looking really soft. Oh, my God. You got a soft war. I don't know if it's software. Where are you based out of Dallas?

Oh, okay. 30 seconds back. Very cool. Let's sit here. So I went to Dallas last year for the first time of my life, believe it or not. Oh, really? I just, I don't know. It just missed it.

What did you think? You said the first time you got out of Dallas? Yeah. I know it's like a gigantic city. I did not go to the right part. Ah. So I was, were you know, uptown or downtown? Plano or?

I was downtown. Downtown is, it's the craziest thing. Downtown is dying. Matter of fact, I was by, it was by where I was shot. Oh, yeah, sure. Yeah, that's not the best area. But even sort of a little bit on, it was a five-minute walk there. Yes.

But it was like sort of on the highway. And I tried to, like, go in and see a few places. But I was like, huh. Yeah. And then I spoke to a few people that are like from the area. They're like, this is like not. Not the area stay. Yeah, yeah, yeah.

I will, because I'm a, I like a, almost every city I go to. I'm like very easily impressed. Where are you from? Here. Oh, you're from New York. Okay. But I'm not one of those people that like will go to like, like I, I've been to Milwaukee three times and I love it in the square city. Yeah. I was blown away by Pittsburgh. Yeah. I can't, I'm sure there's been a city that I'm like, yeah. But, um, but yeah, I just, I was like, this can't be Dallas. Like, yeah, no, you unfortunately have to come back because it's got a lot more to offer than that part. You know, it's, downtown is just dying.

And like, Goldman Sachs is building their new tower. Oh, yeah? in Dallas, it's going to be their second headquarters. They were, they're actually cross street from us now, but they're going to be moving out of downtown. And then there was another big kind of knife to the city because AT&T, which is in downtown, Dallas currently is moving to Plano. So the downtown keeps getting gutted. I walked past the AT&T building. Oh, you did? So every time I go to a city, I wake up.

It's not great down there. I wake up super early and I just walk for a couple hours. Oh, really? Okay. Just kind of check it out. Yeah. I kind of do it in New York, actually. Is that my dinging or you?

No, it's me. Okay. By the way, Brad just texted me. Who did this? Did you do this? No. Is DM? How does he's not lean back?

It's amazing. It's a DM on Instagram, but the person said, I don't know who made it. I'm sure they did. Okay, yeah. It's a top, that's a top 10. That's as good, right? So, I assume you're Mavericks fan? Yes, but I'm...

Did you jump ship? I'm a relatively, I'm a relatively, I have a relatively low IQ with sports. And I can explain why if you're ever curious. No, I'm sure it's not that interesting. But I do enjoy. I do enjoy something. Will you pick last for kickball? I did not do kickball, but.

You were a swimmer. I was a runner. But in all seriousness, I was homeschooled until 11th grade. So I, like, didn't do any sports. Wow. So I, yeah. Okay. So it's not that interesting.

That's an icebreaker. But, yeah, it is. It is. You know, for the longest time in all seriousness, I was totally embarrassed about this my whole life. And the last few years, I'm just like... Why were you embarrassed by it? Because it's just so different

for most of the people you meet their experience? Totally. And I feel like there's a stigma with homeschooling. You're like, oh, you know, knit your clothes and stay inside. There's definitely this. Why are you acting like why is he embarrassed? It's understandable. Yeah, I was...

Is it a negative stigma or it's just, oh... Is there a such a thing as a positive stigma? Do those things... I don't think there's a positive... I don't think there's a positive stigma. I don't think there's a positive stigma. and I chose to not go that route with my children. Who did most of the educating, your father, your mother?

My mom did all of it. Okay. Until 11th grade. She must be very bright. She's very bright. That what happened in 11th grade? At 11th grade, well, I was asking to get out. Puberty.

I was like, I need to. Need to see girls. No offense, mom. But I graduated in a class of five, so I didn't really move much out of homeschooling. It was a tiny, tiny, tiny private school. Okay. So, yeah, that's different. But it did kind of shape me in some ways because something that I'll also share since I'm just sharing.

Can I share embarrassing things? We wanted all of it. Because I thought about this. And I was like, am I going to say this today? And I was like, I think I am. I've also crap my pants. So I'm dyslexic. And I was homeschool.

Oh, wow. That was a huge stigma I had my whole life. And I was super embarrassed about it. I actually was worried. I was terrible testing. Got into college, took no math in college. I was a political science major. I was going to go to law school.

And then I got this internship at NFJ, which is crazy. I didn't know anything about stocks. I'm not one of these guys that was like reading, you know, Warren Buffett in my underwear when I was a kid. I knew nothing about it. What made you apply for it? It's a little bit luck to be quite candid. I was trying to go to law school, to be honest.

And I did not do well in the LSATs. My father was an attorney. So I was like, okay, that's not going to be my path. You didn't want to do it because you saw him. Well, I just, he told me that based on my scores, I was going to be at a law firm that probably wouldn't make me super happy long term. He was like, I don't know if you should pursue this right now. Yeah. So I didn't know what I was going to do.

I moved home after college. I went to Rhodes in Memphis. And I started looking for, I'm just meeting with people and just asking them what they did. I was just trying to figure out kind of what people did, what they liked. And I met an individual that was at NFJ at the time. Okay. And he was looking for an intern. And so they gave me a three-month internship with a temp agency.

So it's kind of like speed dating. Yeah. They liked me. I liked them. And then one of the more senior guys said, hey, if we hire you, you just got to know, you're like way behind. You got to get your MBA, your CFA like yesterday. He was like, we only hire people that are credentialed.

You have no credentials. So it really just happened for me, Josh. It was like kind of stumbled into the industry. That's a great story. I love it. I stumbled into the industry too. Did you really? It's the only industry I could get a white collar job in.

How did you stumble into it? My education was a joke. I didn't take school seriously. I went to yell. Michael's Ivy League. Did you? No, no, no. I fell in love with the stock market first.

I didn't care about like financial services. I was just like, what do I have to do to be involved in the stock market? And it's 30 years ago. I still love the stock. I still wake up every day. And on Saturdays, I check the stock market. It's not even open. I just, that's like my, I don't know.

I fell in love with stocks. It's like, oh, what, what, do I do in the stock market? Well, started as a retail broker, didn't want to do that after 10 years. This is the best version of that that there is. I get to talk about stocks all day. So, I mean, it's people, a lot of people decide in seventh grade, like, I want to be on Wall Street. Most people I've met, that's not what happens. That's not what happens. Yeah, I agree. It's super interesting because there's no industry like investing where you get to learn about all these different companies. And it's just fascinating.

It never gets old because every year there's something new going on. A hundred percent. And it's the peak. It's the spearhead of innovation. That's right. Every new thing is coming out and it eventually goes public and everyone learns about it. It's incredible. Tell me if you have this.

I have this. Michael, maybe you do too. Most of my friends do not do what we do. Like, I wouldn't say on purpose, but I definitely don't want to spend like all my free time with people that are, like, working in, you know, Wall Street. Like, that's... Agreed. I have friends who work on Wall Street, but most of my friends, small business owners,

like lawyers, accountants, they're not... I don't hang out hedge fund managers on the weekend. Same. Not if there's anything wrong with that. It's just not... It's not where I live and it's not what I'm about. Okay. But the...

And it's great. No, it's not. I know you're about so. No, but the negative is they, like, talk about things. They're like, oh, did you hear about? And I'm sitting there like... Dude, we were fucking talking about that three weeks ago. Like, I feel like nobody around me is ever fully caught up.

100%. On almost anything. Not that I know so much. It's just I've heard about things sooner. I thought you were going to say people asking you for stocks. No, they do that with you. Nobody asks me. I've shot everybody down.

I know they do. I know they ask you, like people see you in public that you're friends with or you know. Very annoying. Like, what stocks should I buy? I get that. And I, and I tell you this every time you ever. I don't. That's like if you're a house painter.

They're like, what shade should I paint my living room? Yeah, I always say like, if I knew which one stock to buy, like, then we wouldn't have to discuss, I wouldn't be working. You come to buy the fund? I do. Well, it depends, to be quite honest. Depends on the person I'm talking to. Yeah.

But when they're like, come on, just one. I won't be mad at you. I usually just say, have you heard of a stock called Apple? It's really interesting. They make this really cool product you probably have in your pocket. That's a good answer. You may have some AirPods. Lots of a good answer.

Well, people think that I, like, am in the meetings where the cabal decides which stock is going to go up. Yes. They're like, come on. Yes. Yes. Yes. I know. I know.

I'm like, guys, I hang out with Michael Baton. I don't know. Like, we don't, we're not in those meetings. But in fairness, you are the person they want to ask those questions to because you are in the know with what's going on with the Fed. You know what's going on inflation. All those things. People hear about this stuff. But you know what?

people don't actually want anything explained to them. They want a ticker symbol. Well, that's true. You agree with that? 100% nobody wants to learn. You're right. Nobody wants to learn. Yeah, yeah, yeah, yeah, which stock?

I want to learn. You're right. You're right. You're right. People just want to make money. That's right. So it's so interesting. And it's, so again, I also think one of the interesting things about what we all

do, it forces you to be a little bit of a generalist. 100%. There's a lot of things that I have two sentences on. I can't get to a third sentence. I don't know enough, but at least I have the two sentences. And I think that ability to just converse on a lot of topics. I sort of think it's very useful in life. A mile wide and an inch deep is a necessity in this business.

I have my things I can go deep on. There's just not that many of them. Shake shock. Yeah. Shake shock. I could go to the distance. Well, that's the other great part of the industry. And I love that.

And I think the generalist model is actually really good because it allows you to be more objective sometimes, getting honed in on one certain thing. Duncan's like, fucking let's go already. All right. Sorry, Duncan. Are we holding you up? We got a hot date.

Are we going yet? Yeah, we're going. We're going. We're going. We're going. Okay. Wow, 228. Whoa, whoa, whoa.

Stop the clock. Here's a word from our sponsor. Today's episode is brought to you by Wisdom Tree. Wisdom Tree believes Japan is entering a new era. Corporate reforms and stronger shareholder policies are changing the game. And investors like, Warren Buffett have taken notice. The Wisdom Tree Japan Opportunities Fund, ticker OPPJ, is designed to invest in Japanese companies positioned to benefit from macroeconomic policies, industrial innovation,

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Clearbridge, a Franklin Templeton company. Go to clearbridge.com to learn more. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnik, and their castmates are solely their own opinions and do not reflect the opinion of Redholz wealth management.

This podcast is for informational purposes only and should not be relied upon for any investment to sit Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Ladies and gentlemen, welcome to the best podcast in the world. Is that too much? Always slaps. That's how I'm feeling about it, so I don't know what you want me to tell you.

Longtime listeners, welcome back. We appreciate you. New listeners, new viewers, the first time you're ever watching, the compound in friends, is a show about investing, the economy. Asset management, wealth management, trading, investing, and life. We have a brand new friend with us today. John Mowry is the chief investment officer, portfolio manager and equity strategist at NFJ Investment Group, where he leads a $5 billion value equity platform and serves as

portfolio manager or co-portfolio manager on the firm's flagship strategies. John, welcome. Thank you, Josh. Very glad to be here. This is John's first appearance here and his first, your first podcast. My first podcast. All right. I'm excited.

Let's go. In the second half, there will be physical challenges. Okay. I came ready. Now, you're in Dallas? We're based in Dallas. Okay. Do you know my friend in Texas?

Landman? Billy Bob. You know, he said Fort Worth was his favorite city in the U.S. Could you explain the Dallas-slash-Fort Worth thing? sometimes they're grouped together, sometimes people are extremely aggressive about explaining to you that they're very different. It's very simple. Why is it Dallas-Fort Worth?

Because the airport? Airport. That's it? Yeah, more or less. Okay. But it's really simple. People in Dallas don't really go to Fort Worth regularly. It's too far.

They're not going to deal with it. But whenever we talk about it, we like to get credit for having it. So it's like, oh, Fort Worth, Caltown, the rodeo. But what is it? It's more like a... It's more country. I mean, the rodeo. Okay.

That's, you know, that's a big part of, you know, Fort Worth. But it's got, you know, with the rodeo, it just has more of a Texas, I would say, vibe in terms of kind of West. It's less city, more country. For sure, for sure. Okay. So if you go to Dallas, it's going to feel pretty big city. You go to Fort Worth, it's going to be Caltown. Oh, you know who my boy is in Fort Worth?

You know, Kevin Thompson, the financial advisor? I don't know if I know him. I'm going to connect you to. Okay. He played for the Yankees. Oh. And then when he was done with Major League, when Major League Baseball was done with him, probably more likely.

He said, I'm going to do something different. And he got his CFP. And he's an advisor based in Fort Worth. Amazing. Awesome. Amazing. Do you get down there much? No, never.

I'm going to connect you guys. Okay. Okay. Well, come on down. Let's talk about you. First of all, it's a big week in terms of volatility. I'm seeing liquidations in some of the most popular stocks of the last three years. Seeing liquidations in Bitcoin.

I'm saying liquidations. Like, it's physically. You can tell it's margin-related selling. It's people being called out of stocks at any price. 100%. And Michael sees a little bit of panic, too, which I... I see the volume spiking. It's not orderly.

Yep. All right. Yep. People are heading for the doors. So I want to talk about the seat that you sit in as you watch this play out on your screens. When you say it's a value platform, so you're not one of the people that's riding strategy up and down to 300 points.

What are you doing in the equity markets for... the portfolios that you manage. So we have more of a value orientation, but if I can, I maybe can spend a minute on kind of the history of the firm. I would love that. It kind of parallels into my story.

So I started at NFJ as an intern in 2006. You think about 2006, that was just before the equity markets peaked in the summer of 2007. And value had had a huge run from March of 2000 all the way to the summer of 2007. Okay.

So when I entered, Value Manders walked on water. Yep. And money was just flooding in the doors. Nobody wanted the S&P. Nobody wanted growth. It was like, this is so easy.

Like Bruce Berkowitz era? 100%. Yeah, 100%. And the firm was built on low PE and dividends. And that had worked wonderfully. And there was a bias toward that in the portfolios. But what happened post-2008 is challenges set in. And the one that I would identify as a major one was there was factor decay, okay?

And that occurred, I believe, because of the proliferation of ETFs and passive money. And I don't think value managers appreciated what was happening in addition to a new cohort of companies that were growing to the top weights in the indexes. Value managers just excluded these from the universe for kind of arbitrary reasons. Maybe it didn't pay a dividend. So they excluded these. And then the factor decay is a big deal. Because when I joined the firm, I actually joined doing back testing.

Okay. And borrow Alphabet, or if it knows that it's a back testing software to do like what variables have been the common denominators of excess return over time. Low book to market, low price. Exactly, Josh. And guess what? All those back tests look really good from 1980 up to about 2008. Now, if you extend it further, the way cumulative law graphs work, they still look okay,

but it's like start the back test from 08. Let me see it from 08 forward. Those factors began to go away because what a lot of... The premiums associated with those factors, they're gone. They're gone. And the reason I believe is because... a lot of managers were getting alpha from factors unknowingly. And when the ETFs came out, it took diversified alpha and it made it beta.

It no longer was alpha. So you couldn't just bias toward a factor and get the same alpha that you could have pre that. Why? Because there was too much money in those stocks and that's what took away the discounts. Well, I just think that there became, I mean, for example, then you know these dividend funds coming out, right? Wisn Tree dividend fund. So the smart beta wave, let's say, started in 2009 and probably peaked in 1415.

And then the cloud computing error starts and people don't care about smart beta anymore. But that seven-year period, everybody's all in on factors. Yes. Right as factors ceased to be a source of alpha. Yes. Okay. Yes. And that was a real challenge.

So when I got in the seat in 2017, performance was really bad. And it was a big challenge. And it was a real coup to be quite candid because I was a young. person on the investment team. So they should not have done this. I should not have gotten the job, to be honest. I was mentioned to you guys before the show started. My background was not finance. I did not have any of that in my in my background. And I, you know, I'll say this on air. I'm happy to say this. I was homeschooled till 11th grade. Oh, we heard all that. Don't worry. Oh, you heard. Yeah, we start recording. We start recording the minute you get off the elevator.

Well, okay. Then I say this because I should not have gotten that seat, but I believe I got it because I saw things that we needed to change culturally with people and with process. And I spoke freely about it to the founders of the company because I'd never thought that they would actually act on it. Oh, they must have hated you. No, they act. No, well, there was one founder. Initially, like the other analysts who are like value guys, they must have been like,

they were not. Who is this kid? They were not happy. It was really, it was really tough. It was a really defining component for me. Yeah. But one thing that I would like to mention about. about managers' edges.

Because every manager has to have an edge, right? Right? What is your edge? How do you beat the market? Or else, what are you doing? Or else, what are you doing? And I think that one of the challenges in the investment industry today, because let's be honest, it's like nobody wants to say this.

Two and a half trillion dollars has gone out of active funds the last 10 years. Two and a half trillion. That's a lot. So much money. It's so much money. It's two and a half trillion that's gone into passive. So it's literally just, that's what's happened. And so why is that?

And I think one of the challenges is around actually team seniority and tenure as an asset and as an edge that people talk about because I believe actually that our success became our Achilles heel because it's difficult to reevaluate things. And particularly when you go to consultants in the industry and you say, the first thing people say is we have 120 years of experience, people sum total, right? They add up all the people that work there. Yeah. Yeah, we have centuries of experience.

We have centers of experience. And in a world where information is being more commoditized, I don't know if that's as valuable. And nobody wants to talk about this. Yeah. And so judgment and instinct are very important on how you act with data. But just by saying you have people that have been there for 20 years, it's held out as an edge. And I question it. Well, you, I mean, you've, you've been talking about this for so long.

Like, just the fact that you've been around might actually work against you. Because think about all the. biases you build up over time. Like, I've seen this movie before. Like, you sort of think you know how everything's going to go because you've seen it three times. And then the fourth time, it doesn't go that way. So the reason, so I think I started writing about that like in 2014 or 15.

And I was a very young man at the time. And so I was like a little bit embarrassed to say that at loud because I was very cognizant in the fact that I didn't know anything. And it's like almost disrespectful to the people that have been in the industry and seen a lot. So I said it like out of the corner of my mouth and over time I got more comfortable saying it. But the reason why was because there was a book from Peter

Bernstein, where he described how the industry used to work back in the day. And Peter Bernstein's top three financial writers of all time, Jason Zweig, I don't know if it's Jason's hero, but like, he's that level of author. And he described a period of time where the interest rate on bonds used to be lower than stocks because you had to be compensated for the risk. And any time that level converged, it was a time to buy stock. Stocks got them too cheap. And then one time, it switched. Bonds had a higher coupon than the dividend yields of stocks, and it never looked back. And there were gentlemen that had been in the industry for 30 years that said, just wait, just wait. It's never been this way. And then never looked back. And so I was early in my

career, thank God, open to the fact that what used to work is not necessarily always going to work. And there's a great quote, I don't know who said it, that there are certain people who are experts at an earlier version of the world. And that's who's, that's who's on. TV every day. Yep. I think that's, I think that's fair. And it's really, it's a very fine line on how you evolve. Because in our industry, the word change is a four-letter word.

Can't say change. But you can say evolve. It's like, well, how much evolving is tolerated? It's like, well, we'll see. We had Grantham sitting in the seat that you're in, Jeremy Grantham, two weeks ago. And we were talking about, like, nobody could have envisioned in the mid-20-teen's decade. So let's say it's 2013, 2014, right?

were five years removed from the financial crisis, but it's still raw. Nobody could have envisioned that there would be this crop of companies that could grow in an unlimited way and maintain 40% gross margins for like the next 10 years, like as far as the eye could see,

would have no constraints whatsoever on revenue growth and would keep profit margins at what we used to think of elevated levels. So if you're a value, manager, you watch three years of that, you're sitting there saying, here comes the mean reversion. 100% has happened every decade ever. And then it never comes.

And then it's too late. In 2017 or whatever Scott Galloway would have book about the four, right? It was Apple, Amazon, Google, and maybe Facebook, whatever. Maybe Microsoft was in there. It doesn't matter. No, I think it's Facebook. Okay. And then Jim Kramer coined them Fang and you were like, ding, ding, ding, ding, ding.

That's the top. Oh, really? Yes. Yeah, that was 20. And it just kept going. And then it was like, all right, mobile, cloud. all right, it's getting tired. Boom, AI.

It's just been a never-ending relentless. Yes, 100%. And, you know, there's a couple of things that I'd like to mention on this because, you know, Berkshire Hathaway, you're like, well, what does he own? It's like, well, he has 50% of the portfolio in Apple. It's like, well, that's a growth stock.

It's like, why does the greatest value manager of all time have half his portfolio in Apple? And it's like, does he have Google? It's like, oh, he has Google too. Does he have Amazon? Oh, he has Amazon too. It's like, why is it okay for him to do it? But then if a value manager talks about it as a

possible candidate for a value portfolio. It's not okay. And I think it's about opportunity set. There are people that figured that out, though. Like Bill Nygrin was considered a value manager. What is his fund called, Oakmark? Yes. Okay.

Yes. Nygren was a value manager riding Amazon. Yes. And like nailed it. Yes. And people would say, you're not a value manager? No, he finds value in Amazon. He's just not looking at the PE ratio.

Yes. Okay. Say more about that. I think, well, Well, the way that I tried to tackle this challenge with factor decay, because I still believed in wanting to focus on low valuation and a whole client base, that's what we've done. And we also had an income focus. One of the ways that I tackled that was peer groups and creating customized peer groups

because I believe that the peer groups are what allow you to see when something is attractive or not, less so than a arbitrary rubric of, is it cheap to itself or is it cheap to the market? Some stocks always trade a premium to the market. Some stocks are not going to, you know, maybe. and they're getting cheaper themselves, a bad thing. Businesses change. So the thing about real estate, I use a real estate analogy. You've got property in Florida, right? You've got Palm Springs and you've got Greenwich, Connecticut, and you got Highland Park in Dallas. It's like, should those all be compared? Are they in a peer group? And I was like, yeah, they are. It's the same buyers. Yeah. Yeah, I agree.

And what's crazy about the stock market is you can do this, but it's global, right? You can partition it by U.S. and international. You can split it up. But getting those peer groups right, I think is a big D. and I'll give you an example. So within chemicals, we were always going back and saying Linedel, Dow, these are the cheap ones, right? Low P, high yield. You know the story. It's like, what's like, what's commodity chemicals? It's like, what about Sherwin Williams?

Sherman Williams is a chemical stock. It's like, well, that always trades at a premium. Why does that trade a premium? It's like, well, it trades at a premium because it actually looks more like Home Depot and lows in the home improvement. It's like, well, that's a consumer discretionary. That's a different group. So Gicks has it has it separated.

We could. Don't get me. started on GICS. But this is what I believe at a core level that you have to get the peer group right to get the valuation right. So what are you looking at the best earnings growth story in a peer group versus the GICS classification PE ratios? So we look at five different metrics. Great question. We'll look at enterprise value sales, price to book, dividend yield, P.E. and momentum. But we are getting to your point, Josh, you have to get the growth rates accurate to form those. peer groups. And then what we're doing, it's not a correlation analysis. We're actually looking

for a distribution evaluation relationships. And you can actually see the bell curve in the relationships. And that allows for a greater, I would argue, probability of mean reversion if the distribution shows normality. If that makes sense. So I'll give you another example. I mean, I'm with you. I don't know if he is. Okay. Okay. Go on. Well, Union Pacific prologis. Totally different, right? But they're similar. Okay. because if you think about it, what goes on the truck, it goes on the car. Has to be stored.

So the market knows this. It's like, are those peers? It's like, well, they're not peers in the traditional sense. It's like, but are they peers in terms of how you should think about valuation and risk in the portfolio? I would argue yes. Because the market sees them in a symbiotic relationship, even though they do different things. So it's a different way of tackling the problem that factors were decaying. And again, if you look at a back test from 2009 to present for a lot of these factors,

they stopped working. And I think a lot of managers had a really hard time figuring out how to deal with this. And I think on the value side, what's so difficult as all these value meters got rewarded for not making any adaptations and changes. Do you think being an outsider is why you were able to arrive in an idea like this? Yes. I guess. I haven't ever really thought about it like that.

It's a positive. Like there's a book called Outliers. Yeah, I like that book. And it's about 12 CEOs who did things. very differently than any of the other companies in their space. And as a result, those are like some of the top compounders in the history of the stock market. You didn't go to University of Chicago. I did not.

Right. So you're not like schooled in the Wharton. No. I'm not a while. I think Josh's earlier point is very important to hit on again. It was, to your point, the factor decay, right? A lot of money coming to these strategies, maybe close the discount of some of these attractive multiples. And there was just less the arbitrage closest.

This wasn't an arbitrage. And then here come the fact. And so you had that earlier period, coupled with investor preference, the value stocks look horrible. And these companies look and perform amazing from the next decade. So it's been a hell of a run. It has. And I honestly hate classifying stocks as growth and value.

It's super annoying because now Amazon is in the value index. It's one of the top weights. And it's like, well, now it's eligible for value managers. Nobody will ever call out a value stock. They'll never, yeah. Maybe it pays a dividend goes to eight times earnings. Can we talk about today? I think this week,

software. This week in particular has been one of the most exciting times to watch what's happening in the market. The stories is changing and it's changing fast and it's not just software. It is the, I don't want the Mag 7. I spoke about this last on Tuesday with Josh. I think we have an anti-bubble going on. I think within the Mag 7, Oracle down 55%.

Microsoft goes down every day. It's down 26%. worse than the Liberation Day sell-off. Nobody wants to own the AI winners. So that's like the anti-bubble. And then the stocks, the companies that are being displaced by anti, by the bubble, by the AI names, they're also getting destroyed. So it's like what was supposed to be the bubble, which is not a bubble, is destroying the other names.

It's a really fascinating. Joe Wisenthel had a great smart-ass tweet. he said like he said like I think he's talking about Blackstone and all he's like the private equity companies are creating a bubble

in CapEx for AI which is then disrupting all these software companies that they're invested in. Correct. It's basically like They're disrupting their own portfolio companies. They're disrupting their own siblings.

Yeah. It's bizarre. I don't think anyone expected it to play out the way it is because it's been such a tight group. I mean, a couple things on software I'll say though. The valuations got to all-time highs during COVID. Same with biotech.

So you start at the peak multiple. I think that shapes sometimes when the market starts to get worried and resets and re-rates these companies. The same thing was true in 2007 with the bank stocks. A lot of people forget that price to books of banks were all-time highs. Oh, that's a great point. They didn't crash from a discount. Correct.

They were at huge premiums. So you start up here and then the market says, hey, you used to be a disruptor, but now you're turning into a customer, and that may whittle away some of the pricing power you had. The market trying to reset it. So, to be honest, it is exciting. No one really knows where the multiples can settle out. I mean, if you look at what happened,

I mean, NVIDIA was down 67% in 2022, and I didn't remember anyone in 22 saying, hey, they're going to come out with the most amazing chips. You should be putting your whole net worth, and I didn't hear any of that. And so I just bring that up because these things could get to lower multiples quickly if the fears and concerns stay there. It's very violent.

So one of the people that I do halftime report with said something really smart this week, Stephanie Link. So Stephanie, and she's invested in a bunch of software stocks like everybody else. And she was saying like the problem with bottom fishing in these names, well, obviously the obvious problem is we don't know what's the bottom. But the real problem is there's no proof point. Meaning if they hammer, let's say, let's say they hammer a biotech stock. but we know that in three months there's an FDA decision due. That's a point at which we prove either they have the science or they don't.

Same thing with an earnings call. If they're beating the crap out of a company, but we know they report earnings in 10 days, there's like an end in sight where either you'll be proven wrong or right how the quarter went. With something like this, there is no proof point where you can definitively say, on this date, we're going to once and for all put it to rest, whether or not these companies are about to be disrupted out of business or this whole thing is ridiculous. There's just no point at which anyone can look at and say,

all right, if we can just hang on for a month, everything will be resolved. Good or bad? In this situation, it's like, all right, this is a multiple re-rate. Yeah. Now, there also are some bad fundamentals in the space. But for the most part, these companies report earnings, the earnings are good.

Yeah. Maybe the guidance is soft because there's AI uncertainty. But we're not talking about a situation where companies are missing by 30 cents per share and then getting annihilated. That would be easy. It's just trying to figure out what the new multiple should be.

What are these worth? Can we do some charts? I've got some charts. Okay. John, let's run through some. All right. So the first shot I want to show you is application software. This is Adobe, Applovin,

Salesforce, Datadog, WorkDou, day, all of the names that are just, it's in a 30% drawdown. But that's not the, that's not the worst part. John, show the previous one, please. It felt it's fallen 18% in seven days. The only other two times this has happened is during the financial crisis when the world was in question, the financial world was in question, and COVID. All right.

So there is, there is uncertainty is here. Is this relative or is this? No, absolutely. So can I make one off? observation right off the bat. I can sorry to interrupt you. Go. You mentioned 08 and you mentioned 22. And it's like, oh, well, the market was down,

peeked the trough in 22, 25%. So the whole market was barfing on itself. Not today. And 08, not today. I've got them. So that is a concern because you've got the RTI at all time highs. You've got the S&P hanging in there. I kind of picture a crew team where a lot of people are rowing in the back.

The equal weight looks fine. Yeah. So if the market was, you know, cracking, hard, Then it's like, well, everything's down. Something's down more. Yeah. This is concerning. John, throw up chart.

I'm going to skip ahead because John is hitting it. Throw up chart 13. All right. So I said to a chart goat the other day. I said, this is yesterday. I said, this is really weird. We have stocks that are crashing. Like, who's chart coat?

Don't mind about. We have a guy working here, Matt Sterminaro. He's a goat. Who does, I think, the best charts in the industry. So I said, Matt, amazing. I got, we got to look at this. There are so many. stocks that are down 5% today and down 5% yesterday. In this case, we use 4%. All right. So,

here's what we're looking at. I said to Matt, I bet you that when we've seen a surge in these type of days, you're in a bare market, right? So we said, okay, yesterday, in the past two days, we've had 109 stocks that fell 4% in a single day. And we said how many times, like, when does that happen? On average, on average, the stock market, the S&P since 2000 is in a 28% drawdown when these days happen. That's unbelievable. Right now, we're 1% from the all-time high. That's unbelievable.

Yeah, it's a super different dynamic. It's very unusual. The market is taking out a rifle and it's saying you're out. Because the whole market's sitting up there. You're an AI disrupting. It's not a shotgun. It's you're dead. No.

You're dead. So we've never seen this before. Remember on Tuesday we said, have we ever seen this? Like, where we've seen like cold names get killed, but who cares? There was like one or two of them. They were tiny. They weren't big more. We were talking about like a big group like this when the rest of the market is sort of nothing to see here.

So our friend Warren Pyes answered this in a chart. He said, until the current software debacle, John, this is chart too. Okay, until the current software debacle, there has never been an instance where an S&P 500 industry that was so large, more than 8% of total market cap, has sold off so hard down 25% and yet the market remained at highs within 3% of all-time highs. Okay. Is this super bearish or super bullish? Super weird is what it is. It's super weird.

Because to your point, it's a big group. I've been shocked that the S&P's been so resilient with all the volatility under the surface because you've got a lot of names that are pulling a lot of weight that are smaller. To your point of the equal weight, all these equal weighted names are kind of waking up. The money is rotating out of these. So that's part of it. But I'd be cautious on it because... Now you tell me, I bought IGV today.

I mean... Cautious on the overall market? I'd be cautious. on the software trade. Oh, well, too late for that, John. Yeah. I mean, I don't know why you need to chase. I mean, there's so, there are so many things I think that look really good in the market

today. So it's just, and again, as a value manager, software is not a massive component. Going to your head, though, knowing that this has never happened before, a group this big and important to the index being nuked with the market holding up. If I asked you, is this positive or negative for the rest of the market, like, in the short term or the intermediate term, what would you guess? Because I have a very strong opinion, but I don't want to say it until I hear yours. I think you're going to say, well, I'm not going to predict what you're going to say. You're going to have a strong opinion.

What is my prediction? What's your, what do you, what would you like? If somebody asked you and you had to come up with an answer, what would you guess? If I had to come up an answer, I'm concerned. I'm concerned that you have a large cohort of companies that are under this much pressure. So it's concerning to me. Okay. I'm the exact opposite. So I... I'm so bullish on this. Oh, well, okay, I'm going to reframe something. Are you saying bullish on the market, Josh?

Are you saying bullish on the group? I think this is like unbelievable. First of all, it's poetic justice. All those assholes who told everybody else learned to code. Yeah. How'd that go? Well, that's... Learn to code.

How about learn to do something with actual atoms and molecules because nothing... All this code is now easily replicated and improved upon by robots while we sleep. Why is it super bullish? Because this was the number one risk that people talked about that was going to bring down the market. When the tech bubble bursts, when the Mac 7 cave, everything's done. And what we're learning right now is that the band plays on because there are other opportunities. And people are just taking the money and they're saying, okay, I get it. That game's over.

What's the next game? And they're buying things that cannot be disrupted. And I'm not suggesting people do that. I'm not saying like, go run out and buy the consumer staples. They're historically expensive. But I get the mentality. You can't disrupt mac and cheese. That's true.

Okay. So then there's- By the way, we're overweight a lot of these areas, not states. So you're enjoying this more than everyone else is. Yeah, this has actually been really, yeah. Okay. Healthcare stocks catch a bid. Yep.

It's so bullish. Yep. I know people like, oh, historically, that's defensive. Nah, you don't know what you're talking about. It's an area. area that's undisrupted and probably helped by AI. AI won't make its own drugs. AI will be used at these laboratories.

Pfizer said they think they're going to save $500 million, maybe in a year, because of AI tools that are in there. So like this whole idea of the RSP, RSP, the equal weight being flat while this sort of thing is only disrupting this one sector, why is the rest of the market flat? Because people, I think, are now during a distinction. Some companies are going to see cost savings from AI and a lot of beneficial innovation. And some companies are going to be looking for something new to do because the thing that they once did is no longer needed. And I feel like that's capitalism.

I don't know. That's true. I like it. That's true. I mean, I guess I have a few thoughts on that. I mean, not everything's flat, right? The 1,000 values up five. I think the 2,000 values up.

Energy's up 15. 8. Yeah, energy's up 15. AI doesn't make more natural gas transmission lines. Regional banks are up. It doesn't do it. Staples are up. Materials are up. Right. There's a lot of stuff that's up.

John, short time. In 2000. Does anybody know how much the S&P was down? In 2000. 15? I don't think it was down much. Maybe negative 10. Whoa.

That's spot on. It was down 10. I was there, John. Okay. Well, I say that because when you hear 2000, are you taking SATs in your kids. kitchen, I was there. Thank you. There were a lot of stocks that held up. The problem is nobody owned them. Everybody owned Juniper Networks and Sienna and Cisco and Lucent Technology and Nortel. Nobody owned

Mohawk Industries. Like, nobody owned the things that were flat to up. But John, check this out to your point. This is a few days old. This is as of 130, but bespoke said 57% of stocks are outperforming the index. I mean, you have to love this. Yeah, there's definitely a broadening. I mean, look, I mean, everyone's tired of seeing, hey, small caps are cheap to the S&P 500. So I didn't put that in my, because everyone knows. However, it is true. It is true that you've got some of the steepest discounts there going back to 2000. So I'm not surprised.

And the other component, which the software names got wrapped up in, momentum as a factor had had its biggest run for the last 24 months. And I would only point to momentum as a factor that I still think has efficacy because it's human behavior because people buy what's going up. I think it's the original. I think it's the original factor. Yeah. And I don't think it'll ever get arbitraised away because it's too emotional.

There's too much, there's people that are actually driving. Before Cliff Asness proved that it's a factor, I think people innately knew it was a factor. And I think you look back at people writing about the stock market in the 20s, they were very aware of how momentum works. They couldn't put it into scientific terms. Yes. And they couldn't prove it with math because they were riding those old-timey bicycles with the giant front wheel and twirling their mustache. but they got it. Like RKO was the fucking Nvidia of the 20s.

I think it's the original factor, quite frankly. We had a crash yesterday. Yesterday. The momentum factor divided by value. Worst one day return since, I guess, what happened in 2020, late 2020? I don't know, whatever. But bad, bad, bad, bad. Yeah, again, you know, momentum was in the top percentile of performance, going back historically,

I've been sitting right up there for the last two years, okay, coming off that 22 low, everything ripped in 23, but then it became really 24 and 25, pure momentum. It beat growth, it'd be dividend, it beat everything. It beat low book. It'd be like every factor under the sun. It crushed it. Right. It crushed it.

So I'm not surprised given if you think back again, software multiples started at all-time highs after COVID. You had this huge momentum run. And now you've got a scare, so you've got the big dislocation going on. I'm not surprised by it, but I do think that it's an opportunity for a, other names to re-rate, but they have to have fundamentals. I think this argument that, hey, value is just going to come back, drives me crazy, because it's going to be about the fundamentals that are going to drive that. And I will say, if you look at oil, particularly refiners, not all

oils and drillers are done well, but to be honest, the fundamentals are sketchy on some of these right now. Refiners are growing at 40%. Refiner's going faster than NASDA. It's like, well, how is that possible? It's like, because crack spreads. It's like, well, that's bullshit. And that's been a momentum trade, too, Well, it's turning into one, but it's just starting. I mean, earnings just went from negative to positive territory six months ago for refiners. So if crack spreads expand, that's good. That's just fancy word for margins. So there's a lot of good fundamental underpinning.

This is my point, in energy. I don't think a lot of people appreciate that, particularly refiners. And then the banks, Josh, I mean, these things are printing money. You've got some regional banks that are growing earnings at 30%. So, again, you could have a re-rate because the fundamental, are really good, okay, and they're growing their earnings. I think that's a really key point. So pull it back, so bring it back to 2000.

Because when people talk about 2000, they say dot-com bubble, and that in people's minds becomes a shorthand for like a market crash, and it was. But it was a NASDAQ crash. And a lot of stocks were just fine. They just weren't the stocks that people were talking about. but like this is more reminiscent of that than it is of any other tech any other

market episode that I could call to mind like stocks that nobody talks about like Valero and Phillips in the refining group just like to name one group you're doing really well they are John I got one you're to love let's do it you're to love this

try 17 all right so this is why we call him chart code so this is unbelievable work What's going on here? I'll explain what we're looking at. Okay, okay. A lot of colors. Put your right foot on green. Listen, boys.

Listen, boys. Josh, you might understand this, John, you're a smart man. All right, we've, we've, we've, we've break down the market into desksiles, all right. There's 10 even buckets. Okay. And on the left, we've got the worst performers. Okay. And of course, all the way on the right, we have the best performers.

Okay. And within each desk style, we break it down, how many stocks are in the top or whatever desial of return. And what you'll see all the way on the right, 27% of companies in the, the materials sector are in the best decile of performance, 23% of energy stocks are in the best decile at performance. It's not tech. People are rotating into some of the things that you probably own, which has got to be fun.

Yeah. That's a good chart. It is a great chart. And I mean, look, I mean, this was 2000 was when our firm was born because everyone was on one side of the trade and nobody wanted any of these areas. And as you guys know, materials and energy at the smallest weights and the SP 500. So there's not a lot of money allocated there in broad baskets. But again, what gets me excited as...

That three-year track record around 05 must have been sick. Oh, it was... Like, you don't even need a wholesaler. Oh, I mean, you don't. Right. It was... It was wild. They're all working.

So just look at the orange. That stands out. That's energy. There's none of them that are in Decile 5, 4, 2, or 1. Like, they're all working. Mm-hmm. They're all in the top half of performers. This is better than a heat map.

So good. Like, with the heat... map, they'll show you the ticker symbol of like, you know, the big ones, the 10 stocks that you go of. Look at Staples. But this is like, gives you. I mean, it's unbelievable. See, what's so fascinating about kind of the value growth argument, it's like, I don't like it because stocks are stocks, you know, it's like, as Lilly a Growth stock, as Lillia Value Stock, as Pfizer, you know, going to that. But it is an asset allocation decision. And what I mean by that is the, the 1,000 growth. It's like, what, how much is the sector allocation to tech? It's like, it's 50.

It's like, well, what about Google, which is Com Service? What about Amazon, which is discretionary? What about meta? Which is common. It's like, well, you do that? And you're at two thirds. Yeah. So two thirds of the entire opportunity set is in those groups.

So value just looks totally different from a construction standpoint, if that makes sense. Because energy is 10%. You know, financials are, you know, 35%. You've got materials that are, you know, four or five percent. Reets are 10 percent, depending on what index if it's a smaller, right? So it's totally different groups that are making up the value indexes today. And I think that's not discussed in a lot because it is an asset allocation decision. It's like, you did well the last few days if you had regional banks were up yesterday.

It's like, oh, regional banks were up yesterday. It's like, why are they up yesterday? It's like, we have good fundamentals. They started from a really attractive point in 2023, which I don't think it's enough press either. And the discounts are still there, even though they're growing earnings. Steeper yield curve doesn't hurt. Yeah, you know, can I make one more point about the regional banks, not that this is the most exciting topic? Don't get it.

We go out. We're going to go out. We're going to go out. 2008, this is like I was cutting my teeth and like these banks are just blowing up, you know, everyone's heading for the doors, bear's turn drops, you know, 90% a day. The entire thing's coming unwound, regional banks are going, you know, blown up. And that was a, that was a, an asset crisis that occurred. 2023 was not that. It was a liability crisis. And I think people miss this. It's like, why did First Republic and Silicon Valley failed? It's like, because the yields went up

so fast that if they marked their treasuries, which they have to hold to market, they'll be at big losses. Yeah. And this happened. Paper losses. Paper losses. And it's like, well, wait a minute. That's that we didn't expect that one. It's like, so the Fed fixes, the Treasury fixes it.

We're going to open the discount window. You can, you can exchange anything at par. Well, the Fed caused it in fairness. They did. Yeah. They did. They telegraphed it. They said, and they said we were going to raise rates.

And aggressive management caused those particular banks to fail. Yes. Because there's a lot of other banks that didn't play that game. 100%. But, you know, if I think about what happened with First Republic, that's kind of interesting. That's like saying, hey, you know, we're going to raise capital and then telling your neighbors that you have termites and then saying, now I need to raise capital. So some poor decisions were made with how they could have, I think, avoided these issues. But I bring this up because the whole group got barfed because everyone was like, I've seen this before.

It has to get worse. It has to get worse. But it was different. It was different. And so now you're coming off that base, again, context. context, context, context, like 07, all-time high, 203 got back to 2008 valuations for banks, okay? So now you've got that yield curve steepening

and they're printing money. And by the way, they're not even really lending that much right now. So if you get more lending, that will continue to pull capital. So I think this dynamic that you're talking about with the momentum, you could see that continue because you've got fundamental supporting it. It's not just a they're cheap. Because to your point, Josh, the staples, a lot of these have terrible earnings. We'll see if they can turn them around, but they're high multiple.

If we have now a value run that lasts more than a month, because, you know, over the last 10 years, we've had these mean reversions where it's like small caps are outperforming and then it just fades. But you remember and I remember these periods of time where you could have a five-year value outperformance. And that's like right around when everybody starts launching smart beta products again, but whatever. It could happen. People don't think it could happen. I wrote a blog post and deleted it. Coward? What?

No, because you're right. You're way smarter than me. And I thought this was going into a territory that I don't belong in. I try to stay in my lane. This is not, I should not be the one that writes this. But it was brilliant. If only I had the chops to say what I was trying to say. Now you got to say it.

Okay. The premise was, you know, rotation to value that lasts for five years. years, what will happen, given the way markets and people are these days, is we'll have a mag seven of value stocks. That's true. Because herding is never going away. So I called it the SAG 7, because all these stocks were doing was sagging. And I was going to make the case that in a value outperformance dominion, it would look like

Exxon Mobil, Procter & Gamble, like those would be the champion stocks. of a value move, and they would cease to be value stocks eventually. And we're sort of seeing the early innings of that with Walmart hitting a trillion dollar market cap. I think people think it's like, oh, it's consumer staples. It's defensive. 40 times earnings. Yeah, but I have a theory on that.

Well, I want to hear it. But like, so my take was human behavior, whatever's working, we're going to take it too far. And we will end up, maybe they don't get to 35% of the S&P, but we'll end up with seven value stocks that are 20% of the S&P. Like, and I don't know what's in that basket, but like I was going to write it, but I didn't have like the mathematical ability to prove it. I know somebody could prove it or I feel like somebody could show what that would look like

if that were to happen. I'm just, again, I'm not the guy. I'm a big, I'm like, I'm an ideas guy. Michael's the analytical guy. But anyway, what do you think about that idea? Like, if we have five-year run for value, are we going to end up with seven giant value stocks. Well, you should have written about it, first of all, because you did great job explaining it,

and I loved it. Okay. A couple of thoughts. Can I say one thing about Walmart, first of all? Because Walmart now is in the NASDAQ, right? They, they, well, they switch to exchanges. Yes. Yes.

So I just say that because Costco did that. It's like, well, that's pretty helpful for that multiple. And Walmart's like, I'm going to do that too. So, is it a value stock? Great. It's like, I couldn't come back to the Amazon question. It's like Walmart is a really high multiple. Statistically, neither of those are value stocks.

Correct. Right. Correct. Correct. No, are they Staples? Because historically, when people were worried about the market, they would buy Walmart like it's a dollar store. Yes. Because it was like, it's like a supermarket.

It'd say like, well, people need food. I don't know. That's not applicable anymore in today's market. It's not a defensive stock. For value to work, it's cyclical. Like this is the trade. Okay. So like staples to me is not the trade.

Like, sure. Procter & Gamble may do fine, but the trade with long legs is going to be cyclicals. If you look at the 2000 value, which I'll argue kind of the tip of the spear, that is 40% financials, okay, 20% in regional banks, then 10 in energy. Okay, so right there, you've got 50% of the opportunity set in energy and financials. So my comment to you on, as I think about how this could play out, it may be a few stocks, but maybe it'll be sectors. Because if you think about financials, okay,

financials were the largest sector in the S&P 500 back in 2007, okay? They may not be as big as what technology today we'd have to check, but it was getting up there. So the way that value is expressing itself. City and Bank of America had big market caps relative to the rest of the market.

Huge. So is oil part of that for sure? But I think it's about financials because I think that's where you get the huge dislocate because it's such a big group. It has the ability as it gets bigger to compound and take over the other groups, not unlike what's happened with technology at the highest weighting that's ever been in the S&P 500. So you think that's the, that's the, if there's a value,

if there's a value bent to the next leg of the bull market, you think it'll be harvested by investors who are in the financial stops. It has to be because it's the largest group. It's kind of like when people were getting bullish on, well, like materials can never get big enough to, fit that much bullishness? I mean, you can overweight them, but I'm saying the group's like three or four percent of the SP 500 is tiny, right?

It's a little bit bigger in the, you know. Energy too. It's still. It's going to be hard. It's going to be hard because you're starting a small place. It's going to be really tough. But financials, they can do that, industrials as well. But, you know, I'll make another point, you know, emerging markets, people like,

I like, I like, I do I like emerging markets, do I not? And then, you know, a couple years ago, everyone. I like them when they go up. You like them when they go up that? Yeah. It's not about, that's not about average. And then when they, and then when they, Outworking, everyone's like, I don't really diversify outside the U.S. because I like my money here.

China is the second largest economy in the world. China is the largest weight in the emerging market index. So I found it funny when people were like, I like emerging markets, but I don't like China. It's like, well, that's like saying that you like S&P 500, but you don't like technology. It's like, that doesn't make any sense. It's like, this is the second largest economy in the world, and they would liken it to Russia or some of these other countries. If you had that trade on, though, it's basically India versus China.

and it's done pretty well. Well, since the Halloween lows of October 22, China is outperforming the S&P 500. Not a lot of people know that, but it's actually performed very well off the October Halloween lows of 22, being the S&P. Yeah.

So India's done fine, but India is down. Well, they're all down a little bit, China, you know. But in general, it's hard to get, my point is it's hard to get bullish on emerging markets, but have a problem with China because it's the biggest weight. and the same way that if you want to get bullish on value, it's like, well, what are the biggest?

Because to your point, Josh, everything is run by ETFs now. You have to be bullish financials. You have to be bullish financials. I got it. I agree. Yeah. Just like on a pure market cap basis, value X financials. Yeah. So what do you own?

It makes, it makes material, yeah. Real estate. Well, it would be 10x overweight, like a bunch of chemical companies and. Well, here's the problem. For the most part, the other groups like Staples, right? Okay. They don't grow very. quickly. So if they're going to do well, it's probably going to be because the market's not

doing very well, which goes back to your point, Josh, if you bullish on the market, it's hard to get super excited about like, hey, let's really overweight this group that grows at three or four percent a year. That's going to be tough to get super excited about. But if a group's going at 30 and it's a much lower valuation, that gets a lot more exciting. Yeah. I've got some staple stuff. So if I were to say, um, so on the one hand, I love that we're having a cleanse. I love that all of the garbage has been taken out. A lot of the quantum computing names and all the crap that people are speculating about. And I don't like watching anybody lose money. But that's over, right? That trade has gone there blown up. Now it's Microsoft.

Microsoft, you like the cleanse? You like the, you've done the juice cleanse? I, have you done any, have you done? I have not. Oracle is down 59% from its high. Microsoft just closed the gap from last April. I think it's down 28%. I think this is healthy. I think this, this wall of worry that we're setting up, it's necessary. Here's what I really don't like. I don't like that we're, that, that the market is still basically at an all-time high. Like that could. concerns me. So I see both sides, like, well, it's great because now the 493 is taking the baton. Like, it's all good. However, if I was concerned, here's the chart that I would be looking at. John, chart four, please. We want to see a risk on an environment, obviously, in a bull market.

And the best proxy for me is discretionary divided by Staples. And John, being that you're annoyed with some of the valuation, the way that we like categorize things, you'll appreciate that X, X, Y is 40% Amazon Tesla, right? Yes. So we have to equal weight of two. But they're both crashing. The ratio of discretionary to staples. So staples are breaking out relative discretionary. Which one of these is equal weight? Oh, the light glow. So that I don't like that. They do the same thing anyway, though. Yeah. Well, yeah. Okay. I don't like that. I don't like, I don't love that U.S. Staples are having their best January and February ever. There is a absolute rush into. So staples are up top left corner. 12% in January and February.

Yeah. Bank of America has this back to 1997. Never seen anything like. this, we have fund flows going berserk. Next chart, John. We're looking at the four-week average net flows as a percentage of market cap, right? So it adjust for the size of these companies. And people are just absolutely diving in. And to your point about, well, Staples, like, how much do you want to pay for these companies? You want to pay 40 times for Walmart and Costco and Coca-Cola? I don't know. John, let's skip one chart. Go to chart nine, please. All right. Next one. This is, this is some chef's guess's work right here. Here's what we're looking at for people that are listening.

I've got the staples forward PE and I've got the tech forward PE. Oh, wow. And for the last... Converged. Man, that's crazy. As you would expect, the tech forward PE has been significantly higher.

And now they are touching tips. But let me show you one more. They are... They have converged and they're trading at the same forward PE. And so the next chart... So wait. Both are trading at 23 times forward earnings. All right. So here's some... Here's some...

This is not a chart crime, okay? I am normalizing the axes to only show this particular point. Most of the time, the blue line, the dark blue light blue, they move together, right? Like, for the most part, they move in the same direction. And now you are seeing a hard, a hard break, which shows very clearly that tech is getting a hard re-rating lower, Oracle 1060, right? And Staples are getting a sharp re-rating higher. And so this is not that bullish.

I think one thing I think about this, if you look at the forward estimates for a lot of the Staples companies, they've been negative. Yeah. So you're getting super fast PDE. None of this is fundamentals. Well, that's the thing.

You're getting the P. expansion off of bad earnings. And so, you know, it's much harder for something with good earnings to expand the P.E. quickly, as we know. But when you have bad earnings, when you have earnings coming off,

the multiple can pop quickly if you've even you're up 10% because the earnings weren't there to support the moves. So it's really strange. I don't know if people fully appreciate what they're paying for because the estimates have been really bad for what. They don't care.

Safety. They're paying for undisruptible companies. And it sounds stupid. And then you look at the charts. Dude, they're paying for this. But they're getting disrupted by Ozzypic. John, they're paying for this. They don't want to own Microsoft.

That's what they're paying for. They're puking this and they're buying staples. I know what? I don't know shit about the fundamentals and what Satya is doing and whatever the sustainability. this is a buy. Microsoft. Microsoft.

This is not work day. We own Microsoft. Microsoft 15 times phone earnings versus Colgate, Palm Olive, 30 times earnings. 100%. Okay. 100%, Josh.

I'm a thousand percent on. And whether it's not a... I like that you guys are saying that to fit. Whether it's a buy or not, it is not a sell. If you are selling Microsoft today, take your hands off the keyboard. 100%.

100%. There's way more interesting things than piling into staples. But again, I go back to these other areas because you've got You got earning supporting it. You got earning supporting it.

But yeah, I mean, the Microsoft sell-off, you know, we'll see. So tell us, what are you and what are your people doing in a week like this? Like, so you see- Smiling. No, no, no. So you guys are in the right part of the market, which is why I booked you for this three months ago. I had a premonition.

That was good. No, no. You guys are on the right side of this divergence. Okay. So what are you guys doing? How do you, like, walk us through? the mentality of the people who are now looking for opportunities. You guys are able to, you're on the right side, so you're not like, oh, no, what do we sell?

You guys are like, what can we, what can we buy? So how do you guys talk about it? Well, you know, it's interesting. You know, on a day-to-day basis, you know, moves in the market, they get a lot of press. But as you guys know, the work's being continued constantly. So we're in the engine room, just, you know, going through what we're looking for. Extracting the alpha. Yeah.

I mean, we're looking. You know, whenever you get dislocation, you know, whenever you get dislocation, Whenever you get dislocations, you know, the work picks up. But I'll be honest, you know, we got really bullish on refiners at the beginning of the year. We did not expect that to re-wraising my CNBC column. I actually did not see that one recently. I saw you talk about drillers. I wrote about all three of them separately, Marathon, Valero, and Phillips.

As close as I get, it's pounding my fist on the table because it's on technicals. I'm not terribly worried about it. the fundamentals, these stocks obviously were being accumulated like crazy. 100%. So it wasn't early, but I wasn't late. 100%. But in terms of what we've done this week, I mean, not a lot, Josh, because we're already positioned for this.

We were already positioned for it. And it was not anything that we had to do special. The main thing that we did leading up to this, I think it's positioned as well, is we're very overweight banks, we're very overweight energy and overweight materials. And that was all fallout of where we're finding value in terms of. of fundamentals and dislocations and valuations. Industrial as well, as well, but those areas. Do you have to have an economic outlook that is more bullish than consensus

to be that overweight such a cyclical areas of the market? Or is that not let that work itself out? It's a great question. We definitely think about that. But if I had to articulate why we would push an overweight, it would be, it would be a combination of the multiple you're getting with the fundamental supporting it. It's harder, which is why like staples. Somebody's like, hey, I love staples. Like, why do you like them? It's like, well, I saw some chart on price of book. They're the cheapest. And it's like,

yeah, yeah, but how's the business doing? It's like, the business isn't doing great. It's like, why are people buying it? Well, they want real things. It's like, I don't like that. I don't like that. I don't like that answer. So I think that, you know, the areas that had the fund will support, Josh. Delete where I said that. So, okay. You know, the other thing I'll share to the Russell 2000, That's the small cap index. That is actually beating the S&P off the... We got a new high this year. We did.

It's beating by over 10% off the Liberation Day lows. I bring this up because sometimes rotations can happen below the surface, but you don't see it for a while. So your point that you made earlier, Josh, about five years, value may have a run. Well, it may have already started. We may even be one year in, but you don't know it yet. Right.

You don't know it yet. Because you have to be able to look back to be able to say it. Also, it's just another head fake. We've seen so many of them. Right? 100%. Father, one other piece of market information that I don't love. Now, this is like maybe short-term stuff.

I don't love that some of the companies that are beating in a real way are still getting sold. Pallantir yesterday. I know it's in the basket of shit nobody wants to own, but they had a monster earnings report. Eli Lilly. And also, Pallantir was up 6% that they reported earnings down 12% the day after, right? Yep. Eli Lilly, great earnings was up whatever it was getting rocked today. Yep.

Google. Oh, I'll put that. Google came back. Google came back. We own Google. Oh, Google's on the high day. Look at that. Okay.

Highly dead. I'm glad to hear that. So it's flat. But when stocks sell off on good earnings, that's not great. But I would also say, just like, listen, we've been in a bull market for so long. Expectations were obviously not low. We all know that. What was the S&P up in 25, in 24, in 23?

I know nobody likes losing money, myself included. But if we have a little bit of doubt, it's okay. If you could think past just 20, tomorrow. Like, we need this. Okay, I have a question. How long's the bull market been going? When did it start? I have a different definition. So this is rolling bull markets. It did not start in 2009. Okay. I think it's because in 2010 and 2011 and 12, people like this is bullshit, doubled a recession. This is not real. Yeah, it's fake. The double of recession. I love that. I remember that going around. That was a big, we can't get any inflation where we're pumping money.

Where's the inflation with it's anemic economic growth. And even in 2013, the market was being led by Staples. Nobody believed it. It was utilities and health care and real estate. Remember we talked about this at the time? Like, it was, it was a defensive bull market in 2013. 10-year drop major in 13. So when we broke out of new highs in 2007, like from 2007, it was a defensive rally. And there was a lot of doubt. And so I think that's when the bull market started or not started. I think that's, that's when I would date it to. If we're, if we're being statistical and we say the 1982 to 2000 bull market, the reason we started in 82 is because that's when it takes out the 1975 high.

Why wouldn't we symmetrically say the same thing about this bull market? In 2013, you take out the 07 high. Therefore, this secular bull market, the lows of the previous bear might have been in 09, but the beginning of this one is 13. And it was not just defensive. There was a birth of a new crop of growth stocks, which always happens. Netflix, Lululemon. people forget, we were having fun again in 13.

Netflix was $20 billion. It was a tiny year. But the market was tiny at the time. And these were the stocks that captured our imaginations and made you think, oh, wow, there really are stocks that could go up 1,000 percent, Chipotle. These were brand new growth stocks in 13. I know it's 15 years ago. But how long was it go?

Right. 13 years ago. It was a thing. It's not black or white. I understand the argument. listen, you measure the bare market from the top, right? Like, peak to trough. So why would you measure the bull market from the bottom?

Whatever. I don't buy that, but I understand. There's different. What do you think the bull market started? Well, I've always wondered about 22 because we got two negative GDP quarters. Sickle-b-barreds. That's the-one. Everyone said it wasn't, but I was like, but we got two negative GDP quarters.

Like, well, they didn't count it. And I'm like, we're making two-tunar arguments. It's about recession. Yes. There was a recession in San Francisco. Don't recessions. Don't recess. There was no unemployment.

It's not a, recession. I think your point is... You need actual unemployment. Your point is that we've had bear markets. And I think it drives me nuts that people say it's been a one-way bowl market since the bottom in 2009 or whatever. Because it just hasn't. Where have you been?

Where were you in 2022? That sucked. Yeah. Did COVID not happen? With the stock market not going down 13% a day? Yeah. What about Liberation Day? The thing is that people...

Wait, wait, wait. There's two things going on here. People discount bear markets that happen outside of recessions. Okay. In 22, nobody lost their job. In fact, the cause of the stock market selling off is the opposite. That's true. Employees were too valuable. That's true. Okay. So it's not a recession. And people don't care about bare markets that didn't coincide with recession. That's fair. Okay. So the real deal and the first 10 years of my career, I lived through two of them. The real deal is contracting GDP, crashing stocks and unemployment.

And in 22, we had two of the three. And arguably, the big one is a spike in unemployment. And absent that, it's a cyclical bear market inside of a secular bull market that began in 2013. 2020 didn't reset it. That was a 10 minute bear market. Yeah, that was 10 minutes. Yeah.

Terrifying 10 minutes, but 10 minutes. Yeah. And 22 didn't reset it. Bullshit. Bullshit. 2020 was not 10 minutes. It was fucking 10 days. Dude, Amazon and Google got...

It was a liberation day-esque. It was not... It was scarier because we thought we could die. Amazon and Google got cut in half. Meta lost three quarters of its value. And if you didn't check your account for a week, you missed it. This is a revisionist history. It just sucked.

It was not fun. Bonds were down 20%. I was terrified. I'm not pretending that it wasn't severe. I was scared. It sucked. Your point is, which is the right one, I think people act as if,

if the world doesn't end, if we don't have a great financial crisis, then it's not a bare market. And that's just nonsense. Yes, I would agree with that. I would agree with that. But I think that, again, I'm bullish on rate sensitive stocks. So I think rate sensitive stocks are going to go a lot higher. I mean, you're not going to get a re-rating. Do you like home builders? We're not overweight home builders. We do not have home builders in the portfolio right now. So what else is rate sensitive? Well, again, I would go back to, you know, first financials, right? Okay. But then, anything in materials like steel, anything with cyclicality, you know, those are obviously very rate-sensitive names. And then you have real estate, you know, names like Prologis, you know,

these names, you know, that name has done well the last few days. So I think that the rate-sensitive trade goes on. And you're not going to get a rotation into kind of the equal-weight R-S. If RSP goes, that's more, that is more rate-sensitive by definition because it's not heavier-weighted to big tech software companies that we were just talking about. You know, so funny, you're looking at this chart of RSP, and you're like, what? Yeah, it's at an all-time high. Yeah, it's in an all-time high. In financials, though, there are some sectors that are being blown up as collateral damage to this, like, uh, uh, software Armageddon.

Like, like, well, the alternative asset managers. Yeah. Well, they're all in 30% drawdowns. Some of them away-SP global, fact set. They look like this. They're going straight down. Those are, right. Those are financials.

Yeah. The data providers. Yeah. Those are, yeah. So you have to, you have to actually pay attention. It's not just like XLF. Yeah, John, wake up. Yeah, the brokers.

The brokers. brokers are under pressure, right? So some of the insurance brokers haven't done as well. So the exchanges aren't doing as well. Like M.C.I. S&P. Private equity, blue owls. Yeah. Nuked.

Like, but those aren't, those aren't, those aren't, I would, well, private equity, yes, but those aren't credit sensitive like the other areas and financials. They're financials, but they're not part of what you're describing. Exactly. Do you follow, do you cover CMA? We don't own it currently, but I, I. All time high. Yeah.

Unbelievable. That's a commodity that feasts on volatility. Yeah. That's the commodity. That's the junkie trade. That's like the degenerate trade. Yes. Yes.

So that's benefiting from the run. We don't have a ton of time, but we do have to talk crypto. We don't have to spend, we don't spend a million years on it. But like, oh my God, this is because this is part of this liquidation. It is. All right. Put up the, you want to go in order? I bought Bitcoin at 66,000 today.

I can't help it. I'm a glutton for punishment. We were talking on Tuesday that I'm not going to buy like falling knives. But to me, I have to buy panic. And maybe I'm wrong. And I'll sell it. He only buys full. Knows in crypto.

No, no, no. So I don't, I've learned my lesson. I don't like buying falling knives when it's just relentless selling, okay? But like IGV today, to me, this is a trade. I'm not, this is not a buying a hold for me. When I see falling knives in like big groups that panic. Indiscriminate. Liquidation.

Yeah. I always buy liquidation. It's not always right. Doesn't mean we make money. Might lose. I'm a big boy. It's okay. But I have to buy panic.

If I'm not buying panic, what am I doing? John Chart 18. What percent of your net worth do you have in crypto? Uh, nominal. It's okay. Why? What do you mean why? Like, like, you guys believe?

You don't believe it really. No, no, no. I'll tell you why. I had way too much in Bitcoin and Eath. And thank God, I sold a lot of it. So I sold enough so that if it got cut in half and it did, I don't care. He sold because the P.E. ratio got stretched. Can I show you this Ethereum chart down 60% from 2021?

But like this last leg down, straight down. This is like really since the fall. Well, didn't Tom Lee call the bottom on it? Like on Squawk? Tom was here last week. Yeah. And he said it could... Great episode.

So when Tom was here last week, it was at 2,800. And he said, it could go to 2400. Yeah, it went to 1,800. Yeah. I mean, this is like, what is that? This is liquidation. There's nothing because there's no fun of animals. It just correlated with the tech trade.

I think so, too. Like, it's correlated with the tech. It used to not be. Everyone made this argument that it was an uncorrelated asset, and that drove me crazy. It was until they got ETFed. Yes. And now they're part of the whole. casino. Now's part of the casino. So it's no longer giving you that.

19. Look at this thing. Total Bitcoin spot ETF flows. That doesn't look that bad. It is bad. This is not a great division. Well, is it, here's a question. Is it correlated or is it causal? I think it's causal. I think the ETFs, if they're not putting money into the ETFs, is there any, who else's could buy enough? Josh, this is my point on the factor decay. The ETFs are causal. Yes. So they are 100% are driving. We're on the same page with that. 100%. Robin Hood, 10 year performance. I mean, it's been a wet last year was the best performing stock in the market. This is basically a de facto crypto trade. It is where they make a lot of their money.

And it's what their users are doing. And their account values get nuked when Bitcoin is in a 50% drawdown, which it is right now. Show me Coinbase. 64% drawdown. Holy shit. This thing looks like they just got FDA approval for a new type of flu. I've never seen a stock trade like this. Oh, corn brace is only growing at three per, at a... You just call it corn braids? Coinbase is only growing at three or four percent now. Right. It was growing at 100.

Right. So the market's right. The market's right. It's like now it's like... The market's always right. Well, I mean, for the most part. This is the challenge with Bitcoin. It's the same thing with gold.

It's like, what's the right price for gold? You know, we can talk about that. Whatever the price is today. 8,900, I was told. Dude, whatever... It's like, whatever the price is today's right price. What is the moment is going to be worth in 100 years? It's like, I don't know.

It's like, I don't like the argument that because it doesn't produce cash flow, it doesn't have value, because there's tons of things that don't produce cash flow that have value. But they're harder to value. They're way harder to value. And they're way harder to value because, for example, we own gold stocks. And it's been a great, a great trade. But the valuations look really good there. The fundamentals look really good there. But we know these are expensive on certain metrics, okay?

But these are growing at 130, 140 percent next year. Because where the gold prices is because if you think about a gold, I'm, I would, One time I met with the management of Buennavin Chair. It was young in my career. I was out in Laguna Beach. And I sat down with management. And he was explaining how gold mining works. He got a piece of paper.

And he drew a V and he said, we mine all the gold that's easy to get. And then if the gold price isn't high enough, we can't do anything. We just sit. And then if the gold price gets high enough, then we can mine a little bit more because it costs that much more to get it out.

It's like that's how it works. So it's super constrained. So when you get the price going like this, these things turn into money, printing machines. They're going faster than any stock in the stock market right now. Right. Like if Newmont's cost, if Newmont's cost is $1,600 and the price of gold goes from $3,000 to $5,000, the stock should double. And that's literally what just happened. That's what's happened. Right. But it's hard. And I've, I'm honest with investors about this. It's like, well,

you know, you guys still like gold. It's like, yeah, we still like gold because the fundamentals look really good. And we, we, we were so bullish here. But I recognize. that if the price of gold were a drop precipitously, it's going to completely change economics. And it's unknowable. Right. The economics of the companies you're buying instantly change. And they could be the best managed companies in the world.

It doesn't matter. Yeah. And I want to have an honesty about that. But we like these still. And, you know, they've been caught up a little bit in the momentum sell-off. But, you know, I think those are going to be a little bit more resilient. Oh, that's so funny. Like the golden silver sell-off was last week's story.

Oh, yeah. And the software stocks blew. up so badly this week that it's like, I haven't even, I haven't looked at it. Yeah, no one's, yeah, they've been a little bit caught up because they're part of, again, these, these ETFs group the momentum together. So gold has gotten a little bit of attention as part of that. But it just goes back to Bitcoin. It's like, what's the price of Bitcoin.

What's the price is? The price is what the price is. But that's why Coinbase's earnings, that's why they don't have any earnings because the price is low. So the same thing will happen to gold stocks. Same thing happened to oil stocks. Yeah. Let me ask you guys a question before we get out of here.

Amazon just supported. Take a guess. Let's start a point. I know there. I would say down. I would say up. How much? Any guess?

I would say it's up 7% and I, full disclosure, I own it. I'll say it's down three. Down 10. Fuck you. All right. John Maui, ladies and gentlemen. Hey, can I tell you a question? Do you know that you are one of the best first time guests we've ever had on the show?

I mean, it's, you might be like a podcast. You might be a podcast, bad. That's not our easy seat to sit in. Well, I did well. You crushed the show. John, what do you think? Pretty good, right? Duncan, what do you think?

I know in your headphones you listen to music. I approve. All right. Can I say this? Go ahead. I was super awesome to hang out and do this. I was really looking forward to it. I was so glad to get to come up and do it.

I think super highly of the show. Josh, I've seen you a million times. Thank you. No, I mean, sincerely. I really was looking forward to this. What is that? You guys are awesome. Wait, that's my new drop.

Listen, listen. From downtown! That's so. It says downtown. How tough is that? That's Marv. That's Marv Albert. That's Marv.

I think, right? Is that Marv? Is that one of his? Who cares? All right. John, before we get out of here, we always like to ask people something that they're looking forward to. And it doesn't have to be professional like Amazon's earnings call, which I'm now not looking forward to.

I'm so excited. I'm so anything in the world. What are you excited about? Okay. So I've married 15 years. All right. Okay. I've got a nine-year-old and an 11-year-old.

All right. And I'm a big, big, big, big fan of trips. I think trips are the key ingredient for marriage and they're a key ingredient for families. So I'm like big on this, okay? So I've planned a trip to Croatia this summer. And I'm super excited about it. I got my kids all excited about it.

So that's what I'm really looking forward to time in Croatia. Is that the Adriatic? It's the Adriatic. So it's like being in Italy, it's across the Adriatic. from Italy. Yes. It's the backside. So if Italy's here,

it's the backside, it's that, it's that water body. But it's, it's calmer waters than a lot of the other places in Europe. And I've always wanted to see Croatia. That's where they filmed,

I think, Game of Thrones. So just so beautiful. Okay. So that's what I'm looking forward to this summer. I'm taking my family over there. We're going to spend 10 days. All right. And that's going to be,

but I'm a huge believer in this. I think it's the most, if I was ever, I don't know if we'll ever do this in another life, maybe I'll be counselor. It's like, you want to, have good relationships, spend time. How do you spend time? You go because you're too busy.

I'm too busy with work. I'm distracted. I'm in a bad mood when I get home. Stocks are down. I'm like, I can't take it. I'm not a good dad and my good husband a lot of times when I get home. But I'm way better when I'm away and I carve out that time. So I'm super intentional about it and I'm a big believer in it. Man, I can't tell you how much I agree with that. And my kids who are now grown, they still reference trips that I can't even believe they remember. Like, they'll randomly, out of nowhere, talk about a night we spent in Philadelphia because they remember that the hotel gave them fuzzy slippers and robes. And they thought that was the funniest thing ever.

And they, like, we took pictures of them. And they'll still, like, just casually, it'll come up. And it's just unbelievable what they retain from those moments. From those moments. Because it's so different from the daily grind of this one has to be at school. This one goes to work. So I'm 100% with you on that. I had to go to Japan last year for work, and I took, I took it out.

I took the family, I took the kids, and my kids still, like, they're just... For the rest of their lives. Oh, yes, their lives. Yeah. They still are just like Japan, Japan. They just thought it was the most... It was so clean. It was so techy.

Everyone was so polite. They just, they're just obsessed. Yeah, I love that. All right. Well, John, you did great on the show. We love hanging with you. I want to tell people where they can follow you or find out more about what you do. Give us some URLs that we could send people to.

some URLs like like your website your social media investment group.com. Let's say somebody listened to this and they're like, oh, that guy knows what he's talking about. I want to learn more. Okay. Okay.

So Vertis is our parent company. And they own a bunch of affiliates. NFJ investment group is one of the boutique managers. You can find us through the Verdes website or NFJ investment group. I'm going to tell them to call Joe Taranova's cell phone. 100%. I should call him right after the show. And he will text you prospectus.

All right. All right. Dude, that's awesome. And so it's NFJ. Yes. Okay. And are you doing social media?

Like, what are you? I'm on LinkedIn. I've got Twitter, but I've got a nascent following. I need to probably work on that a little bit. Yeah. Yeah.

Okay. LinkedIn's where it is. LinkedIn is the only social network that matters professionally. Instagram is the only one that matters to keep up with your friends and family. Yes. And you do not really need to go back to the past. My wife manages the Instagram. I manage the LinkedIn.

Perfect. You got a nail. Thank you so much, guys. Thank you for listening. Waitings and reviews. Please, they go a long way. We love you for them. Great job this week.

John Duncan, Nicole, Graham, Rob, Keith, I mean, so many. Daniel, who else? Did I get Nicole? I zoned out. You guys zoning out. All right. Yeah.

Good night. We'll see you soon. Thank you. That was good.