The Compound and Friends - Sentiment Rally

Starting point is 00:00:00 Were you surprised by the meta reaction? Oh yeah. You were? I was too. Up 18% at the open. It almost seemed calculated to like give everybody exactly what they wanted. Like everyone that's been criticizing the company, they like gave it all to you. Expense reduction, buyback, discipline. What do they say?

Starting point is 00:00:22 This is the year of efficiency. It's like everything that everyone was yelling at them about, and they got it. How are you feeling, sir? I'm good. Okay. Just looking forward to these earnings. You got to have.

Starting point is 00:00:39 Michael. What's going on, baby? Good to see you, Jason. Good to see you. When was the last time you were on here? Where was the S&P? Good question. It's got to be a bit over a year ago.

Starting point is 00:00:50 It's been that long? Yeah, for sure. Well, let's see. I'll tell you exactly. We might be at the same spot. How's everything? Things are well. Good.

Starting point is 00:01:01 Starting to travel again. Now the world's really opened up. You can go anywhere. Do you look forward to that? Do you enjoy it? I like while. Good. Starting to travel again. Now the world's really opened up. You can go anywhere. Do you look forward to that? You enjoy it? I like it. Yeah. But I think I'll get tired of it soon enough as well.

Starting point is 00:01:13 Jason, you were on episode 49. We're doing 79 today. Wow. That was June 3rd or June 2nd, 2022. So not that long ago. Wait, June what? June what or June 2nd, 2022. So, not that long ago. Wait, June what? June 2nd. Dude, we're in the same f***ing spot.

Starting point is 00:01:33 What? How crazy? June 2nd, the S&P closed at 4,176. We're at 4,157 right now. That's amazing. Well, it didn't exactly sit there. There was definitely some travel. No, nothing happened exactly sit there. There was definitely some travel. No, nothing happened.

Starting point is 00:01:47 Nothing happened. There was some travel involved. Unbelievable. Look at that. Oh, hell of a fade today. All right, well. We've got some numbers coming up. Yeah, we've got some big numbers.

Starting point is 00:01:58 Josh and I were talking this morning. Is it possible, of course, anything's possible, like if you had to predict one of the three, Apple, Google, or Amazon, to like actually reverse all of the good news that we've seen, it's hard to imagine sort of any of them. My pick was AWS slowing the cloud. That'd be my pick.

Starting point is 00:02:16 Because Microsoft came out with bad numbers. But to Josh's point, A, that's expected, and B, that's like a look into the tech slowdown, like the enterprise tech slowdown. That's not necessarily a broader economic. I guess Apple missing big, that would be bad. And I guess it's going to come down to guidance as well, right? Anything forward-looking.

Starting point is 00:02:40 Sure. It's still anyone's bet, right? We got news coming out saying the demand for cardboard boxes has gone way down. So is that telling us something? Has that been priced in? Don't know. Maybe Amazon is getting more efficient with their cardboard. You see like you get one thing and it's in like a giant box.

Starting point is 00:02:58 Oh, Apple will find out about like their China story, right? Because they have a lot of exposure there. That's right. Why are you so quiet? Who, me? Yeah. I'm pensive. Dude, we have so much to talk about. Wait, what? This is a huge doc. It's a big doc?

Starting point is 00:03:15 No, but really, there's a lot going on. You've got to be selective, man. Yeah, we'll have to be selective. Or we'll keep Jason here until 9 o'clock tonight. So, I think our What Are Your Thoughts doc is like 35 pages long usually. Yeah, I mean this is a big week. Compounded friends.

Starting point is 00:03:32 We got 20 pages. All right. This is a big week because you had earnings and the Fed and a huge market rally, market-wide rally. There's just a lot going on. So we rallied all the way back to where we were in June. Crazy. Put my mic on!

Starting point is 00:03:50 All right. Are you recording live? Yes, we are. Jason, where's home base for you? Boston. What's your favorite part of Boston? My favorite part about living there. Museums?

Starting point is 00:04:01 The Museum of Fine Arts where my wife worked. Yeah. And I kind of go there every other week I've really grown to love it and the fact Boston's a walking city yes

Starting point is 00:04:11 I can walk anywhere it's an easy city very manageable I love Boston sprawling like New York I was in October it's such a walkable city who's on display

Starting point is 00:04:21 at the museum of fine arts people who do they have? Oh, they got everyone. Is it like classic? They got the old masters and then they do a lot of rotating exhibitions of kind of contemporary stuff. Okay. Yeah, I think they just did Gaston, which, you know, he's supposedly the artist's artist.

Starting point is 00:04:47 So I think... Is that the guy from Beauty and the Beast? Yes. Kind of like that guy, yeah. Yes, they have an animated cell from Beauty and the Beast on display. I'm going to the Louvre in April. Nice. So I'll be in Paris with my wife and kids. And they asked, the hotel asked,

Starting point is 00:05:04 do you want us to arrange an English speaking tour guide for the Louvre? And I still haven't decided. So I feel like if you don't have a guide, you're just wandering around and you don't really know what you're looking at and why it matters other than Mona Lisa. But then part of me is like,

Starting point is 00:05:24 maybe it's better to like not put so much on my kids to try to absorb it once and just let them look around. So I'm not sure exactly what to do. They don't know what they're looking at. I think they also might have those audio phones that you can just rent that like you press a button. Or an app on your own phone. Yeah, yeah, yeah. Just do that. But then I just narrate it to my family like you want like

Starting point is 00:05:45 the genie pass for the roof no a person will read a person will tell you about it you get your headset and then the other thing is they were saying that we should get a tour guide for versailles and i'm pushing back on that you don't need that yeah like i'm you're looking at the garden great looking at the hall of mirrors great i could read i could read a bunch of stuff on the web and just tell them what we're looking at now if you're lucky when you're at the lo of Mirrors, great. I could read a bunch of stuff on the web and just tell them what we're looking at. Now, if you're lucky, when you're at the Louvre, you might have someone gluing their hand to the Mona Lisa, preventing you from seeing the Mona Lisa. So what is that? Why is that a focal point for protesters, the Mona Lisa?

Starting point is 00:06:18 You know, they didn't do it across all museums throughout Europe. These are climate change people mostly? You're talking about it. What? That's the point, right? You're talking about it. Because it gets people to talk. It's so visible.

Starting point is 00:06:32 And so shocking. And people talk, and that's what they want. They want awareness. Okay. Well, hopefully that doesn't happen while I'm there. I only have one shot at this. I'm not bringing everybody there again. So hopefully we get through that.

Starting point is 00:06:45 Did you put your wife on the line to save the Mona Lisa? No. We had Michael Mavison at one of our conferences, the Big Picture Conference, and he did a 40-minute lecture on why the Mona Lisa is even noteworthy to begin with. minute lecture on why the Mona Lisa is even noteworthy to begin with. And it turns out it has nothing to do with the quality of the artwork or Leonardo da Vinci or any of that. It was part of a heist. And the heist became international news. And every newspaper that printed a story about the heist printed a picture of the Mona Lisa because it was one of like 12 paintings that were stolen. How is that not like a Netflix movie? It should be.

Starting point is 00:07:27 It's a really interesting story. But he was making the point that things, that was not a painting that anyone cared about until this particular heist, which I think was turn of the century, late 1800s or early 1900s. But it was one of the first like news stories to go global and as a result that image became like something that everyone had seen almost like a meme but before the internet

Starting point is 00:07:53 and that's why to this day it has the notoriety and but that notoriety feeds on itself so we all accept that the mona lisa is a big deal it's not even one of Da Vinci's better works of art. Absolutely. It's not even up there, but it doesn't matter. It's famous. Famous for being famous. Because it contains history, right? So much of art is about the artist, about the story of the artist, that journey, and that time period. And if you look at most of the stuff in kind of a museum, right, like these historical

Starting point is 00:08:26 pieces, most of the time the value is because it tells you a story about that time rather than the artwork itself. You think so? Yeah. Okay. Do you think DaVinci is one of the most widely recognized names in the entire world behind like Jesus? Wow, he's definitely up there, right?

Starting point is 00:08:42 I mean, he, I mean, the Mona Lisa is part of it, but just because he, you know, spanned so many different disciplines. Oh, I saw, speaking of that, I saw somebody, he built the David, right? Or he sculpted it? No, that's Michelangelo. Oh.

Starting point is 00:08:57 Yeah, that's in Italy. Duncan, edit this out immediately. I don't want anybody to know that I'm not a Renaissance historian. Please leave that in. I want people to hear what I'm dealing with. But I saw somebody, I saw somebody, I would have come anybody to know that I'm not a renaissance historian. Please leave that in. I want people to hear what I'm dealing with. But I saw somebody. I would have come around to that eventually. I saw that somebody.

Starting point is 00:09:10 There's somebody who's responsible for dusting it off. It's like a 45-foot statue. It's their full-time job is dusting it. Hey, what do you do for a living? Is that on 60 Minutes? Do they have to dust every part of it? Because it is highly nude, this statue. I was smitten by David.

Starting point is 00:09:25 Absolutely smitten when I saw it. I'm just saying. The butt crack is probably particularly dusty. That's right. That's where the dust accumulates most. So you really want to get in there twice. Let's get in there, John. We're coming in with...

Starting point is 00:09:37 Coming in with three claps. That was a perfect time. Look at that. Look at that. A couple of friends. Episode 79. 79! Look at that. Look at that. A couple of friends. So, 79. 79. Welcome to The Compound and Friends.

Starting point is 00:10:00 All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Today's show is brought to you by Craneshares. I want to focus your attention on some of that Brendan Ahern produces every day. ChinaLastNight.com. On today's show, brought to you by Craneshares. I want to focus your attention on something that Brendan Ahern produces every day. ChinaLastNight.com. On today's show, we spoke with Jason Hsu and it came up that Jason did this thing where the headlines in the West do not exactly line up with the price action.

Starting point is 00:10:38 And Jason was looking at over a longer term period, over a 12-month period. Brendan Ahern has shown recently the dichotomy between the headlines like that morning in a lot of these publications versus the actual, like forget about the narrative, like the actual price action and the discrepancies are pretty interesting. So if you want to learn more about what's going on and why, visit chinalastnight.com. And again, to learn more about the risks of investing in China, visit craneshares.com to learn more. Well, the Chinese government is worrying all the capitalists in the world way more than it used to. And of course, we don't like that. And we wish that China and the United States got along better.

Starting point is 00:11:27 And if you stop to think about it, think of how massively stupid both China and the United States have been to allow the existing tensions to arise. what bad is ever going to happen to China or the United States if we two are close? If we make good friends out of the Chinese and vice versa, who in the hell is ever going to bother us? What do you think about that, Jason? That was DaVinci. That's Charlie Munger talking about relations between the U.S. and China, and he's got investments that are Chinese equities,

Starting point is 00:12:05 and he's been investing in China for a very long time, way before most U.S. retail investors were even able to. What do you think of that concept? Is it naive, or is it an ideal that we should maybe aspire to? What are your thoughts? Josh, before I get started, happy Chinese New Year. This is why the red scarf. Oh, we were going to get there. I had questions. Before I even introduce you, I just want to hear your take.

Starting point is 00:12:33 Charlie is right. I mean, if you look at the world, right, the world's basically now driven by two growth engines, American and the Chinese. I think of the Americans as the scientists in this relationship and the Chinese as the engineer. And it's a really intertwined and symbiotic relationship. We invent the cutting-edge business model, the technology, and the Chinese with their engineering culture makes it cheaper, better quality, and a mass quantity. We can't collect the rent on our IP without someone actually making the manufactured goods. So I mean, I think it's wrong to see kind of the US and China as US and Soviet Union of the 80s, right? Because there was not a lot of trade going on. But that is the prevailing sentiment. But people want to see it that way, right? But that's just not true because we trade

Starting point is 00:13:20 so much. Neither side can afford to royally piss each other off and actually go their separate ways, right? Our French shoring, like, can you French shore away from China to Mexico to Vietnam? Vietnam, by the way, is both smaller and also another communist country, right? It's not possible. Can China move away from this massive U.S. consumer market? Who are they going to replace that with? So there's going to be a lot of restraint shown. And I think ultimately, that's good for everyone. China is not satisfied with the US being the scientist. They want to be both. Yes, that's a source of a lot of attention. And I think that's the thing that has the potential to spill over away from business, but really into like a geopolitical situation. Yeah, you know, that's the thing with being number two, right?

Starting point is 00:14:06 The number two is always looking, well, how can I get to be the number one? And of course, the number one is always thinking, well, I got to keep a distance. I don't want the number two to be number one. So there's always going to be that dynamic tension. You just described mine and Josh's relationship. That's right. That's right. I'm not going to ask who's number one.

Starting point is 00:14:20 Well, I'm not the scientist. That I could tell you. That I could tell you. All right, Jay, first of all, let's give you a proper introduction. We're so happy that you're here. You were with us last June. We recently uncovered. in asset allocation and investment management across developed and emerging markets with $13 billion in AUM. Jason is also an adjunct professor of finance at the UCLA Anderson School of Management. Jason, welcome back to the show. Glad to be back.

Starting point is 00:14:56 So happy to hear. It's the year of the rabbit. Yes. Okay. Chinese New Year or Lunar New Year. Lunar New Year. Okay. Was when? Last week? Last weekar New Year. Okay. Was when?

Starting point is 00:15:05 Last week? Last week, last Sunday. Okay. What is the significance of the year of the rabbit culturally? If you're born in the year of the rabbit, this is your year. But little do you know, your year tends to be a bad year for you. So if you're a rabbit, so you're either 12 or 24, multiples of 12. Because there's 12 different years.

Starting point is 00:15:25 12 animals, right? You got to wear red. Okay. Keep the evil spirits away. Okay. Why? Are you the year of the rabbit? No, I'm rolling off.

Starting point is 00:15:34 I'm the year of the tiger. So you don't look 12. Yeah. Okay. All right. I just rolled off my year. So I still got some residual bad luck hanging around. So I got to wear my red scarf.

Starting point is 00:15:41 What about the pin? What does the pin represent? Oh, this came from my wife's museum. So she works the boston museum fine arts and this is off of one of their price collection so it's a it's a famous dragon yes the head of the dragon very cool all right get it at the gift store all right everybody visit the is it the boston museum of fine arts yes okay everyone uh go visit jason will be eating lunch there when you come in. I want to talk about the new meme that's spreading around people that watch the economy and watch the market.

Starting point is 00:16:14 And everyone now is tripping over themselves to explain the strength in the market that we've seen since the calendar year turned over. Probably started earlier than that. since the calendar year turned over. Probably started earlier than that. But China's reopening is going to be the thing that gives the United States its soft landing. Demand coming back from Chinese consumers, demand for equipment and commodities

Starting point is 00:16:37 and all of the things that we export, not just to China, but around the world. Like China deciding they're finished with lockdowns and zero COVID policy. And just let's get back to the way things were. Do you see it that way? Definitely. I mean, it's contributed to the positive sentiment, right?

Starting point is 00:16:54 I mean, first of all, you know, the China lockdown, we always thought, well, could that spill over to something worse, right? Because, you know, there's that, you know, closing the border, closing the country mentality. Now, all of a sudden, Beijing says, we're going to shift. We're not going to double down on a non-functioning policy. So that kind of flexibility from Beijing signals that they could go 180 on other things, which we've seen, right? They've gone 180 in terms of their fight with the SEC, now letting the SEC to go audit Chinese companies. They're extending on all the branch to Europe, inviting, you know, Germany to come and talk and really saying we're going to be great trade partners, right? This is important. So I think that 180 ship, COVID policy and trade policy bodes really well, right? Is the message for Americans seeing the COVID-related protests and seeing the regime basically, I don't want to say give in, but have a change of heart.

Starting point is 00:17:51 Is that like, should that be encouraging for everyone paying attention to this? It doesn't have a lot in common with the political system in Europe or in the United States. There's still a mechanism by which popular opinion can sway the direction the government decides to go. And overall, that's probably a better outcome than the government doubling down. So, like, that's how we should think about this, right? Absolutely. I think when you look at COVID opening up, it's more than, hey, Chinese consumers are going to buy stuff and their factories are going to be humming. You say it's bigger than that.

Starting point is 00:18:31 It's bigger than that. And it's exactly the point you make, which is you didn't know. It could go the other direction. People protesting. The despot of old would go and crush the protest. But Beijing didn't. Beijing said, look, we're going to side with the people. They want opening up. We're going to open up. We're going to take our off ramp, about face, and move forward. Okay. It's a good sign, right? Because easily you could have the politicians, due to face issue, due to ego issue, doubling down on that policy. That's the hardest part, right? Nobody wants to look like they lost something.

Starting point is 00:18:58 Yep. For Beijing to do that 180 and shrug it off and move forward, I think that's big. I think the world's got to take notice. Like, you're dealing with someone who, you know, is rational, cares about the people, recognized the power still sits somehow, even if you're a one-party state, with the people, right? You got to keep the people happy. Some of the big bad stories that the macro-focused bears were harping on last year, I don't want to say they've completely gone away.

Starting point is 00:19:30 But I would say we didn't get worst-case scenarios out of them. We were worried about a very cold winter in Europe and what that would do to the supply of natural gas. That didn't end up happening. Europe got through this. We were worried about China's COVID situation. That went the right way, at least so far. So this is just like one more domino falling in the favor of the bulls, which— It's a lot of dominoes.

Starting point is 00:19:57 It's a lot of dominoes. So forget about like wind resorts and all of the Macau casino stocks, of course, those were going to double. Even Tesla, the reopening of the economy, obviously, the Shanghai Gigafactory being extremely important to Tesla, those were obvious. But we just got across-the-board rallies in things like Deere and Caterpillar and all of the gigantic, cyclical, industrial types of stocks. And it's, I mean, I don't want to speak, I don't want to get too excited.

Starting point is 00:20:29 It seems somewhat sustainable because it is not just stock prices rallying, but it's being accompanied by these dominoes falling the right way. You know what hit all the time? I thought Illinois Tool Works. Right. Michael Antonelli was tweeting about this. Exactly the type of stock.

Starting point is 00:20:41 Like, does this happen in a recession? This is one of the most economically sensitive companies in the country. Do you think this is sustainable? We will see. Because today, after the bill, we got Apple, we got Amazon,

Starting point is 00:20:54 and we'll see, first of all, what their numbers look like and, of course, what their guidance look like. So I think we're probably... I don't think Amazon could take down Caterpillar.

Starting point is 00:21:02 Like, I just think we're past that right now. Because Amazon has Amazon problems. You know what I mean? Amazon will cite the challenging macro environment, but everyone knows what the issue is there. They're lapping the pandemic levels of growth, which are obviously not repeatable.

Starting point is 00:21:21 I think this is the best description that I've seen of what happened yesterday during Powell's press conference, which stocks initially sold off briefly, but then they just ripped into the close. So Dalip Singh said, Nick Timoreos tweeted him in an article from the journal. He said, quote, markets rallied fiercely despite the hawkish message

Starting point is 00:21:40 because investors know the Fed isn't omniscient, nor is it dogmatic. Economic conditions are in charge when the Fed is in data-dependent mode. I thought that was a really, really good way to put it. The data just keeps getting better. What do you think about that? Well, so, I mean, you know, the Fed's got two things it's got to watch for, right? It's got to watch for inflation, and that's been the primary focus. And at some point, right, once inflation is not an issue, it's got to look at GDP growth and job growth.

Starting point is 00:22:11 I think we're gradually exiting the mode where the Fed is going to be hiking rates, right? Because inflation will naturally ease. The more time we give it, the more prices stabilize. The base effects, it's guaranteed to ease. The question is at what rate? The Fed was a 2022 story. It dominated the market alongside inflation, and that's in the rearview mirror. And so is inflation for the most part.

Starting point is 00:22:30 We got jobless claims this morning, lowest since April 2022. And on top of that, you have labor costs rising at 1.1% quarter over quarter, which is below the 1.5% estimate. So you have still an extremely tight labor market with wage pressure coming down. And you have mortgage rates back below 6%. So the housing market might not crash. And earnings are okay. So what's the bear case? And you have people that are so positioned, so offside, so they're not positioned for this rally. So you could say that valuations are stretched or don't make sense with a five-year risk rate or four or wherever we're at. Fine. But that doesn't matter for the short term, because for the short term, people are offsides

Starting point is 00:23:11 and they have to chase. If Apple, Amazon, and Google don't shit the bed, it's game on. Yeah. And I think that's the big one, right? Because right now what we have is not sort of fundamental driven rally, right? It's sentiment, you know, forecasting the fundamental. And it's going to be tricky, right? It's sort of knife edge, right? You get a really bad number coming out of Amazon or Apple, could be both. It could shift the other way really quickly. Absolutely. But you don't get Facebook gaining 23% in a day without people being massively offsides. No, but the sentiment part is important because the leaders in January of this year were the biggest laggards last year. Yeah.

Starting point is 00:23:47 And actually, I want to quote Savita Subramanian, put this out today. She's calling it a sentiment-driven rally. First of all, January was a historic month for a 60-40 portfolio. 96th percentile month in history back to 1921. 66th percentile month in history back to 1921. So in a century, what went on in January for a 60-40 portfolio was better than any other month other than like 4% of all. I mean that's – all right. What else to say?

Starting point is 00:24:19 Just also getting back to sentiment. Josh and I did a live event with Dan Nathan and those guys. And we asked people a show of hands who thinks the October low holds. Nobody. Nobody. Myself included, by the way. Me too, by the way. Me too, by the way.

Starting point is 00:24:36 Savita notes the S&P gained back all of the losses in December. 6.3% total return for the month of January. Bonds also rallied. Long-term treasuries plus 6.2%. That was a 95th percentile total return. Investment-grade corporate bonds up 3.9. Gold up 6.2. You couldn't lose money in January if you tried. But Josh, the only thing about – and I agree with Savita, but it's a sentiment-driven rally sort of takes away from the fact that it's also fundamentally driven as well.

Starting point is 00:25:03 No, correct. But think about it. Facebook reported a 5% slowdown. So the fundamentals still aren't good. The sentiment was way worse than the fundamentals. So she's saying the worst performing sectors in 2022 led last month. Consumer discretionary up 15%, communication services up 14%. Meanwhile, defensive utilities and staples both down 1%,

Starting point is 00:25:27 2%, the only sectors in the red. So it's a complete reverse. And look at, like we, you spoke about how we speak about housing stocks all the time. Like if, if unless the market is so wrong about where the economy is headed, housing stocks wouldn't be doing what they are. You look at like Home Depot, not just the builders, but Home Depot, like the, the ones that are really impacted by the consumer and their spending. And these stocks are on fire. But we're going to see what the underlying numbers are, right? Because unless earnings improve and grow at historical trend rate, a lot of what we're seeing is price multiple sort of fluctuating.

Starting point is 00:25:58 And I think that's much more sentiment. Well, you're right. You could say that as much as stocks priced in a slowdown in Q2, 3, 4 of last year, maybe they're pricing in too much improvement right now. We'll say it could be true. Let's do this. Let's do this chart escape velocity. So this is from, this is from a Renaissance macro. We had a Jeff to graph on a couple of months ago. He was great. All right. So what they're looking at, what we're looking at here, we're looking at a chart of months ago. He was great. All right, so what we're looking at this year, we're looking at a chart of 20-day highs in the S&P 500. So the commentary that they give is-

Starting point is 00:26:30 Russell 3000. Okay, sorry. Got it, got it, got it. What they say is the market characteristics, which are beta, high cyclicals, et cetera, have been stronger than internal price data until yesterday. 20-day highs hit our bullish threshold level.

Starting point is 00:26:47 Bears take note. It doesn't happen in the midst of bear markets. Narrative, we'll fry you. What are the green arrows? So the green arrows are where 20-day highs are close to 50%. So basically, half of the market is at a 20-day high. Just definition- Significance of 20-day high is that's a calendar month. Yeah, just by definition, that is not characteristic of a bear market. What do you think about that? God, I'm probably still in the camp of this being a bit of a sentiment-driven suckers rally.

Starting point is 00:27:19 I'm worrying that we're going to see some bad numbers with some negative guidance that will still, I think, scare people. So what would you need to see to come off that view? still, I think, scare people. So what would you need to see to come off that view? You know, I actually think we need to see kind of the pendulum swing fully the other way, right? Getting valuation really cheap across the board and seeing capitulation selling. And I think we haven't seen that in this cycle.

Starting point is 00:27:39 So I'll push back a little bit. I think that one of the things that we saw is a lot of the bubbles popped, right? Like all the crypto shit, all of the SPACs, all of the Zooms of the world, Teladoc, whatever. Like a lot of these companies went down 90%. You saw Amazon go down 60%. You saw Netflix go down 75%. Facebook too.

Starting point is 00:27:59 So what more do we need to see? Like in terms of like capitulation, what capitulation, what else are you waiting for? Yeah, I'm probably waiting to see kind of 4P to go closer to about 16, which is kind of the historical low if you look at kind of the band. How close did we get? We were at 17 or 18? No, we barely touched 20. Really?

Starting point is 00:28:20 Yeah. On what? On S&P? On S&P, yeah. I feel like small caps were 10. The June lows, small caps were probably 10 times forward. Yeah, but I guess the small caps were too small to move the broader S&P weighted average. Okay.

Starting point is 00:28:35 So does that require a flush or does it require maybe we don't get the flush, but we get four quarters worth of earnings starting to recover? Yeah, I think for, I would say, big institutions to kind of rebalance back and go into risk on, the kind of big, steady money, it's probably going to take a few quarters of, you know, earning surprising people to the upside. Okay. Let's do hard versus soft data. I think just before we move on to that, if I could paint the perfect scenario, just in terms of what I would like to see the market to do for the next, whatever, six to nine months, is a little bit of digestion.

Starting point is 00:29:10 Like, I don't think I would be too excited if the S&P runs another 10% for no reason right now. Yeah. Well, Powell will not enjoy watching that process play out. But actually, so Lisa Abramowitz tweeted about this, because I wasn't watching the press yesterday. I was doing something else. She said that Chair Powell had an opportunity to aggressively push back against the stock

Starting point is 00:29:27 markets rally year to date. He did not. The NASDAQ pops in response. So I think there was a question about, do you think the stock market is getting ahead of itself? And he basically was like, yeah, that's smart that he's not overly focused or at least not talking about being focused on the stock market. I don't, I don't think that that's not part of his mandate. about being focused on the stock market. I don't think that that's going to help. Part of his mandate. So let's get into, I forget who did this. This is from Haver Analytics. Oh, this is from Goldman. So talking about, yeah, it's from Goldman. Talking about hard data versus soft data, how people feel versus what is actually happening. So they say since last June,

Starting point is 00:30:00 GDP and other hard indicators of economic activity have consistently outperformed business surveys. Let's look at a few charts. So we're looking at hard versus soft data, and there is a pretty big divergence that really showed itself in the fourth quarter. So the soft data is like somebody calls you on the phone and says, do you plan on hiring people next year? Yeah, has business. Right. Okay. So people that answer those calls probably tend to be older and maybe a little bit more curmudgeonly.

Starting point is 00:30:33 Is that fair to say? Well, yeah, certainly. Okay. Here's another quote. Survey data does not provide a perfect read on growth, and they are particularly error-prone when business sentiment is euphoric or depressed. Fears of imminent recession have been top of mind since the middle of last year, and as is visible in the gap between the blue and the red lines in the previous exhibit, the economy outperformed the business surveys throughout the last two quarters. Next chart, please. So this is a really, really good one.

Starting point is 00:31:03 The red line, we're looking at subjective business trends. I guess this is year over year. And the blue line is objective measures, like just straight data. And they track each other really closely. Look at that breakdown. The only time there's a divergence is 2009 when we're rebounding, which makes sense. But look at the divergence that we've seen recently. It's staggering. This goes back to just how people feel versus what's actually happening. So what is the missing ingredient that's led to that much of a disconnect? It's staggering. This goes back to just how people feel versus what's actually happening. So what is the missing ingredient that's led to that much of a disconnect? It's a stimulus. It's a stimulus. People having excess savings. So we keep thinking that the

Starting point is 00:31:34 recession is coming. The recession is coming. So Mike, I was going to say this only goes back to 05. So for me, the missing ingredient is inflation. It makes everyone feel way worse knowing that their costs are up for everything. So 100%, that's why people feel so shitty. But the reason why the data has not broken down, I think, is because in 2021, when we were saying, if we get a recession, will this be the most obvious recession call ever? But what happened was, and we also said, corporations were flush with cash. There was a ton of bond issuance in 2020, 2021. And the consumer, I don't think we realized how well positioned they were. But I think there is another data that you might want

Starting point is 00:32:10 to pay attention to, which is they've been checking credit card spend, right? Like people are running out of available balances on their credit card, and we've seen the fastest accumulation in savings. And both of those could be- I was telling Michael about that on Tuesday night. He was very upset with me. No, I wasn't. No, Josh was citing Matt Klein's piece, which is excellent. I did get to read that. But if you listen to the earnings calls from Visa and American Express and Discover and

Starting point is 00:32:34 Capital One, they're all saying the same thing. Things look pretty good. People are spending. But you're right. They're absolutely- No, but your point about- But they're boundaries. Your point about savings declining.

Starting point is 00:32:40 But you're right. Like they're absolutely – But they're boundaries. Your point about savings declining. So normally the savings rate like pre-pandemic was 8% and it was 30 at the onset of the pandemic. And now it's three. Could that go negative? Sure, it could. Yeah.

Starting point is 00:32:58 Yeah. When was the last time it went – probably a great financial crisis or – Yeah, I mean around every crisis time, right? You see people start to draw down because obviously they're spending more than they can replace their income. Part is job loss, part is just sort of lower bonuses. But we're not in crisis now.

Starting point is 00:33:13 So where do you think that's the trajectory of that is? I mean, we aren't in crisis because labor market is strong, but we're starting to see a slowdown there or seeing layoffs in the highest paid sectors. And that's obviously going to have an impact. Yeah. I did see data yesterday. I can't remember who was from, if it was JP Morgan. Oh, it was Citi. Citi credit card data and debit card spending was down big time in January. Like I know it's seasonal, but down a lot more than it normally is. So maybe, I don't want to like completely dismiss the fact that consumers might

Starting point is 00:33:42 run out of excess savings and the picture might look very different six months from now. Absolutely possible. Torsten Slack said it continues to look like a soft landing. ECI, which is employment cost index, wage inflation is coming down and the consensus is expecting non-farm payrolls on Friday to come in at 190K. And none of the indicators the NBER recession committee normally looks at suggest that we are in a recession. So what do you look – so what do you focus on? One of the indicators the NBER recession committee normally looks at suggests that we are in a recession. So what do you focus on? So what I focus on, valuation is still kind of the primary focus.

Starting point is 00:34:13 We came off of crazy valuation, right? And so it's easy to go, oh, the market's fallen 30%. Some of the crazy stocks fall in 60, 70%. If you're like, oh, it's fallen a lot. How much more can it fall? But if you kind of put in the background what is sort of normal valuation multiple, given the kind of interest rate we have, it's got to be a lot lower, right? Unless the Fed says we're going to go back to- Even though rates are coming down, at least at the intermediate term rate.

Starting point is 00:34:41 Where's the two-year? The two-year is down a lot. The two-year is down a lot, yes. rate. Where's the two-year? The two-year is down a lot. The two-year is down a lot, yes. Don't you get valuation support from the two, the 10, like pulling, I think the 10-year is down 80-something basis points already from the high? The two-year is at 4.1. I mean, clearly, the lower the interest rate, the higher the valuation multiple we can support. But we're ways away from the kind of valuation multiple and the kind of rate that we've seen, ways away from the kind of valuation multiple and the kind of rate that we've seen, I'd say, you know, the last five years, right? So what is the right valuation multiple for, say, a 4%, 4.5% on the short end? I don't think it's the kind of valuation multiple we're seeing right now.

Starting point is 00:35:16 Especially not in NASDAQ. Well, we've spoken about this a million times. What is the right multiple? And do historic multiples, are they fair comparisons given how productive and efficient these gigantic companies are? And it is a debate that we will forever have. It's a hard, hard one. So I totally see both sides. Well, you don't know where they belong, but even if you did, you don't know where they're going to stop when they start going up or down. They always overshoot, right?

Starting point is 00:35:38 Of course they're going to overshoot. And the overshoot part is irrational. So you can't place a rational model to try to figure it out. Okay. I want to talk before we get to housing, let's just look at earnings estimates, which just continue to come down. Maybe this set up a lot of the rally. So we're looking at a tweet from Julian. I won't – sorry. I don't know his last name.

Starting point is 00:35:57 I believe that's pronounced Schwarzfeld. No. Climochico? I don't know. Anyways, good follow on Twitter. Those will be in the show notes, on the video, et cetera. So he has a chart showing S&P 500 earnings estimates dropping like a rock, pricing and earnings growth of just 4% and at risk of a year-over-year decline.

Starting point is 00:36:19 The S&P 500 is trading at an above-average 18 times earnings, makes it tough to support the bull case. Well, you could support the bull case so long as valuation isn't a part of what you do. Like if you could leave that out. Well, also the timeframe, right? Like today, tomorrow, next week, nobody cares about valuation. Right.

Starting point is 00:36:36 But if you have a longer term investment horizon, absolutely it matters. Yeah. And again, it gets hard when you're looking at a longer horizon because over a longer horizon, you got to say, well, what might be the rate over the next 10 years? It could be a lot lower.

Starting point is 00:36:45 So it could support a higher valuation. It could be higher. We don't know. And of course, earning is clearly going to recover and continue to grow. And so, you know, what kind of earnings should we sort of base off of the valuation multiple? So you got too many changing and moving parts once you extend your horizon now to the next five. So for me, the number one determinant of whether or not we're going to have a recession this year is housing. Like, does it get significantly worse? And I don't- I don't see it.

Starting point is 00:37:14 You don't see it either, right? Yeah. And then part of this, this is not 2007, right? Most people don't have a floating rate arm that's going to adjust. Most people have a normal 30-year mortgage. They locked in at three and a half, three and three quarters. There's no pressure to sell. And the quality of the borrowers is better. Absolutely. And the banks are not risking their balance sheet with- Banks spend way more caution.

Starting point is 00:37:38 And there's five buyers for every seller. And interest, the 30-year just ticked below 6%. And so you saw inventory build as the housing market was frozen in the fourth quarter. There was no activity. Can we put this up? But that's about as bad as it's going to get. The fact that it's illiquid. If you are a desperate seller, sure, you're going to take a hit.

Starting point is 00:37:56 But there's no one who's forced into liquidation. Very few. So inventory, this is from Mike Althaus. I'm sorry, Mike Simonson at Althaus Research. They do great work. So inventory built throughout the third and fourth quarter, like dramatically off of historically low levels. And you were seeing price cuts all over the place. I saw this in my town. I'm on Zillow all the time. Price cuts left and right. And- You see that house on shore that's now 1.5 down from 1.9.

Starting point is 00:38:22 Which one? Swimming pool. Big house, like 7,200 square feet. Oh, that one at the end. No. I really like that house. Okay, okay, yeah, yeah. You know which one I'm talking about? Yes. I'm going to buy it for you as a present.

Starting point is 00:38:35 So sweet. So Mike Simonson said, price cuts are evaporating down to 33.9% of the market with a recent price reduction. This bodes well for transportation. Okay, whatever. So next chart, please. So this is a chart showing the percent of properties with

Starting point is 00:38:48 recent price reductions. And this is seasonal, of course, but they're coming down a lot. Wait, this is percent of properties with recent price reductions, US single family homes. Yeah. Down is good. Down is good. That means that there's less price cuts. Okay. So, so activity already springboarded, like housing activity, mortgage applications rocketed. I think prices will not necessarily go back to the ultimate highs, but activity is picking up dramatically. So to Josh's point, this is like one more massive, massive potential roadblock for a soft landing. And it seems that we might just do it. Yeah. I think the risk was never about

Starting point is 00:39:25 a housing market-driven recession or a housing crash that caused a debilitating balance sheet value decline. And people point to that just because it's the last big one. That's the last war. Yeah, the last war.

Starting point is 00:39:38 Yeah, yeah, yeah. I think this one, it's all going to be how strong are the consumers going to stay in their spending mode and corporate spending. And a lot of what's taking away from corporate spending, and that's something we don't talk enough about, is like, yeah, the Fed's been printing money and sending that to the consumers.

Starting point is 00:39:53 Similarly, American companies have been printing money, right? They printed a lot of stock options at record high valuation. And those stock options now become worthless. Probably fewer employees are willing to take those. So I think their spending power has been sort of cut down to size because of their inability to sort of issue cheap currency. So I think that should be taken into consideration.

Starting point is 00:40:12 So I wanted to ask you about that. Can I just say one last thing about the housing crash and then we'll move on? Please. Speaking of housing crashes, a day before the Fed, so that was what was the Fed today? Tuesday. So Michael Burry tweeted sell. That today? That was Monday. Oh, Tuesday. So Michael Burry tweeted sell.

Starting point is 00:40:27 That's all he tweeted, just sell. Sell puts though. Exactly. So you don't understand what he meant. Exactly. Jim Cramer said buy the dip. And you can imagine the response on Twitter. A lot of dunking on one person and supporting the other. Michael Burry has since deleted his account.

Starting point is 00:40:40 He'll be back. I wanted to ask you about corporate spending. he'll be back I wanted to ask you about corporate spending buybacks but also like very ambitious kind of empire building were part of the story of the recovery from COVID

Starting point is 00:40:54 in 2020, 2021 Amazon, Apple these companies just hiring with abandon but there are certain market environments where Wall Street loves it. When companies do aggressive shit like that and their multiples expand and they get more by recommendations,

Starting point is 00:41:13 but then like the mood changes. And right now companies are being incredibly well rewarded for saying things like efficiency, discipline, Facebook. That's the entire call yesterday. The whole thing. It's a whole call. Right.

Starting point is 00:41:27 So Facebook doesn't have growth. What they have now is a newfound respect for their investors. And so if we're in that environment now where companies are being cheered on for firing people and for dropping CapEx and for like calming down. It's a lot of runway. Yeah, but that's like-world spending decisions also. Yeah. So from my perspective, that's not great for enterprise tech,

Starting point is 00:41:53 like software, but maybe I have that wrong. How do you look at that? Or cloud, right? Yeah. Absolutely, right? There was a time, like you say, when Wall Street wanted to interpret everything as positive, right? So you hired an employee, they just, right? So you hired an employee.

Starting point is 00:42:05 They just said, oh, you hired an employee for half a million dollars. He's going to produce 20X, right? Yeah, yeah. Now they realize, no, you just randomly hire people and pay them lots of money and they don't produce. You're just burning money, right? Of course, back then, you had cheap money. You had cheap stock option that you could burn. The good old days.

Starting point is 00:42:20 Yeah, the good old days. Did you watch any of these TikToks where, like, there's like a 23-year-old girl who's like in her first job out of college and her job – it looks like she's a coffee sommelier. She's like going from floor to floor and like making snacks and she's narrating it like this is my job at Google or whatever or I think she was actually at Meta. But there's like multiple versions of that. Like I love my job so much and they're like in a hammock with a laptop. That was like the pinnacle of that idea that you would go to work at Alphabet and there would be somebody come behind you

Starting point is 00:42:53 and give you a massage. That was the whole last decade. It was crazy. Remember we went to Google and we saw that? No, but I, yes. But I think it like really hit its apex with like the TikTok videos going viral. Because so many people were like, what the f**k?

Starting point is 00:43:09 My job's not like that. Like I don't get five snacks a day and there's no cheese tasting and there's no massage therapist on staff. So it's a mood shift now. And it's what happens when you have cheap money and you have no accountability, right? People are just throwing money at you. I think we're back to fundamentals.

Starting point is 00:43:27 We're back to sort of rational business decision-making, which is good, right? Because for a long-term health economy, you can't have cheap capital leading you to sort of wasteful, unproductive pursuit. You're hiring top graduate students from the top universities and tell them to work on pet projects that if they fail, it doesn't really matter, right? Yeah, that was what they were saying. Yeah. And so you got to sort of instill discipline. And I think this is good, right? This is why bear markets and recessions or negative growth is healthy because it take the Xs and some of the bad- Zuckerberg said working at Meta is fun again because the people that are still there are the people that actually want to do work and ship product and feel good about what they're doing. And the party is over.

Starting point is 00:44:11 And there were a lot of people who didn't say anything while they were there. I'm just now I'm just I'm like adding on to what he was saying. I think there were a lot of people who were sitting in Menlo Park just like, what the hell is going on here? Why? Why is this a circus and our software sucks? So I think that's another reason why these periods are healthy. So this was all driven by inflation

Starting point is 00:44:34 and interest rates rising and needing to get serious because Wall Street was killing their stocks. And think about the vitriol with which we were speaking about Powell a year ago. He doesn't know what he's doing. Not you and I, though. Yeah, okay.

Starting point is 00:44:47 Why? Are you f***ing serious? You killed him. No, I just thought— You killed him. I thought he started late. I thought he started late. Dude, you—

Starting point is 00:44:55 And I think that's still— I'm not pointing fingers. I wasn't thrilled with him. Did he start on time? My point is this. No. I'm not saying we're wrong. Here's my point. My point is this. The idea

Starting point is 00:45:06 that we are even talking about a potential soft landing seriously and not pie-in-the-sky shit, like data supporting that, is kind of crazy considering where we were not that long ago. Yeah. I thought we would have a recession in Europe. Europe had faster GDP growth than China

Starting point is 00:45:21 last year. What is he doing? He's breaking the housing market. He's breaking this. No, no, no. But like everyone's economic assumptions, there were too many weird things going on. Were you surprised, though, by how well Europe hung in there, how well the United States has hung in there so far? I'm absolutely surprised by how many things went our way, right? Like statistically speaking, we're not supposed to get that lucky, right? We pulled a rabbit out of the hat.

Starting point is 00:45:47 Yeah, there's no guarantee that the winter was warm, not bitter cold, right? Like we outperform and that's not due to us, right? That's really God's work, right? It could have gone worse. Absolutely. Okay. Let's do some China stuff. I want you to teach us something because we read all your stuff

Starting point is 00:46:04 and you included a lot of things here in the doc. And I don't know if we want to go through these. Don't go through all that. We're not going to go through all of them. But give us the story from the perspective of someone who's a global investor, which you are, and someone who really understands these different geographies. Because last year, international stocks outperformed the US. different geographies, because last year, international stocks outperformed the US.

Starting point is 00:46:31 And there was a huge bottoming process in Chinese equities, which I think, when did that really take place? Would you say October, November timeframe? Probably November. Okay. And the rally has just been incredible. Yeah. Okay. How should we think about 2023 from the perspective of somebody who's allocating all over the world? I would say, look, you got to have a balanced focus on kind of the fundamental growth. And there's not going to be a lot of really strong growth for China or for the world, right? Because the world's sort of recovering and some data are bad and expectation may be, you know, outperformed by reality. But it's still not – the reality is still not strong growth, right? So there's a place for that.

Starting point is 00:47:06 But there's a sort of balance consideration you've got to give to what does the price tell you? What has been priced into share prices? And I would say, look, you look at Europe, you look at China, the expectation or the sentiment that was priced in was Europe was going to freeze over and succumb to Putin, right? That was the expectation. Or not have food supplies.

Starting point is 00:47:25 Yes, people are going to die because they can't afford food, they can't afford energy. But all they have to do is outperform that. The expectation for China, and we talked about that already, was for China to invade Taiwan, start a war with the U.S., to embrace Putin and the unlimited friendship, and even crazier COVID policy. All China has to do is really not do that, right? Don't run over protesters with the tank. And that's like good news. You did this really great thing on your

Starting point is 00:47:57 LinkedIn, which everyone should be following Jason Xu on LinkedIn. You did this thing, China A-share's reaction to negative Western headlines might surprise you. So you made the point that every time the negative headlines start to get ratcheted up about what's going on in China, the assumption is I should get out of Chinese stocks. And I just want to give people a sampling of this because it's awesome. January 2020, people a sampling of this because it's awesome. January 2020, China faces outbreak of COVID-19. Over the next 12 months, Chinese stocks went up 36%. March 2018, US slaps tariffs on Chinese imports. Next 12 months, plus 2%. May 2019, Trump increases tariffs on Chinese goods, up 9%. Trump increases tariffs on Chinese goods up 9%.

Starting point is 00:48:44 This is my favorite. October 2006, ally North Korea conducts first nuclear tests. China went up 287% in the next 12 months. So we have a habit as human beings of assuming cause and effect or thinking that we heard a piece of news. Therefore, we're the only people that have heard it or it happened, or it's just now going to be reacted to, when in truth, things are priced in way ahead of when anyone in America actually is aware of them. And there's something else people don't realize that we think of news reporters as someone who's out there discovering the unknown story and then reporting it to you, right? That may be true, maybe two decades ago, right? Today, something happened, something good happens, and the newspaper reporter is scrambling to ask someone, why did that happen? So they're generally providing a somewhat superficial sort of color commentating of the good news that just

Starting point is 00:49:40 happened, right? So if the stock market's fallen, go find some bad news. And I think readers are confused. I think this is some investigative forecast about the future when, in fact, they're just sort of doubling down on the bad event that has just happened and sort of bringing that cover the markets or the economy, they have their own in-joke about how the stock market opens, the Dow opens down 200 points. They'll put up a headline, Dow falls on latest Trump investigation.

Starting point is 00:50:17 And then the market reverses itself. And all they do is change falls into rises. They say Dow rises on latest Trump investigation. They don't even need to change the reason. They just have to change the information. So we just got earnings releases. Before I look at the earnings and the stock reaction,

Starting point is 00:50:33 Google was up 7%. Dude, I don't want a muted reaction from you today. Stop. I want the whole data. I'm bringing it. Google was up 7% today going into earnings. Like it closed at the highs. Apple closed at the highs.

Starting point is 00:50:44 Amazon almost at the highs. So what do we got? What do we got? Okay, okay. Let's see it. So Amazon is up 1.7% after the close. All right. I got a minute to put a mint in while he-

Starting point is 00:50:52 Amazon net sales, 149 billion, estimated 145.8. So a beat on sales. AWS, 21.4, estimated 21.7. All right, we'll see. Not so great there. I think Qualcomm is out. What a, what a, what a. Don't worry about Qualcomm.

Starting point is 00:51:10 Amazon, all right, guidance. Amazon sees Q1 sales 121 to 126, estimated 125.5. Not great there, but not terrible either. The stock is up 3.3%. Apple's ripping $3 post-close. Yeah, but Apple doesn't report to 430. Excuse me, Alphabet. Sorry, but Apple doesn't report to 430. Excuse me. Alphabet.

Starting point is 00:51:26 Sorry. Alphabet? Alphabet's, you want it in dollars or percentage? Dollars. Alphabet is up $4.09 per share. What are we doing here? Post-close.

Starting point is 00:51:39 All right. So there you have it. We like that number. But Amazon, the knee jerk is up. So that's good. That's good. I know. These days, if you're in line with expectation, it's good news.

Starting point is 00:51:47 All right, Jason, do you want us to erase all the shit you said before this? Duncan, you have time, right? Jason, listen. No, but so this is just, I guess it's just going to build on what we got already this week. It looks like it. Okay. None of the numbers are surprisingly good, but I guess people are expecting worse, right? So if you're in line, it's pretty good.

Starting point is 00:52:08 It's just positioning right now. That's all. You included this link and talked about Bill Gates and his view on China and how Bill Gates opposes the hawkishness in the United States and calls it a lose-lose mentality. Can you tell us a little bit more about what you see happening there?

Starting point is 00:52:29 Yeah. I mean, this is very similar to what we opened the show with, right? Munger's sort of sentiment about if the US and China, leadership from both sides, find a way to be good friends. Cooperate. Cooperate, right? There are going to be disagreements, absolutely. But it's probably easier to work out those disagreements as collaborative trading partners and then put pressure on each other than trying to, you know, friend-shoring away from each other, right?

Starting point is 00:52:54 Because then you lose leverage. Like, the U.S. has great leverage on China because it buys so much from China. Right. The minute you stop buying, well, what leverage do you get? Right. I'm just looking at— sorry, I'm cutting in. Amazon, North American segments, North American sales increased 13%

Starting point is 00:53:10 year over year. That's a lot. International, we know there's going to be a drag there down 8%. AWS, 20%. That's the only number that matters. 20% is probably the lowest it's been. It's the lowest it's been, yeah. It's in line with what Microsoft reported. The stock's not going to be up. Let's see what the stock is doing.

Starting point is 00:53:26 Oh, the stock's down now. But probably not by a lot. Yeah. No, not a lot. 60 base points. All right. Not bad. Not bad.

Starting point is 00:53:32 All right. Let's do this chart. Oh, here's another thing, right? Here's another thing talking about positioning. The stock. This chart. Yeah, let's do it. So this is hedge funds have moved swiftly to rebuild China exposure.

Starting point is 00:53:44 So this is hedge funds have moved swiftly to rebuild China exposure. There were a variety of reasons for people to want to take down international exposure in general, like over the last 10 years, starting with massive underperformance and China exposure in particular. And then there were threats that these stocks would all be delisted and you don't want to get caught in a delisted stock or have to switch share classes or buy something in Hong Kong. So whatever, people just threw in the towel. And that leads to the rally that we got. And this is basically showing Chinese equities as a percentage of Goldman Sachs prime book based on net market value.

Starting point is 00:54:20 This is, am I reading it right to say this is a doubling? Yeah, Jason, I want your opinion on this so we're looking at chinese equities as a percent of goldman sachs prime book and it crashed from a high of 15 in july 2020 to seven percent in the fall of 2022 i know this is chicken and egg are chinese stocks falling because people are dumping them or people dumping them because they're falling you know oftentimes people dumping them because they're falling? You know, oftentimes it's people dumping them because they're falling. Right. That's what I'm inclined to say. You know, like international investors, their influence on the market, at least on the Chinese

Starting point is 00:54:54 stock market, is far smaller, right? Because this is not the case where you got a tiny market and a lot of international hot money can prop it up or crash it. Like the Chinese equity market, right? The Aung San Suu Kyi shares, it's about $15 trillion in size, the world's second largest equity market. And it's- Is that right? Yeah. It's 15?

Starting point is 00:55:11 So a couple of hedge funds in New York are not going to- Not going to move anything. Okay. That's interesting. And so oftentimes, like, you know, that market will move given its own local dynamics. And the international investors simply say, hey, look, if it's falling a lot,

Starting point is 00:55:24 it's a bit of an optics risk. It's a bit of a career risk. Window dressing, get rid of it. I think that if you're United States, your investors probably get more mad if you lose their money in Chinese stocks. I mean, it's very asymmetric, right? Because they'll be like, what the hell are you doing? Why do we own BABA and Tencent? What are you thinking? Why do we own Baba and Tencent? What are you thinking? Have you heard of Apple? Oh, this is interesting. Have you heard of Google?

Starting point is 00:55:49 Speaking of, YouTube ad revenue fell year over year. There's a quote from Google. Our long-term investments in deep computer science make us extremely well positioned as AI reaches an inflection point. And I'm excited, but whatever. Google's down a little bit. Google's down 2.4%. 1.8.

Starting point is 00:56:05 All right. So fairly muted reactions from Amazon and Google. I mean, we had monster moves in the stock today. Monster moves. All right. Monster moves. IMF GDP growth forecast for 2023 recently released. John, you have this chart?

Starting point is 00:56:19 So they have the United States growing at 1.4%. Global growth at 2.9%, emerging markets 4%, China 5.2%, India 6.1%. And we're going to talk about India in a second, about a very specific story. But what's your take on whether or not we need to pay attention to these growth forecasts or how far away they are from what expectations already were? I think that the growth forecast is largely priced in. And there's a famous study, right? Even if I tell you, not just the forecast, I tell you the actual GDP numbers ahead of time, you would not have made money knowing that future information.

Starting point is 00:56:58 And that's just how uncorrelated the stock market is to the actual GDP. So the emphasis on GDP is really misplaced because GDP growth don't always translate into corporate earnings growth. Like, you know, corporations are cutting jobs, right? And that's going to hurt GDP. But they're actually improving margin, improving profitability, getting more disciplined. So I think it's just important to realize- There's a zillion examples of this.

Starting point is 00:57:22 Yeah. Where the fastest growing country had the worst-performing stock market and vice versa. Was it China, one of them? No. China and U.S. are actually the two outliers where the GDP growth and the corporate earnings growth are kind of in the same direction. And the stock market results over time are decent. Like the rest of the emerging market, and I have the paper that came out last year that documents this. And the rest of EM actually had the opposite, right, where strong GDP growth actually resulted in oftentimes below GDP growth, corporate earnings, and even negative corporate earnings. So when you're choosing exposures, what framework are you using if not economic growth?

Starting point is 00:57:58 Corporate earnings growth, right? Okay. You really – because that's what you're buying, right? You're buying companies and their ability to grow earnings. Yeah, you're buying a share of companies. You're not buying a share of GDP. Jason, can you talk about how long – how correlated are corporate earnings to GDP? Very low.

Starting point is 00:58:13 And the reason for that, like U.S. – we think of them being correlated because we look at the U.S. example, right? U.S. is unique. And, in fact, China and U.S. are the two where a lot of the economy is actually listed. To have your economy listed, you need two things. You need to have a vibrant venture capital market. So you can incubate your entrepreneurs. Without capital, a Panda Express would still be a little Chinese restaurant in New York. So you need a vibrant venture capital market.

Starting point is 00:58:42 That exists in the US. We invented that. We export that to China. It's vibrant and strong. And then the next thing is, then you've got to have a liquid enough stock market with good valuation multiple. Then you could list your company

Starting point is 00:58:55 and get liquidity for the owners. Again, most countries don't have a liquid enough stock market. And it's, or they're insignificant as part of the global index. So they often just get eliminated because they're too small to matter. And so China and US are kind of lucky in that the underlying real economy tends over time become listed.

Starting point is 00:59:17 So you can participate, and they're almost two sides of the same coin. Many other economies, like in emerging markets. I was going to ask you, are there other emerging market economies where they're on the right path toward that? You know, the Asian countries tend to be. Okay. And that's because, you know, they always, they have a template. The Asian economy, let's look at Japan. And Japan, of course, imitates the U.S.

Starting point is 00:59:38 And then, you know, there's South Korea, there's Taiwan. So there's that path where they're imitating. But that is the minority when you look at the EM basket. A lot of EM countries, you know, it's just the big state-owned enterprises that list. No one else gets to list. Yeah, and they're missing such a huge opportunity to lift people into the middle class and then into the upper class. The lack of capital is a problem. I'm kind of surprised.

Starting point is 01:00:01 So Google was up 7% today. Oh, it's falling a little bit more now. I would say I'm surprised it's not down more it's down 5% so it's still up on the day but advertising revenue was 59% versus 60% estimated and YouTube ads as I mentioned was weak was 7.96% versus 8.27% estimate and the stock's down 5%

Starting point is 01:00:17 I mean it still seems what did they do over the last month is the point yeah I guess can I ask you about you don't have to have an opinion on buy or sell the stock, but this story about Adani Enterprises

Starting point is 01:00:32 seems like it's one of the biggest stories of all time. This will 100% be a Netflix movie or TV show. It might be based in India, and we'll see how this thing resolves. But basically, this is a company that has now lost over $100 billion in market cap in

Starting point is 01:00:50 two weeks since a US-based short seller has criticized it, and not just randomly with a tweet, but like they did two years. It's a full-blown investigation. So Hindenburg did a—Hindenburg is the company, for our listeners who aren't familiar, Hindenburg did a – Hindenburg is the company for our listeners who aren't familiar. Hindenburg is the short-selling research firm that exposed the scam artist who was running Nikola where he was pushing an electric truck down a hill and letting it roll and pretending there was an engine in there or pretending there was a battery in there. or pretending there was a battery in there. And of course, that probably saved investors a lot of aggravation because that stock was on its way up

Starting point is 01:01:28 when he exposed that. Remember when shorts were vilified? 2020? Yeah. Well, so I don't know anything about Adani Enterprises other than the guy became the second richest person in the world last year. Over a very short period of time.

Starting point is 01:01:41 Well, that's right. If you look at a stock chart and he has nine or 10 publicly traded entities in India, if you look at a stock chart, Over a very short with government officials. And the thing lost $100 billion plus in market cap in a couple of weeks. What's your take on what we're seeing there? Is that a bigger story for regulation in India and whether or not US investors should trust any of the companies there? Or is this a very isolated specific situation? Any of the companies there? Or is this a very isolated, specific situation? So I would say these crazy stocks that come out of left field and all of a sudden propel a new billionaire or a new richest person in Asia, that happens regularly.

Starting point is 01:02:36 And they don't last very long. What's another example of that? I don't really remember. God, there was a broker in Hong Kong that for a very brief period of time and this was just last year became worth more than goldman sachs right this is like a little no-known broker that's trying to get unsure chinese people to trade american stocks right it's maybe the equivalent of a robin hood okay uh in hong kong oh i think i did read about that and it was all of a sudden worth more than Goldman Sachs. But, you know, once that was pointed out, it crashed right back down.

Starting point is 01:03:09 So, you know, there are a lot of sort of meme stocks in Asia as well. And given sort of how illiquid those markets are, a few manipulators or a bit of a craze, a little bit of publicity could propel something to completely unreasonable territory. So I think this happens with more regularity than people imagine. Okay. Why did no one in India point out all of the things that Hindenburg pointed out, which seem on the surface, look, they did a ton of work on this. And I don't have a view here. I'm not long.

Starting point is 01:03:36 I'm not short. But one thing that you do have to say is enough people believe what Hindenburg wrote to produce this kind of reaction in the stock. And a lot of this stuff seems surface level with accounting things and things that any normal person that's a securities analyst should have picked up for themselves. Is there fear in a country like India to blow the whistle on something like this? And it takes an overseas investor to say it out loud? Do you think that's some element of it?

Starting point is 01:04:04 So we got to understand like other countries and their capital markets are more like the like this and it takes an overseas investor to say it out loud do you think that's some element of it so we gotta understand like other countries and their capital markets are more like the us say in the 20s 30s right there they're generations behind they don't have as much right they don't have as much time with a stock market as we do they're not as institutional right most of the emerging market equities market china included are 80%, 90% retail traded. And so the kind of quality that comes out of sell side is primarily to encourage more trading, more speculation, to drive trade volume rather than, you know, as sort of research tool for the hedge funds, for the big pension funds. So the quality difference is very different and the motivation behind it is very different as well. So that's first of all.

Starting point is 01:04:44 And I think, you know, Hindenburg is also quite unique right they do really really good deep research yeah and so yes like you i don't know very much about donnie but i i do know enough about the success of hindenburg do you remember the wave of uh overseas frauds um from like 20 that were unveiled from the great financial crisis, like SinoForest. Yeah, yeah, yeah. Muddywater was a big – Right. So a lot of US-based hedge fund, like legendary hedge funds, got caught up in SinoForest and a few of the others.

Starting point is 01:05:15 And I feel like that had an effect in that it dampened the interest in emerging market investing, and it held back multiples for those stocks for like a generation. Oh, yeah, true. So if this turns out to be as big of a fraud as is being alleged, and it really – I mean it's crashed already, but it really crashes. What does that do to the mindset of people that are thinking about investing overseas in some of these less developed markets? thinking about investing overseas in some of these less developed markets? So first of all, I'm going to start at market efficiency. I'm a big proponent of index investing for US. When you're going to emerging markets, you're India, you're China, you got to be active.

Starting point is 01:05:59 Otherwise, you have this crazy bubble that then takes perhaps a fraudulent company to the number one cap in the index. And it's going to drive it up and it's going to crash down. So when you go into those markets, you've got to realize how inefficient they are, how big bubbles can get, the risk of fraud. And if you go there, you've got to have a manager who's local and actually know the culture. This is a big part of the story that you tell when you meet investors all over the world is like the fact that an index is not an index. Yeah. And in some of these places, you actually do have to do fundamental research.

Starting point is 01:06:37 Yeah. You can't just hope that the market's fully efficient, everything priced correctly. You buy the index and you can participate in the growth because oftentimes those index suffers from the biggest market cap company actually is the biggest dud. Do you think this is endemic of Indian stocks in general or is there a buying opportunity being created away from Adani where there are stocks that are being unfairly associated with this thing that maybe got too cheap? And that I think is another opportunity with these markets, which is a lot of bad companies get rewarded,

Starting point is 01:07:07 and then when they are found out, it crashes the entire market and then creates opportunity for firms that are actually good. Yeah. What are the geopolitical implications of this? Like an American company essentially destroying potentially an Indian company that employs tons of people and is a big, massive company? It's a good question because the guy, Adani, the billionaire, if he's still a billionaire, most of his response was…

Starting point is 01:07:33 American conspiracy? Well, he was wrapping himself in the Indian flag, and it was like a nationalistic, like how dare these foreigners criticize our great companies here in India, which you could understand why that would be his defense. That's a good point. What do you think about that? I would say anytime an entrepreneur go to that move, I get even more suspicious. The patriotic move?

Starting point is 01:07:56 It's like, no, defend your company, right? This has nothing to do with India. It has nothing to do with Indian people. Defend your books. What's the quote? Patriotism is the last refuge of the scoundrel or something. Yeah. Right.

Starting point is 01:08:09 That sounds like something from our presidential policies in recent years. I just saw – getting back to earnings, I just saw a tweet from Gavin Baker that's pretty astonishing. This is from Goldman Sachs. He says, earnings per share misses are being bought so far this earnings season in a historic way with stocks outperforming 140 basis points after a miss. This is an all-time best performance dating back to 2006. Stocks have literally never outperformed earnings misses like this. And I think this is – That's your sentiment rally.

Starting point is 01:08:38 Exactly. That's exactly right. I mean that's – this is the best illustration you could find of why it's a sentiment rally. Yes. Right? Like in real time. Like you say, sentiment rally could still last a long time, right? In the short run, it's rarely the fundamental.

Starting point is 01:08:53 And look, market can stay irrational longer than you can stay on the sideline. Agree with that. Let's talk about Apple. Do you see the headset? Would you wear one of these? Do you have a picture of this? All right. Throw that up.

Starting point is 01:09:08 So I'm going to say something that's going to make me look stupid in five years. I will never put this on my face. Now, I know they will play this clip back and laugh at me when I'm walking down the street. I agree with you. I said that about AirPods. No, but literally kiss my ass. Can we do a show where you're all wearing these? Actually kiss my ass.

Starting point is 01:09:24 All right. So here's the deal. Next time I come back, we're going to do the show with that headset. Come back in a very long time. So from Bloomberg article, and we're going to hear about this headset in the call today for sure. Within Apple, some of the top managers

Starting point is 01:09:37 in charge of launching its new mixed reality headset believe the category could ultimately supply the iPhone as a company's hallmark product. It's going to cost $3,000. So there's not going to produce a million of these at first. Oh my God. It's going to have more than a dozen cameras that can analyze the wearer's body, eye movements, and the external movement. They say people can wear it all day. Yeah. Okay. I'll take the, I'll take the other one that, but here's the interesting thing. If you think about it, Apple, modern Apple has never launched a piece of hardware that flopped as far as I can recall.

Starting point is 01:10:04 That is true. Amazon, a lot of the other companiesped, as far as I can recall. That is true. Amazon, a lot of the other companies have flunked it against the wall. Apple has not done that. I think the watch at first was not a huge success, and then they made it better. So the other thing with Apple, Amazon and Apple are two very different mindsets. Amazon will put out the Fire Phone. It'll get laughed at on Twitter. And they say, okay, we're done. And no one buys it.

Starting point is 01:10:26 And then they'll rip it out of the stores. Apple will fix it. And they've done that on numerous occasions. I don't know how you fix this. I don't understand. I understand why they're trying to create it because definitely it's going to have

Starting point is 01:10:42 a use like a video game use, maybe watching movies. I think that's where I see it initially. But walking down the street, like, do you, do you never want to have sex again?

Starting point is 01:10:52 Is that like, is that Apple's goal is, is to sterilization of. So apparently this is what it's going to look like. Let me say, Oh, everyone's going to wear it. Come on.

Starting point is 01:11:02 Where everyone's going to wear it. Wait, what do you do with the screen? So here's an idea. How about this? There's going to be it. Come on, Josh. Wear it where? Everyone's going to wear it. Wait, what do you do with the screen? Okay, so here's an idea. How about this? There's going to be a transparent mode where you can like, you could wear it and be doing like a FaceTime and also be able to see through the glasses so you don't walk into somebody.

Starting point is 01:11:15 Michael, I think like the next generation, it's actually going to look like a fashion eyewear, be like a pair of cool glasses. And then the next version, you have to contact lenses. They're going to do 50 trillion in revenue from this thing. You really think so? I do.

Starting point is 01:11:27 That's so bullish then. If this is the next, I do. I really do. If you wear those, I'm going to punch you. No, no, no. Version one is going to be

Starting point is 01:11:34 ludicrously hilarious. I'm just telling you, you better be a late adopter on this. Oh, I'm late. I'm not buying this. You're not buying version 1.0? No way. But Jason's right.

Starting point is 01:11:42 It'll be a contact and then a chip in our brain and Apple. Yeah. I will wait until it's a chip in the brain. Yeah. And that chip is connected to chat GPT. So we will be able to regurgitate the smartest people instantly. And that'll be the end of higher education.

Starting point is 01:12:01 So Meta is working so hard at owning this market. And the reason why is because look at what their reliance on the iPhone has done to their profitability. The iOS privacy changes have like literally thrown their product into upheaval. And I'm sure they'll fix it. But they realize if they don't own the hardware, it's going to be very hard for them to control their own destiny. So they really want the Oculus and all their VR products to take off. If Apple's going to launch this in two months,

Starting point is 01:12:35 they're going to have an event this spring. Most people are not going to buy it for $3,000. But just the fact that they are going to be in the game, I think, makes a lot of the investing that Facebook has done over the last few years kind of like null and void. Because you know Apple will be better at this than Meta is. I know. That's why I'm a little concerned about the 20% pop with Facebook yesterday. So Amazon Web Services, the growth is like historical, right?

Starting point is 01:13:02 But Jim Chanish has tweeted this. The net sales went from 39%. This is just net sales growth. Forget about currencies. 39, 40, 37, 33, 28, 20. I mean, there's a lot of competition. Well, what is this? Amazon?

Starting point is 01:13:18 AWS. AWS. Just AWS? Okay, but how much bigger is it now than it was when it was doing 39? But not as big. So when it was doing 39? But not as big. So when it was doing 39, it was 16. Now it's 21.

Starting point is 01:13:28 So it's not that much. So growth is slowing dramatically. You know how many like venture capital-backed companies? Yeah, exactly. But you know how many like venture capital-backed companies All of them. raised money and just turned that money directly into AWS or Azure. All of them.

Starting point is 01:13:46 Like that. So that, that, that part is gone. Uh, we're going to end with one last thing. Did you, you know about the fire festival?

Starting point is 01:13:55 You ever see that, uh, documentary on Netflix? With the Y. Okay. So this guy, this guy threw an event that was a complete fraud. It was supposed to be a festival concert on an island in the Caribbean.

Starting point is 01:14:07 And it became like one of the world's greatest, I guess, like he was promising something that he couldn't deliver. I don't know if it was an outlaw scam or just a giant fail. It's like a little bit of both. Yeah. Sometimes it's the same thing. Exactly. There's just a ton of overpromising.

Starting point is 01:14:22 He got like thousands of like young people in their teens and 20s to like fly to this island. And he put them in tents and he was serving them like MREs. What's an MRE? Meals ready to eat. Like they ran out of food the first day. He's a cheesesteak. He ended up going to jail. So they definitely didn't think it was just a-

Starting point is 01:14:41 Wasn't Ja Rule that was involved? Ja Rule and- That's a good point. He did go to jail. So I'm guessing there was probably some fraud involved. Anyway, it was one of the best documentaries ever on Netflix. They documented like how is this possible. They had all these bands they said were going to play.

Starting point is 01:14:53 None of them showed up. They all backed out because their advanced team got to the island and they're like, no, no, no. You can't come here. And these people – it ended up like Lord of the Flies almost before all these people were rescued off this island. It's amazing. This just happened. All right. Billy McFarland, the fraudster and entrepreneur who co-founded the disaster.

Starting point is 01:15:11 You see the military tents and you know this did not go as intended. The Fyre Festival in 2017 is now a free man after four years of prison and six months of house arrest ended September. Six months of house arrest ended September. He claims he used his time behind bars cooking up his next business project, leveraging his marketing resume for startup clients. And this time he's promising it isn't a scam. McFarland admitted that while he broke the law, his marketing credentials are indisputable after executing one of the most viral social media campaigns ever. You imagine. Here's what I thought. Can't argue with that.

Starting point is 01:15:47 He missed his window. 2021 would have been the ultimate environment for Billy McFarlane. He could have had a crypto event. I know. Absolutely. He could be working for FTX. He could be selling NFTs. He could be doing all of those things at the same time, basically.

Starting point is 01:16:04 He missed his window. He almost should stay in jail until the next bubble comes along and then emerge and tell us about his marketing credentials. Anyway, I thought that was interesting. Sellmates with Sam Bankman-Fried.

Starting point is 01:16:19 This guy, Jordan Belfort, is out there selling marketing courses and how to... I guess. Dude, it's inconceivable that anybody would give these people money. But they do. Like, is it a joke? Are they doing it like as a goof? You don't think Shkreli is going to make $5 million in the next 10 years?

Starting point is 01:16:36 Doing what? Martin Shkreli. Doing whatever the fuck he wants. There are certain people where nothing sticks to them. I don't know if that makes me depressed or excited for our country. Maybe a little bit of both. Well, here's what should make you not depressed at least. We have a very rich history of that going back to the 1600s.

Starting point is 01:16:57 And a lot of what made this country in the early days was people making promises they couldn't deliver. Jefferson was a total scam artist. How do you think they got people to go to Jamestown? How do you think they got people to leave Europe and come here? They just made shit up. Giant party. I mean, literally.

Starting point is 01:17:17 It's all good. You should see their goats. It's a very American thing. We're going to do Jason, did you have fun today? Yeah. We're a very American thing. Okay. We're going to do – Jason, did you have fun today? Yeah. We had a great time. Always have fun coming back here. We're so glad you came.

Starting point is 01:17:29 All right. So we're 0 for 2 with the tech giants. We've got Apple after we wrap. We're excited. All right. So you have a lot of travel coming up. Yeah, going to Europe. But before that, going to the Middle East.

Starting point is 01:17:39 Okay. So you're going to a whole bunch of countries in the Middle East. Yeah, five countries, one each day. Okay. Wow. And you're going to bring your virtual reality headset on this trip? Maybe not this one. Next one.

Starting point is 01:17:48 Next one when it's cool fashion eyewear. That's a good use case I could think of it on a 10-hour flight. Oh, hell yeah. I'd rather be in virtual reality than be in actual reality in that situation. So at least Apple can sell it to all the major airlines. Can they fix internet on airplanes? No. Why is it so hard?

Starting point is 01:18:05 How about in airports? My favorite, they say, oh, free public Wi-Fi. I'm like, yeah, but it doesn't work. They're like, yeah, but it's free. It's free. So we're going to do favorites now. Any books, anything you've been reading or listening to lately?

Starting point is 01:18:21 What should our viewers and listeners know about? Okay, so I got hooked on Wordle. So I think that that's going around, right? How did you get hooked on Wordle via social media? Late adopter. I know, late adopter. My wife told me about it and I

Starting point is 01:18:37 started only a few days ago and I am completely addicted. What do you like about it? It's like relaxing, right? Well, and part is I haven't had to really spell anything correctly for a very long time because autocorrect, right? And, you know, voice dictation. And now I'm trying to get the part of my brain back that used to know what the right spelling looks like. And so it's a part of my brain. Apple missed on both.

Starting point is 01:19:03 Sorry. Apple missed on both. All right. Let's not go on a low note. We'll get to that next week. I got two, and then Michael, you'll finish us up. Go ahead. I just listened to Bill Burr, one of my favorite comics, on with David Spade and Dana Carvey.

Starting point is 01:19:19 And it's just an awesome conversation. So if you're a fan of Bill Burrs or the other guys, it's Fly on a Wall is the name of the show. And the other one is, are you watching Your Honor? Do you know that show? I'm back.

Starting point is 01:19:35 I only saw the first episode, but I'm all the way back. Of season two? So I thought I was out, but the first episode, I mean, I'm back. John, you watch this? No?

Starting point is 01:19:44 He looks like Walter White again. He does. He looks crazy. Yeah, he looks crazy. Anyway, season two got underway. I think it's pretty good. Mike, what do you got for us? Season three.

Starting point is 01:19:57 Not season three. I'm sorry. Episode three of The Last of Us. So Nick Offerman and Mari Bartlett. That's what you should watch on your flight on HBO Max app. You should watch The Last of Us. I Nick Offerman and Mari Bartlett. That's what you should watch on your flight on an HBO Max app. You should watch The Last of Us. I got a 17-hour flight.

Starting point is 01:20:09 So Mari Bartlett is known to the audience as Armand from season one of White Lotus. And him and this other guy, it's kind of incredible how epic that episode was. Nick Offerman was from Parks and Rec. Yeah, what they were able to do, they built the whole world between these two dudes like in just 45 minutes.

Starting point is 01:20:27 Like it was pretty epic. There's nothing like HBO. There's just nothing like it. The quality of their content is unparalleled. They basically, they show like these two guys meet each other. It's the end of the world

Starting point is 01:20:38 and one guy's a survivalist. A prepper. So he takes this whole town in New England and turns it into a fortress and he's all by himself, but he can do everything. So he takes this whole town in New England and turns it into a fortress. And he's all by himself. But he can do everything. Like, he knows how. He breaks into the utility and keeps the natural gas running.

Starting point is 01:20:52 He knows how to, like. He has all the weapons. He's growing his own food. He builds his own fences. He's like. He's just like one of those dudes. I got a buddy like that. And he's totally preparing for the end of the world.

Starting point is 01:21:03 Oh, he'll be good. I am going to stay tight to him. So he should watch this episode of The Last of Us, the third episode. So then like I don't want to ruin it for anyone, but like he meets somebody who needs to be saved. But then they show you like

Starting point is 01:21:17 20 years of their lives together. How long are they on screen for? 35 minutes? Yeah, maybe 40 minutes. They show you an entire life. Yeah. And by the end of it, the episode ends, and we won't talk about that. But you're just like, holy shit, was that a movie?

Starting point is 01:21:34 Yeah. Did I just watch a whole season of a show? It's HBO. It was really amazing. Listen, we spoke. We opened the show with which one of these companies can miss and reverse all the good news. Is it Apple?

Starting point is 01:21:44 Well, they all missed, but the good news is the Q's are only down 1.5% in the after hours. That must have been really bad. That's nothing. It was up 3.6% today. So we'll see what tomorrow brings. So we're going out of sour note, but did he have fun? I had fun.

Starting point is 01:21:59 Absolutely. We confirmed that he had fun. He can't leave until he tells us he had fun. Jason, we love having you on the show. Thank you so much for coming. Thank you for having me. And we want to wish you safe travels. Duncan, any announcements we need to make here? We're all good.

Starting point is 01:22:13 We're all set? No, we have one. We have one. We have one quick one. Next week, we're not doing What Are Your Thoughts on Tuesday. We're moving it to Wednesday. Oh, yeah. So don't look for us Tuesday night because where are you going to be?

Starting point is 01:22:23 Miami. You're going to the exchange conference? Going to ETF exchange. So if you'll be there, come say hi. All right. Very cool. So we will see you guys on Wednesday night instead of Tuesday. Our thanks to Jason Hsu.

Starting point is 01:22:34 Jason, where's the best place for people to follow you and your work? Follow me on LinkedIn. Just Google Jason Hsu and go to my LinkedIn page. Okay. So everyone's going to follow Jason there and I follow you there. I read all your stuff. I think you do a really great job. And,

Starting point is 01:22:49 uh, you are, uh, is Raylian Raylian.com. What's the best place to, what's the best place to learn more about your funds? Uh, funds.

Starting point is 01:23:00 Raylian.com funds. Raylian.com. All right. Our thanks to Jason, John Duncan, Nicole. Great job this Jason, John, Duncan, Nicole. Great job this week, guys. Thanks for listening. And we will see you next week.

The Compound and Friends - Sentiment Rally

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.