The Compound and Friends - Signs the Bottom Is In, Yardeni Sees Resolution, Buying Winners, New QQQ’s

Episode Date: April 7, 2026

Join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for another episode of What Are Your Thoughts and see what they have to say about: the Q's, Jamie Dimon, how dividends really work, the openAI IPO, and much more. This episode is s sponsored by Franklin Templeton and Janus Henderson Investors. Learn more at: franklintempleton.com/activeETFs Learn more at: ⁠www.janushenderson.com/⁠ Sign up for ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Compound Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and never miss out! Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Frankln Templeton Disclosure: Before investing, carefully consider a fund's investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at https://www.franklintempleton.com/. Please read it carefully. All investments involve risk, including possible loss of principal. © 2026 Franklin Distributors, LLC. Member FINRA/SIPC. Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Yep, it's us. Here we are. Hey, we're not live. We're recording during the day. But we're like as up to, we're on the cutting edge anyway. We're as up to date as we need to be, I think. But I just wanted to make that clear. I want to give a shout out to everyone who's here for the debut chat.

You guys are still welcome to come. Of course, we just, we beat you to the punch. But thank you for being here. Today's, what are your thoughts? is being broadcast from a combination of Long Island. And Southern Long Island. And tax-free Florida. Yeah, Southern.

Right. The Nassau County of the South. I'm coming to you from Boko Ritone. Michael is on Long Island. And it's great to be here with you guys. If you're new to the show on what are your thoughts we talk about? All of the biggest topics affecting investors, traders, the markets, the economy. of the week. We have tons of stuff to get to today. Super exciting. But before we do,

we're going to give a quick shout out to our sponsor. Franklin Templeton. Michael, what's going on with Franklin? With geopolitical risks, trade uncertainty and election volatility dominating headlines in 2026 as texting investors in new ways when markets are unpredictable, passive strategies that simply track an index can adapt to changing conditions. That's where Franklin Templeton's active ETFs come in. With more than 50 strategies across equity, multi-accent, and fixed income, including Munis, the lineup is built to adapt as markets evolved, backed by over 75 years of active experience. Franklin Templeton is your trusted partner for what's ahead. Learn more at Franklin Templeton.com slash active ETFs before investing carefully consider a fund's investment

objectives, risks, charges, and expenses. You can find this and other information in each perspective or summary perspectives if it available at franklin templeton.com. Please read it carefully. All investments involve risk, including possible loss of principle. Franklin Distributors, L-L-C member FINRA, SIPC. All right, shout to Franklin. Today's show is sponsored by Janice Henderson Investors, where we believe working together is the way to work better. Like combining your portfolio plans and our in-depth strategy,

your valued assets and our valuable insights, your mission, and our vision. Always working in perfect harmony to find the right investment opportunities, Janice Henderson investors investing in a business. brighter future together. Visit janice henderson.com. So, all right, I'm going to giving you the first topic because to me, this is the most interesting question. We're still getting these insane headlines about the Middle East, which we'll get to in a second. But markets are not nearly as rattled as they were 10 days ago. And I guess the question is, is the bottom-

in. Many people are saying this, despite the fact that entire civilizations will die tonight, many people are saying the bottoms in. And why don't you take it from here? It's like the former president of the United States said, fool me once, can't get fooled again. What would have to happen? What would... George W. Bush.

This is saying in Tennessee, in Texas, maybe they say in Tennessee, too? Yeah, great stuff. Okay. So the VIX is at 25, 26. Right, right. Despite the absolutely insane tweet from the current president, the S&P 500 is at down 67 basis points after a pretty, pretty decisive four-day rally.

So I don't know if that was the bottom. Sure looks like one. But the question that I have to ask you is, what would have to happen for this not to be the bottom? because investors are looking past whatever's happening today, whatever's being said. Oh, like, how would it escalate and get worse? Yeah, what would have to happen for us to retest those?

Go ahead. Yeah, a European oil tanker on fire. Sure. Global news. Like a French, because they're all paying Iran under the table. So my point is this, absent something that we're not seeing today, such as an escalation of the events, yeah, I would say that was the bottom.

Well, we're going to start focusing on earnings tomorrow. So we're getting the banks coming up. We're getting, I think, Delta reports tomorrow, which I'm long. Like, we're getting important companies are going to start reporting. And that's where the market's focus is going to go unless and until an oil tanker owned by Total in France, for example, is on fire in the street. I'm making up an imaginary scenario. I'm not predicting. That will give you your 30 VIX and that will end the talk about the bottom is in.

right now, basically, everything hinges on whether or not we can get the 45-day ceasefire that's apparently being discussed or an end of the war with Iran, which seems unlikely. But basically, the way that I look at this is it's a hostage situation. The hostage is not a person. It's the straight of Hormuz. It's being held for ransom. I don't quite understand why the Department of Defense didn't appear to have planned better for this, they're talking about landing troops on Karg Island and all these things that I don't

fully understand. And I'm not giving a military opinion here, but it just seems like wasn't this obvious? Like, this was the only pressure point that Iran had to apply on the international community. And were there plans to do anything about this? Or was it like, hey, we'll knock out all their military installations and all their, their Navy, which is great. They're, they're Their air power will take air superiority, but like we're going to allow them to choke 20% of all of the oil that has to move on the sea. Like we're that we're just going to cede that to them. So that's what it's like starting to feel like. And I think Trump's frustrations, which we're reading about and hearing about, probably have something to do with that.

So I want to, I mean, we'll just reread what he said, okay? God. All right. President Trump escalated his aggressive rhetoric toward Iran threatening to wipe out the entirety of the country's civilization if Tehran

doesn't cede to his demands by 8 p.m. Tuesday. Quote, a whole civilization will die tonight. I'm not laughing because I think it's funny. Never to be brought back again. I don't want that to happen but it probably will.

It probably will. A whole thing is. civil is eight but then he's like god bless the people of around so i don't i guess nobody nobody knows fully what he means but what we do know is he is doubling and tripling down on this 8 p.m. i'm guessing eastern because that's where he lives 8 p.m. deadline for compliance or midnight destruction will begin and he's talking about wiping the city the country out but in four hours some guessing that means blowing the bridges and taking out the electrical infrastructure. And so the stock market right now is like, oh, that sounds bad, but he probably won't do it.

Is that your take on the reaction or lack of reaction? Yeah, I was to say, that's not my take. That's the markets take. The markets, the markets, the market is barely responding. The VIX set 26. I don't know if traders took him at face value that he was going to wipe out a civilization. the VIX would probably not be at 26th, and the NCP would probably be down more than 70 basis points.

So I listen to the political people and the military people in a time like this not because I think they know what's going to happen. I don't think anyone does, but it's a more informed take than listening to a guy that manages a mutual fund, for example, on Wall Street. And what they're saying is that he really thought you could drop $100 million in someone's bank account

and have somebody to negotiate with. Like, he thought this would be like Venezuela, where it's like, you want to get nuts? Let's get nuts. And then somebody reasonable is like, whoa, whoa, whoa, whoa, whoa, whoa, whoa, Mr. President, we can talk. And then you have some sort of agreement and money is changing hands,

and maybe there's an oil deal. Like, I think that's what, or this is what the military and the political commentators are saying about this. Nothing to do with Wall Street. They're saying like the appearances that the White House thought somebody rational. But we're not talking about rational people. We're talking about absolute maniacs.

Right. Okay. So whatever. The market thinks the bottom is in. I think the bottom is in. Okay. Well, I don't know if you're right, of course, but I'm rooting for that you're right. This is what Ed Yardini.

Oh, I got to show this. John, can we put this on screen? Before we get to. Citrini sent a fucking analyst on a shit. through the Strait of Hormuz to see what's really going on. Can we scroll through this? All right. So the markets are relying on satellite data.

Satrini actually sent, they call them analyst number three, with $15,000 recording gear and a speedboat to enter the straight of Hormuz. This is really demonstrating that you can't replace analysts with AI. I guess. The straight is not closed. Basically, what's going on is Iran is taking tolls, which I think people understood, but I guess this guy had to go prove it for his research firm.

Thank you for your service. Here's Stacey Rosgan. We got Satrini raising the bar on what I expect for my associates. That's a great tweet. If it's a tweet, I'm not reading all this. It's on screen. I don't know. Is any research job on Wall Street or off worth this sort of effort?

What are your thoughts? You're the head of research at Redholz. So I'm asking. I'm not the head of research. Whatever you are. Is this the kind of thing that you would expect of your associates? Well, you know, I'm a team player. Would you do?

Absolutely. I don't ask anybody anything I would. I wouldn't do. I'm going to guess that whoever analyst number three is this person has been to the Middle East before. Like, this is not somebody that, I'm guessing, this is not somebody that grew up in Connecticut and went directly from boarding school to... I don't think, I don't think analyst number three is Kevin. I don't think analyst number three is Kevin. Well, this is pretty ballsy. And maybe when this person gets back, they will reveal themselves and be celebrated as one of the gutsiest research. researchers in Wall Street history. Well, thank you for your service.

All right, let's talk about the market. So the, this is from Jason. Oh, wait, do you want to do what Yardinni said? What did Yardinna say? Quote, I think Monday was the bottom. He said this on TV, pointing to U.S. President Donald Trump's recent speech and accompanying reports that suggest that a resolution

to what investors feared could become an endless conflict. The market's reactions to these developments has been swift and positive on the question of elevated oil prices Yardini expressed confidence in the U.S. economy's ability to weather the storm. He noted that as an exporter of oil and gas, the U.S. actually benefits from higher prices, unlike many overseas economies. Quote, one way or another, the oil is going to come out of the Persian Gulf.

Okay. One way or the other. What's the other way? It's a bottom-is-in guy, and that's as good as it gets. if you wanted to have somebody on your side of the argument. Now, listen, so this is short-term stuff. I don't know where the market's been in six months, but I think that absent something else happening,

the market will be less surprised by what's happening. I mean, it just is. All right, whatever, we'll see. You have some signs that the bottom is in. The most speculative trader is panicked. This is from Jason Gepford. Are they still sentiment? Yeah, sentiment, traitor.

Okay. For only the third week ever, the smallest option traders spent one third of their volume buying put options to open. The only other weeks were at the height of the COVID washout. All right. So the people with the smallest dollar amounts who probably tend to be a little bit panicky are objectively panicking. Here's another Avro in the quiver.

I like it. I like it. Investors are in one of the biggest rushes to cash in history. Macrocharts is looking at the flows into money markets and cash like ETFs over a three-month rolling period. Usually coincides the market bottoms. But this could get way more extreme. You could see two more weeks of this.

Sure, yeah, of course. Yep. I don't know if this as a timing tool, but I like it as a... You're in the zone. A confirmation that there is enough panic. It just might not be the most. You're in the zone.

Char kid made me a chart. I asked him, hey, what stocks bounced the hardest since the low? and we're looking at the percentage of stocks in the S&P that are up 5% since the local bottom. Ooh. And this is good. Hold on. This is by sector.

So the number is the percentage of stocks in that sector that are up 5%. 53% of tech stocks are up 5% since the bottom. Interestingly, you know, it's really not getting much love at all? service now sitting at the bottom Salesforce right there yeah not all tech stocks

work day I mean right Apple's down 4% today that's a pretty big 4 and a half percent today that's a pretty big move not sure what the story is

I didn't see the news can I ask you the low was 330 last day of March yeah yeah and April 1st starts the April 1st was last Wednesday

starts the beginning of a new quarter. And this quarter was the worst quarter for stocks since 2022. So is it possible? We think it's the bottom. But all it is is a rebalance out of fixed income into stocks. Yes. Because the move in the first quarter lower in stocks was so extreme that all these wealth management firms and institutions did a rebalance.

And that's what we got to start off. the first week of April and nothing more than that. I know you're a big story guy. Like, oh, it was the rebalance. I don't quite buy that. Big story guy. You are. You're a big story guy.

But I definitely buy the fact that could this just be a dead cat balance because stocks don't go in a, coinciding with a Q2 rebalance. Stocks don't go down in a straight line. Yeah. We'll say. So let me ask you a question. If you're the CIO at a $200 billion RIA,

And you run the, you know, there's an internal tamp, and you run the asset allocation model for 300 financial advisors. Dude, you're talking, you're talking around the errors. What, you buy, you buy a billion or two to a billion dollars worth of stocks. But it's emblematic of what everyone's doing. So if you just come out of, let's say it's March 30th, it's the last day of the worst quarter for U.S. stocks in four years, isn't your instinct? let's rebalance now and capture that negative and make the most of

that drop in equity prices. So if a lot of people were thinking the same way, a 60-40 portfolio is down. It's not down enough. It's not extremely, it's not down enough to feel like everybody

all of a sudden decided to rebalance it. But I do buy, I don't buy the rebalance part of it, but I buy the end of month, end of quarter type of, let's take a look at what's happening. And stocks are, or down straight, right?

Yeah, I totally buy that. So this could very easily, despite me saying that I think this was the bottom, I don't know, what's my confidence level there? 59%. I mean, I'm not like pounding the table. Okay. Related. Do you think a majority of investors understand how dividends work? Before you get there, 59 is a very soft level.

I do believe it's, I'm going to say 69% chance that that was the bottom. 59 is very, that's very wishy-washy. 60% chance that we saw the bottom, 40% chance that we did it? I would say like if I'm a betting man and you know I am, like minus 130, yeah, I think that was the bottom. I'm going to give it a 40% chance. So, hold on, let's define this. You think that we retest the lows over, I'm saying like in the next like 10 trading days.

My strategy is more about being right on camera than doing anything with my own money for this particular subject, so let's just put that out there. Okay. If we don't bottom, if there's a rung, let's say there's a full-scale invasion of Iran tonight, and we start blowing up meaningful shit,

possibly creating like a starvation. Like, it's really bad, okay? Then I can come back on in two days, whenever the next time we're together, and I could say, well, I told you there was only a 40% chance that it was the bottom. And I look pretty smart.

If it is the bottom, none of us will even remember this conversation, but if we do and say, yeah, I said, there's a pretty strong chance it was the bottom. I said 40%.

That is how you do it. You're a pro. You're talking to a professional market commentator, arguably the best in the nation. You know why I'm not good? Because I'm actually like a human being. You're committing, you're like committing to the,

you're talking about 59% like a crazy person. No, because I'm not afraid of being wrong. It happens, you know. You, on the other hand, you've got a very soft show. I'm not afraid of being wrong either because I can't be wrong in the way that I phrase things. So I'm definitely not afraid of being wrong. Do you think a large portion of the investing population understands the mechanics of how a dividend is paid?

Which population? Just to start with the general everybody, all investors. No, of course not. You think it's like half and half? which part of the dividend story are we talking about? All right, you call your dad. He's been investing his whole adult life.

You ask him to explain. No. He owns 100 shares of Johnson and Johnson. It pays a 3% annual dividend. I'm making this up. Or he has, let me put it differently. He has $100,000 in J&J and it pays him $3,000 in annual dividends.

Could he explain what happens of the share price as that money is paid out. No, he couldn't explain anything. He understands ex-dividend? No, no, come on. Okay, I'm going to say, I'm going to give you actual polling, but I'm going to say it's like nine out of ten people can't. Yeah.

You think you'd agree with that? Yeah. They understand that it's money that hits their brokerage account because they see it when they log in and it gives them their account activity. If you're talking about people like my dad, 10 out of 10 don't know. How would my dad or anybody like my dad know dividend treatment? Yeah. I just think it's interesting because dividends are such a huge component to the return, well, less than before, but still important to the returns that people get in their retirement accounts, but they honestly don't even, they have no idea how it works. They can tell you how bank account interest is paid. And I think they think a dividend is similar, but it's not. You know that? You agree with that? Yeah.

Like most people could explain to you Oh yeah, the bank uses my money They invest it Oh, look at this guy Why are you giving me money? What's the money for? He thinks the bottoms end, he wants to invest. He bought a toy from Walmart yesterday

He said he's got to pay for it So thank you for that $7. I'll invest it for you. All right, go. What a good boy. All right, let's get into this. Meb Faber On screen, I'll read it.

This explains a lot. We did a survey on how dividends work and received thousands of responses The question is which of the following best describes how dividends work for a stock investor? Answer one, a stock yields 5%, the stock is trading in 100 and pays a $5% $5 cash dividend. After distribution, the investor now has a stock worth $95 and a $5 cash dividend. Or answer two, a stock yields 5%, the stock is trading at $100, pays a $5 cash dividend. After distribution, the investor now has a stock worth $100 and a $5.

$5 cash dividend. Now, obviously, if you are watching the show, you probably know. Chart off, you probably know. The answer is A1. The stock price adjusts for that payout. And that's why we think of dividends as part of the total return for the stock. He is saying the audience mostly gets it. 90% of pros understand how dividends work. And 80% of individuals. I don't think so. I don't think He said Meb's audience. Mebs audience mostly gets it. Right. So this is where I'm going.

Yeah. Meb's audience are the smartest, nerdiest, most sophisticated individual investors that exist. Correct. Because that's why they're in his audience. Yeah. He does not put on a red nose and do a tap dancing routine. He's not doing 40% chances. Yeah.

He's not like my audience. No, no. So he says, however, for the broad-based audience, so this is outside. side of him. 60% of pros understand how dividends work. Only 25% of individuals understand how dividends work. No chance is at 25%. I think it's less, right?

Yeah. But still, isn't it interesting? Even if he's right, 75% of individuals think that dividends are just free money that a company pays out like it's a bonus or an allowance? Why wouldn't a company pay out 100% dividend yield? Because they think it's like a checking account. where the bank like drops $5 on you because it's interest. They don't.

Well, think about it this way. Think about it this way. Because that's what they equated to. If a business has $100,000 in its checking account and it sends $10,000 back to its owners, how much money is left in the business? Well, that's how you're supposed to think about it as a shareholder. Right. But they think about it like a bank account.

It's a brokerage account, a bank account. I got income. I got income. I thought that was interesting. All right. somewhat related, even less related than that last thing. And then we'll move on. Black Rock launching its own NASDAQ 100 ETF.

So Balchunis thinks they'll price it at 12 basis points. First, let me just show you, this is BlackRock's chart five years. Just level setting here, what's going on. Now let me show you in Vesco. BlackRock shareholders have not done materially better. than Invesco shareholders since the pandemic. Are you surprised by that? Say that one more time?

BlackRock's shareholders, common stock, have not done better. Over the last five years than the Invesco shareholders, but have they blown them out of the water? I'm not sure. Like the stock, Black Rock's peak was in 2021. It broke out again in 25. Wait, why are we asking this? I can't check it.

What do you mean we can't check it? Do you have the... I'm showing with you. You're looking at the screen? Dude, that's a number. I'm, all right, fine. Is that a joke? Not giving me the percentage return.

I'm giving you what the ride has been like. You're joking, right? Well, I'm basically showing you... You're saying people don't understand how dividends work. You don't even understand a stock price work. You're showing me a number? Well, why can't I just show you the price action? Why do I have to show you the percentage return?

You could run that in two seconds. You could run that in two seconds if you needed to, but suffice it to. but suffice it to say, Black Rock shareholders have done better than Invescos, but I'm making the point that even the dominant ETF franchise,

it hasn't exactly been a smooth ride in the last couple of years. Without getting into like a head-to-head comparison because that part's not as interesting to me. Just the ride itself. But here's the point. QQQQQ is an incredibly successful product. one of the most successful ETFs in the entire industry.

It's $376 billion in assets under management. This is an Invesco product. 45% of the queues is institutional assets. And then 55% is retail investors or traders. It's a 20% expense ratio. I saw Balchunis speculate. 20% percent. 20 base points. Excuse me. Boucherty to be the competitor, which will be IQQ from the Black Rock I-Share's franchise, could be 12 basis points. So here's my question to you.

How much of that $376 billion is actually at risk if Black Rock's competing product is a 40% discount to the Granddaddy Triple Q product? It's a great question. So also I saw that state shoot is now getting into the game. So a little bit of background here. I'll answer your question. I do wonder if there's like a lot of behind the scenes relationships going on here that we don't know about. There's got to be. Because there's no reason why Investco is the only one to own the NASDAQ 100 or like tech stocks.

I'm using Air Force. Did they have a license? Did they have a license that went out? So the NASDAQ 100, the Q's are what, 18 basis points? I asked chat. said, how much money does Invesco actually net on QQQ? Because there's like a lot of interesting stuff going on in here. So this is an old UIT structure.

Remember, this has been reported on many times. Okay. Yes. So here's from Claude, the punchline. Investco built the third largest ETF in the world with $400 billion in AUM for 26 years, pocketed almost nothing from it, all because of how the original 1999 UIT licensing deal was structured. The NASDAQ got paid $500 million a year to let them use the index. BNY got $109 million to be the trustee.

and Investco sponsored the whole thing essentially as a lost leader that drove brand recognition and bought flows into their other products now they finally monetize it but they had to cut the field okay so like there's all sorts of they have to spend a certain amount of marketing

like it's a whole it's a whole convoluted thing so to answer your question how much how much is that risk here so there's two parts of this I have a different question now yeah so something must have happened where a time limit ran out maybe there was some exclusivity

on the NASDAQ 100 for an ETF that is now no longer exclusive or maybe it's about to run out. Maybe. Because to your point, why is there so much motion right now? Yeah. Yeah, maybe. I probably have looked. I probably should have looked into that.

That's okay. So is there a relationship? So is BlackRock licensing the NASDAQ 100 or is it creating just a competitor that's going to be its own index? You can't use the term NASDA. So that's what I ask you. I think they have to be. And I don't think they would bother doing cues, two cues in the ticker.

I don't see Black Rock as trying to do something like semi-deceptive. I feel like they would just pay the freight. All right. So there's an obvious black and white answer that you and I don't know about right now. But let me answer your question is, are the cues at risk? So number one, no, because think about the embedded gains in here, in taxable accounts anyway. If you only queues, you're up a lot of money. So nobody's going to be selling the cue.

Not everyone. Okay. Nobody is going to be selling the cues because they pay 18 basis points of buying the IQQ to pay 12. Now, however, however, new money and big money and non-taxable big money, why would you not save six basis points and fees? So is the moat, has the moat been penetrated? It could be eight basis points. Has the moat been penetrated? Yes, most definitely.

Wait, I'll do you one better. What about for tax taxable, what about for tax loss harvesting the ability to, are you able to? are you able to swap between Triple Q and IQQQ if they're both mimicking the same index? This is not tax advice. But think about all the institutional non-taxable dollars.

Yeah. Why wouldn't they save six basis points if there's no tax impact? Yeah, we saw something similar. IEMJ, is that where you're going? I was going to say IEMG instead of EEM. So IEMG took the crown. And it's fucking huge now.

Yeah. And that's a shitty asset class. But for about 12 years, EEM was the first thing people thought of when you said emerging markets. It was like the default, it was like Q-Tips. Right? Like, if you said emerging markets, people thought EEM. And then IEMG came along with a lower basis point. And it's bigger?

Is it now bigger than EEM? It's 136 billion to 25 billion. But the punchline here is that this was self-cannibalization. Those are both our shares products. Yes, they wanted to capture more of the institutional. Because here's the thing with basis point fees. If you're trading, you want the liquidity of triple Q right now. You don't care about the annual basis point fee.

You ain't going to be in it for an annual period of time. You're not paying it. And think of all the derivative products that are built on top of triple Q, all the 2X long, 2X short, inverse, all the options trading that's, takes place based on triple Q. It's like an extremely important part of the solar system that is the stock market. So for that reason, I think the moat is somewhat defensible. But like, so here's the question.

Where are the assets? Which half of the QQQ ownership is more susceptible? The institutional half or the retail half? It depends which institutional half. The trading half, no, they're staying with the cues. because the liquidity. The hedge funds will stay with trading cues.

At least at first. I think that's right. Because they want the daily liquidity more than anything else. Is that why? Yeah. They need to move in and out of it in size. Okay.

And they're hedging it. They can use futures to hedge it. Like it's valuable to them for more than just the... They don't care about the basis points. I don't know enough about market structure to understand the differences in liquidity devs.

because it's underlying at the end of the day, but whatever, over my ski's there. But this is interesting. So I'm sure there's a pattern that expired or something. It's got to be something with the NASDAQ. You have two great guests to talk about this with

coming up on the Compent and Friends this week. So we'll leave it there and you could pick it back up. All right, let's do topic two. Okay. Oh, my God. All right. This is an interesting,

market, as we keep saying. An interesting market, a weird market. Rob Anderson from Ned Davis research. The benefit from buying winners and the drag from buying losers has rarely been greater. The magnitude of return dispersion for the S&P 500 stocks is more than five standard deviations above the long-term average, only higher and following the dot-time crash, the GFC and the COVID reopening. And what's so interesting is that this is happening in a period of heightened volatility, but like correlations have not gone to one, not even close. Not even close. Yeah.

Last week, we were talking about how 75% of the decline has come from the max 7 this year. So I asked chart kid like, hey, if 75% of the market decline has come from the max 7, what's on the other end of the barbell? Like, what's holding the market up? So he made me two pretty charts. John, let's go to the cap loss first, the red bars. So $2 trillion has come out of the max 7. Josh, where did this $2 trillion go?

Oh, God. It went into the best stocks in the market, of course. Of course. It went to know those stocks. It literally did. I'm not even joking. It went into Exxon and Chevron and it went into pharmaceutical stocks, biotex, went into the shit that's going off. That's what people are doing.

Josh, you're sitting down right now? Yeah. Hold on to your face. Previous chart. Look how pretty this is. So Matt charted. He did a bubble chart showing the mag seven stocks. They're waiting at the start of the year.

How much they've ripped out of the S&P 500 year to date? and then he looked at the other 492. So the max 7 plus Brodum, I guess, is this. But look at the other 492. Isn't this nuts? Wait, there are a contribution to year-to-date return. So they are holding the market up. Yes, Josh.

And there was this talk for years, chart off. For years, people were like, and thank God we were batting this away. Not saying that we could have foreseen this. I definitely would have predicted this. The market is so concentrated when the leaders go, the rest of the market is to go with it. And the opposite has happened. It's amazing.

We said no. We said no every time. We said bullshit. We said 40% chance. 40% at minimum. No, but the big thing was like these stocks are too big to not take the market down. And that was fair. Yeah.

True until the other stocks are the beneficiaries of the outflows from the stock. And I know you hate this, that I'm aware as the money go. guy, but I think I've been vindicated today, and you can, you could extend it not an apology, but like, wow, maybe you're on to something. Maybe people don't just go to cash in their account. They actually buy new stocks. I mean, just give me this much that it could be true. I'll give you this much. Let me take the other this much. If the market gaps down 1.5% at the open, where do the money go? Temporarily into a money market, only to come back into the next, wave of leadership stocks.

Right. Yeah, that's how it works. All right. So, I've only ever seen that. I've never seen anything other than that. Furthermore, I asked Matt for a chart. All right, so what literally is holding the market up? Next chart, please. So this is some great stuff in here.

So naturally, it's ExxonMobil, adding 30 basis points or 29 to be precise to the S&P. And then it's Walmart. And dude, this blew my face right off my body. Micron. Yeah. Micron has added. So do you know how big micron is?

it's so much bigger than I thought. Is it like $250? Okay. That's what I said this morning. I said it was a $200 billion stock. Yeah, it used to be in October, now it's $430. Get the fuck out of here.

Really? Mike God, it's a $430 billion stock. Put it in the Dow so I can call the top. Wait, can you put that chart back up? I love this. So look at the other names. So for people listening, not watching, these are the top 20 contributors to this year's S&P 500 return,

which is not a good return. but these are the stocks holding the market up to Michael's point. After Mike Juan, you have Chevron, J&J, applied materials, sand disk, caterpillar, Costco, Intel, G.E. Vernova, Lamb, Research, Corning, Conoco, Phillips, or now Conoco, Western Digital, KLA, Merck, C, Gate, Verde, Lockheed. All Halo, like, very obviously Halo. None of them are, you can chart off. There's no ambiguity. every one of these companies, physical infrastructure,

these are not asset-like businesses. They don't sell software or information. They're not in the data game. These are the definition of heavy assets and low obsolescence. Many of those companies have been in business for 100 years. Many, many, many on that list. Ben did, to this point, Ben did a really great post called Bottom Fishing. I guess this was last Thursday.

And he was just talking about like the nature of the stocks that are down and how like like at how much they're down. And I think you and I said one of the weirdest parts about the current environment is the types of stocks that are down this year or the stocks that are popular with retail. All right. The stocks that people are individual people are less likely to own the types of stocks that we just talked about. Dude, look at Tesla. Like Tesla is getting whacked hard. Look at this. Yeah.

Here are the beatings. Adobe, Salesforce, Corweave, Apollo, Blackstone, KKR, Ally Financial, Capital One, Visa down 20%. MasterCard. American Express down 22%. Robin Hood down 54%. Coinbase down 60. Block down 80.

Nike down 75. Walt Disney. Do you know, Michael, that Walt Disney is in a 50-50% drawdown? Target down 55%. Josh, Meta, 27, Microsoft, Netflix. These are the stocks people own. They're all down. When did Palantir Peak?

I'm going to say November. Nailed it. Freaking November, dude. In retail world, that's a long time ago. It's forever. November? You can't do it. November?

If you bought a stock because it was going up, and it stopped going up five months ago, you can't be in it. All right. So absent the war, assuming that the current market still existed, absent the war, okay, if the market was looking like this, this is a story that is not getting any attention, really. Throw up this value versus growth chart. So the spread between the total index, the Russell 3, value versus growth,

value is outperformed growth in the first quarter by the widest margin since 2001, dude, let's light this candle. Nobody's talking about it. Well, you want to know why nobody's talking about it? Yeah, it's the war. Go ahead. No, because what you said earlier. Rebalancing?

No. Fool me once. Can't get fooled again. Yeah. How many times have we seen this? Wait, put the chart back up. Can you see any consecutive quarters where it continues? Yeah.

For what once? Yeah. But look how many more consecutive quarters there are. The other one. These runs in growth stocks. So how many these value sucker rallies are people going to lose their money from where they just say, oh, I'm not doing that shit again? Right.

You're not going to trick me again into buying the 10 PE stocks. That's why. Yeah. And I think this has legs. I really do. So wait a minute. So you think we could go again, Q2, value at performance. Yeah.

Now, I don't think it's, I don't think it's going to necessarily that's the same where it's like value up growth down. Maybe it is, but yeah, I think this can continue. Okay. What's this last one? I also think, you know what we can skip this? You know what's interesting also, Josh? A lot of the reason why the market isn't working just at like a high level is the transition from asset light to asset heavy and the pressure that's coming for cash flows and margins.

But it's funny because, and this makes total sense, these companies are being penalized. They're spending too much money. The beneficiaries are the semiconductors, these stocks are still working, bigly. Yeah, and semiconductors are part of the AI trade, but they're physical. Right. They're halo. So the AI trade is not just one trade. That's correct.

It's the spenders versus the spendees. The recipients. The recipients. Yes. All right. Next topic. Jamie Diamond's annual letter to shareholder. others. We've talked about this. Is this the new Berkshire Hathaway Warren Buffett letter?

I think it is. I think so. It's 48 pages. I don't know if I've time for this. There's a lot of charts, though. It's not like 48 pages. It's not like 48 pages of reading. Is the tone, did he say anything that he doesn't always say? Well, I guess what I'm asking is like this is his stature. He's not a pure investor. He's a CEO, but you're the CEO of a bank. You are making asset allocation decisions. by default, is his stature and his longevity and his place in running the biggest bank in the world. It's a 227-year-old bank. Yeah.

Like, has he earned that level of investor attention? No. Or will there never be another Warren Buffett for reasons that have nothing to do with Jamie Diamond or any shortcomings that JP Morgan may have? Yeah, there are tens, hundreds of thousands of people that read the Warren Buffett letter every year. Nobody's reading this. Millions.

I would say millions around the world. They translated into Asian languages. Yeah, I would say by comparison, nobody is reading Jamie Diamond's time. Could it ever get, if he stays there for another 10 years,

could it get to that point? No. If JP Morgan held an annual shareholder day in an auditorium somewhere in Manhattan, would people from all over the world come to see him on stage? No.

Right. I don't think so either. No chance. But for me... Yeah, no, it's great. It's good stuff. For me as a shareholder, this sort of is at that level now. I think it's this.

It's Larry Fink, BlackRock, because these things have like major impact on my business. I need to understand what these guys are saying because I'm in the financial services world. But to your point, somebody working in Silicon Valley probably doesn't give a shit what Jamie Diamond has to say. No.

Or not everybody there, I should say. Okay. So I agree with you. That being said, this is one hell of a publication. And not just because I'm a shareholder. I get a lot out of looking through it is the first chart I wanted to show you. The yellow line is the earnings per, I mean, I'm squinting myself. The yellow line is the earnings per share.

I think the most important thing here, though, is that blue dotted line running across. That's the return on tangible common equity. So the way to think about this is it's not really a measure of profitability, like an earnings per share or a net income number. It's a measure of the efficiency with which they convert dollars to profitability. So what tangible common equity does is it strips out, what this measure does is it strips out goodwill from, you know, like accounting-related stuff where they make an acquisition and they record. a certain amount of goodwill, blah, blah, blah. This just takes the hardcore chart off. This just takes the hardcore activities of the bank itself,

the lending, the net interest margin, the capital raise. How's the business doing? The investment banking. I mean, it's, the point is the business is unbelievable, 2025, another year of ROTCE at 20%. And then, just for fun, I wanted to look back at their competitors. Wells Fargo is like 14%. So not as efficient.

Bank of America 15. City is like seven or eight, but there's all sorts of asterisks with that because they've been restructuring for 48 years. Let's put up this next chart. Just stock total return analysis. They're going back to this date, not to cherry pickets.

I think they're just trying to show you, they're trying to show you the year 2000 but then that 2004 to 2025 is relevant that's when Bank One merger took place which brought Jamie Diamond into J.P. Morgan Chase so he was running Bank One and this is I think there's a guy named Harrison was the CEO at J.P. Morgan Chase

and this is how Diamond effectively got bought out but took over the parent right? Look at these returns. It's insane. It's completely insane. right? Look at 1-5 and 10 for the bank

versus the financials index. Yeah. I mean, it's insane. 23 versus 15 for five years. 20 versus 13 over 10-year period. Are you kidding me? Right.

So Diamond is not one of these people who like loves the sight of himself on camera and can't wait to run his mouth and just talk and talk and talk with very little to back it up. There's a lot of people working in finance, especially in the investment side. People run a bond fund that's returned 1% a year. They have fucking opinions on everything under the sun, political technology.

This is a guy that literally delivers for shareholders on every time frame. And yeah, he's opinionated. He has opinions about what's best for America, what's best for New York City, should people work from the office. Like he has opinions. but let's look at what he's actually accomplished before we dismiss it as, oh, he's another billionaire running his mouth of a... No, no, no, no, no.

This guy is delivering for millions of people around the world, shareholders, employees, customers. All right. Tangible book and average stock price per share. I mean, it speaks for itself. If you're listening and not watching, I'm not sure how to describe this, but it is extraordinarily up and to the right.

This is the assets. So they call this Next chart Now assets Entrusted to us By our clients Look at this Evolution

From 2005 to 2025 The dark blue Is basically Client assets And it's just remarkable How large this bank has gotten Yeah

And everybody can see these charts If you go to JPMorgan's website And look for the letter But we're talking about like a $40 trillion bank. Well, you know what? Here's the assets under custody, $41 trillion. It's all this part of the same story.

J.P. Morgan has been the biggest beneficiary of one of the greatest booms in the history of capitalism. In terms of all of these people with $30 million, $100 million, J.P. Morgan has won that race. But I also want to say it's not just, they didn't just win by winning. they won by not stumbling and then picking up the pieces from those who did

they were able to I think they bought Washington Mutual Bear Stearns and one other bomb in the financial crisis they picked up First Republic incredible franchise

they picked that up for almost nothing once again that was only three years ago like they had along the way as other players have blown up, J.P. Morgan with the Fortress balance sheet, the relentless focus on risk management, the willingness to say no to a business that they don't think is worth the risk. It's not just about how great they are at winning. It's how great they are not losing. And that's so Buffett-esque. Could he have done this at City? No, I don't think so. Maybe that's too tall a task, but at a different bank?

I don't think so, and I also don't think he could have grown bank. Bank One into what J.P. Morgan is. There is something magical about a bank that's been around for over 200 years and is so endemic to not just the banking system, but like the pipes of how everything works. And it's just so important, not just in America, but around the world. So I think he needed to be in the seat at this company to have become Jamie Diamond. It's a great question. We could skip over everything. I just want to do one more of these. me the Fortress balance sheet chart. This is the most important to me. So I'm in this stock for, I don't know, it could be decades by now. I mean, I was buying this when they were selling it

off on the London whale. I don't know if you remember that. You might have been in elementary school. 2010? I was... I don't know, whatever that was. But this is the answer. People like, oh, such and such firm just downgraded shares of J.P. Morgan from a buy to a neutral. And then

somebody asked me like, oh, what do you do about this if you're an investor? If you're an investor, you laugh hysterically. Oh, okay. Oh, it's an equal weight, not an overweight. Okay, that's great. I'll be sure to remember that the next time I'm on fucking Jeopardy. Thanks for sharing. So I don't sell because the Fortress balance sheet is the point. It's not, stock's not going to go up every year. Guess what? I don't need it to. Dividends we invested, Two. Real balls to the wall. All right. Let's quickly do on the opposite end of the spectrum. Let's do Open AI. I don't know if this has been... Not a fortress balance sheet.

I don't know if this has been underreported. That maybe sounds ridiculous, but also I think it kind of has based on the scale. They just completed a deal to raise $122 billion from investors at an $852 billion valuation. Did you know that? Yes, but only because I... Only because I read the same article. you read. It's a lot of money. You know what it is? It's the war. The war is just sucking up all the oxygen because otherwise this would be, this would be all we're talking about. Massive. So they raised Amazon agreed to invest $50 billion. There's contingencies there. Softbank and Nvidia each put in 30 billion. Sure, why not? Oh, 35 billion of Amazon's contingent on opening I go in public

or reaching the technological mindset. Yeah, so their contingent is like, is there actually stock for sale because they're going public. Okay. So, Claude made this chart for me. I said, like, How big is Open AI's raise compared to the biggest races in the history of IPOs? So there's nothing even close. The biggest one prior to this was Saudi Aramco raised $25 billion. Alibaba raised $25. You know what this is like? Show me Michael Jackson's record sales compared to the rest of the Jackson 5.

Pretty much. This is the most insane thing. So they just raised $122 billion. Yeah. Um, okay. From some very important strategic partners to, which should be pointed out. Not dinglings.

Yeah. Biggest corporations, biggest investors. So in the interest of time, we'll skip over some of this. There was an article in the journal. And what I want to talk about is, um, is some of the decisions that they're making. Before that, though. So Anthropic put out a, uh, announcement last night at Google Broadcom Partnership. They said demand from Claude.

So this is Anthropic. Demand from Claude customers has accelerated in 2026. Our run rate revenue has now surpassed $30 billion, up from approximately $9 billion at the end of 2025. When we announced our Series G fund raising in February, we shared that over 500 business customers were spending over a million dollars on an annualized basis. Today, the number exceeds $1,000, doubling in less than two months. Now, the way that Claude or Anthropics calculated into their revenue is a little bit weird, they're booking the cloud revenue and then booking that as a cost of goods sold,

which seems like double accounting in a bizarre way. But whatever. If it's not $30 billion, it's $22 billion. Because these are Amazon cloud customers that are accessing Claude via that relationship. So it's a bit bizarre their accounting methodology. But whatever, it's so much money, so fast, for comparison.

So let's just say that, all right, $30 billion annualized revenue run rate. And let's say it's probably going to be 40. I don't know where it stops or slows down. Charles Schwab did $27 billion in the last 12 months in revenue. McDonald's, that McDonald's, did $27 billion in revenue in the last 12 months. And they have barely, it's hard to say they've barely just begun, but I don't know what inning these companies are. It still seems very, very early.

See through that prism, the sell-off in enterprise software makes sense because these dollars to spend on their shit don't just material. otherwise out of nowhere, they have to come from somewhere. This is coming from somewhere. So, chatGBT said its ad pilot program hit $100 million in annualized revenue after six weeks. So that could be $200 million like the next month. All right. So the news this week, and there's been a lot of news.

So there's a podcast called TBPN. It's like a tech. I've seen a few episodes. So, it's a tech podcast. I only, it's a daily podcast where they cover tech. I only became aware.

Now listen, I'm on in the tech world, so whatever. But I only became aware of this podcast literally two weeks, two or three weeks ago when they had Travis on, formerly of Uber. I listened to the first 15 minutes. I was like, wow,

that's a big guess. Who are these guys? So I didn't like look into it. And then I woke up to news yesterday, the day before, that open AI, is buying this company for about $100 million. And here's what Ben Thompson from Straterey had to say about this purchase.

A few necessary disclosures. First, I have appeared on TBPN a few different times, and I assume I will again. Second, more pertently, I would, for the record, accept low hundreds of millions of dollars for the Stratory Plus Family Podcast. I would certainly want the money and cash, not opening eye stock. Okay. Indeed, this deal makes that distinction all the more important. because I honestly don't know what in the world Open AI is doing here.

This isn't a deal that is going to make or break Open AI's fortune. The company just raised $122 billion. And it's not like TBPN is going to be using up scarce compute, rather. It's simply a deal that makes no sense. And when you put it in such basic terms, it makes you consider how many things OpenAI has done over the last few years that make no sense. And here's the coup de grab. If Twitter is a clown card that fell into a gold mine, that's what Zuckerberg

famously called Twitter. Open AI might be the short bus at the end of the rainbow. They're supposed to be a pot of gold there, but it never quite seems to materialize the colors are fading. And worst of all, there just isn't much evidence

that anyone knows what they are doing or that there is any sort of overarching plan. So Sam Walton was just featured big time in the New Yorker. There's just so much smoky. There's so many weird things going on at Open AI. A lot of turnover. But we don't actually know

what the dollar figure paid for this podcast is. We don't really know. Let's assume it's $100 million, $50, $50 stock and cash. Okay, fine. So they wrote a $50 million check. What is that? Like an AI engineer's salary for 12 months? But to Ben's point, why are they doing this?

Look, with their pay? Well, so I have a good answer for that. I don't know Ben personally. I'm a big fan of Stratoree, as most people are. He's a terrific writer. But whenever somebody gets bought out, that's in roughly the same lane, there's always a little bit of professional jealousy.

Of course. Or even if you look down on that show, if you're Ben and you're like, my content's better than theirs, they just happen to do a daily live stream. How long could they keep doing that for? Will the audience keep showing up for that? Once they're owned by OpenAI,

is it just going to become a chat GPT cheerleader show, blah, blah, blah, blah, blah. What did they really buy? What if the two partners on screen? one of them hates the other one, et cetera, et cetera, et cetera. Okay. But a lot of that boils down to like, why didn't they buy me out? Why did they buy us?

That's my first reaction. Why did they buy the compound? What are your thoughts would be perfect for opening up? Imagine, yeah, my life's ambition is to go work for Sam Altman. So now I'm going to tell you something. I don't watch that show. I've seen it. It's not for us.

It's not for us. It filled a hole perfectly. We have CNBC. we're investors, we're traders, we're professional financial advisors, asset managers. We have the daily go-to, all right, these people are speaking my language.

And it's, you know where it is, it's all day. If you don't have cable, now you have the clips on YouTube, you're comfortable with it, you know, the people, you know, the voices, you know, the structure, the format of the shows.

It just works. Where do you get that? If you're in tech, it's all-in podcast. You have to listen of those guys, or you're a sit on Twitter all day, which sucks. It's the most soul-sucking, miserable, depressing environment that exists. Where do you, like, actually get daily tech market commentary that's not Wall Street?

So it was a great idea they had. They made it look like CNBC. And they have like techers. What's on the bottom? And they won. But if I were a competing tech creator, whether I had a podcast or a blog, I would be pissed. But the question is, what did Open AI buy?

Because these people, these guys were very... No, I know. They bought a PR machine. They bought an outlet. But they're not going to do that. Like, the whole point, I think that... Oh, yeah, right. You don't believe...

I mean... Sam gets mad because... Because the guy, New Yorker magazine shreds his whole life, spends 11 months investigating him and makes them look like a scumbag. You don't think he wants to have his own PR outlet with a million people watching, where he gets to tell his side.

Sure. Everything is content now. Everything is media. There is no business. It's not a media business. Were they going to build their own? You imagine the personalities there? But it's still weird.

Because these guys ostensibly, see, I said it, are still going to produce the same content that they do on a daily basis. They'll talk tech. What does this do for Open AI? I think Sam gets to jump in the seat. I think Sam gets to put friends of the company.

Whatever. How about this? How about this? Doesn't even. matter. The fact is this cements. It does matter and you're wrong. It doesn't. No, it doesn't. No, it doesn't. Everybody at the same reaction is what are they doing.

Because they don't know what I know. Oh yeah. You know a lot more than Ben Thompson. When was Open AI's worst moment in the last two years? We know when Sam was on the podcast. When Sam was on a podcast that he doesn't control. Now, why was he on that show? Because he had things that he wanted Silicon Valley and big tech.

and politicians and everyone paying attention, he needed a forum to say certain things, and that was the forum that was available. Sorry, that was the forum that was available to him. Now that's no longer the case. If he owns his own media, his own way now of getting out the open AI message that he wants to get out.

I'm not saying he's going to turn the show into an infomercial. I'm saying if and when he has news to communicate. They're going public this year. Fine. That's what you do. Ask the question. What are they doing? That's what they're doing.

Be that as it may. Let's assume that he will hop on the show from time to time to promote the company. The knee-jerk reaction that everybody watching was, oh, my God, this makes no sense. What other bigger decisions are they making that also make no sense? I agree with you. That was the reaction. My reaction is different. My reaction is, oh, look, another moron.

Just like Elon Musk was a moron. who somehow has a company worth a trillion dollars before it even goes, look at this idiot. What in the world is you doing, this moron who has a trillion dollar business? Okay. You might be right. Who has partnerships with Nvidia, Amazon, Microsoft. What's this R word doing now?

You might be right. That's my reaction. I'm going to make the case for biotech stocks. Let's do it. Remember how shitty healthcare was acting all of last year? And then I don't know this story. I'm sure you do. But they're working.

So first chart is XBI. This is the equal weighted version. The next chart is IBB. This is the cap weighted version. The IBB has already done a lot better. This looks great. All right. But then I divided one by the other.

And I think I like the XBI more. This is XBI divided by IBB. Seems like there's room to run there. Now that you have to pick one versus the other. Maybe you do both. Maybe you do neither. But XBI looks very good. Can I ask you, can you put that last chart up?

If you, no, I guess, I guess, Just give me the total return level on XBI. If you wanted to handicap this by a fundamental to say that spike in 2021 was more speculative than this spike, what fundamental would you use EBITDA? Oh, I don't even know how these things are valued, honestly. Well, they're not valued on earnings because, but cash flow, I guess on the XBI, this would be less important. Maybe on the IBB, you might want to know some valuation metric, but it doesn't. Maybe it's price to sales. I couldn't tell you the first thing.

But my point is, like, to feel good about buying it at the same level it peaked at in 21, you'd probably want to know one more metric about the fundamentals today versus then. And I think if you did a priced sales, which I'm sure you could do in two seconds, it's way cheaper today than it wasn't in 2021. fine all of that aside this thing is acting great technically yeah i think you'd be right on this it's consolidating 130 looks like the trigger on the upside it looks really good we have a bunch of biotechs in our best stocks of the market list uh sean and i and uh there are some really good charts in there so i like i like the call let's do mystery chart and then we'll bounce out of here what do you got

all right i won't even give you a hint then I'm joking. All right. It's an individual stock, and you are... Oh, I do know this. It's Netflix. You are involved. Look at you.

You're really good at this. How did you know? Because I look at Netflix's chart every day. I don't own it anywhere, but I'm thinking about it again. All right. Before we move on to the next chart, we'll put that back. What do you make of this? I think it's about to explode.

It's acting very well. I think 120 is the next resistance. I think you make an easy 10, 11 points right now. If and when it gets... above 100 and stays there? Is there anything stopping it from getting back to 120, which is where it was trading before they

announced the Warner Brothers deal that is no longer going to happen? Speaking of fundamentals, this company is dripping. Forget about the one-time cash infusion. They just raised prices. Nobody's going to blink. Stock is acting lovely. Relative strength. It looks great. They have every live sporting event you want, including new ones that I need even know

existed. They're involved with every league. You got another chart? Well, let's do So basically, I'm just showing you The stock versus the earnings This trailing 12 months, fully diluted earnings per share This thing is a screecher to me

So I don't I own some I don't own enough of it I think I have one more This is the technical So J.C. would have yelled at me For asking you the technical read on the price chart Look at this Yeah looks good

So where does the stop go? Held the gas. Say it for everyone who's watching. 90. Like the most obvious. The most obvious in the world. You risk nine points to make 20 points. Yeah. Is this one of the biggest no-brainers in the market right now?

It looks very good. On a risk-reward basis, right? Yeah, it looks very good. Let's wrap up. Guys, thank you so much for watching. Thank you for listening. We love you. We appreciate you.

And I want to let you know tomorrow is Wednesday, which means an all-new edition of my favorite show, Animal Spirits with Ben Carlson and Michael Bauer. Later on, we'll do Ask the Compound with Duncan and Ben. And then Michael will return with an all new edition of the compound and friends on Friday. And he's got some great guests and you're going to love the show. Thank you guys again. We'll talk to you soon.

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