The Compound and Friends - The AI Moment Comes to Wall Street

Episode Date: November 3, 2023

On episode 116 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Eric Jackson to discuss: the market's strong start to November, using AI and machine learning to find alpha, the magnificent 7, fintech stocks, the court ruling impacting real estate stocks, and much more! This episode is sponsored by US Benchmark Series. Learn more about the US Treasury 3 Month Bill ETF (TBIL) at: https://www.ustreasuryetf.com/ Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com 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. Wealthcast Media, 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

So last time you were on, the title of the show was, It Can't Really Get Any Worse. Yeah. Good call, Eric. Was that October? No, no, no. It was June. It did get worse.

It got a little bit worse. It got a little better, and then it got a lot worse. No, no, no. No, but June 22? We had a sick rally, and then it got a lot worse. Right. Did you see the photos of the trial of SBF? I did my assertion.

I did my assertion. Did you see this? It was amazing. Yeah, the renderings. I like the one of Caroline. So Parikh Patel tweeted the Tinder bio versus real life. I would say that Sam and Caroline are about equal in terms of their attractiveness. They're both nerdy looking, not super attractive people.

I have no comment on that. What, I can't call Sam and Caroline not attractive people? I think you can call Sam unattractive. I don't think you're allowed to say that she's not attractive. I said, come on. She's stunning and brave. And I will not have you. I will not have you.

Not in this artist's rendering. I said they are of equal attractiveness. No, in the artist's rendering, she looks like Gollum. So anyway, my point is, look what they did to Sam. They made him look like f***ing Rob Lowe. Horrible.

And they made her look like a monster. Mike won't get this reference. Hold that back up. Doesn't he look like the animated guy in the AHA video for Take On Me? No, he looks like… Can we play that? I don't know who that is. He looks like fake Rob Lowe from Saved by the Bell.

John, put up Take On Me. I know we can't play this song. Remember that guy who worked at the— What was the diner? What was the diner saved by the bell? It was called the— The diner, not the Peach Pit. That's 90210.

That's 90210. Oh, what diner did he go to? God dang it. It's going to drive me crazy. The diner saved by— It's like a guy's name. It's like Mel's or Ricky's. The Max.

The Max. All right, close. So remember the head of the Max that was like Mel's or Ricky's. The Max. The Max. All right, close. So remember the head of the Max that was like Kelly's boyfriend, Jeff? Oh, no. He lost me. Are you doing deep cuts? Saved by the Bell characters? It's not a deep cut.

It's a very deep cut. Kelly's boyfriend, the manager of the diner from Saved by the Bell, is a deep, deep, deep cut. Next thing you know, he's going to look like Screech. Oh, is Screech dead? Maybe. That's horrible. Well, Screech did some really bad shit.

I thought it was just a rumor. I know he used a mask. Do you remember this guy? Dude, really? Show the camera. You remember that? Of course. What do you mean remember that?

How recently have you been watching Saved by the Bell? Anyway, is Screech dead? I think so. Dustin Diamond. No, I know he turned out not to be great, but I also think when you're a child star, and not just a child star, but your whole reputation is,

look how weird and ugly this guy is. Yeah, that's tough. He was only 44. You're not going to grow up good. He died during the pandemic from cancer. Yikes. All right. It's bad. It's not going to grow up good. He died during the pandemic from cancer. Yikes. All right. It's bad.

It's bad. But he died young. It's not good. Oh, SPF. So here's my – we're not doing SPF later. We're not going to spend any time on this or crypto in general. But like the end result after reading all his testimony and the end result is like very mundane. There's nothing exciting or interesting about this.

It's just another like Ivy League prick who thinks the rules don't apply to him. Like that's really what it came down. He just – he was probably like vaguely aware that they were breaking the law, but it's like whatever. We'll figure it out. He was just like another entitled like, oh, don't worry. Everything will be fine. I'm Sam Bankman Freed. That's how it, like, that's how his answers read to me.

I don't know. Do you have a different take from whatever you saw or read? No, I don't know about the Ivy League part. I don't think that Ivy League people think rules don't apply to them. No, not that it's a generalization, but I just felt like he had this sense of superiority, almost as if what we're doing, the rules don't even apply. And don't worry.

I think he lives in another orbit. So I think he's that disconnected where he, it's almost like, wait, what do you mean we can't do this? I'm going to do it. Like I've met people that have that mentality. Unfortunately, many of them are very successful. It's part sociopathy.

There's a little bit fake until you make it, which is celebrated in modern culture. And then, like, didn't Bloomberg TV have a show, Rule Breakers? That was like— Sounds familiar. Rule Breakers. It's like, sounds cool when we're talking about tech, not as cool when we're talking about finance. Not as cool when we're talking about finance.

I think the amazing thing about him, and it came out in the trial, was just how he cultivated that persona that the media went apeshit for. They just loved it. And so it wasn't just him showing up with the afro and the cargo pants, cargo shorts, and sitting on the beanbag. But he actually put the thought and care into figuring it out. It was very calculated. And he was right. Do you remember how crazy people were for him?

I wrote one blog post referencing him. I did a search. Did I ever talk about him? I said he was like Warren Buffett of crypto. Because that's what everyone else said. It's like, oh, he's like rescuing all these companies. It reminds me of Warren Buffett. Like it was all extremely calculated. He was called the JP Morgan of crypto when he was behind.

All right, whatever. What I love. The Warren Buffett of crypto. Of course he's in jail. The Warren Buffett of crypto should have the longest sentence. That's how you know he's the Warren Buffett, right? Like that's how crypto – in crypto logic. So he's not impressive though.

When they were asking him questions, the prosecutors, he's extremely unimpressive. Well, the judges like answered the question. His answers are shit. Yeah. Like his answers – he's had six months to sit and think about – he had to have known what the questions would be. Right. This is not that complicated.

His answers were rambling, like almost like circular logic and tangents. It's like, dude, did you just wake up and figure out that you had a trial today? He's extremely unimpressive. No, he's been at mom and dad's house for like – No, he's been in the Brooklyn detention center. He's not been in—or Manhattan, wherever he is. He's in New York in jail. Right.

He had the deal where he gets to stay in his mom's house. With no internet. Yeah, he started sending confidential stuff to reporters. Right. And about witnesses. Right. Another schmuck move. Yeah.

What do you think they're going to—I don't know legal, like, how these things work. I think they're going to sentence him to 10 and they'll do 7. I have no idea. I mean, he's... He will pay... He'll be the face. He'll be the Martha Stewart. He's going to pay. Crypto bad actors. Yeah. And, you know,

he'll be the poster child. I feel like prison is right for disruption. There's got to be, like, prison on the blockchain or something. He's going to get out. Shkreli's out. Shkreli's doing content. Yeah. Not the same crime.

He's been like a big commentator in demand on SBS. Oh, he's killing it right now. Martin is so hot right now. So Sam will get out and Sam will raise a fund. No, he won't. What do you mean? Of course he will. No, he won't. Why wouldn't he?

Who are those other crypto guys? He won't launch an exchange. He'll raise a venture. The three hours guys were out trying to raise money. I don't know if they did or not. Tell me what interest rates are. I'll tell you if SBF can raise a fund. How about that? Are we can raise a fund how about that

are we good John how about that so why are stocks up so much today the WeWork guy raised the money I mean he's not the pariah that SBF was nobody's a pariah is my point Michael Milken runs a conference that like

the prince of Siam comes and speaks at there's no such thing as a pariah. All that matters is are you famous or are you not famous? Nobody cares what you're famous for anymore. If it was five years ago, it's irrelevant. Are you famous? Have I heard your name before? I have?

Great. Let's take a meeting. Jordan Belfort was raising money two years ago. Literally, there's a movie that grossed $500 million about how many people he stole from. He was literally raising money two years ago. Literally, there's a movie that grossed $500 million about how many people he stole from. He was literally raising money two years ago. Tell me where interest rates are. I'll tell you if SBF can raise a fund or not.

The results will surprise everybody because he will. No questions asked. No questions asked. Rest in peace, WeWork, right? It's officially gone. WeWork went bankrupt this week. You should raise another fund. You should do it.

What show is this? Oh, shit. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their 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.

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Episode 115, ladies and gentlemen, welcome to the compound of friends. What is it? 116? All right, start over. Let Eric come back into the room. Episode 116, Compounded Friends. We have a returning champion in the house today. I'm so happy that you're here. Did you miss us? I did.

But every time I come here, it feels like the market's slitting its wrist. You were last here in a dark time. It was really dark. This isn't that. And it got worse. It got better and then it got worse. Well, welcome to the business we have chosen. All right.

Eric is the founder, president, portfolio manager of EMJ Capital, a Toronto-based hedge fund focused on long-short analysis of innovation-driven tech companies. Eric Jackson, welcome to the show. Thank you. Thank you so much for coming back. We had a lot of fun last time. We talked about a bunch of your stocks. We're going to do that again this week.

What are we starting with, though? I just want to start real quick with the market rally before we get into all of Eric's stuff. Yeah. We don't have what are your thoughts this week, next week. Do we have what are your thoughts? Is that technically what you thought? So just to piggyback on the most recent what are your thoughts, we were talking about, Josh and I were talking about

what could be a catalyst for the fourth quarter and we were saying, now that we were predicting what happened in the last two days, but did we already have the washout, right? Breath was pretty bad and people have recency bias. They tend to think that bad breath means that it will forever be bad breath, that it can't turn on a dime, which it has over the last two days. So I have a chart showing the percentage of S&P 500 stock declining for three

consecutive days. And that just hit pretty much washout territory. So 65% of the S&P 500 stocks fell for three straight days. And that has coincided with bottoms recently. Another stat showing that we were at the washout, just 39%, I'm sorry, 10% of stocks were above their 50-day moving average. Also, pretty much washout periods. And then you have that coinciding with the Fed conference yesterday. Pretty much everyone thinks at this point that the hiking cycle is over. You have rates pulled back and that's all kindling for a furious stock market rally. The S&P is up 2.9% over the last two sessions, which would be the strongest two-day gain since January. Can I tell you something else we were right about?

Since January. Can I tell you something else we were right about, though? We talked about this last week. The worst time to be selling stocks that are down on the year is October. Yeah. Literally, October 31st was Tuesday. Another shitty day in the market, I think.

To be clear, I'm not saying that we were right on Tuesday, although we— No, no. Wednesday, Thursday, November 1st and 2nd, the market, I think? To be clear, I'm not saying that we were right on Tuesday, although we- No, no. Wednesday, Thursday, November 1st and 2nd, the market ripped, and look what the best stocks are. Russell 2000 beating the S&P, and every shitty tech stock I ever heard of

is up 9%. But here's what we were right on. Seriously. Roku's 30% today. Because that- Yeah, and Shopify. That selling pressure- 20%, 20%.

Finally comes off. My point was that sentiment and breadth can change on a dime. Yes. And it did. Oh, can I say one thing about that? Please. To the untrained person that's citing internals, and they're like, oh, 65% of the S&P is in a bear market.

Yeah, idiot. When do you think that reverses from? Exactly when it's that bad. Like, that's not a negative stat that you're citing to me. It doesn't necessarily mean it gets worse.

It doesn't have to go to 85. Like, that is what washouts look like. Yeah? I mean, you must agree. And this year, people think of it,

yeah, it's a great year. Market's up and all, especially now. I think it's torture chamber. The Mag 7 is like massed. You know, what a I think it's torture chamber. The MAG7 is like masked.

You know what a disastrous year it's been for most of these Rokus and smaller tech companies for sure. And so I think that's another thing

that this potential rally has going for it now. So the 10 year was touching 5% and getting rejected two weeks ago and had a pretty big drop for the last two days.

It's now at 467. So it doesn't take much to get the stock market rallying. No, and I think it's a combination of things. I think it's the pullback in that 10-year. I think it's the fact that the sentiment has been so poor. I mean, think about, remember all those IPOs that we got in September? Arm and Instacart and Klaviyo,

and they're way down below. I think Instacart and Klaviyo, and they're way down below. I think Instacart came out with like touch 40 bucks. It was close to 20 bucks. Did you like any of those prior to them coming out? Were you like seriously kicking the tires on any of them or not? Klaviyo, I like the most. What's the symbol for Klaviyo?

Okay. So here's Birkenstock. Birkenstock, I mean, really rough out of the gate, right? But it's come back pretty nicely. Yeah. How's Arm doing? Birkenstock I mean really rough out of the gate right but it's it's come back pretty nicely yeah how's Arm doing it's I mean it's down below

I never liked those IPOs in September including Arm because I mean SoftBank sold just a sliver of the equity expensive and expensive too

just to you know test the waters let's get a let's try to stoke some interest in this. And maybe you'll sell a big chunk later if the thing does well and goes up. Instacart, I think, needed the money.

I think that's why they IPO'd. And it's not a normal, you know, think about like 2021. Like, okay, put aside all the de-SPAC IPOs and all that stuff. But there was like a venture-backed tech IPO every week. Every week. Multiple. And there's been nothing. Big ones too.

Snowflake. Like really big names. And Unity Software. There was some really big ones. Huge. I think – so Klaviyo was like the – they do the tech – they handle the text messaging function for like Fortune 500 companies. Here's Klaviyo since the IPO. Not great, but not-

It's probably a great business. I don't know if it's a great stock. I mean, I think the thing that stood out to me is just like, there's just been like, we don't want risk. We don't want IPOs. Like occasionally you'll hear about like Kava IPO and people on TV will sort of try to talk about that

as if it's like a tech company and like, okay, the IPO market's back and we're going to see these names. There's just been crickets. I don't think that we're going to have a really normalized tech market until Stripe IPO. What do you mean normalized? Like, you know, I think we're still in, I know, I know you guys were talking with Tom Lee a couple of weeks ago and did I, did I hear this right? Tom said like said we're going into the second year of a bull market or something like that? In this house, Tom Lee is a hero. I love Tom, and I hope he's right.

He said we're going into the second year of a bull market starting October, which was the 12-month anniversary of the low. To say that in October we're in year two, it's, yeah, maybe it's a little bit of a premature. I think XMAG7, though, like, I think, you know, this has been a, we're sort of coming up on, for tech, we're coming up on, it's basically been two and a half years of a bear market, I would say.

Yeah, so tech peaked in Feb 2021. Eh, shit tech peaked in Feb 21. Well, there's a difference. There's shit tech. And then Fang Tech peaked in Feb 2021. Shit tech peaked in Feb 21. Well, there's a difference. There's shit tech. And then fang tech peaked in November 21. But you're right. It's a really long stretch without new highs for most stocks. And that perfectly coincides with when we bottomed after the dot-com.

It took two and a half years. Is that right? Grinding, grinding down. So bottom of 03 or late 02? So it would have or late 02? So it would have been in 02, but two and a half years. So it peaked in March 2020. Oh, you're right.

And it took another year after 9-11. But Microsoft and Apple made new all-time highs over the summer. Yeah. Google didn't. Amazon has been in a bear market for three years. Yeah. But you say, like, what's a normalized tech market? Like in terms of the, like a normal kind of,

you know, risk appetite on market should be able to digest, you know, new venture backed IPOs every week. There's not a lot of appetite for that sort of risk. So cash yielding 500%. But eyeball test today,

like look at your portfolio, look at your individual stocks today. All the tech stocks are – like I'm in like CrowdStrike and like AMD, Nvidia. These stocks are acting like it's that week right after Thanksgiving where they really go – you know what I mean? Like when tech stocks really go bananas. Well, you know what's going bananas today? It's the interest rate sensitive stuff. So REITs, like Simon Property is up 3%.

SL Green in New York City is up 13%. Utilities are up over 2%. The stuff that is tied directly to interest rates are rallying pretty hard. Yeah, and you can make sense given Powell's comments this week, right? He basically said no mas to more interest rate hikes. And so if you think like Feb 2021 was sort of –

Oh, you know what's funny? Like I don't break anyone's chops about this like live on the air. But I was on CNBC yesterday after the presser. And people are like – you know, we have commenters coming in. They're like, well, he left the door open for – the door is always open. It's his job. What are you talking about? That's like saying, oh, the dentist left the door open for maybe doing a root canal on you.

Yeah, the door is open. That's what they do. So forget about the door being open. There was no change in the statement from the last time. And there's no evidence from the last time to this time that they need to do more. They have things moving in the right direction. So if they're really data dependent, I think we could be done. And I think, I think the comment that really got people excited was, uh, was basically like now there's like an equal risk on both sides to hiking more. So right. The risk is two sided is what he said. Yeah. That, he said. That got a lot of play too.

Meaning we could go too far. We are now acknowledging that it's possible we could go too far. The market really likes to hear that. I saw a data point today about gas prices are down 35 straight days and under $3 in certain areas of the country. That's got to help consumer sentiment.

A certain consumer that's getting buried by gas prices for sure so what are we doing next? Also one other thing about interest rate

sensitive stocks home builders are up 6% over the last two sessions now they had pulled back quite a bit but they're rallying hard do we have Apple

after the bell? Yeah that's coming you're going to give us a live reaction. All right. That'll be – No, but it's not until 4.30, so we might miss that.

Let's talk about – We're going to turn that camera directly onto you for the live – Everything hinges on Apple. Remember when they used to live blog earnings calls? Yes. They still do. Wall Street Journal does it. Do they do that?

Yeah. They run a live blog for – You used to go on Business Insider and see what Joe Wiesenthal – Right. Joe Wiesenthal used to sit there, like run a live blog. You used to go on Business Insider, you know. Yes. See what Joe Wiesenthal. Right, Joe Wiesenthal used to sit there, like finger on the trigger. He had to be first. He used to do that for non-farm payrolls.

Right. He was great. There was a time where that was relevant. What is this chart? Oh, this is a chart of the 10-year treasury yield. Put it up. Yesterday with all the news. So you're right. You were right, Josh.

The treasury funding announcement. I saw Axios had a post on that. Everybody had a post on it. Ask Eric if he's heard about this. Oh. Do you have an opinion on the composition of how many of which maturity treasury bonds they sold this month? Have you heard about this nonsense now? Eric's shaking his head no.

I just heard about Druckenmiller going after Yellen. Oh, again? Not issuing more long-term. So he probably has a point there. Like, every company in the world pushed out their maturities. What the hell are we doing at the government level? If we know we have these liabilities...

No, well, we should have done it two years ago. Well, that's my point. So what are we looking at hereabilities. No, well, we should have done it two years ago. Well, that's my point. Yeah. So what are we looking at here? So anyway, the Treasury Fund, the announcement, I don't know what they announced, but whatever. They announced something. Rates fell pretty decently. They announced six more weeks of winter. We had Jolt's data, the announcement, Powell's briefing starts, it ends, and it's a 15 basis point drop.

I think it was 20 actually on the day. It's 467 today. Which was a big drop, big, big drop. Yeah. We were saying it's going to five and a half last week. Oh, so I was thinking about this, just in terms of how quickly everything reacts to everything else, how quickly these stocks are re-rated based on where interest rates are coming and going to. And yet we've been talking about the economy taking a long time for interest rates to really filter its way through. And I get that, but it's been like 18 months. Like, is there really going to be

like an interest rate shock, like a credit crunch? Historically, it happens in the 19th month. That- They say. Now, I'm not saying that the market is always right and it doesn't miss things. But like I'm sorry. I feel like that risk of interest rates tightening the economy, like it's – that's not the risk right now. It's something else.

I don't know what it is, but it's not that. Rick Santelli had his like moment a month ago when he was on Fast Money. He was talking about 10-year going to double digits. And so – Top. Wait, like 10%? 13, I think is what he said. So obviously like, you know, we haven't priced something like that in. And so, you know, there's a room, you know, that would shock me if, if we, if we get there, especially quickly,

but, um, if rates, if rates go to 8%, yeah, sure. All bets are off. Right. My point is current interest rates. We've already digested that. We've already proven that the economy can- You're saying enough time has gone by. It's over. I don't know. I'm not with you. I'm not with you. I want to be with you, and I understand your point. I'm not with you.

I'm like 65%. I'm not pounding the table that it's over, but like- A lot of things in finance do appear on the surface to react quickly. A lot of things in finance do appear on the surface to react quickly. And then a lot of things happen really slowly and don't become apparent until the least convenient moment for them to come out. I just feel like what you're saying is I can't disprove that and it could be true. I know. I can't prove it. But what you're saying is always true.

Like the just wait. We haven't seen it yet. Well, things take longer than you think and then they happen more suddenly than you think they're going to happen. Both things can be true, even though they sound paradoxical. Well, there's a Hemingway quote. They asked him, like, how'd you go bankrupt? Gradually and suddenly. He said, yeah, slowly and then suddenly.

I think that chart you had up, though, we overanalyze all the time in financials, and we're trying to put the points on, like, well, at 359, you59, whatever, treasury funding announcement. Yeah, point to us where you were bullish and where you were bearish, if you will, sir. And at the end of the day, this could have just been a pullback from 5% because of anticipation of the Powell briefing starting. And it doesn't have anything to do with these funding announcements. briefing starting and it doesn't have anything to do with these funding announcements.

I would have said 24 months ago, if you told me what inflation would be and where interest rates would be, I would say the market's in a 40% drawdown. We're in a recession. I think most people would have thought that and it didn't come to pass. NASDAQ's only 20% below its highs. I think 18% or something like that. Now, Russell is like 30% below its highs. But I would have said the same thing. Like if I would have said Russell and NASDAQ are worse than S&P, that part I would have gotten right. And we're going to talk about a lot of the stocks that you play around with. Oh, so let's jump into this. So Barron's did its big money poll this week. And we could just kind of breeze through this.

But I find this to be interesting just because it gives you like a real sense of where consensus is on the big themes that everyone's debating. So two thirds of the respondents think value investing will outperform growth investing in the next 12 months. About 60% of respondents say small or mid cap stocks will outperform large cap stocks. So Eric, is that wishful thinking? Because so many of the people responding to that poll will look good if small, mid value do better than like the biggest growth stocks.

Like is part of this like, here's what I want to happen. Therefore, this is what I think will happen. Right. What do you think? Are you asking me, do people talk their books? I would say yes. Do people confuse a question like what will happen with what would be great for you if it happened?

I think 100% of the time. 100%. And like, I don't know, 10 years ago, I used to do these blog posts on the Forbes, you know, shitty outside blogger network. I was retweeting them. Yeah, yeah. Oh, the Forbes scam network. I had one of those blogs.

Did you? I didn't. And so at the end of the year, you know, everyone loves to write, you know, what's going to happen next year? Let's make the predictions. And so I thought, you know, what I'm going to do is I'm going to call up some of my best contacts from the finance world, the tech world, and I'm going to ask them for their best predictions for the coming year.

And I'm going to aggregate them, put it in this huge post. So you called Eddie Elfenbein, and then what? And then what happened? And I would be like, OK, where is the S&P going to end the year? Yeah, I was in this. What's the thing that's going to – What's the biggest risk that no one's talking about? The biggest tech trend, like the AI of next year or something like that.

And so everyone would dutifully come back with their predictions. And I did it for like three or four years. And then I stopped doing it because I started to realize that 80% – me included in this group – 80% of the time, like the predictions were just recency bias. It was basically just whatever happened in the last three months of the year, it's going to continue on for the next 12 months. And occasionally, you'd have some weird kind of out there prediction, but not usually. And so 80% of the predictions were wrong.

And I think that's what's happening here in these big money predictions. Like everyone, we aggregate them you know yeah it's going to be value now it was growth but now growth is out of favor because it's been two and a half years of a you know bear market and i mean the same thing happened coming into this year i don't nobody saw like tech getting off the canvas kind of coming into 2023? Well, somebody probably did, but that wasn't the consensus. No, definitely not. No. Here, here's S&P 500.

Majority of big money investors predict bonds will provide a higher return than stocks in the coming 12 months. So that's not an extension of what happened this year, but- You know how often bonds outperform stocks over a 12-month period? Like almost never. No. Bad, really Like almost never. No.

Really bad bear mark. No, one out of three years. Really? Yeah. So that's not a very bold call. Okay. While bonds have become cheaper this year, stocks remain relatively expensive. The S&P trades for 17 times 2024 consensus estimate.

How is that expensive? It's not expensive compared to two years ago. I wonder what it is like XMAX 7 too. I assume if you back out – It's lower, but it's not that low. John, throw this chart up. How often the S&P beats five-year treasuries over different time periods? Oh, yeah.

I had Nick make this one. So over 12 months, just rolling 12 months, going back to 1926, it's 67% of the time stocks beat bonds. Oh yeah, I probably would have guessed that. That's one in three 12-month periods. Where bonds outperform stocks. So not calendar years, but rolling 12-month periods. I should have had, I didn't have time, but I will adjust this.

I do wonder, like, starting level of interest rates I would imagine matter. Right? Bonds are more likely to outperform stocks when interest rates are 5% versus 2%, I'm guessing. Nearly two-thirds of big money respondents expect the 10-year Treasury note to yield at least 4.5% a year from now versus a recent 4.8%. The yield still might rise a bit more before trending lower.

That's a good guess. While noting that it is at or close to levels at which locking in yields for the longer term makes sense. Okay. That's consensus, but also I agree with it. That sounds fair. What else is interesting in here? All this was very bland. 95% expect to reap a higher return from stocks than bonds in the next five years. Yeah, reap. Well, chart back on, chart back on. So 95%—Josh, say that one more time. 95% of the money managers surveyed expect to make more money from stocks than bonds in the next five years.

What's the historical probability? Okay, so 25% of the time that's happened. So 75% of the time, stocks have outperformed five-year treasury notes over a- No, they're saying stocks will do better. Oh, I'm sorry. I'm sorry. My bad. I misheard. 40% of managers prefer U.S. treasuries to other fixed income.

Yields are at 16-year highs. Another 24% like U.S. investment-grade bonds. Okay. Oh, duration risk. An average of 61% of the fixed income exposure of the big money poll people is in short-term securities maturing in less than three years. Only 8% is in bonds maturing in more than 10 years. So that's going to change this year.

What's your take on this? I was saying to Josh this morning, I think that the trillion dollars that went into money market funds, where it took way too long, right? People still weren't moving when cash went to 2% and 3%, and then slowly at 4%, a little bit more. And then at 5%, there was like a gush of money,

like saying, holy shit, I got to get some yield on this. I think that made sense and still makes sense, right? Like you're getting money, you're getting yield on cash, it's great. But how often does successful investing reward like what's comfortable? So I think that a lot of the money that found its way in cash, there will be inertia. There was inertia getting in there. There will be inertia getting out.

And I think that the people that are rushing to cash will be poorly served over the next couple of years because they're just going to forget about it. So when rates, if and when rates go back down, I think they're just going to be stuck there. I think people, it's been such a rapid rise in rates that it's taken some time for people to adjust to that. And I think there's unquestionably some who are taking advantage of it. But I think, how many times have you heard this narrative of like, oh, well, now I'm getting such a 5% guaranteed return from bonds. Like, why do I really want to take – people are going to sort of pass on equities. I just don't think – I mean, I think after this initial adjustment period, back in the dot-com era, interest rates were sort of comparable to where they are now.

The fact is that if someone thinks, like, I can get 30% on Roku in one day? You know, like, and is it sustainable? Is there a rally with legs here? Then, you know, nobody's going to— They'll chase. And by the way, NASDAQ's going to finish this year up 30%. So for everyone in January that was like, I can get 3% on cash, congratulations. Have that 10x. Right.

But do we agree that the trillion dollars that went into money market funds, that's not going to come out very quickly? No, I agree with you. It'll be slow. It'll chase. They'll buy the NASDAQ at, they'll buy the NASDAQ 20% higher. Right.

But it will. Last thing that we're going to do out of this, because this segues nicely into Eric's portfolio. Tech is both the second most loved and the second most hated sector. John, throw this, the blue bars up. So which equity sector do you currently like most and which do you like least? Tech is number two for both.

Why is it so polarizing? Why is only tech would ever be in this position? Don't you agree? Yeah, it's the – By the way – oh, I'm sorry. For the listener. They like energy the best and they dislike real estate the most, which I understand.

People can't quit tech. They can't. They say that they're going to. They say, you know, the big money managers say they want value to outperform and all this kind of stuff. But at the end of the day, you know, it's embedded into all of our lives.

It's increasingly like part of, you know, the total market cap of all the stock market is increasingly going to tech. That was another Tom Lee comment that I thought was interesting. Tech touches every other sector too in a way that some of these sectors don't touch each other. Yeah. Like you can't really say that healthcare has anything to do with energy. Right. You could say tech has something to do with both. Well, because everyone's using it.

Everyone's using the cloud. I wonder if you were to buy the least liked sector whenever this poll is published and held it for six months. What do you think was the least liked last year? Ooh, that's a great question.

The least, probably real estate. We could do this next week. I'm going to guess real estate. Last year, this time last year, October last year, I bet it was tech.

Oh. Oh. Or communication services. You're probably right it was tech. Oh. Or communication services. You're probably right. Facebook. No. Facebook was in a 70% drawdown. And Amazon was off 50%. Amazon's not.

I know. Communications. My bet would be to be consumer discretionary, tech, or communications last October. We'll find out. How do we find this, Paul? Can somebody find this for us? Rob will do it.

He's got a phone. Thank you. All right. Eric, you're a big AI guy, I'm assuming now. Machine learning guy. I am. I've spent a ton of time over the last couple of years. And we didn't talk about this last time I was on.

All right. Teach us some shit. In the infancy. So you think that this is going to disrupt, I think it'll disrupt the world in various ways. But specifically the financial industry. What should we be looking for? I think you can't turn on CNBC

without somebody talking about AI. Sorry. But it's usually just like, what's the next stock? I don't just want to own NVIDIA. What other AI stock can I own? Arista Networks. But you don't hear folks coming own NVIDIA. What other AI stock can I – Arista Networks. But you don't hear folks coming on CNBC and saying, here's how AI is going to put me out of a job in five years or ten years or something like that.

Everyone else. Every other industry is going to be revolutionized, and it's going to lead to massive job cuts except the financial industry. Obviously, I disagree. I think we all agree at this table. Who is most at risk of AI displacing what they do in the financial industry? I feel like it's people you never hear about. Analysts? No, I feel like it's like DTC. It's like trade settlement and operations type jobs first. type jobs first. Anything admin,

anything kind of low, that's easiest to kind of replace with a robot, obviously, is kind of... It's not client-facing jobs, and it's not creatives. It's stuff that's repetitive and formulaic. I agree with Josh, but don't you think that analysts are going to be able to do more

with less? Don't you think that a PM, if they used to need three analysts, they might need two or one? Yeah. And so inevitably, there will be fewer analysts, therefore, I think. Because the remaining analysts will be more efficient. A lot of this is, though, attrition. It's not that they fire 20% of the analysts. It's that they don't hire the next crop to the same extent that they

hired the last generation. So it's glacial in react. This is not like, oh, we have AI? All right, get the fuck out. Go pack your shit. We don't need you anymore. That's rarely how these things go. Right.

It's a lack of hiring for these positions because they could be done more efficiently. Well, and I heard an amazing stat. You've probably heard of Microsoft Copilot. Yeah. It's getting huge play these days. So on GitHub, coders are like freaking out over this. Right. Because they basically have the helping hand of AI writing code.

And now Microsoft likes it so much, they're like trying to extend Copilot. They are extending Copilot to things like, you know, Windows and Teams meetings. So it's going to, it like does an audio transcript of your team meeting and like, you know, sends it to you. Or if they mentioned your name at the meeting and you weren't part of the meeting, you get a little alert and all this kind of stuff. But the software coding piece is amazing. And I heard Jeffries predict that by 2025, Copilot was going to account for like $19 billion of Microsoft. That's 10% of Microsoft's revenue. 10%.

How would they sell? Are they selling that as a monthly subscription or usage-based? Yes. Okay. Are you using it? And so, yeah. And so, like, basically what I've been working on the last couple of years is, like, hiring software folks, building AI algorithms to try to find relationships

between what drives stocks up, what drives stocks down, how does it vary by market cycles and all this kind of stuff. There's so much. And so there's a lot of computer jockeys. You can't use ChatGPT for that because they won't pull in

recent stock market data. It's interesting. They do use ChatGPT, actually, for specific programming language. No, just not stock returns. No, you can't go to ChatGPT today and say, like, what stock should I buy

for the rest of the year? No, you can't. No, no, no. So the point I was trying to make is they're specifically throttling economic data and stock market information. I think the latest data

they're porting in is like September 21. Yeah. Because they don't want anyone to accuse them of spitting out investment advice. Right. No, they don't. They don't want the liability

of somebody building something that they could trade on. Do you think there will be any sustainable alpha here? Absolutely. There will be a chat GPT moment, which was basically last November was when chat GPT kind of became, you know, common knowledge for the 14 year olds. It's like only a year. And so, but before that happened in November, how often did you hear folks talking about big data, you know, AI, neural nets, and then, you know. Very generally.

Generally. And there wasn't anything you could point to. And it was years that that went on. And to the point where, you know, I'd be like, whatever happened to big data? I remember thinking before chat GPT. Everyone used to talk about big data. Did that basically, was that a bust?

And then all of a sudden you had this moment. So I think there's something similar is coming in the finance world with investments in AI and ML. Obviously, that's where I'm putting my money where my mouth is. Let me ask you this. I don't know when this started, maybe 10 years ago when there was like solar, not solar, satellite data, right? Where people were counting foot traffic going into Walmart. Counting cars in parking lots. Cars in parking lots. And you tell me, didn't that get arbitraged out? Not arbitraged out.

Any sort of alpha there got competed out more or less immediately? Didn't everybody have that very quickly? We could have Rob as a guest on the show. That's what Rob was doing. Well, two years ago, I went to a conference like two blocks north of here on 6th Avenue. And it was just data vendors. And there was someone with selling satellite,

and you'd go from table to table. Is that Battle of the Quants? And somebody had like, I got pictures of the satellite images of this Tesla Fremont plant, and the car's rolling off the assembly line, so you could count the number of cars. Wait, is that data, or is that a guy with Polaroids? No, but anyway, my point is, can't that same alpha that, I mean, that's not structural alpha, that's alpha that people find, then it gets computed away is can't that same alpha that – I mean that's not structural alpha. That's alpha that people find. Then it gets competed away. Can't the same thing happen whether it's you competing against Citadel Millennium?

Like isn't everyone going to be doing this? Yes. And that started to happen. They track emails to see – others who track like how much money people are spending on eBay or Amazon intracorder to try to – and then they publish reports to say, hey, Amazon is going to beat its quarter because it's tracking ahead. This is an AI. This is just alternative data. Well, to be successful in AI, you need to feed it with data. And so where I will agree with Michael is that there's a lot of data out there that gets immediately disseminated in the marketplace and therefore the value is gone. There's other data that just – you could blow your brains out spending money on data vendors.

And the only people who are going to make money alpha from it are the data vendors, right? And so – You have to think of something that other people aren't buying. Yeah, but what AI and ML make possible is kind of like, it's basically like a, you know, it's highfalutin nonlinear regression, which basically means you're searching for needles in the haystacks much more effectively than you ever used to be able to do before. So you might find that the Tesla satellite imagery data, when it's paired with some other kind of wonky data, actually does lead to an alpha signal that only you have done the work to kind of put those two things together

and build an algorithm yourself, and then you can take advantage of it. Tell us how you're using AI in your fund right now. So we've done— No now. Give us the equation. I'm kidding. Tell us what you're doing. We've looked at a bunch of areas like operational data, just all the technical moving average, stochastic indicator,

oscillators, and all this kind of stuff. All those kinds of information. We've looked at app downloads, app store downloads. We've looked at Google Trends. Like you're looking for signals. Yes. So you're combining fundamentals with technicals? Yeah.

And, you know, put them all together, put them in a big, you know, jug, shake it up, and kind of see what seems to influence what. And, you know, there have been a number of kind of interesting findings. Like some of those, the standard technical indicators that we would think are like gospel, like, oh, well, when you break down below the 50-day moving average or the 200-day moving average, actually turns out means nothing, you know, in general. But the AI component of this is that you're feeding it into software, which is doing the work that a human analyst would have done in Excel?

I'm trying to figure out how this is AI. It would be hard for a human to even do some of these analyses because you're trying to track all these different variables for all the stocks. So AI is accelerating. Yeah. But is it running the money or is it giving you suggestions? No, it never runs the money.

It gives suggestions. It gives suggestions. And then the human overlay over it. Because we're on version one right now. And it's taken us kind of two years to get here. And I'm sure when we get to version 10 a few years from now, we'll look back on version one and like, oh, isn't it so quaint? We only focused on these variables because by that time we'll have like half a dozen.

It's not going to auto trade for you. Just in the same way that if you had to write a letter, like if Robin's like, Michael, I need your help. Write a letter to the PTA or whatever. You wouldn't take exactly what GPT spits out. You would take it, pull it into an editable doc, and you would— Yeah, but there's a ton of money that's being run that way, just algorithmically. So you, and not just you, but a lot of people are on version one of whatever this is. Right.

Renaissance is on version, like, 20. They've been doing this forever. Yeah. No, you guys had Greg Zuckerman on here, like, I think a few years ago, and he wrote about Renaissance and Jim Simons and stuff and did that book. And one of the most interesting things about that book is he sort of talks about the early days of Renaissance. And they would send people down to Washington, D.C. to go sit in the basement of the Federal Reserve Library. And they'd pull out these wonky data sources that nobody else was paying attention to. And then that goes to your point about dissemination of this. But they figured out that certain variables matter most. And then,

obviously, for them, they have a very short-term time frame. That's another thing that's fascinating about this is that you say, what does your AI model prove, there's so many aspects of the market. Like you could focus on, like, are you focused on, you know, hyper, you know, minute to minute trading? You want to be in and out within a few minutes? But you specifically, you're using it as a screener to uncover opportunities in individual stocks. Yeah, so remember I said like the 200 day, the 50 day, we found it didn't work.

For the universe of like 300 tech stocks around the world, there was no one silver bullet that predicted all stocks. But we would find like certain patterns that really predicted Tesla stock movements. And then other signals that predicted Apple, but only when to get into Apple, not when to get out of Apple. So certain stocks will behave differently than one another. You can't just use one formula for everything.

Oh, that's interesting. And so that's where, again, this is what a human can't do is figure out. And certain patterns might work for Carvana in kind of normal to up markets, but not in a bear market. And so how can you on the fly? Do you think there's enough data, though, for something like Carvana in kind of normal to up markets, but not in a bear market. And so, you know, like how can you on the fly— Do you think there's enough data, though, for something like Carvana? Because it's been trading long enough that you could trust technical signals on how it trades. Well, ironically, we spoke about Carvana the last time I was here. Great trade.

You killed it on that trade, dude. You know, like for whatever reason—Carvana has actually been—it's not unlike Klaviyo. It's like Carvana, I think, IPO'd in 16 or 17. So it's got a decent track record. And, you know, again, one of the fascinating things so far in version one that we found is that I would say like the top 20% out of the 300 tech stocks that trade around the world, out of the 300 tech stocks that trade around the world, I'd say there's about 60 that the models that we found so far work really, really well with. The rest, the 80%, don't work so well. And Carvana, for example, is one of the- This is about when to get in and out, not about what to buy. It's about when to get in and out for which stocks at which moments.

So we tend to focus on a certain subset of tech stocks that the models work really well for. And Carvana happens to be one that is kind of like this kind of weird stock. A lot of people are really bearish on it. But for whatever reason, the signals that we focus on, it seems to pick it up well. So there's a great quote from Mandelbrot, the guy that discovered fractals and wrote about them. And he said, the trend has vanished, killed by its discovery. And I think that markets function that way. They behave more like biology. They're not governed by the laws of physics. So somebody else had a quote,

like as soon as you figure out the market, they change the lock. Or as soon as you think you have the key to the market, they change the lock. So where I'm going with that is, how are you going to know when the signals stop working? And then what? You'll know from the margin calls.

That'll be the thing where you say, oh. Don't you think that that is how markets work? That you can't just figure it out, that they're always changing? Yeah, but, you know, and we've seen that ourselves already, like even since, you know, we've been kind of using

the AI models live, you know, over the last few months. We start June, July, a certain stock, model's trading really, really well. And all of a sudden, the last three months, bit of a herky-jerky market to down markets. That same, the company stock, the model no longer seems to work as well. So when the model's working well, you ride it.

And when it breaks down- You get out, but you to work as well. So when the model's working well, you ride it. And when it breaks down, you get out and, but you, you improve it as well. And so I think that's where, you know, when version two, version three, the chat GPT moment for, for, for how AI is going to impact finance is I think the models will, that you build will get better and better about kind of saying, Hey, this, this is, you know, we're coming to the end of the end of the line here in terms of being able to predict Apple, and it's time to stop focusing on that. But hey, you know, some new tech stock, Klaviyo has now been trading for three years. There's enough data that we have on Klaviyo as

a public company that we actually think we're starting to trade it really well here with this model. So we're going to swap out Apple, swap in Klaviyo. There are so many guys, it's almost all guys, that are doing this in a very primitive way, out of their own memory. There are guys sitting right now, no offense if this is you, but there are guys like, oh, I always buyIA after the earnings. Like when they miss earnings, I buy it on the third day after they report. There's people that will trade a specific stock and they think because they trade it so often, they know how it behaves.

Those are usually the same guys that were part of the stock as a she. Like she's trading heavy today. Yes. These were probably the people like a hundred years ago used to feel

like the bumps on your head and make predictions about them. Phrenology. Right, right. No, but there are dudes in their basements. Well, they're giving the alpha.

They're the ones coughing up the alpha. So, Eric, how much of these models are price oscillators, whatever you're using for price inputs

versus fundamentals versus alternative data? You can build a pretty good model on price alone. And as a former- You're a fundamental guy, right? As a former fundamental guy, that was sort of like shocking to me when we started to kind of see the results.

Oh, so you learned something new as a result of going through this. Yes, I did. For sure. I mean, that's the point. Did you think technicals were bullshit growing up? Yeah. Like, you know, typically, like I was like, well, you know, and- Not bullshit. You got to's the point. Did you think technicals were bullshit growing up? Yeah. Like, you know, typically, like, I was like, well, you know, and you got to know the company.

You got to know, like, what's been happening and the dynamics and stuff. The hardcore technicians would say, who cares? It's not my problem. Right. They don't say whatever you know, everybody else knows. It's in the price. But I would say, though, that we found that the best performing models, though, there's additional non-technical data added in. And we use neural networks to kind of be able to track these different things. What are you using for?

I just want to compare if you're doing the same thing that I'm doing. And so when you use those additional variables, suddenly like – Like what? Like fundamentals? Sometimes fundamentals. Sometimes app store download information. Oh, okay. Sometimes like Google trend data that matters for this particular stock.

So Eric, that makes intuitive sense to me that something like that would work. If you say like, okay, we want to buy stocks in uptrends. Get rid of anything that's not in an uptrend. Okay. We want to buy stocks in these three sectors because we've done all this testing. And according to the AI, these are the three sectors that our signals work the best on. Okay, great. So let's focus on these. Now, is there a data source that other technicians aren't using, but that is fundamentally meaningful enough that there could be an upside surprise in the stock.

So App Store downloads or the ranking or where – that strikes me as like the exact type of thing that you should be doing. And then you could say there's a reason this works like not just theoretically but in practice. The reason this works is no one else would have thought of this combination. Therefore, I'm not fighting against five other algo traders who are running the same algo. So that makes intuitive sense to me. That's my bias. I mean, in my career,

I've always been kind of like a jack of all trades, sort of master of none. And a lot of people look down on that. Remember a few years ago, Marc Andreessen and folks from Silicon Valley were saying, nobody should get a liberal arts degree. You should only study coding.

It doesn't make sense. It's a waste of money and all this kind of stuff. Also, you should put all your money into Bitcoin. But I think that you're onto something, that the most creative people leading these kinds of finance AI projects are the ones that are going to be able to – I got some exposure to technicals. I got some exposure to fundamentals. I know enough to be dangerous.

A little bit of classical literature. Let's do a little art history. Let's find some data sources that are kind of unusual. I'll give you a million dollars drop out of college. Okay. I'll also give you another quarter million. Go shoot your parents. Right. Okay. I'll also give you another quarter million. Go shoot your parents. Like, right.

So it turns out that learning about something other than investing might help you in investing. You know, people sometimes ask me, like, well, why haven't some of these, you know, I hear about Two Sigma all the time. If AI is so great, why haven't they been more successful and so forth? And I don't know any details about Two Sigma. Because their households are breaking up. But I think that if – there's no question. There's a lot of quant shops out there that are pure nerds, pure like software programmers who don't know anything about finance involved in building these models. They're kind of left to their own devices.

And I think they're missing stuff. There are lots of blind spots that you have with that kind of an approach. And I think the most successful approach over time is going to be, you know, you got to have a combination. You got to have technical people that obviously know what they're doing. You got to be able to communicate with them. When we started, we had some folks in Pakistan working in the middle of the night, couldn't manage them properly. It was a pain in the butt. I didn't know if they were working three other jobs at the same time they were working for us and all this kind of stuff. So you have to practically- So to revise a colloquialism for what you're saying, a quant would know statistically

that a tomato is a fruit, but then like somebody that maybe learned something else would be able to come along and say, okay, but you don't put tomatoes in a fruit salad. Yeah. Right. So it's like that extra layer of, I've been around, I know some stuff. Right.

And you're missing this. And so- Your math is missing this really important thing. And so, yeah. And so I think you want to be thinking, and you know, all the finance industry needs to be thinking of like, okay, like what's my team going to look like in five years from now?

How many programmers am I going to have? How many of my analysts am I going to have? Because I think the numbers are going to change, the ratios of how many you have doing what. I mean, one of the points I was making before about Copilot, one of the programmers who works for me was telling me that he saw a stat recently that said 40% of the code that is produced now by programmers around the world came from Copilot. So think about how many fewer programmers you need to employ if that's the case. And that's today on version one of Copilot. What's that going to be like in three years? That's what Michael was saying. It becomes like a supercharger for the talent you have.

It gives them the wherewithal to do a lot more. And when I talk to real people, like I'm talking about retail clients, people who put money with me or kind of talk to about putting money in this type of an approach, there's like one thing I hear like more than anything else, which is like I heard about this AI thing. I've been with this Raymond James advisor for like the last three years, guys kept me out of the market the whole time. He's giving me bad advice. I can't take it anymore. I just want to trust the computer. Yeah. I just, I, you know,

like they don't even understand under the hood, like how this stuff works or how it will work, but they intuitively get that a machine could probably be less emotional, less attached to certain staying in certain trades for too long. Who could, could like pull the rip cord, get out of Apple. Now get out of Tesla when it's at 300 bucks. I 90% agree with that in a bear market. If the machine keeps them invested, even if it's the right thing to do, they're not going to be able to live with just letting this computer make my decisions for me

like that's where it works against you but 90% of the time I agree with you like people have seen enough of human nature that they are as comfortable trusting a machine we still make lots of mistakes and we will make lots of mistakes but

I just keep focusing ahead on like three, five years from now, like we're going to have that chat GPT moment. I mean, I think in the financial advisor world – What do you mean by that? I think – Like on Wall Street, you mean? The chat GPT moment is that you're going to hear about – and it will probably be some big firms, like big hedge funds,

whether it's like 0.72 or CO2, like having big breakthroughs with their AI, having to shoot the lights out type of year, like triple digit returns, and they credit their AI models that they've been working on. You're going to hear about smaller shops, hopefully EMJ, that had focused returns and good returns in tech space or whatever. I think in the financial advisor world, it's going to change that. You're not going to be able to just kind of be friends with your advisors. I think people are going to expect more quant models. They're going to say, hey, Josh, Michael,

you know, what does your model say at Ritholtz Wealth Management? We went through that when the robos came along and the robos all failed. They didn't fail in that the tools aren't useful. They failed to build standalone consumer-facing businesses that could get big enough in time before Vanguard and Schwab showed up. But most of the conventional robo tools today are being used as call center technology so that Merrill Edge, for example,

doesn't have to hire 100,000 new advisors right out of college. They could hire 10,000 who would do the work of 100,000. Therefore, they could scale up to billions of dollars. So I think that the tools are the tools. Here's where I agree with you, though. There is going to be a story. Somebody is going to come out of nowhere that no one has ever heard of, put up shoot-the-lights-out numbers, and they're going to point to the AI. And they're going to say proprietary this, proprietary that.

But that's not a new story. I mean that's what Bridgewater was telling people. It was their models, their proprietary. So it will just be like a souped-up version of like a very old story, which is it's a black box. I'd explain it to you, but you wouldn't understand it. Like Morgan Stanley had algorithmic trading, you know, 25 years. You probably know more about this than I do. But like there have always been people pointing to their models and saying, you can't replicate my model.

There's no question. And one guy invested in me. He said, you know, like we used to have this guy at Goldman. Like he came around and he always – his models worked until they didn't. And then like 2008 came along and he got blown out of the water and he was fired by Goldman. LTCM had models. Sure.

But the difference is now we did not have servers and servers to power these things. So it's materially different now in terms of what's available for those who want to pick up the ball and run with it. That's true, but competition is competition, and everyone is using the same tools, and the tools today are much more sophisticated, but the competition is. But the way you implement those tools is like, there are a million ways you can use the same tools and get things wrong. There's like tons of mistakes you can make along the way in terms of like, uh, overfitting your data, which just means that you could, like you had this big pool of data that you're analyzing, but then you were sort of taking data from the future and mixing it with data from the past.

I guess what I'm saying is there will be people, hopefully you're one of them, that are spectacularly successful using these tools, but the average will still be the average. I don't disagree with that. But the question is, like, if there is a chat GPT moment three years from now, and like, oh my God, you know, like XYZ firm or XYZ financial advisor just figured it out and they're doing this. Well, they didn't do it

overnight. It's probably been three, four years in the making. And so then you're like, we're going to come back on Monday morning, the competitors and say, okay, guys, you know, what's our, what's our strategy? Like, you know, we got to hire some, some folks, uh, software, you know, anybody know any coders? Let's get some coders around here. There's no doubt that's going to happen. Let's just throw it. I totally agree with that. Go off in the boardroom and, you know, come up with a solution.

I would bet in the last three years, Goldman hired more IT people than CFAs. Right. So, Eric, what does this mean for companies that you cover? Like, who are going to be the winners? I mean, obviously, NVIDIA, but what are some of the others? NVIDIA's in the driver's seat. And, you know, we can talk about them, you know, at some point, like that's one of my favorite, it's my favorite of the, of the mag seven large cap stocks. I think it's still underappreciated. I think it's trading wonderfully. Look at this 30% gap or 25% gap or whatever it is

not even getting anywhere near it. I think, you know, what's most interesting about that is that, you know, nobody had ever seen anything like that, like a $7 billion raise above consensus for the next quarter. Or 11 to 17. It was something that's nuts. They did it twice. They did it twice. And two quarters in a row. And there's this Peter Thiel clip floating around Twitter of the last few days that I saw where he's talking about how, you know, the biggest mistake he ever made was on the Series B investment in Facebook. He was in on the Series A, but he wished he could have done it all. And the biggest mistake was that the metrics for Facebook had improved so much from Series A to Series B, but the valuation did not. It increased, obviously, but it didn't increase as much as it should have given what the

metrics were and therefore what that meant about the value of the company. And so his big mistake in hindsight was not recognizing that and going all in. And he said, most people tend to underestimate when there are these big kind of shifts, just how big it is and what it means. And I think that's happening to NVIDIA. I think like that may raise a consensus is, you know, people are now, they raised the whole market for a couple of months. The stock is cheaper now than it was in January, despite being up 200 something percent. That's wild.

But you still hear people going on saying, well, it's expensive. Oh, it's overplayed. The price is up a lot. Somebody said that like, there's gotta be like $200 billion worth of demand or something crazy for NVIDIA. Who are all the buyers of all these chips? Well, this is the big thing is that – I heard you talking the other day about this, Josh, about there's two differences or two phases of building AI apps and then deploying them.

There's the training phase, which is basically you messing around in a sandbox saying, hey, maybe these technical indicators work. Well, NVIDIA owns that market. Right. And then there's the rollout phase, the inference phase. And that's when you actually, so phase one is like, Eric likes cats. This is what a cat is.

Phase two is on reels, like, okay, we're going to give Eric like all the cats, you know, videos he's ever wanted and not give him the same ones. And, you know, so give Eric all the cats videos he's ever wanted and not give him the same ones so he stays on the platform longer. So I think what people are missing now with NVIDIA and why I think it's super underpriced relative to where it's going over the next few years is that they're not demand constrained, right? But we're still at this messing around. The 7 billion raise is a bunch of their customers messing around in the sandbox.

And so what happens when they go to rolling this thing out like full big time with the AI apps that actually work? They will need more chips. And I've heard some people say it depends on the application. In some cases, once you go to rollout phase two, you need 10X the number of H100 NVIDIA chips that you needed in phase. Right. So the inferencing chip demand, first of all, you need CPUs for that too. It's going to benefit the whole sector.

Oh, yeah. The thing about AMD, I recently bought some AMD. Not enough because it went up. If it went down, I would say I own too much. But AMD has not been asleep. They've been quieter because they're not as advanced. But they are thinking about the inferencing market as being their advantage. And they're architecting deliberately for exactly what you're describing.

And we won't know if it was successful for a couple of years. But they're launching their chip, the MI300, which is meant to compete head-to-head with the H100 the first week of December. Do you have thoughts or feelings on the AMD opportunity? I still think that inertia is going to dictate that. Whoever you start buying chips from in phase one is who you're going to use in phase two. What if I tell you Jensen Wang and Lisa Su are third cousins?

I swear to God that's true. Is that true? I didn't know that. They're from the same area of Taiwan. Oh, that doesn't surprise me. Does that change how you feel at all? I think AMD is going to – I mean, everyone's – this is going to be a rising tide. People are going to make money.

I mean, AWS, if I'm right, and NVIDIA, you know, NVIDIA's opportunity is actually 3, 4X what it currently is. And these $7 billion raise, it's just the beginning. It's going to raise a tide for AWS. They say that TAM is $150 billion five years from now. So if AMD gets 10% of that, that's pretty good relative to where it is stock. If they get 20, it's a grand slam. Yeah. But you got to wait five years to find out. I would just say, you know, like in any market,

it's usually the, the, the winner that like, you know, accrues the best returns. And so, okay. If I'm going to own somebody, like, I'd rather like just put my chips behind NVIDIA rather than AMD. You know, the other amazing thing about that Nvidia is like in a good year, a couple of years ago, they were doing like a billion in free cashflow. But now like the world has changed since the $7 billion consensus raise above consensus. And so in the next few quarters, they could do 4 billion in free cashflow in a quarter. 7 billion is not out of the realm of possibility next year. That's massive money that they're going to have to spend on- This is a chart of their free cash flow in a quarter. $7 billion is not out of the realm of possibility next year. That's massive money that they're going to have to spend on- This is a chart of their free cash flow.

Yeah. I mean- Like, their debt's going away with that. It's unbelievable. What if the demand doesn't materialize as quickly? So, in other words, what if we're super bullish on AI and the demand for NVIDIA's products, but we have the timing off.

And there's a quarter somewhere in the middle that lets people down. I mean, you would agree, this is probably the biggest risk to NVIDIA right now. Yeah, and I think also the biggest risk is the fact that they just can't make enough chips. And so they need to- No, no, stipulated, but we all agree on that.

Yeah. We all understand there are literal supply constraints. Yeah. So if – But what if there's – okay, so hear me out. During the pandemic, there was double ordering for everything. Like Peloton found out the hard way. Right.

All right. So everybody was double ordering. The thinking was, well, we better double order because we don't know if we're getting any and when the next shipment is coming. And then supply chains kind of eased. and a lot of these orders were canceled. And that's how you got all of these negative surprises. I'm not saying that's going to happen with NVIDIA. I'm just saying it could. What if there's a lot of double ordering of GPUs right now because Microsoft and Amazon and everyone else is terrified that they're not going to be able to get what they need?

And then they do get what they need and we get order cancellations. And then all of a sudden, NVIDIA gets shocked and it's not bearish on AI. It's just, oh, this wasn't the real amount of demand that we thought it was. Like for me, that's the thing I would worry about. That might never happen or it might happen this quarter.

And I just don't think anyone could know, including NVIDIA when they give guidance. I don't think they could know. I think that there – I would say, yes, the risk is these – anybody who's playing in the sandbox now, using their chips to kind of build these apps. using their chips to kind of build these apps, what if that process takes longer than expected? Or what if not enough new enterprises show up to start messing around in the Playground Sandbox as well? Because it's an expensive sandbox, Eric. It's not free.

Yeah. Messing around, the cost of compute is a real cost. They're going to fall 25% if they miss a quarter. They are. In a day. In a are. In a day. In a day. But the fact that we just had this such an outsized return in May for this raise of what they have.

They're not going to do that every quarter, obviously. I think that just shows how many – we're still very early days in terms of real companies getting in here. I feel like generally speaking, when you think about the fact that we are early days, but the stock is up 100%, 200%, whatever it is, I think the early days argument usually wins. When something is so hot, it doesn't just die immediately. Right. Let's do some tickers. You're buying another AI darling, Groupon.

What the hell? The co-founder blocked you on Twitter, which is cool. Aren't you too old to be getting blocked on Twitter by people? He was the first guy who ever – who I know of who ever blocked me on Twitter. He's no longer with the company. Andrew Mason. Remember, he was like the bright-eyed, bushy-tailed co-founder when they IPO'd in 2011. I haven't heard this name in a long time.

I haven't heard this guy's name in a million years. But why do you like the stock and why did you say that shit about his wife? Well, this stock is – I found it with AI. Obviously, there's no AI tool. Oh, okay. But I actually, to be honest, if you'd asked me earlier this year, I would have said,

is it even still a public company? Yeah, I was going to say, what AI did you use? Chat POS? How did you find Groupon? All right, say more. It's a blue check. Yeah, I just turned super bearish on AI.

So when this stock, like, you know. My AI is shorting your AI right now. This stock is still around. It's still a coupons company, basically. And it's, you know, back in May, it was like a $100 million market cap company. So it was around as a public company, but it was, you know, basically had been

forgotten about, circling the drain. But what I thought was interesting, though, it's kind of an activist play. Because basically, what happened is, the guys who run it, it used to be a run out of Chicago, and the other co-founder is this guy, Eric Lefkowski. He's no longer involved in the company, but the management team was still in Chicago. And I start reading up on it. And what happened is that there was some guy in the Czech Republic who had built a bunch of web companies over there that he'd never heard of and sold them and made some money and knew how to make money from web companies. So he decided that seeing Groupon trade where it is, like this thing is an opportunity waiting to happen. But they were wasting money. They're losing money constantly.

So he basically buys up 20% of the stock himself and some of his friends from these past – With a $100 million market cap. Yeah. He threw $20 million in. Yeah. And then he goes to the group on board. And like an activist, he says, what are you guys doing? Like you should be doing this.

You should be cutting costs. You should cut all this headcount in Chicago where it's expensive to have all these people doing these things. And, you know, you should be focusing on international much more than you do. They were like 90% still US focused in terms of their revenues. And there's a big world out there. And this thing Groupon, you know, it's kind of like Yahoo where, you know, unlike all these DTC companies you see advertising on CNBC these days, we're trying to like come up with these crazy terms and stuff. Everybody knows Groupon. Everybody knows Yahoo.

And therefore, there's like a bunch of inertia traffic that kind of keeps going to these sites, you know, constantly, even if they're doing a terrible job. So he presents his turnaround plan. And the board basically says, here are the keys to the car, guys. You run it yourselves, you know, as a management team out of the Czech Republic. And so they've only been overseeing like one public quarter as a public company but they've they've they've they were adjusted ebidop profitable for like the first time in years and uh the thing is if you start you look at this kind of slimmed down smaller company and say okay what's a reasonable

enterprise value to ebidop multiple for a web company. That's not growing like crazy, but it's just churning out like eBay style kind of profit. Is that 10? I'm making it up. 10X? Yeah. 20X is not unusual for what you see. Enterprise value to EBITDA. And so if you look at what's a normalized kind of EBITDA level, they're doing like $130 million revenue a quarter. They should be doing like 15%, 20% in profits every quarter.

My math says this should be a $100 stock in a year or two. Where is it now? Versus like $12 probably is up today. You say it's a good business. I don't know if it's a good public business. It's just a forgotten about business that's just been ignored. And 30, I don't know, it depends on who you look at. 38% of the float is short.

And so everyone's gotten in the kind of fat and lazy habit of shorting this thing, thinking it's going out of business. So how does this appear on your screen? So it's one of these names that pops out of the 300 that pops up back in May. It says, hey hey something just happened and you know we're detecting some you know

as stocks start moving up again three bucks alpha extraction and it says you might want to take a look at this and this is when I find out about the Czech Republic and all this stuff

that's going on at this company this is kind of interesting anything else outside of the usual suspects that's popping up that's interesting there's a company called Taboola. I know what this is.

The shitty ads. Is that hummus? It was a – Yes. That's right, Michael. Delicious. Israeli company that basically does kind of the outsource ads on the rest of the open web besides Google and Facebook.

Taboola is – you know when you're reading a Business Insider article and you spent way too much time and you get really far down the page? Yeah. Once you get down further than the comments and even down further than – Past the comments. Past the comments, there will be this block with four ads in one. Yeah, yeah. And one of them will have cleavage.

Yeah. Am I lying? No. Okay. One of them will have like just tremendous anatomy. The second one will have something really gory. The third one will like just be like an animated question mark. Each of those units is a Taboola ad unit and they are –

Proud of those units. Proud of those units. No, but that's – it's backfill to backfill, right? Like there's the affiliate ad network and then there's Taboola, which is like, eh, throw a little Taboola on there. We'll see what happens, right? Yeah, but I mean they also place like normal ads. And so the thing that's interesting about them is that they signed a deal with Yahoo in January of this year basically to kind of take over placing ads that's right because the ads on Yahoo are also

reputable say more so you know I've followed Yahoo is you know I know years and years and always been interested in them and as activists play their private still you know they've they were sold by Verizon owns it Apollo bought it and so Apollo put this guy who I know Jim Lanzone in charge of it. And Jim is kind of a seasoned web executive who got to start running Ask Jeeves. Remember that? The search engine? So he brought in Taboola onto Yahoo pages. So he signs his deal with Taboola.

He's doing a bunch of other things. You know, we'll find out when they IPO one day. But apparently they're doing really, really well. They'll probably come out with some kind of normalized valuation and then go up from there. But investing in Taboola is kind of- Oh, Yahoo is going to IPO. Well, they will, for sure. And at some point, because Apollo is going to have to- Can we get Marissa Meyer back? No. I don't think she'll be ringing the bell. Okay. She's not ringing the bell. Okay.

Oh, shit. But Tabula did this deal with Yahoo. And so Yahoo took a piece of Tabula into equity. And so they signed this deal and it's, it can be massive, but the thing is it didn't get implemented. Like they didn't, you know, in January, when you sign the deal, you don't start seeing the results in the financials. It's a $3 stock. So it's a $3 stock.

Okay. But basically, everything got turned on last month in October. So we're going to start with the next earnings report from them to actually see the financial impact. Eric, why is it Tabula Limited? Is it European or British? Israel. Israel. So let me ask you guys this.

Did FinTech just bottom? So Affirm was up 20% today. PayPal is up 7% today. Square just raised guidance. They're up 16% in the after hours. What do we think? You like any of these things? What do we think?

I think it's interesting. They got clobbered on the way down. I mean, just a few days ago, like at the beginning of this week, Square was within a buck of its like March 2020 lows. So they've been hammered. There's nobody left to sell these stocks, though, right?

It's not going to take much for them to get going. Like I said, it's up 60% in the after hours. Yeah. They bought Afterpay, remember them, a couple of years ago? Buy Now, Play Pay Later for $29 billion, and now they're- Their market cap is smaller than what they paid for that. Unbelievable. So have they bought them?

Yeah, I think so. And I think there will be some winners in there for sure. And I think Affirm is interesting. They just announced a deal with Amazon today. Small businesses are going to be able to buy and pay later. People might scoff at that. I love it. Can we do this before we wrap up?

Did you see any of this stuff with Zillow and Redfin? See it. I own the stock. Okay. These stocks all got hammered on a court decision. Did you see any of this? Yeah. What exactly happened? Do you know? I don't know all theed on a court decision. Did you see any of this? Yeah. What exactly happened?

Do you know? I don't know all the details of the court ruling. They were, you know, basically they have this liability that the realtors were all price fixing. Yeah. So this happened in the Midwest. This happened in Kansas, in a Kansas courtroom. I just, we don't have to have a long discussion about it.

It seems like this is a big deal only because I don't know enough to – there was a jury. They had two weeks of testimony from plaintiffs. The defendants were the National Association of Realtors, NAR, and a lot of the big real estate franchises. And they were basically accusing them of price fixing with the commission because home prices have gone up so much that that 6% or whatever is really noticeable. It's like a big chunk of money. And the plaintiffs won. They were ordered to pay $1.78 billion in damages to the sellers of more than 260,000 homes in Missouri, Kansas, and Illinois. So if you sold a home in those three states in the last few years, I guess, you are owed money by these realtors who were colluding and keeping commission rates high, which I'm sure

will be appealed. But they immediately whacked Redfin Zillow, which I guess are highly reliant on commissions and realtors advertising there. So I don't know. I don't own it. I think it's going to be interesting to see whether, you know, where do these stocks trade in five days from now? Because like, was it really that specific court decision that drove them down? They're already going down. You know what's too out of stock? Open door. Two bucks.

They're reporting tonight. Oh, do they? Yeah. Open door reports tonight? Yeah. What are your thoughts? Not a great model. They got whacked in the same NAR ruling as well, which kind of makes less sense than Zillow.

That's weird. They don't have realtors. They're trying to disintermediate the realtors. And so they're buying and selling the homes themselves. So I think that eventually this stock is going to be a winner. It's basically traded. And Zillow, to some extent, and Redfin have sort of traded with housing in general and kind of the home builders. What's one stock that you gave up on this year?

What's something that just you decided it's not going to work? Open door, definitely. You know, I kind of like let go of the rope, and I would say in the spring of this year. There were too many disappointments with it. There have been other stocks like that. Zoom was one that I talked about. I just bought Zoom back.

You did? Yeah. There's a lot of stocks like Zoom. I'm so bullish on Zoom. Where people just have stopped caring. Hang on, I can't let that go. I know, but I like that. That is good.

You're right. That is the sign of a bottom. Because Zoom has gradually transformed itself into an enterprise software company for businesses. And the video, they're using video tools as just the advertisement to get you in the door. We fired RingCentral and adopted Zoom phones. Zoom eventually will probably take over Slack from us. Like they are building all of these, like, really critical

enterprise tools for businesses and nobody gives a shit. Nobody likes the stock. Is the stock still like 69 or something? It's in the 60s. Which is where it was in 2019. It kind of stopped going down. The stock could go to $120 and still be cheap.

You know it's 16 times earnings? Nobody cares. Because they You know it's 16 times earnings? Nobody cares. Because they still think it's a fucking work from home stock. They don't believe the earnings. Think of how much bigger it is today versus when the IPO in 2019. It's a $16 billion market cap or something like that. They're selling software to businesses. It's not work from home at all.

But they still have this video that acts as like the front end. It's how most people know the name Zoom. But that's not really going to be how they make most of their money. That'll be like one tool of 10 that they – I mean they're trying to be – I don't want to say Salesforce. That would be the wrong comp. But they're trying and succeeding

to get enterprise customers. Their revenue is not growing at all. Yeah. I mean, that's my concern. At all. It's never going to grow. It's never going to grow the way it grew in 2020. So what are you buying?

But it's not growing at all. But I'm not paying for it. But to get it to go to 120, there's got to be a bit of growth. You got to have the phones thing play out. Well, Josh is right. If they give any good news, if they raise guidance, it'll be up 20%. Yeah.

No, yeah. And there are a lot of stocks like Zoom these days. And hopefully, it's two and a half years into this frigging bear market for non-Max 7 stocks. I think my risk in Zoom is that they don't find growth and the stock just languishes. But it's not 50 times. Like you're not, it's not a company losing money there. It's a profitable company with cash flows. And I don't think like a mid to high teens, uh, PE ratio is a huge risk. I think they have the chance to figure it out. And if they do, you won't be able to buy it. So look, a lot of these tech transformations don't

work. Like BlackRock, BlackRock, BlackBerry did not work. They tried to be a cybersecurity company and it didn't work. Alright, did you have fun on the show today? I did. You did? Alright, we could do another one. I don't know about Zoom. I think I'm going to stick with my Groupon. Alright, we'll come back next.

We'll come back next week. We'll do a compare and contrast. Groupon, Groupon, Groupon, Zoom. Alright, fair enough. We'll do a compare and contrast. We'll compare Groupon with Zoom. Groupon Zoom. All right. Fair enough. We're going to end the show with favorites. Eric, what are you into these days? What are you watching?

What are you listening to? I thought the most interesting thing in the last week was Stan Druckenmiller. There was like a leaked video of him talking to Paul Tudor Jones at Robin Hood. That was interesting where he sort of took shots at Yellen. And then he did a CNBC interview the other day in the morning. Of all the old guys who go on TV and get treated like gods. That's your guy? I think he's the conscience of the – sometimes I get a little carried away with myself.

I get a little bullish. I get a little Tom Lee-ish. When you hear Stan kind of chiding the market, I think you've got to heed. He always chides the market. Yeah. He ain't coming on to tell you 72 and Sonny today. He's not coming on like he's not coming on to

tell you that things are fine. But he's interesting. Versus a lot of these guys. He's earned the attention and the respect of the street, for sure. Yeah. And not that many guys out there like that. So it doesn't mean he's right all the time, but I agree with you.

What about you? You got a favorite for me? No, I don't. Really? Nothing? I was dry this week. How was Halloween this week? It was good.

Yeah? How'd you do, candy-wise? Clean up? It was good. Yeah? Got some Butterfingers. I like Butterfingers. Is that your go-to?

No, I'm a simple man. I like Snickers and Reese's. I went to Dave's house that night after Halloween. They were sorting candy. They got three kids. They were sorting pounds of candy on the floor. Yeah. I said, you should sort it all right into the garbage can.

Yeah. You know what we tried this year at my house was only buying the big candy bars. That's a ball of roof. What do you mean? Like regular size? You know when you were a kid and you'd go trick-or-treating and you would— there'd be that one house— The hero house.

Giving like the huge— Heroes. Baby Ruths and whatever. Oh. And like so we decided like this year we're going to try that. We're going to only buy these bars and like— And were kids high-fiving you? You couldn't believe the reality.

You know who does that? You could not believe their faces. You know who does that? You could not believe their faces. Dude, you know who does that in America? Blip this out, Duncan. He's a hero for doing that. Oh, I believe that. Well, that's his business. He's the candy man.

And the other amazing thing is that, you know, we had the biggest thing that we handed out was a pack of Twizzlers. That was like, I don't know, 10 or 12 in it. Yeah. It was the biggest, you know, it's bigger than candy. Like the movie theater size? Like the, not that, in between. You know what's interesting? But that's what kids wanted. They wanted the biggest. They didn't care. There was Tw than candy. Like the movie theater size? Not that. In between.

You know what's interesting? That's what kids wanted. They wanted the biggest. They didn't care. There was Twizzlers. You know what I want? Peanut butter Twix. That never makes its way into candy bags.

You know what I gave out? Solana. I did. I did. I gave everyone a thumb drive. We didn't give out anything because we weren't home. I guess we're like the no fun people. No.

I left. You leave a bucket of candy and it's gone in 20 minutes. We did that. But I guess we're like the no fun people. No, I left, you leave a bucket of candy and it's gone in 20 minutes. We did that, but I don't even think we put anything good in there. Oh, so actually, I've been slowing,

I haven't, I've lost momentum on House of Usher. Not really because I don't like the show. It got confusing, right? No, I'm on episode four. I've just been busy,

I think. I don't know. Okay. Did you finish it? No, I didn't finish it yet. I think I'm on four or five how many episodes are there? did you watch this?

The Fall of the House of Usher? no I've heard you guys talk about it it's entertaining I think it's worth I think it's worth checking out I want to help some people out save some time on podcasts

as my favorite so I'll tell you what to listen to what not to Charlie Munger on the Acquired podcast great call just listen to it it's an. Charlie Munger on the Acquired podcast. Great call. Just listen to it. It's an hour.

Every interview, he's on the clock. He turns 100 next month. Every interview he gives, this could be the last one. And he's still awesome. So I highly recommend Charlie Munger on Acquired. You could skip Elon Musk on Joe Rogan. It's like pretty, unless you're like a super fan it's kind of painful there's nothing of substance in it really and it's like at a certain point it's like

rogan's like so so uh hey man what's your favorite color like at a certain point it's like why is even if you're listening at 2x speed like yeah why is it about the way elon talks he's like thoughtful in his delivery. He doesn't just speak. He like takes a beat or two. Yeah, I don't know from that. From Long Island. Same.

We just talk. We just go. We just talk and then immediately regret it. I don't know what all this thought. I don't know what all... People have time for thoughtfulness? It's kind of impressive.

There was one other that I listened to. What was it? Maybe another acquired Jensen Wang. Did you listen to that? No. Oh, shit. shit this is right up your alley so you know who those guys are no the acquired podcast they do like the greatest growth companies ever and they there's two guys they'll each read 10 different books and they'll have a conversation about what they learned. So they've done like LVMH famously.

That's like one of the big – Anyway, they did two episodes on NVIDIA and then they did a third. They got Jensen on. And Jensen gave them two hours. And it's – this is like right up your alley. So on the flight back to Canada, this is what you want to do. Wait, one last thing. So just talking about like stocks that are beating up

that nobody cares about. So Paramount, obviously it's only in the after hours. Nobody owns Paramount. The stock's up 11%. I don't know what they said, but a lot of this beating down names, like it doesn't take much to get them going.

Right, at a certain point, there's nobody left to sell. Do we have an Apple print? Apple is... Should just come out. Apple is down less than a percent. All right, Riley's over. Shut it down. All right. Eric Jackson, ladies and gentlemen.

Thank you so much. We had the best time with you as always. I want to tell people where they can learn more about the fund is EMJ. Is that Eric Mahomes Jackson? Mitchell. Where can they learn more about you and your fund and all the stuff that you're writing and working on?

Give us some places to go. At Eric Jackson on Twitter, emjcapital.ltd on the web. You can find me on TikTok, Instagram. Taking new clients these days or where are we at? Always talking. Always talking. I like that answer. Yes.

All right. Thank you so much, Eric. Thank you, guys. Hey, great job this week, John, Duncan, Sean, Nicole, Rob. Thanks to the whole gang. You guys did a great job. That's right, 116 in the books. Thanks to everyone for listening.

We will see you next week. Take us out. Oh, my ears. I'll be on top of that. 89.5. You don't like when I do that to your ears? No, no, no. No.

No one's favorite was the final Beatles song ever. Oh. I just heard I just heard about that. I just heard about that.