The Compound and Friends - The Joby bull case with Charles Lemonides, Roaring 2020’s with Ed Yardeni, Alphabet vs Nvidia

Episode Date: November 26, 2025

On this TCAF Tuesday, Josh sits down with Charles Lemonides, founder of ValueWorks, to discuss the future of flight and how soon we might see flying cars taking to the skies. Charles makes the case for Joby and dives deep into why he thinks it stands above the rest in the eVTOL space. Then at 35:26 hear an all-new episode of What Are Your Thoughts with special guest Ed Yardeni joining ⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠! This episode is sponsored by Betterment Advisor Solutions. Grow your RIA, your way by visiting: https://Betterment.com/advisors   Sign up for ⁠⁠⁠⁠⁠⁠⁠⁠⁠The Compound Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠ and never miss out! Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Ladies and gentlemen, welcome to the compound and friends. So excited to be bringing tonight's show to you. And we are sponsored by Betterment Advisor Solutions. Betterment Advisor Solutions is for any financial advisor, any RIA who says there's got to be a better way to do this. I need better tech. I need a better platform. I need faster onboarding. I just, I know there's something out there.

Check it out. Betterment.com slash advisors. Tell them the compound sent you. I think you'll be surprised and delighted. So thank you to Betterman Advisor Solutions. Okay, we have a huge show for you tonight. I spoke with Charles Lemonides, who is a hedge fund manager based in New York, who just spent a week out at the Dubai Air Show.

We have a stock in common. We're both invested in Jobi, which is the leader in a new category of company known as an Evital. That is an electric, vertical, takeoff and landing aircraft that effectively, from my perspective, is the closest we've ever gotten to the flying car. And I got a lot of interesting insight from Charles's visit to Dubai. We talk about the opportunity more generally and getting some stuff about the way Charles and his team pick stocks. And I thought it was a really fun conversation. So that's first. And then it's what are your thoughts?

Michael Batnik and I, and we had a special guest, Ed Yardinney, joined us to talk about the roaring 2020s. This was a call that he made during COVID, I think in 2020, November of 2020. So it's, is that five years ago? Six years, five years ago. And so far, so good. He's absolutely nailed the call.

And he thinks the roaring 2020s extend into the next decade, potentially. So I, roaring 2030s, he told us. So we walk through his earnings expectations, how he arrives at them, the multiple that he is expecting to see on those earnings for the S&P 500, and a lot of other great stuff. Then we'll get into the Nvidia versus Google thing that erupted on the market today and so much more. So please stick around, enjoy the show. We appreciate you. Happy Thanksgiving. And here we go. 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 Riddholt's wealth management.

This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Riddholt's wealth management may maintain positions in the securities discussed in this podcast. Hey guys, it's me, Josh Brown, and we are live from the compound. a first time, very special guest. I'm so excited for you to meet Charles Lemonidis. Charles founded ValueWorks, which is a hedge fund and separate, separately managed accounts. Is that the best way? Yep, yep.

Okay. Separate account strategy and hedge fund ValueWorks with the goal to broaden availability of his conceptual value investing discipline in the retail and institutional investor communities, Charles leads investment research and portfolio management at ValueWorks and has final authority for all investment decisions. Charles, welcome. So nice to have you. Thank you so much for having me.

I love being in your compound over here, and the space is great. Quite a kind of pumpkin compound these days. We're super excited to have you. So you and I have this in common. We both are very excited about one particular EV-Tal stock, and that is Joby. And you're back from the Dubai Air Show, which took place last weekend. Last week, Monday to Thursday. Okay.

Incredible air show. I mean, it's just a massive event. Is this the big one? This is the big annual event for the space? There are a couple. There's one in England. There's one in Paris and there's one in Dubai. I think those three qualifies the big ones.

And this one definitely is the same scale as Paris, which I visited last year. How many people go to the Dubai air show? You know, what does it look like? Oh, it's huge. I think it's 50,000, 100,000 or something like that. It's a lot of people. Okay. And how many people from the American investment community are there, would you say?

Oh, it's thousands. It's thousands. Because, you know, it's all, it's a huge range of aerospace companies. From tremendous amounts of defense stuff to commercial jets to now increasingly this advanced air mobility space, which is small for that air show and small for the scheme of things, but growing. Okay. I want to share with you what Andres Shepard, who's been on the show before, had to say about Joby at the air show. And then I want to have you react to it because you're along the stock.

I'm long the stock. I think we're both pretty excited about the potential, even though it's relatively early. But this was what Andres had to say when he got back. Joby was the clear winner from the Evital OEMs, in our opinion. The company was the only one to conduct. live piloted test flights while at the air show, which Jobi carried out once a day throughout the week. More specifically, Jobi's completion of a 17-minute flight from Margum to Al-Makhtum International Airport marked the first time and Evital conducted a piloted point-to-point electric

air taxi flight at the UAE. And there's a lot more here, but that seems to have been a lot of people are saying the highlight of what they saw from this space. Well, yeah, it's really interesting because it's become a really deep ecosystem. There are a lot of these aircraft or flying machines on display, China, Europe, multiple U.S., but you're right. There was only one that actually flew their flying machine and is much further along than everybody else. I mean, you look at everyone telling stories.

and having models and they're great stories and their great models, but one of them's flying and the others are not. Yeah, so Joby to me seems advanced in a lot of ways. In that way, that's obvious. They have something that's actually working now. But they also made an acquisition of Blade, which is the helicopter.

So they got both ports, the Hudson River and then the East River, and they got some revenue. These other companies don't really have revenue yet. And that makes it stand out to me. Not only does it have revenue today, but has the infrastructure in place that when these flying machines are ready, they're going to just swap them in

and the helicopters get swapped out. And I think it's going to be a big game changer because these things are, you know, one interesting element to being at the air show is that the jets are going by and they are making incredible amounts of noise. So loud. So loud.

Yeah, yeah. And then you see this little Joby aircraft come into the air. and you hear some jet noise in the background, but it's the jets from far away. This thing makes no noise, and that's going to change people's willingness to have it showing up in their neighborhoods.

What is the name of the craft that Joe B, S.R.4 or something? It's a little bit like a Star Wars droid. I feel like they need a makeover. I think their name is one issue. I think the bigger issue is the whole word, Evitol. I mean, I don't know who knows what that means. Well, you keep saying flying. machines, and I noticed that. You don't like Evita. First of all, I've been following this

company for six years, five years. I mean, it's electric, vertical, takeoff. And landing. Well, how's that? Oh, Al, tell. Take off. Take off. Take off. Okay, fine. Like I said, it's not a great word. I don't love it. I agree. I agree. I think it's important, though, that as a category, it's called something. It's not a quiet hello. It's not a helicopter because it glides. That's right. You know, helicopters, the engine stop, the thing falls. This, it has a wing.

It flies like an airplane. So we'll throw some pictures up, but for the people that are listening to this and not watching, the vertical takeoff is important because it doesn't require an airport to get in flight. So it lifts like a helicopter. Six rotors, not one, much quieter than a helicopter, double redundancy. One of those rotors goes down, there's still five. If two go down, God forbid, there's still four. It'll remain aloft.

The fixed wing is what differentiates it from a helicopter besides the sound and the singular rotor, meaning it flies like a plane when it's up in the air, and then it can land back down. Which makes it much more fuel efficient when it's flying like an airplane relative to a helicopter. And helicopters are loud not because their engines are allowed. helicopters are loud because the size of their blades is so large that that physics just means when a blade is rotating like that, it makes a lot of noise. Yeah.

You know, as opposed to zzz. Well, I spoke to you about this the other day, and you pointed out a lot of the helipads that used to be in cities like Manhattan have been decommissioned because the exhaust fume is blowing into the buildings, like into the AC. Buildings don't want, right? So this is like an answer to that. Well, there's no pollution coming out of it when it's running.

It's electric. It's electric. That's the E and EVTOL. Right, right, right. And then the bigger issue is the noise also, as big an issue is the noise. Okay. You know, people don't, people, there are protests, stop the chop. You know, and they went to protest when Joby came to New York.

And Joby was smart enough to invite them all in and say, listen to this thing. It's not loud. Okay. And I think it won people over. So the blade business, my understanding is it's $20 to $25 million a quarter, right? Almost a $100 million annual run rate. So that fundamentally sets this company apart from, I think, the other three. One is Vert, V-E-R-T, is Archer, and now there's a third one just came public beta.

Beta is different because there's a more normal takeoff and landing airplane. It's electric. It's got an electric engine, and it has the capacity to put rotors on its wings, so lifts and lands. But right now, what they're bringing to market is an electric airplane. But there are a bunch of other ones, too. There's Eve, which is, and Wisk. Wisk is, I think, if I'm not mistaken back by Boeing, and Eve, I think is Embraer. And Eve will probably be a competitor, you know, in the relatively near term.

Is Eve European? It's, it's, um, South, it's Latin American. Latin American. Well, yeah, I'm rare, um, which is a, uh, I'm sorry, Brazilian company. Okay. Um, so you're at the show, does Joby get more attention than the others? Well, it's, you know, it's interesting. There's, there's a large area with all of these flying machines indoors.

And there had to be, you know, 10 or so of them. Prototypes. Prototypes. Yeah, they're all, they're all models. And Jobie's is a model, too. one that Jobi has there. I don't think the one inside flies. But there are a lot of different ones. And you walk around from booth to booth and they tell the story of how this is going to be something that's important. And I think seeing so many of them sort of validates that this is

going to happen. But like we said, you know, Joby's been at it for much longer than anybody else. Yeah. And, you know, it has something that's flying. They're building-ish one a month right now. They've sold one, a couple to the U.S. Defense Department that have been flying. They do flights, you know, basically every day. This thing is in the air. And it's probably only a year or so away from being government certified. So let's talk about that. One of the things that I think is a catalyst coming up in the next couple of months is these companies start to join this EIPP, which is like sort of like they will work hand in glove with the FAA and share information with each other to start working these into the overall ecosystem of flying things.

Well, right. So the Trump administration is making an effort to create use cases for these flying machines. And that's where I think the biggest advantage Joby has relative to its acquisition of Blade. You know, Blade takes reservations online. You go to the heliport, you pay your hundred. $275 or $250, it takes you to the airport, and it's a great experience. You don't have that setup in many other cities around the country. I mean, New York is pretty particular in how well-developed that is.

And, you know, the thing that's important about that is not simply that New York is developed, but that the people who developed in New York are the people now at Jobi getting ready to develop the same thing in other cities. They have a customer base. They have a customer base. have a management that knows how to put the infrastructure in place. Right. You know, how do you lease the space?

How do you get people coming? How do you get people going? How do you do the reservations? How do you, when you land at the airport, how do they get to their airplanes? All those details, Blade has already worked out. Right. That's not the high tech part of this. That's more like the logistics and the people moving part of this, which is equally important.

Right, right. So there are two parts, right? One, you have to have the machine that fly. in the air and carries people. But then you have to have, and then you have to be able to make a lot of them. And a lot is something we should talk about in a second. And then you have to, and there are plenty of people, I think, that will buy these. I mean, there are going to be thousands of people that are willing to buy one of these things.

You say people, not like people, but organizations? I think it's going to be a wide range. I'm sure there'll be plenty of deep-pocketed folks who fly airplanes and helicopters that want one of these. I'm sure half the mega yachts around the world would rather have one of these on board than a regular helicopter. But I don't think that's where...

That's not Jobi's business is selling them. The business is operating them. And the reason that's super important to my mind is that these things are going to be in short supply for the next five years. Even if two or three companies have them available to be sold three years from now, joby will be lucky if they can make 200 300 300 a year two years out yeah the other guys are going to be

way behind that by every i mean you know there's really hard to see how they won't be way behind that so the thing that you know that limits you then is if you're selling them for whatever it is five or ten million each and you're selling 200 and then you go to selling 220 you know your revenues go up by 10 percent right but if you're operating 200 and you're making five million million of generating $5 million of revenues on that operating 200. And the next year you're operating 400. Then your revenues have just doubled. Is that what you're modeling?

That's exactly right. I'm modeling. So say it again. Let's say there's 200 of these in operation. Listen, I think a year from now, there are going to be a dozen of these in spots around the world. Yeah. Not really flying and generating revenues 12 months from now.

But I'd be surprised if they don't have one in New York City. if not 12 months from now, 15 months from now, not doing any real work, but sort of prepping to see how it, how it fits into what they have. It seems like they're going to be adopting these internationally faster. So there's a six-year exclusive agreement between Joby and the RTA for air taxi services in Dubai and plans for a commercial launch of that in the second half of 26. So let's say that happens smack in the middle of 26. It's at the Dubai airport and it's going to fly to the mall. It's got a couple of destinations that it'll take people. That's a pretty big deal. And it's like a year from now. And it's a year from now.

And it's like science fiction and it's unfolding like here and now. And look, I first became aware. This company first went public five, six years ago. And at the time, they got a lot of enthusiasm because it was going to be the next Tesla and it was gee whiz technology. And we were in a bubble. anyway, expected of problem. Right, right, right. But, you know, when I looked at it back then, it was like, wow, this is a long way off. Right. You know, I mean, like, okay, yes, this is going to probably happen, but decent idea, but it's a long way off. You know, five, six years

have gone by, and you are an awful lot closer. And now it's like, you know, a lot of the early enthusiasm, people got disgusted that, you know, lasted, they lost money all the way down. but now I think you're you're getting to the place where the reality is happening and it's really right so right these stocks were caught up in that whole mania spack bubble with all the crypto stuff that blew up and it was like it was just like too speculative it I made the argument that they probably shouldn't even have been publicly traded all this it's like a fluke of history well they had a chance to raise money and you know they they jumped through that window and they raise the money and they put it the cash on their balance sheet and they've spent it building

out their businesses. But it was too early for investors. Okay. So Joby is a $12 billion market cap. They've raised money on several occasions. It seems like they have enough to start production. For sure. I'm sure they'll raise again if the stock price gets significantly higher. We'll see about that. You're not sure. I'm not sure. I mean, I'd be optimistic that as they start ramping production, they'll sell a handful. And then, you know, it wouldn't be surprising to me if they sold them and leased them back and didn't actually own all of them. But, you know, from a capital allocation perspective, I wouldn't be, because look, once these things start operating, they're going to have a market value and they're going to have an intrinsic value.

And so, you know, if they are spending $3 million on each one and, you know, and have $200, And then 400 and 600, that's a lot of millions of dollars of capital tied up. Okay. People say to you, why would I invest now? Why wouldn't I just wait until they actually launch commercial service in Dubai, for example, or in United, United Arab Emirates, Saudi Arabia, whatever country lets them start up first? Why wouldn't I just wait and see? What if it's a disaster?

Well, they're going to be hiccups, and the stock, I'm sure, will correct by 30%. a whole bunch of times over the next 10 years. The question is whether it corrects 30% from today's level or from two or three X higher. Right. And, you know, I look at that stock today and I look at the chart of it. I'm like, wow, $13, $14. You could easily see how that doesn't hold and it gets down to $10, $11. I feel like I want it.

I don't own enough of it. So I do. I want that. I do. But the reason. reason I do is because it would be ridiculous to miss the move from, you know, $12 billion to $50 billion equity cap because you wanted to get it 20% cheaper. I mean, I made that mistake in Carvana a bunch of years ago, and I kicked myself every

six months about how stupid that was. Okay. Do you see this as being Tesla-esque just in terms of Joe Ben, like the founder, he's still there? he's considered to be like sort of the revolutionary around which the whole ecosystem revolves. Do you see that possibility here? I don't. I mean, people talk about the comparison to Tesla all the time. Right.

I hear a lot. There are some similarities. But, you know, I think that the depth of organization behind the founder is very different in the case of Jobi. I mean, they have real corporate partners that are very committed. to them. And I don't think it's just his quirky, driven style that makes it happen. I think Tesla, I think, I think Musk was very smart and understanding that Electric posed a tremendous advantage. I think this fellow was really early in making it happen. And I think this guy is an important leader for the company. But frankly, I think this company works, you know, even if you

don't have a charismatic CEO. Let's talk about the corporate partners. I think Toyota owns 15% of the business. A good chunk. A good chunk. So they've invested directly. They've acquired shares. And they're going to be the manufacturing partner that enables them to build 200 of them or 400 of them. Well, they have given up cash money to be invested.

And they have management on the board. And they are giving guidance on how to do the manufacturing. but Joby is really going to be the manufacturer. And that's different than Archer. Archer is planning on subbing out the manufacturing to Stalantis. You pronounce that one right, not me. Chrysler. Yeah, Jeep.

Right, right, okay. Or Fiat, maybe. So Joby is, so Joby is building themselves. Jovee is building themselves. California and Dayton, Ohio. And they have a pretty decent size facility in Dayton, Ohio, and they're starting to actually use. use it to manufacture the blades because there are a lot of blades that go on every one of these

and they're pretty sophisticated and, you know, specific. Yeah. So they'll be ramping up manufacturing of a lot of blades. Okay. One of the other similarities here to Tesla that I think is worth considering, and I'm sure you have, I follow smart money. I like to pay attention to people who have taken big swings that have both failed but also worked.

one of the largest equity shareholders in Joby is Bailey Gifford. And this is big Scottish asset manager that took a big swing on Tesla very early on and built like a $30 billion stake as a result with a lot of profit. And I'm curious if you pay any attention. You know how I know Bally Gifford? How? I know Bally Gifford because, you know, I'm a value guy and I look for short ideas. And every now, and there are a lot of...

He used their portfolio. look for short ideas. No, what happens is I look for something, I find something that's really super richly priced. Yeah. I'm like, yeah, it's really richly priced, but they're really well positioned. Oh, and frickin' Bally Gifford owns a slug of it. Oh, so that will, that will question you. I'm out. I'm out on the short side. Okay, so it's meaningful to you. I think they have a 6% stake or more. Yeah, they're really smart investors. Listen, they're smart investors. I think that's a really positive sign. John, can we put up some pictures from, from the Dubai show featuring Charles.

All right. All right. So walk us through what we're looking at. This is what? This is your little aircraft indoors. This is the SR4. Yep. This is the one they're going to be making.

This one probably doesn't fly. Like I said, I don't know for a fact, but it doesn't matter. This one's the one indoors, the one outdoors. Oh, there we are. Hey, I know that young lady. Is that Lynette Lopez? That is my associate, Lynette Lopez. Isn't she fabulous?

She is one of the best ever. All right. So where are you guys? You're in the cockpit? I'm at the controls. Okay. On the far right is Teresa, who is head of IR. Then we've got Phil and John in the back seat who traveled to the Bible.

This is how I know this version doesn't fly. Because you're at the controls and Lynette is behind you. That is not happening. No, that is not happening. Okay. What else do we have? This video? Okay.

So there you go. There's this little thing just buzzing around. Oh, it's so cool. It's so cool. It's like a dragon in the sky. Yeah. People aren't. Yeah.

It's silent. And it's, yeah. Maybe because we have the video on mute, but that's one of the big parts of it. Yeah, no, it's a big deal. It's a big contrast to the jets screaming overhead. But yeah, here it comes. It's going to just go sit there in front of you and go off. Okay.

Do people get used to it? I haven't yet. Okay. So people are staring at it when it's up there? Yeah, for sure. Okay. Is it notable to you that none of the other always, VMs got one up in the in the air you know listen we own joby because when we've learned about

these companies we tried to understand who was ahead and who you want to own the leader in a new category for sure and i think they're the best managed and with the the product that's furthest along okay and i think that evidence is that that this is the company that has the product that's furthest along okay um i mean i think eve will be there'll be other competitors but who cares like it's it's a big world out there, and they're going to be behind Joby. Let's touch on Archer then, not the leader, but at one time, people thought Archer could be a leader. I think the stock price has been, I own both.

I own more of Joby, because I agree with you, but I own some Archer because I thought the midnight looked pretty cool. It looks very cool. Yeah, and that's the extent to my due diligence on that. But, but. Its videos are very good also. Okay. And it has gotten off the ground.

Yeah. So there is something real. And there's resources behind it to get it to market. You know, they have a balance sheet. But that's a different model. They want to sell these. Correct. They're not looking or they are looking to operate them as a taxi because they

signed a deal with the city of Los Angeles. Well, they want to be the Olympic, official Olympic E.V. TAL, which we'll see. They will be the official Olympic E.V. Tall. There's no doubt about it. Will they be ready? They gave the Olympics $30 or $50 million.

for the right to be the official EVTOL. They will be the official EVTOL. Whether or not their aircraft is flying in 20208 is a very fair question. You know, 2008, I think it's going to be a foot race for them to get it in the air. Yeah. But if they get it in the air, I think that Joby gets every bit as much advantage out of that as Archer does because what people are going to find amazing is that these things exist and they operate. It validates the category.

Right. And then, and then, you know, and then if they're actually, if you have actually airports and heliports in New York City where Joby operates them, the fact that people have seen the arch of one in L.A. and has blown their mind, you know, then, you're going to go use the one that exists. Your firm is called ValueWorks. Traditionally, most people don't equate value with investing in flying cars. So I wanted to ask you to talk a little bit about how this fits in. to the type of investing that you guys do. And, like, how does your investment process work to the point where you buy Jobie and you say, we're going to hold this for multiple years, despite the fact that there are no, like, traditional value metrics that make sense yet? Well, yeah, I rebelled against the label value investor early in my career because I never thought.

Luckily for you, because it hasn't gone well. Well, I did eventually turn around and, and, and, and, and, and, and, and, and, and, luckily, luckily, and settle on the name ValueWorks for my firm because, you know, initially, you know, my sense of value meant you buy lousy business is cheap. Yeah. And you simply ply your craft in the bottom half of the valuation continuum, trying to find something that doesn't, isn't really terrible, but is priced really terribly. You know, what I do is actually try to find things that are really exciting growth stories,

but are trading at an attractive valuation. You know, our tagline is quality assets, compelling valuations. quality assets compelling valuations right right and you know how you determine valuation is always a little bit you know specific to a company why did i think joby was attractively priced when we stepped into it well you know they had two thirds of the share price in cash and they had invested that amount again in building their their product up to the point they had done it so i was getting in at a very significant discount to what they had already invested in building this thing. And I think that eventually building this thing will be a money-making proposition. So we're sort of doing the same

thing in Rivian today. You know, they've invested $30, 40 billion in getting their business to where it is right now. And I say invested. Some of that's operating losses, but it's still money that had to be spent to get here. And if getting here is a good thing, then being at a discount to what was spent to get here is probably cheap. I'm seeing the Rivians on the road. There were probably 20 of these EV manufacturers that came along five years ago. Most of them are gone. But the Rivian like sort of caught on. It worked. It worked. They're selling 50-ish thousand a year at the high end. I drive one. I think it's a good car. And I think that, you know, the barriers to entry to the next guys are going to be pretty harsh because there have been a couple that have gone broke and the

value of those cars has evaporated. Of course. And, you know, if you own a car and the manufacturer goes out of business, not great. Especially if they've only built 20, 30,000 over their lifetimes, right? Right. I mean, if you've, you know, if Tesla would go bank up tomorrow, someone would figure out how to service your Tesla. Right.

Right. If that company wasn't there, there's so many of them on the road, someone would service it. Right. when it comes to any other EV maker, you know, if they're out of business, your cars is worth a paperweight money. So listening to you talk about Carvana and Rivian and Joby, I wouldn't use the term like broken growth stocks, but maybe like the right way to think about it is companies that have made big infrastructure investments in their own future, but then other investors have given up. And that's when you get interested in taking a look. Because, hey, look, they

already spent the capital. They already built the thing. And the thing is there today. The thing is there. And the thing is working. It may not be working as well as you. It's a really interesting strategy because most growth investors, when everyone else gives up, they give up too. Oh, right. And sometimes you're right to give up because sometimes the business is a fail. But if the business is not really a fail and they're just out of favor at this moment and they've just had hiccups, look, we own Instacart also, which I think fits right in that. Oh, yeah. Perfect. Right. I mean, I think they're a leader. I think they've built their business. I think it cash flows nicely. And I think people have moved on because of whatever number of reasons, including DoorDash being a tough competitor. So you think 2026 will be transformational for the Evital space because finally, there will be a commercial service, even if it's just a handful of these around the world, there will finally be a cash flow attached to each vehicle.

they'll lose money, but so what, it'll represent the start of people exchanging money to ride in them. And that's like a major turning point. And the growth opportunity is pretty darn massive because... How big do you think this space could be? You know, they're going to be doing tens of billions of dollars worth of sales seven to ten years from now. It's going to be a big deal. Is that the reason to get in now is the chance that it works is the reward is great enough, to justify the risk of it not working today? Absolutely. And to fine tune it too much, you know, this price is right

and that price is wrong, could be a very big mistake. Is there a hurdle for you to add other names besides Joby? Like, what's the deciding factor? Is it more about your own portfolio and not wanting to have too much exposure to the space? No, I don't wouldn't mind having another name in the portfolio. The valuations haven't been there for us. We looked at Blade long and hard as,

a business and you know the valuation never made sense we never made the same value argument we don't make the same value argument with archer um we don't make the same value argument with with eve you know we do make that we don't make the same value argument with lucid i think lucid is you know one of the ones that might not work yeah um but we would you know we we have our eyes out for other ideas you know we walked the the dubai air show and kick tires at a whole bunch of different places. And it wasn't just because we wanted to be sure we were right about ours. It was because we were looking for other ideas. Of all the holdings in your portfolio, what do the value works investors get the most excited to hear about? Is it this?

A lot of people like Rivian and awful light a lot. A lot of people like Instacart a lot. They don't love spirit aerosystems, but they're being bought by Boeing and we're getting at Boeing really cheap. Nobody likes office property investors. that's a dead instrument we own on office properties and it's being a bit bumpy right now. But do you use that as a signal in terms of like

maybe people are too excited about this and too pessimistic about that? Or do you try to tune that out and just focus on the value? You know, I think you make a mistake when you put too much emphasis on whether there's enthusiasm for it today or not. You know, you don't want to focus on like,

oh, I'm buying it at the high and that's bad I'm buying it at the high, and that's good. You want to focus on, I'm buying it at this price, and the stuff behind it is worth this amount, and that's either more or less, and the stuff is either going up in value or going down in value, and stay with that.

And, you know, look, yesterday's price is not a good indicator of tomorrow's price. Well, fair point. I think we could leave it there. Charles Lemonetti's of ValueWorks. Is ValueWorks.com, or where can we go to learn more? ValueWorks LLC.com. ValueWorkslc.com.

Charles, thank you so much for coming. We'll keep in touch with you on Jobi, and hopefully we'll have you back. Thank you very much. It's a total pleasure. All right. Guys, thank you so much for listening. Thank you for watching.

Smash that like button, and we'll talk to you soon. Okay. Ladies and gentlemen, welcome to your favorite live stream podcast, what have you, on stock market, the economy. My name is downtown Josh Brown. If you're here for the first time, my co-host is Michael Batnik. Michael, say hello to everyone. Hello, you know, this is more your beat than mine.

I usually don't do this, but I got to say, I think we're doing some of our best work. like this really is the best show in the world i said it there we i'm comfortable it's true i appreciate the degree to which you believe in what we're doing here um guys the live uh youtube last week it took a while but it took a while i'm coming around you finally with us all right guys we hit a record number of uh viewers live i think last week um i see the chat is full today say hello to a couple of people real quick chris hayes is back i see georgie in the chat um Riley Anderson Kelly S.F. What's up? Wildcat Creek Cattle gave us the P sign. How are you? Everybody's talking about my quarter zip. This is how I always roll. I've been, I know it's

trendy now. I've been wearing quarter zips for at least 25, 26 years. So this is not me being on trend. This is just what I am. Joe Altamoros says, what's up, pounders? What's up? All right, we have a sponsor. Let's do a quick shout out. Betterment advisor solutions. Michael tell us about Betterment. That's right, Josh. Today's show is brought to you, in fact, by our sponsors at Betterment Advisory Solutions. If you happen to be thinking, there's got to be a better way to grow my RAA, you're not alone.

With Betterment Advisor Solutions, we do the heavy lifting so you can focus on what matters most, your clients. From improved service that makes asset transition smoother to fast, paper-free onboarding that delights clients on day one, we've built a digital first platform designed to streamline your operations and make life easier. Now, if you're thinking, wow, they take the paper out of paper. work. That's right. Grow your RAA, your way with Betterment Advisors Solutions. Learn more at Betterment.com advisors. Slash advisors. Come on now. Investing involves risk performance not guaranteed. All right. Michael has

something he wants to get off his chest real quick about the Warren Pyes episode that we did last week. What did you want to say? All right. Getting off my chest is a bit strong, but I'll say this. had you asked you and me and most people at the end of Thursday after a day where the NASDA, I'm sorry, the S&P gaped high by 1.5% closed down by as much, very unusual on great earnings. I would have said, yeah, probably we go lower the next few days at a bare minimum. If you told me that the next three days, the market would take back all of the losses, that you would gain 3.5% and have the best three days sessions since May, I probably wouldn't have believed you.

And the market, if you're not humbled by this market, you're a psycho. I'm so glad you said that. And while I talk, just put up this chart that illustrates this reversal. It's unbelievable. So like we're looking at the last few candles, the last few days. That big red one is Thursday. Chart off. So the point is we're talking with Warren Pyes on Thursday morning.

The show is going to air Thursday, the next day, Friday. and we have no way of knowing that we're going to have a gap up, a crash, and then the following day, we're going to start gaining most of it back. Very difficult to do a market-related show on any sort of delay. But we sort of got bailed out. Ooh. Is that? Who could that be?

No. Oh, my goodness. Wow. We have living legend Ed Yardinny in the house tonight. This is so excited. You know, it's such a coincidence. that you stopped by because we were going to talk about your research over the weekend. And it's so much better to have you here to do it.

I wanted, Ed, if you don't mind, without making you blush, I want to give you your flowers. I was saying this weekend to a couple of people, and I said to you as well, of all of the research that I read, and it's pretty much everybody, you have been the most consistently right in the post-pandemic period talking about this roaring 2020s concept and it's almost note perfect the way it's played out. And I think you drew that parallel between the Spanish flu of, I guess, 1918. Okay. And then the recovery from that leading into this roaring 2020s and they had back then the radio and some other technologies. Of course, we have AI. But it's just been remarkable. And you've stuck to it. You never declared victory.

You never said, all right, I got it right. It's over. You've been sticking with it, and it sounds like you're sticking with it for 2026. I'm definitely sticking with it for the rest of the year and going into next year. And then through the end of the decade, I'm talking about 10,000 on the S&P 500 by the end of 2029. And that's only likely to happen if the economy remains resilient as it has for the past several years, absorbs shocks, shocks remarkably well. And that'll only happen if earnings are remarkably strong. So that's my base case. I mean, I can see alternative scenarios. You know, I'm not saying that

things can't go wrong, but I have been seeing a lot of similarities with the 1920s. 1920s ended badly. I don't think this is going to end badly. I think I'll be talking about the roaring 2030s. So no rest for the weary. From your lips to God's ears, brewing 2030s, we'd be very happy with that. To what do you think the economy owes the stock market for its resilience? Is it a combination of the hyperscalers as well as fiscal accommodation? Like, we've had so much shit thrown at us over the years, and we just continue to grind through. Not perfect, of course.

There's pockets of weakness. You don't have to squint too hard to find them. But by and large, in the aggregate, we're going up and to the right. Yeah, I think there are a few reasons why the economy has been so resilient. We had a terrible great financial crisis back in 2008, 2009. We did restructure the banking system. The credit markets developed some very important shock absorbers like the funds that are always looking for distressed. assets. When a private credit blows up, it blows up in a diversified portfolio. So somebody's

going to get a haircut on their rate of return, but it's not like the banking system suddenly goes into a credit crunch. So I didn't think we'd have a credit crunch. And we didn't. We had a financial crisis in 2023 that lasted, what, about one Friday? And then by Monday, it was a weekend. Yeah, the Fed is really good at playing whack-a-mole in the financial markets and growing liquidity in the Fed put, they've kind of become real masters of the Fed put. The other important development, which I think I got was the, and I have an inside track on this, I'm a baby boomer, and the baby boomers are, all my friends are retiring, I'm not, I'm still working for a living. I got five kids and still helping them out. But my friends

who had maybe two kids are young adults, they're all cruising around now. They're going know, restaurants, they're checking out where their health care provider just to make sure they can climb Mount Machu Picchu on their next vacation. And they're spending money. They have $80 trillion of net worth. It's the... Just your friends. Just my friend. So they're not bothered by higher interest rates. They love them. Are you kidding? I mean, they absolutely love them. And they love the fact that they can't spend money fast enough because as they're spending the money, they keep looking at their net worth and it keeps going up with the stock market. So again, it's the wealthiest retiring generation ever. And by the way, for my observations,

a lot of my friends are helping their young adult kids with things like mortgage down payments, mortgage payments, helping out maybe with the grandchildren's after school activities. So a lot of that just isn't really being captured by the standard talk about, you know, there's only one kind of consumer and not really understanding the varieties of consumers. And then as you mentioned, I've been talking about the digital revolution. The digital revolution started in the mid-60s with the IBM mainframe, and it's evolved to the point where we now have AI. To me, AI is just an amazing application. It's kind of like, you know, we had Word and Excel back in the late 90s, And once everybody used them, it was like, is that all we have?

Well, along the way, we've got a lot more applications. But AI is an application that lends itself to just about every business and all of our personal lives. And I think it's just kind of starting. And, you know, technology is something where you can rent. I mean, when you go on the cloud, you can rent Microsoft Office now, and you don't have to upgrade it. You can have one IT person working remotely. So all these factors have been very conducive to the resiliency, the economy. And, oh, by the way, we do have a rather large federal deficit.

And I've been telling people, I'll worry about it. I'll worry about the debt. I'll worry about my friends of the bond vigilantes. I'll worry about all that when the bond vigilantes worry about it. Right now, the bond yields 4%. It's pretty calm. Yeah, we heard a similar sentiment from Steve Eisman, who basically said I'm on Wall Street 35 years. I've been hearing about bond vigilantes the entire time, the deficit. I'm sure it'll

matter one day. It's not going to stop me from investing today. I want to go. Hold on, Ed, you invented that term. Did you not? That's correct. Bond vigilantes. Yeah. Yep. So that's how that's how long people have been worried about the bond vigilantes. Yeah, I have a shelf just on my bookcase just devoted to books from the 80s, particularly in the 1980s, things like, you know, living beyond our means, the debt bomb. I mean, when I wrote my piece in July of 1983 and introduced the concept of bond vigilantes, I said they're worrying about $250 billion in annual deficits. Now we're talking about $1.5 to $2 trillion.

Yeah. I want to go through some of the specific things that you said to set up this roaring 2020 scenario. And I guess, and I have your charts. So we'll, I'll set you up and you could explain what we're looking at in the chart. To start with, S&P 500 operating earnings rising from 268 per share this year to $310 next year, $350 in 27, $400 in 202028, $450 in 2021. This will require the S&P profit margin to rise to record highs in the coming years. in response to faster productivity growth. And John, I think we have that as figure eight.

If we could want to pop that on screen so Ed can react to it. Yeah, that's it. Yeah, I just wanted to show that I think, admittedly optimistic, but I think a realistic scenario that could get us to the kind of earnings level that would justify the S&P 500 climbing to 10,000. I think by 2030, which gets us into the next decade, we'll get up to $500 a share. The market discounts, it looks forward, and if the market gets kind of as optimistic as I do, and in 2020, and sorry, in 2029 starts looking forward to the new decade, I think we'll be

discounting something like $500 a share in earnings, and you multiply that by a P.E. of 20, and you get 10,000, yeah. Ed, where do you get those numbers from? from those operating earnings? Well, basically I extrapolate what the growth rate of earnings has been in the past, and it's usually six, seven, eight percent is the kind of trend growth that we have. And the question is it going to be six or is there going to be eight?

And I've got more of the optimistic side. So I start out with a projection of revenues. Then I come up with earnings and I look at what the implied profit margin is and say, well, is that reasonable? And so I think this is a reasonable scenario. And again, I'm not trying to pretend that things couldn't go awry, but so far so good. Figure 10, John, forward PE of the S&P will range from 18 to 22 over the rest of the decade. Right. I feel like there's a portion of the investor population, mostly professionals, who just feel this like almost magnetism toward a 15 PE, a mythical.

P.E. that, of course, we could see it. We had, we temporarily had it in 22. And if we have a recession, you'll definitely get it again. But absent that, like 18 to 22 seems to be like the new standard range. And I hate to say it out loud because that's probably, we don't want to use that curse. We don't know what it is. Permanently high plateau. We don't want to say things like that. Or, you know, this time it's different. But look, it all depends on what you think about the prospects of a recession. The economy, since the beginning of the decade, has absorbed a lot of shocks, as I said. The pandemic, the pandemic was immediately followed by a two-month lockdown, causing a two-month recession.

The two-month recession was followed by social distancing, which affected services. Social distancing then was followed by, well, we had a war. Russia attacked Ukraine. So in 2022, 2023, we had a spike in inflation because of the war and because of supply chain disruptions. The Fed came in and went from zero to 550 basis points on the Fed funds rate. Everybody said that's definitely cause a recession. I disagreed with that. I said the Fed's going from zero, which was the abnormality. Five and a half percent wasn't the abnormality. And I kind of took a stance that the economy would be resilient. And then what? Well, then, you know, nothing happened, no recession when the Fed raised interest rates. And now we've had tariffs. So we're testing the

smooth-holly thesis that, you know, the idea that this is going to end badly the way the 1920s ended, which was really something that happened in 1930. And here we are with the economy made an all-time record high. The challenge today, of course, is the labor market. Kids coming out of college are finding it very, very hard to find a job. I think part of that is AI. The baby boomers are retiring, but not at 65. They're kind of hanging around, and that's creating fewer maybe job openings. But whatever is the problem in the labor market, I think the fact that GDP has been so strong is proof positive that we're kind of in a productivity boom. And that's the whole thesis of the roaring 2020s, like the 1920s, is that there's a technology-led productivity.

boom, which generally speaking, there's nothing wrong with it. I think maybe there could be a couple of years where people have to kind of reskill themselves to find jobs, but productivity is like fairy dust, better growth, lower inflation, better real wages, and a better profit margin. Yeah, and I think just that concept of having the boomers still living and spending in their 70s as though they're in their 50s. And supporting grandchildren, like people in their 30s would have supported their own children. That's a really big element, especially in places where we live like Long Island, Ed. And I think that's, I guess it's a demographic thing that was

hard to foresee 15 years ago, but that's sort of how it's playing out. I mean, look, there's no doubt that there is an affordability issue. It's become a hot political topic of late. We know that you know, you go out to a restaurant, you go to a grocery store, you buy, I mean, auto insurance, I got five kids and the youngest ones are in their 20s, and insurance just for one is $4,000 a year. I mean, there's no way kids can afford that. So I think there's a lot of parents helping out their young adult kids. And, you know, that's kind of helping to offset the affordability issue for some people. Of course, there's a lot of people that are doing very poorly here, but from a macroeconomic standpoint, when you add it all together, the consumer

on balance has been remarkably resilient. I want to get to the result of the exercise. Figure 11, you have the S&P 500 on track to rise to 9,000 to 11,000 based on the earnings expectation and the potential multiple that we talked about by the end of 2029. So that's 10,000 by the end of the roaring 2020s, which you note would be up from 3,230 at the end of 2019, representing an increase of 210%. And you ask rhetorically, is that amount of gain delusional? Not really since it was exceeded during three of the previous decades. Right.

Since the 1920s, there have been three roaring decades in which the stock market gained over 200%. So what you're laying out here. is not only feasible, there's precedent. Yeah, take a look at, can you flash figure 12 on the screen? Here's, uh, there we go. All right, walk us through this. Yeah, I mean, those, that's straightforward.

It's, uh, the, uh, the decade percent changes going all the way back to the decade of, uh, the 1920s. And, uh, we've exceeded 200 percent, uh, you know, a few times here. We did it in the 20s. Uh, we, we did it in the, in the, in the, in the, in the, in the, the, in the, in the, you know, the late 40s. And then... Almost did it last decade.

Yeah, almost did it last decade. So the bottom line is that there's nothing unusual about a roaring stock market. We've had it before. And just because I make the allusion to the roaring 1920s doesn't mean that it's that unique. I want to finish by just telling you, it's so refreshing to listen to people of generation who are optimistic about the future. I think there's sort of like a disconnect sometimes when you're talking to people who have seen a lot of history and you would expect them to be more optimistic given everything

that they've witnessed in their lifetime, but it goes the other way. In many cases, they sort of feel like the golden era is long gone and all that's ahead of us is misery and strife and class warfare and, you know, all the problems that we read about each day, but you have very notably gone the other way. You've been right from an investment perspective, and I think you've sort of served as a beacon for people that want to hear somebody

with wisdom and experience say something positive. So on behalf of all of our viewers and listeners, I want to say thank you for that. Can you tell us about quick takes and why people should check it out? And we're going to post a link to that while you're talking. Yeah, well, on Wall Street, I basically provided macroeconomic and strategy research to institutional investors.

We had a lot of individual investors, financial advisors, asking us for a product for them. And so we created quick takes. It comes out almost every single day. And it's basically very market-oriented. We all get, know these macroeconomic indicators and political developments occur. And what we try to do is relate him to the market. the house of the market. Same thing you do, you both.

But, you know, we just put in some more charts in it and kind of have a basic theme that we're pushing. So, yeah, anybody who wants to have a look, just go to your Dennyquicktakes.com and give it a try. All right, your Dennyquicktakes.com, check it out. I read it whenever it hits my inbox. And once again, Ed, on behalf of the viewers and listeners, thank you so much for surprising us.

tonight and walking us through your your uh your take we we very much appreciate it thank you all right happy thanks happy thanksgiving good all right wasn't that wasn't that a delight wasn't that legend legend it's nice to hear from somebody with an optimistic take i agree um any and is any of that something that you would uh i don't want to say like take issue with but um if you were to push back on on that i have an idea of where i would push back where would you where would you where would you if anywhere. I do think the S&P is going to 10,000. So there wasn't anything that he said

that I thought was so outlandish, but I'd be curious to hear your take. I think that a market or economic or both sort of event could just delay the timetable. I do think, I've said to you for the last 10 years that I've known you, I think I'm going to live to see Dow 100,000.

So like S&P 10,000 we're at seven is not so outrageous. Maybe the timing doesn't work and it doesn't happen by the end of this decade because we have like another bare market year, like a 2022, perfectly fine. I don't need it to happen by the end of the decade, I guess, would be my comment. And I don't think that Ed would disagree. We have these like minor meltdowns.

They don't feel minor in the moment. I shouldn't minimize the impact of them. But I feel like those just delay the inevitable. And so if we don't, if we don't get S&P 10,000 by New Year's Eve, 2029, I think ultimately it comes anyway. Can I tell you something? Go ahead. The S&P is where right now?

6,800 or something? Okay. So 6.8 to 10 in four years is what Kager? 67, 65. Okay. So check this out. Dude, it's way less than you think. It is survey.

It's 10% a year. I mean, it's a lot. It's a lot. It's above average, but it's not outrageous. Barely. It's barely above historical average. Literally barely. All right.

So let me get this straight. You PGing this for us? No. Personal guarantee. Listen, I could, I could, what's the Tommy boy line? Whatever. You know what I mean. Yeah, no, I love it.

The Tommy boy line? Which one? I could shit in a whatever and guarantee it. No, no, no. You could get a good look at a T-bone by sticking me. head up a bull's ass. No, it's guaranteeing the brake pads. Or you could just take the butcher's word for it.

That's what it is. But that's the line. I know that is a line. That's not the line that I'm thinking of. That's the best line in the movie. Anyway, that is the man. Let's move on to, let's get bearish. So it was, we are three weeks removed from Sam Altman,

inadvertently pulling the pin out of the grenade and chucking it into the market. Thanks a lot, Sam. Thank you, Sam. Although, I guess the wall of worry that he introduced, I think ultimately is a good thing. But throughout this chart, so since, since those comments, Open AI's major suppliers, this is from Sherwood News, investors are under stress. We're talking about SoftBank, Microsoft, AMD, and Oracle. I just saw after the close Deirdreboa post another chart that was similar showing Google exposed infrastructure versus Open AI and the divergence holy mackerel since he said what he said has been pretty incredible yeah so it's like it's like this interesting thing it's like this game of thrones-esque like the opening montage of game

of thrones that they play during like the opening credits with the different kingdoms rising up and then you think about like there's the kingdom of alphabet and all of the companies that are in deals with alphabet which invidia does supply them by the way which we're going to talk about at the end of the show. But like this, this, like, idea that the kingdom of alphabet is currently rising. And, you know, we talked about this with Kramer the other night. Like, we don't have a stock price for Open AI. I do not think that would, that stock price would look like alphabet right now. I just don't. And I can only judge, right? I can only judge by the last few companies that Open AI has signed these massive bilateral deals with their share price.

prices are behaving in such a manner that tells you the buy side doesn't believe the sell side that these earnings from these deals will actually materialize. That's it. It's a huge dichotomy in the market right now. And to ignore it would be sort of ridiculous. I wish we had that stock price. We don't. Dude, how much did Meta fall? Meta was down 25%. Invidia, as of this morning at the lows was down 16%. Core weave as a proxy, obviously, much smaller company, but forget about it. I think Open AI, if it was public, it's down at least 30%. Microsoft, dude.

Microsoft is the ultimate Open AI proxy on the publicly traded stock market. Just look at Microsoft versus Apple price action-wise. These are, effectively, these stocks became sort of interchangeable as the two largest, most earnings, reliable, Mag 7 names. And Microsoft and Apple do not look the same. Microsoft is suffering as a result of being the company that is currently consolidating Open AIs losses into their, into their quarterly statements. Like they're on the hook.

They're working with them. They're benefiting, but then they're also on the hook. John, draw up that, Mac 7, rolling six today. Skip the next chart just because we're on this topic. Look at this. So shout out to Sean, who was able to... This is a great chart by Sean. To figure this out.

was not easy to make. So we're looking at the correlation within the Mag 7 over the last 60 days. And prior to the most recent episode, they were all moving in unison for the most part. It was one big trade. And then the something changed. And they're all being treated very differently as they should. It's great. Just looking in the chat, a lot of opinions on this topic.

See Paul Breezy says open AI publicly traded stock would be the team of. version Microsoft. That might be extreme. Georgie says Nvidia is an eight-year roller coaster. Yeah, mostly up with some spills along the way. Apple wins all the time, according to Mark. I don't know. Look, I think, you know what the really interesting question is, does that dispersion continue into year-end? Or is now the time you pull the trigger long on the lag of Mac 7s? I think they all catch a bit. so do I That's been the history

Listen People are still underweight There's a meltup at the year And coming I think obviously You know who could be wrong But I think that One thing that is not

We're not talking about anymore You don't Here's what doesn't happen During a bubble You don't get multiple compression Throw this chart up please From chart kid This was the forward PE

Of tech On before Nvidia reported It was 32 times And then a day two later. I'm sorry, a month later, my bad. My bad. This is a month later. A month later was down to 27 times. This is a, this is a, let me stop you. The gray dot is the new forward PE. You don't have to stop. That's what I was saying. Chart off. Well, I'm trying to figure it out. No, you don't have to figure it out. It's self-evident. Everyone who's, everyone who's listening

and watching. Everyone's listening to watch. They're very smart. They're very smart, Josh. I need a second. We had a, we had a, you are a slow visual learner. I've always said this. This is a healthy, and now we could say it's healthy in hindsight because we've taken the losses back. But this is great stuff. We've got lots of doubt. Bring it. It's great. Show the doubt is wrong.

Can I have that chart again just so I could fully absorb it? This is the biggest, the tech sector, just eyeballing, looks like it's the biggest re-rate, lower or higher of all the sectors. That's right. Healthcare and Staples have re-rated higher since October 29th. Health care in particular. Health care in particular. The stocks have rallied hard is the other way to phrase that.

I mean, that's basically what we're saying. Yeah. Okay. Really interesting. Not something that happens in a bubble. You don't see multiple compression. Romsa 675 says Michael Berry lowered the forward P.E. L.O.L. I don't know if I don't know if I totally disagree with that.

No, no. He definitely introduced a lot of doubt. Nobody was talking about their depreciation schedule before him. I don't think. So he elevated a surface to the- Chanos maybe, maybe, but they're, you're right. Like, Barry, very notably through a rock into the pond and we're still experiencing the ripple effects.

And maybe it ends up not mattering or maybe it does, but the market is paying attention. You know what's great? Like, how does this end? I think we say that a lot as if it ever ends, as if the market doesn't open the next day and the next week and the next year, it never ends. But getting back to how we open the show, that sort of price action is, let's not gloss over that. That's like seriously bearish.

When you have a blowout earnings report and the market just says, nah, no. Like, me, my point is this, we're three days removed. If we're six months out and that was the top, I wouldn't be shocked just because that is very bearish price action. Now, hopefully the last three days have put that in the rear of your mirror, but it's not over. It's never over. You know when it's over?

when Barry does his Cassandra unchained substack for two weeks and people stop paying attention and these stocks all reverse and make new highs? Yeah, yeah. That's when, but your bigger point, which I agree with, you know what the difference is between us and let's say listening to a sports podcast on the ringer? The season ends.

The game, the season never ends. The game is never over. one season bleeds into the next there's no dividing line in between the two it just it's the never-ending story I think it's what I love about it so I try to make this point on the air today we were talking about alphabet

hitting $4 trillion in market cap or coming damn close and it's just like dude think about how many storylines within AI and the Mag 7 have come and gone this year and think about how many went in 180 degrees

the other direction. In April, Google was finished. Now, Google is the king of AI. In May or June, what the hell is wrong with Apple? They're falling behind an AI. Why can't they just buy perplexity? Blah, blah, blah. Now the stock's in an all-time high.

There's like, Tim Cook won't even mention AI on his quarterly calls. How about who's going to beat the Microsoft Open AI combo? Nobody. Now those stocks can't get arrested. So whatever we're at Oracle, Oracle went up $200 and then gave it all back a month later. Like no one's talking about trillions of dollars coming and going in one company's market cap on the back of an announcement. So whatever narrative you have about these individual kingdoms within the AI Game of Thrones, just to understand they still rise and fall.

And we might be saying an entirely different thing about any and all of these companies six months from today. It happens all, it happens. It's frustrating, but it's also pretty cool. And it happens all the time. All right. I wanted to do some stuff on strategy because I think this is a really big story. I am aware that the market cap is just not all that big anymore. But I still think it matters because as recently as a year ago, basically, micro strategy

and Michael Saylor had given birth to a brand new, I don't want to say asset class, but a brand, category of publicly traded company like so at some point you had the first ever oil and gas trust publicly traded at some point you had the first ever real estate investment trust at some point you had the first ETF like new things do get invented and then stay forever and people act like like like they came along the time of the dinosaurs they've always been with us no along the way we invent things. Strategy a year ago looked like they invented a new category where it's a company that raises a ton of money, equity and debt capital, and accumulates a digital asset as quickly as it can. Faster than it dilutes its shareholders. Faster than it dilutes

its shareholders, thereby becoming a category killer, a must own stock. And we had a few limitations. But where we are with strategy, and we have a video of Sully asking Tom Lee, who has also launched a digital asset trust, Bitminer, which is for Ethereum like strategies for Bitcoin. But let's play that clip. Let's bring up guys, if we can, MSTR. That is the company formerly known as micro strategy, now just known as strategy. The stock's down 50% in three months, Tom, it's down about 65% from its highs in the middle of July. Is micro strategy down because Bitcoin is down or is Bitcoin falling in part because the strategies of the world, the Michael sailors of the world, have to sell the crypto because their equity is going down. What's the chicken?

What's the egg? Yeah. Well, again, you know, because of my world and research, and on Bitmine, we are really plugged into all the trading desks and all the clients that trade. Anybody who has a sizable Bitcoin long position, okay, let's say it's more than a billion, they have very limited ability to hedge it in crypto derivatives, like calls. The max they can do is maybe 5% of their holdings. And then if you go to traditional CME exchanges, their contract sizes prevent someone from hedging a billion dollar portfolio. However, someone can use micro strategy's options chain, which is so liquid, to hedge all of their crypto. So micro strategy is essentially absorbing all the hedging pressure that the crypto industry is trying to do

to protect their Bitcoin longs. So the reason micro strategy is a leading indicator, it's actually the only convenient way to hedge someone's long is to short micro strategy or buy puts. That's what we're seeing today. This is the kind of stuff, Tom. It's one of the main reasons that we bring you on because you understand what I would consider the engine oil of the stock market, right? We know how the engine works or people think they do, but inside that engine, there are gears, there are pistons, there are things that are occurring that for 99.9% of our audience, they don't do this for a living. We get it. This is a really important interview. I'm going to let you go, Tom. We are watching micro strategy or strategy, watching Bitcoin, and we're watching possibly 77,000,

which you think might be kind of a washout period, correct? Yeah, that's right. Tom DeMarc, who is an advisor to Bitmine, has been really giving a lot of insights. Yeah, he's watching that actually micro strategy at this level here probably is when you want to ratchet into the longs. And Bitcoin may be just a few thousand dollars lower. Okay, that is, of course, friend of the show, Tom Lee. I love Brian Sullivan, by the way. He's very good.

Such a great dude. I saw him the other day. I was out in Englewood Cliffs for something. I hadn't seen him in probably two years. He towers over me. I don't know if you realize. He's like six, seven. March, man.

All right, anyway, what did you think about the point that Tom was making that a lot of the pressure on micro strategy is just because it's like the easiest way for people to hedge big money. in in in in bitcoin itself it's like a the options chain is more liquid and and a quicker way and that ends up putting a lot of pressure onto the digital asset treasury stocks yeah i mean i would defer to tom on that i think that he knows a lot more about this than i do it the story makes sense it checks out but the bigger point um i think if you're selling micro strategy down here or a strategy like i guess there is a hypothetical world with this thing unwinds the need to up their Bitcoin. I think it's a lot, though, in the way Bitcoin is today. I don't see that happening. I don't think strategy is zero. And I'm not buying it, but I definitely wouldn't be

selling it. I think they can raise money. I think, I think, I think if this, I think everyone's talking about like some mythical level, 72,000 where sailor gets a margin call and he has to sell. I don't think that's how it plays out. I don't think that, I don't think that number is accurate. Even if it were, even if it were, I think he makes a few phone calls and sells more I think there's a lot of people that are dying, dying for Sailor to go to zero and for him to have to do not like him for him to have to liquidate be forced to sell to meet margin, whatever, whatever. I would be moderately surprised? Would I be shocked? No, I wouldn't be shocked. But I don't think that's how this plays out. I don't think he's going anywhere. And to your point, I think that he would, he would, I think it's more likely that he has the ability to reach for a life, a life vest. So do I? Then he go to zero. I don't see that. So do I. All right. Let's do some charts. Here's three years of micro strategy or now we call it strategy performance. Effectively, this was, I don't know, a $10 or a $20 stock. They come up with this idea to convert this software business into a Bitcoin accumulator. And you can see the result. It was, I wrote about this on my blog the other day. I forget the number that.

I came up with. I think it was a 3,000% return between when a 3,050% return from when they announced in August of 2020 through last Thanksgiving when this thing became like one of the biggest stocks in the market. I mean, it was just absolutely wild. There were no other stocks in the U.S. stock market in that time that did anything even close to 3,000% is 7x. And I think Nvidia or 10X, excuse me, I don't know, excuse me, 30x.

Yeah, wait, what? I'm sorry, 30X and Nvidia did 10X over the same period. So, like, it truly was one of the great winners. Now we're going to look at the NAV, which is the net asset value versus the, the, market cap. Michael will probably make fun of me for some reason that I don't understand, but I'm looking at this in billions of dollars. And I'm just trying to get to...

So catty. Look at you. I don't know. Maybe I'm looking at it the wrong way. But what I'm trying to figure out is like the market cap of the stock versus the value in dollar terms of how much Bitcoin they hold. Yeah. And it is now trading at 0.93.

So it is a discount to its underlying. holdings of crypto after having traded as high as 2.8 times it's Bitcoin. What are your thoughts? Okay. So I wasn't going to make fun of you, but what I was going to do. But now you will. But, but as point out, that I took your chart and I enhanced it. Next chart, please. So this Josh, what a dick. All right. Go. No, this is a better visual. You are a visual learner and I fixed it for you. So this low visual learner. You are a slow, yes. This is a, this is a, This is the spread, John Toggleback, this is the difference of these two lines. So what we're looking at, to your point earlier, is next chart, please.

Micro Strategy used to trade at a monster premium. The market cap was almost $80 billion more than the value of the Bitcoin that it held. And now it is the opposite. It is, the market cap is $6.4 billion less than the Bitcoin that it currently holds. Now, of course, it's a moving target because the price changes. But I think the point is to what I said 30 seconds, two minutes ago, I would not be selling it down here. It's over. Chainos coverage trade.

It's over. It's at a discount. Can the discount widen? Yeah, sure. Why not? But like, I don't, I want to be pressing that here. And if you ask me, again, you have to hold this for, for two months. Do you buy to sell it?

I buy it. I think the problem with just looking at market cap versus underlying Bitcoin ignores some other things about the enterprise value. They have preferreds out there, which are dilutive. And basically, they're not debt, but they represent a future obligation. The company has to pay, make, I think it's 8% or 11% or whatever the number is. They have to make pretty big interest payments on that preferred stock. And they have a value. And then there, of course, there's also a traditional debt. And I wrote about this on my site. And I don't want to go through the whole post that I wrote but um i think the bigger point that i was trying to make is not a criticism of people who

own strategy or uh told you so i think i was just trying to make the point of like when you have fomo and i definitely did while this thing went up 30x everyone does of course like you you wouldn't be human if you didn't look at that and say i should have just bought it um so i definitely felt that but my point the point i was trying to make is like there is a cure for fomo and it's simpler than you think. A lot of times the cure is just time. Just letting things play out. Nothing is really as great as people think it is when it's going up 30x or 10x. Like there are always, there are always flies around everything. Like nothing's perfect. Nothing's pristine. So sometimes just waiting a little, a little while, and then things come back around. And the irony is,

If you had FOMO watching MicroStrategy run up 10, 20, 30X, well, now it's at a discount to its underlying Bitcoin. So if you loved it so much, why aren't you buying it? And this gets me to another point, which is like, we don't really want the asset that badly. We want the performance of the asset. And when the perception of that performance continuing goes away, it's like, well, who the hell wants to buy this thing? Yeah. And that's where, that's where I think this stock is right now.

What do you think about that idea? I think I, no, no. It's perfect. Perfectly said. I could not agree with you more. The answer to FOMO is give a time, whether it's the Oclo or the rigatones of the world. Like, you have to accept as an investor, especially in today's market, which is never not going to be like it is now, okay? The, the beehive of investors, the people that are able to bring a story to life, that's never going along. way. With the advent of social media, there will always be stocks that are 10xing that you wish you owned. You have to just accept that that is part of the game now. And you're either in that game full time and you accept that it's there and you're not playing it or you're not. That's it.

And so you just have to deal with it. Now, the really great news is that you don't have to play that game if you're not built for it. Nobody is making, nobody is forcing you to. It's a young person's game. Now, getting back to strategy, this is the more interesting part of the story that we haven't discussed yet. So, J.P. Morgan, who, listen, let's be honest, they're no fans of crypto, say strategy is at risk of exclusion for major equity indices as the January MSCI decision approaches, quote. What is that? I'll tell you right now.

With MSCI now considering removing micro strategy and other digital asset treasury companies from its equity indices, outflows could amount to $2.8 billion if micro strategy gets excluded from MSCI indexes and $8.8 billion from all other equity indices if other index providers choose to follow MSCI. So this is probably going to hang over the stock, I would assume. And if it doesn't get kicked out, then it will be a huge lift off of it. But this is, I don't know that I want to get in front of the story either, to be honest. This is a big one.

You know, it's funny here. The analyst that J.P. Morgan writing this made a mistake. It would not be outflows. it's not a fund. Microstrategy is an equity. When people sell Apple, we don't say Apple had outflows. Say people liquidated their stock or they sold it.

It's not, it's interesting. Like the J.P. Morgan person writing this is like thinking of this like an ETF. Right. It's not outflows. He should have said like selling pressure from passive index funds or something like that.

Instead of outflows can amount to $2.8 billion, it should be people mimicking the index might sell $2.8 billion worth of strategy stock. Interestingly, also, they're calling it micro strategy. Yeah, that's, so that's obviously. That's kind of interesting, too. They know what they're doing. They're definitely, they're definitely like pushing his face in the dumb.

And we have a chart. Is this worth putting up, or is there nothing new in here? No, no. All right. Okay, let's move on to the next segment, which is brought to you by Pimpco ETFs. To learn more, check out Pimpco.com slash ETFs. All right, Josh, chart of the week? What are we, what are we saying?

Chart of the day? We'll get there. We're not saying either of those things. I want to start out with some of our charts and then I'll bring their work into the conversation. So Ben posted this on his site the other day. The number of years between 40% bare markets. And the reason, and there are obviously a litany of reasons why we haven't had a great crash that's persisted or blown past 40% in 16. years is because we haven't really had a sustained recession.

2020 was a quick man-made recession. Obviously, the fiscal impulse stopped that in its tracks. 2022, there was pockets of a recession, but you can't have a real recession with the unemployment rate at 4%. So, however, I had Chartkid show me, well, what about all of the 20% drawdowns? I made him start at 19% because we've had a few of those over the years. But this chart looks so much different. We've had a ton.

I think we've had five in the last six years. So, yes, it's been a while since we've had a 40% bear market. And that only happens in recessionary bear markets. But look at all of these 19% drawdowns, effectively quick bear markets. There's been a ton of them. Yeah. I like this chart as a financial advisor. I like the 19% chart better than the 40% bear market charts unless and until I run into

the person who's obsessed with 1929 slash 2008. And those people exist, but that's not the normal person is not walking around saying it's almost, it's almost Lehman o'clock. That's like, that's not normal behavior amongst most investors. I think most investors accept the fact that they were going to be bare. their markets. They don't accept, they don't accept the fact that we're always on the verge of of a depression. Right. So I like the second chart better showing the 19% drawdowns because A, they're almost always about to happen or have just happened. And B, the length of them is not

that long. The first chart shows, oh, shit, we're due, right? We haven't had any pain. And the second charge is like, no, no, no, no. There's been plenty of pain. We've had plenty of bare markets along the way. So which brings me to this chart from Pimpco. So, The big distinction is this. There are two types of equity drawdowns. And we've spent a lot of time over the years talking about these two types. There is the non-recessionary equity drawdowns, which on average are a 17% drawdown. They last five months.

And then there is the recessionary equity drawdown. The GFC, the dot-com box. The knockout punch. The knockout, the one that ruins a generation of investors that completely leaves you with PTSD, not believing that things will ever get better. And that lasts an average of 11 months, which sounds light to be honest, but that's 27%. And of course, the point that Pimpco is trying to make is that is when the treasuries really add ballast to the portfolio.

But absent, absent a recession, we're not just going to fall 40% because stocks are overvalued. Do you want to apologize for referring to this table as a chart when it's clearly a table? Sure. Okay. Put that back up. really good stuff. Everybody should screen grab this from their phone or their computer, wherever they're watching this. I feel like this is such a great reference because the next time somebody's talking about equity, pullback, drawdown, correction, whatever

nomenclature, like answer me one thing. Is it a recession with that drawdown? Or is it just like the normal course of stock market pullbacks, which happen all the time, because the difference could not be more stark. Think about, forget about the depth, 17 versus 27 percent. The length is the killer. And five months, an average of, let's just say five months average, meaning some are way longer versus 11 months. That is a huge game changer in terms of people's ability to get through it. And how, what changes they might have to make, if any and so if you know we're in a stock market pullback but the economy is held up like you should not be waiting for the knockout punch to be delivered because it's just not what normally

happens well said my friend okay i think we did that justice uh great table not a chart not a chart all right we're going to finish with this invidia versus alphabet stuff um just because i think it tremendous implications for the year-end. Michael and I are both on record saying, if they're going to run the stock market into year-end, they'll probably bid for all of these mega-cap stocks just because they're liquid. Nobody yells at you. Even if they go down, you're not in trouble with your investor base as a fund manager. They lend themselves to borrowing against, like, there's just a lot of reasons why these stocks will probably get bought as a group, but it won't It doesn't necessarily have to play out that way.

Let's pull up Google versus Nvidia year-to-date. Google, I'm told by Sean and Char Kid Matt, is on track to have its best year since 2009. It was up 102% then. It's up 69, nice and a half percent this year. And Nvidia is up 31%. It looks like a loser relative to alphabet, but it's, you know, it's a pretty good year for any stock.

I think most people would agree. But this is a really interesting thing being set up here. I wanted to ask you, do you think a lot of the buyers in Alphabet are pulling money from a market cap? Yes. And I know you're a big money that's to come from somewhere, guy. Yes. And I think it's overdone.

I think the ratio, the whatever you want to look at it, the spread between Nvidia, I am generally a, I don't like when people say those alligator draws have to close because like I think that's normally Charlotte and bullshit. But I think this is too much. you want to reverse the reversal yeah i think it's too much do you want i would i would much rather own invidia for the rest of the year than jemini i'm sorry than google um okay next chart google is now more expensive than invidia how many people do you think know this two two people you and i all right google's forward p e minus invidia's forward p e for the entirety of the last 10 years

Because NVIDIA has been the more expensive stock. And you can see by that those gray, that gray kind of stochastic below, that's just measuring the degree to which Google has been a discount to NVIDIA. And now, for the first time since 2016, Google sells at a premium on forward P.E. To NVIDIA, that's pretty, that's pretty insane. Yeah? I love this chart. So normally the price drives the narrative.

but I think that in this case, the narrative actually is driving the price, which is then also driving the narrative. So here's where we are today. Dan Gallagher at the Waltry Journal said talking about Google, the company offers a level of AI vertical integration that even the other big tech companies can't quite match. The recently launched Gemini 3 is a perfect example. Google trained its own frontier AI model on its own networks using its own TPU chips that it designed in house. That effectively makes Google, this is a good one, that effectively makes Google into a

combination of Open AI and Microsoft with a bit of Nvidia thrown in. Wow. It's good, but it's aggressive. So to which, to which the Nvidia Newsroom, because this is all, there's smoke here, the Nvidia Newsroom knows what's going on. They tweeted today. We're delighted by Google's success. They've made great advances in AI and we continue to supply Google. invidia is a generation ahead of the industry it's the only platform that runs every AI model and does it everywhere computing is done invidia offers a great greater performance versatility and fungibility than ASICs which are designed for specific AI frameworks or functions it's such a sub-tweet it's such a blessed you know the southern people they say

bless a bee bless your heart bless your heart yeah that's like how they say go fuck yourself to each other right but oh bless bless bless his heart Yeah. So Invidia drawing that distinction between GPUs and application-specific integrated circuits or ASICs, which we did a whole episode about that. I don't know, six months ago, a year ago. Can't get into it again. But just this idea, TPUs have been part of the Google story since way before we were talking about generative AI. So it's not a brand-new breakthrough technology. They've just gotten very effective at finding ways to be more efficient. on cost, plugging up some of the things that they're doing with their own with their own silicon. And I think it's admirable. I think it's a good sign for shareholders that like Google is playing offense and is got their foot on the gas. And if they do a big deal with meta, yeah, maybe it's a wake up call to invidia about pricing and, and that they might not have the pricing power that they think. And so to me, the selloff in invidia seems sort of rational.

I don't love that they felt the need to answer this. I'm not quite sure. And I also don't love what they did over the weekend, which is the last thing I want to get into. They sent a memo around to the sell side, like to analysts covering the stock, responding to Michael Berry and other short sellers, talking about depreciation schedules.

Let me just read this because paraphrasing, it doesn't do it justice. This is Barron's quoting from the memo. Invidia also responds to claims that the current situation is analogous to historical accounting frauds, Enron, WorldCom, and Lucent that featured vendor financing and SPVs. Invidia, quote, this is the company. Invidia does not resemble historical accounting frauds because Nvidia's underlying business is economically sound. our reporting is complete and transparent, and we care about our reputation for integrity.

Unlike Enron, Nvidia does not use special purpose entities to hide debt and inflate revenue. Is it weird that they felt the need to do that? Like literally invoke the name Enron next to the word invidia. I don't know if I love it. Listen, I don't, I think the wording is weird.

Like, it's not a fraud because they're underlying business economically sound, I don't think the two are mutually exclusive. I think you can have fraud with a good business, but whatever. I don't want to parse their words. The market took $700 billion away from it. I'm not shocked at they responded. Like in other words, like what are they supposed to do? Just let their shareholders get pummeled and not say anything. The narrative is driving the price action and went from $5 trillion to $4.3 and they felt the need to respond $700 billion is a lot of market cap to go up in thin air. over allegations, they responded.

Bro, I'm not Enron, you're Enron. I mean, it's not, all right. Last part of this. Invidias customers depreciate GPUs over four to six years based on real world longevity and utilization patterns. Older GPUs such as A100s released in 2020 continue to run at high utilization and generate strong contribution margins, retaining meaningful economic value well beyond the two to three years claimed by some commentators.

How much do you want to bet that CoreWeave asked them to say that? One of their biggest customers, definitely among their most vulnerable customers to this type of innuendo, how much you want to bet the comms people representing Corweave, who let's just assume are among the top crisis PR firms on the planet at this point, how much you want to bet they demanded of their supplier. We bought all this shit from you, and now people are saying it's obsolete. You need to go out there and say that it's not. I would bet almost any amount of money that that conversation took place somewhere in Palo Alto or San Jose over the last couple of days.

What do you think? I would agree with you. People are human and that's how humans behave. This is a developing story. You guys know, we will, we will, it's very fluid as it gets. We'll stay on it. All right, let's do make the case and then a mystery chart and we'll get out of here for the night. health care.

I don't think this is a run-in-the-mill what's called rotation that's just like going to come and go and we're going to laugh about it. I genuinely think it has legs because of the level of participation of the components of the XLV and then seeing follow-through in the midcaps.

And there's just a lot happening here on the earnings front that justifies it. It's not just a re-rating. It's not just people being like, oh, these stocks are too cheap and getting bullish on them for 10 days. I understand that type of rotation.

I could be wrong, but I think this is more. Eli Lilly just became the first trillion dollar name in the category. The first healthcare stock ever to its join a group with only nine other names. The Mag 7 plus Berkshire,

plus Saudi Aramco, now plus Lilly. And that's a broadcom to. And that's the list. There's nothing else. This is a health care stock. I don't suggest that that means all these other stocks are going to go to a trillion. I'm just making the point. People are looking at that as the upside potential if they own a company that hits a really big category like diabetes and GLP 1. So Lily is Zepound and Manjaro combined $19 billion in the first. nine months of this year in sales. Wait, what words did you just use?

Zepound and Manjaro. What are those? Those are the weight loss shots and the diabetes shots that are part of this GLP1 terseptide monster. Those two drugs combined did $19 billion in the first nine months of the year. They're now bigger than Ketruda, which is Merck's flagship cancer immunotherapy. And it's the best-selling drug in the world right now. So analysts are talking about $100 billion in annual sales by 2030.

And at a trillion dollars, Lilly is two-thirds the value of meta and worth more than Walmart. Did you know that? Wild. Double the size of Johnson and Johnson, which is the closest to Lilly in the whole pharma industry. So double the size of number two. I also want to tell you that this is one of the greatest turnaround stories. in the history of the U.S. stock market. Ten years ago, people were saying this thing should just go private.

It's just worthless. They have nothing. And out of nowhere, they found this metabolic market, and they ran with it, and they got approvals, and they launched, and they marketed. And it's just an incredible come from behind story. Eli Lilly is a 150-year-old business. The founder was fought in a civil war. And 10 years ago, this stock was nowhere. and look at it now.

And I think that's really exciting for equity investors. Let's do these charts really quickly. This is Eli Lilly versus Merck, J&J, and Pfizer. It's like another planet. Next chart. This is the market value as a bubble versus

all of the other bubbles on the chart. There's nothing even in the same category in terms of not just, this is a multiple of sales. Yeah. It's revenue and market cap. Revenue and market cap. Eli Lilly is 10 times sales.

Nothing else is close. Yeah, I mean, and it's not as big revenue wise as J&J, which is a $90 billion revenue company. So it's not as big, but it's growing much faster, which is why it's getting that. multiple. Next one. Last one. This is Eli Lilly's market cap. Another way to look at this at a trillion versus the 15 largest biopharmaceutical companies. Oh, I like this visual. This is clever. It's a good one, right? Just like to just like to wrap your head around the relative size. And you see

like Sanofi, Pfizer, Gilead, Novo, Roche, AstraZeneca, Abv. Like none of these are even in the same ballpark right now. Dude, I haven't looked at these regeneron, biogen, Gilead, Jane Jace, at all time. I haven't looked at these charts in literally years. All right. So here's my make the case then. We're not saying buy Lily. For best stocks in the market this week at CNBC, I wrote up three companies that are on my best stocks list. Sean and I did a dive into this instrument measurement and instruments group, which is really interesting stocks. Here's the first one. I want you to do a beauty contest. Metler Toledo. Oh my God. It's a buy. It's a fucking buy, right? It's a beautiful. What a breakout. It's a beautiful. Okay. Thermo Fisher, same sector. This is the

biggest one. This is a $220 billion. It didn't break out yet, but what do you think is going to happen? I don't know. I would maybe chop around 600, but higher. But do you like the base? Yeah, dude. It's almost perfectly bowl shaped. You got a gap fill in there. Okay. Um, that's TMO. Here's Agilent, which, uh, A, this broke out today. Looks great. Yeah. It's going higher.

Uh, wish you liked the best. Uh, this one looks the cleanest to me. You like Agilent? This is a $50 billion market cap. Adulant was a spin-off from Hewlett Packard in 1999. Um, so it's got a long history trade. What, what, Josh, what, like, what is the overarching story? Like, why are these working after years of being?

AI! No, no. No, no, no. Hear me out. Hear me out. These are ARR businesses now. They used to be sending a salesperson out to a doctor's office or a hospital to sell them a bunch of shit. And now they sell the razor and everyone needs to buy razor blades. All this measurement equipment, once they get installs in these medical facilities all over the world, universities, hospitals, clinics, once they get installs, the ARR just kicks in and they start to look more like software companies. And that's what's, That's how they've transformed their businesses. I got a few more health care on the best stocks list. Sean threw them in just for the hell of it. Biogen. Yeah, unreal.

I was just looking at this. Unbelievable. IQV. Look, look, look, this is. No idea. Just buy it. Shut up and buy it. Here's STE.

This is Starris. This is an Irish company with an NYSC listing. This is about to go. like very obviously RSI not overbought anyway it's interesting to see the degree to which health care names have totally taken over

best stocks in the market list and it's fun I think it's fun and it's a big sector is it the fourth biggest I mean it's not it's some of these are gigantic companies that you don't have a lot of these in other areas

it's a big sector okay or maybe it's not I don't know I think it is all right I had a mystery chart for you Josh I jumped the gun I sent this to John at, I don't know, 2.30, and it did give back a little bit of its gains. So it doesn't look quite as good.

But chart on, again, looks a little bit less impressive after the close. Sorry, what is it? I haven't, hold on. You don't cut me off during a message. I'm talking. I'll tell you. This is a stock that you made the case for a few weeks ago. And I said, it's a compelling make the case.

I forgot to buy it. But this is a stock, and this is a clue that I'll give you. This is a stock that's been left behind. Nobody really cares about it. There's no expectations of the name. Michael, all I want to do is zoom, zoom, zoom, and boom, boom. That was funny. Look at how I nailed this trade.

What do you think? Well, like I said, the stock closed at a much more. Do you know that it went up for the reason I said it would? which is even more satisfying throw that back on the stock closed at $86 so it's not quite as good but back to you Josh why did you say it was going to go up I lit like I telegraphed this and very publicly I said you're jumping out of a basement window with a parachute on did this is a company that the forecast was for 3% revenue growth they did 4.5 good enough yeah all the metrics people cared about were higher gross margins were up um

They have this segment of the enterprise business, which is companies doing over $100,000 in revenue with them. That was up, I think that was up 9%. Like all the important stuff on the enterprise side, forget about the video stuff. They're, I mean, we're customers. Their AI products, I think there was a 4x increase in AI companion, which is one of their verticals. So I can't sell it. I think it's going 100. Oh, you bought it?

I've owned it for, I don't know, a month or two. Oh, oh, credit to you. I made the case and I was long. Great call. Great call. Great call. So, all right. Hey, I get a lot wrong.

I got one right. Okay. Guys, that's the show. Thank you so much to everyone who joined this live. We really appreciate you. Thank you so much. I want to wish all the pounders a very happy Thanksgiving. We are going to get a show up for you guys on Friday.

We're taking a little bit of a risk in that we're not taping it Thursday night because we're not psychopaths. So it'll be a little bit pre-tape, but it's going to be awesome. Another returning champion and a fan favorite guest. So look for that. Animal Spirits never misses.

You'll get that tomorrow morning. And thanks so much for all the ratings and reviews. They go a long way. We appreciate you. Happy holidays. We'll talk to you soon. Farming is rewarding, but it isn't always easy. The Farmer Wellness Initiative is here to help.

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