The Compound and Friends - There's Never Just One Cockroach

Episode Date: October 17, 2025

On episode 213 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by Bill Baruch to discuss: current market trends, the outperformance of gold and silver, how retail investors are winning, non-profitable tech, earnings growth, and much more! Today’s episode is sponsored by State Street Investment Management and SPY, the first US-listed exchange traded fund. Visit https://statestreet.com/spy for more information. Sign up for The Compound Newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

What part of Chicago did you grow up in? I'm from Maryland. Oh, you're Maryland? I grew up in Maryland. I didn't know that. Good old Rockville, Maryland. You're a commander's fan? Yeah, that was a brutal, brutal loss.

To the bit, yeah, well, it happens. I mean, well, makes it worse is against the team in Chicago. So I go to work, hear it from everybody else. Brutal loss, though. We're going to go to a commander's game, Michael and I. Oh, yeah? A couple weeks. Yeah, we're going to go to the Lions game.

The stadium's a piece of shit I hear. Can't be worse than the Metlo's. They're supposed to move back to D.C. how is the stadium is garbage though right it's been a while it's it's it's inconvenient to get to just like soldier field is in chicago met life is the absolute oh yeah i went to a jets game last year yeah the nothing's more inconvenient than the giants i left stadiums early and i was glad i was able to get out of there yeah it was a monday night football game against the bills i think they hit a did they win i'm just kidding no bills won but i think i think rogers threw

at hill mary at the end of the second into the first half that hit um the The Gen Zs want to have an office Halloween party. We do. What does that mean? Like physically in the office? Can I buy a 12-foot skeleton? They want to come in in in costumes. What do we do?

Make it. I'm not going on. I'm not here. I saw. Wait, what day would, what day would have paid? The day before. Thursday the 30th? Yeah.

All right. Halloween costumes. Yay. Okay. Wait a minute. Thursday, October 30th. Do you want me to put it on Home Office? Do we have a show that day?

Inside Out characters. You can be inside-out characters. You can be in. angry, my gosh. Thursday. You know, Halloween was on Thursday last year, too. 30th. Was it?

I know it was an issue. No, it's not Thursday, though. The actual Halloween's Friday. You guys dressed up with Dan. Even better. I don't know dates. I don't even know when some, when the Thanksgiving, it's the same time over year.

November. Is it, is Thanksgiving? Oh, it's the Thursday? Last Thursday. Last Thursday. But the date changes. Duncan, you see, uh, PTA's new masterpiece yet? I don't know.

I want to. Anybody? I'm going this weekend. No, not yet. You liked it? I love it. It's a good movie, obviously. I mean, it's hard to deny it wasn't a good movie.

But what the fuck is wrong with people? PTA has brain-worn people. Like, he's tricking all you guys. It's not the best movie of the last decade. It's not even close. People are going nuts. No, one battle after another. People are going nuts.

It was a good movie. Not everyone agrees that it was even good. I had a good time. I've heard some negative comments about it. But it's, it's, it's, it's, 14 hours long. There's some really great stuff in there. But people are like, legitimately,

people say it's one of the best movies the last decade. What? I did hear a lot of great things before it came out. It's a good movie. I really loved it. So I loved it as a movie-going experience.

I saw it on giant I-N-X-screen. But I would not even say it's in his top three. Like the director. And it's definitely not a top movie. It had its moments. But it's so long. And I just, I don't get the PTA fever.

My kids saw Gabby's dollhouse on Monday and they were raving about it. I never heard that. What is that? It's a kid's cartoon. Should Michael watch that? I think my kids see movies all the time. But it's been a minute.

There hasn't been a good move for kids. Well, you wouldn't take your kids to that movie either. No, I got 8, 6, and 4. You have three girls? Three girls. 8, 6, and 4. Oh, man, you're in it. You're like in it, in it.

Are you in the burbs or the set of... Yeah, Burbs. Glen Ellen, West Suburb of Chicago. I was telling Josh, it's like right next to Wheaton. And Wheaton's like this quiet financial hub that not many people realize. You know, I asked about Whedon this morning because we had somebody reach out from Whedon

who's, I said how far is it from the city, but it's apparently it's a little bit too far. With no traffic, it's 35, but, you know, in a... Traffic, yeah, an hour, you know, could be... With no traffic is hilarious. Like in the morning, you mean? Yeah, yeah, well, I mean, hey, in the commodity space, I'm getting down to the office and if I'm heading down there,

I catch the 4.50 a.m. train. So if I remember driving... Yeah, it's wild. Are you in the gym at 3 o'clock? You're psycho? You're one of those? I hit that at 5 a.m. 5.30.

I won't get in the car in Chicago anymore. I just did the blue line. Yeah. I'm never doing that again. Blue line. It's where we came from, the name. I lived, my first house I bought in the city. Oh, is that what it's named for?

Duh, right? Down the street from the blue line. And then you take the blue line and you get off in Jackson, which is next to the Board of Trade, and that's where our offices. What's the best Italian restaurant in Chicago in the city? Don't tell me about a place in the suburbs that I won't go to. Okay. Old school, I love taking the team to Lasca Rola.

And that's right off the blue line. and west um you know off grand street what what neighborhood is that i know some of the neighborhoods not all them it's uh called west town river north i know river north yeah and then if you're going like newer age matta verde is phenomenal okay i haven't been to either these places um what's the so i took michael to gibson's just because obligatory um took me i feel like what was on your date we went together but i had been there before you so i took you see how that works yeah okay took michael to gibson's we had great lunch there it was great I mean, we didn't like do it.

Which one, though? Downtown or did you do that? No, the Magnificent Mile one. Okay. Like the one that's by all the fancy shit. Yeah, the rush in division. And I've been to Joe's Stone Crab for steak. Did they call it?

Yeah. What do they call it? Joe's, that was great. That was great. It's good. And I've been to RPG steak. RPM. That's where my favorite spots.

Wait, what's the RPG, rocket propelled grenade? Why is it called RPM? You know, I wish I knew. But it's Bill Rancic and Giuliana Ransick. And so when, I think if I got this right, when he won the Trump show, what you call it, back in the day, the first one. The apprentice. He designed the Trump Tower and they had connections to Chicago and did the RPM Italian. Oh, that's where I ate.

I didn't need a steak one. I ate it the Italian one. Yeah. What's the one that sits like right over the river in like a glass cube? That's RPM seafood now. Oh. Yeah. Whatever.

I liked it. So many RPs. But no, we always do our holiday party and at RPM steak. I love the place. All right. But so if somebody's like, I'm going to be in Chicago one night and I want to have a great steak, where do you send them? RPM steak or the Gibson's, the new Gibson's Italia, which is in downtown, like the business

area, the loop, just right outside the loop. I like Italian steakhouses. That subgenre. They just reopened Pietro's here in New York, which is one of the most famous, maybe the earliest version. In Austin, you ever been to Red Ash? No.

It's like Italian Steakhouse. Okay. Flames. I like that kind of thing. So that's what you would do. Gibson's Italia. Yeah, I love the Elmolino Prime. I told you.

I always go there. We love it. Il Malino, you can't go wrong. Yeah, El Malino Prime, the steak. Yeah. Yeah. So I get the steak in a little bit of... I'm getting all fired up over this.

It's almost too much for me. All right. How are we doing, boys? I think we're looking good. All right. It's an important man. All right. Oh, we're going to be a little.

Very confident. What is he? Two-thirty. All right. Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor. Today's show is sponsored by State Street Investment Management and SPY,

the first U.S. listed exchange traded fund. With SPY, investors gain liquid and cost-efficient exposure to the S&P 500 index. You can't predict your future, but State Street investment management can help you create it. Getting there starts here, access the power of the S&P 500 in a single trade with spy. Visit state street.com slash SPY for more information. Before investing, consider the funds in investment objectives, risks, charges, and expenses. Visit state street.com slash I am for a prospectus containing this and other information. Read it carefully. SPY is subject to risks similar to those of stocks.

All ETFs are subject to risk, including possible loss of principle, ALPS Distributors, Inc. distributor. Welcome to The Compound and Friends. All opinions express. by Josh Brown, Michael Batnik, and their castmates are solely their own opinions and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Ladies and gentlemen, welcome to the Compound and Friends, the world's best investing podcast.

It's not even close. You're listening. You already know this. We have a first-time guest with us. Michael and I are so excited to chat with this young man. Young gentleman. Bill Baruch is the founder and CIO of both Blue Line Capital and Investment Advisor and Blue Creek Capital Management, a commodity trading advisor, located in Chicago, Illinois. Bill has extensive experience in the financial industry as an advisor, trader, and manager. He began his career as an...

All right, who wrote this? It's way too much already. We're already at the... Was this you? You wrote this? I just dropped it in there. I dropped it in there. You've done many things.

You were a male model? Yeah, exactly. You were at a firm that was bought by MF Global. How long did that last? How long were you there for? I think it was three or four years before it blew up. You haven't met Corzine? I never met Corzine, but I will tell you, they went public, and the stock never went higher.

I think the high was the day when public. They threw this massive party. What is this 2010? I want to say 20-08 when they bought it. Oh. No, when did it go public? I'm trying to remember. When, MF Global went, I think, public in 08, 09.

Okay. Yeah, and when that would public, they did this big massive party at the opera house. That was the old time high. And they start buying stock for the company, too. They forced you to buy stock and never, never up on it. Yeah. What an unbelievable situation. That's one of the largest blowups ever.

What were you doing there? Eighth biggest big pros. What did you do wrong there? Yeah, right. No, I was at a trade desk and I learned a lot there. It was, I mean, there was really good people in our division and we had obviously nothing to do with what Corsine was doing. But that was back in the day at, you know, where order flow had to go through the floor or your people are calling it, calling it in. And so I, this is the CME.

Yeah, CME. So you're calling NYMEX. You're calling the board of trade. You're calling the CME. And there was some stuff electronic still, but options all obviously going straight to the floor. And so we, you know, we had a lot. a lot of metals traders at our desk. And we actually, there was, there was people that, that were trading the NASDAQ bubble that moved on to the metals because that was the last

big bull market in silver, we had 50 in 2011. So you're watching a lot of people, a lot of order flow. I was able to learn a lot, what works, what doesn't work, saw people blow up, had some people make a lot of money and, you know, learned little things in the business and had a good mentor. And it was, it was a great experience. Your commodities experience help you, help you better understand like supply demand, fear and greed when it pertains to stocks, I would imagine that it would. It's all the same shit.

It's all the same people. It's like the same people issues. Like the way we buy, the way we sell, what drives people to make decisions. I feel like it's not that different. The only difference I think with the equity markets is like the flows that have to go into the equity markets

compared to the commodities. That's great point. Yeah, you're not getting those flows. So commodities, there is like some elasticity that has to kind of come back in. I mean, right now you're not seeing it in like silver and gold, but that's always the fear. It's like when, when does that supply come out? Is who has silver that is going to start selling or whatever commodity it might be that

that's moving? Is it wheat or is it crude oil? You know, I remember the days in 2010 crude oil went to $150. And so we're at it was a broker shop, MF Global. You're opening accounts day after day. Everybody's calling people are, you know, taking home equity lines out to buy crude oil at the time. You know that's, that was like the top. That was all time high and grew up.

But not right. And that aspect of it, not so different from what you see with tech stocks like at the top of a tech bubble. Yeah. I have this theory. I never wrote about it, uh, where I feel like the stock market in the 70s was a commodities market. Yeah. Because you did, because to your point, you didn't have that persistent inflow coming in every two weeks with 401k money and asset allocation money. It was stocks were treated like commodities.

and they were way more volatile and the characteristics of the stock market then looked more like a commodity market and today they don't at all much more cyclical names leading I mean who were the large Exxon, AT&T, GE when was Kodak? Was that the 80s? But yeah, that was, I mean, the names

completely different in the makeup of the largest But I just think people, the way people thought about stocks back then, they thought about them similarly to the way they think about speculating in commodities. 50 years later and market has gone mostly up and we have the advent of the 401K

and now I just think people think differently about they look at it more like a place to stash away savings rather than just to trade they do both now. Proven results. I mean, especially after the 2000. I mean, you've seen 10, 15% average annual returns. So people, they know they're missing something

if they're not invested. It's proof. The only guy saying buy and hold in the 70s is Jack Bogle. Yeah. Now, everybody says buying hold. So that's a very different. After you blew up MF Global, what did you do next?

You know, I left and worked at a, so I wanted to, I never wanted to work for, you know, a big shop ever again after that happened. It was a bad experience, you know, seeing that play out. And so I started with a firm with another gentleman. And, you know, I end up starting my own firm, Blue Line Futures in 2017. In 2017, when my partner is Oliver Slope. and I got together and we wanted to put out good consistent research for clients and kind of take that brokerage move to the getting that content out. I was doing videos every day, talking about the S&P and trading ranges. We're putting out daily research. That has grown. We put out a lot

of content with our help. You're very good at the videos, the walking videos. You're like the only one that can actually pull that off. Most people look ridiculous. You're good at it. Back in the day, it used to be, I just stood in front of a like a wall, a wall, a wall, drop and did it in the office. The walking is better. The walking is better. It's more casual, keeps it tighter. But yeah, but as a company, Blue Line Futures, we put out a ton of content.

You know, I still write a note every day that covers the S&P levels, the trade. Phil Struble, who's here listening. He puts out metals research every day. Yeah, shout to Phil. Phil's in studio. He's not really listening to you. He's on his phone. So he's already heard enough from you today.

Yeah. You got a lot of agriculture content that goes out, but a lot of the, just across the board. Okay. Awesome. Love it. I want to start with the private credit stuff that seems to have infected the rest of the stock market today. It's been a while since we've had one of these financial market driven risk off days. I'm not saying it's good, but it's sort of refreshing.

It's a change from the relentless monotony of AI stocks being up 2% every single day. Been boring. Yeah, I mean, there's a lot of money has been made. But now it seems like we're in a new phase. people are really paying attention to this stuff. What do you think? Yeah. I mean, you're getting some two-sided volatility after Friday's tweet, and you're starting to see

a play out. And again, I think it's that old cliche saying when the shore, you know, comes in, you know, who's not wearing shorts? And I think you get that volatility happening and you start seeing some of that stuff show up. On Tuesday. Where are the cockroaches? That's all I want to know.

On Tuesday, Josh and I were talking about financials. And it's what you see in a hell. healthy bull market. You saw Black Rock hit in Altamai. You saw J.P. Morgan, not quite, but great earnings. Goldman, just solid numbers. But what we didn't do on the Tuesday show was divide or normalized, like what's it doing relative to the S&P? And actually, if we did do that, and especially on a day like today, the XLF divided by the SPY is breaking down like hard. Like pretty disgusting. This is... That's not great.

What timeline is that chart? This is daily. Okay, wow. That's, dude, that's ugly. Yeah. So it's down 2.7% today. S&P's down 70 basis points. Like, this is not good.

Yeah. I would say it definitely not good. And it's been about three, four weeks. Some of the big names, the big money sitter banks, Goldman Sachs, they put a high in. And they, yeah, they jumped up a little bit after report. The banks always jump up a little bit after the report when it's a good report. But it's where they are a week later is. is what I always like to think about it,

because you get that excitement of the report and then it comes in, you know, usually the next two or three days. So I think the next few trading days are going to be critical for what that sector is doing. Well, this one is sell the news, clearly, right? Let me read this to you. This is Bloomberg.

A pair of blowups, oh, on Wall Street, everyone's a friendly rival until the losses start. A pair of blowups in the credit market have sparked a war of words over whether banks or private credit firms are better positioned to weather a broader downturn. So Jamie Diamond said there's never one cockroach famously now. It's been repeated eight zillion times.

Mark Lipschelts from Blue Owl Capital fired back saying the issue was in loans that banks led. So Diamond should be scouring his own books if he wants to squash more bugs. He did that on TV. I saw that. He's sort of a badass. He's got like a little Jason Statham thing going on this dude, right? He came on TV with no tie. like I'm not a bank or what

I do like I do And he's like no you're a fucking cop coach I respect the horseshoe look This guy's got the The Costanza bald But like growing out on the sides I respect I should not He's not cropping it

He's not a phrase like yeah I'm bald with hair on the side So what? What are you gonna do about it? I'm billionaire What do you make of this stuff Is it just noise or is it noise That potentially could lead to something

I think you can lead to something But it's it's more More seismic I think it would have to get deep I got a good stat. I, one of my research guy here, shout out Dan White. 19,000 private equity funds, and there's 14,000 McDonald's locations. There's more private equity funds than McDonald's.

There aren't enough. And, you know, so a lot of people are jumping in with little experience. So I think when you get that, it's, you know, it could become bigger. So my take is for now. And I said this last week, I'll say it again. I'm obviously a tourist. Very complacent. A tourist here.

It's not nothing. It's not nothing, but the question is, like, is it really something? And of course, we will know with the passage of time, that stat, it just smells a little shitty. Like, I need it to be normalized a little bit. It sounds very odd. There's 19,000 funds. How many firms are there? How many of those funds are $4 million?

Like, I think the point, the point, but the point is valid is that there is a lot of activity. Yeah. In private markets, obviously. But the implication of that stat is, to, me what's important. Let's say there are 19,000 funds. That's too many, all chasing the same opportunity. The question is, if how many of those funds can you get your money out of if you could? And then if you could, who goes to the exits? There's no liquidity in these funds. Exactly. And that's the point. That's the point. But to me, you look at that number of funds and you just

picture the competition to write loans. Because if you raise money, you want to make loans. If everyone else has raised money also, which is the case, it's trillions of dollars, and they all want to make loans, what happens? Well, you start cutting some corners. We'll do it faster than the other guys. Okay, great. We'll do it with less covenants, less protection. Okay, that sounds great too.

We'll do, like, all of a sudden, and I'm not saying that's definitely what happened. That's what people are worried about is what happened. But this story is fraud, allegedly it looks like. Which one? Now we're on to. Now we're on to five different isolated incidents. So hold on. It's first brands and it's tricolor.

Is that what else? Have you not seen what Zion's bank is saying and Western Alliance is saying? I was not on the news today. They are writing off loans and suing people saying that fraud has happened. And that's why the regional is getting crushed. So here's what we know. We know that the market is not going to underreact, right, to any negative news. It's going to overreact.

Maybe or maybe not. Maybe it is underreact. And we'll find out. With that stat that you could also say, all right, well, there's 26,000 mutual funds and 14,000 ATFs on making up those numbers and there's too much money. And yeah, maybe that's sort of the whole point of all of this is that there is too much money. There's too much money chasing too few assets. Valuations are high.

The prices of everything is high. There's a lot of money in the system. Well, I go back to Josh's point, too, where you do have this number of funds? I mean, maybe you don't know the size of each one, but that the money's coming in, the money has to be going somewhere and has to be used, which forces poor investment decisions. And I think that's where the problems happen. They can't sit on cash. Yeah.

That's not the type of business that they're in. They're in the business of allocating the money so that they have the ability to bill on it. And you will do things if you need to bill. What do we got here? That was Kobe. He showed me you out 100 on his test. Oh, that's so cute. Was his test on private credit?

Because if not. It was senior secured. John, give me this chart. So I was talking to, I was talking to Cali. today in our research channel and Cali watches like all the spreads and I thought this is interesting.

We were saying like there's no spike in credit spreads in junk versus investment grade or junk versus treasury, but interestingly, this is triple C versus double B spreads. So the junkiest junk versus the quote

unquote highest quality junk. And here's something starting to, it's nothing. It's not It's not crazy, but it's also not zero. I don't know. I look at the regional banks, business development corporations, look at the junkiest junk. And I just say, like, maybe the market's overreacting, but how could we be so sure? Well, the other thing, the idea is on the regional banks, are they loosening their lending standards in order to win these private credit deals?

And is that going to come back to haunt them? Probably some yes, some, no. Right. And we'll, we're all going to find out. We're all going to find out together. there. Anyway, we don't know what shit about this. Let's talk about a stock market. I think it's, I think it's, I think it's notable because other people are reacting. I don't think it's notable because the whole world's on fire. I want to ask you about the

metals world. So the best performing industry group in the stock market this year, metals and mining, up almost 100%, which is insane for an industry group of stocks. That means some of them are up way more than that. Are you like blown away by this? We've never seen this before. I mean, I am, you can't not be surprised at the velocity of gold is up 60% on the year. Well, the velocity of the move that's taken place just over the last three to six weeks is, is absurd. I mean, it's in a good way. That's got to be a little surprising for anybody. But, I mean, you go back to the turn of the year and you start seeing what was bubbling up in gold.

And we get to 3,000, and you see Trump policies, and you see the de-dollarization. you see the central bank buying consistently central bank buying and basal three you know which actually took effect in july of 2025 so it's now officially a tier one asset on central bank balance sheets so you look at that i mean our thesis was gold's going to go to 5,000 we just didn't think that this is going to happen this quickly you didn't think it would happen by Christmas yeah okay that seems to be the trajectory that we're on yeah no one's selling well well there is no reason to sell i mean the most of the buying is coming from central banks and they're putting on their balance sheet, and it's a move away from the dollar.

And there's, you know, we think there's proof that China has understated their gold reserves by 20%. You think they're quietly accumulating gold? Oh, yeah, certainly. Okay. And so I think if gold, and I've sat down with a CEO in the gold mining space, and he asked me, Bill, what would make this, what would ruin this, what would ruin this uptrend in gold? Yeah. And I said at the end of the day, I don't know what would. because the massive selling that would take this away would have to come from central banks and

they're not selling. What we could get, though, I mean, we could certainly get a 10%. And this at the time, gold was at 3,500 to 3,700 or so, it was just breaking out. And yeah, we'd get a 10% move, you know, probably if just de-leveraging. Maybe at this point it could be a 20% move, de-leveraging. I was going to tell you, the only thing that ruins this is a global recession where these central banks are forced to sell gold in order to do stimulus in their own countries, because that is literally what ended the gold bowl market in 2011. European, sovereigns, Asians, or they all, so like... But how does that change if it's a tier one asset now on their balance sheet?

It is as good as cash. Yes, but if you need the money, you need the money. Yeah. The other thing that could end it is if people get too excited at gold. Yeah. Like big leverage coming in on the long side. I don't know. Philo probably has like better, better guesses than I do.

But like it eventually does end, but it doesn't have to end for 10 years. Like there's no... It could be a big cycle here right now. It could be a big deal, right? Definitely. And I think what could end it. I mean, there could obviously be a number of things. And you look back even COVID.

And I remember that it was like the first week of March, that Monday, coming out of the oil, Saudi Arabia and Russia oil news and oil is down 10 bucks. Gold made a high that morning. But then within weeks and the COVID shutdowns, it was, I think, $300. I think it was $1,700 to $1,400. And so gold really sniffs out inflation. and it may not react how you would expect during the inflation. Like in 2022, Fed's hiking rates, the dollar is strengthening, gold was whacked.

But it smells inflation. So it's going to see it and it's going to react prior to the inflation. So I would say what we're seeing right now potentially could be more inflation, but then you're also getting the GDPs of Germany and Japan and things like that. That's why the dollar is actually rising in over this last week, last, last couple of weeks when gold's been breaking out, which is a pretty interesting phenomenon. That's rare. Yeah. I wanted to ask you, why is silver rallying so hard? And then I'll ask you the same on copper. What's happening there? What's borrowing rates, lease rates? You can't get the physical

silver. And they're trying to... So explain, we don't have like a hardcore commodity trading audience. Explain what you mean by that. Well, I guess the best way to put it would be, you know, lease rates. So in order to move silver around, it's, it caught in order to get the physical silver. You can't, you can't moving from spot to spot in order to get it to London. And there's lease rates that in order for borrowing costs, they're surging because you can't get the physical silver. So why do what who needs the physical silver? Uh, in order, you know, it's in order for processing, industrial uses and, and then you're also getting demand for buying. I mean, it's more than 50% of the use of silver now is industrial use. I thought you were to say Jared. Yeah. Okay. Well,

but I thought you, I thought you're going to say teenage boys in Massapegla. All right, go on. Yeah. I mean, so I think it was a little unique that China went into its autumn festival two weeks ago. And, you know, they are a supplier of silver. They're not exporting necessarily. They could be a driver. If they decide to export silver, put it down. But, you know, there was a lot. There was definitely an alignment with those lease rates surge. It costs more money to get your hands on silver, but I guess best way to put it, around the time of the autumn festival festival. So there's a scarcity. Scarcity. Scarcity of silver for sure, right? And tons of demand because silver typically rallies with gold, but has higher beta. It usually follows gold, too. Yeah, it usually follows gold, too. So this has been sort of bubbling under the surface.

And I think once it got above $40, there's always the conspiracy theories that the banks are selling paper silver against the physical, things like that. But I think once it got above 40, the ceiling was lifted. And I think it changed the dynamic of it. Silver just made its first inflation. adjusted high since the Hunt Brothers failed attempt to corner the silver market in 1980. I thought that was remarkable. Like, what a moment.

Just to let you guys know, it's the physical back ETFs over in London. Those are the ones that need to secure the silver. So as they get more investors in those ETFs, the demand that they, the amount that they got to show on the investment demand turning into physical demand. Yes. Wow. Duncan, I'm impressed. That, of course, was Paul Tudor Jones.

Thank you so much for being here, Ptj. We appreciate that. How do you play the upside in the metals? Because I know you're both commodities and futures guy, but then I know you own Newmont and you're involved in the mining stocks, too. Yeah, so let's start with the futures. I mean, the interesting, the CME group has done a really great job of making microcontracts over the years.

So because futures trading is of notional value. And, you know, so the main contract of silver is a 5,000 ounce contract of silver. You know, so at $20, it was a $100,000 contract. Now, at $40, it's a $200,000 contract. At 60, you know, so, you know, it gets, the actual, the value of the contract's larger. So you're, the volatility you're withstanding is larger. Oh, in dollar terms, the swings are huge. Yeah, they're huge.

So now there's a micro contract that's been around for a few years now, and it's a thousand ounce contract of silver. Even at that point, you've got the thousand ounce contract of silver now is what is the notional value of what silver was. I mean, so options, volatility has surged. You know, one of the ways, I mean, again, we were invested in, and I run a metals called metals alpha. It's a CTA. It's an investable program. We, I mean, we've been in this pressing the gas on this most of the year. And right now we've lifted off the gas because the volatility, we are, we run our strategy with looking at the average true range. And the range, and the Ranges have just been massive.

So we... The longer the rally continues, the larger that ATR becomes, which raises your potential risk for when it reverses. You then there's a blow off top. It's going vertical. I mean, I think we go to 70. I mean, we can, I mean, there's calls for 100. I think it was Bank of America.

What's that on silver? Yeah, silver. Yeah. So we put on, when we got out of the futures and we're just kind of, we, we are tiptoeing in the futures because the ranges are $2 to $4 a day. And we don't want, we don't want to get caught in a big down draft if it does happen. And we, you know, call options. We did some call spreads a couple of months, about a month ago.

They got to January 65, 75, 75 call spreads. You do the diagonal caterpillar box? No. But no, something simple that we can capture if it does have that. Why a call spread? Because if it has that bananas move where it just goes up to $5 to $10 over what it has been, if it keeps this pace up, we're able to capitalize on it and know what our risk is to be invested in it.

Oh, so you can put yourself in a box. Yeah. And get the upside, but not. be fully exposed. Yeah, a $10 wide spread, $65, $65,000 goes out to expiration end of December, and initially we're buying those from $0.20. Who else is doing that trade along with you? You're seeing a lot of funds doing that? I mean, I think a lot of funds may use options to manage the risks in this type of environment. That's where my expectation would be. So we're managing, you know, we look to protect our downside as well. So we're doing different proprietary

strategies managing Delta and tail risks. Now, is it true that only silver can kill a werewolf? That in a, what is it, a... Or vampire. Vampire is a wooden steak. Yeah. All right. I want to ask you about copper. What the hell is that about now?

That's its own, that's like, that's its own thing that's going on. Copper's... People are shocked by this. That it's lagging? Yeah. Yeah. Well, just like, wait, I don't understand. The rest of the world stocks are outperforming the S&P 500.

China's stock markets up 38% this year. Why, like, why are gold and silver rallying this hard and copper is not reacting to better than expected everything overseas like it normally does. Well, copper was up over five and a half. And if you remember, it was like the July 30th Fed meeting. And that was when Trump was really going after Powell a lot. And so right when that Fed meeting was dropped, the White House announced that the copper tariffs,

but they're exempting the cathode. And the cathode goes in the refining process to make the copper. And so that actually copper fell historically, 20% that day. Yeah. So it really hasn't. And there's a lot of damage in the chart. But, you know, and then most recently, like yesterday, you're hearing about more exports

from China and they're going to ramp up their, ramp up their copper. You just don't have the same scarcity profile with copper that you. And I think, I think you will over time. But when you have a 20% drop the way it did, there's a lot of damage to that chart. Even somebody like myself that wants to invest in it, like I've only tiptoed in it because, you know, it just feels like there's a lot of damage to the upside. and it's going to, you know, a lot of dead bodies overhead, you know, look at it that way. There's a lot of supply technically overhead.

So I think it has to chew through that. I mean, if the metals in general keep going higher, I think copper is going to have to join the party. But physically, I mean, you look at the data center investment, you're looking at other things that are going on here, the infrastructure spending that's going on here in the U.S. or around the world, the emerging market economies, you know, stepping their game up and investing in their economies, copper is on going to continue to be on high demand, but you're not really getting that growth out of China either as that demand. I think just early in the week, it was a negative CPI number, again, surprisingly in China. So you're not getting that growth.

And that's been a headwind as well for copper. You still like gold and silver here? By putting new positions on in gold and silver here? So you're letting it ride, but you're not pressing, you're not pressing the bet. Yeah, rolling up some stops. But I mean, in our metals, you know, our mining alpha portfolio that you mentioned, we own new bond, we own core. and Barrick, no more than 10 names is the idea in that portfolio that's concentrated.

And we launched that portfolio in July. And I mean, they were already up, you know, half, only half as much as they are now, but which was already a lot of that time of the year. We couldn't, we didn't have time to get all that cash to work. I was going to say, like, they're not letting anyone in. Yeah. So we got, we got about two thirds of the cash to work. And so any pullbacks, we want to be, we do want to be buying.

Are you telling people that you intend to hold those forever, like be invested forever? or would you say to the people, look, this is a gold bowl market and it's in a one for the record. It's an amazing one. But if it ends, we don't want to own these companies. Well, if you look at it, they're not good companies. They never have been. Well, there's, I mean, right now there's going to be tons of free cash flow, free cash flow. Yes.

It doesn't last. And yeah. But then what the phenomenon here is, is you have gold prices higher and you have input costs, energy, and they have to purchase and use. Oil prices are lower. And so that's a tailwind to the business. I think that's something that makes it a longer cycle. And I think we could be a year and a half into what could be a five-year cycle. Just wait until the copper miners discover quantum computing and then boom, just easy.

Extract the copper. You haven't really thought about AI in the gold market yet. What's this purple chart? What are we doing here? What we're doing here is we're talking stocks. All right, let's go. What do you got? All right, Vanda, has some great data.

showing retail activity in the stock market. And what they're showing is that the highest amount of one-day inflows was last Friday. Wait, where is that? Josh, this is called a chart. And the black line is the stocks. I'm looking at the purple line is the volume. I'm looking at the bars. Yeah, there you go.

You got it. You got it. Wait, but we went down. They bought. Okay. So they bought the debt. He's new here. They bought the debt.

The stock market went down on a lot on Friday, and retail buyers went all the way in. And it already worked until today. So let's talk about the stock market. Chartkin, Matt, did this thing for us. When the S&P is up 7.8%, drawing the line to make it work, I suppose, going into the fourth quarter, the average return for Q4 is 7.7%. And in fact, going back to 1950, there's never been a down quarter when the market is up. this much going to three quarters now n equals i don't know enough 15 or so thoughts well i i think

one of one of the tailwinds to a fourth quarter rally is the seasonality that you get in august in september and we never pulled back in august in august in september so you know if we start october lower yeah it's easier to finish higher i i do think we're going to have a strong finish the year and i think i think the mag seven can really can really uh i mean some of those names are you know not done much this year. And I expect strong earnings reports. And I think they're going to be a leader to finish out quarter four. But, you know, the tough thing is, you know, it would be, you know, we're seeing a lot of volatility right now. The VIX is above 20. It's a 24, 25 here today. And that leads to further volatility. I'm surprised we haven't seen more downside this week. And we may. So there's going to be

a little bit of a, you know, rebuild a little bit potentially. But at the same time, every time this market is sold off, it hasn't been down for more than one day or two days. So I think it's going to, we're in this little vacuum of there's there's no there's no government data um there's you know we're waiting on earnings and there's you know no one everybody's kind of waiting starting next week yeah we're waiting no one's blinking yet so we sort of need it we sort of need a Microsoft report to to to get us to stop looking at regional bank charge offs how much more did they spend on on AI right yeah i'm gonna guess i'm gonna guess a lot more um this is a good one we could we could skip the the next seasonal one The bottom line is, absent some news that knocks us, of course,

and maybe it's the cockroaches, the managers are going to chase, right? The people that are underinvested chasing Tijuana that just happens every year. This is some good stuff from Warren Pyes. So we are in a, I guess, a blackout period where companies cannot purchase their own stock. So Warren Pies has a chart that shows the typical annual cycle for S&P 500 buyback volume. And of course, there are blackout periods and we're in one right now. But the- Well, they have to report earnings, and then it's came back on.

But what he's showing is that once the buying picks back up, he breaks it down. Statistically, you do see pretty significant positive returns for the S&P 500 companies. Oh, it's noticeable. Right. Stocks have a better period of time during the buyback phase. I mean, it's obvious, but the point is we're coming up to it. Continuing bid. I like that idea.

Nobody's like really talking about buybacks anymore. I don't know if we're making a record this year, are we? You know why? Because it's AI is just sucking the oxygen out. It's all anybody wants to talk about. And every earnings report, they're talking about raising their buybacks, too. So the buybacks are there, for sure. Yeah.

So, Bill, does this make you nervous? We are obviously in a retail us having a moment. You can call it a mania. Some of the returns at some of their favorite stocks, quantum computing, nuclear, uranium, just scary charts. Flying cars. All that shit. So trading Thomas 3 on Twitter shared that retail has been buying calls for 24 consecutive weeks, which reached a record high last week. I mean, there's just no chill.

You know, I think there's certainly, and that's what's made me nervous this summer a little bit. I thought we'd get that seasonal pullback. And, you know, I love what we were able to accomplish in our portfolio into July and August. And so it made sense for us, you know, to trim a little bit and kind of wait and watch a couple rounds, have some flexibility. And the situation hasn't deteriorated at all. And I mean, September just kept going. Kept going. And so I think that's the interesting thing.

You get these retail flows that keep pushing it higher. But at the same time, I mean, you look at what you buy that, I mean, those many calls. I mean, there's the put call ratio has hit a level that it does cap the upside returns in the near term. So I think that's something that, you know, what we're going through. this week, it could be timely. And I don't think, I don't think it's going to be seismic. I don't think it's like a, I mean, you even go back to March of 23 when these literally banks were not, the doors were closed and shut down the next day.

We, we, AI rallied us out of that. And, and Kai's a crazy question. I don't even understand where people are getting the money to do this. Look at this, so. Put a bit of that. Could we go back to that, though? No, look at this. What is it?

This is showing mega cap tech. So for all the talk of like, we're in a bubble, the Mega Cap Tech are significantly underperforming the crazy names. So it's Mega Cap Tech divided by non-profitable tech. And if you invert this, it is the ratio here is wild. Mega Cap Tech is no longer exciting enough to attract retail trading. These names are going sideways a lot of them, the Mega Cap Tech. That's the frothiness.

They want that Oaklow. Yeah, that's the stuff that's what they want. It makes me nervous. But where, so put this chart back up, the retail options trading. What is this like out of people's fucking paychecks? What are they doing? What are the dollar amounts involved in this?

You know what really got it? Because how do you keep losing unless they keep winning? They're making money. They're killing it. The retail call buyers continue to make money. They're crushing it. And you know what? And you know what really got it going?

And I know from talking people firsthand, I was a little bit in the first one. I haven't done much more after that. But Eric Jackson on that open call. And I think that was the big start. That was the spark. You're right. I was a spark, and we've seen a number.

He's had a couple other calls since then, but that's what really got people super He came out. He came out with the stock at a dollar, said it's going to $80. It did go to $10. I don't know where it is now. It looks pretty vulnerable. It's at 7-Eleven. No, don't try charting.

I know. You can't charge the 6th. No, I know. It could be a 15 next year. He might get Drake to buy a million dollars worth of stock. It'll go to 50. You really don't want to chart that. I agree with you.

That seemed like it was a moment. Yeah. And then ever since, people are just like, What's the craziest thing I could do? Yeah, it's like, what am I buying today to make money? It's like an assumption that you're going to make money today if you just buy something. But that's there's such a good point. Where's the money coming from?

Because it's not only retail and it's not only options. So last week, Bank of America showed that single stock inflows were the fifth largest in history. So single stocks and the biggest ever for a week that the market was down at least 1%. I mean, it's like the firepower is endless that like, like, they don't react negatively to headlines anymore, really. The dips are bought the same day. They don't even wait a day. Well, somebody had a great take on Oclo,

and you could use this for a lot of these companies. There's no exposure. There's no revenue. They're not sensitive to interest. It's just whatever. There's nothing tethering it to fundamentals. I mean, a lot of these names, I mean, they're unprofitable.

They're not making money. I mean, it's a story. They're equity financed. They're not subject to borrowing rates. A lot of tech always is. It's not what you're doing for me now. It's what you're going to do for me in the future. And this is really extending that narrative and saying,

and it's pulling that cash in there. You're buying a story. I mean, these are a lot of people. I'm sure people that have made money at Bitcoin. People have made money and other things. And they're moving that money around. But they've made money, holding things.

And I'm not, I'm not dogging at all. Making money is not done. Making money is not done. I mean, these people are doing their thing. I'm sure that there will be, listen, this is a mania. A lot of these names, these are pre-revevement.

you names, I would guess that there's going to be a handful of winners over the long term. Yeah. Maybe at lower valuations. But a lot of these are going to just be completely white-bath. Companies, though, are not stupid. They're all selling equity. They're all doing second-in-olds.

Allegedly the CEO of one of these companies, I don't know if it's Aklo or I don't want to, I forget which one it was, allegedly, like, sold all of his stock. Really? I mean, we're getting, and we've gotten multiple calls into us at Blount Capital, like clients, like, why can't you buy this name in my portfolio? Listen, I mean, the music's going to stop at some point. it's going to be done. As a fiduciary, we can't, we can't do that.

Why don't we own this piece of shit that everyone else just made 400% on? Yeah. So those are the conversations that some of my team has had. Some have come to me. And it's, I mean, I'm not talking dozens, but maybe, you know, nearly a dozen. It's hard. You have to just send them a link to, you have to send them a link to Robin Hood. Tell them, download the app to whatever you want. I'm not doing that. But let's just bring it back to, because I really think it's important that people that are listening don't hear us talking about this pocket of media, which it is. and say, up, the whole thing's in bubble, the whole thing's in house cards, because it's important

that we zoom out. Yeah. So, Uri and Timmer has a great chart that shows the good news is that the earnings are doing the heavy lifting as we enter year four of this bull market. The P.E ratio is only up 1% year over year while earnings are up 11%. That is critically important. The P.E. is only up, this is for the S&P, I'm guessing, only 1% year over year. So all of this expansion that we've seen, it's earnings.

So it is fundamentals. companies are growing, margins are at all-time highs. Like, there is good reason why stocks are growing up, despite a lot of the nonsense. V-Vidia is underperforming its earnings growth. We see Vinti as almost relative to other pockets and tech of value buy. There's some great names out there. It's wild, but it is that way. Yeah.

I mean, look at like a name like Micron. I mean, we own that in portfolios. It's like our number nine holding. We have a 3% holding of it. And, I mean, I've trimmed it a couple times. But it's, I mean, there's names that are really growing earnings substantially. is, yes, I'm not sitting here calling this a bubble or anything. I mean, I think when you look at some of those non-profitable, frothy tech,

it's kind of a little bit of its own pocket, it's out there. But the names that we're all investing in, the names that are driving the S&P, the names that are really driving the NASAC 100. I mean, there's a lot of money being made by those companies, and I think they're going to continue to grow very well. I want to go back to one of your charts. John, can you put up chart seven? So, Bill, this is yours.

You mentioned the put call. ratio. Walk us through why you think positioning makes it as such that we might sort of see capped upside from here. Well, it's, if everybody's, you know, it's all the boat's invested on one side. I mean, so if everybody's invested in, in that downside protection, whatever might be, you know, it also has an impact on on gamma dealers and really what we've seen a lot of this year where, you know, earlier on coming out of April, it kind of really, it really helped the market move, but at the same time, if, if everybody, historically, if everybody's extremely negative in buying puts, you know, you're not, you're, it's not, it's not, it's not,

move is not going to play. It's so weird. Everybody has one foot out the door, right? Like, as soon as there's some bad news, what is the showing? This is the inverted put call ratio. Yeah, let not, puts are not being bought enough right now. Puts are not being bought enough. Yeah.

Which is like, that's what you want to see. That's April. That's what you want to see. Yeah. We have the opposite of that. Yeah, you see, you see the, uh, the April. Yeah. Oh, so you think we are.

we are susceptible to a downside woosh. Yeah. Got it, got it, got it. Yeah, this is what, so when, when the put call ratio is at this level, it's, it's typically caps the upside a bit. It's toward the end of a big rally, not, not early in the, in the game. And there has been false signals. You can see, like, quarter four of 24, second half of 24, false signals that came out

of April. Because remember, coming out of April, I mean, everybody got so bullish so quickly. And so there was, no one was buying puts anymore. The coast is clear. And it kept going. So there is false signals. It's not, it's just, it's just one of the things to look at. You have another one.

John, chart 10, you say since the Fed cut rates on September 17th, markets have responded as if it were a meaningful pivot with precious metals and small caps outperforming. The small cap rally deserves, I mean, today it reversed because you got a lot of regional banks in there. But like, what do you think it was about what happened on September 17th? I think you get this Fed. rate cut. You get the Fed rate cut last September. I mean, the economy is, I mean, three percent plus GDP. Credit spreads. I mean, this is before, as of September, very, you know, there may be a little wiggle, nothing to worry about. Consumer's cooking. Consumers inflation is,

you know, it's not, it's not where they fed wants it, but it's not, you know, not a headwind too much. So, I mean, everything is sort of almost in that Goldilocks form. And you get a rate cut. I mean, they're just juicing the economy, basically. So they did a rate cut. cut they didn't have to do on September 17. Essentially, that Fed pivot. And it's essentially, it's investors are saying, you know, buy me, whatever's not going to be devalued. Because it's better than if they're going to go in this, Trump has stacked the Fed or will stack the Fed over the next year. So it's in that he's going to get his cuts. They're saying they're going to get the Fed rates down to 2% maybe if he gets his way over the next year. Well, if he installs the Fed chair by

the end of May, which is what's going to happen. It may be best, it may be best. It may be best. It may be Eric. I don't know. Whatever he wants, there's nobody left to stop him. Rates are not staying where they are now. And it almost doesn't matter what the economic data says. Because he's got an opinion that low rate's good for me. Low rate's good for the economy.

Don't care what the data is. Lower the rates. So the labor market is low hiring, low firing. Consumers are absolutely fine. Bank of America just reported. They serve almost everyone. nothing to see there. Everyone is saying the same thing.

Hyperscalers continue to spend and the Fed is cutting. Hard to be bearish in that scenario. On the other hand, if the cockroaches come out and as always, risk is what we're not talking about here. So, yeah, you have to,

you never know. But if you zoom out, you just place those two things, it's hard to, I think bowls have the upper hand. Yeah. You have to give them the benefit of the doubt. Get a little scare here

would be healthy. Great. Let's do it. I mean, it would be great to see if we get a full 5%? A full 5%. Full 5%, maybe seven.

But isn't it a while, though, a full five? A full five. Full five. Wow. Whoa. What's this S&P consumer staple sector chart? All right. I want to talk about this.

Our Fred Toddson and others at Ned Davis Research do great work. So let's start with chart 16. And we're talking about, man, it's kind of wild. The staples have never been a lower percentage of market cap. Well, guess what? Ned Davis shows that the market's not dumb. The percentage of earnings that the staples are producing is also at an all-time low. It just don't matter anymore.

But listen, so John, throw up chart 12. So this is from Todd. Consumer staples and energy and health care and utilities are lower in the S&P than technology. Now, you might see this and understandably conclude, and I love Todd, that this doesn't make sense. Bubble, bubble, bubble. I'm out. Okay. You have to look at the earnings. So check out this chart that Matt did. So similar to Ned Davis, I was inspired by them. I asked Matt to look at this. On the left hand, we're looking at the market cap of staples and health care. And we're looking at their net income. And guess what's happening? They're moving together to the lower right.

The market cap is 14.8%. The net income share meaning percentage of the whole market. And they're the same exact thing. 14.8 and 14.7. It's almost. almost like the market is a dumb. And on the other side of the coin, you have Apple and Nvidia. They make up 8.3% of the total income, up from 4% in 2020, doubled. And yes, the market cap is higher. It's 13.2% because obviously the market's going to get excited and over extrapolate and overdo it. Yeah. So maybe we're seeing that, but the market is getting it right, by and large. So this is an answer to the people that are like the whole thing is dominated by tech. Yeah, because the arnings are.

The multiple, I mean, the multiple of staples relative over the last 10 years is at the upper end of its band. Crazy. Crazy. So, I mean, why. Well, yeah, well, I mean, I think the situation could be different. It may be driving some of the money, you know, right now, potentially. I mean, obviously. What is it?

What's the multiple on staples? 21. So, it got as high as 22 and a half, but 20 over the, the mid range is just under 20 over the last 10 years. So you're paying 20 times for Procter and Gamble that's growing 1% a year. Or 50 for Costco, what should do on? Costco, S. Day, Lodder. Walmart, $39. Costco's 48, S.J. Lutter, 46.

I mean, let's do utilities. This is a fun one. First of all, year-to-date, John, 18, year-to-date returns by sector. This is eye candy. This is crazy, right? Okay, so utilities are the best performing sector

year-to-date up 23.7%. But they're so small as a sector even after that, their contribution to the S&P's year-to-date total return is less than a half of 1%. Think about how insane that is. That's how tiny the utility sector is relative to the whole market, that it could be up, it could be up as much as it is and not even move the needle for the market. This is we're in uncharted territory now.

Yeah. I mean, and these stocks have decent sized market caps at this point because they've gone up a lot. but like in comparison to the microns, the Netflix's, they just, they don't even matter. Yeah. So I thought that was interesting. Here, let's just equal weight utilities, equal weight S&P 500. Look at this, divergence. March 2024.

Basically, people that thought utilities were like grandpa's stocks, nope, that's not what's going on anymore. Now you have record-breaking electricity demand all over the country, all over the economy. And guess what? They're going to treat these stocks like their alphabet and meta now. That's the huge thing is, I mean, if you're going to drive AI and power AI, the power demand, we have a slide for that, too. The power demand is incredible. I mean, you can see some of the forecast here, natural gas. So in our portfolios, we don't own a traditional utility. It kind of happened quick when these things just started going. But we're also, I mean, we own KMI, we own LNG, we own CCJ, the utility, I mean, a uranium, you know, some of this,

but the natural gas is going to be a massive player. Look at the forecast on this chart from 2025 down to 2035, what natural gas in the yellow is going to do as empowering. Why are natural gas stocks so terrible then? Well, natural gas. I own them. I mean the, the explorers, the producers. I don't mean the transmissions. But LNG is breaking down hard. Yeah, it's not, it's not responded to it. I mean, the price natural gas has not moved much. And they don't really, there's legal things to it now.

But basically you just say, hypothetically, you know, they just burn it, you know, they just burn it away. It's just an endless supply. Like, we're like the Saudi Arabia of natural gas. So the transporters of natural gas are what's going to need, the people that own the pipelines, like Kender Morgan. And then, I mean, LNG, there could be more geopolitical things. Because they're not making money on the cheneer, on the movement of, I mean, of the price of natural gas, they're making money on the moving of natural gas. So if it's going to, if they're going to bring natural gas to, if they're going to export it,

yeah. That's the, that's the play with that stock. Okay. I don't know. Can you buy, can you buy the utilities here? We have some names on our watch list, like NEE, a couple others, but, you know, that's a new era. Yeah. Okay.

I mean, it's some of the high quality stuff that can, that can drive with it. But it's, I would like to see a pullback. Well, you're seeing a potential outside day in XLU today. We'll see where it closes, but. Those stocks, I mean, those stocks are basically AI stocks now. Yeah. There's none of the volume that's coming into those stocks has anything to do with dividends in the way that it used to.

Absolutely. I mean, the other thing I'd be careful for us, too, is, I mean, our top holdings are Nvidia and Alphabet and Broadcom and Micron. It's like, how much more AI exposure to? Same trade. Yeah. So if you get a deep seek moment or something like that, your whole portfolio is going to get smoked. So we look at more ballasts within our portfolio and how we...

Listen to this stat. The utility sector is expected to report the second highest Q3 earnings growth rate. 17.1% of all 11 S&P 500 sectors second only to tech. I can't... How many other years historically have there been where utilities were putting up high teens growth? None? Maybe none. It's possible.

I mean, you can't imagine many. It's a pretty exciting time to be in the market and have things like that going on. So, I mean, at least, at least I think so. You have a Mac 7 take going into earnings? Like, where are you most confident? What are the names that we should watch and what are you watching for? I think the bar is high. But I think the bar is in the right spot for some of the names like that have not done much this year.

Amazon, you know, I think the communication around cloud at the last earnings call was, you know, it really hurt Amazon. It kind of pushed them away and then you had these just amazing numbers from others. And I think that's something that if Amazon can deliver the results and communicate well, that stock has done shit this year. I think it's could finish the year very strong. It's pissing me off, actually. It was one of our higher conviction plays coming into the year.

But, you know, as you move and when you raise a little bit of cashier, and then you put that cash back in to something else, we haven't been adding to it. It's still up there. If we get the good results, I mean, it could be something that could really run into the year. I mean, I can't talk about Micron enough. There could be a real repricing. Is that your favorite chip stock right now?

It trades like a commodity, you know, the one thing. It is. It is. It always has been. I thought the interesting thing, I mean, The high bandwidth memory is, you know, making, making things, make it more efficient and power efficient for to run this, run these chips. The Morgan Stanley, I think it was, upgraded. And they, they upgraded the story of DRAM. And so I think there's, there is some interesting stuff with Mike Rod.

And if it, you're seeing price targets go to 220 to 240, but there could be a real full repricing in this name if, if at all things are clicking. And then the more, the four multiple, what, it's like, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's. Seven? Yeah. Or no, it's 11. 11 and a half. It gets valued like a commodity. Yeah.

Is the way they've always done it. I mean, imagine the 20 multiple in that. What? If it becomes a less cyclical business. Yeah. I mean, that would be the dream come true for longstanding micron shareholders at long last. You know, no, no. I think a pullback into earnings is, is a good thing.

Yeah. Right. I'd rather, as a, as a shareholder, you want to see like a little bit of doubt creeping. You don't want to see this thing, these things flogers. To that point, too, you also remember last August, and when we were getting that pullback from the highs, and if you miss, if they're missing, you know, it's going to hurt them more. So instead of being down three to five percent in an up market, you're going to be down five to 10.

It is asymmetric. Yes, yeah. The losers are punished more than the winners are rewarded. Correct. Correct. What do you think of the setup on Tesla going into earnings? It's rallied hard this summer and fall, and it's not as though the fundamentals right away are about to get any better.

It's so strong to quite strong? Has it reacted to earnings so? I mean, when's the last time it's really reacted to the earnings report? It just doesn't matter. I guess the auto earnings on the auto business, it just, it doesn't seem to matter anymore. I mean, it is a breakout. I mean, really could be if it keeps moving higher from here over the end of last year high before it fell out. I think it's more of a momentum play and how Elon communicates and what's the next event more than more than the earnings.

What do you do with Invidia here? They're not going to report until the end, end, end of earning season. Stock just made a new record high the other day. See, it was green today with everything else red. Is it the least volatile stock out there? It's become very unvolatile. I feel like this can't end until this can't end until this is over 200. Yeah, it's got to do it.

I think, I mean, we've actually seen volatility of Nvidia kind of come out ahead of its earnings report often. And, but you'll also, going into its earning, when it gets his earning, we know what all those big names have already set. How much spending is, is Microsoft and meta? And you get those numbers and that's going to correlate to which. I said that to Josh last quarter, it's anticlimatic, because you already heard from all their competitors, all their suppliers. You know what I think this ends when Open AI comes public at a trillion dollar valuation, the biggest IPO ever. Yeah. And it's a flop out of the gates.

And it's not because there's anything wrong with Open AI. it's just because at a certain point, enough is enough. That'll be the... I don't think the market can withstand a meteor of that size hitting the surface of the planet. It's a trillion dollars. It'll soak that money out of all these other public companies. People don't understand.

When a company comes public... Josh is a big money come out guy. When a company comes public, the people who own it privately are selling it to new people who don't own it. They need to pull money from somewhere to buy it. That's by, that's, but it's a tautology, but it's the actual fact that you're selling stock to the public. Unless the public offering of stock.

No, $7 trillion comes out of the money market funds and boom, problem solved. If it's a trillion dollar IPO, the valuation, and they need to raise $200 billion to facilitate the offering, people are going to sell other shit. All right. So what do you think about this theory? people are, I feel like bulls and bears, everybody's waiting for this to end, for it to burst. Is that not, wait, is that not a good framework? That would be, that would, that would, that would, that would, that would, that would, that would make the most sense. The opening IIPO in 2026 is the most sense.

What if the most frustrating outcome is the most likely where this just keeps, we just plot along and there is not, not the most likely. No, no, no, no, no. That's not what I said. I said, the most frustrating outcome is the most likely. Like, like, like, in an LOL world where the most frustrating outcome. outcome is there's no bust and maybe there is no boom and maybe we just plot along and we grow into these valuations and there is no cabloy other than the fact that it's never happened that way no i know i know it'll be okay a lot of things happen than never happened with two percent interest

rates at the end of 2026 and continued AI spending i mean you're going to money's going to be forced into everything that's not you know it has to be invested into things they're not going to depreciate investor money somewhere. And that's what's driving gold. It's driving silver. It's driving, you know, it's trying to commodities, but it's driving AI investment. It's driving these call options into, you know, all these non-profital tech names. So it is seem, it does seem like a scramble for people to get their money out of dollars

and do anything else. Pretty much. Except the dollars aren't crashing. Dollars aren't crashing, but the inflation never went away. It is, dollar is crashing. It's crashing to gold. Oh, stop it. Oh, my God.

those. So I got, no, I got a text from Sprinkles the other day. Should we be doing more gold? Should we be doing more gold? Should we be doing more gold? Hold on. All right. Bill's like, all right, on second hand. I'm giving the sign to Phil here. Why? Bill's going to step out. Are you saying Spinkles is not a sophisticated investor? Here, want to see it? Dead ass. Wait, she sent me a whole bunch of nudes. So I've got to be careful scrolling through this with you here. Hold on. I want to give you the exact words. Here she is yelling at me.

What did you say? I'm curious to hear your response. I was like, shut the fuck up or something. No. No, I told her we have gold. We're fine. We have everything. We're invested in everything.

We never stop investing. I can't find it right now, but it was to the fact of I heard it's doing really good. Now, where the hell did she hear that? Below decks? CNBC commercials. Good morning, America. She's not watching CNBC, no offense.

There's always a gold commercial somewhere. She must be. must have been talking about it on either like she doesn't watch The View Costco like a Bethany Frankel podcast or she listens to Scott Galloway

and Kara Swisher she likes that one I gotta find out from her where she heard this if I hear it's The View I'm bearish no offense to anyone but I don't think it's quite

I don't think it's quite there Gold at 5,000 will be a huge deal and will become mainstream news well congratulations to everybody that bought as much Costco Gold as they could last year. Yeah.

Oh, yeah, they were right. There's another example where the crowd was right. The herd was not, the herd is not always stupid. All those things we just never bring out that at the time with like the end of the, this at the top. Oh, yeah. Jensen Wang signed a bra. Yeah. Two years ago.

In video, yeah, half the price. It did. Was it night? That should have been the top. Remember the watch party? The Invidna watch parties? Yeah. Yeah.

That was like hundreds of percent ago. Right. Why wasn't that the top? The earnings call happy hours. One of these days. Right. All right. Bill, did you have fun on the show today? I had a great time.

Dude, we love you. I have to tell you something. I get the list of who's going to be on the show with me every morning. And when I see your name, I know it's going to be a good show. So I hope you feel that way about me. Of course I do. Would you like to say some nice things about me now? Of course.

Okay. This is a good space to do that. Hey, we always end the show asking people what they're most excited about. You got a lot going on. What's out on the horizon for you? Well, outside of markets, I'm excited. We're going to, my family, we're going to Cancun next week. Okay.

And I got three daughters and another family that we are really close with. They have four daughters. They're all like best friends. The kids don't know that they're going on together. Oh, they're going to be so excited. When are they going to see each other at the airport? Different flights. Different flights.

So we land at the same time. Unreal. And they're going to see each other at the airport and it's going to be like, you know, exciting. Oh, very cool. So they're, oh, so you're going to go, you're going to run into each other at the Cancun Airport. Yes. Probably in the line at Customs. Yeah.

Okay. Awesome. That's going to be cool. How long are you going for? I think just four days. Okay, good enough. With kids, that's plenty. Four days is plenty.

You know, you plan it. It's late October, Chicago. You don't know if it's, you know, weather's going to how the weather's going to be. And we're getting to holiday season and stuff. Okay, I have a plot twist for you. It's Michael's family that's meeting you there. What do you got going on?

What are you excited about? I'm excited for the next. I'm excited for... What's the first regular season game? It's like Friday against the Celtics. Yeah. This is Friday. Yeah.

I think we win that one, too. I mean, I hope so. They are depleted. Coming in strong. Coming in hot. You're a big Bulls guy? Not so much. Bull stink.

No. He's a wizard. He's a wizard's guy. Well, they're even worse. You grew up watching the bullets? I did. Okay. I did.

Joanne and Weber and Sheed. Oh, yeah. What a horrible franchise. No offense. I mean, I think Jordan played his last couple years there. That was just brutal. I mean, I did go see and play. It was great, you know.

But you had that. 80s, early 90s redskins to make up for it. That wasn't terrible. That wasn't all bad. The Mark Rippin Super Bowl, that was fun. That was a fun one too. All right, dude. We want to tell people where they could follow you for more.

So I have a whole bunch of links here. I have blueline futures.com slash bill dash Baruch. We'll just tell people blue line futures, right? I have your Twitter, x.com slash bill underscore Baruch. And you are-social? What's a good social? for you? That's his social. Twitter.

And then bluelinecapitalwealth.com. Bluelinecapitalwealth.com. Okay. And you're on LinkedIn, too? Yeah. Dude, you're everywhere? Yeah. All right.

You having fun doing halftime report? I love it. It's been such a great. And I'll tell you, it's just, it's so great being able to go to the New York Stock Exchange to do it. It's like humble and walk into that. Dude, it's pretty epic, right? It still is.

It's still like a magical building. Yeah. I agree. Well, I love being on with you, as I said. So, thanks for everything. Thank you for being on the show. We appreciate you. Thank you.

All right, Bill Baruch, ladies and gentlemen. You guys, thank you so much for buying out all the tickets for the live Compound and Friends that we're doing. We appreciate you guys. We're super excited to see you all. That's coming up very soon, October 24th. And, man, what a night we have in store for the compound fans. Huge thanks to Duncan and John, who are in the room with us today. Rob, Nicole, Graham, Keith, the whole team.

We appreciate all of you. Thank you guys so much. And thanks to you. You'll see you soon.