The Compound and Friends - Treasury yields break out, how to invest with Bill Ackman, Workday rumors, off-balance sheet madness

Episode Date: August 18, 2026

On this episode of What Are Your Thoughts, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ break down what’s driving the global bond selloff, why pressure has shifted from the front end of the yield curve to long-term rates, and what it could mean for investors. Plus: Big Tech’s massive off-balance-sheet AI commitments, whether the bottom is finally in for enterprise SaaS after the Workday takeover reports, a market that keeps going all the way up, and a look inside Bill Ackman’s evolving Pershing Square empire and his search for permanent capital. This episode is sponsored by Franklin Templeton. Learn more at https://www.franklintempleton.com/advantage 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/⁠⁠⁠ Franklin Templeton Disclosure: Before investing, carefully consider a fund's investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at franklintempleton.com. Please read it carefully. All investments involve risk, including possible loss of principal.  © 2026 Franklin Distributors, LLC. Member FINRA/SIPC. Learn more about your ad choices. Visit megaphone.fm/adchoices

Look at us. We look good, Mike. Look at you. No, we, like we. We're doing good. Feel good. Michael and I had to go pick up the pieces of our demolished little pocket Long Island office today. For those who are not in the know, a car drove through a plate glass window and wrecked our office. But a lot of things survived. It wasn't our car.

A lot of things survived So Michael and I went to Dig through the rubble And see and see what we could pull out of there Do you know I got an injury During the rubble cleaning I was wiping off something And a piece of glass from the car

Lodged yourself in my finger Here we go This white guy's going to sue me now I think it was a Honda Just by the By the damage on my finger I felt like Honda Don't sue me

All right holy cow we have so much to do today i'm just i'm looking at the doc and i'm realizing there's a lot happening i do want to say one thing before we uh say hello to the chat the difference between what we do and financial tv an hour of financial tv they literally have to get to every single thing happening in the market like of of note we're not bound by that we're not tv we're not television this is something different so a lot of people like oh how come you don't talk about this or how come you miss that. Yeah, there's by definition, there's a lot that we're going to miss.

I don't want to say we're curating, I think, or we're filtering. I think what we're doing is curating. Like, we're not, we're not a filter and we're saying like, we're only saying the things that matter and everything that we don't mention doesn't matter. That's not what this is. When I say curating, we're trying to pick the things that we think are interesting or important. And I mean, it's, it's hard.

Most a lot of things I just feel deeply unqualified to talk about even things that we talk about on here like I don't know everything about everything That's a really good point too and uh Guys We don't want to come on and talk about things that we have no idea what we're saying Or if we do we'll try to treat it in a funny way and we'll tell you this is like out of our lane But the market seemed to care about this so here it is But so that's that's how we're coming up with what we're gonna do a lot of you guys are like Like, oh, I like seeing the topics on the screen.

We're doing something totally different. We will have topics on the screen, but they'll take the form of headlines. And we're working on our lower third. It's getting a little bit better each week. But having that static one-third of the screen just list the six or seven things we're going to talk about is not a great use of on-screen real estate. So bear with us as we evolve. But things are coming along really nicely, I think. Anything to add to that?

Did you know that Lazy Boy is a publicly traded company? I did know that. They just reported earnings in the after hours. I said Lazy Boy. They make Futons like LZB. That's right, Josh. Great Paul. The stock is cratering.

But in the housing boom, that was a, that was like a GPU stock. In 2005, six, seven, people were trading housing plays the way that we trade memory stocks now. Ethan Allen was a rock and roll stock. Restoration Hardware. Lazy boy. Like, these were stocks that moved. That's the only reason I know it. And they're still doing $2 billion in sales.

Big company. I have no idea. All right, let's get to it. My chair is a lazy boy. No shit. How about that? It is. It is.

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member FINRA, SIPC. Well done, sir. All right. Let's talk behind yields. Let me just start with it. Before we even explain what's going on, I want to start with a question for you. Are you surprised at how well the stock market has held up so far, given the rise in bond yields? Basically, that's been taking place in slow motion all summer.

Or are you not surprised at all? That's the key. You said it. Slow motion. For now, so far. Well, yeah. That's what I'm responding to your question about so far. So we went from 4% at the beginning of March up to 4.7, and it's been a slow, steady grind.

If it was a more violent move, if it happened in two weeks instead of five months, then the stock market would be a lot lower. But the market has had plenty of time to digest higher interest rates. And guess what? I'm not surprised only because the stock market has responded to earnings. And it doesn't seem particularly concerned with yields right now. Okay, so this is happening around the world. It is not just the treasury bond. I want to start with that.

I'm going to quote Jeff Cox, who writes, great reporter, veteran at CNBC.com. He says the 30-year bond in particular is trading around its highest level since 2003. I had it as 2007, but maybe I'm just looked, but I might be looking at like the 20 and 30 year, like the long bond, the average, and he's just looking. and he's just looking at the 30. But I had it as the highest in 19 years. Either way. The 30 is 07, but either way, keep going. Okay.

So basically, it's $40 trillion in government debt right now. The longer-rate, the longer-term debt is where the yields are really moving higher. And this is what Jeff has to say after speaking with a bunch of Wall Street shops. Fixed income strategists described the run that began in June to a number of variables. Intensified concern over a budget deficit. The budget deficit is now bigger year to date than for all of 2025. Like we blew through last year, so we'll just put that out there. Inflation in an ominous holding pattern, I think it's not quite so ominous, but that's another thing.

Moderating data, a rash of corporate debt issuance. This is the other thing people are saying. Corporates have been floating a lot of debt, I think 20 or 30% more than in all of last year, year to date. And a lot of that has to do with the AI data center build out, which we won't get into. Why would that push government yields higher? Because it's competition. These are AAA rated bonds and they have a higher yield. And so when people choose to buy alphabet paper instead of a treasury bond, theoretically, that's one less buyer.

Okay. Depending on where you sit, you may not buy that argument for why, but what you can't argue is that this is a persistent rise in rates, meaning the selling of long-term bonds. So let me quote, Anshall Pradhan, who is the head of U.S. Wates Research at Berkeley's Capital said on Monday, these are not new forces, and the rise in long-term yields has been gradual rather than sudden, what is notable today is not the existence of these pressures, but that they appear strong enough to overwhelm individual soft data releases. Three independent releases argued for lower yields this month.

Long-end yields moved higher anyway. So that's the interesting thing. The economic data is either surprising to the downside or coming in soft versus expectations. Not the government data, but when they talk about it. been independent. So, you know, we get a hundred different reports every month. And that's the I think that's the surprise. Wait a minute. The economy is fine, but the data is surprising to the downside. Why is the long end climbing? And the reason is people would rather be doing other things than holding 30-year treasury bonds. What are your thoughts about that summation of what's causing things?

Yeah, I think that's mostly right. But here's more important. The 10 year are so much more important than the 30 year. I know that's where the term premium is and that's where the economic uncertainty and the deficit concerns is all out there. But that's a tiny part of the overall government pie. It's 1% of new issuance. I think it's like 5% or something like that of outstanding bonds. It's a much smaller piece of the market.

And most asset prices are priced off of the 10%. year and not the 30 year mortgages everything keys off of the 10 year and the 10 year is still within range it's been going sideways yeah it's at the upper end of its range but it's been going sideways in this range since september of 2003 so if you tell me if you could tell me okay i know with certainty that the 10 year will break out of its range and it'll be 5 5 by the winter i would say i would say sell risk assets but i would say that that would put pressure on risk assets absolutely and that's not where we are well i'm really glad you brought that up because that is where the bears now believe the puck is going.

It could be. Yeah. Chart on. Okay. So this comes from Robin Brooks, who is, I'm not going to say permabare, but definitely more on the pessimistic side. Is he British? Got it. I don't know, but first name Robin.

Do we name boys Robin in the United States? Not since Woody the Pooh. and that was Christopher Robbins. So that wasn't even his first name. Either way. I think the last male Robin born in the United States was Batman's sidekick. No, Williams. Oh, that's a good call.

That's a good call. Anyway, we're going to go ahead and say allegedly British, but he's a, I mean, he's a super thoughtful guy, great writer. And I wanted to show you this chart while we have it up. This is 10-year, 10-year forward government bond yields, and he's showing you, all over the world with one major exception, Switzerland, this is happening. And what is it 10 year, 10 year forward? It's what the market thinks the 10 year yield will be 10 years from now. And so you're seeing all these yields clustering between 4 and 7%.

And this is every continent, every developed market. The UK is in here. The U.S. is in here. And so let me just, you know, let me just quote. Robin because he's smarter than us on this topic and certainly has a better handle on it. Ten-year, ten-year-forward bond yields. What markets price for the ten-year yield ten years from now are rising all over the place, but they're up the most where the stock of debt is high and political dysfunction is acute.

I finger Japan as deeply distressed in Sunday's live stream. He did what the Japan? You're such a child. As it happens, Japan's 10-year, 10-year forward yield is. is up most over the past 10 days, followed by the UK, France, and Italy. Markets are homing in on the most vulnerable places. There's obviously the question of what sparked the sell-off. US yield curve has seen very pronounced bare steepening since the last Fed meeting on July 29th.

That's been dragging up the long-term yields everywhere. Spike and oil. Bonds don't like instability. The war in the Persian Gulf is still on fire. This kind of finger-pointing misses the point, in my opinion. You have a lot of debt, run unsustainably large budget deficits. You're vulnerable to any old shock that comes along. It's not about the shock, but instead, the mess we are making of fiscal policy on a global scale.

So it's a debt binge everywhere. Nobody thinks there's any consequences all at once. Now you have corporates issuing bonds at the highest rates that we've seen in a really long time. And it's just, it's become too, you're right, it's become too much. Well, an optimistic take, and he's right. Like everything that he said is right, that the countries that have the most perceived political instability, the highest deficits, like they're being punished the hardest. The other point is these yields are kind of normal.

When I talk about 7, 8, 9% where it's like, holy shit, guys, we have a major issue. We're going to have like a funding crisis. That's not what's happening. These are pretty normal rates. and they're happening with the backdrop of an AI boom and potentially high economic growth. So I don't think it's like a 100% glass half empty. Back to Jeff Cox. The U.S. saw a budget shortfall of, listen to these numbers, 432.3 billion in July,

the widest single month gain since March of 2021. And that would lock in a $2 trillion deficit for the full fiscal year, which ends on September 30th. So I mentioned $40 trillion is total government debt and the public portion of that $40 trillion is about to hit 100%

of GDP. Well, goodness for investors. One more. Debt financing costs. This is the other big one. 1.1 trillion through July will hit

$1.37 trillion. That's just the cost of servicing debt. That's up $84 billion. over 2025 and we're only in August. The government will now spend more money on debt financing, not paying down debt, paying the interest on the debt than anything else in the budget

other than Medicare and Social Security. Who are they paying the interest to, my friend, us? The holders of the debt. So, and it's increasingly, it's increasing, Spider-Man meme. It's increasingly US investors. So if the government wants to keep funding this party of spending, I don't know that I'm all for it, but I don't know, I don't know how bad it is.

Listen, I get the concerns. We're going to talk about corporate debt and balance sheet stuff in a second. I would just lastly point out, U.S. companies have issued $1.7 trillion in bonds year to date. That's 27% above last year and more than all of last year combined. That is a why we're, what's with all the spending? Like drunken sailors, I say. Well, that's debt not spending debt issuance to fuel. the spending.

You know what? And I said this on TV on Monday. I did closing bell. Until Ed Yardini tells me to worry about bond vigilantes, I'm not going to.

And he coined the term. And he got the last word in this piece. The bond market is actually finally working the way it should work. It's allocating capital efficiently. Great. I love it. It wasn't doing that when the Fed was rigging the bond

market by keeping the yield close to zero. So this is kind of back to market driven interest rates. He's like sanguine about it. So I, so my answer is that I am to. It looks normal. This is what a yield curve. This is what a textbook yield curve looks like.

Fine. It's fine. I think that's right. I just think the five handle is throwing people because of how long it's been. Who's it throwing? It's throwing journalists and pundits. The market is not thrown. Do you,

oh, people in the chat are saying this. Do you think it's just because like it's like a slow summer. a week or two, like everyone's in the Hamptons. The news flow has been slow. No, stop. Earnings are mostly over. And so they're using this as a way to get attention. Oh, I thought you said that's why the markets are responding.

I was going to say people are always on their phone. I don't think that matters where people are if they're in the Hantons or not. No, I think it's, listen, I would expect people, I would expect this story to be covered regardless of the time of the year. It is a story. This is a market moving story. I get it. Let's place through the charts real quick. Here's the 10 year treasury, just to set the table for you guys.

To Michael's point, much to do about, sorry. You're right. My bad. Much to do about nothing. We are up 51 basis points on the 10 year, but we are 25 basis points below the 2023 high. Thanks to Chart Kid Matt and Sean for these visuals. Here's the 30 year that everyone's carrying on about. Look, undeniably, it's at the upper end of its range over the last five years.

But what the hell does the last five years mean? We came out of a pandemic. It was a totally abnormal starting point. Here's the yield curve one more time. And again, to Michael's point, the yield curve is supposed to curve. It should look like this. I don't think we want to see it race to 6%. But so long as it's somewhat gradual, these are not like insane rates for a 30-year bond.

Like the bond holders should demand 5% or more to lock their money. for that period of time. Yeah. All right. Sticking with the topic of debt concerns, the off balance sheet stuff is going to be a perpetual topic until, I don't know. It's not going away. It's just starting, frankly.

So the Wall Street Journal did a story about this, and they showed the percentage chain from a year earlier. And we spent all this time talking about KappaX, how it's supposed to research trillion dollars. Can you explain what it is? is off balance sheet for the viewers? So for so meta is a great example. Meta is building a data center,

the Hyperion data center in Louisiana, but they are not paying for it directly. It is not going on their balance sheet. And therefore theoretically, bondholders are not punishing them because or investors are not punishing them because it's not on their balance sheet. So Blue Owl and other investors and there's a separate entity, they take in all the credit risk.

Of course, Meta is backstopping this. So it doesn't matter. matter off balance sheet on balance sheet this is not catching anybody by surprise in 2008 when all this ship blew up and you looked at all the insurance company holdings that were holding all this toxic paper everybody was like wait what how the hell did we get here so like what is it like what is a cd what is a cd0 squared what are these instruments today in comparison in comparison this is what this is way out in the open nobody has caught off guard it's the opposite so This in and of itself being like the next thing to blow up the market, I suppose it could be,

but it's usually not the thing that is standing across right in the face. So anyway, we speak about the CAPX and you look at the numbers, you say, holy cow, that's a big number. They look small in comparison, at least in terms of like the year-over-year change for what's going on off-the-balance sheet. An Apple, for example, I'm sorry, Alphabet, for example. Look at this. So the CAP-X and these are bigger numbers, but the off-balance sheet obligations are up 800% year-over-year. year. And here's how the accounting rules work. So I spoke about meta earlier. Their hyperion lease obligation will remain off balance sheet until it starts paying rent. All right. Again, this is on

the calendar. I think it's 2029. So this is something that every analyst in the world can model. It's in the price of the stock. It's in the price of the credit default swaps. Nevertheless, these are large, large numbers. Are you surprised that the market seems to be less concerned with it or do you think that no actually meta stockholders are definitely concerned with this no i think i think the market is concerned with it and i think it's kept a lid on stocks like meta um and you know it's it's been problematic it's been problematic for uh phase timing me for a change it's it's like talking to a wall i almost want to take i almost want to take the call and do this with him on air right now but i think he has i think he has an alarm set to call us tuesday i think he has a

I think he has like a mental block about this. We tell him, I don't know, how long have we been doing the show? Seven years? I think he has a disease. I'm going to kill this guy. All right. The purpose of doing these things off balance sheet is really interesting too. So let's say you're Blackstone or Blue Owl or KKR or whoever is going to finance a gigantic

data center project, right? Because they're not building little ones. They're only building gigantic ones at the stage in the game. You go to the people who are going to fund this with their investments, and they're fixed income investors. They're not like stock people. They just want the money back plus interest. You go to them and say the tenant is meta.

And meta actually is not going to take on any debt, but they're going to own a little bit of equity in the project. And they're willing to commit to like, 10 years lease on the, I don't know what the details are for the one that we're talking about. But like, meta is saying we will pay the rent for 10 years. Okay.

That's a really easy sale to people that are private credit portfolio managers because they look at it like, all right, basically it's a met bond, but it's not. Like there are, it's not clear because we've never seen a big one of these end up in court.

Like who's really finally, finally, finally, finally on the hook. What we do know is these are multi-billion dollar projects. They're extremely complicated, expensive. They take a really long time. And, you know, we haven't seen a tech giant in a courtroom battle against an East Coast private equity firm that's like, what the fuck? What do you mean you're pulling out? What do you mean you're not using the day? What do you mean you don't care? Like, we've never seen it. I have to believe this. is going to happen at some point not all of this compute and all of these data centers are going

to turn out to be good projects it's just there's not really a there are laws on the books but there's not really a practical roadmap for what these things look like should they come undone i think and this is definitely outside my lane that all of the terms and options of the deal are very much specified in the contract you can only imagine the amount of legal fees that's going on to put these things together. Yeah, META disclosed $347 billion in total obligations for leases that haven't kicked in yet. I hope they're good for them all.

I really, I really do. Well, I read an article today that META is probably going to lose, there are 29 states suing them over child protection. They might have to pay as much as $200 billion. billion dollars in fines. And this is not federal where you can call Donald Trump and get yourself out of it. This is states. If they have to pay hundreds of billions in fines, what does that mean for all the ratings

on all this off balance sheet stuff? Not to mention meta's own debt. It can't be good. Can't be considered a positive development. The stock looks really shuddy. John, throw up the earnings reaction. So I stole this chart format from Warren, Pons, and Fernando. They do great work and they've, they've created this chart before, looking at what happens to these stocks going into and coming out of earnings.

All right. So time zero is you're lining up when they all reported. And you see a big, big, big difference between Microsoft, which got the gigantic boost from the cloud data. Same thing with Amazon versus meta. Meta can't get out of its own way. The stock is approaching recent lows. It looks terrible. I think people are, I think people are just looking at this and saying,

Remember when meta was like this asset light, high earnings growth, crazy profit margin thing? Man, I wish we had those days back. I remember when this was an advertising company? Now it's a data factory business and we think at some point they'll cry uncle and rent all this compute out. And that'll be the thing that turns to stock. Let me ask you this. For now they're saying they're not doing that. they're saying we're going to use the compute ourselves you are

350 billion dollars worth of leases are you sure that's probably the thing that that the last lever they can pull is to say all right we probably don't need all of this compute i don't see here's a deal with amazon or something i think the likelihood of uh i think meta's earnings are fairly predictable right it is not like It is the biggest advertising machine on the planet except for Google. You more or less know what you're going to get. You don't know what the spend is going to be, but you more or less, you could triangulate around their earnings, okay?

So right now it's trying to get 17 times forward earnings as all this bad news is working its way through the Python. How low can this thing get? Can it get down to 13 times? Could it get down to like Berkshire taking a stake in it? The thing is that you can't model panic. And I'm not suggesting there's going to be a panic. in meta stock, but there was a panic in Oracle stock.

It's an ongoing. It's a slow motion panic. And Oracle's got a great bit, you know, Oracle's got an amazing business. Throw the- I don't know if it's as good a business as Metas, but it's a great business. People have made money as Oracle shareholders for decades.

And there was a panic in the equity. Stocks time- And it was caused by the debt. Yeah, you're right. John, let's talk about Exhibit 2 from Bank of America. So they say hyperscalor U.S. investment grade index debt can go from $288 billion at year in 25 to $659 billion by year in 27. I guess it's conceivable that they could pass the big six U.S. banks, which is absurd.

And again, this is what's on the balance sheet. Like this is them tapping the public debt market. And Josh, you're right. This is obviously, obviously weighing on some names more so than others. Oracle, for example. So Oracle has a ton of debt, a ton, ton, ton of debt. They are super tied up with the contract with Open AI. And the credit default swaps look nothing like the other hyperscalers. So I don't. I mean, this is look at look at this dude. All right. So I don't necessarily think that the market is legitimately pricing in even the potential of a default with meta or even

Oracle for that matter. I think, and again, outside my lane, I think a lot of this is hedging and trading and a quick way to bet against the AI trade. I don't think that anybody is actually buying a five-year credit default swap paying a million dollars to protect 10 million. So for Oracle, for example, all right, that's 211 basis points. It's $200,000 a year on $10 million worth of production. It's going to cost you a million dollars over five years. I don't think anybody is actually laying that out. I think it's more of a trading vehicle. What do you think?

Right. So people are positioning. Right. Because if there is a crisis, they'll be positioned. And this is a great way to get a lot of leverage there. You get a lot of leverage. You get a really rapid move. And then you got to hope the counterparty is willing to market appropriately and make good

on the trade. But that's a whole other story. I think one more time with that chart, do any of these. Nudges up in the other names. Meta, Alphabet, Microsoft, Amazon, Nvidia. Do any of these other squiggly lines look like they're finished going higher? I think this, this, I think they all get over 100.

All right, fine. 100 basis points in spread. I think all of them. Well, what does this do to the equities is the question as that, as that plays out? So far, not a whole lot. It's crazy. How many stocks are? 100% reliant on this not blowing out.

But it's the opposite. The entire NASDAQ. Yes. But the reason why Oracle's spread looks like that is because of the equity. Yeah. Agree. Because it's George Soros created this term called reflexivity, where the prices for an asset dictate the reality

for a business or a sovereign. government or whatever the case may be. But then it's like a feedback loop where then things worsened in the real world, which then reflects again back into prices. And you get sort of this spiral and that can be up. It's not always negative. That could be upward or downward. So stocks, sometimes when things are going well in the stock market, let's say it's easier

for them to recruit great engineers. Exactly. Or it's easier for them to do deals with other companies because everybody wants that Halo effect. A really great example of that right now is Anthropic. They're seen as like the leader in AI. Therefore, every company wants to bring them in for meetings or do deals with them, which means more contracts, which means the valuation keeps going higher.

And I think Anthropic on Monday, the news came out. Revenue was up 11X over a year. John Charlotte. Some ridiculous. What are we looking at? Trailing 12-month revenue. Anthropic just discloses they're talking to investors. $65 billion annual run rate.

That's where they are. Oh, my God. Look at the right hand side of the chart. From zero three years ago? Is that accurate? Yeah. I think their first dollar was March 23. Oh, my God.

So Netflix does $49 billion in the last 12 months. Coca-Cola did 51. Uber did 55. I mean, this is insane. Insane. This is the thing that's enabling us to look past or not even look past, but to mentally be comfortable with a trillion dollars in annual

CAPX in 2027. What's driving it is the revenue and they're taking that revenue and they're handing it over to the data centers and saying thank you for perpetuating this. We'll be back with another fistful of revenue in three months. The music is playing. The music

is very much playing and you know the the bears would point out like this is nuts. Putting Gemini aside so much riding on two privately held companies. It is absolutely crazy. It is interesting times.

We've been pointing that out for a while. No. Rumors on workday, and I don't even know what the latest is. I know these things are moving. Okay. Let me say what the news was last week, and then you could take a victory lap. On Thursday, news broke.

that Silver Lake was in talks to acquire Workday, a human resource software company, stock shot up 19% it halted, 55% growth in Workday Share since late June. A possible sign

the AI-driven Saspocalypse is ebbing. I did say we have to see one of these prominent ones in a take private in order to truly say we're going to stop with the Saspocalypse meltdown, at least in the stock prices, maybe not in the rhetoric. What was your reaction when this happened? And what's happened

since? Uh, my reaction is I sold right away. Thank you very much at 218. And I'm not taking a victory lap because I took, I took plenty of stabs at workday and service now and didn't come out that far ahead. Although it was nice to get one victory. But the bigger question that you asked is, is it over? Is it, can we say that the bottom is in for these horizontal names? Not the bottom. Is the period of time, where you could just mindlessly short any of them anytime you wanted. That's done.

It's over. That part is over. I think Palantir and Crowdstrike said, oh yeah, feel free to remain short. Watch as my share price doubles in eight weeks. So that part of indiscriminately selling everything, past software,

Visa and MasterCard, the ratings agency, Schwab, yeah, thank God that's done. That's been, right? It's been over.

So that episode's been over. I don't know, though. that workday and service now and at Laysia, which reported a great earnings, great quarter, I don't know that sales force is out of the woods. I don't know that sales force price is not going to be lower a year from now.

I don't know that I found the table. Yeah, I think they probably feel a little bit of pressure coming off, but they definitely don't feel like they've solved the longer term issue. But I don't think that they're running around in helmets in the basement of the building like Churchill's war room.

I think that, they very much were this spring. And I think that that, look, these guys, they all say, we just take care of the business. The stock price takes care of itself. Not true. Bull fucking shit. You look at your stock price every hour. You know it.

Every time you put out news, you want to know how people are reacting. And the best gauge is the stock market. And when the bombs felt like they were dropping in May and June, I don't think they felt like they had an inch to breathe. I don't think that's the case right now because while the share prices are not back at 52 week highs for most of these names, they're not on the lows and they've stopped falling. It's the right thing for management to say, obviously, what else are they literally going to say? But you have companies like Adobe and Duo Lingo where the earnings per share is at an all-time high and it's growing 15% whatever it is. The stock's down 70% because the market,

I know we were saying this in the spring. The market doesn't care about the earnings today because they know that in four years it's going to be 40% lower. Now, the market may have been wrong, but I don't think that we've heard the last of, last of this. You know what else has changed? The rhetoric out of the AI guys. It's really only two guys. It's, it's, nobody listens to the deep mind guy.

He's not a CEO. So it's really only Dario and Sam, whose voices matter. And six months ago, these guys were saying reckless shit every chance they got. pop on a podcast. Dario's like, oh,

casually, 50% of all white-collar jobs will be gone by 2030. Really? Who the fuck are you selling software to then? Like that's what you want to say? Sir, the microphone is plugged in. All right,

he's not doing that anymore. And actually, I don't, I'm not a Twitter guy, but from what I hear, his fellow Silicon Valleyites are ripping him to shreds every chance they get because of those types of pronouncements.

Sam's got a little bit more disciplined on messaging as well. Sam's home was attacked a few times. No, I think he wasn't super fond of that. Time to shut up. Time to shut up. Maybe don't be publicly noodling with the idea of anarchy in the streets on a podcast schmuck. You want to go public? You want to do a Wall Street road show tour like,

Elon got, where they bring water slides into the lobby at J.P. Morgan, you want that treatment? Stop saying things like that. It's not going to help you raise money. And instead of the news cycle being about how great OpenAI's products are, it's how crazy is Sam Altman? Or how much harm does Dario mean to white collar employment? That is the wrong way to be speaking a few months before an IPO. They know that. They're smarter than I am. So they've stopped doing that. I think that's also bought a little bit of a reprieve in the SaaS apocalypse also. It's just like not in the headlines every second, how they're all going to be disrupted to zero.

Well, this is a much better market environment than humanity environment, because how many hundreds of thousands of people does Salesforce employ? Is it a million or more? Could be. Yeah. Well, I don't think it's a million, but it's a lot. All right. I like this better. Many would say too many.

But the bigger picture, and I listened to Kodroski on Alex's show, Alex Kanchowitz, the big technology podcast. I actually shared it over the weekend. I thought it was so good. Kodroski is not like anti-AI. He's just saying like these are not going to be great businesses. Specifically, the providers of compute. And then the LLMs, he's basically saying they will really,

if they haven't already, that they have no choice but to go into enterprise SaaS themselves. They will be creating because there is hyper deflation in the value of a token. It's falling 80% a year every year for the last four years.

And he said to overcome that, you have to like million X the business or whatever. You need to sell something with high profit margins. And the thing to do is to productize the compute and the data and create, products that corporations will pay you for.

The other thing is he thinks that they have gravely, the people selling stocks in the SaaSpocalypse have gravely misunderstood why SaaS is even a thing to begin with. And the reason is people, especially executives at big corporations, they want somebody they can yell at or sue when things don't go right. And Salesforce is the perfect entity that you can yell at or sue. when something goes wrong. If your employees are all doing open source shit and working with the data themselves

and something goes wrong, who can I sue? Who can I yell at? That third party has to exist. And that is really why enterprise SaaS exists. But you know what? Rewind back to May and April. We were saying these things at the time that you can't just rip out Salesforce.

It doesn't work like that. And yet, the market is saying, oh yeah, down 4%. Oh yeah, I keep saying that down 7%. It's really hard. The market didn't say that people would rip it out. The market said that people would negotiate. Doesn't matter.

Fine. Offer with the salespeople. Fine. And true. Result in lower revenue per user and smaller margins. And that takes a decade to play out. It's really hard to stay long and to fight the market when it's falling like that every single day.

Really hard. I can't do it. That's not how I invent. I don't, we have, we know people that lean in. like we're friends with Jonathan Boyer. If he likes to stock at 80 and the market is pricing it for bankruptcy and it's at 40, he's not running from it. He's buying more of it.

Remember when Microsoft is crashing? We're like, Jim, it's crash. He's like, I like the business. I don't really, you know, I think the market's wrong. So some people can do it better than others. Hard game to play. All right. Last thing.

Jackie Jimrat is saying Salesforce is 83,000 employees. What did you say a million? Did I say a million? Close. No, I asked if they, okay, sorry, I don't know. I don't know the employee count of every company in the world. I'm teasing you. Amazon is Amazon and Walmart are like a million each.

Okay. So the scale is much lower. All right, let's talk about the stock market, which is doing okay, better than okay. We've got the, we've got every advanced decline line from the New York Stock Exchange to the S&P 500, 400 and 600, making new highs. This is, of course, the great folks at All Star charts starting this. Andy Thrasher shows it a little bit differently, looking at the number of, one month lows with large, mid, and small and then all. And of course, you don't see many new lows in the bull market.

There are none or very few, I should say. And, uh, Yurion has a great chart. Yuri and Tim Rover at Fidelity showing the cap weighted index in black with the blue equal weight and underneath in the pink. He's showing the percentage of members above the 200 moving average. And it is the highest level that it's been. in quite a long time. So you're having the market hit an all-time high with 75% of stocks above their 200-day moving

average. This is about as good as it gets. And we'll do the Uriand chart. When you were at set, I mean, it's not a, it's not a, it's a nice corroborating piece of evidence. It's not predictive. And as you can see, when you get into the 70s, you, you can get a market pullback. It doesn't mean you, you, you can get a market pullback.

It doesn't mean you will and it doesn't mean you won't. And a really obvious example of that is look at this period of time coming into the start of this year. You hit 71 and then before you know it, they pull the rug out from under you with the Iran war. And you're at negative 44. What does correlated mean? I understand narrowing. I understand broadening. What does it mean on the chart where it says correlated?

Well, it's when all stocks move it together, which is a great segue. into the next chart from John Crenzky. Check this out. Krenzky shows the trading days where more than 80% of the downside volume, more than 80% of the volume is to the downside. And we haven't had any. Jonathan says it is an anomaly

in that there has yet to be even 1.80% downside volume day. Wow. The average year sees 21 such days and we have never had a year with less than five. This is so insane. Chart off, please. Because even the reason why this is happening is because even during the war, you had the energy stocks. I think this is why you had the energy stocks absolutely ripping.

There's been a lot of charts that have like made the year funky where you have like Adam Parker has a chart showing negative beta, ever core copied it. I think Adam was first. And the reason why there were so many negative beta stocks, meaning stocks that go up when the market goes down or go down when the market is up, is. It was primarily energy, and that is just making this calendar year a very odd one to say nothing of the concentration and AI up software down software up AI down. It's just been an unusual year for sure. Yeah.

This will be a memorable one. I think we'll look back at this and have so many like examples of things that will be relevant in the future or like obscure things where we're like, hey, remember that actually happened before? A lot of years lead into the other. A lot of years bleed into the other. This is not one of those years. We got the SpaceX IPO. Like there's just a lot of funky shit happening. Lastly, also from Krenski, financial stocks are on their longest weekly winning streak ever.

Are you kidding me? 11 straight up weeks for financial stocks. What is that? The yield curve? What is he? I know the earnings are great and I know the stock market is. Everything's working. Yeah.

Everything's working. Money. MNA, and making money on Wall Street. Yeah. It's all IPOs, it's all, it's all happening. Speak of it's all happening. Dude, this, this, this acmin letter is, is a lot.

Like, there is, there is a lot going on with this Perjink Square guy. I know that he's very controversial and I know he aggravates people. And I know there've been like a lot of reporters who have busted his chops about his ego, his person. I just don't, I really don't care. I like him. And I'm fascinated by him. I don't know him. I met him once.

I met him on the set of my TV show. He came on and did an hour trying to rescue Valiant SharePrice. But I just, I think, I think he's a G. I think he's awesome. And I think he's always interesting. And the new, so big news last week, big news this week. We'll start with this week because it's more fresh. He's launching Persian Square Ventures.

And he's a square. What's the difference? He's a Twitter addict. I think he checks his Twitter every 10 minutes. And he does, he's famous for these CVS receipt length tweets. And he's, to his credit, he's in the mix.

Like he doesn't hide from people. He says what he thinks. People criticize him. He comes back. I don't do that shit. I don't know why he does that. But I respect it. But anyway, so he announced

this thing, Persian Square Ventures. I think it's interesting. Nobody has done this right. A lot of people are trying. Nobody has done the venture for everyone. Shit right. I mean, we gave it a shot with Equity Zen. Unfortunately, our timing was not great. I don't think anyone has done this well. But anyway, be that as it may. It's an evergreen permanent capital vehicle that will be able to continue holding investments even after companies go public. So he was on X talking about like it's not fair. I get access to SpaceX and X and X and XAI or these are opportunities that public market investors are not able to access.

With good reason, most of these don't turn into SpaceX. I know I shouldn't have to say that. Most private venture back startups do not have a happy end. They just don't. And the ones that do, it's very common that the pedigree behind those things makes it so that I don't care if you're Bill Ackman, you probably are not going to be able to get access for public market shareholders. But be that as in May, if you're going to tilt at windmills and you're going to be on a crusade

and Ackman is a crusader, this is like a worthy goal because the truth is a lot of the biggest winners in the last 20 years. the public never had a shot at, or the last 15 years, they came public at $100 billion valuation, or these days a trillion dollar valuation. So it's a worthy goal. Anyway, I thought between this week and last week, where he talked about his portfolio changes,

it's just been like an acman-heavy period of time. Why don't we do the portfolio holdings change first? And then we'll talk about some of the vehicles that people can use if they want to bet that he's going to be right on these things because he takes concentrated positions, really big swings. He engages directly with the board and the CEO, and he sort of tries to create his own alpha. And to a lot of people, that's an attractive way to invest.

What did you think about the current top 10 holdings and the current portfolio? What was your reaction when you saw this stuff come out? Listen, these are blue trip names for the most part. These are, right? These are like these are good companies. These are, I was about say good stocks, but I guess to varying degrees. But he charges a arm and a leg, dude. We're going to get there.

This is, this is the portfolio as of the latest filing. Yeah, it's fine. I've, I'm not hating on this at all. 12%. This is across all of his vehicles, which we'll get into. 12% Microsoft. He's got $567 million. worth.

Next largest, Uber 12%. Meta 11. Brookfield, 10%. Amazon, 8%. QSR, restaurant brands. That's Burger King, 8%. Visa, 5.6. MasterCard, the same.

S&P Global. 5%. I thought that one was interesting. Netflix, new position. 4.9%. He's back. Famously, he blew himself up in Netflix in 2022, sold at the bottom,

supposedly lost $400 million, one of his worst trades ever. And then Fannie and Freddie are tiny. I thought the Visa MasterCard Netflix ads were pretty notable. Situation zero in the chat, pointing out MasterCard and Visa are 11% of all of Zasta. Pretty big bet on credit card companies. Would you make of that one? He nailed it. I'm guessing he bought them closer to the lows.

I mean, they went from 52 week lows back in March. Again, another thing that was going to get disrupted by AI sounded ridiculous at the time. I didn't buy him. Credit to him. Went from 52 week low to a 52 week high in a couple of months. So you nailed those. How should I feel Uber is the second largest position and now Netflix is in his top 10. I own both of those stocks myself.

Uber is getting rejected hard at the 200 day. That stock, yeah, its stock is not going to get back above 80 without a fight. Like it seems to want to get there. but there's just, it seems to be endless sellers. Hopefully it's not him out there selling it. I know he's, I don't know that,

you know how there are things where you know, but you can't substantiate, but you just know. Here's something. I know he's on the phone with Dara every single day, giving him unsolicited advice. Just blowing him up

every time Uber's negative 4% on the day. This is his second largest position. I know that he, he is Daras number one headache more than Waymo. The company just reported earnings a week or two ago, and it's doing great. The problem is how does this, how does this overhang? When does it go away?

It goes away. As I, we're not going to do a whole Uber thing. It goes away when it's apparent to the consumer that the roads are flooded with autonomous Uber's. Do you know how long that's going to be? it's going to be years before the average person encounters an Uber AV on a street in the city they live in. Well, you know what else?

Slow methodical rollout. I'm still an investor here, but that you ask what it's going to take. Unfortunately, that's what it's going to take. Well, here's the other thing. If it does break above, it's 200 and it goes to 85, we won't be talking about it. There's overhang anymore. So it could just be that too. All right.

So I wanted to do a quick. We'll roll through this quick. primer in how to if you let's say you look at this portfolio you look at the track record of Bill Akbin you just like the guy you like his ideas he's got a co-portfolio manager who is uh also building a name for himself and you just say to yourself you know what I like that for a sleeve in my portfolio I want a little bit of like I want a little bit of direct acman so I thought we so here's the ecosystem of all the ways that you can do that I want you to remember remember that Bill Ackman had its worst two or three years of his entire life in the not too

distant past. And what he learned from that is, I cannot be managing a hedge fund and at the mercy of my LPs because they are going to want to liquidate me at the absolute worst time. He's made no secret of the fact that Warren Buffett is his idol. He's made no secret of the fact that his goal in life is to build something bigger than Berkshire Hathaway. and live long enough to do it. And so he has been de-emphasizing the hedge fund

and raising money into vehicles that look more like permanent capital, a la Berkshire Hathaway's insurance subsidiary, where Buffett got to invest the premiums rather than deal with redemptions. Buffett didn't run a mutual fund or a hedge fund. Okay. So, and Buffett had a private partnership and shut it down in favor of running the public vehicle, Berkshire.

Anyway, it's the hunt for, perpetual capital or like permanent capital. And that's what this is all about. So if you actually look at the ecosystem, the first one, we'll do these in order. Persian Square Holdings chart on. So this came public in, I don't know, 2013, 14, something like that. It has not really distinguished itself. It's not terrible, but seven and a half percent a year in total returns since inception. This trades in Amsterdam, and this was his first stab at permanent capital. This is basically a publicly traded fund that owns the stocks that he owns. So all those stocks that we just listed, Microsoft, Uber, et cetera, Brookfield, they're all in this thing. And what do I mean

about permanent capital? He sold shares in this and he keeps the money. It's not a mutual fund where there's money coming in and out, redemptions, et cetera. So he has the capital. Any invest that capital. Let's do the next one. PSUS. This came public in April. It's too soon to have an opinion about it. But it's a closed end fund.

I think he raised $5 billion. It is down 22% from the IPO price, which was 50. And it's trading at a nasty discount to its NAV. If you're a value investor, that's great news. It's great news. I love that. Because the actual portfolio nav is basically flat. It's down like a percent. And the stock price, to your point, Josh. So there's a massive, massive discount on Bill Ackman's face right now. And he's definitely really pissed off about it. Yes. If you think about this PSUS, basically you're paying like a 2% management fee,

which is very high. You're buying the Ackman portfolio. He's got 13% of this is in cash. and what's interesting is I'm about to show you the holding company that he took public at the same time this April Persian Square PS is the ticker So just buy that Well it gets complex So what should he do with PSUS What he should do

is he should buy back stock Here's the problem If he buys back stock It conflicts with PS Persian Square capital management because then there's less fees being paid up to that. If he buys back shares at the closed end level,

it hurts the holding company, the management company. So it's a built-in conflict that fucking sucks, quite frankly, I hate it. And I'm sure he's thought about it and he's got a great answer for that when he does a presentation or whatever.

But that's the reality. I also think it's carry. I'm not 100% positive. I think it's horrible rate is like 5%, which is not that high. It's not like he's getting fees when he beats the market, which is traditional. Now, why is he charging 2% for PSUS? Because he can.

Because he has $2 billion still in a traditional hedge fund structure. And those people would howl at the moon if he made this 1%. But stay tuned. Because another lever he could pull to close the gap would be to lower his fees. This is not what he's known for is thinking that his skills are worthless. but I'm just pointing it out. Now there's the Howard Hughes Holdings Company. This is the Berkshire Clown.

So basically Howard Hughes, yes, named after the famous, this was the company that was started by the famously reclusive, insane billionaire Howard Hughes. Now it's more of a real estate company, and he's trying to turn this into Berkshire Hathaway. The real estate they own, they own South Street Seaport, but then they also own all these planned communities. so it's land and its housing and its buildings. And now he slapped an insurance company on top of it. And then on top of that, the idea is like,

I will turn this into my Berkshire Hathaway vehicle. The thing is, Warren Buffett and Charlie Munger never charged a fee to manage money for Berkshire Hathaway. They made their money as shareholders. He's double dipping here. He is a shareholder, chairman of the board. He controls it. and also he got the board of directors to sign on on him being the allocator in chief

and they're paying him a performance fee and a management fee to manage the cash flow that the insurance company and the real estate assets throw off not quite what was going on at Berkshire directionally it's sort of similar but he's making a lot more money the way that he's doing this what else that I want to say all right Persian Square PS let's do that one last so Michael you said just buy this

yeah this looks better okay so Ackman the person beneficially owns 45% of this so as of August of 26 he owns 181 million shares out of the 400 million

shares outstanding and basically what this thing is, it's the capital management company. So this is when I say such and such entity is paying fees, paying fee, this is where they're paying it to. So PSUS, PSH, and the Howard Hughes Corporation are all paying this entity to manage their capital. Kabish? You got me on that?

Gabish. The guy that was Kapish. Capish. It depends if you're Brooklyn or the Bruch. He has real skin in the game and all of these entities, but like arguably, if you wanted to bet on Ackman successfully launching this venture fund, for example, and when I see successfully launching, selling it to the street and having the fees being paid, if you wanted to like be alongside Bill Ackman, you buy the management company. The thing is you're not going to get one-to-one upside on the portfolio. So if you want to bet on him as a businessman and an entrepreneur, you buy P.S. If you want to bet on his portfolio and his stock picks, you would buy PSH, which you have to buy as an ADR or the new vehicle, more likely, PSUS.

And if you wanted to bet on the Berkshire concept, you would buy Howard Hughes. It's a lot. Any of these that you buy, you're paying a lot of fees. and you have to just like be religiously comfortable with. Yes, I am the sort of person that pays somebody 2% to pick stocks because that's kind of what the setup is. I hope that was helpful for people listening.

That was a good job. You did a good job. But at least you're paying for a concentrated portfolio. At least he's not a closet indexer. Like you're... I agree. And that's one of the reasons I like him. He's not mimicking the index.

He's saying, I'm smarter than the market. And I'm going to put my skin in the game to show you. that I really believe that. And I respect that a lot more than the parade of mutual fund managers who are 300 basis points away from the S&P in one direction of the other. Me too. Me too. I'm going to quickly make the case for, listen,

the market's been really calm and really great. Oh, I'm sorry. I have to say one more thing. I'm really, really sorry. This is the whole key to the whole thing. He touts this performance number. I shouldn't say touts. That's got a negative connotation.

21% annual return versus 10 or 11 for the S&P since inception of his fund in 2004. The problem with that is there is probably not one investor on Earth who earned that because the drawdowns have been unbelievable, especially in that valiant JCPenney era. Herbalife. Herbalife. That's one. Two, it's jumping from one vehicle to the next.

The original fund. Was it Gotham? Was that him? No, no, no. Leave that out. He's, I think this is Persian Squirrel for. Gotham was another debacle that predated it. Didn't go well, but he wasn't the only person there.

He had the idea, I'm going to buy up every golf course in America or something. It was not great. You almost could not have possibly earned that return with real dollars that they talk about. Although with his investments, he like did create that. return. So it's it's compliant. It's mathematically sound. It is real. He did do that. The question is, could an investor have ridden alongside from 04 through now, jumped all those different vehicles, never redeemed that at any point? Is that realistic? Did anyone actually do that? Not actually. He did. He did. He did. And that's why he's a billionaire. And that you can't take away from him.

I just don't think that's a track record that any institutional allocators should look at and say, yeah, I could have earned that and definitely not a retail investor. That's a lot. Okay. So, no, it's okay. So the market has, I want to make the case that if you're going to put on a new position, you really have to love it. And maybe just take a second because the market could not be treating us any better than it is today.

Chart on. You've got the VIX at 15. You've got the equal weight S&P. basically as far above its 200 moving averages, it's been over the last three years. Like, to say that the wind has been at our backs is a massive understatement, okay? So if you're hunting for new positions,

just maybe take a beat. The market's treated us awesomely. Like is right this second the time, you're saying like, all right, I get it. You want to add a new stock to your portfolio. Is today the day that you want to do that? And you were saying like not necessarily. I'm just saying just maybe take a beat.

That's all. Unfortunately, I bought something to say, the mystery chart. Okay. Love it. Hold on. You know what? I think I could guess what you bought

without even look. Hold on. Let me look at you. Okay. So anyway, here's a, here's a, here's an industry group that continues to lead that on any pullback,

I like it a lot. I like it a lot. So this is from Scott Brown, CMT at Scott charts. He says, Leisure continues to lead. New all-time highs for PEJ today as betting against the consumer's

willingness to spend on travel remains one of the worst bets you can make. So shout, to Invesco. I didn't even know that this ticker existed. What is this? But, but it looks great. And these are the top holdings. You've got Expedia also pretty concentrated portfolio. The top 10 PEJ. Yeah. So top 10 Expedia, Airbnb Viking holdings. Cisco, Starbucks, Hilton, Marriott, Las Vegas Sands. What is that expedition? I can't even read that. Uh, Lynn, I don't know what

that is. Lindblad, whatever. And Cinemark Holdings. I mean, this is real exposure to the spending economy and it looks awesome. Compounding over 15 years at 10%, which is probably market equivalent. It's had a really good year because people are in the real economy spending on leisure and entertainment. You're right. Yeah. So if this pulls back, I mean, I like it a lot.

I wonder, I feel like travel, like specific travel might be better. And I'm sure there are travel ETFs by now, thematic. I want to dive in, I want to dive into this. and see what else is in there okay um all right what did you buy today you son of a bitch so i made it the mystery chart put it up oh i like this don't don't guess it's spot it's spotify spottify you're too good at this i can't even play with you dude i almost bought this today too we think of like hold on how did you know because i i told you i was looking at this chart today so you saw the five hundred seventeen dollars and say that's the only five hundred dollar stock

i could think of right now no no i would have got an absolutely y-axis i literally I'm really staring at this chart today. Looks great. All right, I love this. So rather than me describe what's on this chart, wanna you describe what I'm, what my annotations are pointing out. Okay, there's a lot of negativity in the name,

despite the earnings being pretty solid. I think the hangover of competition, same thing with Netflix, competition for YouTube and TikTok. We know, we know, we know, we know. There's no more sellers. The stock found a double bottom and it's nothing but higher lows and it's about to break out.

I love this. I wish I bought it today. I'll buy it. I think this is, I think a couple of things. I think this is, is the best business. I think this is the best business in media. I think it's better than Netflix because there aren't 10 Spotify's. It's Apple Music which sucks and I unsubscribe from and they're Spotify. And I understand that people listen to music on YouTube and they just let the videos play.

I am fully aware of that. People that actually care about music and want to hear their favorite songs perfectly and pristinely remastered and delivered in the absolute highest quality format available are not letting a video scroll on YouTube happen. They're on Spotify. Globally, globally. In every country, in every region, humanity loves music. There is something, it's a drug. These are songs are not songs. They're spells. And they put you in a different mood instantly. And people since the dawn of humanity have been willing to pay for music or Kenny J. Kenny J. That's right.

So I think it's like the best business in media. They beat their shit out of XM serious. Almost like they're off the board. Like nobody even talks about the two things in the same sentence. There's no more Pandora. Oh, really? Like every, not really. like they they live they have literally one and now it's a matter of can they be the first media

business to get to a billion subscribers i think they literally could where are they now 400 it's like 600 million how many companies on the planet like it's apple it's like a tiny list have 400 million people paying them on a monthly basis how many four two I don't know the number anyway this is a trade I could be out of it in two days

so I don't I don't want to go crazy chart back up and then we'll get out of here I just love the type of I love the higher lows I love the seller washout that's what I want to point I want to point this double bottom at 400 my stop I have a stop in below that level because it's a it's a trade and it could turn

into an investment I don't think they have pricing power I'm seeing in the chat okay that's why they keep raising the price I don't even understand what you're saying. It doesn't matter. The jury is out if it's going to take out that 200, if the 50 day is going to cross back above the 200 day. But that's what we're setting up for.

And you've got a moderately rising RSI. You've got momentum coming in. If we get a golden cross, the Bulls take over this chart. I think 400 you could play off that level. it's 21% below where we are right now. That's a pretty good risk reward. 50% potential upside. This stock was 800 a couple of years ago.

So let's say 50% upside versus 20% downside. I like the trade. I like the trade. We went way long, but guys, we did a lot tonight. Thank you so much for watching. Thank you for listening. I appreciate it. Songs are spells.

That is correct. All right. Guys, remember tomorrow is Wednesday. All new animal spirits. We'll get an ask the compound Wednesday at 1 p.m. And then we'll get an all new talking wealth. If you're an advisor, you want to check us out. It's a separate channel.

People that care about financial advice and the advisory business, which are going to drop a new one of those Thursday at noon. Friday morning, new the compound and friends. Keep it locked. Stay with us. We appreciate you. We love you. We'll talk to you soon.

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