The Compound and Friends - Vanguard’s Joe Davis on AI vs Debt, NVDA $4 Trillion, the US Dollar Plunges, Next Hot IPOs

Episode Date: July 1, 2025

On this TCAF Tuesday, Josh Brown sits down with Joe Davis, Vanguard’s Global Chief Economist and Global Head of the Investment Strategy Group to discuss Vanguard's 50th anniversary, Joe's new book, AI, megatrends, inflation, and more! Then at 48:48, hear an all-new episode of What Are Your Thoughts with ⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠ and ⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠ including a special appearance by IPO expert Aaron Dillon! This episode is sponsored by Public and Rocket Money. Fund your account in five minutes or less by visiting: https://public.com/WAYT⁠ Cancel your unwanted subscriptions and reach your financial goals faster with Rocket Money. Visit: https://rocketmoney.com/compound   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 Public disclosure: All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. Alpha is an experimental AI tool powered by GPT-4. Its output may be inaccurate and is not investment advice. Public makes no guarantees about its accuracy or reliability—verify independently before use. *Rate as of 6/24/25. APY is variable and subject to change. Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Ladies and gentlemen, welcome to the compound and friends. Tonight's show is sponsored by our friends at public.com and the public trading app. We are also sponsored by Rocket Money. Rocket Money is a personal finance app that helps find and cancel your unwanted subscriptions, monitors your spending, and helps lower your bills so you can grow your savings. What if there were an app that showed you everything you're subscribed to all in one place, how much it costs, how much you're spending on it. And then you could say, you know what?

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All right. Tonight's a big show. We had Joe Davis, who is the chief global economist for Vanguard, come and tell us why he thinks the future, like the next five to 10 years, is a pretty binary situation. Either debt and deficits and entitlement spending absolutely sink us, or AI sparks the biggest productivity boom since the onset of electricity and we find our way out of this mess. And he thinks, well, I'll let you hear what he thinks.

So we're gonna do that. And then straight from there, it's an all new edition of What Are Your Thoughts? It's Michael Batnick and I, we talk about the US dollar crash, Nvidia at almost a $4 trillion valuation, the next slate of hot IPOs coming in the second half this year and so much more. Thank you guys for listening.

I'll send you into the show right now. Welcome to the compound and friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

Hey guys, it's your host, Downtown Josh Brown. Welcome back to Live From the Compound. We have a very special guest with us today. His name is Joe Davis. Joe is Vanguard's global chief economist and the global head of Vanguard's investment strategy group. Joe leads a team that is responsible for Vanguard's research and thought leadership agendas, as well as the development and oversight

of the firm's investment methodologies and models. Joe, welcome to the show. Oh, thanks for having me. This is like, this has been a big glaring event on my calendar for weeks now. I've been so excited about it. And I did spend the weekend reading your most recent paper. And we're going to talk about the book. But I just want to first start by congratulating you and everyone at Vanguard on the 50th anniversary of the firm, which you guys celebrated in May.

Yes. Okay. And there was a big bell ringing, a big ceremony. Oh, it's been really special. Okay. What is 50 years of Vanguard mean to you? Well, I think it's really just a testament to investors. I think one of the beauties of Jack Bogle's philosophy, really, I think just long-term investment philosophy, was just what he would always say, stay the course. And what that means is that you don't, it's not that you don't care about market volatility, Josh, but you just, you got to stay invested in the markets and let compound just take its time and lower the cost of investing. So it's been truly wonderful. See, the actually the entire industry has really

embraced this, not just a Vanguard story. And so that's why I think we're celebrating 50 years of cost of investing. So it's been truly wonderful. See, actually the entire industry has really embraced it. It's not just a Vanguard story. And so that's why I think we're celebrating 50 years of lowering the cost of investing, which means investors get to keep more of their hard earned dollars. The first 35 years were the hardest. Oh my.

Because Vanguard was really out in the wilderness. It was kind of like you guys were running beautifully, but the Zeitgeist was very much active investing for all of that time. And then a switch flipped and it became the Vanguard era. We're very much still living in the Vanguard era now. And I remember being there, I don't remember the day, Josh, but I remember I started working at Vanguard early 2000s

and I knew I had the privilege of knowing Jack. And he would famously say, you get what you don't pay for, which a lot of things in life, that doesn't seem to be intuitive, but quality, all those sorts of things you associate with cost. But it's just really having driven down the cost of investment.

It's just been phenomenal. And to see that, because ultimately it's not Vanguard's money, it's the end investor's money. It's just been a privilege to be a part of it. Okay, well you guys have done an incredible job. And today we're going to talk about your new paper and your new book. We'll start with the paper because I spent a day on this yesterday in preparation and

I really love the way that you framed what the, I don't want to say battle, but what the central conflict of the next five to 10 years in terms of the economy is going to be. Will it be the AI decade where we will offset the population issues that we have, the demographic issues that we have, and we'll find a huge productivity boost because AI, in your estimation, is a GPT, a general purpose technology revolution, akin to the internet or electricity. That's one outcome. It's one path. The other outcome is debt and deficits will unfortunately have a bigger impact than the impact of AI.

And you have that as your second highest probability for how things play out. Give us the background on the way you think about mega trends and the way that you think about the four most important drivers of the economy and investing. Well again, where I started with all this Josh, as you can imagine my role, you get a lot of good questions from investors.

It's not just what the Fed's gonna do with the stock market say the next six months. It's actually a very poignant questions. I mean, you'll get it from clients. You talk about it on the show here. Are we deglobalizing, which means, are we in a higher inflation world? Is the bond market ever gonna care

about the high levels of debt we have? Yeah, and is AI overrated? Is it underhyped? What do we know? These are the questions people come to you with on a regular basis. These are the questions all the time. And again, there's a lot of, in my profession, respectfully,

there's a lot of narratives being told. But if I'm an investor, tell me, what are the probability and odds of some of these outcomes? Because if we can start talking about that, we can start talking about risk management, maybe modest portfolio diversification. And so I didn't have good answers to the questions from clients.

And so we tried to provide, create a data-driven framework. It is a model, so it's got limitations by definition. But I'm proud of the fact that we're starting to quantify these outcomes. And that, to my surprise, was the eye-opening finding. I cannot generate the consensus view that most have on the U.S. economy over the next five or 10 years. It is very unlikely we're going to have stable growth and stable inflation.

I'm not here spinning narratives, Josh. It's coming out of this push and pull between the deficits you mentioned on the fiscal side, which can be negative, and then the promise of AI, which can be disruptive, but can also power on growth. We're going to get one of the two. We're not going to get the consensus. So the framework that you use, the megatrends, these are, and we'll put these charts up ultimately, but you're saying since 1890 megatrends have been a powerful driver of changes in the most important four aspects of the market. What are those things? Earnings yield? Yeah, earnings yield. So it's on the stock market, the real driver, it's interest rates. Is earnings yield is a stand in for valuation and profitability?

Yeah, it's a stand in for profitability, valuation. Okay, so that's one. What's number two? Tenure treasury yield. Okay, what's number three? Inflation. And then interest rates? Yeah, just growth. Well, the ten year treasury. Okay, so then economic growth.

Yeah, economic growth. You specifically say real economic growth, meaning inflation adjusted. Yeah, inflation adjusted. Those are, what are those four things to you for the investor? Well, again, stocks and bonds, I mean, they're the catalyst for stock and bond returns. Okay, so that's the drivers of return. Drivers of return for most portfolios. Okay.

When you think about those four things, one of the things that you do in your paper, your team does in your paper, is you try to get at to what extent are each of those driving the returns in the market over time. And they're not necessarily constant. No, they're moving all the time. They're moving all the time. That's what makes it so hard to forecast stock returns. Totally.

Because you don't know which of these things is going to be the driving force for the next six months. Well, the big eye opener for me, Josh, is that everyone, even central banks, the Federal Reserve, they do this, the Federal Reserve, they do this all the time. They're at press conferences, and they talk about all the demand. They've got to raise interest rates

or cut interest rates because demand is weakening or not. That's part of it. But what the megatrends really is getting at is these forces that really drive this inflation, that drive growth, and hence, stock earnings. No economist is going to debate that technology is important, but also deficits and borrowing costs.

We got globalization and demographic factors such as immigration. Those are driving the business cycle. I'm talking GDP, I'm talking stock, S&P 500 returns. They explain half of the variance from like month to month. I'm thinking this is a long-term issue. I'll worry about it in year 2035 when I'm retired, Josh. Hopefully I'm retired by then.

But I'm like, no, this is actually mattering much more in the near term than people think. Okay, one of the points you make is that the consensus forecast for growth going forward is that it'll look just like it just looked. It's so that's like the consensus view and you have it as kind of like a bell curve, but effectively most of the forecasters

are clustered around one and a half to 2% growth and then two to two and a half. And of course there are some outliers, but you don't think it's gonna be that simple. Why is that? And again, I was in that camp. I've been there for two or three years. If you had asked me what's growth for the US

the next three or four years, I'd say 2%. Why? Well, it's the easiest thing to do is extrapolate. And so I'm not disrespecting me. I was part of that issue. It's what I call the status quo. Like it's not gonna change. The question is, where do you see the risks?

And it's only when you start thinking about the inner play, like a living, breathing organism, think of how debt can change the interest rate in the bond market and inflation. Think of how technology, which has not driven growth for 25 years, materially, since the computer and internet, does that have the prospect for doing it. Now you can see if you can start interacting these forces,

you can start to get a better handle of where the risks are shifting. And that's what was eye-opening to me, is that we are unlikely to get a better handle of where the risks are shifting. And that's what was eye opening to me. We are unlikely to get the 2% growth. Can we double click on something you just said? One of the premises in your work is that we've been missing this next technological shift since the internet age started,

which is now 30 years ago, the beginning at least. That's the irony in today's economy. We don't have another GPT. And we talk about technology all around us, all around us. We're modeling three types of technological change. What I was shocked to find is that we don't have any of those new, that is called general purpose technology, not since the internet. Social media, you can maybe call it, if you're stretched, a GPT,

it's done zero to economic growth. It's an offshoot of the internet. The internet and the computer, which lifted growth in the late 90s. So we have that and we actually have a lack of automation in a service-based economy. So those two forces are pushing down growth on a trend basis. And that is financial ramifications if we persist over the next 10 years. You think AI has the potential to be bigger than the internet and computer age? Yes.

In terms of its impact on economic growth? Economic growth both through automation and what I would call copilot. Some call copilot, right? So augmenting you. Augmenting workers. Augmenting workers. So tell me what I can do better. Not just save me time.

But we need both. Because we have an aging society. We're losing millions. We're at the peak of 65 year olds. So that we are we are simulating what what what AI and other technologies will do next quarter next year and five, 10 years out based upon today's signals. It's not magic, Josh. And this is not speculation. We are taking of what the companies are doing, the labor and investment are doing. The beauty is we have 150 years of seeing when there was past flops in the pan

and when there was the early emergence of electricity or the personal computer. And we're seeing similar signals as those early stages of electricity and personal computer. So you're not saying that tech hasn't been important. What you're saying is the last general purpose technology wave is already 30 years aged. It's aged.

And we need something to replace it. It's like a movie sequel. I mean, it's a new movie, but this is not as good as the original. And so it's just diminishing returns. Okay. All right. I think I could wrap my head around that. As I was reading that, I was like, wait, all the earnings growth is still coming from technology.

It's still, it's always there. Your answer would be yes, but it's old technology. But how do you get a lift? We're going to have a flat labor force like 10 years from now. You're thinking more about the bigger picture, not just corporate earnings, not just corporate earnings. You're thinking about societal impact. Societal impact, yeah.

Okay. All right. Got it. So talk to me about, talk to me about how that affects your outlook for the economy then if the, if the most probable case to you is that AI is going to be transformative enough to overcome the demographic headwinds and the deficit problems that we face, what does that mean for your outlook? What, and how do we translate that into how investors should think about the future? Yeah, I think that's the key one, Josh. Tell me how I can... And be very specific.

I will be as specific as possible. So one is, is from the US equity market, at least from the tech perspective, is effectively saying with 100% certainty, AI is going to be the next thing. And we're going to get that high 3% growth, let's say, if consensus is to. GDP growth. GDP growth. Low inflation will justify the higher multiples, will grow into it, and the market's

not overvalued at all. And that upside to the growth outlook is going to come in the form of productivity. Productivity, new business opportunities, which happened to pass. It's not just efficiency play, and you're justifying the current multiples. My point being is that the tech sector in the US and the NASDAQ and those are their pricing in effect

But that has already happened. I'm saying it's a roughly a 60% probability that's gonna happen Which is a pretty bold forecast on my part So that's code word for saying that part of the market is stretched Even if you have the technology even if you're yes Even if you're the most bullish on AI as you could be put it put another way You need to see earnings growth in the next four years to be stronger than electricity was unleashing through the to the US economy in 1920s Twice to just to justify current multiples and I am NOT bearish on on tech and I'm not bearish on AI What I'm saying is the current price paid for that is just a little bit stressed. Now, how do you navigate this path? Because I just told you,

Josh, that AI can, we could drive up 3% growth, but if it doesn't accelerate in the next four years, we have a deficit problem with higher interest rates and lower growth, which is a more nasty mix. So how do you navigate that? And I will answer your question. There are a few investment strategies that actually do well in both those states. So you don't have to pick a side. Okay. So your next highest probability case for the future is what I call deficit. Domine AI just is delayed in its impact or it's more marginal. It effectively says the chat GBT that you're using or the Microsoft, it kind of that's as good as it gets. So you did.

I don't think anyone believes that. No, I don't believe it either. But the signals are still too weak to say that that's going to overcome millions of people retiring. And then we have structural deficits of 6% of GDP during peacetime. That that that's there are outrageously high levels. Yeah. So you got it.

I'm not saying we're saying more odds than not, we're gonna overcome them and we're gonna have growth that's stronger than we've seen in 40 years. Okay. With disruption, but it better be that strong. And then if it's not, now we're in the world of risk management, because now you're talking about growth that's well low below expectations

five years out and you have an interest rate that's continued to rise with our deficit pressure. So what we saw in April with the trade and we saw the bond yield and the bond vigilantes, we saw the weakness of the currency. That is a glimpse of my other scenario if AI doesn't prove out to be as transformative as we think. Well, that's a very discouraging glimpse. It is.

The stakes are high on this. I'm not being sensational. I did not see this. I was not looking for this outcome. There are two things that saved the stock market this April. The first was Trump walking back. Those nominal rates of tariffs. But the second was earnings season. And in April and May, we ended up getting some of the strongest tech earnings in the history of the stock market. And Nvidia was last. So it was Microsoft, it was Meta, it was Broadcom, it was Oracle.

It was everyone involved in this AI build out. So not only will it save the economy in your most probable case, it's already saved the stock market on multiple occasions. So this is consistent. If AI is going to be that next electricity personal computer, you need to see the tech sector doing what it is doing. Yeah. You know, we saw it before.

It doesn't guarantee, my only point is, it doesn't guarantee the outcome. We've seen investment cycles in the past. Now we look back and say, well, it wasn't as important. Biotech had this in the 60s. We had some flashes in the pan, and that's the only reason why my odds are below 100%, Josh. We didn't have any of those false signals,

but there's enough of them that it says it's not yet. Right, the tough part of that being around for as long as you and I have is we all remember 3D printing. Like we have this. Metaverse. The metaverse. Like we have this, unfortunately.

You gotta respect it a little bit. But I tell you what though, if you will want to get into then. Okay, what's the second half of the chessboard though, if you're our Bolshané? Because there's two phases to what I call a tech cycle from an investment standpoint. And they can last, these two phases combined, last at least 10 years. Is the second phase all of a sudden the S&P 493? All of the non- AI direct plays become beneficiaries and grow earnings faster.

You're really smart Josh. Yeah, you beat me to the punch. But it's not criticizing. There's two reasons why it happens. You actually want to invest outside of tech in the second half. And that's because if this technology, whatever it is, they'll call it AI. If it's that transformational, what is it doing for you and I if we were on a hospital?

I would find an energy company. How am I getting more efficient? What new proxies are unlocking for me? What new drugs is it discovering for medical treatments? That's what needs to happen. That's what happened. The electricity powered the assembly line, which powered GM and Ford, motor company.

Without electricity, we don't have those companies. You use an icon of an electric drill to illustrate that in the paper and I thought that was a really great way of just like wrapping your head around what does it mean to be augmented by a GPT wave. So people building is a really easy thing for everyone to imagine. Bringing power tools to a job site versus however we had been doing things for the hundred thousand years prior, hitting objects with heavier objects. That instantly unlocks the workforce to be doing more at a higher level, which allows

you to think more ambitiously and imaginably about what else you can accomplish. There's going to be a lot of disruption in the labor market. I mean, we're showing 20% of occupations are gonna see significant job loss in the next seven, 10 years. We started doing this work a decade ago because we've got some sense of, well, I was trying to get some sense,

how important is AI gonna be? And so it's not, yes, it's gonna unlock these opportunities, but I'm not gonna sugarcoat it. There's gonna be copiling, but there's gonna be some significant disruption. Is the get out of jail free card, the demographics themselves, we're going to have this wave of people leaving the labor force at the same time

that this transformative technology theoretically will create this disruption? AI will come at the right time given our commitments on the debt side. I mean, unless we're going to raise taxes and cut the entitlements. And I just care about the gap. I don't care about the politics. I'm talking about closing the gap over, you know, seven or 10 years out.

I'm not talking about tomorrow. But if AI would come at the right time in the demographic headwinds that we face, and you think the US is alone on this? You got Europe and you think Europe, China, everyone else has small potatoes in terms of demographic headwinds relative to China. Okay, you refer to this as a J-curve. I want to quote you and then you can react to it. Transformation recurs to a technological advance, a GPT, or again, general purpose technology, that unleashes creative destruction on a massive scale throughout the economy. As GPT cascades across it, the economy is reorganized and a new ecosystem

is built around harnessing the GPT's benefits. Think of all the people who have internet jobs now, which did not exist 25 years ago. During this period, there may be a dip in productivity, which is commonly referred to as the J-curve associated with the adaptation to the GPT. In short, humans and machines learn to reorganize themselves to produce at higher levels than before. Was the 1930s in part exacerbated by the fact that it was in the midst of that electricity J curve, or is that too far of a leap to make?

I think that's too far. There was a lot of big bad policy errors. Trade, the Fed. Tariffs, sound familiar? Yeah, sounds familiar. Although the Fed really, really did it. So you don't think that that conversion of a non-electricity to an electricity economy was part of it?

No, I wouldn't want to portray it that way. I think though, like how are we even simulating technological change? Why we're saying that AI could be very disruptive. Because by the way, every economic forecast that I've seen and most central banks assume the debt levels we have on the negative side, Josh, and the AI, let's call it on the positive side, will somehow magically offset each other and balance out so that we'll get no change in the economic regime we've been in. If you're skeptical of that view, now I'm questioning a lot of consensus forecasts, a lot of respected institutions, Federal Reserve, IMF, CBO.

So these are powerful institutions. I respect them a lot. Where is the danger of us getting that wrong? The deficits are much more substantial than we are projecting? They are, yes. Or part of the AI is over-hyped, which is why we wanted to bring data-driven framework.

This is not me on a bad day, I'm more pessimistic. On a good day, I'm more optimistic. We're trying to bring math to it. Josh, watch why we, it took us two years to collect all this data, and we wanna be as scientific as we can. And that's how we're simulating the effects of future of AI. We're looking at what, you know,

this J-curve comes out of VC and venture capital. If CEOs around the country right now are adding more labor than typically would be expected, that's one, and they're investing more, you said are adding more labor than typically would be expected, that's one, and they're investing more, you said about the earnings, than typically would be expected. So you got labor going up and capital going up. The current ROI is low. Why would any CEO and CFO do that? Because they're thinking five years, not one year. Which is why the j-curve goes from negative to positive. We pick up those signals, it's not magic, in real time. We've gone back 150 years. So you can anticipate the sand shifting

on the undergredients of economic growth because the technology leads to economic growth by three to five years. New products in the lab, you know what I mean. Michael Batnick and I were looking at CapEx versus employee headcount for the largest U.S. tech companies. The only one not furiously adding CapEx relative to its employee headcount

is Apple. All the rest are investing at a higher rate than they were during the original dot com boom and- That is a J curve in real time. That's the J, right. That's the reverse of the J curve. And this is out of just great theorists at MIT and elsewhere. We need to make a new theory.

You can then project out when the S-curve reverses. Now, the S-curve is going now. S-curve is the adoption. The adoption, right? So right now, there's two phases of technology. Think of it this way. There's the companies that produce the tech, and then there's that consumer.

So right now, we're in the production phase, which is great for AI tech. I'm not belittling any of that. That's amazing work. But at some point, we're going to move into phase two. And no one's talking about that investment opportunity. Phase one outperforms the tech sector, always outperforms. It was the computer companies, it was the dot coms,

it was the tens, and it was called the ruling 20s. At some point, it shifts. It doesn't have to be a bubble, Josh. It shifts to the consumers. It's all like the value-based companies. Tell me how a financial institution, a Vanguard, a bank, is gonna get more profitable from consumerists. How's your firm gonna get more?

How is a hospital gonna triage patients more effectively? So I think we're six months to a year away from a consensus among small business owners that AI is improving their profitability enabling them to serve more customers or doing all the things that we hope it does. I don't think most small businesses could say that right now but we see B2B uptake amongst larger publicly traded companies and what we're what I'm focused on now, so I look at the

stocks that are leading the market, still with a prism through which I look at stocks. I'm finding companies like Viva Systems, this is a healthcare software company that's been around forever. All of a sudden, they look as though they will be the key implementer of AI for their healthcare industry customers. You are absolutely seeing that uptake in a major way when you view it through that prism. So I don't think it's reached me yet. We're playing, we have all the tools, we're doing all the things. That's what I'm seeing from a macro perspective.

You are from the investors perspective. Looking at it from companies that are not in the AI business and making chips, but implementing. It has to happen. If AI is going to be transformational. And on the defensive, if you think AI is hype. So let's say you're skeptical. Well, you're running for the 493 on the S&P to diversify. And I'm not picking on the Mag 7.

I'm truly not, because they're doing amazing things from an innovator standpoint. I'm thinking about second half of chess board. Where are people not talking about the investment opportunities three years from now? because they're doing amazing things from an innovator's standpoint. I'm thinking about second half of chess board. Where are people not talking about the investment opportunities three years from now? Because if we're talking about AI now, if I just woke up today, it's like too late. Too late, Joe. Yeah.

Think about it. You think about the underperformance of small caps, the underperformance of non-US companies. You talk about US exceptionalism. It's all been driven by the top seven. And then also the value space, massive 100 year relative differentials. Now I'm not saying all those sectors, all those areas I just mentioned,

non-US equities, value-based companies are in ETF, and non-MAG7 are all gonna outperform the future because they underperform the past. This is the most interesting thing, like the most out of consensus thing you could say is that from a stock investor's perspective, the biggest beneficiaries of the AI boom will going forward, will not be GPU and chip manufacturers like Amazon, Alphabet, Nvidia, Broadcom, and will not be the cloud service monopolies, Amazon, Microsoft, Alphabet, but will instead

be companies that have their profit margins expand by 500 basis points in the next two quarters because they're implementing AI. You could get a re-rating in small cap value. You could get a 20% re-rating with no change whatsoever to the economy. It's not just simple mean reversion, which is a dangerous, you know, you know that. So it's like, no, this is how economic growth and cycles work during transformational change. It's got to unleash, it's got to spread, and we got to go from producing to tech. And I'm not saying those companies are going to crash and it's a bubble.

We don't have to get into that debate. I don't have to drag Bob Schiller in here from Yale. We're going to have to have that. You don't need to answer that that debate. I don't have to drag Bob Schiller in here from Yale and we're gonna have to have that. You don't need to answer that question. All I'm saying is what the next phase is, and that is the phase that, and you don't have to pick sides. Because whether, if AI's a dud, like social media,

we all use it but doesn't really lift growth, okay, well the Mag-7 is gonna come back down to earth. But it's the- Well, I think the physical AI is really gonna be the thing. But I think you're onto something. It's like, tell me how, I think we have a little time on this. I don't see it like in the next six months.

But yeah, there's going to be a consciousness that's consistent with other market cycles. And I at least didn't see this until we got into this work. You see with electricity, you see with the combustion engine. And I'm not telling history just for nice stories. I'm talking about from an investment standpoint, what do we talk about the next four or five years? It's actually pretty exciting. And I think that's good for the durability of the equity market because it's so concentrated right now

and more of a handful of sectors. I think it would be healthier. And that's, I think, for your listeners just to consider, like what's the next opportunity set? Knowing the MAG-7 have done fantastically. The MAG-7 were a much bigger proportion of the S&P 500 in February during the last high versus now. So now the S&P has broken through to a new high, but the MAG-7 as a percentage have declined

in importance. They're still gigantic. They're still dominant, but we are seeing an S&P that's less concentrated this time than it was four months ago. I think it's a really good development. If I had to pick one of the market indicators to continue to be looking at is that share that you just mentioned, Josh, going down in an upmarket. That means this J curve is spreading. And this is not a six-month cycle. These things that you don't have to be obsessed every single day to watch the news.

You can think, oh, this is a four or five year, it's a trend that can be at a tailwind, and you don't have to be cute trying to time it. But I think the answer that we're giving people, if this is the era of AI, aren't I making a mistake sitting around in mid-cap values, small cap, bank stocks, other companies that are not playing in AI? And the answer, hopefully, bank stocks, other companies that are not playing an AI. And the answer, hopefully, is no, because you own the beneficiaries.

The Mag 7 have nothing but CapEx bills in front of them for as long as far as the eye can see. And they're going to lower the cost. The cost of technology is going to radically down. I think people on the tech side, they just underestimate. There's some stars that emerge. You know this, Josh, but they underestimate new entrants. I want to talk about one of the other mega trends,

which is inflation. Oh yeah. One of the things that I think you do really well is debunk a lot of false perceptions that people have. And one of the biggest ones is that we had this era of globalization, specifically the entry of China into the WTO, which had this like massive impact on keeping inflation subdued because everything they

were exporting deflation effectively from China to our shores. And that's what kept inflation in check. And now the result of the trade war is that inflation is going to be with us in a major way because we no longer have cheap goods coming from overseas. You sort of say the China shock while noticeable in the data is not as pronounced as people think in terms of keeping prices low, therefore may not be that important going forward

if we have this bifurcation of the two economies. Let's do a good summary, Josh. I mean, again, all we're trying to do is quantify these issues in a complex system. And the key insight is that we're allowing all the other factors in a horse race to hit inflation too, because it's not just globalization

that can drive prices up and down. You got technology that can move stuff. How about the Fed? We got deficits that can lead to higher inflation. So we're controlling, we're letting the data speak. And what I found is globalization, yes, the more we globalize, which means the more we trade and have more imports and exports coming into the US, yeah, you have cheaper goods. It's comparative advantage.

But it's been 22 basis points. So 0.2% of inflation with the acceleration of globalization over the past 25 years. In other words, we would have had an inflation of 2.2% rather than 2.0%. If that sounds like a small difference, then bingo. Globalization hasn't affected inflation. That's important because some people are out there saying, we're in a deglobalizing world. Ergo, which I'm not cheering for by the way, ergo, we're gonna have a high inflation future. And you hear it and say, what do you mean?

Six, seven, 8%? You're talking about- I would ask the question differently. Yeah. I would argue if the China shock was not really that big of a shock and did not give us as much disinflation as people think it did Probably it was more damaging from a societal standpoint politically, maybe it would have been better if it never happened and

Trump is right and we should here we go. I'm just asking the question because it's a logical conclusion. Well, I don't talk about some of the paper, but I started talking about it in the blog. And listen, there is definitely, when you find that when you globalize more, open up your markets, your own domestic investment rate goes down. And that's what happened this time. And I found that. We find 150 years has been happening. And you boost the profitability at the same time. Yeah, so are there signs of a little bit higher income inequality, lower domestic investment,

which could have had the manufacturing sector, the middle class? Yeah, it's in the data. And there's not, I mean, for my person, as a macro economist, there's not a debate to that. Now question this is like, not just that open-ended question, Josh, I would just rephrase a little bit to say, well, like, what's the alternative and what other policy measures are we talking about? If I'm going to say you do not want to, what's going to happen is you don't want to just cut off your borders.

I think it is, is like, where are those pockets of production? Where are they going to move? And most economists, myself included, have done a poor job. Like they, everyone says economists, oh, we believe in free trade. Yeah, but there's an asterisk there. It's a level playing field. It has not been level. There's been abuses made across multiple countries

for a hundred years, by the way. And so I think we have to, we do have to account for it. And some of that is coming up in the current dialogue. These are all trade-offs. They're all trade-offs. And the idea that one is right, the other is wrong is not true. No, no.

Okay. No, I see you don't want to push people on, I always worry about what called corner solutions. You know what I mean? Like it's all right or all wrong. It's like there's, this is a complex web, but I'm not going to back away. Yes, there are trade-offs.

Like if you think what most rational people would say at this point is yes, there were trade-offs. We can now look back and study them. And the reality is that in some cases, the pendulum went too far, where we got too little benefit for giving up way too much for working class people. Or you got concentrated gains versus spread out losses

that a lot of people see. I think that's the other thing. Yeah, I would agree with that. Let's talk about demographics. You find this to be important, but not as important as the people who have made a career of studying demographics seem to say. When I say important, I mean the impact on inflation, on the economy, on the stock market. So what's the Vanguard House view based on this research about the impact of demography

and where do we stand from a demographic standpoint? Well, you know, there's that old phrase demographics is destiny, which means it determines your fate for growth, inflation. But it doesn't. It doesn't. It's actually not. So nobody should say that anymore. It's not true.

Okay. And so I'm going against a lot of studies who have looked at some of these issues in isolation. When you put them all up against each other, I'll think of inflation. People say, oh, well, fewer people. Oh, so we're going to have high inflation because we have fewer workers. Right. Simple econ 101 would tell you, Josh, if you have people. Also, we're gonna have high inflation because we have fewer workers. Simple Econ 101 would tell you, Josh,

if you have one fewer worker, you'll probably also have one less consumer. Supply and demand moves that way. Prices are unaffected. So this is actually Econ 101, but it's become this narrative. I mean, I even heard the Federal Reserve talking about, we have lower interest, neutral interest rates

because the demographic, it's amazing how the R star and all these neutral rates have risen yet the demographics haven't changed the past 10 years. I would say I've seen more people have wrongheaded ideas about investing as a result of demographics than maybe any other source. I know.

I don't know why that is. Well, they, I think they look at Japan. Yes. And I think they see this kind of sclerotic generation of less and less younger people and they match it up against this endless disinflationary, deflationary cycle and they say these two things explain each other. Therefore, if we find other countries with this demographic problem, the returns in the stock market will be weak.

And I tell you, listen, if you have a slowing population growth, or even goes negative, like parts of Europe are, right, or parts of Asia. Listen, I'm not cheering for poor demographics. It's a part of growth. Like GDP growth at Denday, which is like earnings growth, you know, loosely, GDP growth is equal to the number of people changing plus the technology. But it's that last one, Josh, we were just talking about. 97% of the ups and downs of GDP growth

over a five-year base, 97% are correlated with technology. Effectively, zero correlation with demographics. So yeah, we want skilled immigration. Yes, we want all C equal higher population growth. You have a little bit higher economic growth. But there's no correlation in the investment outcomes we care about. Right. It's just, it's just, it's, and actually it's never been true. In fact, here, I'll give you a little

factoid. Some of the greatest periods of technological, you know, just acceleration were periods when demographics were worsening. I'll give you four. The Renaissance. I was gonna say let's start with coming out of the bubonic plague. The bubonic plague? The Renaissance, I was going to say, let's start with coming out of the bubonic plague. The bubonic plague? The Renaissance, Industrial Revolution, the Roy 1920s. And if AI is correct, we're going to have another one added to the list. When you say weakening demographics, you mean a larger portion of aging people?

Both. We look at both dimensions. It's either aging of society, like the percentage of... It's not. I mean, you know, to be blunt, the mankind's been aging since we've been on planet Earth. I'll give you a concurrent example. A lot of headlines last year about the South Korean population going negative. Effectively, young single people are just not marrying each other and starting families. There are a lot of societal cultural reasons for that we're not going to get into today. The KOSPI is up 30% year to date this year and the I think it's called the 2550 index which is like there.

NASDAQ is up 42%. There's absolutely no correlation whatsoever between South Korea's demographic problem and the returns of their stock market, the profitability of their companies. It's just not there. It's just not there. And again, all sequel, you're going to lower GDP growth or raise it a month, but all the big moves up and down are around the technology side. The only time that Democrats become an issue, and that's hence my deficit-dominant scenario, Josh,

is if you tie the aging of society to your debt burns. Which we are doing. Which we are doing. And so again, I'm not saying it can't matter, but it's gonna be now through debt and deficits, not because we have an aging society per se. Yeah, okay, let's do another myth bust. Inflation is entirely monetary phenomenon,

rising fiscal deficits don't matter. That's a common perception right now. myth bust. Inflation is entirely monetary phenomenon, rising fiscal deficits don't matter. That's a common perception right now. What's wrong with it? Well, I just that what I find and what we find and there's there's some academics who wouldn't disagree with with my statement. And that is, if deficits the gap between revenues and tax revenues and spending, if they're chronic, so they're not just because of COVID

or because the global financial crisis and you know, deficits blow out. A deficit every year forever. Yeah, it's just every year forever as it just keeps rolling over, you can start to raise inflation expectations. John Cochran at Chicago talks about this, it's called the fiscal theory of the price level.

We weren't looking for it, but we find modest evidence of it. Now, it's small in the United States right now, but remember, we're attributing underneath the surface. We have like, this is like a sonar radar system. We can see what's driving inflation, not just the cyclical stuff, but these forces. And it's starting to modestly put up inflation. It started during COVID. The last time we saw this was in the 60s and 70s when we started at the rise of inflation and hence, interest rates. So I'm not saying that the 70s is coming. What I'm saying though is you can have high deficits

that people, and why does inflation expectation start to go up? It's because you and I start to think, you know what? Congress is never gonna raise taxes, Iranian spending. Now you start to see pressure in the US currency and you have some out there talking about the potential of a fiscal crisis. I think some of those are overblown, but that dynamic is why deficits, fiscal deficits can

matter for inflation. This is when you hear the Fed say things like inflation expectations are well anchored. Well, they was well anchored. Again, the Federal Reserve has them, but that doesn't mean that they're omnipotent. Now, those that want to paint a fiscal crisis picture, and they're out there. There's a probability, in fact, we've quantified it in the book, it's 5%, that literally the US currency goes through massive depreciation, and we have a really spiking interest rates because of our debt levels, high inflation. It sounds like an emerging market. Why they're not

that high and not higher is because you have the Federal Reserve, to your point, Josh, where I'm going, the Federal Reserve is going to try to fight this, whether the inflation is from COVID and supply change or it's Congress continuing to print money from a deficit side. But there's, I mean, that's, I think, thematically what we're going to see. I think we're starting, we're living it a little bit this year. We're going to pass potentially another fiscal, you know, a fiscal package. Yeah. Deficit's going to go up.

Yeah, you have the Federal Reserve on hold for longer. Yeah. And that's a little bit of a little tension there. And now specifically saying they're on hold because of developments on the fiscal side. And there's tension, you see the headlines. There's tension. That I think is one of the thematics here.

You can navigate it. That's the deficit world that we could be in. The last thing I wanna tackle from the paper is this idea as America ages US debt is projected to set record highs. You have a chart in here and we'll add it. But effectively you're showing these spikes in US debt throughout history and you're showing the one that's coming soon 2024 to 2054 the next was 30 years. And according to the CBO forecast that would land us at about 171 percent debt to GDP. Yeah. Okay. Which is not good. Not good. Are there is there any way out? Yes, there is. There is a way out. Does it rely on Democrats

and Republicans to something? Well, which may not leave you a great deal of confidence. That's why you've had your bets a little bit outside, invest outside the US. And I'm not joking. That's always been a core. Compromise is the way out or? No. We're not outgrowing that. You can get a little bit on the growth side.

You can buy time. And when I talk about, listen, whether or not we'll get the political sort of meeting in the middle, I don't know. That's why I think, you know, you could see a little bit pressure in the bond market, not tomorrow. This is probably 27, 2028 issue, not to put a timestamp on it, Josh, I'm not complacent on it. It's just, but yeah, the bond, I mean, if the bond market, you know, applies a little bit of pressure, that's where you start to see some of the interest rate pressures, not tomorrow. We generate scenarios where the 10-year treasury yield is 6% or 7%, not 4.5%.

This is not for tomorrow. And I don't mean for people to be scared of their fixed income investments. The irony is if you're in this world and AI doesn't sort of unleash growth. You're going to see a lot of demand for bonds. A lot of demand. Right. I mean, you got real rates of inflation of 4 or 5%. It'll count through itself.

Well, this is an awesome paper because you did something that I see a lot of people have opinions. Not many people have opinions and they can say, but this is what the data said and this is why this is my opinion on On the drivers of all these things. So I want to congratulate you on that. Before we let you go, let's talk about the book. So it's called Coming Into View, very clever cover. I like what you guys did there.

And the sub header is how AI and other mega trends will shape your investments. What's the premise of why it's a book and what people, very tough to write about AI in book form, I would point out. Totally. Because. Well, we had AI write the book.

Because it moves very quickly. The technology moves very quickly. Well, actually, it's what we were just talking about there, Josh. We took the paper and its own die-opening results of the economic diagnosis and the investment opportunities only reason why we felt compelled to write the book. the eye-opening results of the economic diagnosis and the investment opportunities, only reason why we felt compelled to write the book.

And to write it for a broader audience. The paper you mentioned, I mean, you know, again, Josh, you have a deep, and your listeners have a deep investment background. Well, what if I'm just reading the Wall Street Journal a little bit? I'm watching my 401k. A typical person at an airport sees this and says,

I love books like that. So if I sound like an economist in that book, people can take that book and smack me in the head with it. Because I tried hard to take those papers and just put it in digestible form. I don't wanna read all these white papers. Just tell me like, demographics, does it matter or not? And we use some stories.

People like the story. So we use that as some stories. De-globalization, is it? And they say, no, it's a fallacy. We're not de-globalizing. Not in the dimensions that matter most. Yeah. So like, but we're just, all the data framework

you talked about in the paper, that's the same empirical engine we're using behind the book. And we talk about portfolios that investors could think about. Yeah. And I channeled Jack Bogue, you saw, and where we start, you talk about 50 year anniversary and so forth. And, you know, I'd be remiss as a Vanguard employee not representing Jack.

So in fact, I lead the group responsible for thought leadership. You know, we have over 100 people now. It probably takes 100 people to fill Jack Bogle's shoes. I think we only got one shoe. But it's just people for someone who don't want to go all the technicals but the hept is behind in the paper. So the book concludes with a couple of chapters and this is like I love when books do this it's like okay I just gave you a lot of information now what do you do with it? So the last two chapters, chapter 9 of Victor's portfolio act 1 divide and conquer, chapter 10 of Victor's portfolio act one, divide and conquer. Chapter 10, a Victor's portfolio act two, choose wisely without ruining the end

and telling us who dies or, or spoiling. Like what is the investor walking away from the book having learned? Well, I think you're saying, listen, the future is not going to be the recent past, but here's an investment portfolio where you don't have to be heroically smart and pick sides. Can you hedge regardless of which path unfolds? Because it's going to be an optimistic or pessimistic one and you don't have to bet the ranch on it. And so this is around diversification

of risk management, Josh. And some of the things we talked about today on the equity, on the stock side, it's not all tech, even though it feels like it now. And on the fixed income side could be a source of ballast, despite the concerns of deficits I mentioned today. And I talk a little bit about the role of active management for those, yes, from Vanguard,

the role of active in a low cost way to amplify some of the risk mitigation you wanna think about. So there's opportunities ahead. It's not just mitigating the risk. There's opportunities emerging that are not apparent right now. And I'm glad that you talked about some of them today.

Now who will play you in the Netflix movie version of Coming Into View? Oh my goodness, I'm just happy to have a job. Can I give you, I got one for you. Guy Pearce, you know the actor, Guy Pearce? Oh yeah. Terrific actor. You got a little facial structure.

Oh I don't know. I feel like that works. I don't know who's going to play me. Listen, I'm excited. I'm going to read this this summer. And I want to tell people they can get coming into view on Amazon, Barnes & Noble, wherever. Find books for sale at the airport. So I find most people buy my book at the airport. Yeah, dear. Airport. I enjoy it.

Alright, this is awesome. Any parting words for the audience of investors, it's your airport. I enjoy it. All right. This is awesome. Any parting words for the audience of investors, advisors, people that follow your work? What do you really want to land on them as a result of this? Well, again, I think start thinking about living in a deeper AI world and what's the next investment opportunity. That's awesome. Joe Davis, thank you so much.

And where can people follow your work other than buying the book? LinkedIn and you guys, right? You're talking to all the investment, the smart investment folk out there. Absolutely. All right, Joe, thank you so much for doing this. We appreciate it. Thanks to all of you for watching, listening. We'll see you soon. Welcome back.

It's another all new edition of What Are Your Thoughts? First time viewers, first time listeners. My name is Downtown Josh Brown. I'm here with my cohost as always, Mr. Michael Batnik. Michael, say hi. Hi. All right. I do what you say.

The usual suspects are behind the scenes making magic for us all. Nicole is in the chat. Duncan, John and the team are on the ones and twos. We have a packed show for you guys tonight. Wanna say a couple of quick hellos to those who are joining us in the live chat, which we always so much appreciate.

John Carlo, Georgie, Ben, Cliff, Jack, Chris, all the regulars are here. Magnus is back, James Dell, I see you. Let me see who else, Steve S. Tuesday routine for me too. What a coincidence. Lance Howes here. Banzai fan.

We appreciate you guys. Thank you so much for coming. Biff. I see you as well. Jackie Sosa, the Racers Bank, Patrick Othrow. All right. We got a whole got a whole squad, Mike. What?

What's with the Pink Pony Club? This is not, I'm not online enough, I guess. What are you talking about? She's stuck in my head. I just can't stop. I can't stop. I sing it to myself in the shower. It's the strangest thing.

Who's the artist? Who's the artist? I don't know that song. Chapel Rowan. I mean, it makes perfect sense for my whole persona. I think it's about a girl singing about being in like gay clubs in Hollywood and coming out to her mom or something. I don't make perfect sense.

I can't stop singing this song. All right. We have a sponsor. Let's tell everybody who's sponsoring the show. We do have a sponsor. Today's show is sponsored by Public. It is the investing platform for those who take it seriously. Me. So let me tell you something, Josh.

AI and AOI, it's not just a feature. This is like what they do. It's woven into the entire experience. Portfolio insights, call recaps. They give you smarter context at every single touch point. Yeah, they also have a 1% match on IRA deposits, IRA transfers, and 401k rollovers. You know, a lot of people watching the show or listening probably have an orphaned account

out there or an account that's sitting somewhere for no particular reason, just because that's where it started. Public might be a great destination for you to consider moving it over to. It takes five minutes or less to move an account. Funding an account is even faster. Find out more at public.com slash W A Y T. Huge thanks to public. All right. We are going to start with IPOs. And I think that the most exciting thing, hang on, let me hold that thought. Look who's here. Yeah, it's Aaron Dillon, you guys. Do you need to borrow a cup of sugar?

We're back, man. We're back. IPOs, baby. Come on. IPOs. All right, guys, for those of you who aren't familiar, Aaron Dillon is our resident IPO and pre-IPO venture backed startup expert. Aaron knows more about this topic than anyone that I know and we're super excited to have

him back on the show to fill us in on what's going on. Summer is en fuego in the IPO market again. It's cool. You excited? Oh yeah, very excited. It's go time. What are you most excited about? Tell us what's going on.

Well, I mean, first of all, IPO window definitely has opened back up. I mean, Core we've certainly ripped. Flung open. Yeah. Often, right? I love it, man. So like there's a buzz,

but there's a lot of really interesting things happening in the private market too, right? Which I know most people in the public markets don't talk about this stuff a whole bunch, but it's in the news all the time. But yeah, I mean, it's good. It's really encouraging to see like a circle come out and rip, a core weave come out and rip, right? And those are kind of playing in two major emerging tech themes. Which of those are more surprising for Michael? Which of those were the most surprising to you? The success of CoreWeave or the success of Circle?

Both. Can I say both? I mean, not just not the success, but the degree, the magnitude of the success. I thought that CoreWeave was the only pure play AI company to come out. So that wasn't super surprising. But from $40 to $1.20, where did it go? I don't think anybody had. $60.

Yeah, I mean, wild. I don't think anybody saw that coming. Aaron, what about you? I mean, listen, Circle was like, talk about timing. Timing is everything, right? With the Genius Act, I mean, that was incredible. I don't know if they dialed it up that way, but man, that was perfect timing.

So I mean, that was perfect timing. So, I mean, that genius act doesn't come out or doesn't get close to being passed and signed into law. I'm not sure. I think the market understood that that was going to happen. Oh, yeah. It's the only explanation. Like that wasn't an upside surprise to anyone, really. But smart bankers, right, Josh, to pull the trigger right when that's happening. I read a severely caustic take about how Circle employees and shareholders were effectively robbed by the IPO process. And I mean, look, you have an IPO, what did it go up? 7X? Yeah. Yeah. I mean, that's if you sold at the IPO, that's tough, right? Well, so you have a company, well, no, it's about how much cash was left on the table. Okay. I mean, that's if you sold at the IPO, that's tough, right? Well, so you have a company.

Well, no, it's about how much cash was left on the table that should have been in the hands of shareholders. Now, I understand this is an imperfect process. I also understand anything crypto, it's like triple suspect on Wall Street. But still, if you have a stock come out at 30, that's trading at 300 within two weeks, you sort of have a right to be a little bit angry. Like, why didn't this come out of the $100 a share? Yeah.

Like, okay, so the speculators buy it, they get a triple, why did they get a 10x? But this is impossible, because for every circle, there is a weeble that prices at, wherever it did, it ran to 76 and then ran back down to 12. We only say this with the winners. It's crazy how they have no idea. Yeah. Because one of the things, right Aaron, one of the things you always hear is like, oh, such and such deal is 2X or 4X oversubscribed. Yep. Okay. Is that always just a lie by the underwriters to keep people excited? Because they said it about

Facebook and Facebook bombed on the first day. So they don't even really know. Yeah, it's marketing. I mean, I suppose if you're putting together a book, there's a spreadsheet somewhere, right? With people's names and numbers next to it. You can only fit in so many people with so many shares being sold at the IPO. But still, I mean, well, how would they know? I mean, how would they know?

They do the best they can. They obviously... Indications of interest. It's across I.O.I. you do a road show. Well, it's obviously. And then a salesperson follows up with the people that were at the road show. It's obviously a highly imperfect process.

Maybe a bad analogy, but NFL scouts and analysts, they have all the data in the world and they still can't figure out who's going to be a good quarterback. Like some things are just, predicting the future is hard. Okay. It's like retail. I want an AI program that tells me where to price an IPO.

And I want to run that alongside the actual IPO, the debut, and let's see who gets closer. I don't know, will AI do that for you yet, or did all the platforms make it so they can't? I'm sure someone's going to have an agent soon that will do that. I mean, I get it's an imperfect process, but like, does it have to be as imperfect

as it was 50 years ago? Seems absurd. Okay, let's put up your slide. So these are the top 10 pre-IPO stocks and some of the names that you think compound viewers and listeners should be paying attention to before they come out. Run these down for us, let us know what's happening. compound viewers and listeners should be paying attention to before they come out.

Run these down for us. Let us know what's happening. All right. So a lot of the names on the left hand side here on this table on the left, the top 10 companies by valuation. So these are all private companies, venture capital backed private companies. You're probably reading about these in the news all the time. Every day.

So you're seeing some familiar places there. One name that maybe people might not have seen on this list is Safe Super Intelligence. So that's Ilya Skutskovor. He was a senior guy, co-founder at OpenAI and split when Sam Altman and crew kind of had the blowup a year and a half ago. Right. And then Altman came back like after the weekend was over. Ilia left and he started safe super intelligence. And that was right out of the gate at a 32 billion dollar valuation, believe it or not. Dumb question. Dumb question for me, Chardoff. My understanding was he quit because Sam Altman was becoming too capitalist and wanted to convert to a for profit and take even more money from Microsoft.

And now here he is a year later, readying his own IPO, and wanted to convert to a for-profit and take even more money from Microsoft. And now here he is a year later, readying his own IPO, which I would imagine is a for-profit enterprise. So maybe he didn't like shortcuts OpenAI was taking or... Yes. Or maybe he changed his mind. Zuckerberg at Meta just tried to buy

safe super intelligence and they said no. So he was getting, I mean, think about it, Josh, you and I start a company, the three of us start a company, right? mind. Zuckerberg at Meta just tried to buy safe super intelligence and they said no. So he was good. I mean, think about it, Josh, you and I start a company, the three of us start a company, right? $32 billion valuation. Zuckerberg shows up six months later, wants to buy it for 32 billion and you say no. Yeah.

So I think this guy is operating on a different, you know, Yeah. Also, I'm not interested in backing anyone who's doing this, who's doing this, this shtick with like, oh no, we're like here to save the world by making AI safe. Get out of here. You're here to sell ads. Shut the f**k up.

Just like everybody else. All right. Let's, let's put the chart back up for the listeners. Let's run through some of these names. SpaceX 400 billion implied valuation, OpenAI 315 billion. These are not nonsensical because this is the price that these shares are currently changing hands at. Do I have that right?

Yeah, there's an active secondary market for all of these companies. That's right. Right. So you might say they're overvalued, but they're not made up. People are buying and selling these shares. Proper volume, Josh. I would say this stuff trades like fixed income. It's like a who you know market. So you can definitely buy it, but you got to

have relationships and there has to be trust and then you can get access to the stocks. Okay, let's do let's let's do a few more. XAI, we don't have to talk about that's Elon Musk's company. They just raised $10 billion yesterday. Yeah. They're also raising debt capital, which I find interesting. And I think they're working with like Morgan Stanley. Do I have that right? You got that right. Yeah. A lot of these guys are doing debt for the data centers like CoreWeave did.

That's one of the reasons CoreWeave went public. Why would a company opt for that? For debt? Yeah. So I think it's you literally have you have the, like Corby for example, right? They can't build these data centers fast enough. There's so much demand for AI compute, right? Whether it's training or inference compute.

So like training a model or running AI models that they can't build the data centers fast enough. So use that. I got the contracts, revenue contracts already lined up. But why? It's quicker? Well, you're not diluting your shareholders, right? Your equity shareholders.

And you know it's revenue good on the other side. You got these multi-year data center contracts, so you just finance it. Right? You need a lot of capital, but the equity guys can't keep putting up money at that rate, and they don't want to get elbowed aside on the cap table.

I think they could, Josh. There's plenty of money that wants to go into these companies. It's just, I think it's a more, it's a smart way to manage your cap table. And the debt's coming from where? Blackstone and the like? You got it, man. What actually ends up happening is Elon goes to the debt holders if he has to and says, rather than make the next interest payment, let's convert you guys. And who says no? Because it's gigantic firm.

They have equity. They also have debt. It's like, all right, fine. Shift it over. Now, Elon Musk takes care of that. He just did that with Twitter. Did he not? He did it with SolarCity.

Did it with SolarCity and Tesla. Like that guy takes care of his investors. He makes sure that they make money. They all come back for the next deal. You could say whatever you want about him, but they come back to the table. Even when he loses, he still finds a way to win. And there's a lot of duplicate. There's a lot of people on the Twitter cap table that came right back in for SpaceX,

Starlink. They want it. Oh, yeah. And they make money. They always make money with him. All right. The chart back on. All right.

These next two have been venture backed private market startups since I was a young man. Stripe and Databricks. Why do I feel like I've been hearing about these two for my entire life? Like my entire adulthood? What is the story here? They've been around forever. Yeah, the Colson brothers started Stripe a long time ago, right? It's a hundred billion dollar. If this comes public tomorrow, it's probably 150. What do you think? Listen, so the Colson. I agree with that. OK, plus all the stuff again with crypto, like all fintech companies are crypto companies, in my opinion, now that this genius act got blessed by the government.

Right. So that's going to happen. But the Colson brothers, the guys that started Stripe, they basically came out and said, we're never going public. OK, so we'll be hearing about this for forever. Databricks is snowflakey. Correct. That's exactly right. Yes. Okay. Right. All right. Anthropic. There's talk of Apple maybe plugging into Claude. And obviously Amazon's a really big backer of Anthropic. 75 billion. Revolut is European fintech.

Or no. Yeah. What is that? You got it. Yep. Online banking. All right. Is Anderol, so the last one we'll do from this side of the thing. Uh, chart off. Anderol being valued at 42 billion. Is this going to be the hottest deal of the year? I think it is. Oh, for sure. This seems like the stars are aligned to this. Yeah. Yeah. Yeah of all, it's an AI play. Yeah. Yeah, yeah. It's an AI play. They have this lattice AI system. It controls all these autonomous robots.

That's effectively what it is. It's autonomous warfare. It checks every box. It's founder led. It's got a long history. They didn't start the company last year. It's physical, but also AI because they're building military equipment and hardware. It's defense tech, which is

the hottest flavor of tech. It's private talent here. Right. Thanks to Palantir. It just, and then the pedigree on the cap table, it just, it checks every box for an IPO that you could possibly want. That's right. I think the so Palmer Lucky is the fellow is the CEO, right? He's the guy that created Oculus and then sold it to Meta. So he's already a billionaire, right? But he came out and said, they're not going to go public and do an IPO until the market

really understands their business model. Right. So I think this idea of AI controlling drones and then those drones being used in warfare is obviously a new thing. I think, not to be cheeky, but you're seeing it in the Ukraine war, the power that drones can have on the battlefield. So that might actually pull the IPO forward a little bit because I think people are starting to get it. Yeah, I think investors fully understand they completely bought into Alex Carp and this idea like, look, somebody somebody's going to have the best technology in the world.

Backing up their military, it should be the United States. I think there is wide spread approval of that concept. Is this going to be a direct listing or are they actually going to sell stock and raise money? Oh, I think my gut is everyone's going to be doing regular traditional IPOs. They're all doing regular IPOs. That's what I'm, that's what I'm hearing, right? But again, I think Andrew's like a 2027. That's where I put it. All right. What are your other, what are your other stocks to watch and tell us why? Okay. I love this stock rock. GRLQ. It's the private market in Nvidia. Okay.

So you're like, yeah. Jonathan Ross. That's like a crazy statement to me. Jonathan Ross is the CEO. He created the Google TPU, Tensor Processing Unit, the AI chip at Google. Like from a sheet of paper, this guy built it into a big business, ran Google Cloud segment of it, and then decided I'm out. I'm going to do it myself. He started grok. Okay. I love this. So it's chips. So it's chips like semiconductor, but it's for inference running AI models, right? They fab them here in the United States. No tariffs. They use like kind of old tech. So they store memory on chip. It's I'm telling you, these guys are so dialed in. I love this company. Do people get this one confused with the Grok that XAI owns for AI? Because that one's with a K.

You got it. This is with a Q. With a Q. That's right. GROQ. What stage is that at? Early. They're early. So it's $4.6 billion secondary market valuation. They're early. So it's $4.6 billion secondary market valuation. But I'm hearing buzz that these guys are going to go to like a 9, 12. I wouldn't be surprised to see these guys. I have one advisor I work with. He thinks it's a $100 billion company. Give me that four.

Yeah, can we have it at four? So you have a bunch of these in funds and you're doing single stock funds so that investors in the private market can access these. What's the most in demand, like other than SpaceX and OpenAI, which I think for obvious reasons, what are you getting the most calls about from either wealthy people or financial advisors? What do they want to own? Yeah.

So we build like, so we do these single stock funds, right Josh? And then we help people build portfolios. I'm a big believer in like diversification, right? But some people like love Elon Musk, and they want a lot of his stuff in there. And some people don't like the guy. They don't want any exposure. So these are kind of tools.

You can kind of build what you want. I get tons of demand for Andrew right now to answer your question. So that's what I would have guessed. That's why I think that's going to be the big one. That's right. That's right. And then why I think that's going to be the big one. That's right. That's right. And then listen, the Elon Musk, XAI, and the like, SpaceX,

and the like, those are all big ones as well. Can you tell me about Harvey? This is AI for law firms? AI for law firms, that's right. Yeah, so it's an AI app. So just 30 seconds on how I think about AI. There's AI infrastructure, chips, electricity, data centers, etc. There's AI platforms. It's OpenAI, XAI, Anthropic, etc. Right. And then there's AI apps and AI apps are just starting

to come out. So those are apps that are built on top of an OpenAI and XAI and Anthropic. Right. of an open AI and XAI and Anthropic. So Harvey uses Anthropic and open AI to deliver solutions specifically for lawyers. It's surprising that that's a pre-IPO startup. Lawtech, I guess, is what they call it. A hundred percent. So you take the model and then you train and fine tune the model on like a specific law firm's data, right? And that's what Harvey does. So you take a great law firm, whatever, Davis Polk, right? They go in, I don't know if they'll work with them, just an example, right? And they train all, they take all Davis Polk's data, they train the AI and then the associates

and everyone can use Harvey AI when they're writing contracts, reviewing contracts, et cetera. And it's trained off of their unique data. Oh, interesting. So you're still getting the Davis Poke like advice, legal advice, but it's codified in a, in an engine that anyone working there can access. That's hot. All right, let's do a lightning round and then we're going to let you go. You got it. You got it. Caoshi versus Polymarket. I read that Caoshi is twice the size

of Polymarket by valuation because Polymarket can't work with Americans as clients in Polymarket and Caoshi can. Do I have that right? Yes. You got that exactly right. That's right. Yes. Wealthfront just filed. And Caoshi's also got a lot of connections. Caoshi's also got a lot of connections into the broker dealers like Robinhood and other broker dealers. So they got like distribution channels set up too. Got it. Josh. Okay. We've talked to those guys. We like them. Wealthfront just filed. So this is kind of a retread. They tried to get acquired by UBS. UBS paid the breakup fee and walked away. Four years went by. I'm sure they've raised a little bit of money since then, but this does not seem like anything that people

are terribly excited about, or maybe I have that wrong. What do you think? Listen, I mean, first of all, I wish them the best. I hope they kill it in the IPO. I'm a little leery. My understanding is half their assets earn a cash product, like a high-interest savings account product. Michael, is that true? Can that really be real? They were aggressively promoting that early on. Not in a bad way. It's cash. It's yields, but that's hard to believe. So they should just call themselves a Bitcoin treasury then. All right. Metta bought half of scale AI. They bought it. They wanted the founder.

The Aqua hired for the founder. Can you imagine the cocktail party talk? Yeah. $15 billion man. That's pretty, pretty impressive. Okay. What's pretty pretty impressive. Okay What's this poached chart? These are all the people meta has stolen from other AI Startups, it's like the who's who of AI man These people have like built a lot of the tech that everyone's using and excited about and met has got a lot of them Right. Okay, it's there. So Mark Zuckerberg is personally calling people and emailing people and poaching them out of these companies. Yeah. It's all right.

And paying like hundreds of millions of dollar packages, compact for these guys. If you're not bullish on AI, just look at the way this guy is operating right now. Yeah. I mean, listen, it won't be for lack of effort. If Metta doesn't win the AI race, it won't be for lack of effort. If Meta doesn't win the AI race, it won't be for lack of effort or trying. They're going for it, right?

Tell us what Clueless is. OK, Clueless. So first of all, I'm a big believer that in a couple of years' time, we're literally going to have AI devices listening, seeing, hearing everything that we're doing. It's going to be like, you know, not the phone, something else, whatever it is. I'm not, I'm not sure what that is.

But if you know what it is, Josh, tell me, because I want to invest into it. Okay. So there's that, but something's going to come out and devices will be listening to everything that we say will be, will be getting it. Clueless like a first sign of that. It's tech. You download it on your desktop computer. It sees everything that you see on your screen and it hears everything you say. I'm out. It listens to everything. Everything. But here's the thing. So Google is talking about this. Michael is so out. Everything. So here's the thing, though, guys. Everyone's talking about this. Google's I.O. conference, right? Their developer conference. They're using the thing though, guys, everyone's talking about this Google's IO conference, right? Their developer

conference, they're using the term personalized context. Yeah, personalized context is code for the AI sees everything that you do. Creepy. That's what that is. So once you got that the AI is like your that's your personalized assistant that everybody loves. So maybe we'll all grow more accustomed to that. But at first blush, I don't love it. Last slide, high potential second half 2025 IPOs. This is what you think is coming like

now. You have Klarna, which is buy now, pay later. Kraken, which is crypto, Gemini crypto. What's Navana? That I never heard of. That's the old TripAdvisors, right? They rebranded. So that's like corporate travel solutions. Yeah. All right. And you think and you think this is the class of second half 25? That's that's right. Yeah, that's right. So listen, I just parting thought opening the IPO window is open.

But here's the rub. Like a lot of these companies do not want to go public. Yeah, they're not. I guess their founders are not pushing, excuse me, their backers are not pushing them to. Oh, Josh, we could go have a beer, man. I could talk to you for hours about all the different like structural, really solid structural things that are happening in the private market that generating liquidity for employees, early investors. It's all very organized, very thoughtful. Like these companies can raise billions of dollars in weeks. And maybe at higher valuations. So who needs higher markets? And it's all very orderly,

Michael. That's a good point, right? It's all very orderly. So there's not a lot of volatility. It's like very thoughtful. It's all institutional. Well, we're going to talk about the tokenization of private company stocks later on in the show and maybe that's the monkey wrench. If you have a de facto public company and all the scrutiny that comes along with it, you might as well just have a public company. And that's something that's coming in the second half of this year as well. So Aaron, you're the man. Tell people where they can visit to learn more about what you do.

Yeah. So go to agdillin.com, right? And just agdillin.com slash subscribe. We send out a research report every Saturday morning. That's the best way to get in touch. All right, awesome. And Nicole will throw that link in the live chat for everyone watching.

Thank you so much for joining us. We're gonna goodbye you. Thanks Aaron. And move on to the next thing we're talking about, which is the big, beautiful bill. Is this already in the market? If you had to guess, who knows? I don't think that this is moving the market to you.

No, I think it's like in the minds of the investor class, they've already decided this is going to happen. I don't know. I don't follow this stuff closely. I spoke to Bill before we hopped on and I said, hey, what do I need to know about this as far as impacting investors? And he said, it's a snoozer. There's really not a lot in here.

I could tell you some like minor things, but nothing with nothing. It would have impacted the markets if it looked like it was going to fail, but it doesn't. I think it would have been a negative because a failure to pass this bill, at least now, would have meant a sun setting of some of the tax cuts from 2017. That's why it matters to investors. But as long as it's going to go through in some way, shape or form, I don't think the details are important to the market. And I don't think investors are hanging on every word. It's a weird thing. So because it's predominantly a bill about the federal budget, they were able to push

it through the reconciliation process, which is kind of like a parliamentary trick where they don't need a two thirds majority vote in the Senate. They could just get a simple majority. So like 51 50 using JD Vance as the tiebreaker. And that's what they did. That's what they accomplished today. So they basically they hold up in the Senate.

They have like draft legislation from the House. They kept everybody there for 24 hours straight. Nobody could leave. Some of these people are 120 years old. And basically the whole thing came down to whether or not they could convince Lisa Murkowski from Alaska to sign onto this and agree to it. And in order to like shore up the Republican votes, they were, they're cutting a ton of money from Medicare, which is not going to be popular, but everyone will find out about this later.

But in order to shore up the vote from states like Alaska that are like, wait a minute, my people are not going to love how much you're cutting. They're doing this rural health fund, which will be like hospitals for red states, basically. Like basically just bribes and both parties play this game, but it's just like when you read the details of how they got this through, it's kind of remarkable. I think the way that this became a market story was the Elon Musk angle because he decided

he wants some more smoke. Let's put up these Elon tweets So this started last night It is obvious with the insane spending of this bill which increases the debt ceiling by a record five trillion dollars That we live in a one party country the porky pig party time for a new party that actually cares about the people How can you call yourself the Freedom Caucus if you vote for a debt slavery bill with the biggest debt ceiling increase in history? Then he starts threatening every member of Congress who campaigned on reducing government

spending and then immediately voted for the biggest debt increase in history should hang their head in shame and they will lose their primary next year if it's the last thing I do on earth. Chardoff, how do you think Trump responded? Deported. Chard on. Elon Musk knew long before he so strongly endorsed me for president that I was against the EV mandate. It's terrible. It is ridiculous.

It was always a major part of my campaign. Electric cars are fine. Not everybody should be fine. Anyway, I'm going to deport Elon. I'm going to shut down his rocket launches. No more subsidies for satellites or electric car production. And we're going to save a fortune. Perhaps we should have Doge take a good hard look at this money to be saved.

That's the Trump reaction. Tesla stock sort of reacted. It was notably red in a green tape yesterday. And I'm really surprised that he wants to do this again. It looked like they were literally going to come to physical blows the last time they had a fight. Was that two weeks ago? And apparently, Elon wants more smoke. The stock went down 5.5%.

Now back at 300. What are your thoughts? It's nuts. I don't know. What are your thoughts? I have nothing to say other than the obvious. This is insanity that there is political fighting that is causing tens of billions of dollars to swing around the market cap. It is not normal. If you're a shareholder of Tesla and a Donald Trump fanatic, you just treat this like a

comedy, right? You don't pick sides. You're just like, all right, I'm backing the president on this. I want his big, beautiful bill to pass, but I also want Tesla stock to go up. So you're like rooting for them to start laughing and stop fighting with each other? What do you think? I have no idea. Okay, great. All right.

All right, sorry, you want me to just make up thoughts? So I have no thoughts. Let's move on. This is boring. That's my thought, asshole. I think if you're along Tesla, it's not boring. Unfortunately not. I don't think you are either. But if you're a Tesla shale, this is not boring. It's annoying. This is an absolute distraction. It's a clown show. Yeah. I wonder if it gets worse. I guess. What does worse look like? Well, the House is now going to vote on this. And the majority of the House is fairly slim. Republicans controlled by maybe 10 votes, 9 votes. And a lot of House

Republicans are making noise that the bill in its current form is not signable. And Elon seems like he wants to be part of this process. And he's What is his involvement with this? He's passionate about not raising the debt by $5 trillion. But legally, what's his involvement? the debt by $5 trillion. No, but legally, what's his involvement? That part doesn't matter. He owns Twitter.

He has the biggest megaphone on the planet. So he's decided that he's against this bill and that he's willing to risk the market cap of Tesla in vocally being against it. So he has no involvement. His involvement is like as a peanut gallery, but it's the loudest, he is the loudest person in the country

when he wants to be. He's louder than Kanye. He's louder than Obama. He's louder than like a former president. Nobody has to- Does Trump have a nickname yet for Elon? Oh, I bet he does. I bet he does privately.

No, I bet privately. Yeah, Mushroom Jones or something. I don't know. It's probably something. Can we talk about the bull market? Can we do that? Yeah, go ahead. OK.

All right, we're chart heavy here, so we're going to run through some stuff. All right? Turn on, please, John. So the S&P 500 is at an all time high. And the first half of the year is in the books, as they say. So I had Sean make us a table of the top 60 performing stocks in the S&P. And number one should be no surprise, it's Palantir. What else jumps out to you on this group, Josh? This is pretty diverse. I mean,

that's my first- Sorry, Matt Furlong in the chat says, Elon's nickname is Special Kenny. Oh, that's good. That's good. All right, continue. All right, so the thing that jumps out to me right off the jump is this is a diverse list.

If you look at the top 10 names, we've got Palantir, NRG Energy, Hamad Aerospace, Seagate, GeoVernova, Supermicro, Newmont, CVS, Uber, General Electric, Philip Morris, Dollar General. I mean, we're all over the place here, Josh. It's a mix of stocks that have been going up for years, like Micron, CrowdStrike, the tech names. But then you also have stocks that just got so crushed

last year that it's not surprising. I mean, it's still surprising, but it's not insane to find them in the top 20 performers because like some of these were in 70% drawdowns. CVS, CVS in an obvious example. Some of these like DoorDash, I think was not a great stock last year. So this year is a recovery. So I think there's like a mosaic definitely had not been having a great time up until recently.

So I think there's a mix of like comebacks and then stocks that have been trending higher for years now. Okay. Next 20. Let's take a look. We've got, oh, we're like Caribbean's on the list. Oh, IBM, we've been speaking a lot about that. Okay.

Again, I just see a lot of diversity. There's a lot of information technology, but there's a lot of discretionary. Anything here for you, Josh? Almost all of these names, if they're not consumer, are AI. It's just one thing that jumped out at me. Vistra is a utility on the surface, but it's the utility supporting all the inferencing and AI and cloud stuff. Amphenol is connectors, like cables and chips

and all the AI stuff has to be put together like has to work together in rugged conditions. And that's Amphenol. Sean and I wrote this up in the best stocks. KLA is chip equipment, Western DIG obviously. So a lot like a lot of the IBM Oracle, these are like all feeding into the same AI spend. All right. Lastly, the next group, what I see here is just a lot of financials, which is interesting. We've got, let's see, we've got WR Berkeley, not a name I'm super familiar with, Northern

Trust, Goldman, Schwab, Intercontinental Exchange, Citigroup, a lot of things are working this year. For the listener, this third group of 20 best performing stocks, so number 41 through 60, they're all up between 23 and 30%. These are way better than the S&P, would be the point I would make. And if the market closed tomorrow, nobody that owns these stocks would be upset. Like if the market ended the year tomorrow, I made 24% in Charles Schwab this year. Yeah, I'm happy.

You know what I mean? Like think about that. I made 26% in Metta. Like it's great. So being number 40 through 60 is not bad. It's really good. No. All right. This next chart has some face blowers on it. I want to show you the sector performance with the maximum intro year drawdown, which was a big kick in the teeth.

And the one that jumps out to me, and there's many, is technology. So Information Tech had a 26% drawdown that happened mostly in the month of April, and yet it's still up 8% year to date, wild. I don't even think anybody would know that. I don't even, I know it, but I don't even know that. I mean, seeing it this way. Do you think the average person would even believe you

if you said the tech sector at its worst point this year was in a 26% drawdown? No way, right? The average person. No, it's just like, there's no way it felt like that to somebody who casually observes the market. Yeah. Because it was too fast.

Yeah. How long was it in a 26% drawdown? 10 minutes? It, it was fast. It was over before you knew it. Okay. The here. All right. This is what jumps out at me.

This is exactly the way that it's supposed to be. The least painful drawdowns were in utilities, negative 8%, now up 9% on the year. Staples negative 9% now up 6.5% on the year. So this is the minimum variance, am I saying that term right? Defense was defensive. Defense was defensive. And even like, healthcare, healthcare sucks, but negative 13.6% is not as bad as tech.

Now the thing is you're still not making any money. Healthcare is one of only two sectors that's still negative year to date. But like the defensive sectors did act defensively when they were supposed to. Yeah. So John, we could skip the next chart because we have something similar coming up.

Let's throw this chart at By Eric Soda. So I saw Eric tweet this last week and I thought it was really interesting and worth talking about, and we got some follow through today. The tweet is this. The surprise to me is that with a NASDAQ at a new high, only 10% of the indexes stocks are at a new 52-week high. They have a lot of room to run to reach their 52-week highs. Can you say bullish?

So throw up today's heat map. Today, we saw a wildly rotational day. I love today. Out of mega cap tech. So Nvidia was down 3%. Broadcom was down 4%. Palantir was down 4%. Tesla got pounded.

And look at not just the green across the screen, but the absolute bright green. And I think we've got a chart from ChartKid. John, do we have that one? Boom, thank you. So we're taking a look at, for those of you who are listening, the S&P 500 daily return against the S&P 500 equally weighted daily return.

And there is obviously a highly, highly correlated data set here. But there was a big outlier today because the cap weighted index was actually down three basis points, dragged lower by the giants that we just mentioned. But the equal weight, holy mackerel, the equal weight was up 1.17%.

And this is something that you don't see too, too often. On really no news. Quarterly rebalanced, today's July 1st. Yeah, well that would be probably the most probable explanation. The only answer, big money, maybe it's institutional, maybe it's wealth, like whatever channel people looked at, first, second quarter performance,

or first half performance, said all right, halfway through the year, we gotta add to whatever's been lagging and we got to take some profits and whatever's been going up and that's it and the effect of this will probably last another half a day and that's back to business as usual. Don't chase small cap rallies. The most improbable part of this bull market that we experienced in the first half of the year and it's hard to say that it was a bull market because obviously there was a bear market in between.

But nevertheless, we're sitting at all time highs. The US is up 6% on the year, but the rest of the world, my God. John, please. Josh, thoughts? Let me take a look. Yeah. I told you and Ben two days ago, I was looking at my 401k, which I almost never do. And it said like the S&P was up 4.75% on the year and my 401k was up 9.5%. And the reason why was a 39% allocation to international stocks.

And I had to like rub my eyes because it's been so long since I've seen international stocks help an equity portfolio. But this is it. So for the listener, Europe up almost 24% year to date. International developed, which I guess includes Europe, but then is also Japan and select countries in Asia up 20. International emerging which is China, India, Brazil, blah, blah, blah, 16 and a half. And then US stocks 6.2.

I don't know. It's been a minute. I think this is the biggest outperformance for International versus the S&P going back to 2001 So it's a quarter century since we've seen a first half like this and People are people have taken notice. I don't know. I don't know if you're gonna see that in the fun flows Are people gonna chase this? What do you think? Nope, no why cuz they won't believe it'll they don't they won't believe that it's it'll it'll sustain. It's just too short-lived Are people going to chase this? What do you think? Nope. No. Why?

Because they won't believe it'll, they won't believe that it'll sustain. It's just too short-lived. That's not enough time. If you zoom out of the US divided by the rest of the world, it's still, it's a blip. Do you think international stocks will finish the year ahead of S&P 500? Yes. The gap is too wide to close at this point, in my opinion. It would be weird if this whole thing reversed.

What would have to happen? A land war in Europe. Something in Ukraine spills over into Poland. Then you could kiss the whole thing goodbye. It'll be gone in two seconds. But absent that, Sean and I were looking at earnings growth for the different regions of the world. I didn't get around to this on CNBC today, but I wanted to make this point.

I ended up talking too much about something else. But like you've got earnings, you've got not just the dollar falling, which we're about to get to, but you actually have earnings growth in a lot of these places that it's just like it's been a while. So and not small. So let's look at the dollar. Thanks short kid Matt. What are we looking at here, Michael?

This is the worst performance for the dollar to at this point in the year through the end of June in 50 years. It's been a, and this has been a tailwind obviously for us investors that are invested in foreign stocks. Yeah. Um, but it's not the whole story. And I think that's kind of, I think that's kind of, cause people knee jerk like, Oh, international stocks went up.

I guess that's cause the dollar. Yes, in part. So it's the worst first half of the dollar in 50 years. But you have expectations now for earnings growth. 13% for Japan next year.%. Wow. EM earnings are growing already this year, 15%, and are expected to grow by 12.4% next year. And again, that's versus US earnings expected to grow 8% year over year. So if you actually pull out the impact of the US dollar. Sean did this work for me. International stocks would still be up 11% year to date. So the weaker dollar added 7.3 percentage points to international performance.

So it's a factor, the weak dollar, but there's more to the story. Yeah. Wanna laugh? Go ahead, please. I love to laugh. This is Um, want to laugh? Go ahead. Please. I love to laugh. This is October, 2024. Uh, wow. This is the economist cover with rolled up a hundred dollar bills blasting off like a rocket ship. Yeah. And it says the cover,

the economist, the envy of the world. You know, we've said a million times over the years to be careful of magazine indicators and they're only obvious. Yeah, this is a good one though. And that's still true. But man, the economist in particular has a knack for really nailing tops and bottoms. Do they not?

Maybe or maybe their covers are just so aggressive that the stupid one they do every year or two, it just becomes like perhaps so pronounced in our imagination. It just feels like it's always the economist. All right. I want to end with this. Two more quick charts. Number one, it's not just the US as we're discussing obviously, but 55% of global markets

is really delish. 55% of global markets made new 52-week highs last week. That's the best level in over a decade. You love to see it. And then finally, there is this tendency for people. I would put myself in this category. The antennas go up a little bit at an all-time high. Is this too good to be true?

When does the crash happen? When's the next shoe to drop? For whatever reason, our antennas go up. We feel like we're going to be true. When does the crash happen? Like when's the next shoe to drop? For whatever reason our antennas go up, we feel like we're going to be rug pulled. And that is just not true. Stocks don't make all time highs because everybody's dumb and the world is about to end. Chart on please. So this is on exhibit A via Chart Kid. We're looking at the average one year forward return, one, three, and five years after an all time high. And guess what folks?

I identical. You know, even better. You are better off. You are better off investing at an all time high than all other days on average. So it seems so counterintuitive because of the gambler's fallacy. We've talked about this before. Like you go up to the roulette table and it's red, red, red, red, red. And you happen to walk up and see five in a row.

Bet red. No, it's going to be black. Of course. And there's like, it's not totally insane. Because if you think about like a hundred coin flips, it's of course, probabilistically, it could be a hundred heads. It's just unlikely. So you think this is the time it's about to flip.

Too many reds. Right? So that's why you see a new all-time high or you see a string of new all-time highs. You're thinking like it's about to be black. The problem is most new all-time highs aren't the all time high. Well, the other thing, when you think about it this way, what does all time highs do it sucks in buyers? Um, yes.

Well, of course it sucks in people that are worried about missing, missing it. And that that's what gives it that momentum, uh, all to itself. Um, All right. I think Robinhood just checkmated the entire industry with what they announced this week. And I want to get into this thing about... Are you serious? Yeah. I'm super bullish on this.

I know it's surprising. It's surprising. I really think that they just cracked the code on something that probably other firms aren't going to be able to follow them quickly into doing, and it's going to give them a huge advantage. You think tokenization is that much of a game changer? I think building the rails for tokenization puts them in a position to be at the front of the tokenize everything movement that is clearly coming. I think doing this with traditional financial assets is really powerful.

And arguably, they're the only firm that could have done it. I don't think Coinbase has the TradFi bona fides to be screwing around with stocks. In fact, we know that they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they fact, we know that they, they, they, they regulatorily, they can't Robinhood is the only firm that could have done this. The only firm that wanted to. But I really, really feel like what the market response to what they just did is not carried away. Let's do this chart. This is, uh, this is mine. Oh, okay. I asked for a chart. I don't see it here. I wanted to see Robinhood versus the broker dealer industry group index. I don't have it. All right. Let's put that chart back on because this tells the story better than the bullshit

chart that you were asking for. No offense. Thanks. All right. So I'm looking at, I've showed this chart before. It is wild. So in 2023, way back in 2023, okay. So what are we talking about? Two and a half years? Two and a half years ago, Schwab was 22 times the size of Robinhood. 22 times. And it is now only twice as big. Holy shit. Yeah. So Mark Aguilar in the chat is saying they are the Uber of investing. I agree. Don't hate it. Jay Ford points out they also announced mortgages.

No brainer. I don't know why other people haven't thought of connecting those dots. People in their 20s eventually are going to want mortgages. Why wouldn't Robinhood give them a way to do that? I don't know the specifics of it. But why do you think, Tell me about the Checkmate. Why do you think the tokenization thing is such a big deal? Okay, a couple things.

The first thing is they took shares of OpenAI and they took shares of, I think this is how it went, and they took shares of SpaceX and they dropped them on their users for free. Smart. It's a gift. Okay. So they had a million dollars worth of one and a half million worth of the other and they tokenized them. They used the Arbitrum layer two, which is like effectively built on Ethereum.

And they basically said, you now have tradable shares of private companies that other people can't get access to or have to buy a big chunk of in order to qualify for a fund or blah, blah, blah. So they're basically saying, look, you're accredited. You want to be involved in private companies. These private companies aren't public yet, but you want to have access. Here you go. Can't have the shares.

We built a tokenized version of those shares. You can have them, you can sell them, buy them. The rails that they're built on are specific to Robinhood's platform. So you can't move them out of your account, but that's all coming. Robinhood has talked about working with other blockchains and interoperability and making it so you can transfer stuff in and out, self-custody assets. Yeah, I believe that you can transfer in, you're not be able to transfer out. I can't even get my Bitcoin off Robinhood. No, no, no, I'm saying the share their tokens of the

of the there's no one else that could take those tokens from you. So if you want to sell them, you have to find another buyer on Robinhood. It's in its infancy. But ultimately, what this does is it paves the way for other assets that are not currently traded to become traded using Robinhood's protocol on their platform. That's number one. Number two, it's 24-5 trading. Remember that. So not only are they tokenizing private companies, The next phase is tokenizing public companies, which multiple brokerage firms are currently working on, multiple asset managers are working on. Wait, you said it's 24-5, it's already 24-5, it's gonna be 24-7.

It was 24-5, it'll be 24-7, but like having tokens representing company stock that are tradable all the time, that are available in the crypto ecosystem at Robinhood, I feel like it's a gigantic leap to where stocks and crypto are completely blurred. And this is the thing that Robinhood has been working on for 10 years and they're actually doing it.

I'm surprised to hear your posture because I feel like six months ago, you would have been like, this is bullshit nonsense. Well, it's traditional financial assets that are now easier to access and fractionalize. And I don't need to need it. I don't need to service. And actually one of the points that Vlad made, I thought very successfully, somebody from the crypto world said, well, why is this a big deal? Who really needs this? And he's like, you know what? You're

right. For a US investor, we're already 24, 5. We have markets that are liquid. We already have medium speed rail. So me showing you high speed rail, it's not that impressive. It's not that meaningful. European investors or investors in other continents, other countries that can't access US stocks with the ease that we can in a tokenized crypto environment, they can, or they will be able to. And that's game changing. There are a lot of countries where they are local investors. They have to buy funds in order to get access to the US stock market.

Now they'll be able to buy the tokens that represent these shares. Think of this like ADRs here in the United States for European companies. Now, it's hard for you to understand for people to understand why this is exciting because we don't care about other country stocks. We're not dying. Oh my God, I wish I could buy LVMH. Well, you can. It's an ADR and nobody wants it. If you're from another country and you're watching Palantir, Nvidia, all these Well, you can. It's an ADR and nobody wants it. If you're from another country and you're watching Palantir, NVIDIA, all these stuff, you're like, oh my God, I can't believe I can't buy these things. Robinhood's got a huge audience in Europe. They are now opening

up tokenized versions of US companies to everyone. So when you hear people say, we're democratizing this and that, you and I, we laugh. This is like actually. They are democratizing access to US stocks and to private company stocks. I think where this will go by the end of this year, I think you'll have probably that whole list that we did with Aaron Dillon of all those pre IPO startups. There'll be a token for each one of those. And why that's exciting is because when they do go public, you'll have people involved that ordinarily would never

have been able to get involved. Yeah, I will say this humbly because this is not my land and I can't see the future any better than you can. But I don't know, I know that there's going to be a supply of tokens. I'm not sure that there's going to be a supply of tokens. I'm not sure that there's going to be the demand. Okay. Here's a token that represents a share of and they're all, you think there's

going to be a demand problem for that? And we'll, and we'll go public in 2026 or 2027. I think there's going to be a demand problem. I don't, I think, I think people are going to lose their minds. Guess what? But, but, but my understanding is you still need to source the shares. You can't just create tokens out of thin air. You convert. Correct. A lot of these startups that we just talked about, OpenAI, they have hundreds,

thousands of employees. Some of these employees are vested. They have their stock. They can do what they will with it. So here's where tokenization makes a lot of sense to me. Let's say that you have a lot of money at Coinbase, for example, and you sell some Bitcoin or whatever it is, you don't want to transfer out to a different brokerage account. You're on the blockchain, you want to stay there. Tokens there make a lot of sense to me. Yes. Yes.

The tokens at Robinhood. This is the first time that Robinhood has leapfrogged Coinbase. Robinhood has been chasing Coin first time that Robinhood has leapfrogged Coinbase. Robinhood has been chasing Coinbase. They did this first. And again, they're uniquely positioned because they're in the TradFi world. They're FINRA members. Coinbase could not have done this. Listen, it's interesting. I'm very, very curious to see where it goes. I didn't read this yet, but Jenny Johnson had a headline in Fortune on the CEO of a Fortune 500 company and we're going all in on digitization or tokens or something along

those lines. Yeah. Wisdom Tree's got something they're doing here too. Yeah, they're involved. Everyone is all in on tokenization. The idea is it lowers costs and it speeds up. Settlement is instant. And with tokens, the transaction happens. It's on the blockchain. That's the end of it. There's

nobody filing paperwork in a Manila folder. Put up this thing from Dan Dolev, please. So nope. The Mizuho. So this is Dan's take. Party like it ninety nine dollars. Get it. Raised his price target on Robin Hood. Dan's friend of the show. He's kind of our informal fintech analyst on balance. We believe Hood should get rerated. Unmatched product velocity availability in 30 plus countries. Myriad of new products, including stock tokens, staking advanced charts on mobile crypto perpetual futures, which we don't have time for today

We'll talk about that another time. They are just innovating in multiple lanes a Hundred times faster than the incumbents. They are they are let me just one final thought here The stock has gone absolutely vertical on Gigantic volume. Yeah put in a potentially gnarly candle today. If you want to buy the stock, you can buy it back at 70 bucks. How do I know that? I don't, but we'll see. Yeah. The route, look, I'm not saying the price should be the price. I'm just saying the rally is justified in terms of the excitement. I agree. Yeah. I'm always have the posture, for the most part, that the public is not stupid. The stock is rallying for a reason.

sure for the most part that the public is not stupid. The stock is rallying for a reason. Yes. Anyway, let's, I have one more. This is tokenized real world assets. You know how small the tokenization of stocks is? It's zero. It's zero. You can't even see it on this chart because it's one of the few things that hasn't been

done. Well, this entire thing is zero. It's 15 billion bucks. I know, but it's early and someone's going to own it, I think is the point. Yeah, no, I'm thing is zero. It's 15 billion bucks. It's I know but like it's it's early and someone's gonna own it I think is the point. Yeah. No, I'm not I'm not fighting you. I don't disagree. Okay. Yeah. Okay Nvidia This is funny. So throw this chart up chart kid shared this today. Remember this chart because I do these charts have a tendency of disappearing when they don't work on and what we're looking at for the listeners is the have a tendency of disappearing when they don't work out. And what we're looking at for the listeners

is the price of Cisco and the price of Nvidia. And of course, what they have in common is they both went up and to the right. And I'm only teasing. They're both the giant behemoths of their day. OK? And we know what happened with Cisco. What if Nvidia is the same as Cisco was in 2000?

That was the thing. So ChartKid was kind enough to update us. And here we go. So now, I guess Nvidia did follow the path, like kind of, but it blew past it today. So there we go. Yeah. Sorry, the matchy match chart didn't stay matched. So anyway, Nvidia is a $3.89 trillion company.

I mean, it's going to four. Where does it ultimately go? You think this thing gets to 10? Is that crazy talk? Well, let's just start with, can it go to four and hold four before we start 10? There's a lot of T's in between four trillion and 10 trillion. Four trillion, it's only 150 billion away.

Come on, it's like one day. Barron's did a piece. I put this on LinkedIn and people got upset about it. So which part? Nvidia, if it gets to four trillion, will be 36 percent higher than the entire FTSE 100, which is the Dow Jones of Great Britain. And and only 18 percent short of Japan's entire Nikkei 25.

Wow. It would look, it's a biggest company in the world. It's not, it's not that crazy that it's now the biggest company in the world considering how important its product is. It's crazy. And I mean, it's always going to be crazy, but somebody has to be the biggest. So Beth Kindig tweeted, in October 2023, Nvidia was expected to generate $96.6 billion in revenue in fiscal year 26 and $112 billion in fiscal year 27. Now it's expected to generate $200 billion and $250 billion.

So just in October 23, expectations for 26 were 96. They're now 200. And for 27, it was 112, and it's now 250. So again, the market is not dumb. High expectations. 50%. Right. In October of 2023, when Nvidia is already the hottest stock in the world, the expectations

were still 50% below what they are now. But at the time, they were scorching hot. They seemed unrealistic. Right. And that's because the big thing that people forget is it's not just how many chips can we sell. Once people have spent a trillion dollars on these chips, they're locked in to that architecture.

And they have to continue to pay Nvidia because it's a platform. It's not just a chip. People forgot how much more there was behind the sales of the chips. All right, Josh, we're already an hour in, so let me just move on to this last part real quick. So you and I spoke about this with Cole. I mentioned the Bloomberg article that for those who missed it, this is like actually I'm reading this.

This is not me making this up. I'm not on mushrooms, ketamine or acid. Here's the quote, a footwear startup is teaming up with two space companies to design a shoe in orbit as part of a mission to make artificial intelligence and blockchain less expensive and more eco-friendly than it is on earth. Yeah, sure. Why not? AI enabled computer sneaker.

Yeah, sure. Why not? AI enabled computer sneaker. Yeah, sure. We have the SIBO files 19B4 for first of its kind, Pengu and Pudgy Penguins, NFT ETF. Sure. Why not? And then we saw an article in the FT. This is hilarious. OpenAI's former chief technology officer has raised $2 billion for her new artificial intelligence startup in a deal which values the mysterious six month old company at $10 billion. Basically this is getting funded at $10 billion. Nobody really knows what it does. It doesn't matter.

So here's, here's the point that I want to make. Anytime you have all time highs in the market, it is a green light for stupid behavior, right? By definition, you will never not have dumb behavior in a bull market, especially at the top. I think one of the big takeaways for me with my maturation as an investor over the years is that this dumb behavior that you see at the margins, and maybe this is a little bit less marginal, it doesn't matter. It is a distraction and a sideshow. Now it is like sort of a temperature on the market maybe, but all of these micro bubbles within a bull market, noise.

As dumb as they are. Chris Hayes says, hold on. Sodaq Jackson says, Boiler Room Josh would have loved pitching those companies. Oh man, I'm writing the pitch in my head right now. Space Nikes. All right, Make the case. All right. This is not as exciting as the stuff Michael just walked us through.

People think that like being a professional investor or being a good investor means you have to have a new idea every day. And it's just not like that. Like in the real world, you should have a few like really core insights and just follow them through to their conclusion. And you shouldn't have a new stock every five minutes. That's wise. Well said. I want to revisit Toast because I think we're on the verge of the next breakout.

I think you're right. I want the pitch because I told you I was going to buy it. I didn't buy it. And it is hanging so high. I have to buy it. Dude, it's just going to go. One day it's just going to go. It won't. Well, one day it's just going to go. I agree.

This is not investment advice for those of you within, within your shot of my voice, please, I don't know you. Okay. Um, basically for people that have never heard of this company, if you go into a restaurant these days, there's like a one in five chance or one in three chance that the waiter or waitress comes to your table for the check and they have a device in their hand and they hand it to you,

or they just take your credit card from you and do it table side. If you go into a place that sells food without a waiter or waitress, there's a very good chance Toast is the screen in front of them at the counter. Their products range from point of sale hardware, which is what I just

described, but also kitchen displays, payment processing, supplier and invoice management to payroll, delivery, delivery management, menu consultation, marketing programs. They have an AI program called Sous Chef that helps restaurant owners become more efficient at running their business. They have a hundred something different products that they sell you as a restaurant owner. Once they get in there and they get you using their payments terminal. Their take away is about 50 basis points. Okay. It's a lot of money they're making and their gross value across their platform.

As they add more restaurants, it's just, it's absolutely booming. The March quarter was a breakout quarter because it was their first profitable quarter. And from here on out, hopefully, you're gonna see gross margins rising, net margins rising. In Q1, gross margins hit mid 20s. Net profit hit mid single digits, like four or 5%.

That's versus big losses the year prior. They spent a lot of money upfront to equip restaurants with these handheld devices, but then inertia takes over and it becomes like a sales force. You can't get rid of them. Restaurant owners are not ripping this equipment out ever. So it starts with point of sale and it ends with Toast selling you every other software service that you need to run a profitable establishment. This is a $25 billion market cap, not yet in the S&P because it hasn't been profitable for long

enough. Just announced enterprise deals with Marriott, Applebee's, Topgolf, anywhere that they're selling food or hospitality, there's a toast machine in the building. We're talking about 130,000-something customers, businesses all over the country now standardized on toast. UBS just upgraded it. A bunch of upgrades recently. Annual recurring revenue, which is the only

number that really matters rose 31% in Q1. It's now 1.7, 1.7, I think that's supposed to say billion, which is explosive growth for a company in this business. Live customer locations are now 140,000. So this is, in my opinion, let's put this chart up. Look guys, not complicated. The share price is following the growth in trailing 12 month EBITDA.

So you're literally witnessing a company go from losses to growing cash flows every quarter, I think going forward now will be a better earnings picture as they keep adding locations. Two potential negatives here, worth talking three potential negatives, chart off. One is the whole restaurant business slows down because of a consumer driven recession. Okay, fine. It's the same risk for every other stock you own.

Grow up. Two competition, Clover, Square, which is called Block now, but Square and you know, like other payment. Okay, every company is competition. Grow up. Um, and then number three, their costs are rising because they keep adding all these new services like AI and all this stuff. The market doesn't care about that right now. Well, that one I kind of get the, the, the P E's at 45 times earnings.

So markets telling you, don't worry about that. It won't matter until it does. But the bottom line is, if anyone's equipped to deliver AI to the hospitality, travel and leisure industry, Toast is the best position player to do that. It's also a payments player. They also since 2020 have been making loans to restaurants, which is hugely profitable. Tokenize them. Tokenize, tokenize these loans. Strategically important, they should tokenize.

Anyway, the stock rocketed up to 45, which was a new 52 week high. It's backed off a little bit. I think it's biding its time. They'll report again in August. And I think if that's a good report, and I don't know if it will be, this name gets into the 50s or 60s. So that's my make the case. What are your thoughts?

You had me at Applebee's. Great. I like it. I do like it. I do like it. And why don't I own it? Coward. Basically.

Oh, sorry. I thought that was your inner monologue. I was just vocalizing it. Okay. All right. I've got some mystery charts. All right. Let's hit it.

We're going to zoom out. Okay. This is a decade. Needless to say, this is not a great stock. Is this a price? In fact, yeah, it's the opposite of a good stock. It's a horrible stock. Okay. This is the price of a stock.

Yeah. Can I have one clue? I'll give you two more clues or two more looks. Well, let's zoom in please. All right, this is the last five years. Not great. And year to date please. A little better.

A little better. Would you buy this? Do I own this? Is this Pfizer? It could be. No, no. We, we, we, we. This looks as shitty as Pfizer.

We spoke about this last week. This is a great American. Disney? This is a great American stock that I threatened to buy, which I haven't bought. I'm probably not going to, but I kind of want to. Oh, Intel. Yeah, that's the one. Look, I'm sure it'll. Look, I'm sure. Just rewind, just I kind of want to. Oh, Intel. Yeah, that's the one. Look, I'm sure it'll...

Just rewind two charts, please, John. At some point of the recover. I just don't know when. There's just no more sellers. Well, my argument is like, why wouldn't you just buy it when it breaks the downtrend and not get it at the all time low? Yeah, yeah, fair. Like that's how I...

I'm not saying like never own Intel. I'm saying like, why put yourself through that? Do you have to have the bottom? I will say, it's not, but I will say, it's gone sideways literally since August of 2024. It has gone sideways so far that it is now above its 200 day moving average only because it just stopped going down. By accident.

Just for getting out of bed. I could picture this at 18. Could you? Well, I think it's binary. I mean, it's not going to go sideways forever. I think it's going to either be a 30 or 15. Yeah. It looks bottomy.

But there's no fundamental story for why it's going to turn. Yeah. You know, like maybe wait for the, I'd rather buy it up 10 points after they crush an earnings report like Dell just did or like, see that's a difference between you and I. I don't wait. One thing though, one thing though is these things do sneak up on you. Like Cisco looks amazing. IBM looks amazing. These are stocks that went sideways for 10 years. Yeah. So, but 10 years. But I'm not doing it.

All right. It's a pink pony, huh? All right. Guys, thank you so much for joining us for this extra long edition of What Are Your Thoughts? It's been a pleasure for Michael and I to see you here for the live. Those of you listening in Podcast Land, please give us a like and Those of you listening in podcast land, please give us a like and subscribe to the channel for God's sake. Also want to mention tomorrow's and all new animal spirits, Michael and Ben, and we will be back later this week for the compound and friends. Other than that, wait, we're not back? I'm back.

I'm so good back. Okay. Michael will be back with an all new edition of The Compound of Friends. I will be on my fourth bowl of pasta. Bon journo. Guys, thanks again. Have a great night. Whether you're just getting started as an investor or you're managing a multimillion

dollar portfolio, Ritholtz Wealth Management has the solution for you. It all starts with building the right financial plan to speak with a certified financial planner today. Visit ridholtzwealth.com. Don't forget to check us out at youtube.com slash the compound RWM. Make sure to leave a rating and review on your favorite podcasting app.

If you love investing podcasts, check out Michael and Ben every Wednesday morning on Animal Spirits. Thanks for listening.