The Compound and Friends - Wilfred Frost Comes By, Margin Debt Tops $1 Trillion, Nvidia Earnings Preview

Episode Date: August 26, 2025

On this TCAF Tuesday, Josh Brown welcomes CNBC host Wilfred Frost for a look at the success of US stocks vs the UK’s market and what made Wilfred’s dad David Frost one of the most important TV journalists of the 20th Century. Then at 37:30, hear an all-new episode of What Are Your Thoughts with ⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠! This episode is sponsored by Public. Find out more at: https://public.com/WAYT   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 brought to you by Public. That's public.com and the public trading app. I use it all the time, super easy. Go to public.com slash W-A-Y-T. We had some fun this week. My buddy, Wilfred Frost, came back from England and co-hosted Squawk Box for CNBC.

Most of you guys probably remember Wilfred when he had the show with Sarah Eisen. They were doing the closing bell for, I don't know, four or five years together. And I was a regular on the show and Wilfred and I became friends. So it was really cool to catch up. And we talked about the difference

between investing in the UK versus investing in the U.S. Is it cultural? Is it political? Is it structural? Why are multiples so depressed across the pond versus here and what can be done about it?

And I really learned a lot from Welf. So I think you guys will enjoy that. And then it's an all new addition of what are your thoughts? Michael Batnik checked in from vacation in Rhode Island. And we did a pretty in-depth preview for Nvidia, which is reporting earnings this week, probably the most important stock with one of its most important reports ever. So we dive into that. We look at the Everything Rally.

Got a lot of rotation happening in the market, making Michael very bullish. We talked about CEO. raising guidance while Wall Street analysts continue to be lukewarm on The Outlook. I thought that was an interesting disconnect. And there's a make-the-case. There's a mystery chart. We looked at the explosive growth in margin debt, LOL. It's not as bad as you think.

And so much more. So stick around. Please enjoy the show. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnik, and their... their castmates are solely their own opinions and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions

in the securities discussed in this podcast. Ladies and gentlemen, welcome to live from the compound. My guest today needs no introduction and I'm actually, I don't want to say embarrassed, but I'm sheepishly about to do an introduction. And the reason why is you are a professional at this. And I've only, I only do this in my spare time, but I'm going to give my best shot. Wilfred Frost is a British business journalist and television presenter, known for anchoring Sky News Breakfast. He spent five years as a fund manager at Newton Investment Management, which I did not know about, before launching your broadcast career in 2011. You guys know, Wilfred primarily as the host of CNBC's Worldwide Exchange, which aired from three in the morning

to five in the morning? Five till six. Five till six. All right. But you were the co-host, the closing bell, with Sarah Eisen. I was a weekly regular. We had the time of our lives. I think that ran from 2018.

Try to remember when it ended. I did 18 to 22 on that. Four years, yeah. Okay. All right. Wilfred is here to discuss the current state of markets, as well as his new weekly show, the Master Investor podcast, where he interviews legendary investors and business leaders to offer listeners exclusive investing insights and ambition fueled inspiration. Did you write that? No, I didn't. You guys wrote that. I'm going to take that off. Pretty badass.

Yeah. That title, and I looked at your guest list, I haven't listened to all the episodes. It's pretty apt. You have Ray Dalio. I love the Liz Ann Saunders episode from last week, especially because you gave me a shout out during that. You're getting some incredible guests, And obviously that's a testament to the work that you did while you were here covering business and meeting all these folks. Yeah. And we had David Solomon as well. We had Dan Niles. Tone it down. We got it. And lots more to come. I mean, the thing that I'm so excited about the podcast is pretty much everyone has said yes that I've asked. Okay. Obviously, I haven't scheduled them all yet. It's a weekly drop. And I'm, I think that's, I'd like to think two things. one is, as you said, a testament to the groundwork one puts in

and building those contacts over time. But I think that there's an interesting offering. So the tagline that I came up with are you guys have just improved with giving Josh the script there. Unbelievable. Unbelievable is where we celebrate and learn from the success of the greatest investors, business leaders and politicians in the world, giving you our listeners the edge.

And I think in the UK, there's been something lost about that in the last decade or two. I don't think it applied when I grew up. And in my six and a half years in America, when I moved back, I kind of was a bit disappointed and surprised, but the amount to which we seem to want to criticize success rather than celebrate and learn from it. So that's kind of the heart of what I'm doing that. Well, it really seems like you're in a position to bring that, those animal spirits back in the UK. I feel that if you can build an audience of people who have found huge success investing,

And these are not people that they got lucky or their brother-in-law tipped them off to a coin or they accidentally bought Nvidia and forgot to sell it. But like people that over decades have established credibility, have made money for a lot of other people, not just themselves, have invested for on behalf of hospitals and pension funds. Those are the type of people that I think do offer the type of example where your viewers who are maybe only semi-interested in investing. might become inspired. So I love that for you. Absolutely right. And I think, you know, it is important because when you have inflation at 11% in the UK a couple of years ago, people are losing money if they're just sitting in cash, let alone, I think for the next decade we're probably going to have over 3%. The latest print in the UK is 3.8%. You know, people have to be smart with this or else they're actually

losing. It's not just a, you know, people don't want to take risk perhaps in the UK, but actually if you're just standing still, you're losing. So I think that's a point. And, you know, our Listeners after eight weeks are roughly half UK-US. It's definitely not just for the UK audience. But I think it gives a slightly different perspective, me doing it in this format compared to what I used to do for CNBC. It's long form, 45 minutes or so 30 to 45 minutes an episode. And it's not too tied to the short-term news cycle. It's life lessons from these people, as well as politicians. We had Jack Liu so far. We've got Liz Trust. Former Treasury Secretary Jack Liu.

We've got Liz Trust coming up. We've got Nick Clegg coming up to former British politicians. politicians who have different perspectives on the economy and business. So I think it's life lessons as well as investing tips. Ultimately, either way, if you listen, I think we'll give you an edge. As you're speaking, I'm just looking at the Futsi 100. I think a lot of listeners or viewers of this would be surprised to learn that it's actually doing quite well. They'd be like, the what? Yeah. What are we talking about? So these are-year-to-date, we are ahead. Just most consequential companies in England.

And you guys have a stock market now. It's depressing that you have to describe what the Fudcy 100 is, but you probably do. I sort of do. Yeah, but it's very rare in my entire time in the markets, which was since I graduated in 2008, that we're outperforming the US because the US has been the only game in town. I mean, I think you still are the only game in town, to be clear. But in a relative sense, it's not been a bad year in terms of stock market performance. And, you know, it's a similar kind of theme you're seeing here.

You're seeing a bit of the value or quality pickup relative to the growth. We don't have much growth, but, you know, there's a price for everything. Well, right. So what you lack is the type of, like, globally dominant technology giants that have been one of the driving forces of earnings growth and market cap growth. So, Nvidia, I believe, is larger than the entire Futsi. Oh, easily. I mean, at $4.4 trillion, I think you've got five companies bigger than separately

bigger than the Futsi one. And then I was looking at some of the components of the Futsi in preparation for this. And I see, like, I see companies like Rolls-Royce, which people associate with the cars, but I think BMW makes the cars now. They don't even do that. They're making mini-nuclear reactors and jet engines. And it's tech. Historically, we were fantastic engineer, you know, engineers.

We developed Concord, which flew quicker across the Atlantic in 1970s. than people can do today. So it's a great shame. But, you know, this comes back to it. It is in our DNA. Britain is a mindset towards success in capitalism. I've always thought it somewhere between continental Europe and the US.

And I growing up always believed that maybe this is because my father had such an affinity with America and the household I grew up in, but that we were much closer to the US than we were to continental Europe. I still believe that. If you look at our history,

if you look at our DNA, you look at some of those success stories, but there's just been some kind of something that's held it back. And I think it's there. I will always be a massive long-term bull on the United Kingdom. But we definitely have slowed down of late. I think first things first, stopping the listings from leaving should be like priority one. And the way you do that is with less onerous regulation.

But like you look at this company called Ferguson, trades here in the United States. it was a U.S. company acquired by a British company. I think it spent 50 years as a British company. And then they left and we listed here because they looked at the multiple that they were getting on their earnings. And they looked at their U.S.-based competitors. And they said, this is ridiculous. We should at least be getting a similar multiple to what our competitors get. Hasn't worked.

Still very cheap stock. But I think we want to stop that for you. And then I also think the rebirth of the IPO is something. that the public gets excited for. Yeah, so it's interesting. I think the listing problem is almost the kind of public face of the issue, but I don't think it's the core issue because it is just a fact that, you know, capital, multiple in the S&P is, what, 22 times versus 12, 13 times in the UK.

So it's very hard to argue against relisting if you're a business that is kind of comparable to what's in the other country. Right. Particularly if you're about to IPO and, you know, some of the fintech successes in the UK are choosing to IPO over here. It's a problem. It'd be great to correct, but the key thing is where these companies are headquartered and based. And can we make sure that if you are the next arm holdings, for example, which is our one big tech success story of the last decade, listed here, listed here after being bought by a Japanese firm and private for five or six years, can they

develop and stay physically based in the UK? Because that is more important to me. I think that you want to make sure we remain, and I think this is a question mark at the moment, attractive to the best global talent in the world, and most importantly, to our domestic talent. And if you can show those people, this is a place where your ideas will be rewarded and you can have a great career, then we're still fine long term. And the listing thing is a problem. We need to address it because it raises the working capital costs to the company there. If you're going to have to raise capital and it costs you more, these are all factors. But, you know, I think worse would be as if you see Arm, it chose to list in the U.S.,

but if it says we're closing 50% of our research facility in Cambridge and we're moving it to the Cambridge here, do you what I mean? That would be a much bigger problem. It's such an important point because when I'm invested in a stock and I look at who's the CEO, and I try to understand the family tree, like, where did this person come from? So one of my bigger investments is in Uber and Dara, of course, comes from like that. I remember you talking about that. That family tree with Expedia and Barry Diller.

Like you look at all these companies now, SaaS software companies where the founder came out of Google. You look at like in the semiconductor industry, there's this whole chain of people, how they got to where they are now. You kind of need that and it takes generations. But the sooner you restart that process because you're not just giving birth to companies

that then list their IPO. Think about all of the executives and engineers at these tech firms, at a certain point, they want to leave and do their own startup. And you want there to be an ecosystem so that they can actually staff that startup locally, not just go out to Palo Alto. Yeah. And what we've been poor at in the tech industry in particular, I think, in the last five to ten years, is allowing the early, like, unicorn-type success stories to scale

in the UK. Right. So actually, we've got some of the brightest minds. Our education, I think, is still very, very good. We don't need no education. Well, that's true. But people are coming up, British song. People are coming up with some of these ideas and you're developing these companies.

But then can they get the access to capital and talent to really scale? And they're being picked off by American P.E. Again, they're still sort of headquartered there, but they need to be able to grow further. I'm curious what your thoughts are about who the audience is for business, financial media and business in the UK. The great thing about your podcast is people all over the world are going to listen to it. I'm sure they already are. Well, it's a really interesting question. So, you know, I was, I'll rewind the clock of it. When I moved out here December 2015, I had been two years at CNBC, London, came out here. I was blown away by the scale of interest

in what is a sort of niche area of journalism, business news. And I think in America, CNBC and its, it's, it's rivals, which it leaves in the dust. I love CNBC. You know, fighting for maybe 25% potential audience of the population who are just people who are interested in success, want to be successful themselves, but they don't necessarily. Tens of millions of households. Tens of millions of households. That would tune in if you can get them to pay attention. And these are people who didn't have to work in finance, but they may have made their money in any area, but they want to be interested in the stock market. And success stories. And, ambition and celebrating all of those things. I think in the UK, the sort of CNBC and Bloomberg

are fighting for 1%. It's literally just the people that work in finance, who might have it on in the office, but probably not at home. And so there's a big, big gap between the two. I actually think in the UK, there's much more than that one or two percent of the population out there. They're interested. Oh, definitely. But it's probably not 25. And I think it's 10 to 15. And I think, by the way, that market is also served as if it is only one or two percent. So I think, you know, here there's fierce competition for a podcast like this as, you know, present company very much included in that sense. And so I think it's a big, big chunk of people. And we'll find out in the weeks ahead.

By the way, the early numbers make me think it's right. No, that I just think there's a lot of people that want to celebrate success and not just always had this slight tone of envy and criticism. which, you know, do you know, your episode with Tom Lee recently, you guys were talking about this about people that got jealous of crypto successes, you know. By the way, I'm the person that hasn't bought every single time. You're the last buyer. I'm the last buyer. Okay. But I'm not jealous of any of the success stories. I've got some friends that have made a fortune from it, paid off their mortgages. I think fantastic, good for you. I wish I'd joined you, but I'm not envious that you've done that. And I think way more people have that kind of mindset

than of almost sort of publicize in the UK. So I want to ask you if you think this is true. I've been to Europe. I've spoken with people that work in the financial services industry. I've spoken with a lot of financial advisors. I once went to an event. British company put on this event on the continent, and I guess they assembled financial advisors

from every European country in Berlin for three days on asset allocation and basically fund managers pitching. Berlin's fun, right? Berlin was fun. What I heard from people, and I know you see Britain as being more similar to the United States than the rest of Europe, but what I heard, including from British financial advisors, is that as a financial advisor, it's sort of really hard to get fired because most of them work at banks. And these banks are 400 years old. And the families who are wealthy now are the same families who are wealthy 400 years ago.

It's people that had land effectively. And so as a result, the advisors get switched around, but the family never leaves the bank. And so they sort of see themselves as not as entrepreneurial as advisors in America. They sort of see themselves more as, well, the relationship is really between this family in Amsterdam and this bank that they've been at for 200 years. And I'm the part that can get kicked out. So what I have to do is not take too much risk. Whereas here in America, we have to take risk on behalf of our clients.

They expect us to do so. They don't like it when it goes poorly. But we do reap the benefit of having made people a lot of money when it goes well. And I just didn't really hear that mindset in talking to British and European financial advisors. Am I like overgeneralizing? Well, I mean, there's some element of that. I've never heard that specifically, but everything you're saying kind of tallies. I can totally believe that.

And I'd say it slightly differently, which is, you know, so I started my career in finance at Newton Investment Management, and it was your classic, slightly stale, loved everyone I worked with there, but slightly stale, long-only asset manager. Now, I love the way my investment knowledge is kind of played out because it was great learning toy. I did all the classic DCFs, very, you know, it was, picking stocks, analyzing companies. Are we going to switch our position from Vodafone to British Telecom. We'll spend a year debating in. By the time we shift, one's moved 5%, the others move 5%, and then they stay flat for a decade anyway. But

it was all very good grounding. And then I switched to the Asia Desk, which is a little bit more dynamic, but it still wasn't particularly dynamic. And then I came out here for CNBC where people like Tom Lee, people like you are being quicker on the money. You're more focused on things like momentum and sentiment. And the first year, I'm thinking, sorry, guys, you know, this is a cheaper stock, so it's better than the other one or whatever. And so I think there's definitely that difference.

The traditional asset management industry is the same as it is here, but you don't have as big of a new retail trader's sentiment. And you don't have that influencing what the market does as much and thus allowing you guys to build success by looking at that and giving it a weight in how you put up your decisions. Is there a cultural difference though in the willingness to take risk that can be overcome? Definitely. And the willingness to take risk, I think, is, again, somewhere between the average in continental Europe and in the U.S. How do you overcome that? It's hard. Yeah. And I'm not going to sit there on the podcast and tell people to take risk,

but I'm going to give them as much of an education and the tools if they so desire that hopefully they'll be in a better place to do it. But, I mean, yeah, it's an interesting point on that. Part of it may be structural. Sometime in the 1990s, we basically decided as a society here in the U.S. that we were going to put the onus of retirement directly on the household. So we went away from these like sort of defined benefit pension schemes to fund retirement. And we said instead, ladies and gentlemen,

this is the 401k, you choose your own funds, you make your own decisions about how much exposure to risk versus how little, and it's on you. The company is not going to pay you until you're 85 years old. Like there's no pension anymore. Well, we did that too, maybe five or so years later. Okay. And yet, we're stuck in between both. So we've much fewer defined contribution beneficiaries of those types of pensions now. And yet, the defined benefit pension isn't as embraced as it is here. So that's a great snapshot for the difference when I moved here versus the UK. People here are so actively engaged on their own 401k. Almost because they have to be. Yeah. Whereas in the UK, A, people don't

probably save enough into it in the first place, but they won't have a slightest clue about what's in it. It'll be managed by some arm of the corporate that they work for, not even necessarily in the asset management, which will be outsourced again to some kind of pension fund manager. It'll be pretty heavily in bonds as well. So it's a whole mindset that needs to change. Yeah. I wanted to ask you, so my take on the way finance is covered here on the part of big media, because I want to talk to you about what you think about. You mentioned being bullish on traditional media, bullish on the news. So the way I've always thought of it is CNBC covers the markets like sports. I've always looked at it like it's ESPN for money, which is what I love about it.

And I think that's what the viewers love. Bloomberg is a little bit more B2B. And I almost feel like they are covering markets through the lens of data and analysis because that's their main business. And then Fox business really seems to cover it almost as like a different version of politics, which is fine.

There's room for everybody. In the UK, you just don't have that many outlets that are specifically focused on markets but you are bullish on the concept of traditional news, maybe not specifically cable itself, but just like sort of having these news outlets that are large, dominant, and that do a really good job of covering whatever it is, politics, etc.

I'm really bullish on live TV, particularly relative to how it's priced, if there was a price for all of this. Obviously, you can look at some of the stocks, which trade off that. ITV in the UK is on a sort of eight times P. It'll be really interesting to see what P.E., you know, the new Comcast spin-off, Versant starts off at. So, Ferson will be MSNBC, CNBC, and the Golf Channel.

And I bet it'll start on a very low P. And I, you know, depending, everything has to have a price, I'd be a buyer of that potentially. But my point, and, you know, my day job in the UK is mainstream news, Sky News is mainstream, and the podcast is on the side. I think that expectations are so low, one, you know, Sky News you can't trade, which is owned by Sky, which is owned by Comcast. But I think if it was trading right now, I'd be on a very low P. And I think that's wrong because all of the sort of new media that has evolved,

let's say over the last decade, has had so much money poured into it. So there's, you know, the high-quality drama and docs that can be on Netflix or Disney Plus or HBO or wherever. Yeah. There's the kind of news-ish-type rivals of these types of podcasts, which are all fantastic. But it's hard to see how those new media threats could have more investment in the next decade relative to old media than they've had. That's interesting.

And I think live television, outside of sports, has been really hollowed out. And there's always a need for it. Now, I totally agree with your framing of CNBC, which is it covers it like sports. So it makes there always be a need for that niche audience, which is quite a need. quite a sizable niche to stay tuned in. And in mainstream news, you don't have that reason as often, but there will always be a requirement for live television news. And the competition is lower than it used to be because it's been hollowed out.

And you see that here. There's cost cutting of the big cable news channels here. So if something live TV really resonates, it no longer has as much competition. Exactly. And then all of a sudden, you've got pricing power on the advertisements that are going to run during it because it becomes bigger as a result of not being as competitive. Exactly right. And I think that on top of that, we're about to relaunch the breakfast show,

my new co-anchor and I, Sophie Ridge, they haven't announced the date yet, but it's in the next couple of months. I think the day gets announced next week. It'll be in the sort of late part of the year. And I think that we can just give it a bit more energy and freshness as well, which makes a big difference. You know, I think if you, if you throw some, I think, you know, our aim will be to bring a warmth and a relatability to the breakfast show, intelligent conversation, but in a very inviting way, with a sort of unscripted jeopardy to it. So this is the thing that live television has the podcast own.

Yeah. You know, the viewer knows that it's live, whether that's the two presenters chatting and something going wrong or right, or. funny, a reporter joining with a report from the field or in the studio or a live interview, particularly when you're holding someone to account a business leader or a politician. There is a jeopardy about it being live and not knowing what's going to happen. That 10-minute conversation could contain less in it, and it would still be more attractive to the viewer than a recorded 10-minute version of it because it's live. And, you know, I have mainly, I think that because of my own experience in TV, but also from

watching back, you know, the tens of thousands of interviews, my late father did. You know, that aspect of it being live, the unpredictability about it. I think the viewer knows that and they're more drawn in all else. So I'm glad you brought that up because I wanted to talk about, I wanted to talk about the legacy of what your father accomplished as arguably one of the most important television journalists or maybe just journalist period of the 20th century. For people who are unaware, what could we tell them about David Frost and sort of the, the, the, the life's work that you are now doing to remind people of how important journalism is. Yeah, so dad started on TV age 22 in 1962 and continued for over 50 years, so the day he died in 2013.

Yeah, so 51 years on screen. And did it, you know, across actually not just two continents, because he was pretty big in Australia and the Middle East as well. Like across the world, but particularly UK and US. and across so many different genres as well. You know, he wasn't just a business journalist or a politics journalist or an entertainment or sports. Like he and anyone, you know, you could think of

in the last 50 years he interviewed. I think you were off that week, but I was listening to the episode Michael and the team were discussing when Hulk Hogan died about, you know, people who were globally famous, like Hulk Hogan was. And they listed the other people that they thought were in that category in the last 50 years. I think every single one of the ones they listed, dad had interviewed. At times, multiple times, you know, like the Beatles, Ali,

Elton John, you know, it's extraordinary the spread that dad did that with. And, you know, after he died in 2013, I, you know, picked up the reins of his company. And I bought back and done various deals to digitize catalog and by the rights of interviews he's done. I now control about 80% of the 10,000 plus interviews he's done. And, you know, I've done a series of things. There was a podcast series called The Frost Tapes and now TV series called David Frost Verses, which came out earlier this year on MSNBC. It's not on a streamer yet in the U.S.S. but it will be soon. And it was to really try and go back into those moments in history where dad had a particular front row seat to them unfolding. And, you know, it's been a... So I'm going to ask you about the most famous example. I don't think I was born yet. You certainly weren't.

But the Frost Nixon interview, which, of course, there's a famous movie about that episode. But I think your dad is widely credited with the person who basically broke the story wide old. open when talking with President Nixon and getting Nixon to a point where he just couldn't take it anymore. And maybe you could tell us a little bit more. We have a young audience on YouTube, but this is probably fascinating to them. Yeah, I think this is the most famous interview he did because he sort of became a part of history with it. And so obviously Nixon was forced to

resign 1974 because of largely because of the Watergate scandal. To be clear, Dad didn't break that story, which broke a year or so before. That was, you know, amazing journalists like Woodwood and Burns. So Washington Post. Washington Post, exactly. But Dad was very much involved in the U.S. broadcast media at the time and covering it as it broke, but he didn't break the story. Nixon was forced to resign in 74. And then famously, his vice president, General Ford had became president, immediately pardoned him. So he never stood trial for his crimes. Right. And dad took on the media establishment, the networks here. NBC, ABC, and CBS to get the broadcast interview with Nixon.

He outbid them. Because someone was going to get him to talk. Someone was going to get him to talk, and it took three years. By the time the interviews happened, it was 1977, though he did the deal in 75. I may have been born then. Yeah, I was going to say when you were saying now, I was like, I may have been. And then he outbid the networks. He paid Nixon $600,000 to get the exclusive interviews, which inflation adjusted is

2.1 million. And he's just a presenter dad. He's not a business at this point. And then because he outbid the networks, they were so pissed off they didn't want to buy it off him. So dad then had to build together 140 local TV stations to distribute it. He kind of built a cable channel before it became the case. That's wild. And it was so, and then had to fund. Because otherwise he would have put up all that money for nothing. It would have been an underwhelming thing. But that process was incredibly expensive too. So the two-year process was, you know, cost him about $1.5 million in total, which, you know, inflation adjusted then, you're, you know, you're closing in on $10 million. Dad was on the hook for. And then he sat down for what ended up being 28 hours

across four weeks of recording sessions with Nixon. And he had to get Nixon to admit wrongdoing and to apologize. 28 hours sounds like you can get somebody to admit to just about anything. Well, I mean, thank God he paid so much money to secure. that time. And he wore him down over time. By the way, those 28 hours, I've watched from start to finish, and I don't recommend it. It's pretty dry. Do we have something? But this bit, I think, is breathtaking. So let's show people what we're talking about. In the Houston plan, it's stated very clearly, use of this technique is clearly illegal. It amounts to burglary.

Why did you approve a plan that included an element like that that was clearly illegal? Yes, well, burglary is the word, but another way to put it is that you get the information that you need. There are some actions that have to be covert. By covert, let me put it this way. Or in this case, illegal, in fact. Well, let me say that it is legal, in my view. So what in a sense you're saying is that there are certain situations

and the Houston plan or that part of it was one of them where the president can decide that it's in the best interest of the nation or something and do something illegal well when the president does it that means that it is not illegal by definition exactly

that's the money that's so that's the money shot that's that's the moment that people were that's so now we've got Bob Woodward there reflecting on it but that is the moment after by the way the first half of those 28 hours didn't go that well for dad

and so the pressure was building and that was the moment where it turned where he knew he had a line that would resonate in fact there they were talking about the Houston plan not Watergate and as it goes on he gets him to admit wrongdoing and apologize to the

American people about about Watergate. And, you know... But the poker face. There was no... Your dad did not do like a gotcha. Like, there it is. He just, he kept going very calmly.

So that very moment, I remember him talking about years later. And I remember him saying, essentially, the gravy train had arrived. And you wanted it to keep coming and more to come. So you don't want to say, aha. Or you don't want to be like... Imagine this serotonin fireworks going on in his brain at that moment. Inside, he's thinking, I thought I was going to have to sell my hair. house. Right now, this is the first

moment I think I'm going to be able to keep my house, but you have to keep it together. And it honestly, you know, there's different styles to interviewing and different things at work. Dad, under unbelievable pressure, stuck to his guns, stuck to his DNA, and he got there with Nixon. And then the pressure on him going into it,

you literally can't make it up. He was, he mortgaged his life to do that interview. And he stuck to his style of interviewing. It worked. Who was in the movie? I should be watching. played dad, and Frank Langella played Nixon. Oh, Langella is one of the greatest actors ever. And do you know what, the two of them inhabited those roles for three years because it was

a play in London to great success for about a year. Then it moved to Broadway for about a year, and then it was a film, and then you had all the opening nights and stuff. It was, and we used to, I was a university around that period of time, so it was like late teens, 20s. It was great fun. It came in late in dad's life, so it gave him a wonderful boost, because, you know, kind have made him a sort of pseudo movie star right in the twilight of his life.

And obviously my brothers and I were like signed up to all the opening nights and premieres and awards nights. And whenever we'd see Michael at any of them, we'd always joke being like, Dad, how are you doing? Which he didn't really find that funny, but he had to go along with it. It's so funny how the, like, it's so funny how like we're still debating what the president can and can't do if they quote unquote believe it's in the best interest in the country. Not for us to get into a whole political discussion, but it's eerie that. It's eerie, the echoes, and I don't think it's an accident that George Clooney brought back

the play, good night and good luck. I love that movie. I haven't seen the play. So it's a film, but they made it a play this summer, and Clooney starred in it. And I don't think that it's random. Obviously, I think there's, we still live with this issue to this day. Yeah. Well, someone should bring back Frostnakes into Broadway.

I would go. What else do we want to do? I do want to ask you about, I do want to ask you about the new show. on Sky News just for our American viewers and listeners. This is a really big show. Like, this is the one. You're like Kathy Lee Gifford. The equivalent. Something like that. Yeah, yeah. Okay. Listen, it's a dream come true. I grew up, you know, obviously with my father doing breakfast television in the UK, and I can't quite believe that that's where I'm at now myself. And I think there's a huge opportunity. I think that I think Sky News has all of the ingredients

to be the biggest network in the UK. And I think that Sophie and I, who's my new co-anchor, can harness that. And I think there's lots of attractive things about it, more free-flowing, less scripted, warmer, intelligent but inviting. And I think we can bring the biggest guests in the world, from British politics to American business. I'll pack my bag. You just, you just get you're on, man. You're on. But I think the biggest thing is, is unleashing and harnessing the talent internal at Sky News, which I think is a sleeping giant. Well, listen, I want to tell you, I love when I see you back stateside. We had a lot of fun on closing bell, you and I, especially when I was in person. And it's, anytime I see you back on CNBC, I'm just, I'm so excited about it. So, I really appreciate

the kind words. I really appreciate joining the podcast as well because I love listening and I love the way you guys have harnessed great content and minds in such a kind of conversational way. I take lessons from it and it's been a pleasure to join you. Well, good luck with the podcast and thanks for stopping by and let's do this again. We'd love to. Cheers, Josh. Thank you so much. Guys, this has been Wilford Frost, ladies and gentlemen. Make sure that you are following his new podcast. What's it called? The Master Investor Podcast with Wilford Frost, available wherever you get your podcast. watching. We'll talk to you soon. Thanks, Josh.

What just happened? What just happened in this kid? Oh, all right. Hey, everybody. Welcome to an all new edition of what are your thoughts? My name is downtown Josh Brown here with my co-host. Mr. Michael Batnik, as always. Michael say hello. Hello, hello. All right. Michael is coming to us from Newport, Rhode Island this week. I feel like the whole world is in Newport, Rhode Island right now. Really? You get that sense? My whole Instagram feed. Okay. Well, I'm here. First time. Great. Great spot. So this, I think this exact week last year, I was in Newport visiting with our advisors in the area. Did you? did you go into the breakers?

I don't remember. Let me say. No, you didn't. You would remember, that's Vanderbitts bail tub? No, I didn't do that. Oh, the mansion. Dude, you don't forget this.

It was one of the greatest, one of the greatest days of my life. We did the mansion tour, but we walked around outside. We didn't go inside to anything. So the first tycoon is actually the only bio of the big four industrial guys that I didn't read.

And now that I'm on my audio book kick, Forget about it. I'm going to slay this book in two seconds. Yeah, those homes are in, those homes are complete, complete in total insanity. There was no Hamptons at turn of the century. So Newport was where they went in the summer. That was like the billionaires from New York.

That was the where they went. All right. Let's say some quick hellos. The chat is lit right now. I don't think he's with us tonight, but I wanted to mention Jack Rosenfeld has successfully recovered from heart surgery. He's one of our regular pounders. And I just wanted to give a shout out to Jack.

You all can do the same thing in the chat. I'm sure he'll see it later. Magnus is here. Brian Grill. Benjamin Cliff. All the regulars are here tonight. We'd love to see you guys. Thank you for joining us for the live.

It means a lot. We love the energy that you guys bring. Heather, I see you. Rob Fitzpatrick, what's happening? Matthew Stevick. They're all here. And we love that. We have a sponsor tonight, public, the investing platform for those who take it seriously,

you can build a multi-asset portfolio of stocks, bonds, options, crypto, and more. You can do everything. You can fund your account at five minutes or less. They've got A-I, A-I, excuse me. A-I-I-O-I-N-A-A-A-A-A-A. It is all happening. I don't see that in the read, dude. I do.

It is all there. How about this? For a limited time, you can earn a 1% match on all IRA deposits, IRA transfers, and 401K rollovers. That's pretty sweet. Fund your account in five minutes or less. Find out more at public.com slash w-a-y-t as in what are your thoughts paid for by public investing. Full disclosures in podcast description. Okay. I have one more item of housekeeping. Nicole will kill me if I forget. There's an impersonator on TikTok pretending to be the compound. Just to reiterate we will never DM you, ever, especially not from the compound account.

Like, that's, it's just, it's from a compliance perspective. It's never us. So do not enter into any chat rooms or financial transactions or share any personal details with anyone DMing you pretending to represent us on TikTok or any other platform. I also want to remind you guys, August is Portfolio Review Month at Ridholt's Welf Management. we have certified financial planners standing by to take a look at your situation, review your current portfolio, and shed some light on how your allocation may or may not fit your long-term goals.

Go to ridholtzwealth.com to get in touch. Hundreds of people have done it this month, and this is your opportunity to talk to us. So we'd love to hear from you guys if you're looking for some help. All right, Mike, does it feel like the media is overdoing or underdoing invidia earnings week or just right i have to be honest i can't answer that question because i haven't paid much attention but like i gave me my take it matters there's a big one i think it matters a lot um and what's interesting is the options market the last time i i looked it only seems to be uh like a six percent implied move up or down which i think is less than usual but the last few

reports, I don't remember the stock doing much. I don't, I don't know, like, how long ago was the earnings party? And then the stock was flat? You remember? Was that last summer? Oh, man, chart can make a chart of this. But John, go to the second chart, the option's pricing chart. So to your point, yeah, it doesn't feel huge. Doesn't feel huge. But this is the actual in blue, the actual one-day price change post-earnings. And you saw that, there's been a few below it's actually. Oh, you know what's, wait, you know what you're seeing in this chart? what like the uh the days of them reporting a great number and the stock rallying huge ended in 2020 the first quarter how many quarters ago that's right josh one two three four quarters ago

or five quarters ago excuse me um it just it doesn't it does not seem as though this is like the kind of rock and roll response to earnings that it used to be um And I guess that's just like the nature of the thing. Everybody knows the earnings are going to be good. Well, also, when you're $3 trillion, it's hard to add $300 billion in market cap overnight. It just is. The amount of surprise. Where is it even coming from?

Let's stop the first chart. This is so Chartgo did serious work for tonight's show. And what we're looking at, if you happen to be listening, is Nvidia's price since the launch of Chad Chabit. versus or compared to, it's growth in forward earnings estimates. And the price is up 964%. And earnings growth, I don't know why it's not earnings, but earnings growth on a forward basis is up 1,100%. So, okay.

So the company's earnings have actually out, the growth in the company's forward earnings estimates, 12-month forward estimates, has been rising faster than its share. price. Yeah, that's right. Nobody would guess that. We know that empirically because it's multiple,

is shrinking as we go along. It's not as expensive on forward earnings as it used to be. And it's sort of getting cheaper each time because it's not like they report 50% earnings growth, which is, I think, the expectation tonight. And the stock goes up 50%, it's not what's happening. If you're saying that Nvidia is a bubble because, of the market cap, just in a vacuum. Oh, it's $4 trillion a bubble.

Or how can Nvidia be bigger than the healthcare sector, whatever it is? You have to give some context. And Chartkid did it. Look at the price versus the valuation. So Matt said, next one please. Matt said, Nvidia went from, nope, next one, went from 5 to 178. Thank you. Invideo went from 5 to 178.

And over the same time frame, its forward PE ratio shrunk from 38 to 33. I feel like that's the only stat somebody needs to know to understand that the stock market slash summies are not in a bubble. So look at this. It went from 5 to 178 and it's trading below the average on a forward PE basis. It really is just a one-of-one remarkable growth story that we might never see again. Leave this slide up. That's not even the most insane thing. The most insane thing is that when it was selling it 70 times earnings at the end of 2022, that's when it was the most screaming of a screaming.

that's when it was the most screaming of a screaming buy. And the reason that's the case is because 2022 was such a technology shit show that and Nvidia was partially reliant upon the crypto market for GPU sales. Oh, big time. So this period of time that we're referencing end of 2022, there's no chat GPT yet. ChatGPT is launched in November 30th, and it probably takes a full 30 days before everyone figures out what this means for GPUs. So the most ironic part of that chart is that the ultimate buying opportunity in this stock

was when it was selling for 70 times earnings, which should tell you a lot about the usefulness of backward-looking PE ratios, investing in growth stocks. It's almost one of the most moronic things you could possibly be anchored to. Great. And that's an unbelievable illustration of that. We skipped over two charts. Should we go back and do them?

We should. I know Matt put some effort into these. So let's get into them. What are we looking at here? All right. This is just revenue by segment. And gaming. So the whole thing is data center now.

Yeah, but to your point that we just spoke about, this used to be gaming. Remember, like, before crypto, this is a gaming stock. This is like Xbox and all that shit. Once upon a time in 2015, before people were bullish on, they weren't saying AI back then. They were saying machine learning and virtual reality and augmented reality. That was the first time people started to get excited about Nvidia, but almost the entirety of the business was gaming. Literally chips for Sony PlayStation's and Xboxes.

And the market cap was like 40, 50 billion, which made sense given. the size of the company. So now it's $4 trillion. It's a 10,000 X return. And they're in a completely different business. It reinvented itself twice. And we've spoken about this a lot over the years. These gigantic winners, the story changes all the time. Like not just the story, not just the narrative, but the actual company, what the company does and can do changes all the time. We did an episode of the compounded friends with Adam Parker three weeks ago, and we titled the episode, Why Valuation Doesn't Matter. And instantly, like, you see the chatter.

Oh, this is the top. No, it really doesn't. Because if Nvidia is going to be a completely different company, and we don't know that it will be, you know, in the past, this is hindsight bias. But just the possibility that that could happen is the reason why companies like Tesla get the benefit of the doubt and the earnings multiple is so high

because nobody that owns a stock now is valuing it on the amount of cars they sold over the last 12 months. There's one other chart in there. Did we get that? No, this is the thing. This is the main thing, right? Okay.

So this is data center revenue. So this goes back to 2022. You can't even see the bars three years ago. It's a tiny inconsequent, not inconsequential, but compared to now inconsequential. It's like they're ticking along at $3 billion a quarter, $4 billion, $4 billion, $4 billion, $5 billion. It's now a $41 billion business on a quarterly basis.

People in the chat are asking why we're showing 2026. And it's not because we have a time machine. This is, I think, fiscal year, 26, which is just the way the company titles the quarters it's reporting. Can I say one other thing? If Invidia is a $4 trillion market cap in two years, in three years, if it goes down to $3 trillion, not to $2 trillion, that doesn't necessarily prove that it was a bubble because it is getting the benefit of the data of these valuations

because the growth, the remarkable growth, and what it ultimately could become, depending on how big AI gets. And so the outcome might not prove anything. I know that might sound moronic, but like, we don't know. Based on the estimates now, it's not a bubble. If those estimates fail to come in because people's expectations are too high, that's just the story changing and the fundamentals changing.

Yeah. So if the growth rate slips dramatically and it only turns out to have grown 5% instead of what's priced into the stock of 15% or 20% or whatever it is, all right, then people were too bullish. So here are some things for you guys to. look for when the company reports tomorrow night after the close. If you're recording this Tuesday, so it will report Wednesday post-close. This is this stock, it's already up 35% year-to-date, which is more than triple the S&P 500, up 40% of the last 12 months. But wait, but a stock that was down 35% very quickly in the first quarter. How insane is that? Recovered at all and then some. Expected to report adjusted earnings of $1 on revenue of

46.2 billion. And again, as we pointed out, almost all of that is data center, which is the hyper-scaler build-out for AI. Last quarter, excuse me, this quarter last year for comparison, 68 cents revenue of 30 billion. So yeah, the stock over 12 months is up 40%, but so are the expectations going into this quarter. So if they do these numbers, that would be 49% earnings per share growth, 53% revenue growth, respectively. So right in line with what the stock has done and maybe even faster. They're going to pay a 15% tax to the U.S. government for anything they sell into China. And that is already factored in by analysts.

That's an $8 billion China-related hit to earnings this quarter. It's a pretty big number. There's a couple other things that I want to say about this. The big part of the story that you're going to hear the analysts ask about is the Grace Blackwell chip sales. Right now they're selling the G.B 200, which is like their top of the line, fastest, best, blah, blah, blah. And then in September, so next month is the GB300 sales begin. And that's supposed to be not just incremental, but like an explosive improvement over the current Blackwell model. So you're going to hear people ask about the timing and whether or not they're going to hit their fiscal fourth quarter, their calendar fourth quarter.

The other thing that's happening is really big orders for Grock, which is the Elon Musk empire. And so you'll maybe hear some questions about timing for that. I think I just want to leave you with a couple of quotes from Wall Street. This is all the analysts came out and said, reiterate, you want to be long this stock. to the numbers. J.P. Morgan, we expect July quarter results to be slightly better than our, well, then how are these your estimates, or consensus estimates, they're talking to the G.B. 200 shipment ramp and the start of G.B. 300 ramp. Goldman Sachs, quote, to be clear, we remain very

bullish on NVIDIUS prospects for driving outsized growth in 26 based on positive hyperscalor capex commentary. So that's like Microsoft, Amazon, et cetera, everyone who reported three weeks ago, they all reiterated their CAPEX spend or actually raised guidance on that. Baird, raising our revenue and earnings estimates on a significant acceleration in GB200 sell-through shipments. What they're doing is they're tracking the racks that go out from the OEMs with the chips already embedded in them.

And that's how the analysts are getting a read-through to like the pace of chip sales. They're saying, like, this number of racks went out from the OEM, figure out the number of GPUs that would be on each rack, and that's what's giving them confidence to reiterate or raise their numbers. Two more, Stiefel. We aim to build a view into the foundation of the mosaic of NVIDIA's end customers, which in totality include CSPs, that's cloud service providers or hyperscalers, neoclouds, sovereigns and enterprises. will continue to grow, supports a longer tail growth outlook, blah, blah, blah. One of the things is that it's not just new data centers. It's swapping out old chips for new Nvidia chips into those data centers once they're already in existence. So it's like a replacement cycle on top of a buildout.

And the last one, this is Dan Ives at Wedbush. I'm going to read it as Dan, okay? Okay. Let me get its character. The pieces of the AI puzzle are forming with massive strength from the hypers seen this past earnings season in use cases, okay, building across the board on the enterprise. Now, the biggest and most important piece in the AI puzzle is hearing from Jansen and Nvidia around demand trends.

The godfather, the godfather. Especially with a green light now on the China market, okay? Shout to our buddy, Dan. Dan's the goat. Green light on the China market. Anyway, wait, let. All right. Two things.

That's really good. Two things. We heard from everybody, all of their major customers. We heard this is not going, I'd be surprised if it's a surprise. We've heard everything, which brings me to my second point. Why are they like six weeks behind all their, behind everybody else? Isn't that bizarre? It's like so anti-climatic.

Smart. Crowdstrike, too. Crowdstrike too. Yeah. There's a, I don't really know how it happens, but I feel like once it does happen where you schedule your earnings in this particular week, you don't really move off of it. Because I was just going to say, I have no idea how that happens. I don't, I don't know.

Well, I'm sure there's something. For starters, for starters, when I started in business, most of the earnings season was pre-marked. It wasn't until we had thousands of companies in the West Coast like Microsoft that became really important that we started to have all these afternoon reports. But think about it, in order for a company in Cupertino or Palo Alto or Menlo Park or San Francisco to report before the bell, they'd have to wake up at 3 o'clock in the morning. So that's how earnings season became an after-hours phenomenon for, you know, for half the stocks at this point because like half the S&P is California-based companies

and they report after four, which is actually one o'clock their time. I don't know if you know how time zones work. But so that's just a little tidbit for you. Buffett's the only one that does it right. Saturday? Saturday. And no fucking conference call. That's great.

Figure it out. Everything he does like that I love so much, even though I love earning season. I really love it. All right, Josh, this is a bold market of stocks. Everything is working for the most part. And a couple of weeks ago, maybe for the last couple of weeks I've been saying, like, maybe to listen, it's just like pump your internal breaks. If you feel like you're getting left behind, just like take a beat, don't give it to phone mode. That's always good advice, but especially when stocks are going straight up.

And I think I said sell something two weeks ago. Yeah. And the market's going sort of side. a little up to sideways, but this is a... No one's going to be mad at you for saying that. No one's going to be mad at you for saying that. Dude, three weeks ago, I said sell some Nvidia. No, dude, I'm not...

It's probably going to 200 today. I am not embarrassed. Yeah, no. But my point is this. My point is this. Market doesn't wait for you. Bull markets don't wait for you. Bull markets don't give you a chance to get in.

There are so many stocks that are just hanging high. And they're all working. Like, everything is working. This is like just if we can forget about everything fundamental, forget about your opinion on what the labor market, forget about your opinion on tariffs and cost pressures and the housing market, just forget all that. Literally, if you are just looking at stocks, indexes, you would conclude that we are in an absolutely global synchronous bull market and it's only getting started.

Now, that might prove to be wrong. Everyone could be wrong. That's certainly possible. But you have to give the stock market the benefit of the Dow. It's working and everything is breaking out. So I am bullish on the rotation trade. Let's go through a few charts. This is gosh dang it.

Oh, wow. Look at this. Look at Equal weight. This is from the chart life. Okay. The Dow ripped out hard on Friday. Equal weight, new all-time highs, microcaps, new all-time highs. Let's look at this new chart from Alfonso at All-Star charts.

microcaps, they've been dogs, high rates have smushed them, multi-year highs. And this is phenomenal. The fundamentals are supporting this. So Matt made this chart showing Mag 7 on the left, actual earnings growth versus consensus estimates. And the actual earnings growth is slowing from insane numbers, obviously, right? Like that, you can't continue to grow at 36% forever. But look what's happened into the actual earnings growth of the 493.

and look what's happening to consensus estimates. They are going up in a big way. Here's this for a rotation. I'm not I'll stop talking. Look at this rotation. European banks versus U.S. banks. Are you kidding me? This is your ultimate risk-on signal.

Does anybody-so don't dig in your heels. You're not smarter than the market. It is all working. And maybe there's something that comes along tomorrow to knock us off our axis. Maybe it's Nvidia's earnings report. Certainly could be. But my goodness, this is a bull market. Don't fight it.

I mean, the microcap thing is shocking to me. I understand the action in the last week because of Jackson Hole. It's like the last boot on the neck of small cap stocks is this ridiculous, what are we, at four and a half percent interest rate, whatever it is, it makes absolutely no sense to anyone. So I get that Powell signaling a dovish move in September should be the trigger. But they started rallying well in advance. Well, that chart you just showed me.

Yeah. Can we put up the, can we put up the, uh, and it's, it's everything you want to see. It's discretionary over staples. It's home builders. It's financials. It's tech. It's everything you want to see. John, give me this S&P 493 earnings growth accelerating.

Nobody knows this is going on. Like, nobody's even thinking about this, right? Look at this. I don't, I don't believe so. So these are consistent. On the right side, these are consensus estimates for everything but the Mag 7, and for Q3, 2025, the number is 4.7% expected earnings growth, then four and a half. Then it jumps to start off 26. Q1, 9.9%. Then 10.9% the next quarter. Then 14.3%. Now, analysts always go into the new year, overly optimistic, and then they cut their expectations as the quarter. quarters go on. We know that. But what we also know is that companies are beating the shit out of these estimates. And we just did 12% earnings growth this past quarter X NVIDIA. So let them,

I guess let them, let them cut their estimates. If we're really going to get anything even close to 10, 14, somewhere between 10 and 14% earnings growth for the S&P 493, then the equal weight should be at record highs. Why wouldn't it? Why wouldn't it be? So don't, please don't hear this. I know you can interpret it any way you want as, oh, Michael's flipping Bob. Listen, it's not me. It's the market. The market is bullish. Sorry, let me correct. I got to correct somebody in the chat. Adam is saying, dudes, Momo stocks have been tanking nonstop for a month. Which one? Not sure what Michael is talking about. No, that's what he's saying. The money is leaving a lot of these broken momentum names and it's going into the Russell 2000 and value and other areas of the market.

So a stock doesn't get born and then die as a momentum stock. Just so everyone understands this. Who said that? Adam. Adam. So Adam is correct that there are a lot of names getting nuked. We spoke about this with who was on before Tom, the week before Tom, or maybe it was Tom. There is a great chart that I think Grant made.

Todd Zon. Okay, maybe it was Todd, showing that even though the market is at an all-time high, the number of stocks that are making all-time, 52-week highs and 52-week lows is expanding, and a lot of that's coming from the 52-week lows. So you're right, there are a lot of names getting nuked because AI is making winners and making losers. But if you step away just from the AI trade at the moment names that you talk about, they're getting nuked, and yeah, there are names that are getting smoked, equal weight, small caps. When I say everything is working, okay, yeah, there's things that are not working. But everything that you want to see working in a healthy bull market, it's all happening. But I want to go back to the nomenclature of what is a Momo stock? Like Reddit running from 70 to 200 is a momentum stock.

But then when it falls from 200 to 100, it's not a momentum stock anymore. Right. Like momentum has a definition. It's not a feel thing. It's like a former momentum stock. No, it's a formula. So, yeah, Circle's getting smoked, Figma's getting smoked, Corweave is getting smoked. There are names, absolutely.

It's not hard to find losers. But if you look at the agriot and I'm actually talking about the mega caps, the equal weight, the microcaps, the Russell 2000. It's a bull market. Let's move on. Yeah. I think that's a good point. I think this ties right into it. Bloomberg has a piece about how like corporate America is more upbeat on the outlook into

year end than Wall Street is. And this is pretty rare. Because a lot of times Wall Street is taking its cues from what corporate leaders are saying, especially when they, especially when you're talking about like analysts covering sectors

or, you know, some of the strategists that do these surveys. So like this time, Wall Street like sort of isn't listening. Corporate leaders and CEOs are at least in the things they're saying, and the way that they're giving guidance are super bullish right now.

And there's a little bit of a disconnect. So let me just share this with you and then I don't want to hear what you think. Among S&P 500 index companies that adjusted their revenue views in the current quarter, 44% have raised, which is the highest proportion since 2021.

The share of outlook downgrades is only 14%. That's the lowest in the data going back to 2015. quote, this is a Jeffrey's equity research guide, quote, there's basically no reason that a management team would want to raise guidance on something that they're not 100% positive on because they know the implications of that. I would argue that is a lot of what's powering stocks higher. And then the last thing on this, strategists at Goldman Sachs also flagged the disconnect

between what companies are saying and the macro picture. the firm has the firm's in-house barometer of economic activity among s&P companies so they're tracking the real revenues of all companies excluding energy rose 4.8% this quarter from the same time a year ago exceeding the pace of economic growth so companies are acting like it's 2019 like game on and um the street it just can't get there mentally i guess um because they're just not as bullish. What do you think? You know who else flank this? Me. I said with Ben a couple of weeks ago, I am done listening to the headlines and the economists and the strategists and the this and that.

There is such, and I said this, there is, when you listen to the calls and I listen to a lot of these calls, there is such a disconnect between what they're saying. And to the point that the Jeffrey's out of us make, or whoever it was, us they're not they have no incentive to over promise if they set the bar too high and they that's not what they're trying to do they're trying to tell you the truth like if anything they're looking to sandbag so whether they would be crazy to bullshit they would be crazy in this climate they're not in the business of doing on on guidance that's not what they're doing so again yes there are companies that are having a difficult time as is always the case but for all the ones that

I listen to, the consumer is fine. Yes, the low end is struggling a bit or more than a bit in certain cases. But they're all saying the same thing. Growth. Growth. Tariff concerns overblown. Like, they're not seeing it. Look, 44% of the companies saying anything that guidance are raising. What else do you really need to hear? Now, wait, hold on. This is the critical point, critical, critical point. I am talking about large cap stocks. I'm talking about stock. I'm talking about stocks that have no problem tapping capital markets, okay? So there was a big disconnect between what these companies are saying and how they're doing and how maybe Main Street is doing. And maybe that, like, that's also a large part of the story. Because yeah, there is a lot

of people that are, the labor market is slowing down. There is a lot of people that are like not doing great fact. But we're talking about the stock market and the companies powering the stock market are doing great. I'm with you on that. All right. Let's, um, let's keep moving. Okay. So we made the case, or I made the case last week for rate cut stocks, I believe. And here's one that we never talk about. And we spoke earlier in the show at the top of the show about NVIDIA. And we talk often about the next earnings call and what stocks are going to do next week. And maybe not enough time about these are actually businesses. And it's pretty miraculous that the price follows the fundamentals

or the fundamentals follow the price, whatever, like price leads fundamentals. But they're tied together. So this is a great example. Let's look at Wayfair, a rate cut stock that we just never talk about. This is Wayfair's operating income, okay? And when people were staying at home

and moving to their pandemic, the stock, I'm sorry, the company, the company, the fundamentals of the company went crazy. and then came the rate hikes, and then came the frozen housing market, and the company, the company got smoked. The fundamentals of the business got smoked. And then this company, by the way, is founder-led.

This company made a lot of operational adjustments and efficiencies, and they really turned their business around. And wouldn't you know it, the stock is up 64% year-to-date, but more importantly, look how the price. Look how the price. It's a miracle. Look how the price follows the fundamentals or vice versa. John, toggle back and forth. Boom, boom, boom. There it is. It's almost perfect. It's almost if you overlaid them. It's pretty good. Like a professional, we would be able to see both things happening at once, but it's almost perfect. It's pretty good. Here's what's interesting about Wayfair. So Trump said something about tariffs, indeterminate amount of tariffs or something,

and the furniture stocks got wrecked yesterday. So R.H. would be a good example. And Ethan Allen, all these furniture companies, I don't care how highfalut in their brands are. They all have the shit made in China. So Wayfair, very interestingly, does not struggle with the tariff issue

the way that all of these other furniture sellers do. They said they have 20,000 suppliers. Yet, but they don't, but they don't own it. They're a, so what I think people miss about the Wayfair model, they're like more like Amazon enabling third party sellers of furniture under the Wayfair banner, but they don't themselves import the shit into the United States and pay a tariff. That's on the supplier to, to figure that shit out. Wayfair is just passing along a piece of furniture from a seller to somebody that buys

something on their website. And it's a really different model, obviously, than the other publicly traded furniture companies. And I didn't, I wasn't really like up to speed on the Wayfair phenomenon. We have a couch in our office from Wayfair. It's the easiest thing on earth. I think we bought it. It arrived like eight hours later. It was in a tiny box. I'm like, how does a couch fit in that box? I swear to God, I took a pen and ripped open the box along the seam and this couch like inflated itself and we just have a have a have a have a couch from wayfair i said oh now i get it this is the easiest furniture purchase i've ever made in my life this stupid office couch i got it within hours of ordering it so i don't know how that happens

yeah well the stock is work and the business is work and it's up 64 percent year to date all right moving moving on to one other can i say one thing i i do think that this is the next leg of the bull market is the rate sensitive names now that we're back into a cutting cycle, even if it's a short-lived cutting cycle, these stocks have done nothing for so long. I really like the action in the home builders and the stocks related to houses, mortgages. It's time. I'm seeing like property and casualty insurers perking up. And I just want to say my best stocks in the market list has 190 names on it. Wow. The average over the last year has been like 70.

Wow. So that's what's on that list now. Yeah. Is the rate sensitive stocks that just woke up out of nowhere. Yeah. Okay. Yeah. That's working.

All right. I listened to Home Depot's call. I own the stock. And this was very interesting. Speaking about like, just listen to the calls. All right. So they were asked about what a potential rate cut would do for the business. And I thought this was noteworthy.

Certainly some relief on mortgage rates in particular. particular could help. I think referring to it a bit of a frozen housing market with 40 plus year lower turnover rates and even new starts are struggling a bit. So lower rates would certainly help. We don't have a crystal ball on what that number is. When we talk generally, though, to our customers, each of our sets of consumers and pros, the number one reason for deferring the large project is general economic uncertainty. That is larger than prices of projects, of labor availability, all the various things we've talked about in the past, by a wide margin, economic uncertainty, excuse me, is number one.

Quote off, please. I thought that was remarkable. And again, a big source of why there seems to be an enormous disconnect between how the market is behaving, between what economists and strategists and people are feeling. it's it's really something it's special right there's no gimmick there's no gimmick that you could pull off to make people millions of people all at once say i'll do my roof i'll do my kitchen i'll do the bathroom like everyone has these projects that they're waiting to do the only way these things end up happening is if people stay in their jobs and they feel confident that they're going

to be in their jobs for a while. And unfortunately, the conference board numbers, consumer confidence is just horrible. Present conditions, future conditions, like none of these numbers look good. They all look like they're headed to the zero line. I really think this is the, this is maybe this is recency bias. But I can't remember another, actually, that's not true. COVID, COVID was like this, where you have the stock market making an all time high and you're just like, I just don't get it.

Home Depot is saying the number. one reason is general economic uncertainty, and you're seeing that everywhere, and yet the stock market is breaking out all over the place. Now, when you really peel back the layers of the onion, we can make sense of it very easily, right? It's AI, it's CapEx, and Amazon and Google, they don't care about the unease of the general population. Like, they're spending, and rate cuts, and inflation, well, I don't want to say it's moderate or not, but like it, so it makes sense, but it doesn't. It does and it doesn't. Well, the 20% of Americans who I refer to as stock market Americans who own 85% of the stock market are not sitting around worrying about

general unease. Not yet, because it hasn't touched them yet. Right. So we're talking about a different consumer. And we're not talking about the people who are loading up their portfolio with stocks right now. All right. So entirely different person. For this next topic, for this next I just want to say, chart kid Matt, I called him at 440, and I said, I said, you've got five minutes. Can you make me a chart of margin debt as a percentage of SEP market cap? And he said, yes, five minutes. And it's like, go. I hung up on him.

That's so funny. Keep going. Because I ordered a chart from these guys, and I think it's in here also. Did we order the same chart? Mine's better because I'm a professional. All right. You'll explain to me why yours is better. This is a piece at the Wall Street Journal.

tell us demos. Margin borrowing may not be a great predictor of the S&P 500's next move, but it can still tell us something useful about how to invest. We'll be, tell us, we'll be the judge of that. Relax. Basically, FINRA tracks the data. They don't know who's taking out the margin debt, and they don't know what they're using it for.

So this is aggregate, but we topped a trillion dollars for the first time ever as of June, according to the July margin data, which I guess just came out in August. Investors are borrowing money to buy stocks and tell us goes into detail about some of the reasons why it might just be a mechanical thing. One of those reasons which we're going to get to in chart form is just the fact that the stock market is bigger. And so margin debt is sort of rising commensurately with the overall size of the market value. that's one thing. Another thing is short selling. You do short selling using margin debt. And when prices rise, you have to post more collateral would be the way I would explain it. But it's post more dollars to your equity balance in the account so you can maintain your short position. So that's not people speculating on a higher market. But it's a scenario that would drive margin debt up. So there's a lot of other shit going on. But let me just quote a couple of things from here. And then I'll have you do the charts.

If margin borrowing by individual retail investors was surging faster than the overall total, it might signal exuberance among that crowd. But FINRAD doesn't track who's doing the margin borrowing or what purpose they're using it. Margin loan books grew well over 15% of Charles Schwab and interactive brokers in Q2. We get that from the earnings report. on top of fees generated by trading volume, this helps fuel growth in net interest income, hence why these stocks went up so much. Robin Hood's margin book grew 90% in the second quarter from a year earlier.

Okay, so that's growing faster than the stock market cap. One other thing I wanted to do here, this can be a double-edged sword. If prices plunge, so can margin lending. investors roll back borrowing to slash risk. And as collateral needs shrink rather than grow, margin debits can become credits and interest income falls. So talking about the impact on the brokers and their P&L. But what about the turtles?

Did I say totals or turtle? All right. Let's just go with turtles. I love it. It's a trillion dollars in margin debt. And I know put this chart up from WSJ real quick. This is what it looks like. Total debit balances in customer securities margin accounts.

over a trillion for the first time ever. And I know the way to rationalize this is to say, yeah, but look how much the stock market is up. Therefore, it's just keeping pace with blah, blah, blah. So let's do my chart, which you can make fun of, and then we'll do yours. I'm not making fun of this. This is just typical you. It's very amateur.

It's very amateur. This is FINRA margin debt versus the overall market cap of the Russell 3,000. And all I'm trying to do here is establish the fact that it's not like these things have completely divorced each other or that the rate of change is so wild that there's a massive gap between the Russell 3,000 market cap and the total margin debt. I'm not trying to do anything magical here, but this is just the way I visualize what's actually happening. And when you do that, it's not a five alarm fire. right this is obvious like what why would it be all right you show me your chart no i'm i'm patting you on the back oh thank you so much i appreciate that actually no i'm patting you on the head show my chart thanks dad all right show my chart all right this is the chart you adjust so margin debt as a

percentage of market cap this is all you need to know that's it this is it okay so let's tell people the numbers please so 2008 to now yeah so thousand eight got a little nutty, obviously, 3.3%. Margin debt is a percentage of total market cap. And if you look at it today, it's 1.8%. And look at the change in the previous mania in 2021. Again, things went a little nutty. And yeah, they're on the rise today, certainly on the rise from the lows.

But it's, you know, it's really nothing with nothing. Sorry. The message of this of your chart, your chart's better than mine. The message of this chart is that we're not taking on enough margin debt. Yeah. What are you guys doing? Why are you guys so bearish? Relative to history.

Did you not hit the whole market? Get involved. So as a percentage of the S&P 500's market cap, you guys just are not fired up enough. Like, come on, people. Get with it. More leverage. Actually, it's a great segue, Josh, to the next one. Well, to tell us Demos' credit, he did not.

The headline was more alarmist than the piece. No, the article was great. Great article. The article was great because I think he explained a lot of things. All right. This is our last one. There are now officially more ETFs than stocks. I feel like that's good, right?

Yeah, why not. Is it good for you? If you like it? There's only eight Nvidia leveraged ETFs. Like, it's not enough. Did you think we would get here? I always knew we would get here. Yeah, look at this chart.

It was. There's another Bloomberg story, but it's Morningstar data. So, here, I'll just quote the number. Thanks to a breakneck pace of new launches, there are now more than 4,300 exchange-traded funds, a figure that for the first time eclipses the total number of stocks currently hovering around 4,200. ETFs account for a quarter of the total universe of investment vehicles up from 9% a decade ago. Issurers have been busier than ever this year, having launched more than 640 ETFs, a record-setting pace that comes to about four per day.

The number of funds that came to market in the first half, 469, nice, was nearly 50% higher than the year earlier period and about 140% above the previous five-year average. There's like a lot going on here. I would just point out one of those things is that it's cheaper than ever to get a product launched. So it's not like people are like doing this huge lift. the paperwork's faster, the law firms charge less, the exchanges are streamlined, it's way

easier to launch product than it was 10 years ago, 20 years ago. So let's just establish that. The second thing is it costs less to keep a zombie ETF out there that barely has any assets. So that also reduces the risk of launching something that doesn't catch on. And then the last component to this is these are not indexes anymore. We're not in Kansas anymore. These are active strategies. Some of them pretending to be factor. Some of them are two and three X leverage, whatever. None of this is indexed. That's over. That game has already been won. So what we're seeing now are basically almost more like stocks than they are like funds, I would argue. Right? From a risk profile perspective, from a concept perspective.

The other thing is, every time there's a successful product launch, that issuer doesn't just say, okay, great, we did it. They say, what are three more funds we can launch and create a suite? Because that's where the real money is, an ecosystem of ETFs all keying off a similar theme. So Tom Lee's launching a bunch more, like just like Kathy did. So you have these. you have these runaway hits

and then it's like well we need we have to put out another single or else the band is not going to you know like it's it's human nature for one successful ETF to beget 10 more attempts it's a lot of turtles

is it problematic no I mean there's well well hold on there's a lot of junk to the investor yes I was going to say there's a lot of junk there's a lot of shit being thrown against the wall. And some of it is sticking. In fact, a lot of it is smearing.

A lot of it. It's so disgusting. It's truly, truly revolting. Okay. Do you think that the risk is that a lot of people are going to trip and fall over into some of these shitty products because they don't know any better? Yeah. Yes. And you know what?

Like, who's to say? You know what? The best way to do, I'm sorry, the best way to learn is to do. So I am optimistic that some people unfortunately get burned with more money than they should. But I'm bullish on investors learning. There's never been a more educated investor class ever. People are not dumb. They touch the stove once.

They burn their hand. They don't touch it again. And so a lot of these things that are being launched, if they don't work, they won't take money in. I think the exchanges should raise their prices. I don't think more is more. I think the exchanges should say, okay, this is just activity for the sake of activity. That's not their job. All this market making bullshit going on with funds that barely have any money in it.

I think one of the exchanges should differentiate itself from the other, like NASDAQ or New York. One of them should say, we only do quality here. We're not focused on trading volumes. We're focused on what we think is like best for the market. Oh, yeah. As a shareholder of New York Stock Exchange, I don't want that. They're running a business. This is capitalism.

It's just, I don't know. I mean, oh, stop it. Don't be holding now. I come from the 1900s and where where I come from, like, things like mattered. I get nothing matters anymore. Oh, shut up. This is not, I don't be an idealist. This is the world that we're going on.

I understand like nothing matters. All right, dude. So why not 80,000 ETFs? I'm saying 10X that shit. Yeah, why not? And it's just a lottery ticket. And maybe it's a piece of shit. Maybe it's not.

no one's really paying attention. I don't know. You know what? We have a great guest. We have a great guest on the compound and friends later this week for me to get into a fight with. I don't have to fight with you over it. Yeah. Okay.

I am, I'm going to make the case for, dude, I'm bullish on the notation trade. It's been a minute, minute, minute. I think we're here. You love these head fakes. I do. I'm a sucker. They get you every time. They get you every time.

I forgot, I am a sucker. I forgot to bring the chart of the IWMSPY, but I'm telling you, man, it's turning up. All right. This is the one. This is the time. This is the time. So Bespoke tweeted last week.

There have only been 15 other days since 1990. This was, was this Friday? Maybe. When the cap-weighted index fell at least 0.4% while the equal, no, it's not funny. I'm going to talk about it. While the equal-weighted index rallied 0.4%. I don't know this is Wednesday or Thursday,

but either way, it was an outlier. And I think the rotation is on. Here's one area that I think is going to go. Maybe not a rotation. trade per se. But Chinese Internet, this is the time. Look at this. You believe in Triple Tops? I know we don't. Oh, that's going. Right? I don't own this, but I probably should. The whole Chinese stock market is up huge this year and nobody's talking about it. Nobody cares. Chinese Internet stocks are about to go crazy, I suspect. I don't believe in, I don't believe in

triple tops. No, not a thing. This is going to go. Grant Hockridge has a chart showing that the Russell 2000 has been below its all-time high for 950 days. which is one of the longest streaks of all time. Guess what? This baby's about to fly. So I am a believer that the rally is broadening out for real, for real, for real, for real. In fact, how about this?

It is happening today. That's a fact. It doesn't require faith or belief. It's happening today. But I believe that it is going to continue. If Nvidia misses and this is the top, they're going to clip you up. That's okay.

This is going to go viral. It's going to go viral. I'm just saying. I'm a big boy. I can take it. All right. Because it's happened to me. I've never been wrong on video before.

I never ever. So what are you making the case on though? Because you're saying rotation into the rest of the market, but then you're saying like Chinese internet. You're just seeing like everything. Chinese internet was a bit of an outlier. But the things that have not worked while the bull market has just soared. All right. The things have been left behind.

So the everything else. The everything else. The 493. The 493. I love it. I love it. And I actually think you're going to be way right. Okay.

This is going to be a tough one for you, but you're very good at this, and I wanted to challenge you. And then we'll get out of here. Here's my mystery chart. Say no more, Josh. No, I'm just kidding. Yeah, right. Not this time, my friend. All right.

Couple hints. It's a stock, not an ETF, not an index. Okay. It's a U.S. stock. Okay. It's a household name. Okay. It's probably the first company in U.S. history to be literally put out of business by crypto.

Okay. Western Union? Holy fucking shit, are you good? I mean, that was great clue, so thank you. Look at this. Are you seeing this? I am. This is a $25 stock five years ago.

It's $8. Now, why today? Why am I bringing it up today? Why? Michael. I got the nod. No, I'm just kidding. Here's what I want to tell you.

Massive insider buying. Massive. One of these guys, I think Matthew Kagwin is the CEO on August 18th, which is when is at Friday, bought 17,500 shares in the open market at $8.36. That's a quarter million dollars. Two days later, three days later, on the 21st, Devin McGrannahan, which I guess is a board director or an executive, bought 176,000, 470 shares at $8.49. He now owns 900,000 shares. So he materially raised his position.

The bottom line, and this is NASDAQ data over the, the last three months, there have been three open market buys, but over the last 12 months, the whole way down, 23 open market buys by insiders. The number of shares bought over the last three months, 222,772 versus only 26,000 sold. Over the last 12 months, 910,000 shares bought versus only 200,000 sold. I like to set up. I'm almost. I, I'm just a lot. I'm I like it. There are almost no publicly traded companies where you'll see a ratio of buys to sales like that.

So, and granted, this could literally be put out of business by the blockchain. Remember, Western Union, guys, for those of you who aren't aware, is remittances from immigrants who are trying to send money back home. Historically, they paid egregious fees to Western Union, and now they can do it with Bitcoin or stable coins or whatever. and this might be the first company in history to actually be disrupted out of business by blockchain or

it might double what if there's a Western Union stable coin dude I like that stock I like how it's I like it I like it I might buy it for real I like that you guys to mystery chart very proud of you all right we're going to let Michael get back to his vacation I want to remind you guys tomorrow

is an all new edition of Animal Spirits just like every other Wednesday morning That's my favorite podcast. Make sure to listen. Ben's got an all new edition of Ask the Compound. And then on Friday, very special guest. Multiple, multiple appearances on the show. And we're super excited to have him back.

So look for that on the Compound and Friends Feed. Thank you guys so much for listening. Have an amazing summer Tuesday night. You know,