The Compound and Friends - Will It End Badly?

Episode Date: March 8, 2024

On episode 133 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Todd Sohn of Strategas to discuss: the top ETFs to gauge market conditions, what the future holds for Nvidia, money market funds, how the VIX impacts returns, small caps, and much more! Thanks to the Tema Cardiovascular and Metabolic ETF (HRTS) for sponsoring this episode. Learn more at: https://temaetfs.com/hrts Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com 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

This is my f***ing shine box. No, it is. It's primer. It's anti-shine. Shine box. Michael brought his shine box. Look at this. This is serious. You insulted him a little bit. You insulted him a little bit.

That's actually my favorite scene in the whole movie. You insulted him a little bit? Just like the whole thing. Give these Irish hooligans a drink. Give us a drink give us a drink and you just know it's coming

and what's that actor Vincent he's dead he's so good he's the ultimate that guy Frank Vincent

yeah ultimate bad guy and Billy Bats yeah Billy Bats but he they also he's also great in Casino

they used him in The Sopranos yeah he was in everything he was in everything he was in Casino too Rob told me this morning today's the 26th anniversary of Lebowski actually He's also great in Casino. They used him in The Sopranos. Yeah. He was in everything. He was in everything. He was in Casino, too. Rob told me this morning, today's the 26th anniversary of Lebowski.

Actually, I have a hoodie. It says Jackie Trehorn Productions. The dude. And I walked into Twin Oaks the other day to pick up Logan, and one of the older ladies sitting behind the counter goes, who's Jackie Trehorn? Jackie Trehorn treats objects like women, man. He really does.

I took you to the movies to Lebowski, 25th anniversary. Yeah, that was fun. That was surreal. Josh and I went to see the 25th anniversary a couple months ago. It was so f***ing odd because I've seen that movie 150 times. Where do we go? Jeff Bridges did an introduction. Oh, that's even better.

No, like at the beginning of the movie, he like sat, was sitting on a couch. He's like, hi, I'm Jeff Bridges. Like, here's why this movie is like still resonates. I forget what he said. I did that with Back to the Future. Yeah. I did that with Godfather. I like – I think that the movie theaters, if they brought back classics and framed it the right way, it's a big people go.

Get rid of the 30 minutes of previews. Yeah, just preview all the 30- of previews uh yeah just preview other 30 year old movies uh so before yeah i i listen when uh tarantino and robert rodriguez did the double feature grindhouse double feature right and they did uh death proof was um quentin's movie and i forget what the other one was called uh with the hospital and they're like zombies. But they put fake trailers. Machete was a fake trailer. Yeah, yeah, yeah. With, what's his name?

Danny Trejo. But Machete's a real movie. And like Lindsay Lohan was a fake trailer. I think they made one. But they made the movie. They ended up making the movie because people were like, I would see that shit.

Hilarious. Hilariously violent movie. Cult character. Now he sells tacos, I think. Danny Trejo is also, he's like the Mexican Frank Vincent, I feel like. Desperado is like his.

He's like a bad guy in every great movie. So before we just came on, I was looking at NVIDIA. Oh, yeah. NVIDIA, listen to this nonsense. It's added, forget about earnings, which was 11 days. So bullish.

All right, so 11 days ago, reported earnings. It's added $660 billion in market cap since that. Larger than 590 stocks. Just over the last six sessions. So since last Thursday

with no news. Since last Thursday on average $60 billion a day. Added. Subtle. $60 billion a day on average every day.

On no news. So that's $366 billion in market cap. That's bigger than Costco and it's bigger than all but 19 companies. Over the last six days for no news. So that's $366 billion in market cap. That's bigger than Costco. And it's bigger than all but 19 companies over the last six days for no reason. After already being up more than any other stock. After adding $276 billion on earnings day. It's almost larger than Apple.

It's taking Apple's market cap. Yeah. That's what's going on, right? Is Apple shedding cap to the semis? We came up with this phrase today. An Apple a day does not keep NVIDIA away. Okay. Well, to me, Apple is like 17% below its 50-day or something.

Yeah, it's oversold. But where is that market cap going? I think it's going right into semis. Ooh, it's coming. Look at it. There you go. That's it. If the day NVIDIA crosses Apple, that's like the day that-

Sell everything. That might be the- How old are you? 37. Were you alive? No, I'm just kidding. Were you in the business the day- I didn't realize you were so young.

I mean, the guy's in shape. He's young. I'm trying to stay in shape. I got small kids. Do you remember the day where GLD crossed over SPY on AUM. 2011, yeah. The ultimate gold sell signal. That was the actual top.

Can I show you something? NVIDIA passing Apple would be a ring-ring, ding, ding, ding. I feel like that would say, okay, if you've been long, maybe it's time to- Do you know that VanEck does an annual gift? Yes. They do a Vineyard Vines tie. Did you see this year's?

Robotic? Robotic, something like that, right? It's A-O-I. We got pitched something by a guy from Australia, and he kept going, Aoi. It was amazing. All right. It's got like an artificial intelligence.

Yes. That's a cool one. I like it. Like a robot. It was last year, Jerome Powell. But that's a GPU. It's a tie with GPUs on it. I had the fortune of joining Jan, and I had to ask him, like, what is that robot?

He's like, oh, it's AI. Okay. Do you want this for your collection? My collection? Yeah. Yeah. I have not worn a tie ever. That's my gift for you.

Don't we gift a gift? Love this turn. All right. Thank you. This is. Hey, Mike, just a heads up. Yes. When you call for charts, since they're numbered,

just let me know the slide number. Oh, wonderful. Who numbered them? Well, in the bottom right, there's a slide number. So, Todd, how often do you produce these charts that we're going to go through today? So, every Tuesday. And this, when I sent you guys over here,

is more just like the monthly handout if I go travel. So, it's a monthly handout that is not, that's like fresh every month. You're not recycling charts for the most part. Yeah, fresh. It's usually a compilation

of recent work. It's just easier that way rather than starting from scratch. You're lazy. Your charts are really good. Really good. I appreciate that.

I'm super excited to show people this stuff. We try to keep it simple, provocative. Hey, are you going to watch State of the Union tonight? No. No. Are you?

I had no idea it was on. Today's… Really? Like, no clue? I'm not online like I used to be. I had no idea it was on. Okay. I'm not a politics guy.

No, I'm not either, but I feel like it's kind of like the one thing of the year that's… Wait, is the State of the Union annual? No, right? Semi-annual? No, it's this annual state of the union annual so the last one before the election it's just it's it's not important in that like you're going to change your mind on something it's just like good to know oh this time there's a buyback uh anti-buyback stuff going on with biden they have a one percent excise tax

on stock buybacks and they want to take it to 4% or something. And that's like his red meat for the anti-billionaire crowd because they don't really understand how this stuff works. I don't know if there's anything else specific economically or stock market-wise, but I just feel like it's good to know. Talk about inflation coming down. Put it this way.

If anything actually comes out that anyone's surprised about, you'll see it. Yeah. I'm going to read about it tomorrow. I'm going to watch Tokyo Vice instead. What are you drinking? Oh, Tokyo Vice.

It's fantastic. I have not started it yet. How's the second season? Oh, it's good. Yeah. It's good. That actor's great. The kid that plays Jake?

Oh, yeah. He was in Baby Driver. I don't know if you ever heard of Baby Driver. Oh, that's right. That's where he's from. That's right. That's a great movie.

Yeah, fantastic. The whole show's great. I love it know if you ever heard of Baby Driver. Oh, that's right. That's where he's from. That's right. That's a great movie. Yeah, fantastic. The whole show is great. I love it. What are you drinking? This is a draft matcha latte. Matcha, I was going to say. Sounded fancy. Sounded expensive.

Did you learn that from Tokyo Vice? No. Did you watch the third episode of Shogun? I did. How was it? Amazing.

It's great. I'm a little behind. John, we good? I think we're good. Let's get this shit started in the words of Ronnie Mung. Clock's coming in. Zero, zero, zero, zero, zero. It's not. I'm a little behind. John, we good? I think we're good. Let's get this shit started. In the words of Ronnie Mung. The clock's coming in. Zero, zero, zero, zero, zero.

It's not a chance. All right. Hey, John, what episode is this? I'm talking about your friends. Episode one, two, three. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions.

Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Thank you. companies that they've identified as leading the charge against heart disease, diabetes, and obesity. Obesity is forecast to affect one in four people globally by 2035, and obesity-related conditions like diabetes and heart disease represent vast markets with significant growth potential. Team a cardiovascular and metabolic HRTS ETF, a better way to invest in life sciences. Episode 133 The Compounded Friends Where's my, put my shit on Louder I want my guests to feel it So the vibes are important, right Nicole?

Otherwise we'll just do this shit at Zoom We won't waste our time Alright Hey everybody, welcome to The Compounded Friends Episode number 133 Thank you John Duncan is in the house today Nicole Hey, everybody. Welcome to the Compounded Friends, episode number 133. Thank you, John. Duncan is in the house today. Nicole, Rob, Sean's here. Whole gang.

All right. We have a very special guest today. We're talking to Todd Sohn. Todd is an ETF and technical strategist at Strategas Securities and Strategas Asset Management, an institutional research and asset management platform. Prior to Strategas, Todd had several roles at J.P. Morgan and SAC Capital Advisors. Todd, what's up? It's great to be here. How are you feeling? I appreciate you guys having me on.

How was your weekend? I'm looking forward to the next weekend. Why? What's next weekend? Well, it's just the weekend. How was your weekend? It's Thursday. We're almost, it's just the weekend. How was your weekend on Thursday? We're almost there. I don't know. How was your week? Well, last Saturday was rough because it rained all day.

And when you have two kids under five, that's not good. Is that your situation? Yeah. What are you doing to celebrate all-time highs? Disney Plus. And the NASDAQ, the Equal Weight, the S&P, and the Equal Weight. All four. Equal Weight, S&P 500.

I want to get this so I don't forget. Today, we'll break a 544-day streak without a new all-time high. What's up? Third longest. Wait, is that good? It's great. It's great.

Third longest in history since 1990. And if you were to backtest it, when you go a year or two, at least 250 days, the forward returns are usually pretty good. 2011 is actually the only miss on the Equal Aid Index because 12 was a little funky. So wait, third longest streak behind the dot-com boss

and the GFC? Exactly. So in other words, like we've paid our dues. We did it. I think if it's not tech, then you've definitely paid your dues here. Yeah. And this, you know, we can get into it whenever.

We will. I want to ask you about Strategas. Yeah. Okay. Why is it so hard to pronounce? That's a great question for Jason Trenner. I'm just kidding. We love Jason, by the way.

Mike and I, we just remembered, we had beers with Jason at—I think it's gone now. Tots at Beer Bar Mountain. I think it's— No, it's over. It's like something else. Do you know the same restaurant group owned every restaurant ringing Grand central prior to the construction project at one Vanderbilt. They owned the Spanish tapas place, uh, the pizza place, which was legit Naples 45 gone, gone. What's there? Nothing. There's a, there's a 12 Cito Makase something

there. Some bullshit. I don't know. Naples 45 for people that worked in midtown Manhattan in the two thousands, that was the shit because they would put out free pizza on the bar. Yeah. Like, and those pizzas were giant rectangle sheet pans of legit, legit pizza. I think the thing I'll miss is that beer bar always used to roll out these huge TVs during the World Cup. Uh-huh. And so whenever there was a goal, we're right next to that. Uh-huh.

You'd hear just noise. I remember watching like the game was 2014 or something was like a really big year. And that was, that was cool. So that's gone. Everything's good. Everything.

Here's what you should know about New York. Everything good is gone. Eventually. It's just, that's, that's how we roll. Although I went last night to a place that I think will, will last outlast a nuclear Holocaust.

I went to Bomonties in Brooklyn. I don't think you can kill this place. Where is it? It's in Williamsburg. And it has a cigarette machine, right, when you walk in. Still functioning? No.

But they're not pulling it out of there. Everything is so perfect. You don't want them to change a centimeter of this place. And they haven't. But it's like, the food, it's not a museum. It's a serious restaurant

with a kick-ass chef and the food is unbelievable. I got to check that out one day. So yeah, you got to hit that. All right. So Strategus is research. Yeah. Institutional research primarily.

And then you guys were acquired by Baird. Right. Okay. Five years ago. Yeah. So shout out to Baird. We have a lot of friends at Baird. Mike Antonelli. Yeah.

Mike's the best. He's my guy. Great person to joke around with and we're both huge Disney fans. Yeah. I will say that. He definitely has that Disney adult energy. Mike. He was my tour guide. I'll take you next time. Oh, you hung out with Mike again in Milwaukee?

No, but he gave me all the notes. Yeah, yeah, yeah. Baird, they've been a great partner what made them want to buy strategists because they're midwestern very buttoned up i know they cover great coverage on like industrial america you guys are new york you guys are wall street so what was the what was the match yeah we're we're Wall Street in the old tradition. Jason loves the history of Wall Street. But we have a very fun culture, right? We take our business seriously, but don't take ourselves too seriously. And I think that culture, along with the way we present research,

where you try to keep things simple and very visual for everyone, right? All of our clients are busy readers. They can't spend a half hour reading 750, you know, 7,000 words, right? All of our clients are busy readers. They can't spend a half hour reading 750, you know, 7,000 words, right? We're chart-based. And I think that really spoke to the folks at Baird. Okay. Because, okay. So it's institutional caliber, but it's easy to digest for all of their clients. Exactly. It's the type where you can look at it on a train and be good to go for your day. Sharks for dummies. And the best way possible. The way I look at it on a train and be good to go for your day. Charts for dummies. And the best way possible. The way I look at myself is keep it simple sewn. Keep it simple.

Oh, I like that. Okay. So you're in New York. You're pumping out these amazing charts. What do you think people want from you information-wise in a tape like this? The market is melting up. It's a game of like who can stick around the longest at this point without like is melting up. It's, it's a game of like, who can, who could stick around the longest at this point without like losing their nerve. It's like, it reminds me of chicken, like

Nvidia now 900, like how much longer can you ride this? I don't know. I'll tell you at 1200. So clients want to know, is this a bubble? How much, you know, how much longer can this go? And this is when you have to use history, right? Um the point we were just saying about the EqualAid S&P 500, that really hasn't run that far. You look at a name like NVIDIA, it's what, 70% of them, it's 200 day. It's actually- Todd, do they want you to give them a reason to stay or do they want you to give them, here's what to look for to get out? What do you think? Like, I know not everyone's the same. It depends on the client. I think mostly to stay.

Okay, that's interesting. So I think the last- Is that what you would have guessed? No. You would have guessed people want to sell? Yeah, give me a reason to sell, not to stay. Okay. The last two to three years have been a great case

of when to stay involved, right? Because we're in a 24-7 news cycle. You're getting thrown information left and right from good sources, bad sources, weird sources. And then the market bottoms in October 2022 when it just felt awful. And we've gotten this historic run since. Yeah. And if you stayed the course and respected the tape, did your due diligence, you've been off pretty well. We've had a lot of clients who've just been happy in cash, 5% yields. Yeah, not anymore. Not anymore, right?

The FOMO effect might be coming actually into play here. Yeah. With NVIDIA specifically, prior to February 21st, I was like, okay, listen, if this is going to be the leader in a new category, trillion-dollar TAM or whatever the hell it is, I understand it's a $1.6 trillion market cap. It's a lot, but it's justified. It's growing rapidly.

It's forward PE. It's not insane. It's a lot, but it's justified. It's growing rapidly. It's forward PE. It's not insane. It's a lot, but it's not insane. I take it all back. After the last six sessions and another $360 billion, and we're going vertical, this is not healthy.

It feels- You're pulling forward four years of performance. So my way of measuring this is if you look at the triple leverage semiconductor ETF, SOXL, if I can- Please, take her away. Take her away. I never even knew that existed. What is it? SOXL. SOXL, if I can. Please,

take her away. Take her away. I never even, I didn't even know that existed. What is it? SOXL. Oh, that must look like

the Empire State Building right now. Look at the dollar volume on it. Is it mooning? It's doing four or five billion a day now,

which is pretty significant for a fund like that. Could that move the stock? It has to move the stock. I think so, yeah. I don't know about NVIDIA, but some of the smaller ones. That could, right, that could move like AMD maybe. Yeah, you know, the smaller guys, the Skyworks, the Corvos.

So who's like the fresh cash buyer of NVIDIA right now? Like the dumbest asshole on Wall Street? Honestly, like who's like the new the new money in video right now? I wonder, if you're an active manager, this stock has gone from half a percent of the S&P to five and a half.

It's a career ender. No, dude, the joke is it's index funds, honestly. Yeah. Seriously, it's every single day. It's everybody. The whole world is buying this stock. It's people putting their money

into your brand. Mike said, where are those assholes? It's us. But now you have to deal with a third name that's over 5% of the S&P if you're an active manager. It's us. But now you have to deal with a third name that's over 5% of the S&P if you're an active manager. That's so hard.

Do you know that? This is a true story. I invented this stock in 2015. I literally created it out of Fang. With NVIDIA? I swear to God, I did. There's a record of this. I literally went on TV.

I said, take Netflix out of Fang, put NVIDIA. Hang on, hang on. Josh is claiming he invented the question mark. This is out of control. Buffoon around. I absolutely did. Jensen Wang would have done what he did without your help. No, no, no.

I'm not saying I invented the company. I said I invented the stock. It's two different things. You invented the stock. Correct. Listen, you had a- I made it a TV stock. I'm not going to let you do this.

Not one person on TV was talking about the stock. Miraculous call. Michael. Miraculous call. Michael. Miraculous call. This was not a CNBC ticker. He invented NVIDIA. I literally invented talking about this stock. Miraculous call. Michael. Miraculous call. Michael. Miraculous call. This was not a CNBC ticker. He invented NVIDIA.

I literally invented it as a stock. That thing does make more sense with NVIDIA now because the Netflix never had a great influence on the S&P. Great stock. Yeah. But it was always one to half a percent. It wasn't five percent. So it was very one-dimensional. It was movies on TV.

Like that's not a fang stock. But stay tuned because they're— Now they got the live stuff. Now they're going to start doing— I own Netflix. I think it's going to be a trillion dollars. Yeah, I think so. Dinner Time Live with Dave Chang.

Good one. That's a fun one. They're going to go from boxing to—you'll see. They're going to be bidding for NFL in three years. Yeah. Maybe sooner. Maybe sooner. Anyway, so I invented the stock.

But that's not even the point I wanted to make. You know that thing where you like discover this band and it's a cool because nobody else is into it and then like uh this happened with blues traveler which i also invented in 1991 they had like sort of a mini breakout hit with but anyway but i was listening to him in like 90 a a year, a full year earlier when they were still playing Nightingales on 2nd Avenue. None of this matters to you. The point is,

then they have this record with like three smash hit songs and like girls in white Acura Integras are playing it like on their way to high school and I'm like, does Blues Traveler suck now? What year was that?

Right around the book? 95, dude. 95? 95. But now I've come back around. Now nobody really cares that much about them. And when they do shows, it's like 10% of the audience

is girls that were in high school in the 90s and the rest is like back to their real things. Do you know how he's going to wrap this up? I don't know where this is going. I have no idea where I'm going. I'm not sure where this is going. I never got that way with NVIDIA. Probably because I make money based on it going up.

So I was never like, oh, NVIDIA is not cool anymore to be bullish. And actually, hilariously, all the value investors on CNBC are now long the stock too. And they have contorted their like- You got to change the narrative. They have. They're like, oh, on a price to sales basis, it's one of the cheapest stocks. No, based on 2037 earnings, it looks pretty reasonable. You can buy triple leverage and NVIDIA, by the way.

There's ETFs for that. Yeah. It's just solo NVIDIA? Just NVIDIA, leveraged. What's the ticker on that? Well, there's a few of them. The one that comes to my mind is NVDL.

Why do you know that? What kind of crap can't you buy NVIDIA for? I really enjoy ETFs. Okay. Look at this thing. Look at this. I mean, you've made your career if you time this thing right.

Okay. This is, you would agree, this is like one of the biggest story stocks of all time. Oh, yeah. I mean, obviously, but. It was nothing a decade ago. It's crazy. Pre the creation of the stock. The novel long is up 200% year to date.

That's good. Do you remember this? Like in 2018, the stock crashed because of crypto? Oh, yeah. No, not 2018. Later, but yes. Nvidia is washed. Because it was like an ETH play. It was an ETH play?

And also video games had a bad market too. They have a video game system, which I've never played or seen. They should spin that off. Is it possible for something like this to like, and I'm trying to be optimistic, can this not end badly? Can this just go years sort of sideways,

or does there have to be a 40% crash? I never liked the this end badly discussion. I don't want to throw that out there. I don't want those bad vibes. Everything ends badly. Otherwise, it wouldn't end. Didn't you see Cocktail? I did.

Great movie. But in real life. I mean, the last time NVIDIA did this, what, six months ago, it went sideways for four or five months. It traded beautifully. How many times have I told you it's trading beautifully? Just consolidating, consolidating. It was absolutely perfect.

It got super stretched. It was 100% above its 200-day moving average. And then it just went asleep for a few quarters or however long that was. And then it took off again. That is the best thing an individual stock can do. So maybe it could do that again. Correct through time. What happened last May when it had that explosive like guidance?

Yeah. Everyone said- The gap in the- It's part textbook. Perfect. That's a CMT's dream. Doesn't get better. Everyone who had missed it and was mad at it, and there were a lot of people, their

shtick was like, okay, that's amazing. Let's see them do it again. And LOL, they did it like three more times. They did it again, and some of their peers are doing it again too in the space. Can we talk about market conditions overall away from NVIDIA? You talk about the top ETFs to gauge market conditions. I like this because from my perspective, I know you guys do institutional research, but I feel like retail investors use ETFs to track

the market. I don't think they care about the index, even if it's the same exact thing. They know SPY. It's like good enough. So take us through your 10 ETFs to gauge the market right now. ETFs are a great, they have a dual purpose, right? Low cost, long-term, tax-efficient investing. That's three things. Well, that's silo one. Okay. Silo two is –

The NVIDIA lever long notwithstanding. Just for the people who just try to save money out there. From my perspective, I love that they offer a lens into the psychology of the markets, right? Triple leverage NVIDIA, volumes in the SOX, SOXL. This is my version of that here. And there's so many products out there that I try to boil it down to a short list every half or quarter to say, okay, here's what is on my radar. And to touch on a few of them, I mean, Mag7. My friends at Roundhill, they changed the name of this product a few of them, I mean, Mag7. My friends at Roundhill, they changed the name of this product

a few weeks, months ago from Big Tech to Magnificent 7. It was a great audible by them. I was going to say, what was it, Cole? It was,

it was, it was literally just called the Roundhill Big Tech. M-A-G-S. Okay. And this owns just the Mag7 for real? Own the Mag7, yeah.

Six, this has, I'm sorry, this has 69 billion in it? Million. So this is, this has, I think probably closer to 169 now

the EU I mean this is is a little dated I'll apologize for that what else is in here ARK ARK story I think that was more of a rate idea that if

if rates are going to go down to nowhere then let's see if ARK comes back but ARK has not done anything which is kind of remarkable she's not an Nvidia it's yeah I mean she has been

not recently no she sold a couple. There are crypto products doing very well. Yeah. But we'll see about that. Then do you have stuff like here? Sorry, let's cut off. ARK's down 4% year to date.

They had a good year last year, but yeah, still recovering from the heyday. But it's interesting that we see this massive rally without the high beta tech participating. Yeah, I think that's a huge difference now versus 2021. What if this comes back? Then what's the market? Then we're getting real far. This doesn't come back if Tesla doesn't. True, yeah.

You really have to have a view on Tesla. Zoom too is a giant holding. Zoom, Tesla, Coinbase. Okay, why do you have Alpha Architect US quantitative value in here? We love those guys, by the way. They do great products. Wes and Jack. This is the opposite of Mag7 and ARK.

It's literally, they do some serious value digging, right? They know their metrics. They're real quant type guys. And so the idea is, okay, well, that starts working. Then we're seeing rotation into energy, industrials.

Oh, that's interesting. These are all leadership ideas. All-time highs. The fact that that's going up tells me that this is a pretty broad market. And this one, when I say this, value went nowhere for years.

Yeah. And now it's breaking out. Yeah. Big time. Bond blocks, B-rated USD, high-yield corporate. So this is your proxy for junk.

Yep. That's XB as the ticker. Why would you watch that rather than the other two, HYG and J&K that everyone else watches? This is literally just— Your contrarian play?

This is just B-rated. So it's not all the junk. Yeah, it's not too watered down. Oh, that's interesting. This has no money in it. So yeah, they're trying. They're trying. Okay. And AUM can scare some people away in ETFs,

but the basket itself is still liquid. But when you say ETFs to watch, you're not just tracking the price. You're tracking the flows. The flows, the performance. Because you're trying to understand not just performance, but sentiment. And they don't always go in the same direction. Exactly.

Okay, that's interesting. You have S&P dividend aristocrats, good call. SHY, BIL, which is short term. It's cash. Wait, hang on, hang on. I want to stick with BIL for one sec. So this thing is a monster. It started out 2022

with $13 billion under management. By the end of 2023, we're at the peak, it had ran to 40. And we know why, obviously. But now it's down to 31. So its assets are in a 20% drawdown. So money's coming out of-

Money's coming out, probably going other places on the curve or to stocks. We're going to talk about this later. Money's not coming out of money market funds, but it's coming out of- Money's coming out, probably going other places on the curve or to stocks. We're going to talk about this later. Money's not coming out of money market funds, but it's coming out of short-term bonds.

That's interesting. Yeah. Because you know why? This is what I've been saying. This is money that's in the market. Money market funds are a different vehicle mentally. Like that's your cash.

Than a bank account. A bank account is different than your brokerage account. Yeah, I agree with that. Money coming out of BIL makes a lot of sense to me. My buddy at Strategas is Ryan Kabinsky.

He's a great macro strategist. We go back and forth on money markets all day, which we can get into. We're going to. Yeah, for sure. We'll do that. You have Japan and India in here as standalone. Is that because they've just been such outperformers

versus other international markets? Yeah, India because of the China divestment theme that's going on. India is the pivot. India is the pivot. India is the pivot. For everybody. I saw the guy from Apollo talking about doing business in India. He's like, this is not back office.

We're like making huge investments. There's some serious money going there. I like that story. They seem to be enjoying it. Like the Indian politicians, the Indian business people. It's a moment. They're in the spotlight because everyone's angry at China. Like Apple is

kissing this guy's ass. Like everybody wants to be in India now. That's the next big growth story. Okay, I love that. Alright. Then you're watching the US dollar. JC's a big dollar versus stocks guy. It's breaking down. A lower dollar would be nice. It is. It's going lower. It helps everybody,

right? Yeah. I think lower dollar is always good for risk assets. It's rolling. We'll see. would be nice. It is. It's going lower. Helps everybody, right? Yeah. Pretty much. I think a lower dollar is always good for risk assets. It's rolling. We'll see. I mean, the longer term, it's, what, kind of sideways over the last year and a half. That's what they want you to think. Over the last week or so. Yeah.

Alpha Architect High Inflation and Deflation ETF. That's one. H-I-D-E. High Inflation and Deflation? How does that work? I think they position the fund based on. Oh, it rotates. Yeah. Yeah. Should we go into real assets or should we be into more growthy type assets? H-I-D-E? High inflation and deflation? How does that work? I think they position the fund based on, yeah. Should we go into real assets

or should we be into more growthy type assets? Okay, so you're following these right now because they're important or they're tied to some of the major themes in the market. Exactly. And then you're trying to gauge what's happening with price, what's happening with flows,

what are the takeaways for our clients? So you have reasons. For the BIL, you wrote largest cash like ETF, dot, dot, dot, flows to equity question. Yeah. Exactly right. And there's a whole spectrum of cash like ETFs. So if it starts to see from BIL,

do I start to see from other related products? And does that contribute to the FOMO idea or where's that going? Speaking of the FOMO, getting back to the nonsense, the NVIDIA twice levered single stock ETF, guess how many assets is in that? A billion.

A billion four. I mean, come on. That's out of control. That's top. A billion four. Top quartile of ETFs, basically. And a stock that will give you twice the daily return

of NVIDIA. That will end badly. It's a day trader dream. What kills that historically is either, obviously, you know, a big correction in NVIDIA, but if NVIDIA just stops, just stops going up, then you'll have the decay too. I mean, we don't wish that on anyone.

What are we saying about stock market apathy? I don't see that as much these days, do you? Not as much recently. Yeah. I wonder why. John, you had that? As we raised rates from 0% to 5%, every conversation I had was about money market funds,

5% yields. I can get 5%. I don't have to worry about stocks because of whatever story. Yeah. And when you looked at weekly money market flows, it was billions by the way. We're talking 60, 70, 80 million dollars.

Records. Yeah. And to me, especially as the market bottomed a year and a half ago, I just felt that this was reflecting apathy. No one cared about stocks anymore. Stocks are done. 60, 40 was done. Even though they had a great year. Yeah.

And it went through last year too. Maybe that's starting to change now, especially as the hiking cycle might be done. Do you think it was no one cared or do you think it was people were afraid to express optimism out loud? Yeah, that too. So I think there's always an element of that too. People were scared, but I found it amazing that the most pedestrian vehicle on Wall Street,

money market funds, and especially retail money market funds, their asset growth was 32% in the last year. Yeah. Anyone- During a stock bull market. During a huge bull market. You call this a cycle-defining chart.

Why? It just shows you where rates have gone. Next chart. Zero policy. Yeah. Zero Zerp rate regime to high for longer, whatever we want to call it.

And money market funds have just been the beneficiary. They're the best-selling vehicle, basically, of all time now. Yeah. And cash on the sideline is a recurring bull trope. Yeah. Like, with good reason.

But it's, like, actually true now. Oh, it's totally true. And I think the institutional AUM, that I can see staying on the sideline. Because if you're a corporate treasurer, 5% is great. You're keeping that, and that goes on the balance sheet. You have a bogey, and it's probably not 12%.

Yeah. So the retail is what I'm really focused on now. And I get it. There's demographic issues out here, right? But look at this chart that you have. So you broke the money market AUM into retail and institutional. And retail, it's still pouring in. Retail is just linear by the week.

It's still pouring in. They love it. Now, so where is this? All right. I don't know. That's coming from the checking account. I don't know anything. Where is this coming from? Paychecks and I don't know if people are selling stocks. No, they're not. I don't know. That's coming from the checking account. I don't know anything. Where is this coming from?

Paychecks. And I don't know if people are selling stocks. No, they're not. I don't know. What stocks are they selling? Because everything's up. They're not selling stocks. It's coming from their checking account.

That makes sense. Everything is up. What are they selling? Honestly, I'm not even joking around. Apple. Nobody's selling Apple to put it into a money market fund. They love their 5%. It's checking accounts.

That makes sense too. It's bananas. It's still coming in by the truckload. We're going to get new data%. It's checking accounts. That makes sense, too. It's bananas. It's still coming in by the truckload. We're going to get new data in like two hours from ICI. I'm curious to see what the retail number is. And when does real FOMO set in? Well, your take is that the flows are not going to reverse. It's not a market story.

It's a what story? Yeah. So the flows in this won't stop until you get cuts. This is you. So it's like 3%. You said Fed funds rate. You're showing the bottom story? Yeah. So the flows in this won't stop until you get cuts. This is you. So it's like 3%. You said Fed funds rate. You're showing the bottom pane. Yeah.

That's the Fed funds rate. That's the Fed's overnight policy rate versus- A Vanguard money market fund. That's a Vanguard standard seven-day yield money market fund. And they are in lockstep, obviously, as they should. And you're saying it's likely money market AUM doesn't meaningfully shrink until these rates are sub 3% where more competitive equity yields are.

So you might not see that this year. No offense. I don't think the Fed has that in them. No offense. I'm not offended. I won't take any. You can make fun of me all you want. I'm taking.

You can call me names all you want on this. I don't think you can. I totally agree with you. I think you're right, but I just, I think it's early for anybody to look at that. I think the market could be up 50% this year and money will still stay in money market funds.

It's different buckets of money. It's crazy, right? Just to think, it's totally different buckets of money. I'm agreeing with you, but it's also crazy to me that we could have back-to-back 50 years in the queues. I'm thrilled to get these returns in the stock market.

I have plenty of money in stocks between my retirement account and my brokerage account. And. I have plenty of money in stocks between my retirement account and my brokerage account. Yeah. And I have a ton of money in cash and I don't care. The fact that I'm getting five cents on my cash,

I love it. I'm not mad that the market's going up. Those numbers show it too. Everyone loves it. Because you haven't, it's like, the analogy I like to make

is that going from zero to five was I just put a bowl of M&Ms in front of my starved kid. You know, he's hungry after school and here you go. He's just going to town. Yeah. He's not even hungry anymore. He's hungry after school, and here you go. He's just going to town. Yeah, he's not even hungry anymore.

He's just going. He doesn't even care. But can I say one thing? I don't need Pomontis. I've got my M&Ms. Can I say one thing, though? I also think that there's a really strong muscle memory on the part of the investor class.

They know how quickly a plus 10% year in the S&P could become plus 1%. They know how fast these gains can be taken away, and that's not going to happen in a money – the worst thing that happens in a money market is it yields less going forward. It's a cut, yeah. But it's not a cut to your portfolio value in stocks. So I think people like – remember.

That's how much people love money market funds. To your point, what are we talking about? This is 40 years of net flow data for mutual funds and ETF vehicles. And the red line there is money market flows. This is a face melter. Money markets are the best selling vehicle. The best selling vehicle of all time.

The most pedestrian and best selling. Now, equities have a problem because mutual funds and ETFs are at odds with each other, right? They're both money out of mutual funds, money into ETFs, so they're netting out. Bonds are generally fine, but when money markets get going,

they're, I don't know, they're Jalen Brunson going on a hot streak. There you go. But I just, I'm trying to like wrap my mind around, I guess it's money supply writ large because like gold is up.

Yeah. Value stocks are up. Japan and Europe are up. Where is the cash coming? It's got to be coming from people's bank accounts. That would make sense. There's no other place. That's a question I am just frankly not smart enough. Yeah, crypto is up. Home prices are up. Everything is up. A lot of liquidity and a lot of asset price appreciation in the last 18 months. And people just need to put it somewhere. Todd, people get worried in the market when things are really calm and there's just a melt-up. People like their antennas go up like this is something that's going to come out of nowhere. This is going to, well, this can't go on forever. Actually, you have empirical research, evidence, data showing that a low VIX, a calm market, is not necessarily anything to fear.

Exactly. I think the VIX prognosticators, every time the VIX becomes a teenager or less, there's always an article headline, oh, low VIX, be careful. 12. It's, yeah, it's BS, okay? Yes, of course, at some point, it will spike. And we all know that. We all know that. But what does the data show?

The data shows you get pretty good returns. 12 months out, when you're in decile 2, as we are flirting around with right now, the S&P 500's on average up 10%. You get standard returns. Can we pause here? Yeah. Decile 2 meaning we're in the second least 10% grouping

of volatility, day-to-day volatility. So we bought that against forward S&P 500 returns. Exactly. And there's no reason to think that an 11 or 12 VIX regime means a 12-month return that's lower. Yeah, no. Why do people think that? We had that for years.

Why do people think that? I think people just instinctively don't trust. They just don't trust common markets. It's a gambler's fallacy. Totally. They think there's complacency. And maybe there will be, and it will happen. Yeah.

But more often than not, the statistics skew to positive returns. Because if you would say to me, because if you would say to me, like, what's the best time to invest? I don't know if I would say 12 months from now, the return, but I would just instinctively say, give me a 25 to 30 VIX. I'll put my life savings into the market that minute. I don't even care what the news is.

Yeah. And I also know I would be right. So this graph shows you that. And you know I would be right. That's right. That's definitely right. A high VIX, 30 and above is, okay, you're in the pain zone.

March 2020. Hold on. That's an amazing insight though. A super high VIX and a very, very low VIX. Details. They might not be an equal 12-month average performance, but they're both not bad. Exactly.

That's really interesting. It's when you start to get the higher VIX along with higher equities that things are a little bit unusual. Yeah, but you have the 25 VIX. That means the market is expecting 25% move in the market inside of a 30-day period. Yeah. You have to blindfold yourself, put a parliament light in, spark a Zippo, take a huge poll, and just empty your bank into the market when that happens.

Yeah. When you get panic VIX, that's a great time to buy. I love that. I literally do that. And Mike just said March 2020. That was – the whole world was ending. So there's VIX spikes and there's VIX. That's a great time to buy. I love that. I literally do that. And Mike just said March 2020. That was, the whole world was ending. So there's VIX spikes and there's VIX regimes, right? 2022 was a higher VIX regime.

And now we're low. It's been 14 for a long time. Yeah. It's just beautiful. And if you've stayed out of the market because the VIX has been a bar mitzvah age, it's been a mistake. Yeah.

And the data shows you that. Do not fear low vol. It's interesting why so many people struggle with, like, yes, complacency, but complacency is not always a signal that something's about to go wrong. Yeah. Eventually, it will manifest itself. Oh, a friend of mine who knows nothing goes to me the other day. Dude, stop sub-tweeting me.

Is the market going to crash? And I was like- People are scared. I said, why? He's like, I don't know. Isn't it doing so well? Like, but why would it crash? And he's like, I are scared. I said, why? He's like, I don't know. Isn't it doing so well? Like, but what, why would it crash?

And he's like, I don't know. Yeah, because they, seriously. I don't know. Anyway, I'm going to Chipotle. No, I get it. People, people don't, people,

cause people, I, I suffer from this. People say to themselves, this can't last. It's too good. And I totally, I totally get that mentality.

No, because all that normal people know, all that they like stick out about the market is, are the crashes, right? They're not, they're not paying attention to the market 99% of the time. They only get it when it's crashing. So they think crashes happen more frequently than they do. Yeah. People like, uh, catastrophes, I guess. I don't think they enjoy it. I think they anchor to it because of how memorable it is. That's all. That's the only time most people are, when people guess. I don't think they enjoy it. I think they anchor to it because of how memorable it is. That's the only time most people are, when people, if you don't care about the market at all,

your only exposure to the headlines are when the market's crashing. Yes. Yeah, you start getting alerts on your phone. It gets front page on whatever website you're reading. All right, let's show people this. Put up, John, VIX spent a large chunk of 1990s below average levels.

This really gets to the heart of it. You could have a decade of substandard volatility and it could persist for years. I lived through a lot of this in the early days of my career. If you stay out of this because the VIX was low, you are literally, you know, smack yourself in the face. Tell people what the numbers are. This is the VIX from 91 to 99, right? One of the great bull runs in history.

What was the ceiling on that VIX? 22? Yeah, from 91 to 96, you barely made it to 20. Yeah. The average was 18, maybe? You had a spike in 94 with the bulls. Yeah, a little spike there. And that was it.

It was very short-lived. And then it wasn't until later in the 90s when you had some geopolitical events go down that the VIX finally started to get activated. But here's what's funny about that. Here's what's funny about that. Because this is right about, this is right when I get my Series 7, 97.

What's funny about that is as the VIX goes into a higher volatility regime, the gains for stocks start to accelerate. Yeah, yeah. Other than like this one little mini episode in the summer of 98. Like 96, 97, 98 make today's NASDAQ look fairly tame. So that's, and that's with a higher VIX too.

Yeah. I mean, you want, you average. The VIX is not helpful at all to anyone. I am not a huge fan of it, to be honest. It's a lot of attention. And I just wanted to run some data to help our clients out. We had Bob Pisani on the show last summer. He put out a book.

First of all, he was so great on the show, but he did this like masterclass in how absurd the VIX is. Like when you see it in the 20s, like think about what people are predicting is imminent. It's almost always going to fade. And I think that's a really important takeaway. We're in this unusual market environment where just things are going well, right? Like obviously things are going up. You have a chart showing the three-month percent change plotted against the percentage above the 200-day moving average. And we're in the top quartile of those two events. And again, you have this table showing forward returns.

Not bad. Not bad. Next chart, please, John. Momentum is great. So along with the VIX and other fear factors, oh, we're too extended. The market's run too far, too fast. You're 10%, 12% above your 200-day.

That's such an easy comment for anyone to make and it always sounds smart. It sounds smart, but the data tells you the exact opposite. Yeah, bear sounds smart, bull sound naive.

Yeah. You don't know the rest. No, but the extended part, like when you see, like when you see your favorite football player score five touchdowns

in a game, like it's conceivable he could score six, but it's like ridiculous. Yeah. And then it's not path dependent. Or can he do it again next week? Yeah.

Or next week. So you show that when the S&P 500 is in the top quartile, so the top 25% of three month percent change and how extended it is, which that gets people nervous when you're really above 10%, you know, when you're really going vertical. You show that 250 days later, the average return for the S&P 500 is 11%. And it's positive 81% of the time. So- Wow.

Can't beat it. It's pretty damn good. Momentum- It's pretty damn good. Works. And occasionally it'll mean revert, especially in the near term. But again, don't be scared by extreme stats or low VIX.

So if you knew the odds, and we know the odds, 80% of the time historically it's been higher, does that mean that it's going to be higher for short? No, but you've got a good chance. So it's all about probability skills. SKUs, not skills. I'll take 80 over 20. 80 is way greater than 20.

And if you're just trying to stay invested, that's all you need to know. So to your earlier point, like this is the chart you put in front of, you put this in front of the long only asset, asset allocator who has to decide, am I still riding a 60% stock allocation into 2024 or am I dialing that back to 55? You're giving them cover to stay at 60. Exactly. Yeah. Just give them these numbers. They can make their decision. They might decide on some other basis, but if you're just, you're not basis, but you're not going to decide on VIX when I'm done with you,

and you're not going to decide on it's overextended. Yeah. And also maybe just, listen, there will be a correction. I guarantee it. Absolutely. It could start tomorrow for all we know. But the statistics say over the next six to 12 months, we're in pretty good shape.

I love that. What's this? Only a few weeks removed from a surge in 20-day highs. What are you showing us here? So what we were just looking at before was index level momentum, right? Just the price change. Well, it's also important, especially now that we have 5% NVIDIA, Microsoft, Apple, to look at the internal breadth skews of what's going on within the index.

Indices can lie to you. They mask a lot of what's going on. And so we always measure this percentage of stocks turning to new highs, right? Just a typical technical metric. And in late December, right, as there was a lot of consternation over the narrowness of the market, right? You had one of the best one-month high readings we've seen in years. So that means reflects major momentum, participation all over the place. And again, when you get surges in the percentage of stocks making a new high, it can be short-term climactic, right? A little mean reversion pause because things got overheated.

But in the long run, it's a great signal on the durability of a new bull market. It's another way of saying breadth thrust. Exactly, yeah, it's breadth thrust. When did that spike occur? It was late December. That was 70% of the S&P making a 20-day high at the same time. Yeah, that's a really good reading.

I like that. And you don't expect to stay there. You say, all right, it backs off for a day or two. You get overheated. But think about what's going on for that to happen. That's everyone deciding they don't own enough stock. It is indiscriminate buying. Yeah. Okay. All right. I love that. What's the bottom pane? Oh, that's showing the percentage. Yeah. Okay. So when that happened, look, we went sideways. Yeah, it was crazy extended. You pause for a few weeks, maybe a month. And again, not a perfect signal, but the forward returns more often than not

are good for the bullish investor. Let's do this. Can correct in the near term, but a strong longer-term message. That's another way of saying what you- Here's some similar comps. 2019, 2020. So you get this 20-day high surge,

and here's what happens after. So over the next month, the signals are pretty mixed. In fact, kind of skewed negative, which you would expect. Exactly. When things get crazy stretched in the short term, you'll give some back. The other analogy you can make is, okay, I just ran a four-minute mile.

I'm pretty frigging tired. It's a rubber band. But over six months, 12 months, there's some negative numbers here, not a lot. Not a lot. There are no 12-month negative numbers. The probabilities are very much in our favor if you want higher stock prices.

And when you look at the market of stocks, to quote a JCism, how can an overwhelming amount of demand for buyers possibly be bearish? It's not. If you think that's bearish, you will never make money. Exactly.

If you're a knee-jerk contrarian and you're like, you're trying to fade everything in sight, you're already out of it. Dude, we've been doing this for 15 years. You have to look at the data. Just because the market ran up a lot doesn't mean we're done. It's not every time over the last 15 years

when things got extended, the bears came out of the woodworks. Yeah, too extended. Listen, if you're a day trader, okay, maybe it's not the most timely, but for investors that I think we're all in the same timeframe here, this is great. You can't ask for much more.

So this is the next area. Is the rally broadening or not? I think – all right. Wait, this is not a debate. No. The data is clear. is clear the data is clear that tech outside of the semiconductor explosion a lot of like large cap tech is is probably the polite way to say it is just consolidating like you don't have any blow-ups really no but what you have is name brand dow component s&p 100 companies that have

nothing to do with ai breaking out all over the the place. Costco, the latest example today. Costco's a semiconductor at this point, the way it trades. Holy shit. Costco is 17% year-to-date. Reported tonight. I don't know what the numbers were. Wait, this is going parabolic.

It must be the hot, it's got to be the hot. They report in 15 minutes. Right. So that's just today, but in the last couple weeks, it's Walmart, it's Target had a huge move.

IBM. IBM today. Go down to Chipotle, IBM today, uh, go down to Chipotle, McDonald's, all the home Depot. Look at my dollar general. I don't know.

This stock's going, this stock's going vertical. I mean, even target starting to Disney made a 52 week high, uh, last week. Love me some Disney going up. All right. So it is broadening.

The problem is it hasn't yet gotten down in market cap to the small caps. And so, uh, but equal weight looks fine. Yeah, equal weight's great. So if you're looking at Russell 2000, which in my opinion, people should not use that as a gauge for what the S&P might do. No.

We have to scroll out of that nonsense. The Russell 5% rates have revealed the flaws with the Russell 2000. Totally agree. Regional banks, Uman Bus Biotech. Real estate with the Russell 2000. Totally great. Regional banks, Uminbus, Biotech. Real estate. They've struggled. Real estate, yeah. That index has struggled to adjust, I think.

You know what people never mention? When you're talking about the Russell 2000 as a reason why things aren't as good as they seem or whatever, how about the f***ing mid-caps? Mid-caps made a new high. All-time high. Yeah. Mid-caps are great.

Looks amazing. There's parts of small caps that are doing fantastic. Remember when that actress was doing midcap commercials for Spiders? Elizabeth Banks, I think. I almost said Elizabeth Holmes. It's Elizabeth Banks. You're right. She's a great actress.

Yes. She was like, yo, what's wrong with midcaps? And everyone was like, no, nothing. It's fine. It's okay. Midcaps are great. Yeah. All right. So it is broadening definitively yeah so it's all about the bench we have an index that masks a lot of what's going on right the biggest stocks have the most influence the bench is

essential for 2024 yeah so what's the bench the bench weight yeah equal weight s&p 500 russell 2000 and one of my favorite underrated funds, the Vanguard Extended Market. Did you see I have this in the bottom of the doc? I did. Can we do it now? Sure. I have newly discovered this.

This is a fantastic ETF. Josh invented this. You invented this. Michael Santoli told me to look at it. I asked aloud on the air, will CrowdStrike be the next S&P 500? First, I called Sean from the desk. I'm like, Sean, you have 30 seconds.

What's the largest non-S&P company that could make the S&P? Just look at this. So it's actually, it's KKR. Okay. Slightly bigger than CrowdStrike. But those are one and two, and then Snowflake is three. But this index, this index, f**ks. but those are one and two,

and then Snowflake is three. But this index, this index, this is the largest Russell 1000 companies that are not yet in the S&P. What an amazing hunting ground for names. This was a really cool fund when Tesla wasn't in the S&P. Yeah.

And I remembered it from them, but I just, all right, so these are the names. CrowdStrike, Snowflake, Workday, Marvell,

KKR, Apollo. So private equity. 52 we caused today. Looks great. Chenier, Atlassian, which is team. I never heard of Ferguson PLC. Datadog, Block, DoorDash, Palantir.

These are names. Now, what most of them have in common is they haven't put together four consecutive quarters of positive free cash flow. Right. And that's kind of what Sam Stolval wants to see of them have in common is they haven't put together four consecutive quarters of positive free cash flow. And that's kind of what Sam Stovall wants to see before he gives them the nod. And it costs them, you know, it costs you. It was the same thing with Tesla.

It was however many billions of dollars before it finally got in. SMCI. SMCI is in small and large now. What idiots are buying that stock? But Mike, isn't this a great list? I'm sure the ETF is interesting. It's hunting ground. Right, because these are like amazing companies

that are on the cusp of full-blown profitability. And also people know the front on the indexes. This is the list they look at. Yeah, I mean, if you get a name from here added, it'll probably pop. So Supermicro is still in this, but I think it did get added now. Yeah, it's in the S&P. There might be some delay in how long the etf holds on to these names yeah the rebalance vanguard

usually lags from it all right so that's part of your bench i love that yeah so think of the mag seven the top 10 names they are lebron james and anthony dav right? They put up 30 a night. They pushed the index higher. But I need D'Angelo to put in 15 tonight or I need Austin Reeves or, I mean, we could use a Knicks example. I need Josh Hart. Our bench is like basically the team right now. Yeah.

The bench, as long as the bench participates, we're in good shape, especially if one of the stars goes down, like Apple right now. To stretch an analogy, what you don't want, you don't want to see the leaders falling and… And the bench. Right?

Like, you don't want to see Bogey scoring 27 points a game with Jalen on the bench. That's not good. Or Jalen being hurt. Yeah, I mean, it's not great. But how many times can you hear people be like, Apple's holding up the market? Well, are you saying that now? Yes, what are you saying now, tough guy? It's a 7% weight. Of course like apple's holding up the market well are you saying that

now what are you saying now tough guy it's a seven percent weight of course it'll hold up the index how about apple's an atm machine well now yeah now it's not working down 40 percent from its highs and then markets at an all-time high yeah so now what the bench is working and if the russell 2000 breaks out which by the way you you have a chart showing that this is the fourth longest streak without a new high in the russell 2000 What are bears going to say if that makes – when that makes it – Wait. Let's double click on this. I love this.

So you talk about bear markets and how bad they've been, right? How desolate. And Russell is getting up there in terms of length, right? The bar is really low for small-cap stock. What's the numbers? Is the fourth longest bear market for the Russell? One, two, three. Yeah, fourth longest consecutive days without a the fourth longest bear market for the Russell? One, two, three. Yeah, fourth longest

consecutive days without a new all-time high for the Russell 2000. That's so bad. That's so bullish, though. Terrible it's been. Yeah, the bar is super low for small caps to work.

Maybe they're not an outperformer by a huge margin, but these numbers, we're getting to an extreme territory in terms of- Should I just blindly buy small caps right now for like my higher

risk tolerance bucket? I like it, yeah. But the 600 over the 2,000. All right, but are you PGing it? With the 600 over the 2,000? What's the historic? Because I'm asking you, what's the historic after it comes out of a period like this? How good are the results?

Oh, you know what? Well, just eyeball it. I mean, they look pretty good. I actually don't know how the exact numbers off the top of my head. I feel like it's going to be really good. But it should be good. And all these bullshit regional banks that everyone's so worried about, they're just going to shrink in proportion to the good small caps.

There's this interesting evolution going on within large and small cap indices where the banks are shrinking in Russell 2000. The industrials are taking share. Some tech, some discretionary. Yeah. Healthcare, I'm not really sure where that one's going to go. But that's going to turn into a great way to play the American re-industrialization,

that small cap index, because that's what those companies are. There's a lot of home building stuff in there. Home builders. This is where I think active actually works. Active doesn't work on large caps because it's too hard to outperform. But if you are a smart, small cap active manager, this is a great.

So the data doesn't back up what you're saying, but I've always believed what you're saying. Yeah. I've always believed that if I were to be a stock picker, not me, anyone, you probably have a better shot looking at things that 8 million other people aren't looking at. Exactly. Yeah. Just intuitively. Now, unfortunately, Spiva says, nah, not really. But I get what you're saying. And I actually think that that's probably a more interesting career too.

Yeah. In stock picking. It's too frustrating trying to be an actor. One of my favorite small cap stocks right now is Callahan Auto Parts. What a showstopper.

Is that a Tommy Boy reference? Thank you. All right. It's horrific. All right. So you a Tommy Boy reference? Thank you. It's horrific. All right, so you're telling me blindly buy small caps. I like your advice. Thank you for that. Let's do the sector flows chart, John.

So this is XLK relative to the S&P 500. So if there's a risk, right, flows, anecdotal observations, volumes are getting aggressive for tech. And rightfully so. Tech has been phenomenal. We've been talking about NVIDIA here. So I love tracking flows to sectors

just to see, okay, what's a little bit out of consensus? What's aggressive? These are not signals, but they help explain psychology of market participants. This is nuts. This is so crazy.

And so over the last year, tech ETFs, so broad-based like XLK, the semis, the software, have taken in $18 billion. And then all the other 10 sectors have seen minus $18 billion. It just happened to be symmetrical, but a lot of money out of healthcare, a lot of money out of energy, stable. So this just makes me nervous if I'm a tech-focused manager right now. Okay.

Oh, can we do one more thing on small caps really quickly? Yeah, let's do it. Clear this up for me. Okay. Oh, can we do one more thing on small caps really quickly? Yeah, let's do it. Clear this up for me. Why would I even look at the Russell 2000 when the small cap 600, which is standard and poor's version, so deletes all the non-profitable isn't.

And I don't know if they deviate that much all the time, but. They're pretty different. There's some nuances. Well, you have less biotech by definition because you're calling out all the money losers right what else it's probably some software more software or less less in this small cap 600 yeah yeah i think so i could be wrong but it just makes sense to me because what do you have more of though do you end up with more financial more banks yeah oh so then that i don't want that i could be wrong okay off the top of my head but

if you want the like the quality filter well we know all right we know rias that are like either either a dfa shop or they're similar and they just won't allocate to money losing anything so they will so when they do the small cap bucket if they're not doing it inside of dfa they'll do it with small cap 600 yeah i think it makes sense russell 2000 means more a little bit of a risk barometer than the, to measuring small caps. I'd buy that. So semis are a little bit stretched.

So speaking of, yeah, it's at close. 69% over the last 52 weeks. Pretty nice. I love this chart. It went from 2% of the index in January 2014, grew to 3.5% in 2019, and now it's 10.5% of the index. That's kind of wild.

It's going to pass banks soon? It's going to pass software soon, which is the largest group weight in the S&P. I think a lot of people are forgetting how cyclical semis have always been, more so than software. So Broadcom is $600 billion market cap now. Obviously, NVIDIA, AMD, Intel, Micron.

Well, this is interesting. Inside of the semi-index, look at what the biggest weightings were 10 years ago. It's pieces of shit like Qualcomm that never go anywhere. Intel, Texas Instruments, those stocks do not matter at all right now. Statistically.

It's all about the ones Mike was just saying. Yeah. ABGO, ASML. These are the stocks that really matter. TSM is not in this index, but TSM, right? Oh, is ASML in the US Semi? I don't think so because it's not a US. It's the same shit though.

It's part of the same idea. It's a global Semi. Listen, this is a worrisome chart. This is extreme. Not to be alarmist, but… No, I agree. It's going vertical. This is vertical. It's extreme. It's also part Not to be alarmist, but… No, I agree. It's going vertical. This is vertical.

It's extreme. It's also part of the index evolution. So you're telling me short this, go more across this. I like where we're at. I would not… I like where our heads are at. I don't want to stand in front of it,

but I just want to pay attention to that. Okay, hey, this is aggressive. So getting back to… It's funny because on the one hand, we're talking about the euphoria, and then we're about to talk about the apathy. And of course, it's not apathy. That's a bit extreme. But it's not quite the euphoria about the apathy. And of course, it's not apathy. That's a bit extreme.

But it's not quite the euphoria that existed in 21. That doesn't mean it's not crazy. It's just not f***ing insane. Yeah, we're not there yet. So in 2021, using ARK as a poster child, the flows into ARK were miraculous. From March 2020 to February 21, it took in $35 billion as it was peaking out. And since then, there's still nothing much going on. It's lost $9.3 billion in outflows

and nothing with nothing. Yeah, I mean, listen, they've built a great ETF business. They've done what one in a thousand have tried to do. Have you ever gone down there and spent time with them? No.

I have not. Okay. I have not had that fortune. But at least just high beta tech, right? You can use the Goldman Index, whatever. It's the same thing. Yeah. Oh, yeah.

It's a very similar idea. So I'm just using this as a proxy high beta tech, right? You can use the Goldman index, whatever. It's the same thing. Yeah. Oh, yeah. It's a very similar idea. So I'm just using this as a proxy for investor sentiment, right? Unprofitable tech, to be clear. Exactly. Yeah. When I say high beta growth, I mean, ARK traffic's there or that the Goldman non-profitable tech. They really, though, lean into innovation more so than they – of course, technology is a huge part of innovation. But she'll own like DraftKings. Oh yeah. Teladoc. And these are not,

these are not semi stocks. That's not a lack of appetite for risk names. It's just that the market doesn't want money losing companies in this environment. Yes, exactly. Especially with 5%. Right. Right. Oh, that's a good, that's a good way of thinking about it. I'm just curious if money starts flowing back there at some point, but nothing yet. So where's money flowing since 2023? You've got this fund flows chart. Yeah, okay. So the big story for me

is what's going on in fixed income. Bond, actively managed bond mutual funds are now seeing money come out, right? We know the story with equity mutual funds, right? They've been seeing outflows for years because of performance, because of cost. And now, because we've had this rapid rise in rates, you're seeing money flow out of those funds,

I think, for tax loss harvesting purposes or whatever the situation is. And that's very different than what we've been used to. And now that money's starting to go to fixed income ETFs. Can I tell you something? Did you ever look at the returns of the most popular actively managed bond funds? I haven't.

These guys are doing like 2% a year. Honestly, like for all the media appearances and all the slide decks and the bullshit, there's like- Not much. I mean, it's not their fault. That's the environment. That was the interest rate. What are they supposed to do?

There's nothing they could have done differently unless they were going to like lever up irresponsibly. No, yeah. Right? So I'm not blaming them. I'm just saying if you're an investor and you're looking at in your portfolio,

where am I paying fees to and getting nothing? That's the answer. But the story here is money's coming out of actively managed bond funds. It's the same thing with stocks. People are harvesting losses

and they're just putting in the index. And they're putting in a different wrapper. Yeah, so this is nothing to do with the managers. No. They can't do anything about the environment. But this is to it in a different wrapper. Yeah, so this is nothing to do with the managers. No. They can't do anything about the environment.

But this is to me about a wrapper. It's taxless harvesting. This is a wrapper in that the growth of ETFs is now shifting to fixed income. Yeah. As opposed to just passive equity. But so the big bond shops, they understood this. They built ETF versions of their flagships. Oh, yeah.

All of them. They get it. They're all coming. If they're not here, they're on their way. Of course. And that's the responsible thing to do because you have to – if you're an asset management firm, you have to go to where the people are. You're not going to get them to go back in time. You have to give the solution they want.

Some people want to stay in mutual funds for whatever reason because they're comfortable with it. But, I mean, ETFs are— What do you think has to happen with rates or economic data for there to be substantial manager dispersion in the active side of fixed income? Like, let's say you're PIMCO or you're DoubleLine. You're one of these great bond firms. What are you rooting for for your own chance to outperform? There would have to be a blow up that you miss in a certain segment of the market. Okay. So, so the alpha of avoiding damage. I was just going to say volatility. I wonder if that's the easy answer. Do they want volatility or do they just want structurally higher 10 year where everything else keys off of that? I don't know. I don't

have an opinion. I don't know if I have a great answer, but that would make sense. You're saying movement. Movement, volatility, and an event. Dislocations. Some sort of event. Event they could either bet on or avoid. Exactly. Like a blow up in office space that they don't have. Yeah, blow up in some sort of corporate sector where they leaned into it

or they completely avoided it at the cost of their competitors. Got it. Okay, that makes sense to me. I think that's a simple answer. That makes sense to me. I think that's a simple answer. That makes sense to me. Josh, you're excited about Robinhood? Should I buy this thing? Did you buy it? No.

I think it's going to $25. I don't want to buy this stuff. I really don't want to either. It looks fine. But I'm pretty sure it's going much higher. I don't really… I don't normally… I don't know. All don't normally – I don't know.

All right. Here's the point. I thought of a couple of things. First of all, Robinhood just told the street yesterday. I guess they had like CEO day or something. Vlad came out of his sarcophagus and spoke to the press. And he said 25% – I'm just kidding. 25% of total trading volume at Robinhood is now coming outside of traditional market hours.

So that's retail. This is not internet like the old days. This is retail trading after 4 o'clock or in some cases now I think on the weekends. The toothpaste is out of the tube for retail. Well, I think it's a big moment and not a lot of people are talking about it, but I think weekend trading is on its way and it'll be treated like sports. And it's no different than sports betting. Yeah. What is the difference? But there will be relatively little trading unless there's an event. But when there's an event, it's going to be so exciting because of how wild it's going to be. There's not enough liquidity for it to be orderly. But I agree. Yeah, you're right. Yeah. There's not enough liquidity for it to be orderly.

But I agree. Yeah, you're right. 98% of the time, there'll be nothing, no trading. And then the 2% of the time when you have the events, there'll be a ton of trading. Right. It sounds exhausting. But market makers will make markets.

Oh, yeah. 100%. It's going to be a whole new business. And they're going to make a fortune. But this reminds me of when the fast food companies all figured out, wait, we can make these people fat at 8 o'clock in the morning too. Breakfast all day?

No, new day part. It's like, oh, how about a burger in the morning? But it's a sausage instead of a beef patty. And they're like, oh shit, we could do that. Yeah, just tell the people to come in earlier. And that's, I don't know, a trillion dollars. So this is a whole new business for the millennial generation and younger.

They want this. I usually take Saturday mornings to reset and just hang with my kids. I couldn't even fathom. Well, that's over. No, I'm saying people won't trade unless there's an event. But when there's an event, they're going to trade their ass off. All right. Consumers have traded more than $10 billion in volume overnight since Robin launched.

It's 24-hour, five-day-a-week trading. All right. So it's not weekends yet. That's not that much. But it's Robinhood and it's retail. That's all I'm saying. But is that stocks? Because if it's not, then it's a lot of-

Oh, they quoted, I know this guy, Steve Kork. He used to be a TD. For a lot, quote, for a lot of the customers here, the notion that they have to wait for somebody to ding a bell two times a day to transact is very foreign to them. I get that. True.

Yeah. By the way, Carl Cantone just tweeted money market assets hit fresh record $6.08 trillion. Now we got to see the breakdown. That's kind of wild. Um, trained. It doesn't stop.

The stock market is not stopping money. Market funds flows. It's just not. Yeah. Yeah. I still think it's apathy. So here's the thing with the ETF thing though. If stocks are moving,

let's say they go to Saturday. They do a four-hour Saturday session just to test it out. And you get a stock like NVIDIA make a 6% move, which is totally conceivable. Do the ETFs eventually have to start exploring how there could be some sort of automated participation on the same day as the stock? I feel like they have to. They have to, yeah.

I don't know how the plumbing would work. participation on the same day as the stock? I feel like they have to. They have to, yeah. They have to. I don't know how the plumbing would work. Because even if a stock makes a move on a Saturday or a Sunday, that could be negated by Monday's open if the volume overwhelms that movement and just completely makes it like it never happened. Right.

But what if it doesn't? You could have some dislocation. I mean, you're going to start seeing ETFs if they're trading at – I'm telling you. I'm telling you. I think ETFs start to trade 24-7 algorithmically. That's going to be fun.

I mean, I just can't – They will work. I don't like this, by the way. I'm not into this. I'm not into this either. I also know it's going to happen because I hate it. The wrapper has been time-tested, so they'll work. So do we work seven days a week now?

I already do. Yeah, I guess. It won't make much of a difference to us. All right. I have nothing else to say on Robinhood other than I wanted to put up the chart. John, we have a price chart. If I took the ticker off this and I didn't tell you what it was, you would probably say low volume pullback to 15, buy the shit out of it.

If I'm putting on my CMT hat, yeah. Right. Why not? Right. I'm just saying like – Even back to 13. Yeah. Right?

I think Robinhood uniquely will get off to a head start in after hours trading more so than any of the other brokerage firms because that's what its users are. Yeah, they're at the forefront of that. They'll roll this out before Fidelity does, obviously. Dan Dolev is bullish on Robinhood. He's the fintech analyst at Mizuho, friend of the show. His price target is only $17,000 though. But he sees all these catalysts

as helpful to Robinhood. So I might end up buying this. Mike, what are we doing next? Bitcoin. What's the race? Tell, like, what's your… Oh, what, on the ETFs? Yeah.

It's fantastic. Which one are you endorsing? No, I'm just kidding. All right. So here's a stat. This is from this guy, Hodler15 on Twitter. Hodler15Capital. That's me.

Black… This is so insane. Hodler15 on Twitter. HODL15 Capital. That's me. Black… This is so insane. HODL15 Capital. BlackRock's Bitcoin ETF has bought in more Bitcoin than was mined every single day since the ETF was launched. It's at 10 or 11 billion now in assets. Which chart is this? The blue bar chart? The blue bar chart.

Next one, please. That's a cool chart. So… We're going to go back to this. Okay. So, total Bitcoin ETFs, total assets past 50 billion.

Yep. I think Grayscale is about half of that. But even if you exit out, it's still 25 billion in ETFs. Yeah, Grayscale is 27-ish. Despising outflows. Wait,

don't we have a chart though where I know this isn't true? Oh, here you go. Yeah. Yeah. This is the money out of Grayscale and into the others and it looks like that matches up. No, no, no, no, no,. Yeah. Yeah. This is the money out of grayscale and into the others.

And it looks like that matches up. No, no, no, no, no, no money in has swamped the money out. It's,

it's about a net of plus nine or 10 billion. I know. I know it's more. I'm just saying it's funny. It's funny. It's funny to see one lose and all the others gain. So with grayscale, I,

I know that there's some stuff going on in terms of getting, um, money out of the company. Not too indefinite. But also, they're charging 1.5%. And I can get the others for free. Yes, but if you have an embedded tax liability. Michael, explain this to me.

And you're basically trapped there or you're taking the taxable gain. Are you surprised that BlackRock is outracing Fidelity by double? No, because BlackRock is a leader in ETFs, and they're not screwing around with this. They know that— And Fidelity is a pretty big ETF shop. Fidelity, too. I don't think it's a surprise that BlackRock is outpacing them,

even though I get Fidelity as a digital asset group. But BlackRock— But Fidelity has— Here's how I was thinking about it. Fidelity has been crypto forward relative to all of the other brokerage firms. True. And they have the account base, the retail account base. BlackRock has incredible sales coverage of the industry, distribution.

But Fidelity literally has captured native accounts. But Fidelity is taking in, what, $7 billion or something? Yeah, they're still doing really well. I think BlackRock looked at it as it's rare you get a new asset class into the lexicon of ETFs, right? Equity, commodity, fixed income, now crypto. Kathy's out raising Matt Hogan. That's a surprise. So the second

tier is still doing really well. You're surprised by that. I'm very surprised by that. It's a marketing war. Here's a crazy data point from Jim Bianco. The 10 spot Bitcoin ETFs had 709,000 trades yesterday. That's more trades than SPY and QQQ combined. That's unbelievable. That's wild.

This is for real. I know there was a lot of speculation that they'll flop or whatever. I mean, this is… I said 100 billion, and I was joking, but I think that's actually where this is. Well, they're at $50 already. Now, GBTC included, but still, they're at $50 already. My guess was this will get to $100 billion just in ETFs.

And I think that's... I think you might be right. I mean, the flow is... Like by the summer. I don't know what happens when crypto corrects next and how big it is, what happens. I don't know. It can't. Don't you understand the halving?

I don't have time. It can't ever go down now. I don't get the halving thing. No, it's not complicated. It's more demand than supply. The ETFs are buying more than there exists. Dude, I just said this. BlackRock alone has,

the ETF has bought more Bitcoin than has been mined every single day since it came to market. What happens when that runs out? No, it's a one-way trade. It can only go up. Wait, what happens when what? When you're not mining anymore. What is that? In however? No, it's a one-way trade. It can only go up. Wait, what happens when what? When you're not mining anymore. What is that?

In however many years. There's no more Bitcoin to mine. So bullish when you start mining. No, that's like way, way, way into the future. No supply ever again. It's way into the future. I mean, how many years?

That's 2177. So start drinking your own urine so you don't lose vitamins and stay alive. Like Blade Runner type stuff? You just got to outlast everyone else to make it to the end of mining.

Do you have any idea how much these ETFs will have in them by the time that happens? This isn't a one-way trade. There's no reason why it would ever happen. I mean, they don't have ETFs. There'll be no more Bitcoin. They'll start adding gold to these ETFs. The dips in Bitcoin can be measured in nanoseconds. They'll buy dog with nunchucks, which I learned about today.

I like dog with nunchucks. I'm bullish on that one. Is that a coin or a postage stamp? I don't know, but I like it. Okay. I want it. This goes back to my martial arts background. So your dad's a martial arts teacher.

What is he? Is he Steven Seagal? His name is Steven. Seagal? Yeah. I explained this to Mike before. Wait. He's a martial arts instructor?

Did he train you? Yeah, so when i was younger okay i explained this to mike earlier that did you have to paint the fence up and down no no side to side um he's been a martial arts instructor for 35 years yeah he has one of the largest schools in the country wow and he's taught some pretty well-known people, as I was explaining to Mike, particularly from the Cohen family. Oh, wow. Of SAC Capital Advisors.

That's how I ended up there. Okay, that's how you got your gig. I'm extremely proud of him, but I forget where we're going with this. Can you beat him up? No, he can beat me up. Yeah. Is he Black Belt? He's multiple times Black Belt. Multiple Black Belts. going where with this, but yeah. Can you beat him up? No, he can beat me up. Yeah. Uh,

is he Black Belt? He's multiple times Black Belt. Multiple Black Belts. Um, you know, it was, Did he ever compete? No,

no, no, but he goes to UFC fights with some of his friends that are much younger, like the UFC fighters. How did he get into that? I don't know.

Okay. He was a music teacher and then got into karate. Not a lot of overlap there. No, no overlap. No overlap. I think he got laid off from the music teacher and then got into karate. Not a lot of overlap there. No, no overlap. I think he got laid off from the music teacher thing and then he started up a small karate school and just grew it over the last 35 years.

Does he watch the Karate Kid remake on Netflix? Where's his dojo? Eastchester, Scarsdale. Safeandfit.com. Okay. Good plug for that. From my father's karate studio. Terrifying growing up with a martial arts father.

Yeah. Why? Because he could beat the hell out of me. Not that he would. Not that he would, but he's Jewish. Yeah.

So that's not going to happen. No, but it was just, he was big and strong. Yeah, Jewish men don't hit their kids typically. No, no. There was no abuse in our family. There's a lot of guilt though.

It's almost worse. Very scary. I would almost rather take the punch sometimes than what I had going on. I mean, you almost threw my PlayStation out the window. You got mad. Right.

Well, listen, karate men bruise on the inside. Remember that. All right. Did you have fun on the show today? It was fantastic. It was great. Okay. Did we get out everything we wanted to get out?

What did we miss? Great charts. Thank you. Your charts are great. What did we miss? I need to give a – I would love to give a plug to our asset management. By all means. That's what we're here for. So listen, you introduced before we have, our institutional research is run by Jason Trenner. My boss. By the way, what's Jason? Jason's awesome. Jason is fantastic. He's great. Yeah. He's not good enough to get on this show.

That's why we had you. Jason's a great writer. Yeah. I've learned so much from him about market history over the last i was gonna ask you like who are your mentor who are your mentors uh obviously jason um from the industry or at strategists in general whatever so jason my teammate chris varone oh we know chris yeah um john roke chris is a technician chris is our cmt and john is a technician as well. John has been super kind to me. But he's not, he's not, he does his own thing. No, no, he's just a good guy. Also a martial arts master. Yep. And then I think in the ETS space,

Dave Nottig and Eric Baltunis. Those are two of the best guys, period. On the Mount Rushmore of ETS for me. Yeah. I think those have been the most influential for me in terms of my thinking. Who's the Mount Rushmore of ETF? You got to throw in Todd Rosenbluth and Tom Lydon. Matt Hogan.

Oh, you got to throw in Matt Hogan. There's some names. Yeah, I don't know if four is enough there. Eric and Dave. Ben from Morningstar. Ben Johnson, another great guy. Okay. But so speaking of ETFs, we have our asset management arm.

We do offer two ETFs. One is the ticker SAMT, Strategist Macro Thematic Opportunities ETF, a little bit of a mouthful. But what that does, it's unique because it rotates themes. So we'll take Jason's ideas from our research. And if he says, okay, reshoring is going to be big, cash flow is going to be big, free cash flow,

or AI is going to be big, we'll boil that down into four baskets of stocks and put it in an ETF. That's the way that works. How often can that make those kinds of shifts? Every six months. They're themes, so they try to have staying power. So if someone's like, I really like Jason's research and I believe in his big picture opinions, that would be a way to express that in a portfolio. Exactly. Exactly.

So that's SAMT. And then we also have a strategist policy opportunities ETF. That's SAGP. That's run by my teammate Dan Clifton and Courtney Rosenberger in DC. And I would look at this as a form of factor investing. And what they did was take, so you have momentum, quality, value, right? They're using lobbying intensity. factor investing. And what they did was take, so you have momentum, quality, value, right? Yeah, yeah. They're using lobbying intensity.

So the companies that lobby the most in Washington, D.C. So they'll be watching tonight. Oh, I'm going to hear all about it tomorrow from them. Yeah, yeah. Yeah, that's my recap. Lobbying is a factor. Yeah, lobbying is a newer factor.

And so they do this on a global scale, global companies. And it's 100 stocks in that ETF. And listen, like any other factor, it goes in and out of style. But it's different. It's absolutely different. You know who's lobbying like there's no tomorrow? Amazon and crypto. I don't even know if crypto's lobbying. I know they're lobbying. They're trying to actually elect people or actively put candidates up against people who are crypto hostile.

And I think it's going to work because they have endless money right now to do this. Yeah. So if you've been somebody that's been getting soundbites on C-SPAN, talking shit about crypto, like they're going to come for your seat. And they could afford it. Yeah. AI is next, I think. Okay. Whatever AI companies are going to start lobbying.

AI lobbying. Yeah. Oh, that's going to be enjoyable for everyone. Dan's been mentioning that. That's starting to come up, I think, in calls. There's an article, maybe in Puck, about Andreessen and all the time he's spending in Washington. And that's related to crypto. Totally.

No, AI. More AI? Yeah. Yeah. So you want to be long companies that are like – Lobbying because – Getting things done for themselves. Exactly.

Yeah. That's it. All right. That's it. So I don't know if that's – I'd be curious. Like on the energy side, all they want to do is drill more. That's not always good for price. No.

No. So – A lot of healthcare in it because they want drugs passed or some sort of regulation. Okay. All right. Well, listen. We think the world of Strategas. So much respect for the stuff that you guys put out.

We love your stuff, as I mentioned to you. When I see you in the media, I want to hear what you have to say. I appreciate that. Yeah, and thank you so much for coming. Will you come back? I would love to. Go have me. What are you doing tomorrow?

I'll be at the office. After martial arts. What do you got going on? I will be at our office. After martial arts. What do you got going on? I will be at our office. Todd Sohn, ladies and gentlemen. We always finish the show with favorites. We just like give the audience a little something that they should check out that they are currently – that we are currently being entertained by.

So what do you have for us for favorites? Let's see. Tokyo Vice on TV. On Max. On Max. Yeah. And then in books. Duncan, you enjoying that this season? Yeah, it's see. Tokyo Vice on TV. On Max. On Max. Yeah. And then in books. Duncan, you enjoying that this season?

Yeah, it's great. It's one of my favorite shows. I think it's really well done. John, too. Big thumbs up. Yeah, I got to get into it. Very well done. I want to go back to Japan.

I went there eight years ago. I need to go back now after this show. Books, Billionaire's Row. Did you go to Japan eight years ago to get revenge for a match your father lost? It was, you know, the guy from Karate Kid 2. Kumite. Karate Kid 2.

You know, your father is a coward. All right. I love revenge movies. What's Red Carpet? Oh, so this is a book I just started. It's about the,

about China's influence in Hollywood. Oh, I'd love to read that. Who wrote that? It's a guy named Eric Schwartzel, I want to say. Yeah. My butcher's name. Yeah. And, you know, to read that. Who wrote that? It's a guy named Eric Schwartzel, I want to say. Yeah.

My butcher's name. Yeah. And, you know, you think about some movies, especially big blockbusters. Star Wars, Marvel. Marvel specifically. Like, they had to cater to China to get that release in the region. But what does that look like? They have to change evil characters away from Chinese and make them English?

Top Gun, right? Yeah. No bad. Oh, they took the Taiwan patch off his leather jacket for no no negative depictions of the region you know they haven't had a chinese bad guy since rush hour three and you never know it was an english guy was a bad guy in rush hour wasn't it oh my god yeah it was that guy it was a guy from batman begins you can always have an evil english character yeah you're right nobody will break your balls over that you You're right. I can't even remember that.

Yeah, no. Because I don't have that much going on. All right. Is it a good book? So far, so good. I'm very early on. Okay. What's Billionaire's Row?

Billionaire's Row is about the four gigantic buildings on 57th Street. Oh, yeah. Like 157. 157, 220 Central Park South. 434 Park is not quite there, but it's the same kind of thing.

Wait, you're reading a book on that? I read it. It's fantastic. It's great. These apartments are basically like safe deposit boxes, right? Yeah, so a large portion of that book was about how all the money just came in from overseas. For the not Chinese. Don't say Chinese.

We don't want to get canceled. No, no, no. Middle East. Middle East. Middle East Russian. What's MCU? That was a very good book about the entire Marvel history. Oh, I know who wrote that.

What's her name? Joanna Robinson, maybe. She's great. Yeah. I mean, I'm a big nerd with that stuff. That's in trouble, dude. I think MCU reminds me of like where I think the Magnificent Seven is headed. I like that analogy.

I'm going to have to take that. You just get to a point where people have had enough and they want to do something different. It's getting tiring. It needs a break. I think it's getting a break. People aren't going. It peaked. People just won't.

They won't go. It peaked with Endgame. Endgame. That was it. All right. I just want to mention Shogun and FX one more time. We've been talking about this a lot. But it's because it's great.

Yeah. It's quality. So I met a Japanese person yesterday who was also watching it and 80 of the show is in japanese like data it's subtitles yeah but that takes courage on the part of fx to make that creative decision wait you gotta wait you have a chart for this what are you what are you pulling out here we're talking a lot of japan right now okay i have to talk one of the charts i have in here. Can we? Because I'm super proud of it. Okay, go.

So we talked Tokyo Vice. Yeah. Shogun, which I haven't watched yet, but I need to. And then the Nikkei's at new all-time highs. Oh, let me see. Okay, yes. The last time the Nikkei was at new all-time highs, Michael Keaton played Batman in Beetlejuice.

1989. Yeah. Right? Okay. He played Batman last year in The Flash, and he's playing Beetlejuice again. And Beetlejuice is coming back. So-

Is it this year? Halloween? September, yeah. It's not Fundamentals. It's Michael Keaton that's driving Japan. I kind of like that. Do I have this? Yeah, it's in the deck somewhere.

Japan's having a moment. This is a Japan moment. So we asked this guy. This guy makes the technology for all the brokerage apps in Japan. this guy this guy makes the um the technology for all the brokerage apps in japan he's like uh like the way apex powered all the u.s uh so he's doing that for japanese trading and uh he said like uh only 10 of japanese people have money in the stock market yes culturally they have no interest j funny enough jason in our morning meeting brought that up too that they're just not they're just not there. But that's bullish.

I think it's super bullish. Yeah. Because they're not going to ignore this. You're going to have to get on board soon. Yeah, I agree. Or if you're not there already. My head looks so white in these pictures, Nicole. Wait, he got a sneak peek of the pictures? Too much matte. No, we can color corrupt that. What color

would you like your head to be, Michael? I don't know. Like a little bit less? Absolutely white. You don't pronounce the E at the end of matte. Matte. No, it can color corrupt that. What color would you like your head to be, Michael? I don't know. Like a little bit less. Absolutely white. You don't pronounce the E at the end of Matt. Maté. No, it's not Maté. I know. I call it whatever. All right.

Your head looks great. Wait, I want to recommend Ben put me on to Mr. and Mrs. Smith. I can't believe how good it is. I had like no interest in the show. But the acting and the writing, it's like quality. Did you watch the movie? It's really good. Did you watch the movie?

In the theater. Like with Brad Pitt? Yeah, and it was sort of a joke, right? I haven't seen it. I don't remember it that well, but it wasn't great,

was it? What's good about, what makes the show good? The acting and the writing. It's really good. Is it like funny? Or is it like really serious? No,

no, no, neither. I wouldn't, it's not a comedy. It's just, John, you like it?

It's just f***ing good. Yeah, I'm enjoying it. Okay. There are moments, definitely. Good writing. Is that Childish Gambino? Yes. Okay, he's always good. And Maya Erskine, she's great. They're just, it's just good. Yeah, I'm enjoying it. There are moments, definitely. Is that Childish Gambino? Yes.

Okay, he's always good. And Maya Erskine, she's great. It's just good. It's fun. Oh, I have a flight this weekend. What do they put the whole season out? Or is it a movie? What is it? Okay, it's fun. It's a good watch. And it's quality. Maybe I'll do that. Alright, hey. I'm thorough.

We're going to wrap. Duncan, do we have anything else that we're doing? That's it. Alright, Duncan, you did an awesome job this week. Thank you so're going to wrap. Duncan, do we have anything else that we're doing? That's it. All right. Duncan, you did an awesome job this week. Thank you so much. As always, John, incredible job. Everybody on the team.

Guys, shout out to everybody. Daniel, too. Really appreciate it. The listeners, the viewers, really appreciate it. Thank you, guys. Nicole, great job. Guys, thank you so much for listening. We want to make sure you go ahead and leave a rating and review on the podcast app of your choice.

Hey, everybody. Hey, everybody. No, we don't do that today. Do we do that? We usually do. Hey, everybody. Have a good weekend. Thank you.

Is that fun? This is awesome. All right. I think we're going to do it one more time. I just want to make sure we got it. I'm here. Yeah, we can do better. You got to do a good job by you.

Yeah, yeah, yeah. Good job. Good, thank you. You're welcome. That was awesome. So this is going to air in six months. I hope you're so excited.