The Pomp Podcast - #1511 Jordi Visser | Is A Recession Coming Soon?!

Episode Date: March 22, 2025

Jordi Visser is a macro investor with over 30 years of Wall Street experience. He also writes a Substack called “VisserLabs” and puts out investing YouTube videos. In this conversation we discuss the Fed’s interest rate decision, stock market outlook, Tesla, AI, Nvidia, and how investors are approaching April 2. =====================Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit https://www.xapobank.com/pomp to join.=====================BitcoinIRA: Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Take 3 minutes to open your account & get connected to a team of IRA specialists that will guide you through every step of the process. Go to https://bitcoinira.com/pomp/ to earn up to $500 in rewards.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on, guys? We got a great episode for you today with Jordy Visser. Jordy has over 30 years of experience on Wall Street, and he is here to break down exactly what's happening in markets. We go through the interest

rate decision and why the Fed may or may not have been right. What's going on with his market outlook? Stock performance this year? Is it in the toilet or should you actually not be worried? What's going on with AI, NVIDIA, hardware and many other topics that people are all worried about? And then, of course, tariffs. April 2nd is fast approaching, and that is D-Day for tariffs And Jordy's here to tell us exactly what you should expect and how you can position your portfolio to benefit potentially. All right, today's episode with Jordy Visser. I hope you guys enjoy it. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments.

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Americans on their journey to upgrade their retirement. Bitcoinira.com slash pomp to upgrade today, and you can earn up to $500 in rewards when you add funds to your account. All right, Jordan, I thought a great place to start the conversation is the Fed decided not to cut interest rates this week. I think that's a mistake. What do you think? You think they should have cut or do you think that they're making the right decision here? I think they're making the right decision just because they actually don't know yet what the policies are. I think if they had a better clue as to what they are, it would make more sense. If you go through the dot plot and you go through where all the estimates are, the best way to categorize things are they don't

know. So even though they took growth down, they took inflation up. I think the main point is they don't know. I think the most important thing in this though, was that Powell said he used the word transitory again. And so we're back in a world where I think transitory is going to become a more important theme in investors' minds over the course of the next couple of months, because most people are settling on, we don't know what's going to happen for the next two to three months, but even the White House is saying everything is going to pick up at late Q3 and into Q4. And if that's the case, markets will usually get ahead of that by a couple months. So I think the tariffs are important for both the Fed, but I think for investors to get over that transitory part, too.

So transitory obviously makes everyone cringe the second they hear it, right? They're like, all right, I got like brain damage hearing that back during the pandemic. But I agree with him because he said that tariff inflation was transitory. And what I tried to explain to people was when they put the tariffs on, there's a change. And therefore, that change can lead to imports being more expensive for a short period of time before domestic production ramps up and then prices fall. But the second year, there's no change, right? Like the tariff is the tariff. And so it does feel like in a weird way, he probably should have used a different word because I mean, literally the second he said transitory, I got like three text messages.

People were like, did you hear this idiot? right um but i agree with them that like the sentiment is correct his analysis is correct um but you know it's just one of those words like just strike that out of the speeches never use that word ever again i think for an entire generation right i think you're right i think people still have this especially investors have this horrible thing of how quickly 2022 turned into this disaster because everyone knew that inflation although it was transitory it was just you know it went really high in the interim and everyone thought it was stupid to not acknowledge that it was moving higher. I think this time the transitory thing actually fits

because even in the worst case scenario where people are other than maybe the media trying to create some sort of fear, you're talking about 30, 40 basis points of risk of a rise into next year and then probably, like you're saying, flattening out from there. What about asset prices? It feels like the market wants to recover, but every time it starts to get a little bit of excitement. We then have a down day because some news breaks, there's some uncertainty, chaos, whatever. How are you looking at the stock market right now? I'll use transitory again. People are frozen right now. From the hedge fund side, particularly the more hedged ones, based on everything I've heard, their overall investment numbers are down

significantly, meaning the balances are down. So people took risks down. I don't think they have any comfort. So every time we get a rally at this point, and I'll just use the easiest thing to look at for people, is that the 200-day moving average, every famous investor has said the same thing. Nothing good happens below the 200-day moving average. Well, we're below the 200-day moving average in the S&P 500 and all of the other indices at this point. And so right now, people are just frozen. They're waiting for April 2nd. I hear this. I was on a call yesterday with Brazil. What about April 2nd? Everyone's frozen until April 2nd. So I don't see anyone taking any great risk here in the overall direction of the market. I think what is happening,

which people have to start to just recognize is we have austerity in the US. There's no way to, right now, we don't know what the impact is going to be to growth. Sentiment in terms of every measure, both investors, but also economic surveys has collapsed. The hard data is still good. So I think people are in this phase where they're like, we know things are going to soften in the u.s we know that germany and europe has increased some stimulus on the back of needing to increase defense china did more this week and they are absolutely committed to increasing consumption inside china so another demand story with inside the country which means that on a global basis u.s is weaker rest of the globe a little bit stronger so it makes sense that their

markets are doing better and then the high multiple names here like the mag 7 they've come down so i think investors are frozen i think once we get more clarity on april 2nd and people can start to put some details on it at that point anything that is positive will be times two because i don't think the economy is headed towards versus i saw i think it was the mag 7 is down but the 493 other companies is up like one percent which was surprising to me because all the tariffs all this stuff that we're talking about shouldn't actually affect the mag 7 for the for the most part. So why do you think the mag seven got hit? It was just they were so inflated from a multiple basis that people were just looking for an excuse to sell them off or

what's happening there? Yeah, it again, the mag seven got up to I think $15 trillion in market cap. So out of the US market, they were, you know, 25% of the S&P 30% of the S&P. And so as money has been leaving, which has been a major theme, there's been a rotation away from the United States and into global markets. Now on some of the metrics, especially for CTAs and some of the trend following groups, you have allocations to the foreign markets much higher than the U.S. And on the U.S., I think it's the first time that CTAs have been this short since even maybe COVID. I don't even think 2022 U.S. equities got this short. So that's why the rotation theme has been there. I mentioned last week that the S&P cumulative breadth, which again, we'll take into

this this concept that you brought up of the 493 being up on the year there's just been a rotation even with inside the market and that to me is the most important thing because as of yesterday i think the s p 500 is down about three percent year to date three and change we're not going into a recession unless that number is much much lower and sits much much lower so i think it's just been a rotation at this point it's always hilarious to me to see the fear-mongering that happens with a three percent drop in the stock market coming from the bitcoin and crypto world where that happens in 20 minutes and nobody even blinks um so it just feels uh a little overblown but it is what it is um another stock that has been absolutely decimated is tesla uh tesla feels

like uh there's two stories going on there's like what's happening at the dealerships and the cars and like the uh kind of attacks etc put that all aside for a second um the stock itself is down significantly and some of that is probably people are turning in their cars or you know whatever But there's almost a counter movement of people who are saying, well, if you're going to go and try to attack the company, I'm going to go and support the company. And so I always wonder, is it better off to be the controversial stock where you have people fighting over you? Or is it more of the Michael Jordan, hey, Republicans and Democrats both buy sneakers and I'm going to kind of stay out of politics? How do you evaluate their stock performance and kind of Elon's impact maybe versus more just broad market impact? I'm sure you've seen it. On my video last week, I highlighted the difference in,

let's just take the inflation data, the University of Michigan inflation data expectations. I think Republicans for the next, I think it was the one year mark were zero or 0.1, and Democrats were up at some really high numbers. So you've got this bifurcation in everything being politicized from sentiment and obviously tesla's a unique situation first of all i don't think it's a car company the way that people should think about it i think it's been valued the way it's been valued on the future of robotics and optimus but also on ai and just kind of the the stranglehold it has had in collecting data so the car situation because of the tariffs and then when you add in the political side. I think that's where Tesla's come in, which what really makes it interesting, and I think the

stock has to be watched. Half the country seems to hate Elon Musk at this point. And obviously, the part that hates them historically has been a little bit more interested in electric vehicles. So you have this weird dynamic that's happened with the stock. And I think that actually, it becomes an important signal. So the way that I always approach markets, I try to find the stocks that represent something that they're not. And the panic in Tesla right now, somewhat justified on the car side. But that means they've taken down the beliefs in the robotics. And I think it was last night that Elon Musk came out and said, don't sell your stock to the employees. We're going to be delivering, I think he said, 5,000 optimists this year. The robotics side of Tesla

is the one that when you do the research and you read some of the people we're talking about, this is really the most important part. And Elon Musk has called this the most important industry and the biggest industry over the next 10 years that the world has ever seen. So when you're looking at it, you have the short-term panic on the tariffs, the short-term panic on Elon Musk's doge and all of that stuff. But the reality is if the company is going to benefit dramatically from robotics and it's going to put this stuff out and it's going to companies to start and eventually going to individuals, it actually is the stock that I'd be watching for any kind of change in trend as a leading signal or

a coincidence signal that sentiment has reached a point that reality is setting in and people we're starting to invest on the future again. That makes sense to me. And when you think about Tesla data is all people care about, right? They want to know how many are you delivering? What are the humanoid robots, et cetera. I saw a clip from the All In podcast with Scott Besson, which blew my mind. I've written about this now. We create a video on it. I just, I can't get it out of my head. Chamath Palpatia asked Besson, point blank, GDP data, inflation data, jobs, data, et cetera. Do you believe the data? And the first word out of his mouth was no. And then he kind of polishes the answer very quickly. Yeah. Right. But his gut reaction was

like, no. And then he starts trying to explain away why it's okay or this or, you know, whatever. But if the treasury secretary doesn't have faith in the economic data that's being produced, that feels like a very very different world than maybe what we were operating in four years ago how do you evaluate whether this stuff is actually accurate or not okay first of all anyone who thinks it's accurate i mean first of all you're talking about the way we actually gather the information and do it in a world of high speed electronics where everything is real time, the government has not caught up. And that's why Elon Musk is shocked. And when you hear him on Joe Rogan, just talk about if you saw what we're working with, in terms of just the

infrastructure, the architecture of the technology, you can understand why the data wouldn't be real. Second thing is, I remember, at your event, one of the first things I said was, GDP is a useless statistic now. And so you get past the you can't believe the data. But then, in a world where software and the digital economy and services have completely taken over the overall economy. Tariffs are a perfect example of when GDP was created. So whenever people go back to the 1930s or they go back to McKinley and they talk about tariffs and trade wars, it was a completely different world back then. We didn't have the instant communication and information. So now we do anything. Everyone in the world knows immediately what's going on. Back then,

how would you know about the trade war how would you know until you actually saw your demand go down it's not like it's going to be in all the papers and everybody's going to see it it's going to travel across the world so trade wars were really again this gap of communication and information it took a while for the information to get there so when you watch it's a wonderful life and the way that you found out there was a bank run is by people running down the street that's very different than being on your phone and the reason i bring that up is if people don't know this. Tariffs are only, I mean, imports of the US are only 14% of GDP. This is a domestic economy that is service-based and the administration is recognizing for real reasons that we got a

problem with the data. We got a problem knowing where we stand. But the one thing we know is we have a deficit, which is real. We have debt, which is real, and they have to navigate it through it. So I watched the same interview and I thought that part was very illustrative of the way they're talking about things, but it's good to have Scott Besson in there. And even Stephen Marin for another person, someone who's been in the finance world on a regular basis that understands how important these things are to making decisions. Makes sense. April 2nd, fast approaching. This is the D-Day for reciprocal tariffs and a whole bunch of other stuff. Walk me through, how do you think professional investors are approaching this? How are they evaluating it? Is it a probabilistic?

I think this is going to happen. I think this is going to happen. Let me position accordingly. Just what do you think that approach looks like? And then what do you think is going to actually happen on April 2nd and the impact on the market? So I wrote a sub stack this week that I've never seen sentiment across the board this negative relative to nothing actually going on in big ways. So this is the fear over April 2nd at this point. And even though the market is only down to the degree that we said, the sentiment numbers, no matter which gauge you use now, and there's so many of them, but now they're all down, whether it's newsletters, whether it's retail traders, whether it's institutional positions, whether it's CTAs, everything is

now representative of a market where people are too bearish. Now, historically, that means when you look out two months, I feel pretty secure in saying that two months from now, you're going to look back and be like, that was a good buying opportunity to go through it. Now, for the next three weeks, I think it really depends on what comes out on April 2nd. What they've talked about, there's two things that I think were kind of brought up this week that I think are positives. One are they are negotiating right now. So there are negotiations happening and being able to deal with, I think they've said 15 countries is what they're focused on. So it's not the whole world, it's 15 countries. If they are negotiating and they're able to come out with something where

they can highlight, well, we were going to have these at tier, whatever tiering system they're going to have, but we negotiated, this is what's going to happen over the next 10 years. I think you can get through April 2nd with volatility at the point. I would be surprised if we don't get some sort of sell-off on this. But we're transitioning away from a trade war, which is bad, to a tariff negotiation. And I think that's the best way to kind of put it is if we can stay in the tariff negotiation as opposed to the trade war side. And the reason I say that is last week when I came in here, we were 200% on wine and there was a back and forth. it's actually been a pretty quiet sparring week this week. And I think that means you've left

kind of the trade war and we've gone into the tariff negotiation. And I think everyone around the world is scared of a trade war. Every country is, and I think they want to negotiate. So I think it's been a positive week to at least go there. So when April 2nd comes, I want to kind of head towards the, it's tariff negotiations, and then people can start investing again, at least with companies for the second half of the year. When April 2nd comes, let's just walk through maybe two different scenarios. All the tariffs get put on that have been promised. There's like a flush out in the market and then here we go. Or what do you think happens? Yeah. So this is the part that's the most important when it gets back to the soft data versus the hard data.

If you're going to have a really bad year in the stock market, I think you're going to need to have a recession at this point. And a recession for people as opposed to hearing what's happening. we could easily have negative GDP in Q1, because right now, unless something changes dramatically, we're right around the zero line. And I don't think people are going to be doing excess spending. You had Brian Moynihan on TV this week, and he was very optimistic in saying, we're still seeing credit card growth here. So the consumer is not stopping. They're just shifting things. I think a move lower, there will be buyers to kind of step in for a couple of reasons. One is it'll be a new month. This has been a bad month.

hedge funds will have their chip stacks as I like to stay back again, meaning they're measured on a monthly basis for better or worse. So when you've had this kind of a month, people generally kind of tighten things. We know there were losses. So I think people also tighten things. The weekly jobless claims, no problem whatsoever. The federal tax receipts, no problem. These are weekly data points, which are still saying that everything is fine in the economy. You need to have job losses because at the end of the day, if people don't lose their jobs. Yes, inflation can make it feel bad. Yes, things can be bad. But if people have income coming in, they're going to keep spending money. And I just don't see anything. The most interesting

thing was the Philly Fed number came out, I guess, this morning. The employment number component of it is fine. A lot of the expectations, it's frozen. And so I think people just have to accept the fact that if they get to buy the S&P down 10% for the year, that's where I think they should be looking and doing their homework right now to take advantage of the situation because in the back half of the year, and I said it last week and I'll say it again, I think growth is going to be fine because people are over-exaggerating what the administration wants. And Besson, I thought, made it very clear on what he wanted on the All In podcast. And I highly recommend people go in and look at it. They don't want a recession. No, I don't think they want a recession. But

I also think that one of my takeaways from his conversation is he understands And you need speed in actions, but those actions also have to have a lack of speed in negative impact. So what I mean by that is you want to come in and very quickly get momentum as the administration, but you need to kind of de-lever slowly. And so if you come in and you're just like, we're going to blow everything up, well, you're going to get the recession. You're going to get all these negative side effects. But if you're able to put the plan in motion quickly, there's your speed kind of on entrance, which they're only eight weeks in, it feels like it's been a year. And then you just slowly implement this deleveraging and really shift so much from the public sector to the private sector. If they pull this off, that will avoid a recession, be much better for investors, kind of all these different things.

I think a lot of the market reaction has just been, oh my God, they're coming in, they're going to deleverage. this is bad sell my stocks right so let's actually use numbers since because he gave specific numbers on there number one because i agree with they're trying to come out fast but they're trying to come out fast with the things they need to be fast on so let's go through he said i want to get the deficit down to three percent by 2028 i think just like when you get on a high speed roller coaster and you're sitting there stationary and then you go really fast at the beginning that's feels like the fastest part, but it's not actually the fastest part. You're moving out, you're going from a stall speed. So everyone has to adjust to the reality of this rollercoaster ride. And they

hear we're going to get the deficit down. So they extrapolate everything into year one. To take it from six and a half to three or seven to three over a four-year period, it is doable based on the way he said it. I don't think people realize, but coming out of COVID, we're still seeing nominal GDP at 5% a year. The decade before COVID, we were kind of in the three and three quarters to four and a quarter range, which means if we take a hundred basis points off of nominal GDP, that's what they're talking about doing. They also want to see inflation come down. So I thought he gave a very clear example of we're not trying to do everything this year. The tariffs we're going to negotiate. And then you hear, I mean, the media has covered it.

Trillions of dollars we're going to get back in tariffs. Well, if imports are about $4 trillion dollars and you get a 6% tax rate, you know, in terms of the tariffs, which again is the opposite side. It's just a reciprocal side. Well, then you're talking about hundreds of billions of dollars. So let's just take $250 billion. Well, then over a 10 year period, which is what they're talking about, you've got trillions of dollars in terms of revenues coming in. I do think anyone that doesn't believe that is likely to happen is missing something. So it's either going to be in the form of investments or it's going to be in the form of revenue. But I think that's what the negotiations are, but they're still not going to take GDP down to zero. The only way you can get

GDP down to zero on this is literally if people say, I'm not spending again. But the only thing that'll do that, they're worried about their jobs, but they have a job. It's a weird thing that they're worried about their jobs, but they have a job. So I think he covered it well. And I'll just end it on this. At the very end, in the last minute of the podcast, I took this, not as anecdotal. I took this as real. Scott said, I went into Mr. Trump's office. I said, here's a policy we're thinking of doing. It'll probably create job losses. And the response he said was, okay, well then go fix it. They don't want job losses. They don't want a recession. And that may sound weird to the federal side for the employees they're getting rid of, but they're giving them

nine months or whatever number it ends up being now to go out and find another job in the private sector to hopefully be able to help the economy and by giving them that much time i think they're trying to space this out so i don't well they're just shifting right they're shifting people from the public sector to the private sector and they're doing it in probably the uh nicest way the most like long ramp you know i think a lot of like a uh a ramp gradient is uh if you're a wheelchair ramp it's not very steep right but if you're a skateboarder dropping into a half pipe it's very steep right they don't want the skateboard half ramp they want the kind of wheelchair ramp where it's okay nice and slow we go down we don't want too much acceleration here

and um if again if they're able to do it it all makes sense as to how it can work i think the big debate right now is like can they actually pull this off yeah can they pull it off but again i i every time i we get caught in this there's two parts of the economy there's the restructuring that they're trying to do, which to me is a restructuring of things that have been in place since World War II, which means by definition, they're problems that have built up over 80 years, but also they get back to that GDP statistics, which is the value of the goods that are produced. Software, coding, AI, robotics, everything that's happening on the other side, we're

at a productivity acceleration point here. So the timing for doing this is actually perfect because we should we will be seeing the productivity benefits that are coming. We've already been seeing it in profit margins. I actually think that's going to continue to happen. And that's where the disconnect between I think stocks and profit margins can outperform, even if nominal GDP comes down, because theoretically we're getting rid of inefficient nominal GDP, which would be the government side, getting it to the private sector, which has a much bigger multiplier. No one would disagree with that. I just think the fact that those two are colliding right now is a very positive sign because it is accelerating. Another area where GDP, I think a lot of people have hope will continue to accelerate

is AI. NVIDIA had their big event this week. Shares were down after the event, which I don't know if you read into that as to why they were down. But it seems like the way NVIDIA goes, the way the tech sector goes, and people are kind of looking at that as the unofficial leader. and if it went down, the whole tech sector went down shortly thereafter. So what was your takeaway from this event and why the stock performed the way it did? NVIDIA trades just like Bitcoin right now. So let's take the two of them together. Meaning every time that there's this, Donald Trump's going to make an announcement on crypto. You get a run up into the event and then it sells off afterwards. NVIDIA has had the same thing. Buy the rumor, sell the news. And every single

time that seems to happen. And that just means that people underestimate how important momentum is in the stock market. I've been amazed as I've gotten more into the crypto community, how good the traders are. Like there's a lot of people that trade crypto on a regular basis that are really good. Like they expect to lose money. They just want to make sure that when the momentum starts, that they're on board and they're bigger than, so they kind of, they get in, they get out, they get in, they get out. That's not the world that I grew up in with investors. Investors, they don't want the volatility. They're scared of it. Well, crypto, they're in there. And I think Nvidia and Bitcoin are linked in this where there's a lot of momentum involved and they

want to see this go higher. I thought the comments that came out of Jensen were incredible. I'm surprised it didn't get more attention. Again, I understand the stock is still valued at say next year, somewhere between 25 and 29 times earnings. But he took numbers up. He answered all questions on deep seek has led to a hundred times more compute. And he explained to go for more inference. It's a hundred times more compute than just asking chat GPT a question because of the reasoning and everything that happened. He talked about where we are with the embodiment of AI, which is something that I'm passionate about. We're taking the brain and we're going to be sticking it in hardware. And he talked about how important that is, the data center needs that are coming. So

I think he forecast last year in the beginning of the year that by 2028, we will have had about a trillion dollars of CapEx investment for the data centers. Obviously this year, towards the end of last year, those numbers were taken higher for this year to like 300 billion. Then you add Stargate, whatever that number ends up being. He's now talking about the fact that we're going to have a trillion dollars alone in 2028. Now, they benefit dramatically off of this. So their stock is probably going to move with the earnings growth.

And I think that's where the problem is, is everyone's in a wait and see mode with this stuff. But that gets back to the tariffs. It gets back to everything. I think people are just frozen because they don't have a lot of certainty. But I think you have to take it back to people are momentum investors dominate the market and they want to see this stuff going higher. They want to have it work well.

And right now the market just has a cap on it. Yeah. The AI stuff, I think, is shocking people, not only because of what's possible, but I saw a quote from the Y Combinator, Gary Tan, and he basically said something to the effect of our companies are leaner, they're more profitable, and they're moving faster than we've ever seen because of AI. And so this is the quintessential startup incubator or accelerator in the entire world. We invest in a lot of these YC companies.

And I was talking to a friend of mine who invests with me. And he said, he went through Y Combinator and he said, these are the best founders that I've seen in a long time. And so, okay, that's the people, which means YC is probably getting better at selecting and people are, you know, more people are applying, the pool's bigger, all this stuff. But then we were saying, wait a second, if you put better people with better tools, you're getting the one plus one equals,

you know, four or five scenario here. And it seems like that is now what's happening across all these different sectors. And my buddy, Sam Parr and Sean Purry, they have this podcast and they interviewed recently a high schooler. And in the middle of the day, and they're joking on the podcast

that the kid is skipping school to do the podcast. The reason why they're talking to him is because he built a app called Cal AI and on Cal AI, you basically take a picture of your food and it counts the calories for you. He's doing $20 million in annual revenue. He's got 15 employees and you know, they've got whatever millions of dollars of profit. And you're talking to this kid. And again, the kid is incredibly impressive. You don't accidentally stumble into something like this right but you start to realize that he actually saw other products and was frustrated by them and then so i'm just going to use the better tools to do it better than they're doing it and

now here he goes he's off to the races yep and so if that is what we're starting to see i mean game on it feels like this is going to assault every part of the economy and maybe we will get a lot of that gdp growth that people i think are kind of hanging their hat on and hoping for. So you've mentioned this, and I don't know if we've said it on this podcast, but we've talked about it in private. And it's a big theme of the Bitcoin community. So opportunity costs were usually about money solely. Time is now the biggest opportunity cost. And I bring that up in the story that you just mentioned, because I've seen it in my own life. The amount of time I wasted being at a job where I sat in an office and I worked with people and they've got complaints

or they've got questions and we sit there and we talk, we go to meetings, we spend an hour in a meeting. I can do stuff with AI all day long. And the biggest limitation is just how creative I can be. Now, creativity takes having the ability of thinking in a room, in quiet, in walks. And that's why once I stopped sitting behind a desk, I started to feel like I was becoming more creative. And so I think with younger people, they've identified and they've had the time and they still are creative. I think the more that you get older and use The Office, the TV show as an example, like you literally become methodical and you go off, you're depressed, you're going to do the same job. And I think AI is giving the ability for the startup community to grow rapidly.

I mean, Wiz is one of the most amazing stories to come out of the M&A world now. And so you had a company that I think was formed in 2020 and Google's now paying $32 billion. Out of nowhere. And again, that's another thing of like, if you're going to be negative on tariffs, just remember, we haven't had a lot of M&A.

This deal will be very important to see if it gets through. But this is a company that it's got to be the biggest to go from zero to 32 billion in five years. I don't think there's been a company that's gone to that size that quickly, even OpenAI or any of these. No one. So even though it's not a pure AI company, it's definitely benefiting from the AI and whatever you get in the security and cyber or anything along those lines. So I think we're at an age where things are going to go parabolic much faster. Businesses have a harder time of the adoption phase of AI just because of the nature of the culture to actually get people in.

But that's where the profit margins are going to show up. The startups will benefit the most, but I think you're also going to see it in the bigger companies too. What are the areas that you're paying attention to in AI that maybe other people don't yet think are important or don't yet spend time looking at on a day-to-day basis? So I started at 22V Research. The first thing I'm doing is really talking about moving from investing in the cloud to investing in earth hardware, the merging of AI and hardware.

It is here. It is now. It's not just robotics. So every time I talk to people about humanoids, they're like, well, that's gonna be down the road. Don't fade the progression that's already happening in robotics and don't fade the fact that it's going faster

than you think. So it's now and it's going faster, but more importantly, self-driving, autonomous driving. Jensen talked about all of these, by the way, in there. The phone, the computer, like we're gonna have AI native phones at the end of this year, much more so than we do. I think Android already is out there.

iPhone hasn't. But when the iPhone comes out with a native AI, I think people are going to realize the reason this is important has huge implications for physical stuff. So if you leave the cloud where commodity prices were in a bear market for a decade, look what copper is doing. It made new all-time highs this week while the S&P is going down. Everyone's worried about a recession. Dr. Copper, not saying there's a recession.

Natural gas going higher because we need electricity to power this stuff. I don't think people have put the time into, maybe there's not going to be a recession. Maybe there's going to be this massive build that's happening. So when Jensen says, hey, not only is the CapEx number going to be real, it's actually getting bigger and bigger sooner. Well, isn't a lot of the fears that have happened for the Mag7 based on when DeepSeek came out? So I think people have missed this story that's happening where the collision between AI, the brain and hardware is right now. And this has a lot of different situations for a lot of

different companies. And I can just tell you, whether it's a micron technology that does DRAM and NAN and depends on them, DRAM prices have gone up. NAN prices are starting to go up. You're going to start to see these companies. There's not a lot of supply in them because they just came out of a 15-year bear market. Same thing goes for oil companies are doing extremely well this year. Oil is not going higher. So Freeport-McMoran, sitting down at low levels. IBM up on the year. Chevron up on the year. And these companies are not up a little. They're up 10% to 20%. Cisco, Intel. You got to start to go back, I think, a little bit. And we haven't found a good name for it yet. But this is like the rise of companies that were thought were dead, which

were based on hardware. That's going to be the theme for me coming out of this year as we get closer to the robotic revolution. I think it's a very interesting way to look at how to play what's happening is everyone is so focused on the open AIs and all those companies, but actually the hardware providers may have a significant advantage and it's very hard to compete with them if you don't have scale, if you don't have access to capital, if you don't have the engineering kind of talent. And so these companies have been around for a long time for a reason, right? They've been able to survive at a minimum. Yeah. And again, they've had to restructure their business. And all of a sudden this wave is coming back where it's like, wow,

we didn't expect. So when you take data centers, you take cars, you take humanoids, you take phones and computers. These are all industries. Cars have been dead. I mean, personal consumption expenditures of cars, I think is down to about 240, $250 billion a year. That may sound like a big number, but it's, I mean, we were growing every year based on population. People don't realize like car sales haven't been higher in a year. Like we've sat around the 16 million cars per year. Gambling revenues or gambling expenditures in the U.S., it's a straight line up and it's up to, I think, $260 billion a year for gambling. So the economy has changed dramatically. And you're at this point where people have to realize we haven't had a hardware

boom in a while. And it's not like this is going to be what happened with China and we're going to be having problems. But we're starting to light up coal plants again. And that may make people like unhappy that we're focused on climate. But the reality is we need the power. And what I always like to say is the reason this has to happen, whatever you think of the administration's policies, we can't go into a recession. And Scott Besson basically said that. But I want to remind people, it's really important when you start worrying about a recession, you can't have a recession if you're in an AI arms race. You just can't. You can't have a recession if you have a fiscal deficit of 6.5%. Ray Dalio said that. You can take growth down, and that's what the

policies are. Well, if we get 2% GDP or 1.5% GDP this year and profits still grow at double digits, I think people are going to start jumping into the market at some point soon. Yeah, I completely agree. Where can we send people to find what you're writing online or the videos you're producing? 22V Research, for people who are at this point institutional, they can reach out there. I am doing deep dive research with names. They can certainly see me on my YouTube channel and my sub stack. I'm still writing those and those are always going to remain free and open. I'm trying to give people just, it helps me think, I know you do this as well. I'm a creative person. I like to think about the future. There's so much going on and I don't like,

and I don't read the news. I watch you more. I don't, I don't even have the TV on most of the day except for sports. Everything that I do is podcasts and everything I use is X. And I think people should be looking there. I'm an X as well. And that's where I'll give real time stuff, but people can always find me there and they can reach out. You're a fantastic follow. Highly everyone does that. And we'll talk again next week. Thanks bud.