Fear Buying AI & Automation Stocks, Whoops Too Many Winners, Booming Tech Trade — With Josh Brown

29:01Now what? Where do those people enter our industry from? Who makes use of them? How do you get money back for the cost of supporting them for the first couple of years? Because as you know, Alex, There's no wealthy family that's going to be happily assigned a 24-year-old advisor Right You know, absent somebody that's a little bit more senior So look, it's an existential question for just like How do we train entry-level people in this country If we're creating endless amounts of software that can do entry-level jobs better Than a kid right out of college can do And I'm sure we'll solve it I'm sure we'll come up with something Or we'll turn into Japan for the next 30 years where young people have absolutely no hope for the future and don't think that they will be able to be as prosperous as their parents or their grandparents.

29:51I don't have the answer, but I know it's the big question. Okay, I have two follow-up points on that. First, the point that you made about the software that will take the notes for financial advisors, that exists in every single discipline. Not necessarily the software, but the same problem and the technological opportunity. Just think medicine, for example. My father just retired. He was a podiatrist. He spent half his life doing paperwork, right? And this is going to be a thing of the past. Like him having to sit in the basement, filling out these electronic medical records. No doctor is going to have to do that again because this is all going to be generative AI.

30:27The doctors will simply check the output and the list goes on in every single profession. So I think that this is the benefit from this versus like maybe there's like that small percentage of people who enjoy taking the, you know, doing the note review or enjoy doing the paperwork this is going to be a huge benefit. And I can't believe I'm being this optimistic about it, but now thinking it through, I think it'll be a huge benefit. Now, for the junior entry level work, I think it's a real issue. But here's like two thoughts on that. First, for a firm like yours, it's probably going to be important to have a strong bench of young talent.

31:01So even though it might not pay off like right away, there might be some incentive for you to have them in the firm. What do I do with them if the AI note taker that Salesforce provides me or Zoom provides me or Microsoft provides me is more useful and costs nothing? Like, what do I do with that junior person if I don't need them in the meeting? And how are they going to learn to be an advisor if they're not needed in the meeting? Yeah, so there might be just more extended training. But I think the second point that I wanted to make here, and by the way, like, maybe that's too sunny. It probably is too sunny now that I'm saying it out loud.

31:40But the second point here is that, you know, we do have declining birth rate in the U.S. and in the developing world, developed world in general. Right. And so you're just going to have much fewer sort of people seeking jobs in those entry level fields than we have now. and you might need the AI. The reason why Japan has pushed so hard into AI automation, sort of the, I think you even talk about this in your book, the factories that are just like lights out factories where you don't have anybody is because they needed it. Like in Japan, they didn't have enough of those young people seeking jobs.

32:21And in the US and in China in particular, that's going to be a major issue as we look 10, 20 years in the future. then after that i guess the question is the next five i guess for me the next five yeah i mean they always talk about how like in a technological shift there's going to be pain and that's probably what's going to happen but well listen i i like to be optimistic too and i just i guess uh i guess just from my perspective it's worth it's worth bringing out both sides of this yes companies are going to become fabulously profitable as they institute all this amazing technology that's coming down the pike and it's already happening.

32:59And of course, we're going to get rid of a lot of busy work that people should not be doing anymore if they don't need to. A hundred percent, I agree. But the second order effect is like, how do you be an entry level employee in the age of AI? We're going to find out. Yeah. No, I don't think you're off base at all in bringing that up. It's going to be a problem without a doubt. And you mentioned, okay, maybe if people have their work automated, they'll just have a good life and they'll paint or something like that. But that sort of brings us to the most interesting part of the book, at least from my perspective, where you write about what happened during COVID when we had all the stimulus and people were empowered.

33:41And effectively, people were empowered to do whatever they wanted. Effectively, the economy broke because of it. And you... It's catastrophic. Paradoxically, it's not great when everybody has all the money they need. It's catastrophic for capitalism. So I think I should just read this section of the book because it's so good. And I like condensed a little bit. But you write capitalism felt like it offered possibilities for everyone for the first time ever. This is in the COVID times. Everyone had money. Everyone had options. There was a bull market in people forming their own LLCs and starting companies, a bull market in sitting on their asses and doing nothing, a bull market in quitting jobs, a bull market in whatever they felt like doing, indulging their hobbies, accepting flexible hours, moving their residence, taking college classes while being employed, secretly having two full-time employers, quitting without quitting, being paid for waking up in the morning, taking extended periods of time in between gigs, making a big career change.

34:44whatever people wanted to do, they could do. Freedom on a previously unimaginable scale. And that was the problem. Widespread prosperity, it turns out, is incompatible with the American dream. The one and only way our economy works is when there are winners and losers. That's what we learned at the conclusion of our experiment. You weren't supposed to see that. Now the genius out of the ball. For one brief shining moment, everyone had enough money to pay their bills and the financial freedom to choose their own way of life. And it broke the economy in half. So this idea that we could end up in utopia, which a lot of people, especially folks like in the sort of extreme areas of AI, like the thinking parts of AI talk about, basically your perspective is we had this already in COVID when we gave out stimulus, people were empowered in a way they never were before and it broke the economy uh it got out of hand we had the nft craze inflation and then effectively the government was like let's restrain this and break it and then you saw the rise in interest rates and the attempt to uh spark a recession you you really got to read the you really got to read the full chapter of that book if you're not you.

36:01No, no, I'm saying to listeners. If you're listening to this. Because what I lay out is the sheer amount of spending, not just spending, stimulus. So that's fiscal policy, monetary policy. It was just, it was so endless. It was like 20 something trillion dollars plus zero percent interest rates, plus a raging stock market that allowed anybody who wanted to to go public. I mean, it was just like this once in a lifetime situation where we flooded people's bank accounts with cash. We flooded people's 401ks with gains. The value of suburban real estate went through the roof. Like just everything all at once made people feel for the first time ever, everyone, that they could do whatever they wanted.

36:52And the result was 9 % inflation in the United States. And that's just headline. If we get into individual components, forget about it. There are things that quadrupled in price that'll never go back again. The UK had 11 % inflation. We cannot ever again run this experiment because effectively what happened was the people who really hated their jobs were able to just not show up and do them. So you would check into a hotel And there was nobody to clean the rooms So they would say to you Alright, the hotel's open COVID's sort of over But we don't clean your hotel room You had restaurants Begging people Doubling the salary and then doubling again Begging people You had trucking companies that couldn't find drivers The ports shut down You literally couldn't move shipping containers Because people are Doing like I fix bicycles startup in their backyard.

37:52And listen, it's not for me to say who doesn't deserve to get their happy ending. That's not, right? All I'm saying is the reason capitalism works is you have people at the top of the heap that have already made it, probably because they killed themselves to get there. And then you have people who want to be where they are and are willing to do the jobs that are necessary in order to get there. So you have the super rich, and you have the lowest income households, but then you have this group in the middle, the middle class. The middle class has to strive. Otherwise, it falls apart. The middle class can't ghost quit.

38:29They have to show up to their job. And not only do they have to show up to their job, they have to buy lunch next door to their office. They have to do these things. And if they don't, if enough people don't do these very normal things, everything breaks down. And that's what we went through. We had an 18-month period of just the most bizarre science experiment. And it turns out the American dream doesn't work if we all get it at the same time. And again, it's not for me to be the arbiter of who gets to quit their job and start the company of their dreams and who has to show up for work. I'm not saying that any one person should determine that.

39:08I'm just describing a situation where you can't have everybody be in a place where they feel fine about either working or not. Right. And it is crazy that the Federal Reserve was basically like, we need to try to force a recession to get people back to work. They never said it, but that was the explicit policy aim. Right. We need to crash this economy to get people back to their jobs. Right. It's crazy. But - I mean, it didn't work. They weren't able to do it, thank God. We got inflation down anyway, despite their efforts. But they, you know, listen, what's so wild is that you basically had people become professional baseball card traders.

39:56You had people leave New Jersey and move to Montana. Not like two people. Like millions of people did something completely different for 18 months. Some people became amateur bakers. Some people, myself, became very casual alcoholics. Like we just, everybody got to like live their version of I do whatever I want now. And one of the craziest things, Alex, even like a year ago, there's an element of this that's still with us. I remember going to – I had to go to the mall to do a return. I was helping my wife with something on like a Wednesday at 10 o 'clock in the morning. And I look around and the mall is full.

40:37What the hell are all these people doing? You know what they're doing? They're walking around with AirPods taking customer service calls while they shop and do errands. Like that's literally what's going on. It's still going on. so we're we're probably permanently changed as a society as a result of the the covid period i don't i don't see how we get everybody to forget about it let me ask you this josh do you think this could have worked if we didn't have the inflation or is it but the inflation is caused by it but okay let's say that maybe this is an impossible hypothetical and if it is call me out on it but let's say that um you know most of the inflation was caused by the fact that the supply chain was broken.

41:21And we know it was broken during COVID, that shipping a container went from China to the US, went from$2 ,000 to$20 ,000. And that was reflected in consumer prices. If we could find a way to do this sort of policy that allows people the flexibility to do what they want and keep inflation in a reasonable rate, do you think it makes sense? Because I'm also speaking as someone who's one of those peoples that did that career shift, started the podcast, you know, in August, 2020, quit my job in May, 2020. So like that flexibility actually ended up being quite good for me. And I think, you know, probably added to some economic activity if we could have people find, you know, the true thing they should be doing.

42:03You could turn customer service into chatbots and people are satisfied with the outcome of those interactions to a reasonable degree. And then if you can turn every McDonald's and Starbucks into a combination kiosk vending machine, which Sweetgreen is doing with salads right now in Manhattan. Go to the One Pen Plaza outlet of Sweetgreen. I own the stock, full disclosure. It's a vending machine. They have a machine in there that makes between 500 and 800 salads an hour during the work week. You order from a screen and the machine makes you a salad. And the calibrations of ingredients and dressing and it's perfect.

42:44It's a machine-made, flawless chopped salad. If you think about how many people do you need to make 500 salads during 12 to 2 p.m. on a Monday? I don't know, 15 people, 20 people? So if those people don't need to be there anymore because the kiosk is taking credit cards, cash isn't changing hands, nobody has to monitor the salad assembly line because it's a computer with very powerful machinery attached. Like if that's where this is all headed, then absolutely. There's a universe in which we can survive 10 % to 15 % unemployment and still like have a fairly good economy. I just think the people that are not working but want to work are not going to be happy.

43:35And look, in the book, I reference Vonnegut. And if you haven't read Player Piano, I highly recommend this book immediately after you read my book. Kurt wrote this 70 years ago. And it's still relevant because it's about humanity. And so in the future that Vonnegut envisioned back in the 50s, basically had white-collar managers who ran these massive industrial conglomerates. conglomerates and you had basically people that used to do something for a living and are no longer needed and the ultimate result is an uprising even though those people were being cared for they weren't discarded in the street they had homes built for them, they were fed they, you know, but it's at a certain point you feel just absolutely useless, you feel suicidal and that's when the opioid shit starts, like it's just not realistic to think that the version of American capitalism that you want is a version where a lot of people could just walk around talking to trees all day.

44:43It's just, it's not good for the soul. People need to feel needed. They need to actually be needed and they need to have a purpose. And the purpose can't just be have as much fun as you can today. It's just, it's not good. It's not workable. It's, you have to be eating mushrooms in San Francisco So, you know, in a dorm room conversation at two in the morning to think that this is where things should be going. It's really not. Well, I can tell you a lot of the inspiration for that perspective on where things should be coming, should be going, does come from those mushroom sessions. Which is fine.

45:22And then wake up, sober up, and realize that people need to be wanted. And you know this and I know this. And, you know, look, we have 4 ,000 clients. So we talk to people that have done every single thing for a living you can imagine. And we talk to people who inherited money. We talk to people who were poor until they were 50 and something finally happened for them. We talk to people that had early success in their 20s and then lost it all and had to get it back. We've heard it, every version. There is no version of people who are happy and satisfied with their life that has anything to do with I wake up and do whatever I want.

46:06That is not the story that we ever hear. The most satisfied people are maybe not the busiest people but the people who genuinely feel that they are most counted on, even if it's just by relatives. and I just think that's endemic to humanity. It's always going to be that way. So it's a lot of fun to grow your own weed, bake your own bread, drink seven nights a week, whatever people did during that period. But it literally could not have gone on longer and if it did, it would not have led to anything good societally. And you know, could point to Jan 6, could point to - NFTs. The Black Lives Matter and the responses to that.

46:52It just, when people had too much time, it was too much time for us to look around at each other and get into fights. It's just, it's not great. So I want, I like full employment. I think it's better than, hey, guess what? The software does your job for you and you have$5 million in Apple stocks. You don't have to worry about anything ever again. I don't think that the person you say that to is better off two years later. We're here with Josh Brown. He's the author of You Weren't Supposed to See That, Secrets Every Investor Should Know. We've been talking a little bit about the book in the first half.

47:24Second half, we're going to talk about some of the big tech companies he's looking at in the market more broadly. We'll be back right after this. Did you know your credit card points and miles can lose value to inflation? Credit card companies often reduce the redemption value of your points and miles. Now, imagine a credit card with rewards that can grow in value. With the Gemini credit card, you can earn Bitcoin or one of over 50 other cryptos instantly with no annual fee. Every swipe at the store or gas pump earns you instant rewards deposited straight to your account. Plus, sign up now for a$200 Bitcoin bonus to kickstart your rewards.

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48:38You're used to hearing my voice on the world bringing you interviews from around the globe. And you hear me reporting environment and climate news. I'm Carolyn Buehler. And I'm Marco Werman. We're now with you hosting The World Together. More global journalism with a fresh new sound. Listen to The World on your local public radio station and wherever you find your podcasts.

49:06And we're back here on Big Technology Podcast with Josh Brown. He's the CEO of Ritholtz Wealth Management. He also hosts The Compound and Friends, one of my favorite shows, CNBC contributor, and the author of You Weren't Supposed to See That. Josh, let's talk a little bit about the market coming back here for the second half. So we also talk a little bit in the first half about how the Fed tried to force a recession. I think this was supposed to be the year that that was supposed to happen. The S &P 500 is up 23 % year to date. We've been hearing about, yeah, recession, hard landing. Rates are going down now.

49:42Inflation is lowering. So mission accomplished. What do you think? Well, so I had on the compound of friends last week, we had Dr. David Kelly, who's probably the highest ranking strategist at JP Morgan. And his perspective is that the Fed really had nothing to do with it. We had these temporary supply imbalances all over the economy. And we had all these labor market issues, again, stemming from how stimulated everyone was financially. And those things like work their way through the system and reality came back. And it turned out that the economy kind of healed itself. I mean, that's like a stylized version of what he was saying.

50:27I'm not as smart as him, so I wouldn't disagree with him. I think the Fed does play a role, but there are a lot of people who think demand for capital is ultimately going to get to where it needs to get to. And the Fed can exacerbate the direction one way or the other. But here we are, to your point, Alex, at the end of 2022, the idea that we would have a recession and a hard landing in 2023 was effectively consensus. This was the unanimous opinion, pretty much, of Wall Street strategists, of mainstream economists, of CFO survey that they do at Duke University. Like this was just what people said.

51:06It's happening. Like this is it. We're going to have the hangover from the pandemic era stimulus. There's nothing you can do about it. And we didn't. And I think a big part of why we didn't was the consumer ended up being more resilient than we thought. And it turns out we don't really have an economy that's highly dependent on manufacturing the way that we used to. So it's not like you have a street with 10 people living on it and eight of them go to work at the plant all day. And when the plant lays people off, the economy goes to shit. It's just not the version of America we live in right now.

51:40So that was helpful. Services-driven economy is going to be less susceptible to higher interest rates. It's not part of the manufacturing cycle of booms and busts and inventories. And okay, so there's that. The second thing is we had this AI genie come out of the bottle. And that nobody could have predicted that. Maybe you could have. Powell couldn't have. Certainly not, yeah. So GPT hits on November 30th of 2022. Coincidentally, the stock market had bottomed two weeks prior. Crazy. We're celebrating the two-year anniversary of the stock market as we speak. I don't know if you know this. Most people don't.

52:18The NASDAQ is up 28 % on the year. This year? Yeah, it's crazy. The growth this year has been out of control. So that's all AI. So we have a raging stock market. We have housing activity renewed because mortgage rates are falling finally and people feel less trapped in whatever their situation is. We have inflation moderating. The Fed has done its first interest rate cut, and they started off with a double cut, and they'll probably do another one in a couple weeks. And we have this election that everyone was terrified of, and it looks like actually the outcome is going to be still up in the air, but probably lead to a divided government, which is positive for stocks historically, where no one party gets to do a lot of weird shit in either direction.

53:09And we'll get through this election, which is a big bad thing that everyone's worried about, and that'll take place. And God forbid we have an inauguration where one side concedes. That'll be interesting. But so like a lot of the negative potential catalysts that we've been living in the shadow of are fading. It doesn't mean something bad can't happen out of nowhere. I'm just describing the things that we were terrified about. And so that's really the story of what's happening right now. We've had earnings growth this year. We were already supposed to have been in a recession as of last year. so it seems as though it's like a it's a new bull market and it's two years old and in your book you describe something called this relentless bid and you know basically that's everybody's putting money into their 401ks traditional retirement is uh not what it used to be that money 401k money is going into equities and it's just effectively coming into the stock market month after month quarter after quarter and that is relentlessly bidding up the stock prices um and effectively has a put in terms of how low it could be.

54:17I'm sure I'm butchering this a little bit. But basically, yes, we are seeing earnings growth. But how much does that relentless bid have to do with the fact that, like, we have gone through this turbulence and the stock market has grown the way that it has? Yeah, so I don't want people to think that that's, like, my justification for buying stocks today is that 401k money is going to just keep coming in and levitating the market. I wrote that in 2014 originally. So it was my way of describing the process by which the actual behavior of the stock market had begun to change because of two things.

54:54One, this wave of price insensitive money. By the way, 401k is$11 trillion. Okay. People are adding to that$11 trillion every two weeks when they get paid. They do not consult the PE ratio of Apple. it's an automated decision. The money comes in, no matter what's happening in the economy or with politics or the weather or sports, like nothing enters people's thinking. It's just a wave of money and it keeps coming in. The boomers, the wealthy boomers, they don't even have to take money out. They just borrow against it. Like if a wealthy boomer wants to buy a vacation home these days, the guy at Morgan Stanley says, okay, no problem.

55:40So we'll, here, sign this paper. We'll give you a 50 % borrow against your treasury bonds. We'll give you a 30 % borrow against your stocks. It's a non-underwritten loan, so it takes five seconds. The only thing you have to do is not buy more securities with it. Take the money out of the brokerage account. Go buy the house. Now, you don't have to sell your stocks, and you have a second home. Boom, magic. This is the securities-based lending Is like one of the driving factors People said There's a guy, Harry Dent He's a demography guy And his big thing was In the year 2020 Every baby boomer is going to turn 70 And they're all going to simultaneously liquidate their portfolios No, it's actually not how it played out Now they borrow against their portfolios They don't even pay capital gains tax So you have that You have this 401k wall of money coming in And then you have a new business model on Wall Street.

56:35When I wrote the piece 10 years ago, Morgan Stanley, Merrill Lynch, now Bank of America, JP Morgan, UBS, all the wealth management units at the big investment banks and brokerages were converting their stockbrokers into financial advisors and changing their comp model. They were trying to push them away from commission-based transactional brokerage business and push them more toward fee-based asset management business. And it worked. And one of the side effects of that is financial advisors like myself are building financial plans for their clients. And the plan doesn't say to sell stocks. In fact, when the market dips, the plan says, hey, actually, you should be buying more stocks and rebalancing because it's gonna make the probabilities for your client go higher.

57:33So you've got this automatic bid coming from the wealth management side, these 70, 30, 60, 40, 50, 50 portfolios, where when stocks sell off, bonds get sold, stocks get bought. And the effect of these forces that I'm describing is a dampening of volatility. And it is a acceleration of the correction process. So it's not that we don't have corrections. We do all the time. They don't last long because the wealth manager with$50 billion under management pulls the lever and there's a firm wide rebalance across all of their accounts. And the wall of money from 401ks comes in. And oh, by the way, nobody's actually selling their securities for any reason.

58:21They certainly aren't selling it to live on in retirement. So this is like profound shit to me. I don't know how interested your audience is in this No we are for sure If I could anthropomorphize The market for a minute I would just say it's like It's like a new person The old Mr. Market where everybody was like On tenterhooks every time something would go wrong Everybody would panic Nobody panics anymore they panic buy Look at the response To Israel being invaded Look at the response to the Ukraine Being invaded look at the response now Iran's Iran's uh I don't know within minutes of of obtaining their first uh nuclear bomb people panic buy stocks when these things happen it's it's crazy yeah but it's happening when the there was that mini crash on in the beginning of August you'll remember some something went on in Asia I think where the market dropped like 10 in a day uh it was the first day of my vacation, my son, I talked about this on the show, my wife and I, we landed in Ireland where we were spending a week.

59:27And as soon as we got, we like did red eye. So we watched the Asian markets collapse overnight. And then this was in Japan, something happened in Japan. Anyway, a second we get, we get on the ground, I'm like, just go buy the S &P 500 and do it as soon as you can. And the market's up like very nicely since then. Yeah. What you're describing is the yen carry trade. So basically, the United States cut interest rates and Japan raised interest rates. They are terrified of inflation for some reason. So as a result of that action, all of a sudden, there's this thing called the yen carry trade where people are borrowing money in Japanese yen terms, and they are using that money to buy things like stocks and real estate here in the United States.

1:00:13Warren Buffett is involved in the yen carry trade. He sold bonds, denominated in yen, and used that to fund the purchase of Japanese equities. So the Japanese carry trade is something that institutions and hedge funds are using as a way of obtaining cheap funding, which leverages their buying power and magnifies their returns. So when the Japanese raised rates and the United States cut rates. It was like a blip in the carry trade. It was a margin call. Some people had to sell some stuff. And then that had a ripple effect. Japan had a mini 1987. Some of their biggest publicly traded companies like MUFG were down 25 % in a flash, which is obviously terrifying.

1:01:00And then here in the United States, we had this crazy wild pre-market where people thought like the stocks were going to like open up down 10 % and keep going because the muscle memory of that is still there. People remember these panics, these crashes. What ended up happening was it was the best buying opportunity of the year to your point. And we didn't hear from a single panicked person. Wow. Not one. Because there's no time. Yeah. Because even if you wanted to panic, the market went green like later that day. like what like it was crazy damn it like what yeah so you know this and and i think i'm a great story that you told alex because it's um it's emblematic of just this time that we're in right now there's a higher proclivity to panic buy than panic sell yes okay we have about 10 minutes left let's quickly do amazon nvidia and apple if you're up for it so with amazon i own all three full disclosure yes uh i i want to ask you amazon i want to ask you this question about amazon so i was on uh with you guys on the compound and friends in july i believe and we had a debate you and i about like whether amazon was looking up or not and you kind of sold me on your viewpoint but i had mentioned that there was some weird things going on with amazon culture lo and behold september 16th andy jassy comes out with the memo we're going to do five days in the office from now on And he also points out, this is the most pointed admission of cultural problems in Amazon history from a CEO.

1:02:33He said, we have added more layers than we had ever before, and it's created artifacts that we like to change. That means pre-meetings for the pre-meetings for decision meetings. A longer line of managers feeling they need to review a topic before it moves forward. Owners of initiatives feeling less like they should make recommendations because the decision will be made elsewhere. Truly day two type of culture taking place. in Amazon. But obviously, the company has existing assets that are quite strong. So what's your perspective on the Amazon trade right now? Look, I think the expectations for Amazon are very low.

1:03:10And the stock is selling at a discount to the multiple it sold at in the before times in 2019. And they've never, ever gotten their premium valuation back. And you can't say the same for the rest of the mega caps in tech. Meta looks outstanding right now. NVIDIA looks outstanding. Amazon and Tesla are probably the furthest away from their 52-week highs of that group of stocks. I think Apple made a new high today. So Amazon is absolutely being treated as though there are issues there. Like, I don't think when they go into this next earnings report, people are expecting any sort of like upside surprise or anything like that.

1:03:55So it's kind of in a weird place. But, you know, from my perspective, that's why there's an opportunity. And, you know, we just went through this cycle with Meta. The stock was in a 75 % drawdown. People forget. It's since, I think, more than tripled. So when companies have problems and they address them and they admit to them, it's like the first step of like hey we have to change something here so i don't know how long it takes yeah for for jassy to get get his act together but uh i think the stock's gonna work definitely i mean maybe this memo that jassy sent is his year of efficiency memo saying that the company needs to figure it out from a cultural standpoint yeah i mean that's that's certainly that's certainly how it could turn out um there's you know look there is some idiosyncrasies with Amazon in terms of like on the retail side, they've been gaining share with the essentials.

1:04:45The problem is with the essentials, it's not a very profitable business. It almost feels like they're playing defense by pushing that so much just to make sure someone else is not getting those sales. So people don't get excited about that. There's a lot of questions about whatever they're trying to do on the entertainment side. It's not a clean story. But again, that's reflected in the fact that this is still selling at a discount to its historic multiple. And, you know, the bears would say, well, it should. And I guess I would agree. Right. The real question is, will it always? Yeah. Yeah. Okay.

1:05:24Apple, as you mentioned, hit a new high. It's closer to$4 trillion than it is to$3 trillion, which is to me just nuts. Because if you think about the context, Apple intelligence has been pretty lukewarm, like a true release. The Vision Pro has gone nowhere. And they have issues in China, which is 20 % of their market. So what do you think explains the sort of, speaking of a clean story and not, the sort of disparity there between Apple's story and its performance? You failed to mention that the Vision Pro, probably the thing that people were most excited about for them to launch other than AI, has been a flop.

1:06:04Yeah. Like, unmitigated. Did I think I mentioned that? Nobody is saying that was successful. Maybe if I forgot it, it was. Anyway, but go ahead. So I guess this is the way I would put it, and this is a very real politic answer. In the end, it's cash flows and earnings, and do you have them or do you not have them? And Apple has them. And Apple, basically, it's a$200 billion cash hoard with which they can pursue$300 billion worth of buybacks off the cash flow alone over the next couple of years. so they can buy in a ton of stock and they are churning out plenty of profits as a result of the services business staying strong and they can have a flop here, a flop there, an underwhelming iPhone launch, et cetera.

1:06:52But they get the benefit of the doubt from the investor class that whatever's wrong or half-baked in the case of the AI effort, they will eventually figure it out and get it right. and like yesterday they dropped a hint i don't know who sourced the wall street journal but like apple is considering a lighter weight headset yeah no shit because facebook is uh meta is selling a ton of the ray-bans and now they're going to sell this orion uh unit so obviously like that's where the ball is so apple's considering it okay i'm sure it's like all hands on deck internally they they must make sure that the next iteration of the vision pro is a little less dorky.

1:07:36I think it's a problem for Apple that Meta is beating them to the future of AI and mixed reality. Yeah, I watched Zuckerberg on stage with the Acquired guys talking about denigrating the phone as the center of the center. He basically said, you're all suffering from this huge amount of recency bias just because the iPhone has been the dominant lens through which we view the internet. That doesn't mean it's going to be the case the next 15 years. And he kept saying, listen, if you really want to look at a piece of glass. So he is very clearly winning the wearable thing right now. And I guess I just would say, like, Apple rarely gets there first.

1:08:23I think they just get their best. Yep. And I think they'll figure it out. Okay, lastly, NVIDIA. I think when I was at your office the last time it was approaching. The all-time high yesterday. Yeah, right. It was approaching$3 trillion, and you're like, if it hits$3 trillion, I've got to offload some. And I didn't. You didn't. So clearly you believe that NVIDIA has room to go. Does it eventually tail off? I mean, I'll just give literally 60 seconds on why I think NVIDIA might be limited, or what the case would be that NVIDIA is limited, right? It's that other companies are going to come up with specialized hardware for things like inference.

1:09:01That's going to undercut NVIDIA's ability to sell. And also just that their pricing power might not last for as long as they think it will if people aren't going to have real return on this technology. What's your perspective? I don't know. They just told us they sold out of Blackwell chips for 12 months. Okay. So they're okay. Is that what they said? Yeah. Yeah. I mean, to me, that's not a surprise. um they listen this has been this has been this has been the bare case on nvidia is that the hyperscalers will at some point stop spending and i've made this case before but like the thing is nobody knows when right and you know there was talk a year ago nvidia is cisco and remember all those slide decks and charts and presentations where yeah they all right they overlaid NVIDIA over Cisco circa 1999 uh it's doubled since then right it's doubled yes can I tell you one last funny thing of course yeah definitely I just got a dividend from NVIDIA paid into my Fidelity account just see just the idea that they're paying a dividend too is really funny yeah I know I mean it's small percentage wise it's nothing right but it was funny yeah no I mean, it's the gift that keeps on giving.

1:10:23I mean, it's definitely been, you've been early on it and to ride it from where you were to where it is now must be just an unbelievable high. Yeah, it's look, it's the biggest winner I've ever had in my life. And I don't, I think you could live another hundred years and not see anything like this ever again. So I, I'm, I'm, I'm not like beating my chest. Like, look, I got Nvidia. A lot of people have bought it over the years. I just happened to have gotten into it like really, really early before I was excited about AI. There was no AI. So I'm happy about it. And I've sold a little bit along the way.

1:11:01But I think my position now is maybe a forever position. I don't know. We'll see. Okay. We'll see. The book is You Weren't Supposed to See That. Secrets, Every Investor Should Know It by Josh Brown. You can get it at all bookstores today. You can also listen to his podcast, The Compound and Friends on your podcast app of choice. and see him on CNBC at the Halftime Report. And every now and again, Josh and I show up there together and it's always fun to be on with you. Josh, great to see you. Thanks so much for your time. Thank you, Alex. You're the best. All right, everybody. Thank you so much for listening.

1:11:32Thanks again to Josh for coming on. Ranjan and I will be back on Friday breaking down the week's news and we'll see you next time on Big Technology Podcast.