A Crash Could Be Coming But Not for the Reason You Think!

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2:17Learn more at brex.com slash AF. Let's talk about the strength of the market and a few interesting things. I saw on Instagram, I put in a group chat. So S &P 500 relative to M2 money supply is almost exactly where it was at the dot-com bubble. And then also the S &P, the dot-com bubble overall chart laid over the current S &P 500 chart. It's almost exactly the same. So a lot of people are starting to say, this looks a lot like the dot-com bubble and a market crash is coming.

3:09With all the kindness and love in my heart, from me to you, from Xander to you, if you think a crash is coming this year, you're misinformed will it come next year yes the great part about my thesis about people say why invest in two index funds if they hold the same companies um team clipped this up i've always said for mitigation of risk notice when software stocks were down 20 to 35 to 55 the s &p was only down 3 % and everyone was panicking like it was 1999 or 2001. I will say despite the difference between 99 and now is that companies, okay, think about it this way. I criticize Apple while being at$4 trillion.

4:03In 99, you couldn't put six companies together that was half as good as Apple's fifth competitor. The strength of the market is better because the companies are better. Look at Anthropic. And despite all the stuff I've said about Sam Altman, and that's been revealed in the book that's come out and all the investigative journalism, that company's worth a trillion. Anthropic's worth a trillion. SpaceX worth it pre-IPO. Maybe two. Maybe two trillion. Arguably, right? So the strength of the companies are better than we've seen. and you can't leave out Google, you can't leave out Lily, you can't leave out, there's a bunch of companies if you go down the list of Dow, the S &P, the NASDAQ that are just, are like some of the highest grade of company that we've ever seen.

4:55So the comparison would be false and wishing for a crash does what for you? It does nothing. Even if we, let's say we drop 50%, you know, like if I can be very honest tonight, you know who doesn't give a damn about a crash the people who've been invested the last 10 years a 50 drop means if you're up 2 500 3 000 like the people who got an expedia in 09 20 they don't care about a drop that's why length of hold like for you guys it's already been what seven years i don't think y 'all selling in the next three why because you've extrapolated what what the ip is going to be worth in 22 years so I think everyone who wishes for a crash are only the people who've been sitting on the sidelines I think I'll say this I'll say that they do care if there is a crash from the standpoint of great here comes a new entry point for us to go to buy it's going to be another yeah I think the dot com era is hugely different and I think you kind of touched on it but when you look at the revenue that these companies are bringing in that changes it when you're talking about Apple, NVIDIA, Broadcom, Amazon, Google.

6:07You're talking about Meta, trillion-dollar companies. Sandisk, Micron. I mean, Micron's not even a trillion-dollar company yet, right? But we've been in this company since it was 100 billion. It's probably sitting at about 500 billion now. Sandisk is not even at 200 billion yet. There's so much more growth for these companies. The demand has not changed. And we're still at the start of a revolution. I think that's what makes it very different from the dot-com bubble. and this we're going to see every but i was the start of a revolution too true dot com i was going to say we have to start at this revolution but the demand is there and we're starting to see now companies that are about to ipo that are going to have some of the answers of how we now monetize it right like i personally just upgrade like claude same hit the upgrade right the run that they've been on right like i started out as a 19 subscriber to claw pro i've recently upgraded to a 200 subscriber to monthly why because of how i'm using it on a functionality basis so that starts to tell like here's the story of how we can now monetize on some of the ai that we're using menstrual is doing it in europe there are more stories coming out we already talked about man and what meta's doing so the use case is slowly starting to creep into the story quarter after quarter we keep thinking okay well the demand's gonna change the demand's gonna change in every quarter that we've seen and we're gonna see big companies coming up next week the the mega cap companies will be reporting i know there's something that's gonna be reporting this week as well that hasn't changed right we just saw tsm demand has actually tripled well would you say would you say some of the best companies in human history came out of the dot-com era a few a lot of them a few I think there's more Google, Amazon Google, Amazon Amazon for sure part of the dot com era it changed the world it birthed some of the strongest companies ever it revolutionized the world started a revolution a lot of the same talking points dot com wasn't like NFTs there were a lot of companies that bust the AOL Time Warner merger.

8:20But the key is why did they bust? Why? Because of the revenue, right? Were they bringing in revenue quarter to quarter to quarter to quarter? Was there a demand for their services? There might have been a demand and there might have been an influx of companies in the dot com. They were trying to create the demand. Exactly. And that's the difference, right? So when we're looking at demand, we can clearly see it. How do we see it? Because we're watching it being spent with a lot of these AI companies. There's a reason why Broadcom is now almost a$2 trillion company. There's a reason why TSM is having this triple increase in demand.

8:55It's the reason why ASML is shipping out machines to a point where they can't even meet demand at this point. And that's just from the AI infrastructure. If we start talking about energy, if we start looking at the GE renovations, I know we're going to talk about a few other energy companies. There's demand there. There's demand for infrastructure. There's a huge revolutionary demand that's happening that makes it a little bit different because of the revenue that's being brought into these companies. The question is, why did they bust, though? Hey, yo.

9:26You ready? But, Rashad, to your point, though, I would argue, even in this AI... American pie.

9:37Yo, I love the show. Yo. Powered by... Mado, we need you.

9:48but in this ai era there's a few companies i think that will suffer the same fate as some of the ones in the dot com era um if you look worldcom was a part of that excite web van e toys pets.com geocities netscape who was acquired by aol the prominent players that came out of it was amazon google video um intel dell compact went under so you're going to have a like the premise of look look what you just said you said you said Nvidia Amazon Google put an asterisk more death in in in that dot-com era and a bunch of money wasted though this is gonna be a lot of definition in this era the cream always gonna rise there's a lot of great rappers of New York in the 90s but there was 10 ,000 rappers in New York that never made that was a bust is it is are putting nvidia because it ipo'd during that era because nvidia was not a darling in the 2000s right it's not it's not it came but it came out of that era it came out of it you can argue there were probably four to five great companies versus i don't know my math maybe i think it was 122 what are we saying the years are for the dot-com era 99 well 90.

11:08let's go 96 to 2000 pre-world tracing, so 2001. Yeah, so then Google doesn't IPO to 2006. Right? So we don't... Meta's 2012. We didn't say Meta. Meta's a social media company. Google is a dot-com company. But Google's a 2006. Yeah, because the dot-com era technically is 95 to 2000. It was like when we were in high school. 2001 is like... Intel, Microsoft benefited, but microsoft ipo and here's the other argument too this revolution has helped those dot coms so a company like dell was over left dell has completely changed their business strategy right and we were talking about this company a year ago and i said look this is not the dell computers that you thought this is an ai story now right they're doing the racks they're figuring out how they're going to manage and utilize ai to the point now they hit a 52 week high today this is that was a company that you wouldn't even think of when you were talking and now there is a craze so that some companies will not make it right we saw all birds saying hey we're going ai must have the bubble look recession indicator that doesn't help our argument right when you're talking about a company that didn't really move when they were selling their own product now going into AI.

12:34Okay. There's a case there for that. And then there's also geopolitical risk that we can't account for. If your best finance people are doing expense reports, chasing receipts, or spending time on month-end close, it's time to get Brex AF, a gentic finance that eliminates that work before it starts. Learn more at brex.com slash AF. This is Sophia Donner from OK Storytime. This summer, find your next obsession on Prime Video. And listen, we're not saying you need another obsession, but there could be a lot worse ones. Steamy romance, addictive love stories, and the book-to-screen favorites you've already read twice, so why not watch them a third time?

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