Bullish on Stocks, Bearish on the Economy — The Inevitable Collision

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1:23Take a listen. He's writing this much later in his life, consciously creating this image of himself. And I do want to emphasize how unusual this model is at the time, this self-made man myth, because you don't want to be self-made. It's low class to be self-made. You know, this idea that we have today is the opposite. Right. And it comes from Franklin. Today, there is the derisive term nepo-baity. Well, exactly right. And these days, if you are a billionaire, you had better have a Benjamin Franklin story about starting in a garage, coming up with the idea from nothing. And here is Benjamin Franklin inventing it right before our eyes.

2:07This has been brought to you by Odoo. To listen to more of our American Genius series, listen to business history. New episodes release every Wednesday on the iHeartRadio app or wherever you get your podcasts. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for$15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of$45 for three month plan equivalent to$15 per month required.

2:44Intro rate first three months only. Then full price plan options available. Taxes and fees extra. Default terms at mintmobile.com. about UBS raising the target on the S &P. And yeah, futures, it looks like it's at an all-time high right now. Trump's laying out a 30-day plan to end the war in Iran.

3:05And there's been dispute about that from Iran saying that they, you know, they haven't agreed to fully everything. You know, it's always kind of back and forth. they even one of the reports came that they they told iran to just uh don't say anything publicly like anything that he says publicly because anything that he says publicly is just propaganda for the american public don't worry about it like don't don't don't even worry about it um and then you know we'll talk about the abraham mccoy's he kind of snuck that in there he's on a conference call with saturday arabia uae uh qatar turkey and um they said like he was he said that that's part of the agreement that everybody has to agree to the Abraham Accords.

3:44And he said, when he said that, it caught everybody off guard. Nobody spoke. And he had to actually had to make a joke to get them to laugh. He was like, you know, are you still on the line? If you don't know about the Abraham Accords, that's a whole nother conversation. But there's a lot going on right now, but he's pushing that the war is over. And that has the stock market up at an all-time high right now. So where are we at with this target? Where are we at with the war allegedly ending? Stocks going to the moon as a result of that? Where are we at? The war isn't over. I haven't talked to any U.S.

4:24intel, but I have got a couple of war sources. That's not over. So that part is manipulation. But what I will say due to rising inflation, global debt to GDP is 308 percent the only place you can really put the market is either into a business stocks or tech companies pre-IPO so there has to be capital that is deployed um my end of year target I know UBS is and I talked about this in the stock club last month But my end of year target for the ES could go as high as 8535. There's no reason to short this market. I know everyone keeps looking for a short. Ben Carlson told us like on Stock Club call yesterday.

5:13Everyone keeps looking to recreate Michael Burry's short. But the real trade, and I've said this before, is not the big short. It's to ride the market up endlessly. I have ended up probably at 85 35 by end of the year if not by March of next year we should hit the target hole for the long term um and we not only that this is the greatest class like these last 10 years these are the greatest class of tech companies we've ever seen like when you pair nvidia amd microsoft open ai data bricks anthropic you can take any other and i asked been like have you seen a class with this much quality no like one of these companies if you ported them back into the early 1990s they would smash ibm in 80s and 90s so there isn't there's no benefit and i said it before but all the optimists and all the bears make all the money like being a pessimist you may sell books or subscriptions but in terms of creating real wealth um you have to hope for the long term 85 35 is my my long-term target for the s &p i had it i had that said last week i said 7900 to 8100 i think i'm going to lead more toward that 8100 um if you're looking at at the futures market i think the first thing i looked at obviously the market was closed today but the first thing i looked at was where's oil because Because that'll tell me how we're going to look on tomorrow morning.

6:44Oil, I think it got down to$90 a barrel. Yeah, it got to$89. It's creeping up right here now. It's at$91. But you can see how the market's responding. All the large, the NASDAQ, the S &P, the Dow are all up on that anticipation, which is great news for the companies that we invest in. Because when you see prices go down, then you obviously start thinking about consumer spend. And consumer spends look pretty good, even with gas prices going up. I know the average price in, I think, all 50 cents is now$4. Summer month, you start to see more spend and travel. So that is always good. That means that, you know, rates potentially, and I know the new Fed chair got sworn in Friday.

7:26Again, historically, that usually means that there's going to be a down cycle at some point. We haven't seen that yet. But there's some hints that there might be some interest rate cuts and there might be some like pressure to do that uh so we'll see but yeah we're in a unprecedented time when i mean just think about five years ago how many companies had a market of a trillion trillion yep we have 13 right now yeah we are so it was saudi and ramico and apple now yeah 13 even think about this like a hundred billion dollar company as isn't even taken serious anymore until you get to a quarter of a trillion no one has mass interest anymore yeah we're like them we just saw cerebus and i think that the evaluation was 155 billion and they were saying like oh it's a small ipo it's a disappointment small like in in context to what spacex could potentially do at nearly two trillion we've already talked about anthropic and open ai at one trillion.

8:32These companies are IPO-ing at a trillion, which is going to add to it. Micron is on the cusp, potentially, of being the next trillion-dollar company. Walmart passed it. There's real revenue. It's an unprecedented time to not be part of this market. We talk about one of the biggest mistakes is not partaking in the market. Yeah. But that midterm drawdown with the new Fed chair, I wonder what that's going to like you said he's going to be forced to go in a particular direction I think that will cause a mid-summer turnaround for sure don't panic in July and August I had a phone call about that I was like well I'm bullish on the market and I'm like you know in mid-turn years like well why do you say you're bullish and then you give us information like that I'm like I want to give you the total picture so nothing surprises you I'm going to give you all the information that I can possibly give you so that you could have it and you can make informed precise decisions that's what it's about all right like i can't press the button for you but i can give you information and so i want you to know all that i don't want hey you never told me about midterm elections and how that could potentially affect the market well here it is right you never told me about august and september and october and how volatile that can be well we're saying it proceed with caution because because Ian, you did bring up something last month, last week where you said in modern history, it really has been only three years of market downturn.

10:08That's true for sure. But there was also a flat for 10 years in early 2000s, but also a lot of the reason why there hasn't been a market downturn in 10 years is because it's been artificially inflated by the amount of money that's been pumping to the economy, which is not sustainable. So there's global economic issues at play here that are bigger than companies. Their bigger program is a bigger program that's looking shaky. So companies look strong, but the bigger program is on very shaky ground right now. Is it going to make the program hit the printer or no? It can't. You've already exhausted that option.

10:49I don't think you, how long can you do that? Since 2020. and to your point you could argue without that that money printer since covid we would have relived that flat decade you think hell yeah with the level of innovation it would have been worse than 2008 i've always said i'm 2020 on it would have been worse than a great it would have been worse than the great recession 25 of all capital and all cash ever printed happening between 2020 2021. Yeah. They just put money into the economy. It's so much stuff. Think about this. Even in our community, even being a decamillionaire isn't celebrated like how it would have been 10 years ago.

11:38Oh, no. A decamillionaire 10 years ago would have been a lifetime generational crown and achievement. especially like if you're in the midwest or now if you're a decade millionaire in east coast or west coast that's damn it feels like a million and some change in a smaller city i've never seen as many people talk about potentially getting to 40 and 50 and 60 million dollars um and it was even posted earlier today i think there's like i think they said it's like seven to 8 million people that have a net worth higher than nine to$13 million, that's because of the money printer. Yeah, for sure. So, but that's not sustainable.

12:30Are you bearish or bullish? No, you can be both. I'm just saying. What are you? When? You bullish or bearish? I'm bullish on the stock market bearish economy. Okay. See? Yes. But it's going to collide eventually. The bearish on the stock market is going to come. The bearish on the economy is going to impact the stock market eventually. But even with that, the circular investment into AI and the data center thing we have to talk about too on Blackout and how it's affecting water supply. The environmental impact. Oh, my God. Like, it's a real concern. Even if I know people like sometimes make fun when I'm like, hey, I'm in Mexico.

13:15I'm studying the ocean. The waves of the ocean is more sarcasm than ever. But even sea water temperature has raised four degrees in the last year and a half. For those you don't know, it takes a lot of power to warm up a sea. That will have great ramifications. and with the water supply drying up literally and being tainted in the Midwest and Southeast, we're going to have an ecological crisis like something we haven't seen if we don't get this shit in order really fast. What do you think about the circular economy idea? We saw, obviously, Oracle got hit, Microsoft got hit. That story really hasn't changed, but those stocks have kind of not rebounded all the way back to their all-time high.

14:05They've stabilized. They've stabilized, but the story really hasn't changed, right? And so it almost feels like, was it over-sensationalized? Definitely needed to be called out so that people are aware of it. People sold out of those stocks, but you're starting to see. We just talked about Microsoft. Even NVIDIA was a part of that. I mean, they're pretty much the centerpiece of this. But it hasn't been affected the same way as it was, let's say, late October, early November, when we started to hear more talks about it and people started to unpack this quote-unquote circular economy. Like any Ponzi, it's under sensationalized.

14:48Alleged. Alleged. Alleged, right? So I'll say for the record, it's good going back to the relationship part. The put protection for a lot of these companies is Hefe and D.C. I think one of these companies could have had a cataclysmic restructuring if it was not for the relationship there. And I don't think we've seen the last of it. I think some of the companies that have gotten beat up are not favorable with him there. and do i think we'll they'll never let us have like the crash like we did in 2008 but if you ask anybody in tech that's a couple of these companies should not have gone under already they're they're lying so intel will kind of intel will fit in there right it's the reason why you save intel but you let spirit airlines go right just in terms of companies it's a selection yep Yeah.

15:42And then have NVIDIA invest in Intel. Or if not, then when I go see ZZ, then your business in China is going to be restructured and all of it goes to Huawei. My grandmother used to tell me all the time in politics, enemies make strange bedfellows sometimes. Like you're going to have to make some deals and have some concessions with some people you don't want to fucking do business with if you want to stay alive. NVIDIA and the Intel situation was a prime example. There's a prime example. That's a fact. Shout out to everybody that came over from the Knicks game. They're about 25, so that's over.

16:18It's over. They swept. Shout out to everybody that, you know, has made a decision to invest in their education. You know, we love the Knicks, support them. But, man, you guys, Mark and Monday's match, it's you guys versus the world because you are the dedicated few. It's like the Marines. You only need a few good men and women. And you guys are the few good men and women that's out there. Love y 'all. Appreciate y 'all. That's changing the world. You've chosen education over entertainment. And that's something in this world that's extremely difficult. And that's very rare. So kudos to you guys.

17:04And you brought up Huawei, and I think that's a company that people should know because of the innovation. and the importance of China. Right, so there was a new article that came out in the journal. I think CNBC covered it as well. Huawei is now trying to create semiconductors that will go inside of compute and will go inside of phones, which is a direct competitor to Apple. Apple for sure. Apple for sure, but also NVIDIA and somewhat. And this is a lot of times when you have to read and actually take contextual clues out. So, yeah, potentially it could be a competitor, but they said they won't be online until 2031.

17:45So, I mean, take that, but innovation is happening, right? This is a long-term game. This is not like, hey, who wins the next three years? It's who wins the race 20, 30, 40 years out. So the fact that they're innovating at this level right now and that they have, again, NVIDIA is the leader now, but who knows what that looks like in five years in terms of that market, which is why I'm sure he's trying to get back into that market. Yeah. And Huawei phones are better and tablets are better than Apple tablets and phones right now. That technology is sick. Sick, bro. Yeah. What country was that? I think it was Senegal.

18:24And I mean, Huawei, they had a display at this economic forum. And I mean, the technology that they're displaying is just like, yeah, it's ridiculous. Ask yourself, what are your best people spending their time on right now? Expense reports, receipt chasing, month-end close that takes weeks. You become what you spend on, and that's not what you're building toward. Brex is the intelligent finance platform that eliminates that work before it starts. AI agents that handle the manual stuff automatically, so your team can spend their time on what actually compounds. It's time to get Brex AF. Learn more at brex.com slash AF.

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