The Real Reason Stocks Are Going Higher!!

0:28Hello, everyone. We've got a lot to discuss today. The U.S. national debt continues to grow to the sky at an alarming rate. It's not a big secret. Frankly, thousands of people yell and scream about the problem every single day online. But new data suggests that the debt ceiling, which remember, is supposed to limit how much money the government can actually borrow, the debt ceiling may actually contribute to a higher national debt over time. Wait, what? Now, you can see in this chart from Global Markets Investor on X that the national debt explodes higher as soon as the debt ceiling is raised or removed every few years.

0:59has the opposite effect. It almost seems like the national debt is a coiled spring when it hits the debt ceiling. The second that the politicians strike a deal to raise the ceiling, the national debt flies higher. And the problem has become even more widespread than merely a fast-growing debt. The United States government is now paying more than$1 trillion per year on the interest for our debt. That chart should scare the hell out of every single American citizen. But you know what's even more insane than the US having a$1 trillion annual interest payment, back in 2022, one third of all Chinese provinces were allocating their entire provincial revenue to simply service their debt.

1:39Now, one out of every three provinces, that's a ridiculous number, 100 % of their revenue was going to pay off their debt. And that was back in 2022. So imagine how much worse the situation is now. Now, I share this data about China to highlight that the debt problem in America is actually a global issue. Politicians and central bankers have lost all discipline since the global financial crisis. It didn't matter what language they spoke, what higher education degrees they boasted on their resume, or which geography they lived in. They all printed as much money as they possibly could, and it has led to total economic destruction of their finances and the debasement of our currencies.

2:14But thankfully, the story doesn't end there in tears. There's still hope out there, I promise. If you want to be wealthy, you got to figure out how to own equity in a business. Nick Maggiulio shows that the poor own cars, the middle-class own homes, and the rich own businesses. Nick says that starting a business doesn't guarantee great wealth, but it's one of the few paths to get there. And we are watching the investment dollars from those businesses flow towards the future of software and artificial intelligence rather than the old world. See, here's the thing, is that old traditional office spaces have a high density of human labor, but we might not need those people.

2:50Michael Arruth shows that the likelihood that data center construction spending will eclipse office construction spending is probably gonna happen in the coming months. Data centers is where it's at, so is software. So what's happening to the businesses helping to fund this build out of the future technology? Well, they appear to be winning in a big way. Mike Zaccardi shows that the top 10 largest companies in the S &P 500, they are dominating the remaining 490 smaller companies. Mike explains that the 10 biggest US companies have driven almost all of the S &P 500's earnings per share growth in the past two years.

3:22So welcome to the new economy. It is beating the heck out of the old economy. Just take a look at Berkshire Hathaway stock. Opening Bell Daily's Phil Rosen points out that Berkshire Hathaway has dropped 15 % since 94-year-old Warren Buffett announced his retirement in May. The stock has underperformed the S &P 500 by 26 % since that date. It was also the last time that the B shares actually hit a record high for Berkshire. The national debt's not going to stop growing. The interest payments are a major problem, both here domestically and internationally. So asset prices are all going up because the currencies will be debased.

3:56But the most efficient companies positioned for the world we're hurtling towards, those are the areas where the best investment opportunities lie. Oh boy, Alex Karp and the team at Palantir, they have built an insane company. They just reported their Q2 earnings and it was a blowout financial performance. Palantir drove$1 billion of revenue in a single quarter for the first time in company history. But what was even more interesting to me is that the CEO says Palantir is going to grow their revenues while shrinking their employee headcount moving forward. And now Alex Karp, CEO of Palantir, he's not exactly one to shy away from saying what's on his mind.

4:32In the company's earnings call, he literally told the haters to read the results and weep. Watch this. CEO and co-founder Alex Karp saying, quote, just tell the haters, read them and weep. CARB telling me with some notable exceptions of some big international clients that, quote, this is an America story. It's everywhere in America. We're going faster than we are even able to grow. Like, we're going to have to start turning away people. We are now very focused on people who are partners that are willing to learn from us and then ramping them up very quickly. Palantir posting a rule of 40 score of, get this, 94 % for Q2.

5:06That's, that's, higher is better. This is basically an unheard of metric. Now, you know what my favorite part of the Palantir story is though? It's the fact that retail investors saw the opportunity before Wall Street. This allowed the self-directed investors on the internet to pile into the stock before Wall Street realized how successful Palantir would be. Those retail investors continue to do very well as Palantir grows. So you're gonna end up with an engaged and energetic retail shareholder base. And that shareholder base is going to serve as marketing for Palantir moving forward. So please, if you are watching or listening to this, stop sleeping on retail investors.

5:41They're setting the tone in financial markets. And Palantir is one of the latest examples. Wall Street's finally waking up. If you see where retail is going, you can then understand how capital is going to flow in the mid. If you can see where retail is going, then you can understand where capital is going to flow. And ultimately, you'll see which stocks are going to go higher over time. All right, ladies and gentlemen, we've got a very special treat for us today. I've got Nathan Halberstadt coming on to actually explain to us what is going on with Gen Z and young Americans. Why do they feel like they are so far behind in today's modern economy?

6:16Nathan works at New Founding, which is a great organization that is a mission-driven allocator of capital, trying to solve civilization's problems. And so this conversation is something you're going to want to pay attention to. Here's my conversation with Nathan. All right, Nate, I thought a great place to start the conversation. You created a viral chart over the weekend. And in that chart, you basically show that people who are married over the age of 30 and people who own homes over the age of 30 has essentially fallen off a cliff over the last couple of decades. Why did you create the chart?

6:42And why exactly is this happening in such a serious way over the last couple of years? Yeah, thank you for having me on, Anthony. So what's what's important about this graph is it shows the the actual reality of what's happening on the ground in the lives of young Americans. And as you pointed out, it's shocking because it shows this cratering in the percent of young people who are both homeowners and also married. And I think there's an obvious civilizational concern here that we all share about something like that. But I would even say as well for your audience, for investors or people who are operating businesses, there are also interesting implications that we should also get into.

7:19In terms of how this all started, just to provide a little bit of context, I was on Twitter, sending some jabs basically back and forth with a few boomers. I mean, ultimately, the post that spurred all of this was I was talking with some individuals about how boomers are a little bit softer on the migration question than Gen Z. And of course, some boomers were in the replies basically talking about how much harder actually in many ways boomers had it versus young people today. And this is sort of the narrative that I wanted to actually push back on. So this lady, Carol, who I'm sure is a lovely individual, she posted, don't forget the 22 % interest rate fiasco in the early 80s.

8:06And I think this is a part of a narrative that if you're a young person like I am, I'm Gen Z, you constantly hear about the high inflation. And of course, that's under Carter and maybe helped get Reagan elected. Or if not the high inflation, then sort of the high interest rates that came later. And there were, of course, multiple small recessions in the late 20th century that are these were significant and they did impact people. But I think one one thing that I wanted to highlight is the actual impact on the life of young people is much smaller. So what we see in the data in the chart is that from 1950 to 2025, the percent of young people who are both married and also homeowners declines from over 50 percent to close to 15 percent.

8:52And there's a lot of different reasons why that might be. And I'm happy to I'm happy to talk about that. Yeah. So let's talk about maybe homeownership first. I think that if you control for marriage, certain pockets of Americans own more homes today than they did previously, and then other pockets, not so much. And what I always wonder is how much of it is the young people just realize owning a home may not be the great financial investment that they previously were told by their parents and grandparents. And so instead, they're like, look, I'll just rent, and I'd rather put my money somewhere else.

9:22That's kind of maybe one thought process. The other thought process is I think that there's a lot of folks who they enjoy having kind of the temporal lifestyle that comes with if I buy something, I kind of can't leave. Right. Instead, I can rent something for a year or two. And then if I decide I want to move to a new city or I get a new job or I meet someone or I just want to travel, I have the ability and freedom to do that because I'm not tied down by this piece of real estate that I bought. How much of that stuff do you think plays into this? Andy, that's a good point. And that's absolutely a factor.

9:51What the data shows is that there's an increasing rate of young people who are delaying purchasing a home or just not purchasing a home at all. And I would argue you should think about this as young people in two different categories for the most part. One is a category that I do believe is properly boxed out. I really do think that people who are below a certain income threshold are no longer able to purchase a home. And one of the biggest changes that has occurred, of course, is that from 1950 to 2025, the multiple of median home price versus median household income, right, it used to be a 2x multiple, and it's gone above 6x, right?

10:31So there's a lot of people who maybe with a certain type of job used to be able to purchase a home, and they're just no longer able to. But you're absolutely right. There's a second category. And that's young people who are actually often quite sophisticated, quite successful, probably people like yourself, Anthony. I don't know when you purchased your first home or if you own a home right now, but there are people in a certain category. I know Mark Cuban has, for example, talked multiple times about not purchasing a home at too young of an age in order to give you more flexibility to move around, find new job opportunities.

11:02If you're an entrepreneur or an investor, being somebody who has a little bit more mobility, there's definitely an advantage to that. So I'd say there's sort of two different groups there. The first one is maybe boxed out more as just a matter of circumstances. The second more as sort of a cultural or choice based thing. I think we should sort of think of those separately and acknowledge the reality of both of those. Now, let's talk about marriage. On the other hand, you know, obviously, I always tell my wife that I feel fortunate. Like we were the last people through the door before the dating apps really like exploded.

11:34You know, we met each other in real life. And it feels like if you go and you talk to young people, we have a lot that work with us at our various companies. they'll talk about they can't find anyone. They can't actually meet the type of person that they're looking to meet. They're just constantly on these dating apps. And it's just kind of like this hookup culture or there's like swipe, swipe, swipe, swipe, swipe. What's driving the marriage thing? Is it like a lack of people wanting to be married? Is it the dating apps? Is it something else? Yeah, so one thing that we could look at is basically in 1950, 90 % of 30-year-olds were married, roughly speaking.

12:08It differs a little by gender and there are different data sets as well. And now the percent that's married is closer to, you know, it's lower. It's lower than, you know, 50 % type range. That's basically halved. And again, there's a lot of different factors here. You, of course, have people who, you know, who are in relationships, who are just delaying marriage for a longer period of time. The dating apps are, of course, a factor. I mean, relationship dynamics have been shifting. And there's been so much discourse, of course, about this. I mean, one thing that might be reason for hope is what I guess what I've actually seen from younger people is a more recent rejection of the dating apps in that sort of culture.

12:48I mean, if you just look at Match Group, which owns Tinder and many of the other dating apps, look at their stock trajectory over the past five years. They're down 70 % over the past five years, and the company is not doing well. I think increasingly, people just don't see dating apps as a great way to meet great people. It does, I mean, of course, has happened. But, you know, what you see now is more people returning to church or returning to try to find high trust, you know, high trust communities or dating through friends and family networks and things like that. And that's a reason for optimism.

13:20So in some ways, I'm optimistic that more relationships will form more organically, a little bit less online. And that'll be a good thing, I think, for society. society, one dynamic that I would point out here, and this actually relates to, you know, why did the floor drop out so badly for Gen Z in a way that it didn't drop out for, let's say, boomers when there was a recession or when interest rates were high, which they were. And it's really, it actually has to do with social trust and institutional trust, in my opinion. When the floor dropped out for the boomers, I think there was social fabric in place to catch them.

13:55And today for young people, there really isn't in the same way. And that, of course, has implications for economic implications, but it also has implications in terms of dating and marriage and things like that. The silver lining would be, I would argue, there's been a little bit of a recent turnaround where I see some reason for optimism. What are the economic fallouts of that? And what I find interesting is there's people young and old, domestic and international. There's all kinds of people who watch this show. And there's some portion of them are going to be like, oh, my God, he's got a real live Gen Z-er.

14:23right here. He can ask him questions. First one in the lab here, in the lab. So give us kind of like, what are your friends talking about, right? Like kind of pull back the curtain, if you will, in terms of what you think some of the economic things are. And maybe if you even think about this as like, why does Gen Z feel like they've been left behind and how do we fix it? Yeah. So one thing that I think investors and business owners and others should know is that you know the i'd say the youth are are dissatisfied in many ways on both the left and the right to a to a greater degree than the past they're more ideological on the left and the right and they're and they're more radical and and figures like the one that we've been talking about are a part of are a part of that story i think a lot of people a lot of younger people i think feel like they maybe have to uproot themselves more heavily than they would have in the past in order to succeed right it means moving multiple times first for college and then for early career to a big city and then somewhere else for, you know, somewhere else for maybe an MBA or whatever else.

15:23And, and so the people who's who have succeeded, maybe have sacrificed more. And then the people who haven't succeeded, it's been quite hard for them, or there hasn't been the same fabric in place for them to have sort of just a normal life, you know, three, three, four kids and, and purchase a home and you're, you know, in your late 20s and the rest. So these, these have led to more radicalism. You know, maybe for investors, some things to consider would just be like the risk of political instability. We obviously see Mamdani in New York City potentially going to win the mayor race there. And he's, I mean, he's genuine, he's a charming, but pretty resentment filled socialist and seems pretty likely to win.

16:02And, you know, there will be, there will be, there will be implications from things like that for, for sort of investors and business owners and, and others. So beyond the political instability, I would say. There's also just sort of a risk of policy shifts that it might be interesting to get out in front of. And we'll talk about this hopefully shortly here. But there are, let's say, offshore scammers and people like this who are using AI tools or other mechanisms, basically. And they are targeting, in my opinion, they're targeting businesses in America and hurting young people. And I anticipate that there will be certain policy shifts in the years ahead.

16:48So obviously, we see the tariffs going in, in place, the EU and, you know, increasing, let's say, deglobalization or isolationism. And some of these things seem increasingly likely in the decades ahead. And so those would be things where you'd want to sort of reposition yourself around being invested, you know, more locally, invested, you know, hiring people who are more local, tighter personal, tighter in-person networks and things like that. All right, let's get into, I saw you in this little dust up with this guy, Akshat, I think is how you say his name. He runs a offshoring company that, you know, the promise of these firms is, hey, I have really smart, maybe sometimes even US educated people who have moved back to some foreign country.

17:30I will contract with you in a US-based business. And basically you can offshore your talent now and you can do it with what is presented as similar quality at a cheaper cost. And I think in this case, from what I could see from kind of the outside looking in, you got into a little social media tiff with the guy who's got a bunch of Indian citizens who are US educated, who've moved back to India. And he's basically promising much lower wages with the same quality of work. Why don't you like that? Yeah, I mean, the reason that it's a problem is, you know, Fortune Mag reported last week that 60 % of new college grads from class of 2025 are unemployed or underemployed.

18:12And these are people who graduated back in May. And so when I think about the people who are, you know, a few years behind me from my high school or just friends from church or other networks, you know, it's been quite hard for them define the sort of entry level associate or analyst or even an executive assistant or administrator type type type roles. And there are there are two things, I think, applying a lot of pressure on them. I mean, one, one is AI technology, which is advancing, and it's very good at doing sort of low and white collar work. And it's very good at being sort of an analyst as as as we were talking about that graph earlier.

18:48I mean, I generated that in chat GPT. And and the end, And, you know, that's something that two or three years ago, an analyst would have done, an entry level person. And so in some ways, it feels a little bit like for younger people, the ladder is being pulled up a little bit behind them. But what's exacerbating this is this sense that the opportunities that remain are being distributed out to foreigners, to non-Americans, even in American companies. And so, I mean, the Washington Examiner reported three weeks back that Microsoft applied to fill 14 ,000 low-cost H-1Bs. And at the same time, they're firing 9 ,000 Americans.

19:27So that feels wrong, basically, to a young person. You could sort of ask, like, how many college grads did Microsoft actually hire this year? And did they hire more foreigners or more Americans? And isn't Microsoft an American company? And so that's the burning platform. That's the sensitivity here. And I think why why actually when I started getting in this spat back and forth with Akshat, this guy who professionally offshores American jobs to India. That's why I think it felt incredibly salient. And I'm happy to go through the sort of the details of the back and forth exchange. So I'm going to play devil's advocate for this because I think there's a lot of people who would say, OK, that sounds like Americans, you know, young kids get your game like, you know, pick your game up.

20:09Let's go. Let's be more competitive here. Either accept less money or increase your skills so that the American companies have to hire you over somebody else because you're just better. Now, there's a lot of nuance in this. Right. But I think that there is this general sense. And frankly, it usually comes from more boomer type folks who are like, I don't want to hear any of the excuses, like just like be better. What's the response to kind of that talk track? Yeah. I mean, I think we need to be high agency and encourage people to take responsibility for their own lives and their own actions. But at the same time, we need to make sure that there are pathways open for the people who want to go through them.

20:48I mean, one way that I've tried to frame this to sort of more the boomer type is basically just say, you need to invest in the next generation if you even want things like social security to be funded. Or if you want there to be people who are here in America who are doing well. and sort of carrying on this sort of American project with the values that you have and, you know, continuing to build strong businesses here in America, you know, you're going to want young people to succeed here. You can't just offshore all of it. And if you do, then that will, you know, create, I think, an existential crisis for America.

21:25This will also just further exacerbate the political instability here in America. out. So the other thing that I would basically argue is that there is something of a labor arbitrage here going on that I think there are reasonable reasons to be against it. The same reason that, let's say, goods coming from overseas, India, Singapore, etc., Trump has been negotiating tariffs on those goods coming in from overseas. I think we should think about white collar service industry work in a similar way. I mean, if the wages in India are a quarter or an eighth or a tenth, then these individuals, I mean, I think it is reasonable for the government to put in place some sort of a barrier in order to foster sort of like local talent here in America, which we need in order for our society to continue to do well.

22:20So what could that look like? Is that something where you say, hey, look, anything that the American company is going to pay to, let's say, an Indian citizen who would take one of these jobs, we actually are going to tack on an extra 25 % that the American company's got to pay to maybe it goes to young people or some sort of education thing, or it's a government revenue. How do you think, and I know you're not a politician, but how does that type of system work? No, that's the right question. The first thing would actually be mandating disclosure. What I found, and we'll talk through the narrative here, but Akshat was working with hundreds of American companies, but he had NDAs with all of them.

22:58So we don't even know really the scale of the problem. So the first thing would probably be to mandate disclosure anytime a US firm is offshoring American jobs. And many times this offshoring is particularly egregious, right? You see the Investment Banking Associate, you know, this is, you know, over 150k a year American job for a young person, and it's being replaced by an under 50k per year person in India. So So disclosing when that happens, you know, if you're if you're doing that, then your local politicians and customers, clients deserve to know, I think. And because it's a thought process there, because it's fascinating, right?

23:32When they do that as a business owner, if you went and you talk to them, some business owners would just be like, well, look, I'm going to where the most talented, cheapest capital or cheapest labor is. And I'm going to go and I'm going to hire that. And as my job and my fiduciary duty is to drive as much profit as possible. Yeah, you know, whatever. Right. What I think you're making an argument for is you're well within your right to go do that, but there are negative consequences to doing that. And you may actually be short term benefiting, but at a long term cost to your local community, the young people, the country, et cetera.

24:04And so is there some way to balance the short term versus long term impact of these decisions? Maybe disclosures is one aspect to it, but also I think you're making even an argument of like it's anti-American to a degree. Yes, it is anti-American. And I think that after the disclosure, there should be serious conversations about about taxing the offshore labor. And there's a number of different ways you could structure this. I mean, you could you could basically charge close to like American income tax levels of taxes on that labor that is going overseas. And even if it doesn't, you know, even if it doesn't bring the cost of the offshore labor to the same to the same level as in America, it could help balance it out a little bit and provide a little bit more breathing room for for young Americans.

24:45And it brings in more revenue for, you know, to the United States. Like this feels like a very, very reasonable position. One other risk that I would actually put out there is that is that, you know, there are there are there are security and shareholder. So national security and shareholder concerns that also come into play here. So one of the investment banking firms that Akshat was working with here in America works with one of the largest healthcare providers in the United States. Through our digging, we sort of traced this. And you have to ask yourself, what are the risks of an investment banking associate getting sort of all of the material private information of sort of a major American healthcare company?