In short
The episode argues investors should be “picky” now: stay bullish but more cautious on AI/tech due to rising Treasury yields, stretched valuations, and shifting risk toward treasuries and away from foreign markets.
Guests (backgrounds)
- Julia Ostian: Tech/AI-focused investor; looks for real value amid AI hype; trims when valuations get stretched; also watches beaten-down sectors like defense.
- Jack Bowman: Macro/bond advisor; emphasizes 10-year Treasury yields and Fed credibility; notes clients asking about treasuries again.
- (Host/others referenced): Steve Kress (pre-market market/yield focus); Jared Dillian (prioritize risk, not return); Kathy Wood (ARK) is discussed.
Key claims
- 10-year yields around 5% make treasuries a “risk-free” alternative; avoid long-duration/overvalued stocks.
- Yields are driven more by lack of trust in the Fed than by the $40T debt headline.
- AI “rogue” fears are viewed as marketing/regulatory capture; real winners are infrastructure (chips, memory, networking, power).
- Valuation asymmetry: upside may be modest while downside can be large (example AMD).
Notable examples
- Meta +30% recently → more caution.
- Avoid long-end treasuries: under 10 years “fair game,” over 10 years “not touching.”
- Infrastructure holdings: Micron; SK Hynix (after IPO); speculative: Bloom Energy.
- Defense/space/quantum names (e.g., AVAV, KTOS, Intuitive Machines, Lunar, Rigetti/continuum) are described as temporarily out of favor.
- Palantir: strong/“misunderstood,” but near fair value; watch/pullbacks (e.g., ~$120 buy zone).
- Netflix and Uber discussed as value/ads/network-effect opportunities.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOMarket Sentiment and Treasury Yields
0:45 to 3:00
Discussion about current market conditions, including a cautious outlook on stocks and the appeal of treasury yields.
“So I'm still bullish with a lot of things such as AI and a lot of companies that I was bullish a few months ago, but I'm more cautious about it.”
Focusing on Tech and AI Value
3:00 to 4:30
Investors share their approaches to finding real value in the tech sector amidst hype, particularly in AI.
“And we could return to that a little later.”
The Shift in Bond Markets
4:30 to 7:16
Discussion on the changing attitudes towards treasury bonds and their implications for investment strategies.
“is still just fine, but I think the yield really pulls a lot of money out of foreign markets.”
Concerns About Inflation and Investment Risks
7:16 to 9:30
Exploration of inflation risks associated with rising yields and the challenges in managing debt in modern economics.
“And I don't think that we could modulate our spending lower to fix it.”
Kathy Woods' Predictions on Inflation
9:30 to 11:40
Debate regarding Kathy Woods' insights on inflation and technological impacts on the economy.
“But even if AI gets cheaper, because we're burning so many more tokens and we get that economies of scale of like, tokens are getting cheaper, even as we're burning more.”
Investing in AI: Opportunities and Concerns
11:40 to 14:00
Discussion on the current AI landscape, including investment in AI infrastructure and the balance between innovation and risk.
“And on the other hand, we have Jensen Huang who says that no way, it's not going to happen.”
Current Focus on AI Infrastructure
14:00 to 15:55
Discussion of investment focus on AI-related infrastructure stocks.
“Because basically this whole narrative isn't real.”
Market Timing and Stock Valuations
15:55 to 17:50
Evaluating stock market conditions and valuations for AI companies.
“And just really quickly before we move on, Julia, I feel like we might have touched on this or talked about it in depth last time.”
Perception of AI Risk and Regulation
17:50 to 20:00
Discussion on the perceived risks of AI and the regulatory landscape.
“And I think it's very, the asymmetry is not good.”
Amazon's Conflict with Meta AI
20:00 to 23:15
Exploration of Amazon's blocking of Meta AI and the implications.
“Yeah, in addition basically to this fact was I just watched an interview with Alex Karp, and he has different ideas, basically, to put it lightly.”
Show all 19 chapters
Current Trends in Defense and Quantum Stocks
23:15 to 27:20
Analyzing trends and movements in defense and quantum stock sectors.
“So that's also another example of how things are complex and not only related to safety and regulation and all.”
Palantir's Role in AI Development
27:20 to 28:00
Discussion on Palantir's significance in the AI landscape and investment perspective.
“that all of these stocks that I just named, they will be rallying as well.”
Investing Insights: Palantir Evaluation
28:00 to 29:53
Discussion on Palantir's stock performance and future projections.
“I have to say also I rated Palantir as a buy some time ago, maybe a month, maybe two months ago.”
Defense Stocks and SpaceX
29:53 to 32:39
Exploration of investing in defense ETFs and the dominance of SpaceX.
“So yeah, in general, I really like Palantir.”
Uber's Market Positioning
32:39 to 41:01
Discussion on Uber's stock, market performance, and potential growth areas.
“I think for the valuation work, we have to see this at least working a bit, like adding a few, I would say billion.”
Netflix's Growth Opportunities
41:01 to 42:00
Exploration of Netflix's valuation, market response, and ad strategy.
“I think we should share a little bit more about Netflix.”
Netflix's Advertising Strategy and Market Response
42:00 to 45:50
Analyzing Netflix's surprising success with its ad-supported model and market implications.
“So that's a lot of opportunities to grow, a very reasonable valuation and a overreacting by the market.”
Investment Patience and Market Predictions
45:50 to 48:38
Discussing investment strategies, patience, and current market positions on stocks like Meta and Amazon.
“I think I don't have any other stock to talk about right now.”
Caution in Stock Picking and Market Trends
48:38 to 50:25
Exploring the importance of cautious stock picking in the current market environment and the divergence in stocks.
“And this strategy proves to be working well for me.”
Transcript
Automatic transcript. May contain errors.0:00Thank you.
0:30Julia Ostian:what you're looking at in the markets, how you're thinking about the markets, what you would share with investors right now.
0:35Kenio Fontes:Hi, guys. Thanks for having me again here. I think that I'm acting, but acting with more patience right now. So I'm still bullish with a lot of things such as AI and a lot of companies that I was bullish a few months ago, but I'm more cautious about it. Meta surged at 30 % in the last few weeks. So I'm definitely a little bit more cautious with it. And also because of treasury yield. We are seeing a 5 % more 10-year treasury yield, which is very appealing. So it's something like, why take the risk of a slow growth company or a high valuation company, just giving an example like Apple, instead of taking a treasury view, like a risk-free option.
1:29Kenio Fontes:So I think that's my way to look at things right now. I'm still bullish, but with a little bit more cautious stance.
1:37Julia Ostian:Just to echo a couple of your points. One, I've been doing these morning, right as the market opens, right pre-market open with Steve Kress, and he has been extremely focused on the 10-year treasury and how much that portends to what's happening in the markets and market sentiment and what have you. And the other thing, I talked to Jared Dillian a couple months ago, and he had this quote that I loved, prioritize risk, not return, which it also sounds like you're more focused on these days. Julia Ostian, who is making a valiant effort today, which we really appreciate to show up. Thanks for what are you thinking about the markets today?
2:14Julia Ostian:Hi, Rena. First of all, thanks for having me. Second of all, markets, thankfully, are very interesting, especially the sector of what I'm focused on is the tech sector with the AI. There are a lot of things going on in the recent months. And what I'm trying to do basically is go through all of that hype and try to find some real value, see whether there is still an opportunity for the investors and break down the existing stocks which investors really like in this space to understand when this bubblish environment has the chance to disappear or maybe it will continue. So that's basically what I'm now focused on.
3:00Julia Ostian:Besides, I also like looking for the industries that are beaten down. And we could return to that a little later. For example, right now, one of them would be probably defense for me. as with all of this environment while we're still at war and the Middle East crisis is not going anywhere. The defense sector is beaten down because of the AI hype, because everyone is focused on the AI. So basically that's another area of my interest had been off lately, at least. Much appreciated. Jack Bowman.
3:36Jack Bowman:Yeah, thanks for having me. I'm always happy to be back with the Dream Team. I think yields are the right thing to focus on. because this is the first time in my career as an advisor where I've had clients come to me and ask me to buy treasuries. Normally, they're always saying, I want anything but bonds. No more bonds. I've watched bonds be trash for so long. I don't want to buy 2 % yields. And now people are starting to say, hey, what about bonds? Have we thought about treasuries? And this shift in my anecdotal experience is likely reverberating throughout. It's not just us talking about it.
4:10Jack Bowman:It's not just my clients. And that's a lot of money sloshing around, right? I've seen asset managers at record low participation levels in emerging and developed markets. They're still bullish on the U.S., but they're starting to pull risk back from other places and places where stocks yield a lot more than the U.S. in particular. So that's been my focus. I think the U.S. is still just fine, but I think the yield really pulls a lot of money out of foreign markets.
4:36Julia Ostian:It sounds a little bit, you know, the notion of like horseshoe politics. It's like people starting from opposing views, but then coming back around to the same point. It's kind of like that. Do you want to spend a little bit more time, anybody, Jack, if you want to start? Because I know you focus on the macro picture more, like about the treasury and bond picture in particular. I guess how you would best summarize and share what you're thinking about there and why it's so salient for investors.
5:02Jack Bowman:Yeah, I actually think, and this may be an important point for investors. I think the debt hitting$40 trillion was a really sexy landmark to talk about for the media. And I'm guilty of this. I wrote a Seeking Alpha article, you know, the debt hits$40 trillion and talked about the ramifications. But I don't think yields are actually motivated by the debt hit$40 trillion and now everybody thinks the U.S. is irresponsible. I actually think that the yields have been pushed up and are motivated by a lack of trust in the Fed. That it's people don't think the Fed's going to do the right thing. And so yields will have to be higher later.
5:35Jack Bowman:This is why I think yields fell when the Fed hiked, although they're above that level now. And I think it really will rest on their next hike if they can restore true credibility. So I think they proved to a lot of people that Warsh is not some puppet. He's not just going to lower rates because Trump's tweeting about it. But I think there's still a lot of fear that this was a one and done, which is what I've called it. It's a one and done. This is just to placate everybody. And if that's true, and the next time we see the Fed meet, it's a hold again and not another hike, I think we'll start to see a lot more of that interest rate pressure.
6:10Jack Bowman:It's less motivated about the debt.
6:12Julia Ostian:Yeah, actually, I remember that Jack had been a skeptic about it. He said in his article that he doesn't think that the Fed is going to raise the rates this summer or even this autumn. And they did. So we didn't even discuss that. Don't you think that it's a risky situation? Like, I'm not investing in treasury yields at all. I'm not buying bonds. At least myself, I have a portfolio that is managed by an external firm, basically, with my pension fund and everything. But isn't, I don't mean like default risk of the US, but isn't it bringing some, I don't know, like inflation risk or maybe some market risk, the fact that the yields are rising?
6:56Jack Bowman:Yeah, I mean, that's kind of the way that we deal with debt in modern economics is like we grow out of it or we inflate out of it. And that's the big fear is that we're going to have to inflate out of it because we can't grow our way out of a trillion dollars a year in interest or whatever it is. And I don't, with the current tax code, it's like we don't bring in enough revenue for how much spending we put out. And I don't think that we could modulate our spending lower to fix it. So we're always going to have this big deficit unless we fix that. And that introduces a whole realm of politics to get into.
7:29Jack Bowman:But yeah, the fiscal situation is weak.
7:32Julia Ostian:So are you buying or not? What should I do? Should I buy some?
7:35Jack Bowman:I have been telling people I'm avoiding the long end. Like if you're buying treasuries because you want some income, that like anything under 10 years is still fair game. But everything over 10 years, I'm not touching.
7:48Julia Ostian:Okay, fair enough. Thanks.
7:51Kenio Fontes:I have a question for everybody in the room. Recently, I saw the letter from Kathy Woods. I don't know if you guys saw it. And it was very interesting. I don't have a strong opinion about it, but you said something like the insert rate is coming down because the inflation is coming down. So AI will bring a lot of productivity. So the inflation will definitely drop in the last few years, in the next few years. Or even we could have a deflation scenario. So what do you guys think about it? It seems so unbelievable right now.
8:32Julia Ostian:I don't know, Kenny. I'm not Katie Muth, of course, and I'm not sure where this thing is coming from. But as far as I'm aware, the productivity boost doesn't take the inflation down and that's not how it works. But by the way, I didn't read that thing. So I'm not sure. I'm just reacting on what you just said.
8:53Jack Bowman:Yeah, this was a letter to shareholders that she sent out. Was it yesterday or the day before? but I read this too. And I did not buy Wood's argument about technology. I think it is true to some degree that technology is deflationary, right? TVs for what you get cost way less now than they used to. Same with computers and all kinds of things, right? The initial IBM Watson that used to fill up a whole room, now it has the same computing power as my phone.
9:19Julia Ostian:Yeah, but what about billions in AI investment that are being burned? And we know for a fact that they're being burned. That's the question.
9:28Jack Bowman:It didn't create economic deflation. We saw technological deflation, right? But even if AI gets cheaper, because we're burning so many more tokens and we get that economies of scale of like, tokens are getting cheaper, even as we're burning more. I don't know if it translates to economic deflation. I think the real economy will still, the real economy doesn't run on tokens.
9:52Kenio Fontes:Yeah, I think we can't be sure about that, but maybe for some level, maybe we'll see some deflationary, not a real deflation, but some lower inflation because of productivity because AI applies to every segment, every industry in the next decade, probably even more. So I don't know, maybe for producing cars or software or anything like that, maybe it will be a little bit cheaper, mainly because of Jack said tokens, the cost per token is falling dramatically.
10:27Julia Ostian:There's an article out of the news team early this morning that I read. The AI buildout could cost$10.3 trillion as the financing risks move off big tech balance sheets. There's a lot to digest. There's something we've been talking a bit about on the podcast is We had Alex King a couple months ago talking about investors shouldn't be sleeping on software stocks. And then earlier this week, it was not sleeping on analog semiconductor stocks. Steve had a video conversation yesterday about an undiscovered AI stock. We had Joe Albano talking about Bloom Energy. Bloom Energy has been in the news. as you all suss out the cycle that we're in or the point in the cycle that we're in or try to understand, if I could bottom line it, what are you most interested in the AI side of things these days?
11:27Julia Ostian:So I guess I'll take that question because, yeah, I just said that's what I'm focused on. And yeah, so first of all, this whole AI story right now is incredibly messy because we see company's frontier labs, especially on one hand, together with Sam Altman, Elon Musk even jumping in, Dario, and basically everyone saying that we have to have a slowdown because AI is going rogue and it's becoming, in general, unsustainable and dangerous even, to some extent. And on the other hand, we have Jensen Huang who says that no way, it's not going to happen. He will sell twice the number of the GPUs next year with Vera Rubin, which is crazy if you think about that, because Vera Rubin is both more expensive and also it's more powerful.
12:18Julia Ostian:So where this whole compute is going to go, nobody basically has an answer yet, but Jensen is very sure that he can pull it off. So these two powers are basically like playing against each other. And my point of view in all of this is that, first of all, AI in general and AI adoption is not an LLM adoption and especially not a closed model adoption. So the frontier labs with Anthropic and OpenAI, even though they distribute a lot and they make for sure a lot of noise, they're not the only AI companies in the world. And even LLM is not the only technology of AI in the world that is successful and that is being adopted.
13:02Julia Ostian:so as of for me I'm focused sorry?
13:07Jack Bowman:I said shout out to Jev that's been the big news of a non-talking AI yeah
13:13Julia Ostian:not only there was some well how is it called with the protein
13:22Jack Bowman:protein folding
13:24Julia Ostian:yeah protein folding with Astra wait wait wait wait Alpha Fold protein folding problem that was being solved by AI recently, which is incredible. It's like an incredible breakthrough. And there is a good point in the thing that we have this cool technology which will help us with the drug development, with vaccine development, and it will take our medicine basically years ahead. But we are not afraid that this AI will go rogue or that it will create some biochemical weapon or whatever. And why is that? Because basically this whole narrative isn't real. So I'm focused on, as of right now, on the infrastructure, because anyway, the sole winners, or at least the winners for sure of this AI adoption would be infrastructure players that benefit from all of the companies in the world building out the compute capacity, whether it's for open models, closed models, internal models, or whatever else, or even compute capacity for making some AI of their own, for example, like this AlphaFold.
14:36Julia Ostian:And that's basically it. I'm focused on chips, of course, on memory, on networking, on power. Also in the future, Bloom Energy was one of the stocks I rated as a buy just recently, and I think it's fled since then. So that's one of the stocks. It's a speculative buy, of course. And I said so in my article that the stock would definitely plunge, especially if something happens with this AI demand. But in general, there are some plays that are not noticed by the market yet, but they are scarce. There are not many of them. And as of right now, especially investors awoke once again. I was cautious about the AI at the beginning of the summer and I sold a part of my stocks, which proved to be a good decision because they plunged afterwards.
15:29Julia Ostian:And we've had a couple of months, like three months of the price drops and consolidation after that. But right now we see, I think, ahead of the meeting of the US president and the Chinese president some rebounds. So maybe today is not the best time to look at the tech stocks, but in general, there is still an opportunity in some of the places in this industry. And just really quickly before we move on, Julia, I feel like we might have touched on this or talked about it in depth last time. But when you say that you got out of the stocks, is it more of a sensing thing than it is you're looking at black and white data and you know to get out?
16:12Julia Ostian:Or do you just feel like the run up is too far and it's time to get out? How do you play that? Yeah, definitely at the beginning of the summer, I felt that I saw that the run-up was pretty intense and that the valuations got to the high multiples. And I personally wasn't comfortable at where it was going. So basically, I didn't see a large upside, but I saw a substantial downside. And back then, I already profited greatly because, as I said, I was focused on looking for areas which were beaten down. And this area was like nine months ago at the beginning of this year, maybe 10 months ago, it was AI.
16:57Julia Ostian:So that's when I bought the majority of those positions and they rallied enormously, like 200, 300 percent gains. And yeah, I just felt that I want to close some of my positions and to trim the others. And I basically, positions that I left holding are the infrastructure, which I'm comfortable holding. It's Micron. I added, by the way, SK Hynix after their IPO. And this is one of the only companies, AI companies, okay, AI related companies that I added throughout the summer. And yeah, so basically just because the valuations got really ahead of what's going on, even with this insane adoption, the valuations are also very high.
17:46Kenio Fontes:Can I just give an example of what Jolio is saying? For me, AMD is the best example. It's up like 300 in the last 12 months. And I think it's very, the asymmetry is not good. But it's really what Julius just said. The upside, maybe there's a decent upside, let's say 20 % or 30%. But the downside could be fairly 50 % or 60%. So it's really about asymmetry. So why buy AMD when you can buy NVIDIA, which is definitely more cheap. So I think that's more as well, all the disvaluation topic.
18:30Julia Ostian:Yeah, that's actually for sure. And by the way, when I say that stocks are expensive, I don't mean that there is no upside. Because as we see, for example, with Intel, I rated Intel as a sell at$80,$90 per share. Yeah. So do I think that it was a fair rating? It was a fair rating. But Intel is rallying on the sentiment. So like the fact that I say the valuations are stretched doesn't mean the stocks will drop for sure. I just mean that there is no clear and adequate upside in terms of how these companies are doing. If investors are looking for some trade on the sentiment, it's definitely still a possibility with all of these stocks, especially Intel and stocks that are rallying as much.
19:22Kenio Fontes:Yeah. Yeah. And it's also about market safety, right? Like, I'm not willing to hold AMD for 100 times earnings. So I think it's just not comfortable enough.
Read the full transcript
19:37Jack Bowman:Julia, to your point earlier about the AI safety thing being a whole bottleneck in this operation, I'm totally with you that it's BS. It's all marketing. And I think it's a lot of regulatory captures. Like, we want you to regulate it so we can be the ones to tell you how it needs to be regulated. and my prime evidence of this is like it was like three or four days before Dario's paper about why we should slow down Anthropic opened a new wet lab where they're going to have clod work on biology in animals and I was like, okay, so it's safe enough to test biology on animals and virology and things but not safe enough for like Joe Schmo to write LinkedIn posts or whatever most people are doing with it it's like...
20:23Julia Ostian:Yeah, in addition basically to this fact was I just watched an interview with Alex Karp, and he has different ideas, basically, to put it lightly. But this one specifically, he claims that he isn't sure whether Antropic will at all IPO because of all of this danger scheme was to provide some regulation in the AI landscape in order to basically protect themselves from the lawsuits that are coming their way. And there are many of them. So he says that they have basically right now a liability that is like unclear the scope of their liability. And basically, if there are going to be public and tropic and open AI, they will have to disclose all of that.
21:24Julia Ostian:And we will basically see all of the lawsuits and all of the settlements and all of the things that went wrong and with the companies. people and basically everything that's going on and that's another thing to consider in general when talking about ai security so the point is that not ai is dangerous but companies that are developing this ai are dangerous and they probably need to be regulated but not make the regulation not to write the regulation but you know have the regulation against these companies that it will keep them intact into some safety measures. I'm not sure, but for sure they have to be regulated somehow.
22:09Kenio Fontes:Did you guys see that Amazon was blocking the meta AI agent? It's definitely something interesting to talk about because it's very related with what you guys were talking about, about regulation and all this conflict of interests. because Amazon just blocked saying like, hey, we didn't know that your agent was on your website. We didn't approve this. And we have some security and safety fears. So we are not approving this. But what the truth is, it's very, very different. We can't know for sure because, of course, Amazon has a lot of revenue coming from advertising. And when you have an AI agent scrapping their website, checking for the best and the cheapest option, you will lose some of this mold of advertisement.
23:15Kenio Fontes:So it's a very complex landscape, but I feel like maybe they will have to come up with a solution that's a win-win, like good for Amazon because they are having more people buy on their website and also good for Matup because their agent is allowed on Amazon. So that's also another example of how things are complex and not only related to safety and regulation and all. this stuff.
23:46Jack Bowman:I'm not bullish on open weight models generally, but that is such a good example of like how a closed weight model of like, oh, well, they made a deal with Amazon that it weighs more heavily sponsored products in your answers when you ask to look for something. Like I can see that being a reality. That's so dystopian.
24:05Kenio Fontes:Yeah, I don't, I don't know if this is the best option, but I can
24:09Jack Bowman:also see agents agents don't watch ads that's such a good point like uh defense sector i don't have
24:17Julia Ostian:so much like i don't have a lot to talk about about defense i just um recently i've been breaking down quantum a sector that i've never been bullish on before last week i think that i rated my first quantum stock as a buy and i i just noticed that quantum had been rallying or basically the price movement had been very similar to some of the speculative defense stocks drone stocks that i'm holding so basically my portfolio the one two portfolios that i'm managing they are diversified I am heavy on technology, of course, but I am trying to keep my Sharpe ratio in order and basically to diversify well enough so it will not go down, I don't know, like 99 % the moment when the whole tech sector goes down.
25:11Julia Ostian:So I've been holding some speculative drone stocks, and I just noticed that Quantum had very similar directions of movement. And then I've broken down also space stocks, some of them, for example, Intuitive Machines, Lunar. It's a company that I'm following for a couple of years now, and turns out they enjoy, or not, the same defense momentum. So basically, these three categories, together, of course, with huge players like Lockheed Martin, all of the defense players, basically, they see the same price movements. And right now, all of them are down. Also, the space stocks are down and the quantum stocks are down, drone stocks are down and overall defense is down, which is odd, right?
26:03Julia Ostian:Because we are like in the middle of the war. and of course why everything is down is because the market is interested in the guy and what's going on there so institutions investors have been rotating their money heavily and these are just the sectors that have been left without attention and by the way one of the sectors like this had been in february cyber and i've been buying cyber and talking about cyber and writing about cyber and right now when everyone notice cyber it's too expensive already so whenever i get asked about cyber i tell like listen the momentum is gone so it's just something i noticed and it's just something i bought actually myself i added both uh lunar both intuitive machines and i also added um regetti and continuum of the quantum stocks just recently and yeah basically i hold if someone is interested, Avav and Ketos, AVAV and KTOS.
27:08Julia Ostian:As of for drones, all of them are cheap and basically the moment that the defense will get back in favor and the momentum will be there, I am pretty sure that all of these stocks that I just named, they will be rallying as well.
27:26Kenio Fontes:What do you think about Palantir? Do you have an opinion about it?
27:30Julia Ostian:I love volunteer.
27:32Kenio Fontes:Yeah, but recently I was bullish last month, but now I'm a little bit more cash also because it just surged like 30 % or 40 % or something like that. And I have to run the calculation again, but I think the margin of safety is a little bit thinner than I would like right now. So it's still a very strong company. I'm not saying it's not, but I'm just a little bit more. Yeah, definitely.
28:01Julia Ostian:I have to say also I rated Palantir as a buy some time ago, maybe a month, maybe two months ago. And it's up nicely since then. And of course, I'm happy about it. I still hold my Palantir for like six years already or five years already. And I'm not selling like I dreamed it so many times and took a lot of profits, but I'm not selling it entirely. And in general, I think that Palantir is probably the most misunderstood company in this whole AI story. because in my opinion still this is as of right now the strongest and the best case of ai use cases and development and how to make money how to monetize ai and nobody in the world had gotten close to volunteer as of right now but for some reason as frontier labs are gaining more and more attention and they're gaining more and more money from venture capital, from private capital.
29:00Julia Ostian:Palantir is basically going down as though Palantir doesn't enjoy from the same AI demand as or from the same AI adoption, let's say. So basically for me, that's an interesting story with Palantir. I think that this stock will be volatile in the future. I think that right now they're close to their fair value, if not even slightly higher than that. So I wouldn't be jumping all in plenty right now. I think that adding it to your watch list and following it, if it pulls back again to$120 per share, that would definitely be an opportunity. $130 per share, I think that was approximately the level I rated it as a buy.
29:49Julia Ostian:If it goes lower than that, I think I'm going to buy myself even. So yeah, in general, I really like Palantir. And I think this is one of the greatest AI companies there are. Michael Burry just added two short positions there. I don't know if that changes anybody's viewpoint.
30:08Jack Bowman:I have this thing about Burry where it's like, whether he's right or wrong, he's always early. So whenever you hear about Burry's positioning, it's not time. Uh-huh.
30:19Julia Ostian:Michael Earlybury, what else should we get into?
30:24Jack Bowman:My take on defense, I think, is super straightforward because I've been looking at it from the ETF perspective. And it's been drones over space. That defense ETFs are going two ways. They're chock full of space stocks or they're chock full of drone stocks. And I'd rather own drone stocks than space stocks. And quite honestly, if there was an ETF that let me go long SpaceX and short all of the other pure play space companies, I would do that. Not because I'm bullish on SpaceX, but because I think they're just going to win. They got the low-Earth orbit first, and it's over. They figured out where the best positioning is, and they're already...
30:56Jack Bowman:I mean, that band is either SpaceX or SpaceX debris.
31:01Julia Ostian:No, you are totally right. And not that they're going to win. They have already won. SpaceX had already won, long term. And I also don't think that there is a reason investing in peers of SpaceX. So that's not what I was doing. I invested in intuitive machines. And that's actually the company that would rather be part. And they are partners. So basically, they are working with lunar landers and with some NASA projects. But they are not related to the line of business of the SpaceX. and they actually order their services. So yeah, I definitely, in terms of space, I definitely think that all of the competitors of SpaceX, this is a no-go for me, for sure.
31:50Yeah.
31:51Jack Bowman:Yeah, it'd be like Planet Labs and Viasat and those kinds of companies, right? What's the big one?
31:57Kenio Fontes:I can see this long-end chart working, but only in the very long term, like a decade or even more than that, because we have to see their project and their maturity and their execution and so on. So it's a very long-term strategy, in my opinion, of course.
32:17Jack Bowman:Yeah, and it does rely on just Starlink's thesis. Like I have in fact done the fact that like most of SpaceX's stock is really based on Grok's performance and XAI and all of its other business.
32:32Kenio Fontes:Yeah, yeah. And also the AI data center on the space, on the Harvard working. I think for the valuation work, we have to see this at least working a bit, like adding a few, I would say billion. I don't want to say trillion on total addressable market, but they would say trillion.
32:54Julia Ostian:Yeah, they are saying trillion. They are saying. I think Musk said something like one and a half trillion in addressable market for the space data centers or whatever. So, yeah.
33:04Kenio Fontes:Yeah.
33:05Julia Ostian:You know, it's cooler than a billion.
33:08Kenio Fontes:Exactly. Like the movie from Matter.
33:13Julia Ostian:It's getting crazy and it's getting crazy fast. I think we have to talk about Uber because that's also Michael Burry and some other great traders of our time like Nancy Pelosi had been adding and insiders had been loading up, but the stock goes down. So I guess we have to talk about Uber. We have to talk about Uber.
33:35Jack Bowman:30 % lower over the last year, despite how many times I buy. The market just doesn't care what I think, I guess.
33:42Julia Ostian:Yeah, exactly. I have actually, I have a very large position across both of my portfolios, by the way. It just happens so. And I used to... No, but I am actually, I really like Uber and just recently my husband had asked my opinion of what should he add to his portfolio. It just happened maybe a couple of weeks ago. He decided to drop part of his private capital. Basically, he was investing in some dividend positions and he decided to go stocks and Uber. And by the way, Netflix as well have been two of my probably safest choices for investors who are looking for value and maybe even some anti-AI so I'm I'm pretty confident that the moment this whole AI story at least cool cools down and investors get cautious I think they will be turning to Netflix and probably to uber as well so that's uh how i am personally diversifying my portfolio my tech heavy portfolio
34:53Kenio Fontes:with stocks like that yeah i have i have a position on both stocks you just said like uber and netflix i'm more bullish with netflix right now but i also like the uber story i think it's a very cheap stock that is posting like a very decent growth to not say high growth like the EPS I just checked the EPS growth estimates it's like 20 to 25 % in the next five years or so for a stock that's trading like 15 times earnings for the next fiscal year so it's very cheap and the moat in my opinion is huge for this business it's all about network effect you have to own both ends you have to own the customer and also the driver.
35:43Kenio Fontes:And of course, we have all the narrative behind the AVs. But if you also own the AV fleet or the AV partners and own the customer, the mode is intact. I'm not sure if that's the case for the next two decades, but it's definitely the case for the next decade. So I think that's my opinion. And Uber has a lot of market in emerging markets and so on. And this would take so long, the AV trend, would take so long to reach places such as Brazil, such as rural Brazil, where I'm not living in the countryside anymore, but it would take so long to reach even the main urban areas of Brazil. So I think it's not a real, real risk.
36:34Kenio Fontes:maybe in some markets such as California or New York. So I think that's my opinion of Balderberg. It's a very cheap stock with a wide mole and also very strong optionalities. So very like bookings, hotels, groceries, delivery, everything.
36:59Julia Ostian:Yeah, actually, I really like the delivery story and they've acquired this company or they made it up, I don't remember how it's called, with the robotic deliveries. And that's one of the initiatives I really like, and especially for big cities.
37:14Kenio Fontes:Surf maybe? Yeah. Surf Robotics? Yeah.
37:17Julia Ostian:So basically, I really like that initiative, especially for the big cities with a heavy traffic load. I think that's going to work very well. And in general, this whole story with both robot taxis and in general, just because the stock is undervalued as much as Kenny just said. So, yeah.
37:45Jack Bowman:Yeah, what really sold me on Uber outside of the fundamental story we've covered was that it's become a verb in the U.S. Like you Uber places, even when people are in a Lyft, they'll say I'm Ubering to wherever.
38:00Julia Ostian:it's Kleenex. It's all the things. Yeah. Yeah.
38:03Jack Bowman:It's Google. It's yeah. And, and that sold me on the network effect more than anything, because you, you can't buy culture like that. That has to just happen. But once I saw it, I was sold. I was like, okay.
38:14Julia Ostian:Is there a time that that doesn't match up that that effect, it doesn't equate to a long last, I mean, I guess long lasting brand sounds like it may, but like, does that equate to a great stock? Does that equate to a great investment?
38:30Jack Bowman:Yeah, that's a great question because I don't, I mean, you think of like Listerine is still the mouthwash of choice, but that wasn't a good stock to own for however many hundred years.
38:39Julia Ostian:People don't stop talking about that stock. My God.
38:42Jack Bowman:You know, it's like they had a monopoly on the product for like 60 years or something ridiculous and it was still wasn't a great, a great buy. So there's definitely times where like the culture does not dictate stock prices and valuations. And that's why the fundamental picture is so important and why I think it's different from a stock like Palantir, where we're kind of talking about like, Yeah, we're bullish because buying Big Brother is always on trend, but you probably shouldn't buy at this valuation if you're expecting short-term gains because you'll probably be disappointed. I don't feel that way about Uber, although I haven't felt that way as it continues to drop.
39:12Jack Bowman:So maybe I'm not the right person to listen to. But the margin of safety is there. It can only drop so far before deep value investors start scooping up and they're already close, I think.
39:22Kenio Fontes:Yeah, it's the opposite of AMD. The downside is limited, but the upside, I don't know, maybe I could see Uber doubling in the next two years. And it's still been a decent company with a decent valuation.
39:37Julia Ostian:But if you think about that, how many companies have seen 200%, 300%, 400 % returns, large companies like AMD, HPE even, Dell, one of my holdings. sell like nvidia had uh grown slightly i think like 20 30 percent it had so this capital should be coming from somewhere right so there you have stocks like netflix stocks like uber some other industries that have been on a decline just because investors wanted to rotate their money into more attractive industry so that's just natural and that's just the organic way of how things work So we have to basically wait for the market to calm down because what's going on right now is for sure unsustainable.
40:26Julia Ostian:We have to see some resolvent of this whole AI frenzy any way possible. I'm not sure how it will be, whether it will be some kind of a burst like of a bubble. maybe those IPOs will be cancelled, which in my opinion would be the best thing for everyone just to calm down and re-evaluate things and understand what's going on. Because I think if Antropic is going to IPO soon, that's not going to do well for the whole AI market. But let's see.
40:58Kenio Fontes:We talked briefly about Netflix. I think we should share a little bit more about Netflix. I can start. I always liked the Netflix story, like the utility narrative, like nobody would cancel their Netflix because everybody wants to watch something after their work or their weekends and so on. But I never had a chance to buy Netflix at a fair price. But market just give me that a few weeks ago. So that's summarized my opinion on Netflix. I think the store is great and markets are overreacting due to some concerns about engagement and, oh, Netflix is not producing a viral TV show for a couple quarters.
41:48But this is just normal, I guess.
41:51Kenio Fontes:I can wait. So the valuation is very good. The growth is very good. They have a lot of opportunities in several markets, not only on TV shows and movies and all this studio and IP development content, but also in content related to games and experiences and all of that and live events. So ads. So that's a lot of opportunities to grow, a very reasonable valuation and a overreacting by the market. That for me is an opportunity. So I recently added Netflix.
42:25Jack Bowman:I was very surprised about Netflix's push to ads because I thought it would be disastrous and it wasn't. They have added so many users who are totally okay with ads. And maybe YouTube has just conditioned people that online streamable content just comes with ads now or what. But their ad push has been huge and a huge boon for them. And I was surprised the stock hasn't reacted to that. I think that was the next step, was reining in anybody who can get app access that doesn't want to pay for a subscription.
42:56Julia Ostian:Yeah, but in my opinion, it's actually, it makes sense. This way, you can be a casual viewer. You don't need to, like, it's a huge problem of people who pay for those subscriptions that you get one. And you're like, well, okay, I'm annoyed from this content, but I'm not unsubscribing because, I don't know, I already have a subscription, so I continue paying for it. And for example, I have a Netflix subscription and sometimes I'm not opening this app for like three months in a row and I'm just like not even checking out what comes out there. So this way, basically, you can be a casual viewer. And if every platform had this ad opportunity, you could be like just searching online for a TV show or a movie that you like and basically watch any of them.
43:41Julia Ostian:So that's, in my opinion, it's just like makes sense that it would work. And there are some people that are interested in this kind of service. And yeah, that's an amazing thing. And also, by the way, both about Uber and Netflix, both of them are growing their ad revenue right now. And I'm in general bullish on the ad industry because I think it's going to be growing at the fast rates for like many, many years, like decades probably. So, yeah.
44:10Kenio Fontes:Yeah, and this increases the total addressable market because maybe the viewer is not willing to pay$20 or$15 for a subscription, but they will pay$80 with ads and they are fine with it. And not only that, but Netflix is not having a small average revenue per user, which they call ArtPool, because these$8 could be$10,$12 after the ad's revenue. So it's crazy. It's great because you increase the addressable market without hurting so much the average revenue per user. So I think it's a great initiative.
44:59Jack Bowman:Yeah, that was my fear when I heard that they were bringing on the ad users was that it would degrade margins. And seeing that it hasn't has been very interesting.
45:10Julia Ostian:Yeah, but advertisers are paying a lot. So that's basically that's able to balance this whole thing out and even maybe increase it in the future, which is crazy. I talked to Dan Rayburn like two to three times a year on the podcast, and he's like a streaming media expert. And Netflix is always one of his favorite stocks. But also like to your point about the companies and the culture, he always is touting that they kind of like get it. They get when to pivot. They get what metrics to release. They get what things not to release. They just kind of get it. They get what deals fall through and make a bunch of money off of anyways.
45:50Julia Ostian:Happy to hear your closing arguments?
45:52Kenio Fontes:Yeah, I can start. I think I don't have any other stock to talk about right now. Netflix is probably my most recent bullish position. And other than that, I think my position right here, right now, Now, my stance is the thing that I just said in the introduction. I'm acting, but acting with patience. So I'm willing to wait for Meta to become cheap again, Amazon to return to a level that I'm even more comfortable to increase my position because I already have a solid position on Amazon. And while I'm waiting, I can receive 5 % on treasury. not to mention the Brazilian treasury which is only like 14 % so I can wait so that's my approach here I'm acting but acting with some cautious stance
46:49Julia Ostian:make Medicheap again
46:51Kenio Fontes:and thanks for having me here again of course
46:54Julia Ostian:thanks for coming on appreciate y 'all coming on, thanks for making the time Julia? yeah I guess that we have moved away from the era where ai basically flies on just this conversational hype that why the technology can answer me in my language and right now the story is about making some real money and showing some real results and for now the only segment that is showing those results will be infrastructure if we're not taking into account volunteer of course or some ai companies that do not develop large language models so basically as a for me i'm not really falling into this hype i've been bullish about the i-bound it was selling off because i seen an opportunity then i changed my mind because i saw that the valuations are stretched and i thought that it should sell off and correct and basically as always my favorite thing to say is never fall in love with an industry or a stock i i'm not doing that i'm not holding stocks just because i love them i i don't like any of them.
48:02Julia Ostian:I don't like any of the managers or I don't love any of the management. And I'm just looking at what's going on with the company, whether I like the direction, I don't like it, where the company is going and how the management views in general, the industry they're in, their development and what next steps they should be taking, the ways they can be pivoting. And in general, how this whole story involves not only with the tech, of course, but in general, my investments. It's not always playing out, of course, and I'm not always in the winds. But so far, I have to say that I'm beating the S &P and Nasdaq both throughout this year.
48:43Julia Ostian:So I've been happy so far. And this strategy proves to be working well for me. And yeah, so thank you for having me. And it was very fun as always.
48:53Jack Bowman:I think to Julia's point about not falling in love with a stock. Maybe I'm just too much of a romantic to be a good trader. There are stocks like Palantir or Costco or stuff where I just can't get rid of them. And I said this last time I was here of like, I'm the lone bull in the China shop. I still feel like no matter how much doom and gloom we have, the treasury is at 5%, whatever, treasury 5%, but stocks are still killing it in comparison. And I will say that I am a little divergent here. I gave my first sell rating on something since April, which I rarely ever do. I consider sell ratings to be a little harsh.
49:29Jack Bowman:So I try to reserve them. But I gave it to small cap growth. It was an ETF that I came across. And I see cracks where they're forming. And it's not in the large caps. I still think the NASDAQ is moving strong. I have no problem with large cap. But I'm worried about some of the real economy, right? Because the economy doesn't run on tokens. And so despite all of this talk about everything, it's like, some of these small caps are not looking good. They're expensive and they're not growing very fast. And that's indicative, I think, more of the general population in the economy than it is large caps are.
50:02Jack Bowman:And that should give us some caution. So I had this phrase that I've been thinking of where it's like every market is a stock picker's market if you're brave enough. And I think that has been very true now more than it was last time I was on, of like being picky is super important. And I know we always say that. You can always say being picky is super important, but I feel that way more than I did before.
50:27Julia Ostian:Well, the decibel levels can move up, you know? I mean, it's not a binary affair, this journey that we're all on. Yeah, yeah, yeah. Really appreciate that. Really appreciate all your time. Look forward to talking to you all again soon. Thank you for sharing so much actionable insight and thoughtfulness. Thank you.
50:45Kenio Fontes:Just a reminder, anything you hear on this podcast should not be considered investment advice. This is for entertainment purposes only, and you should seek advice from a licensed professional before
50:54Jack Bowman:investing. If you enjoyed the episode, leave a rating or review on your favorite podcasting app, and we'll see you soon with a new episode.
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