Big Tech Breaks Away From the Pack as Markets Stumble on Tariff Blitz

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29:02We're back with ProfG Markets. Over the past couple of weeks, the Trump administration has unveiled a wave of trade deals, though, as we've discussed, many of them are really frameworks rather than finalized deals. First came Japan. The U.S. set tariffs at 15%, down from the previously threatened to 25%. Trump also said Japan would invest$550 billion in the U.S. and open its markets to American autos and rice. Next was the European Union. The deal mirrored Japan's, with a 15 % tariff on most EU goods, and a claim from Trump that the bloc would invest$600 billion, and a similar framework with South Korea followed.

29:39Then, on Thursday, Trump announced tariffs as high as 50 % on more than 60 countries that set to begin on August 7th, a delay from the original August 1st deadline. Two standouts are Canada and Mexico. As we record, Canada actively faces a baseline tariff rate of 35 % outside of previous carve-outs, while Mexico's tariff rate of 25 % got a 90-day extension. The major indices all declined on Friday following the tariff blitz. Okay, it's been a big week of tariffs and a big week of quote-unquote deals, we are seeing the art of the deal in effect, or as I would prefer to put it, the art of the framework of the deal, or the art of the concept of the deal.

30:26Because all of the deals that we've seen, as I have said, are not really deals. None of them have been legally binding. None of them have been signed with any signatures. We're not seeing any actual contracts, we're not seeing any treaties, all we're seeing are these claims that we have a deal, followed up by some signs from the other side that actually there is no deal because they start backing out of it. And we can go through what those are. For example, with Japan last week, where it was supposed to be a$550 billion investment, and then it turns out that only 1 % of that is investment. The other 99 % of it is a loan, i.e., I guess they just buy U.S.

31:09treasuries like every foreign nation does. We've seen some developments with the EU, which again would make it look like not really a deal. I guess I'm droning on here, but your reactions to a week of quote unquote deals, you know where I stand. The most hilarious thing about these announcements is they I'll include some like crazy number of indicated investment. We're going to, you know, Japan's going to, Japan pledged 500 billion in investments in U.S. industries. And just, you know, you're getting a million dollar bonus this year. It's, well, I'm talking about a compensation framework for the team.

31:46You're going to extend me a million dollar line of credit. Let me know the rate. I pledged to invest 550 billion dollars in your overall well-being and compensation over the next 30 years. these did i don't even know how you would measure this shit they're totally unenforceable but again it goes to the notion that the world has figured out what what he wants is a press release he doesn't want he doesn't want a trade agreement that benefits americans he wants a press release so throw in a big number and agree to it nod your head and he'll he'll he'll think it's great there was this great article in the wall street journal talking about gdp and even gdp is becoming a strange number because GDP popped was really strong because they add in or they subtract out imports because imports are manufactured domestically.

32:30You subtract out imports. Import volume quarter on quarter was down 30 plus percent. So I'm for just getting some sort of some sort of agreement or an agreement to move on and get back to business because so many companies have a friend who owns a specialty products company. It's like, it's just so hard to figure out how to plan our business. And then the other observation I would make is that we have a global economy where it's becoming such that if you pull on a string, the whole thing can come undone. And what is that string? That string is seven companies with a large association on AI that are now responsible for 40 % of the market cap of the S &P, which is 50 % of the global market cap of all stocks.

33:14And these companies are, I don't want to say doing too well. You never want to let your, you never want to slow down your thoroughbreds, but look at their earnings. Look at, if you were to sort of bifurcate the economy into two buckets, that is the economy that is somewhat impacted by a slowdown or actual tariffs directly. That's everyone from P &G to Ford Motor, you know, Caterpillar, great American companies, right? The kind of industrial, bigger employers, not as profitable, but great American companies. And then there's the tech guys. What has happened here? This has been a giant distraction, tax, clusterfuck, inability to plan their business of the kind of 493 companies that aren't the Magnificent Seven.

33:56And if you thought, what would be good for the economy? Some sort of legislative or executive action that gives even more power and more money and more market cap to the Magnificent Seven, at the cost of the 493 or the other way around. So this is the two big announcements from the Trump administration are an AI policy that will transfer wealth from the creative communities to tech communities, basically saying there is no IP protection. AI can do whatever the it wants. And also transferring money and capital from traditional companies to the tech companies. These guys, meta and alphabet, have not slowed down at all.

34:33They're not worried. These tariffs don't affect them at all. So what do we have? If you're a money manager, And you're trying to predict, okay, what companies look good or not. At this point, you even have another reason to go, oh, fuck it. I'm not even going to waste my time looking at traditional companies. I'm just pouring it all into Meta and Alphabet and Broadcom and NVIDIA because these guys don't appear to be, they appear to be immune from all this distraction and bullshit, this tax that every traditional company in the U.S. has to pay indirectly or directly. So what have we done? I can't.

35:05And this is my investment strategy. My investment strategy is basically slowly been moving to a 0.1%. I think income inequality is going to get even worse, even worse. Anyways, your thoughts, Ed? I think it's such an important point. And I think actually a better distinction, you make a distinction between sort of the traditional P &G type companies versus the digital tech companies. I think the distinction is literally just the distinction between physical goods and digital goods. and if you're Mark Zuckerberg or Sander Pichai, you're probably sitting there thinking, why on earth have we decided that we're going to tax items that live in the physical world versus the digital world?

35:49What is the reasoning for that? What is the point? But they're not going to say anything, of course, because why would you want to say anything? We're actual stuff that you can hold in your hand. And then we're not going to do it for the tech companies. Why are we doing that? We don't really know. But to your point, that is what we're seeing in the markets, where we're seeing this explosion in the tech stocks, where for whatever reason, they just don't have to deal with this tax that's coming in the form of tariffs. Meanwhile, the manufacturers, the people who make stuff, they are having to deal with it.

36:24And so it is, as you say, widening the gap, increasing the bifurcation, especially when you look at the performance between, say, the S &P 500, or we could just look at the top 10 stocks in the S &P versus the Russell 2000 versus the small caps, which have been way underperforming this year for exactly the reasons that you described. And so, yeah, if you're a tech company that ships software, you don't get a tariff. That's not something you have to deal with. Why? I don't know. That's just what we've decided. Maybe because it's easier to track physical goods? I don't really know. But that's what's happening.

37:02No, it's because he's got the tech bros are up his ass. Peter Thiel owns the vice president. He's got tech whispering in his ear, we love you. We're smarter than you. We'll figure out a way to make sure the algorithms like you. We have a ton of money. He respects money. Maybe it is just that. It's if a rich person shows up and asks me for something, I'm more interested in what they have to say. In my opinion, the most outrageous one, and some of this is affection, I absolutely love Brazil. I'm going there in two or three weeks, is Brazil has been threatened with 50 % tariff rates, which would match the highest tariff applied to any country in the Liberation Day program.

37:41And that's despite the fact that last year the United States had a$7.5 billion trade surplus with Brazil. So, okay, we're on the right side of this, according to you, Mr. President. Instead of economic reality, what is driving this ridiculously punitive tariff rate? The fact that Brazil now has a stronger democracy than America and wants to hold Bolsonaro accountable for an insurrection. And he's decided, well, I don't like that. So that would be like me putting on a tariff, threatening a tariff with American Eagle unless they can convince Sidney Sweeney to go on a date with me, which could happen, which could happen.

38:18I can see going there. I think he's creating cloud cover for me. Anyway, this is not what you're supposed to do in a democracy. It's not a way to run a – you don't – if you're the CEO of a company, you try to reward – you know, you try to reward outcomes, not personalities or behaviors. or who kisses your ass the most. And the president absolutely has to be in the business of going to Congress and passing laws that correctly or incorrectly systemically affect or don't affect everyone. Otherwise, this really is, king is the right term. He's decided, oh, he's King Joffrey. I mean, it's just like, whatever my sugar level is that day, but this is not the way to run a government.

39:01I think the rest of the world has basically said, Give them a press release with some big number. And meanwhile, we continue to have, I don't know, the most anxious, obese, and depressed generation coming up in history. And anyway, here we are. We're saying that these deals aren't deals, right? That's our view. And what I have heard from other people, both online and by more MAGA-leaning acquaintances. All your friends, you young male, aren't all young men, Trumpers? They all swung right. Yeah. The claim is that that's TDS. That's Trump derangement syndrome. And the idea is that it's like, well, why are you so obsessed with this idea of getting a signature?

39:54Like why does, you're just nitpicking, you're finding reasons to say that it's not a deal. and you're just saying because you don't have something signed, that's your reason why it's not a deal, that's a pathetic reason to call it not a deal. And I just want to point out that no, this is not the TDS talking, this is the facts talking. The reason that the signature is important, the reason why it matters, is because as we have seen over and over again with Trump and his deal-making is that when you don't have a signature, the deal doesn't happen. That's what we keep seeing. And it's what we saw with Japan.

40:33I mean, we've seen it before. We saw with China in the first administration, and we've been over this in the daily episodes, $200 billion in investment that never happened because nothing was signed. We saw it with Stargate. We saw it with Saudi Arabia. And we're seeing it again this week. We saw it with Japan. We saw it with the European Union. And by the way, this is some information we later learned after the quote-unquote deal came out. We later learned from the EU Commission that the investment, that$600 billion investment, that investment is dependent on quote, the intentions of private companies, which the EU and Brussels has no control over.

41:12By the way, we also thought the EU was going to lower tariffs on all American goods to zero. we later learned a clarification that the change only applies to certain products, not all of them. So the point being, if you don't sign anything, we have evidence it's not a deal. And you have to ask the question, why aren't they signing anything? Why wouldn't Brussels put pen to paper? Because they didn't have time? No, it's because they don't want to do that deal. because the deal doesn't make sense for them and they're not going to uphold their end of the bargain. And this is why signatures are important.

41:52This isn't TDS, oh, I'm nitpicking the signature. No, that's what makes a deal a deal because that's what shows you that it's real and that it's not just talk. That's their way of saying, I do not have a fucking cogent argument to refute the argument you have just put forward. So I'm going to accuse you of being deranged. I'm sorry. I think we have a president that is a convicted felon who now is being very credibly associated with pedophilia. I don't see that as derangement. I see that as pattern recognition. And it's very effective because it immediately says to somebody, it immediately accuses someone of being mentally ill and emotional.

42:32And that's hard to say. No, I'm not mentally ill nor emotional. But this is their way of surrendering. Whenever anyone uses the D word, they're saying, I don't have an argument to refute what you've just said. Yes, exactly. And it's become such a crutch. And it is so funny how anytime you put a coach in argument forward, yeah, it's, oh my God, he's losing it. He's throwing a fit on live TV. We've been radicalized by Mother Jones videos. Yeah, exactly. And the more, I mean, it's just, it doesn't hold water anymore. One thing that I think we should also bring up, this copper tariff. We got another, some more news last week.

43:14As you'll remember, Trump imposed the copper tariff at the beginning of July, on July 9th. We learned last week that actually there is an exemption for refined copper, which is kind of a big deal because it turns out refined copper makes up 90 % of all copper imports into the US. And so after that happened, well, the copper market crashed. Copper futures fell 22%. And I just want to give you your credit here. A few weeks ago when this copper tariff came out, you said that it was taco and you recommended on this podcast that it might be a good idea to short copper. Every market is slowly but surely learning this is all jazz hands.

43:59The copper market freaked out and spiked. So the trade is to go short copper right now. So for anyone who listened to Scott's advice, congrats, because the copper market just completely plummeted on one announcement where he literally reversed the entire decision. 90 % of copper is now not subject to tariffs. But most importantly, do you think Sydney Sweeney listens to the podcast? I'm sorry, Ed. She's already up. She's already up on her AEO stock. Yeah. She deserves every dollar. She's taking up a lot of mental real estate for you, I've noticed. It's popping up a lot in these podcasts. I'm just interested in the intersection between specialty apparel and the influencer market.

44:43I find it fascinating. I find it fascinating. One thing before we move on from this tariff story that I'd like to get your reactions to. There's some new data that we saw, which shows that after the Trump tariff announcement in April, we saw this explosion in revenue from consulting firms, consulting firms like KPMG and McKinsey and BCG and PwC. They all reported double-digit growth in revenue. We also saw a massive explosion in job postings for management consulting positions, which were up 60 % in the first half of this year. And basically, what we're kind of beginning to see here is that in the same way that when there's a lot of volatility, it's a great thing to be a trader.

45:35And that's what we've seen in these bank earnings, that the trading desks are making a ton of money because of all of the volatility that's happening because of the tariffs. In that same vein, when tariff and global markets and economic policy is so uncertain, is as uncertain as it is right now, it is a great time to be a consultant because consultants' jobs are to tell business leaders things they don't understand. So, you know, you've built multiple consulting businesses. I just wanted to get your reaction to that data. I've spent my whole life basically renting my brain to old white guys. That's how I've made a living.

46:16And in the 80s and 90s and nots, they were all old white guys. Things have gotten a lot better. But anyways, just as investment banks like volatility because there's more trading and they get more commissions, consulting firms love insecurity. and when all of a sudden CEOs have a ton of questions they can't answer. And you go away and you try and answer them thoughtfully. And even if you get it wrong, they can blame it on you. I think that's the primary benefit of consultants is it gives a third party that they can blame the decision on if it's wrong. Anyways, this is a consulting firm stream.

46:52The nuance here is the following. It's about to be a great one, three, five years for consulting firms, specifically their shareholders. and a terrible time for consultants. Because when I look back, my first job out of college, was at Morgan Stanley, I was an analyst, it was a class of 85 of us. I look back on all the work I did. I still have some of the decks I put together and the proofing of perspective. I used to spend, once a week, I would spend all night at the printer proofing a prospectus on a bond offering. Okay, I would be there for eight hours. Now AI can do that in an eighth of a second.

47:28I think the two years of work I did putting together decks, analyzing data, spreadsheets, all that shit, I think it could be done in eight weeks now. And I got to think it's the same as consultants. If I were back at L2, I think we could do double or triple the work with the same number of people. Or quite frankly, if you hit a bump, you can lay off one third to two thirds of your staff. So this is where you're going to see a consulting firms. And it's a larger metaphor for the broader economy. You're going to see more profitability. You're going to see shareholder value go up because these companies are about to expand their operating margins.

48:02But employment and what I'll call more loosely speaking purpose are going to come under attack. On that vein, there was a study that was just published by Microsoft where they showed that the top jobs in the world that are most at risk from AI or most at risk is at being replaced by AI and the least at risk. And I will just note that one of the top jobs, one of the most at-risk jobs in our economy is news analyst. Well, what would we call you? I think I might fit in that bucket, but I'm not so worried because... Because your accent? No, not the accent. One of the least... Your boyish good looks?

48:41...at-risk jobs, according to Microsoft, is dishwasher. So there's still hope for me. So in my mind, a decent tax would be the following. If you're in an AI-related company, of which there are a lot, by the way, those companies have recognized, registered the most extraordinary profits in history and, by the way, are paying some of the lowest taxes, tax burden since 1939. I think a populist, James Tallarico, Pete Buttigieg, is going to come up with a creative idea and say, look, we don't want to get in the way. You can't bottle technology. You got to let it run. But at the same time, what we can learn from the past is what we've been really bad at is protecting people and figuring out a way to retrain them, give them extended employment benefits, give them free education credits to try and figure out more transition, easier career move.

49:30Use it as sort of an opportunity maybe to rethink their career. but why not put a levy quite frankly of a half a percent one percent two percent and just call it a retraining tax it's like look we're not going to pass legislation i've been watching that show the studio which is hilarious and ai is now the new demonic monster it's the new kind of remember the luddites used to break into factories and destroy machines that's what's going on now they're trying to all the the precious creative community is is angry at anyone who talks about AI. Sorry, folks. You can hold the wolves at the door for a while.

50:06There's no way you can keep technology in a bottle. Shareholders and money wins. At the same time, I think it would be fair for someone to say, look, these companies that are registering the most extraordinary windfall in profits in history, we're going to tax them an incremental 1 % and we're going to create a fund for retraining vocational program, extended employment benefits for the people who are going to be disrupted by this technological shift in our economy. Because we can solve this problem, but we should solve it by helping people get to the future, whether that's installing energy efficient HVAC or getting a degree in something else or just having more time to try and find a different business or a different pivot.

50:49But that's where we should be investing, not this ridiculous indignance that, oh, we're going to shame an executive who tries to use AI for a film or a TV show or a commercial. Folks, it is coming. There is no stopping it. We'll be right back after the break with a look at the Autonomous Wars. If you're enjoying the show so far, hit follow and leave us a review on Profit Markets.

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53:14We're back with ProfG Markets. The autonomous driving awards are heating up. Uber just unveiled plans to roll out more than 20 ,000 robotaxis across the US over the next six years. As part of that move, it is investing hundreds of millions into EV maker Lucid and autonomous tech startup Neuro. The robotaxis will be Lucid's new gravity SUV fitted with Neuro's technology and only available on the Uber app. Meanwhile, Waymo just revealed plans to launch a robotaxi service in Dallas next year through a new multi-year deal with Avis. Uber and Waymo are still partners in Phoenix, Austin, and Atlanta, but they are not partnering with Uber for this Dallas project, and it is clear that they might be becoming rivals at this point.

53:57So a few things going on here, Scott. I mean, this is all in the context of the autonomous wars or the robo-taxi race. The first is this collaboration between Uber and this lesser-known autonomous company called Nuro. And that's important because, as we know, Uber has been forming this partnership with Waymo, and it's pretty notable that they're now switching to another company. The second thing that's going on here is Waymo launching in Dallas without Uber, and it caused Uber stock to fall 5 % on that news. So the autonomous race is happening, and there are a lot of different players and moving parts here to keep track of.

54:41We've got Waymo, we've got Uber, we've got Tesla, we've got Lucid is kind of becoming a player here. We've got this new autonomous company, Neuro, which was founded by the former engineers of Waymo. A lot of stuff is happening and it's worth just checking in. So any initial reactions to what's going on in the robotaxi race? Autonomous was, I just spoke at this quantum convention in Chicago. And I would say that optimistically what you would say about quantum is that it's where autonomous was three or five years ago. And that is the performance has not matched the promise yet, but at some point it's going to be big.

55:22And it feels as if that day is upon us. It was like manana, manana around autonomous and people got kind of jaded and forgot about it. And now it feels like, wow, it's happening. Waymo has logged a hundred million miles And it's a really interesting case study because who has the power here? Is it the one with the customer interface that has gotten people used to their UI, Uber, which does an amazing job? I was just thinking the other day, I used to rent cars all the time. I would roll into an airport and I didn't want to pay 80 bucks to get a Crown Victoria that felt like it was reentering the atmosphere.

55:57Cabs were so shitty. And I'd rent a car and I'd go to that Hertz Gold thing and it would say Galloway and I'd and I immediately hate my car and I go back and I'm like, I'm not driving a white car. I'd be like, do I get a free pack of cigarettes with that car? Because clearly it's for smokers only. I'd always, I'd never like the car I got. I haven't had, I don't think I've rented a car in five years. I mean, Uber has just been such an incredible innovation. Waymo, as far as I can tell, by going into Dallas solo and not partnering with a front end company like a Lyft or an Uber is basically going vertical.

56:30And this says to me, Dara is no fool. He is, you know, he's a smart guy. I think he is going to now, and that's why he's partnering with the number three or four player who I'd never heard of before, because he has to make sure that he has, you know, I think the term is monopsony. He has to make sure that he has multiple providers such that if Waymo starts fucking with him too much, he can say, sorry, Waymo, I'm not going to sharpen the sword that cuts my head off. I'm going to kick you off the app and I'm going to find a technology that guarantees not to compete with me that doesn't go vertical.

57:02But if I were to pick a winner, hands down, the one that's going to get the most market cap here, I think it's going to be Waymo because what they'll be able to do is Waymo is going to do for Alphabet what Musk is hoping AI will do for Tesla. And that is he's hoping if he can create an AI veneer over Tesla, that'll justify the market cap. But what Waymo is going to do is it's going to give this like Alphabet, this growth feel. They're in this hot new area. They're the leader. It's growing. They'll announce small numbers, but those numbers will grow and it'll give Alphabet on top of that unbelievable cash flow they generate.

57:45It'll give it that all important innovators perception, which will take the multiple up. And because Sundar is such a smart guy, he's going to go, okay, the market capitalization increases we get off a$200 billion company. If we get another turn on EBITDA or whatever, it gives us another$100 or$200 billion in market cap. So it's worth it to us to put another$10,$20,$30 billion into autonomous. And I don't think anyone's going to be able to keep up with them. So they have the most, they have the best technology and they're going to be able to justify a level of investment that I don't think anyone else is going to be able to match.

58:22So the advantage of Tesla, when we talked about this, is that they supposedly can produce an autonomous vehicle for about 40 grand, whereas Waymo now it's about a quarter of a million to fully outfit these things. But I just think that the quote-unquote AI veneer or juju that takes the market cap of Alphabet up several hundred billion dollars is going to afford them with the ability to just overwhelm that market with capital and go vertical. So I would bet on Waymo. What about you, Ed? I'm really not sure, but it is so interesting how this is all hinging on this question of the verticalization strategy.

59:02And on the one hand, it's whether you should go vertical. And that is a big question. It's a question that Uber was grappling with when they were beginning to build their own robotaxis. And then they decided, no, this is too difficult and it's too expensive. We're not going to do it. We're just going to operate the networks. it seemed when Waymo started partnering with Uber that Waymo was going to just focus on building the cars. Now it's looking like maybe they actually want to operate their own network without Uber. Tesla was always interested in going vertical. But this has been a debate on what is the right strategy, whether to go vertical or not.

59:40And it relates to our conversation with David Risher, the CEO of Lyft, where he basically told us, and he's probably talking his book, But he told us that going vertical in autonomous is too hard. Probably doing his book because, you know, he has every incentive to partner up with a Waymo or a Neuro and operate those fleets. So there's one, there's the question of whether to go vertical. And I'm not sure I know the answer on what's right there. And then the second question is, if you are to go vertical, how? How do you do it? And that's another question I'd like to get your reaction to. and our research lead, Mia Silverio, had a really great point about this.

1:00:22And she pointed out that if you're trying to go vertical, there are basically two ways to do it. The first is the Netflix strategy. And that is you start with the distribution, i.e. delivering DVDs or later building a streaming platform where you just license and distribute content that other people made. And then you slowly work your way up the supply chain to get into the manufacturing or the content creation, and then you own the full strategy. The other way to do it is what we call the Apple strategy, which is the other way around. You start with building the product, you build the hardware, you start with wholesale partnerships, and then eventually you gradually start to own the distribution networks, i.e.

1:01:08the Apple stores, and then you're fully vertical. And it's interesting because we're seeing that dichotomy in the robo-taxi race right now. You've got Uber, which is in the Netflix position. They own the distribution. Do they go up the supply chain and start creating the cars? And then you've got Waymo, which firmly owns the top of the supply chain, building the cars. And the question is, do they go down, down the supply chain and start owning the distribution? So one of the seminal business professors in the history of academia, I think his name is C.K. I believe it was University of Michigan, and he came up with this concept of core competence.

1:01:48And that is find out what you're really good at, focus on that, and then outsource everything else or just aim to be industry average and everything. And what that led to was, okay, we're a great manufacturer. We're Kellogg's, we're in the business of manufacturing cereal, and then we distribute it to Kroger's or Vons or, you know, Gelson's, and their competence is retailing. the whole notion of core competence has been destroyed. And if you look at companies that want to be over a hundred billion in market cap, eventually they go vertical. They either reverse engineer where they say, okay, we're going to backward integrate.

1:02:22So Costco has a great private label brand. Walmart went into Sam's and JC Penney's launched their own denim. They got sick of selling Levi 501s, you know, buying them for 40 bucks and selling them for 41. And then to your point, Apple and the luxury industry, Chanel and Dior used to sell through Barneys and Neiman markets because, oh, they were better at retailing. We're good at artisanship and manufacturing. And then everyone from Richemont to LVMH, really their biggest kind of business strategy the last 30 years is they've gone vertical. They said, no, we want to control the environment. And distribution plays a huge role in branding.

1:02:59And then the ultimate gangster move was when Apple forward integrated into retail. But effectively, once you get above a certain point, it's not if you go vertical, it's when. My biggest consulting client initially at Profit was Levi Strauss and Company. And our big kind of recommendation was, if you want to control the brand, you got to go vertical. Look what's happening at Sears. They're putting your shit in the back and they're putting Canyon River or whatever it was called, their private label in front. You have to control your distribution. And they started opening original Levi's stores.

1:03:31The luxury market has basically gone into the real estate market and they've gone vertical. But I would argue eventually everybody goes vertical or almost everybody. And that is they try and find a distribution partner and they try and control the experience. And almost every great retailer backward integrates into producing their own product because they all get hungry for margin. In the case of, I would argue most the advantage, I would say the advantage is in custody of the consumer because is Uber has an enormous advantage in that I'm used to their interface now. They have my credit card. I'm not sure I want to sign up for Waymo.

1:04:12I will at some point, but if Uber offers very, you know, $3 off or free rides, click here for autonomous, you know, that is really powerful. So essentially the pole position is you want to be the brand that controls, that has custody of the consumer, so to speak. Kind of a good bull case for Uber. Well, this is not over yet, so we'll be continuing to track this, but it is interesting how this is all ramping up right now. Okay, let's take a look at the week ahead. We'll see earnings from Palantir, AMD, Disney, Uber, Shopify, and Eli Lilly. Before we get a new prediction, let's check in on the big prediction we both made last week about Figma.

1:04:55Figma went public on Thursday, and it did indeed see a huge pop. So we were correct about that. The only thing we were wrong about is we way underestimated how big the pop would be. The company priced at$33 and it ripped up more than 200%. So the good news is if, I mean, no one could really get into this IPO. If you bought on Thursday, you probably were allocated maybe one share. you weren't getting in at 33. But, you know, we were right. Probably should have been a bit more bold with our stock jump prediction, 30 % versus 200%. But either way, your reaction, Scott? It's easy to be right on something like this.

1:05:40Dearth of IPOs, incredible company. You pointed out that there haven't been many clinical, just traditionally great companies that aren't fashionable. They're just great companies. And I was calling everywhere trying to get shares, and people told me the book you try and build is 8 to 12x because people always put in a bigger request than they know they'll get allocated because they know they'll get clipped back. And a strong book is 12 times. And this was the last I checked yesterday. It was at 40 times. And you pointed this out. Like how many really like just great companies have gone public recently?

1:06:14So I'm now seeing that it's, as of this reading, up 240%. Our prediction was this would be the IPO of 2025, and it's looking like it might be. And this spring was ready to pop. So good for them. And again, the thing I love about this is investors now have another great company to invest in a pure play. Investors get this company at a lower multiple. Actually, that's not true. It priced at a lower multiple than what Adobe offered it for. This company is going to take that capital and try and maintain that growth rate by hiring more people. There's more corporations and customers are going to have more options to beat each other up with and keep prices low and competitive.

1:06:58It'll inspire innovation. Adobe Express, which we love, is, you know, the big term they always use in their new Adobe Express is collaborative. And Adobe's a great company, but I got to think that they got on that collaboration theme because Figma is known as being very collaborative. So is Adobe a better product now because they don't own Figma? I would argue yes. So who wins? Corporations, the employment market, the tax base, investors. And this, again, goes to just the notion that good regulation is not an inhibitor of the economy. It enhances the economy. It creates economic growth. Anyways, congratulations, Figma.

1:07:39Is it true that you got in? Yeah, but not for as much as I'd like. Yeah, I did get in. How did you get in? I have relationships with every underwriter, and I still got dick, quite frankly. Well, good for you for getting in. Any predictions for this week? No, I don't really have any. Do you have anything interesting, Ed? Why are you laughing? Bitch, you're the co-host. I'm just laughing because I don't. Co, co, start co-ing. Oh, I have my prediction, which I made last week. We're not going to see a September rate cut. And you know why? I'm wondering if this is a rhetorical. Why? Ego. Ego of Jerome Powell?

1:08:14People forget. people have egos and feelings. And if this is a coin flip, what do you think Jerome Chairman Powell's going to do? He's going to do the following. He's going to look straight into the eyes of Donald Trump and go, fuck you, boss. I disagree. I think a weaker man would submit to the ego, but I think we've got a guy who's dialed into the data, and I think the data that we've seen, we've got the GDP, which told us no story of the tariff. We've got the PCE data, which came in hot. So I think we are not seeing the story that he would like to see in the data, that the tariffs are not impacting inflation as much as an economic textbook would tell you it will.

1:08:59And therefore, he's not going to cut rates in September. To be clear, he will do, quote unquote, the right thing. When the right thing is a coin flip, I think he probably gets a little bit of pleasure out of standing up to a president. There is never a reason. There's never a reason to be rude to somebody. The president has been rude and disrespectful to this guy. And I don't care how powerful you are. If it's a coin flip and he could go either way, which way would you go? What would you do? Say it was like, okay, we could make a very solid argument to wait. But also it does look like inflation isn't as bad as we thought.

1:09:34It might make sense to start the right cutting cycle. It is literally a 50-50, which I think it is right now. what would you do if you were chairman pal you're not gonna like my answer and you're gonna call it too mature and lame but i would do my very best to focus on the facts and not my ego and which is impossible that's what makes us human ed he's built different he is he's a different breed you just think he's a machine he's a machine he doesn't care i find at the end of the day everyone especially people who have testicles have pretty big egos That's fair. Okay, well, we'll see.

1:10:36Lifetimes

1:10:42You held me In kind Reunion As the world turns And the dark flies In love.

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