#295: Even Bolder Stock Buys for 2026!?

0:00Emmet:And had we a heading to pitch, which is the best company you never heard of, or possibly never heard of, I think Danaher would equally fit for URI pitching it there.

0:17Emmet:Emmet, how are we getting on? Howdy, Mike. How are you this week? I'm okay. People might notice I don't have my floating mic and my big can earphones. They kicked the bucket. that was the technical difficulties that started last week so they're on the way but this is just a small excuse i'm using airpods and i don't know if the sound is going to be as clear as it usually is which might be a bad thing i think people might be yeah you're talking rubbish anyway mike you know yeah um but better audio is on the way don't worry um but we've got a good some good feedback uh from last week's episode emma so we said we continue on with the kind of same type of format we actually got a nice comment in from one of our Finnish listeners.

1:00So if you want to write in to part of my wall street.com, if you have any good Finnish insights there, because it is actually quite fertile hunting ground for stocks. I found, especially with charging and fearless, a lot of stocks pop up from Finland that you wouldn't really think. So yeah. So what's on the menu then today, We're jumping in same format with each pick, a category, and we're each going to pitch a stock. So the three categories today are one from Magnificent Seven. That's the one we couldn't get finished last week.

1:33Emmet:That was our teaser. The next was a biotech. And then the last was a stock that has absolutely nothing to do with AI. I think they're all pretty appropriate. Magnificent Seven is the most talked about collection of businesses there may have ever been. biotech is interesting it's on the up and up it's kind of had a post-covid hangover and it seems to be in recovery mode so i think there's definitely some interesting businesses to come out of that space and then something that has nothing to do with ai whether this is a good thing or a bad thing in the current market i think long term finding those businesses that aren't attached to what can be considered a bubble i think in in no uncertain terms like we could get very specific and look at the details of things and maybe compare it to the dot-com bubble and it comes off more favorably.

2:24But I think it's not a huge jump to say that there is some form of AI bubble fomenting at the minute.

2:31Emmet:Would that be fair to say? I think so, yeah. I think it's as good as certain because there's small businesses now hyperinflated to multi-billion dollar valuations based on zero revenue. And then there's giant businesses pumped into multi-trillion dollar valuations based on what they're doing with AI. So it has touched every business. And it's analogous in my mind to the dot-com bubble where suddenly the internet was everything. And then there was those businesses that were quote unquote pure plays in internet that ended up being part of the internet lore, whether it was e-toys or e-pets or flues, which I think Whoopi Goldberg was a co-founder of an internet startup journey.

3:13was she pets.com pets.com is the one that always pops up it is yeah that's the the hold that up

3:19Emmet:as you really don't go to a.com website or you certainly didn't in the late 90s or shouldn't have in the late 90s to buy a labrador puppy like it just doesn't it's incongruous a bit like saying um is ferrari an internet company of course not it produces physical cars but internet is part of its brochure where its brand touch point and everything got into a kind of a hot mess and now we're we're looking at something similar with AI because even when you slacked me about us talking about a business that has absolutely nothing to do with AI I think I picked a good one but when you consider what Elon Musk is saying which is that human beings will very soon as a consequence of AI through the optimist robots be able to do anything a human does you could start to elongate that argument all over again and say that ai will ultimately touch everything but i think right now today we have plenty to pick from that are sherwin williams-esque which is as we've often discussed on this show paint and it ain't okay well let's get into the magnificent seven first you kick us off this podcast is brought to you by profit the four minute a month stock selection system built for long-term wealth creation.

4:36Emmet:It's as simple as this. On day one, buy an equal amount of the 10 recommended stocks. On the rebalance date, profit tells you what to sell, what to buy, and you repeat the process. It's that easy. The result? Since 2009, profit has delivered an average annual return of just over 19 % with performance spanning multiple market cycles it has outperformed the s &p 500 13 out of 17 years that's 76 of the time which is virtually unheard of sign up today email frank at my wall street.com and if there's a discount going he has it okay i'll go first so um well i spoke at length about tesla a couple of weeks ago just before we broke up for uh christmas new year's break uh so i'm not going to go with that so we're down to magnificent six and uh i'm going to choose google which was the stock that my friend david from the motley fool chose to buy if he was heading to a desert island um and as much as like last week we spoke about business like cameras um or indeed rivian are there there are businesses that cameras probably unheard of by anyone who doesn't subscribe to nexus until last week rivian it's known by a lot of people in the western world but certainly when we talk about google or indeed its parent company alphabet everybody knows it everyone listening to this podcast has interacted with its assets tens of thousands of times whether or not they know it and they probably do so there's loads of angles that i can take in pitching alphabet um but the one i'm going to go for and we've discussed them all over the years here in stock club we've spoken about youtube and Instagram and I'm sorry Instagram is owned by Facebook YouTube and we've discussed Waymo and we've discussed all the different assets that they have through to Google Ventures um where I remember once reading that surgery brand is so hard to please that if you walked in and invented a time machine that had been funded by Google Ventures he'd be annoyed if you had to plug it in for electricity so um but what I'm going to go for is the very thing we're going to go against than the last segment of today's shows, which is the dominant narrative around Google for the last year or two was that it somehow missed AI.

7:00Yeah.

7:01Emmet:Yeah. And that OpenAI's chat GPT was the OG, it was the giant, it was the disruptor, and it certainly is slash was. I think you can still classify it as a disruptor for sure. For the longest time, Google search seemed so completely unassailable And then all of a sudden, here arrived this shiny new box number three. That's right. And investors panicked. And Google, who effectively invented much of modern AI, was suddenly being portrayed as slow and bureaucratic and on the back foot. Well, now that story is out of date because it implemented quite the significant U-turn. and what we've just watched is one of the most important competitive reversals in modern technology and it's kind of somewhat missed because as we opened up the show with AI is everywhere it's every discussion it's will it disrupt Atlassian will it take down Adobe will it do this will it do that and Google was one of the businesses that was being held up as a laggard and it was getting crushed but its advantage was decades of ai research and the world's best data uh custom built infrastructure and virtually infant financial firepower were all in place at google to fire to to scale these models at a level no no other company on earth can really afford and in 2025 and i'd even say in h2 the second half of 2025 all of those assets just snapped into place and a small internal moment in google captures really captured that shift perfectly in august a google engineer uploaded a new image generation feature from deep mind almost as an afterthought it needed a name so she made up a name for this thing at 2 30 a.m called nano banana have you heard of nano banana yeah yeah i remember this this was a very much uh a bit of a wow moment it was a bit of a wow moment comparisons yeah it really was within days it was one of the top global ai benchmarks it was trending on x and it was blowing past internal usage expectations and by September just gone Google's Gemini app became the most downloaded app in Apple's app store and the momentum didn't stop by November Google launched its most powerful Gemini model yet and this time it didn't just catch up to open AI it completely leapfrogged it on several key measures internally open do you remember seeing Sam Altman on TV um he had issued a code red code red yeah that was that's right the headline for sure it was yeah and and he basically instructed everyone working in ai to stop what they were doing and reorientate because of what they could see instantly with google and what happened with google didn't happen by accident it had spent more than a decade laying the foundations that others are really now just trying to replicate and it merged google brain and deep mind uh and brought sergey brain back into the technical trenches which he was kind of out certainly from an outsider's perspective someone not working in google and not sitting watching it kind of transitioned from a non-executive role and this whole ai race drags him right back into it and oh totally it's very much being seen no question either i mean he completely leaned hard into this multimodal ai training gemini on text and code and audio and images and video from day one and that decision uh slowed early releases but really is now paying the dividends so crucial google also solved the problem that most ai companies haven't even reached yet which is the cost one of the big again dominant narratives when you switch on CNBC or Bloomberg in the morning is this kind of everybody's spending so much on AI, but no revenue is falling to the bottom line.

11:15Emmet:Well, long before generative AI went mainstream, Google started designing its own AI chips, which they called TPUs, as opposed to CPUs. We're all used to hearing about CPUs. Well, these TPUs are tensor processing units, are the latest generation of tech for ai and it has materially reduced the cost of running these large models which crunch an awful lot of chips as we know chips need energy and create heat and this is a very even though we're talking about microscopic or solid state physics a lot of heat is created a lot of work is being done um to the point where google is reportedly in talks to sell these AI chips to competitors.

12:01Emmet:So the existential question, of course, was search. Would AI kill Google's golden goose? And so far, the opposite appears to be happening. AI overviews and this controversial AI mode search of led users to ask more complex, higher value queries. Search ads, paid Gemini tiers and enterprise subscribers and even custom hardware are all I suppose contributing to AI becoming this revenue engine as opposed to just being a big cost center full of nerds over in in a data warehouse on the other side of the campus and then by the end of last year Gemini had over 650 million monthly users which completely closed the gap at GPT faster than anyone had expected so i think the story just i suppose to summarize the story that google is down and out is completely wrong it is on the rise and i think it is in the seven they are all pretty magnificent there's no wrong choice in the mag seven but um i'm gonna follow david gardner's lead as i've done so successfully so many times in the past and um i'm gonna go with google slash alphabet yeah yeah it was my stock of the year for 2025 and i think it's obvious why you summarized everything there and even the comparisons with open ai and chat gpt are very prudent because you touched on it like google has the applications for all this if you know what i mean if you know for sure like it's it's chatbots are almost an enhancement of search and it knows what to do in search so it knows what to do with the chatbots and then you have all the infrastructure that's already there and Google Cloud and everything else.

13:45It's an amazing business. And it's just so diversified. There's so many, there's so many bows in its quiver, so many bows in its quiver, so many arrows in its quiver.

13:54Emmet:Oh yeah, yeah. It really, it really is an amazing business. And 2025 was kind of the come prove it year for us. And it did that in playing color. So I think it's a very strong pick. And just before we move on to your one, a quick pop quiz for you, mike which ai engine do you use most of the time which what's what's the one that what's your go-to engine i'm actually a bit of a weirdo i use perplexity which is from from anthropic yeah is claude not from anthra anthropic perplexity by claude by anthra anyway yeah okay so that's who you use no perplexity is different to claude claude i think oh my goodness it's all a blur how could i not know this i'm sorry i'm looking at it here perplexity is its own thing um oh i see so claude is bianthropic and perplexity is perplexity yeah yeah it comes from this guy arvin serenina yes he was uh former open ai former google brain and deep mind so fairly well split up but i just got a what's i got a free pro subscription to that when i signed up for a revolution credit card or something so does me i'm not really uh too yeah yeah um i have got to sign up for revolution because everybody is telling me about the free stuff they get is certainly more value in my mind than the actual utility of Revely, but there you go.

15:28Emmet:Right, so what's your Mag7? So this is actually a tough one to pick because the time recording this, they're all at or near all-time highs. Yeah, for sure. Within roughly 10 % anyways, that might change between the time you record and the time this goes out. So it comes down to personal preference here. There isn't much opportunism afoot, you know? So with that in mind, I went with Amazon. It's a stock I've owned for a while. and as you said look you can't really talk about the Magnificent Seven right now without talking about AI but I feel like with Amazon why it wins out for me is because of the diversification around it I was complimenting Google and the diversification there but with Amazon there's almost an even further extent of this business beyond the technology and if that makes sense like obviously we could talk about NVIDIA but I just feel like it isn't diversified enough and it's the number one cost for everyone in this conversation you know you're talking about google's tpu chips amazon have their own tranium and in first year chips as well these kind of businesses usually will figure out a way to reduce expenses expenses and nvidia is absolutely the top of the list here do you know what i mean i'm surprised you didn't take i'm surprised you didn't take tesla obviously well i did in first i did go i went deep on tesla there a few weeks ago so i thought i'd just give it a rain check you know yeah the google i would probably usually choose it's another stock i've owned for quite a while um and as you said the ai race it really looks to establish itself as a clear winner and not clear winner sorry clear leader would that be fair to say ah absolutely yeah then yeah so it just brings me to amazon obviously very much in the air race too and it's having a bit of a purple patch over the last nine months or so but not hugely it's not on any kind of run like google is do you know what i mean um yeah it's still just home along obviously aws is there and it's got increased workloads from ai does have increased competition from microsoft azure and google cloud google cloud but it just looks to be like this kind of never-ending run with aws do you know what i mean it's powering powering everything we know basically it's got about 200 billion dollars in remaining performance obligations which are expected to be seen over the next four years alone.

17:51You know, and then with the cash flows from that, it invests into the kind of less profitable parts of the business, like Amazon Marketplace and everything else around that. And it's just this huge ecosystem that is so synergistic. Is that a word? There's so many synergies. And then I touched on that as well. But I think this is worth mentioning too, is Amazon's dipping its toes in developing its own Tranium silicon chips, Tranium and Infertia. And the famous thing where AWS came from, where Amazon logistics came from, was Jeff Bezos looking internally at his expenses and turning around and basically turning it into an opportunity.

18:39this is that and this is them looking at how much they're spending on NVIDIA and being like wait a minute can we do this ourselves now obviously it's not going to be a legitimate alternative anytime soon but it does like beg the question and probably my one reason for maybe being a bit wary of NVIDIA is just considering who their customers are they're not going to be enslaved to that customer relationship for so long they're just like it's just not in their nature especially with amazon it's been so much of the amazon culture there uh so yeah i i really like amazon there's other parts to it too the high margin revenue from ads which q3 ads there was up 24 year over year to just shy of 18 billion which is kind of nuts like you completely forgot that amazon has slowly become the third biggest ad platform in the world And that just shows the diversification of the marketplace of AWS, of everything under its umbrella is just amazing, really.

19:45So, yeah, obviously you're looking at CapEx, but that's the same across the board, really, for the Magnificent Seven. So, yeah, I think just the scale and breadth of its retail platform, the ancillary services that come from that. and then on top of that you have AWS and now the AI efforts as well. I'd make the argument that it's maybe the most diversified out of the seven. So that's my basis for picking it anyways. And I also think it's maybe the most in the real world as well, if that makes sense, just with the marketplace. So yeah, Amazon.

20:22Emmet:Yeah, I'd agree. I think it and Google are actually neck and neck for the most diversified. I think the other five are more specialist. So with that proverbial 10 grand investment for your grandant, how would you split it between Alphabet and Amazon? Oh, this is, I think given Google's recent run, like it's not going to do that again, or it would be what, flipping$7 trillion company this time next year. So I will go, I'll go six and a half grand into Amazon and three and a half grand into Google. How does that sound? Yeah, it sounds good. I think we should have a no 50-50 split. No 50-50. There's no, there's no sitting on the fence.

21:13Yeah.

21:14Emmet:I think I'll go 60-40 into Amazon. Even though I pitch Google, I buy your arguments and I agree the fact that Google has had, alphabeta has been firing on all cylinders lately when everyone just realized that they weren't dead in the water so yeah i'm going to go 60 into amazon yeah but again that one is a that one is a fair one to split the base because like an awful lot of people listening to this will own both stocks i own both yeah you know oh yeah um so yeah okay we're getting a bit more interesting now we're going into biotechs oh yeah yeah i'll kick i'll kick this one up so i'm going to preface this by saying that med pace is my favorite biotech stock but similar to you with tesla i just talked about i think right before christmas you did you did i even pitched it in horizon as you know about a year or two ago uh and it's in nexus too it's kind of it touches a lot of bases but it is such an amazing company it's magnificent but okay so anyway we're not talking about med pace we're not talking about it's also what are you going to go with quite expensive after a recent run up so it's always been expensive um and i also figured if we're talking biotechs that you would have picked the riskiest stock known to man so to balance that i went with danaher um okay yeah you know you know you probably know dana has been on the market for yeah 20 30 years it's uh yeah at one point i think it was about a 250 bagger it's come down to earth at this over the last over that kind of COVID hangover, which I mentioned at the start of the show.

22:42But for people who don't know, it's a life science and diagnostics conglomerate, really. It owns a number of subsidiaries with three distinct segments. So biotechnology, this is kind of the one company division in a sense. It's a branch led by this company, Sativa. It worked as a client to bring new treatments to market provides tools from discovery to distribution. Then diagnostics, which is the largest segment by revenue. I really like diagnostics in general because most of the time they operate this razor blade business model, which we've talked about a lot on the show, but basically, you know, the classic example is Gillette.

23:24Gillette sells you this brilliant Mac 3 razor at cost, or is it, you know, it probably has to be at cost because it's illegal to sell it below cost but then you know for the next 10 years you're buying the blades and that business model works so well very sustainable lots of free lots of cash flow coming in that's what an awful lot of danaher's diagnostic businesses do they provide tools and software for things like biopsies blood tests molecular testing and a lot more across a number of different fields there's multiple businesses here beckman coulter cepheid radiometer mamatome just a few names from it for anyone who might be in this area that could recognize them.

24:07And then last but not least, we have the life sciences division. So this would provide chemicals, lab equipment, tools, all of that to power the analysis, visualization, characterization, and production of biopharmaceuticals, cell, and gene therapies. So the companies involved here are Abcam, Aldebron, Beckman-Coulter life sciences, gene data, integrated DNA technologies a lot more. So yeah, with that, it's a very special company and it's been a very volatile stock for the last five years. Big thing that happened post-COVID was there was a huge slowdown in biotech funding that just hit demand across all of Danaher's divisions.

24:51But then the last few quarters, we've shown some early signs of recovery. Demand is rising, margins are improving, and the stock is up. It's up about 30 % since April last year. That's after falling about 40 % from all-time highs set in late 2021. It's always been perceived as one of these really high-quality businesses, and it always carried a pretty premium valuation. It did. It's obviously well diversified across all of the life sciences gamut. It's$100 billion plus, I think, market cap, and very much considered a blue chip in what is quite a risky industry so it's always been well admired it's always been well admired and it has this dan her business system as well which is kind of famed across famous mba programs and stuff which entirely you know dan has produced like this

25:43Emmet:army of ceos for other businesses who started their career in the early stages in there and had we a heading to pitch um which is the one of the best or the best company you never heard of or possibly never heard of i think danner would equally fit for uri pitching it there because it was only founded in like 1984 and as far as i recall was named after it was either a mountain or a river or something in montana it was kind of like this invisible business danner creek rings a well but the two lads who who founded it and i don't their names i can't recall but they came up with this dbs the danaher business system yeah that as you rightfully said is just being now it's studied just like the the kellogg school uh has kind of modeled on certain businesses its methodology dbs has done the exact same and has produced these incredible ceos armies of them and yet in 1983 this business didn't even exist yeah and i think when we're touching on we looked at on the downer business system but in general the culture because it's so important because you're integrating new businesses into a much larger umbrella company that that dvs is so key in elevating the operations of the incoming business so if he danner goes and buys emmett and Mike's diagnostic testing, you know, that business could maybe produce 100 million at 10 % margins.

27:17And we bring it into Danaher and with the shared synergies and the shared client base and everything else, and then just the pure operational know-how and improvements there, and even the shared resources with other companies with similar, say, plants or manufacturing or whatever, it can go and produce 110 million revenue, but bring those margins up to 20-25 % very easily. And that's the beauty of having a serial acquirer in such a specific niche. And I think that's really what is covered by the DBS in a big way as well.

27:49Emmet:So yeah, that is a frigging company. You're dead right. And when you started by saying, I'm going to pick a risky, super risky one and I knew you'd go to a moderately stable one, you're on the money because that really is stable. And I have something that's just like a rabbit on a rocket ship. exactly yeah how did it get there and where's it going so will i pitch mine yeah go for it all right okay well we have covered a lot of biotechs in recent months so i'm going to pitch a stock that will be a familiar name to long time horizon subscribers as i pitched it there but i have not invested in it as a matter of fact when i pitch a stock in horizon it goes onto the watch list then after a time if i am not gonna buy it i stick it into the basement i remove it from the watch list so i've actually removed it from the watch list but the secret is folks i still watch them i just don't watch them as closely so uh but so i i am watching this business and um if you want a clean expression of the of the question can ai actually change drug discovery recursion pharmaceuticals is one of the purest ways to play that trend because i believe it is unquestionable that ai is going to revolutionize one of the most complex things which is molecule discovery to cure something that's highly highly complex um so recursion pharmaceuticals is a platform company and the core idea is very simple uh but extraordinarily ambitious which is to automate biology at scale.

29:32Emmet:In those few words, you're like, what's that now? Well, what it does is it generates enormous proprietary data sets and uses machine learning to discover drugs faster, cheaper, and with the higher probability of success than the old trial and error model, which has been the making and breaking of countless pharmaceutical businesses since the birth of chemistry you might say and they've gone further than anyone else recursion has built what is possibly the largest or arguably the world's largest private biological and chemical data set and if we were to put a measuring tape to it their data set is 23 petabytes which was created through automated experiments running around the clock now hold the door emmett what's a petabyte well the petabyte is written as PB and it is the unit of digital storage equivalent to 1000 terabytes or 1 million gigabytes.

30:32Emmet:So for photo, a high quality digital photo is five megs. One petabyte would store about 200 million photos. So 23 petabytes would be in the order of four to five billion images. So basically the number of photos on your 13 year old daughter's phone. So five billion images is the way you kind of put your head around what is 23 petabytes. Well, they have 23 petabytes. Anyway, moving on, what does it do? Well, what recursion does is it perturbs cells. It images those cells. It analyzes cells. and it feeds the output of what it finds and sees back into a model that learns patterns that humans and big spreadsheets and old ways just can't see.

31:25Emmet:So it's biology as a data science. And why would we look at recursion now today, January 2026? Well, the first reason is validation. So in 2023, recursion struck a deep partnership at NVIDIA, which it has since expanded. And NVIDIA provides them with cutting edge compute and AI expertise. And in return, it gets access to recursion's biological data for its BioNemo platform, which is not a marketing partnership. It's a, and I think it's, I don't really know what it is, but it's like an endorsement from NVIDIA that recursion is onto something in an extraordinary way in an AI era. And crucially, it gives recursion access to world-class AI infrastructure without it having to incinerate the cash that we see AI businesses requiring in order to build something themselves.

32:25Emmet:And the second and more important reason is that recursion is no longer just a discovery business. Drugs have moved into the clinic and its pipeline includes programs in rare diseases such as neurofibromastotosis type 2, cerebral cavernous malformation, and a whole bunch of these other unpronounceable illnesses that I hope and pray none of us are ever exposed to in the real life. But they are areas with limited treatment options and have clear regulatory pathways, but a way, but and smaller, but more predictable commercial markets. I think I spoke about this in the past, about rare diseases. When a disease affects a small patient population in America, which anywhere but in the U.S.

33:14Emmet:is typically designated as less than 200 ,000 people, it can qualify for this orphan drug designation, which comes with incentives like market exclusivity, fee waivers and tax credits. And again, I mentioned in a previous podcast that in my earlier days, I invested in an orphan drug specialist called transchirotic therapies. And it was then in my 20s, I learned about how wonderful this orphan drug designation is because it makes it commercially viable for a business to chase a cure to an illness that otherwise nobody would look at. so if you had a son or a daughter or sister brother or mother with a very rare and curable illness you want those business out there incentivized to make it work yes it's it's expensive to find a cure but the market is small and the pills or the injection whatever it is it's expensive to buy but at least it creates cures where otherwise there are none so when it comes to recursion there's also other shots on goal in oncology and neuroscience and that's important because platforms only become valuable when they start producing outcomes and not just insights.

34:28Emmet:Now, the uncomfortable part, which was probably implicit in my opener, Mike, this is a very, very, very, keep saying very, I'm it for five minutes, high risk investment. And recursion, it has no drug sales revenue today, and it burns a ton of cash doing R &D, and its losses are ginormous. Margins are deeply negative. It's very different to Danaher. And even with... I was just looking at it there while you were talking a negative 1600 operating margin. That's correct. I mean, it has$400 million in the balance sheet. But time is not infinite. Clinical trials can pretty much always do drag on, they fail.

35:10Emmet:And regardless of how elegant computational prediction may look it's the bottom line that counts baby does this thing that you've discovered cure the element at hand and that's the bare case in plain english biology is very messy ai models may not generalize and the company could spend years and billions more proving nothing like so that's kind of like i can say oh it's got petabytes of data and a super high AI trained system in partnership with NVIDIA. But all of that amounts to nothing so far and may continue to amount to nothing. However, if it's the opposite, if recursion's approach works, even partially, drug discovery economics change and timelines will totally compress, costs will fall pharma companies won't need to reinvest endlessly they will be able to partner and license or indeed acquire and it has a market cap today that still reflects an awful lot of skepticism um and success and even just one or two of its programs would probably reprice the stock in a time called quick and remember in december i pitched a company called wave which is the a a competitor to glp ones yeah but it has a distinct advantage of it you only need one shot or two shots a year and it builds your muscle it only gets rid of the fat you look like a greek adonis if you take it well that was an example of a pharma that in a time called quick in the space of a week as far as i recall went up 50 100 i can't quite recall and that's a good example of where once it's evident that what you're out to do is more than just a pipe dream it gets priced into the stock so in reality recursion is just a bet we are not betters we try we we try to invest with favorable odds we're not better but recursion is a bet on whether ai can move from assisting drug discovery to actually driving it um and that is certainly not a bait a bet you the same person would make with anything other than a tiny percentage of their portfolio.

37:26Emmet:So anyone who believes AI will reshape healthcare as profoundly as it's reshaping software, this is the kind of investment. It's uncomfortable, it's volatile, but it has a high upside that might just augment your personal portfolio's worth. So that's my few minutes on recursion. Very good. Okay. Yeah. I was right to pick Danaher. I think it's a good balance. 10 grand. 10 grand. You get the phone call. Howie, Uncle Mike, what's the story? Howie and Michael Jr. What you doing my 10 grand? So what did you do with his 10 grand Danaher versus recursion?

38:08i will go nine and a half danner paltry some in recursion it's too risky for me but the fact that we talked about it and i had the opportunity i couldn't leave nothing behind

38:22Emmet:i hate siding with all of your pitches considering i had all the world to evaluate and nobody told me what to pick but i'm going to choose yours for the majority as well simply because well for the same reason that i stuck it into their horizon basement i like it i hope it succeeds oh my god i hope it succeeds i mean we all you me and everyone else will have a better life if recursions shizzle is that the word shizzle is that what what's the name snoop doggie if they're shizzle shizzles but if they manage to do their thing um they are going to change humanity but i'm still only going to put 30 in three grand uncle mike into recursion seven grand into danaher yep you heard any other of them leave it with me i'll talk to you in 20 years sounds good okay uh so we've kind of spent a bit too much time in this episode talking about ai oh yeah so the last pick is the complete opposite oh yeah let me go this is going to be oh my god if we have one listener left at the end of this who isn't friends or family i'll be surprised i'm going to talk about waste management literally the business picking up trash you just can't get further than ai than garbage trucks um it is north america's largest trash hauler um and landfill operator i've known about it forever on a subscribe to dividend investment newsletter in the late 90s i remember reading about waste management and even at that in the late 90s i got a kick out of thinking that the garbage truck team were on the stock market i was like i didn't even know you could buy shares in garbage trucks Well, here we are.

39:56Emmet:They pick up your rubbish, as we say in Ireland, or your garbage. They recycle your cardboard. They operate landfills where eventually all your stuff ends up. And it was founded in 1968. And it's about as old school industrial as it gets. Trucks, bins, holes in the ground. But it's what legendary investor Peter Lynch called a disgusting business. and what he meant and he meant that as a compliment by the way your business is disgusting i love it um nobody wants or likes to think about trash i i i don't think many people young people look out the window at the garbage truck woman or man and go i want to do that because it's smelly and it's raining in ireland when it's out there but it's it's a pretty quote-unquote disgusting business and so the stock doesn't get hyped you don't hear a recursion style argument about changing humanity when you're talking about a noisy truck pulling up outside but the fundamentals are really rock solid it's recession proof firstly i don't know anyone who stopped getting their garbage lifted because times were times are tough people and businesses produce trash in good times and bad the stock has delivered uh returns exceeding well over a thousand percent uh 1035 i think i read yesterday over three decades um it's constantly beating the s p 500 and then the dividend aristocrat etf um has it in there and it just pays a really great dividend every year since i think 2004 it's at least 20 years paying uh dividends and it's it's kind of ratcheted that dividend from 75 cent to three bucks 30 a share and then just last month in december 2025 they announced a 14.5 dividend dividend increase for this year 2026 plus a three billion dollar share buyback program and it has a mass a massive competitive moat because you need permits you need a land you need equipment you need a bunch of people very happy to lift garbage and you need contracts to operate in this business and waste management owns all the infrastructure they control the landfills which appreciate in value as they fill up which is the opposite to most assets they have long-term municipal contracts and they also have the benefits of huge economies of scale it seems to be an unstoppable business and there is by the way before i shut up a hidden growth angle here's the interesting part landfills produce methane gas which waste management captures and converts into renewable natural gas and electricity and they've invested and this isn't by the way a little what does a funny smell over here boss what do i do it sure put it in a bucket no they've invested they've invested that's a job you give the apprentice but that's yeah turn the bucket upside down and catch the methane and bring it into me um they've invested waste managers invested three billion dollars into renewable energy business and it's expected to generate about 500 million dollars in ebitda which is not to be sniffed at and shouldn't be sniffed at all because methane is doing and the stock the stock is a very important term there oh not to be sniffed at all and i'll wrap up by saying the stock hit an all-time high of 242 dollars 58 cent last june but it has pulled back around 10 % to, I don't have it up and right here, by 218 bucks.