Brian Belski Breaks Loose, Palantir Erupts, Stocks Getting Quietly Killed, Uber and Tost Report

24:30It's not just about valuation. It's about the structure of the deal-making. And I think we could all agree any company that comes out and says, we have a deal with NVIDIA or a deal with OpenAI, it's an automatic 10 % pop in the share price. Except self-serve. Except one. No, but I was just going to say exactly what you just did. And that's not Apple. That's not Microsoft or Google. We're talking about OpenAI and Anthropic. Which don't have share prices, by the way. So OpenAI, all right, so let's just say they're doing$20 billion in revenue, whatever it is. Okay, it's not$13, it's$20. Maybe let's say it's$25.

25:02They're looking to go public at a trillion dollars. Guess what? They better grow into, they better get to$100 billion in revenue. Now you might say, and I don't know anything about this, Michael, there's no roadmap for OpenAI to get to$100 billion. Fine, maybe that's the bubble. But is it in the public market? Yes, yes. because think of how many of these companies are reliant on OpenAI continuing to spend at the rate it's spending in order to keep reporting their numbers. And that's the part that people are saying, we're not calling this a bubble because Microsoft's 100 times earnings. We're calling this a bubble because the revenue growth is not sustainable if somebody kicks out one of these legs to the chair.

25:45I'm not suggesting I'll be the one to see it coming, But I don't dismiss the bubble concerns as easily as somebody who just compares PE ratios. Yeah, we're in the same boat. And I kind of go back to my O 'Neill training as well. Stocks are rarely linear. Shaquille? Yeah, Shaquille O 'Neill taught you a long time ago. Will O 'Neill. Bill O 'Neill, the great Bill O 'Neill. Stocks are rarely linear for long. So, you know, call me cynical. Why, Belsky, are you opening a firm at the top of the market? So my comeback would be, well, I don't think we're at the top of the market. We still think we're at the top of the market.

26:19It's funny that you said that upon your announcement. I think you're a little bit self-conscious about, oh, my God, what if it is the top? And I chose to launch my firm the same day. Well, I mean, you know, again, that comes back to the humility or self-deprecating. But, you know, our call is that a 25-year secular bull market started in 2009. I don't know. You and I have talked about maybe different. Maybe it started in 2011. Close enough. 13. Yeah. 13. Potato, potato. But I think we have, I think we got another 10 years to go. But we are going to have, we are going to have a recession again.

26:51We are. We're going to have a bear market again. We are before this big secular bull is done. And it maybe is one of these frothy people failing or really tripping. Small mid, a partial defense against the unwind of the AI bull if and when it ever happens, meaning market cap comes out of the Oracles and out of the Microsofts and looks for a home in an area that's not reliant on open AI getting to a trillion? Like, is that a possible story? I think all three strategies are, meaning dividend growth, value, and SMID. You think they'll act as a counterweight in a portfolio of some extent? I do, depending on how bad it is.

27:32I think they could, yeah. I do because, again, if you go back into SMIT in particular, I know a lot of people have talked about, the Russell 2000 aren't making any money. Well, you can't make a broader index thing. You've got to look at the companies. The S &P 600, it's got lots of cash in the companies. Some of them are paying dividends. The MidCap Index, the MID within the S &P, looks really great as well. And you combine the two, there's a lot of great ideas. So if you think about, like, I already mentioned Celsius or Shake Shack or Chewy. these types of names that have nothing really to do with AI.

28:05Or I love small cap financials like Glacier Bancorp in Montana. It's an amazing company. Or First Citizens is a roll up a lot of, I mean, these smaller banks, I think, are very well positioned from a relationship standpoint, just like the big banks are. We love financials in general from the value perspective. But I think that both those areas, meaning Smith and Value, are going to be huge winners through this. And I do think too that there's not enough dividend growth investing either out there. So I think I go back to when I was - We don't like the taxes. No, we don't like the taxes. Relative to the buyback.

28:42Well, just reinvest the dividend, reinvest the dividend. No, no, no. We don't want to pay the taxes on the dividend. No, I don't. So we're going to Ford versus GM. Yeah. I don't know that there are huge differences between the two. I know Ford's got the best-selling truck. GM's got more high-end luxury SUVs. I get that. But the really big difference seems to be GM's return of capital to shareholders is almost all in the form of buybacks. And Ford's is almost all in the form of dividends. I don't know. Like, I feel like that's a pretty big difference. And I don't know what else is very different.

29:19I think that's right. If you go back to, like, I go back as a young strategist in the late 90s. And I remember marketing in Boston at Fidelity. And I remember meeting with a portfolio manager there. And he's like, Belsky, I got, he was a small cap manager. He's like, Belsky, I got to buy Microsoft to perform. I don't, I don't know if we're quite there yet on that. But the other thing too, is I wonder if there's got to be some data out there. Chart guy can figure it out or something. I wonder how many value managers there are now relative to 10 years ago or SMID managers. How many left? Not many.

29:51How many left? And they have less money. Yeah. Or dividend growth. It's like straight down. That actually is a contrarian signal, right? Now, you have to have the fundamentals. Don't be contrarian just to be an asshole. Be contrarian if you have the analysis to back it up. Or why it will change. Or why it will change. And I think that, again, let's go back to the dynamics of the market. I think we're going to have broadening out. If you have broadening out, that obviously makes it for more cyclical areas in the market, more cyclical areas within consumer discretionary, with industrials, and certainly within financials, which we still believe after all of this are still under-owned.

30:28Which part of the financials? Because there's a lot of different areas. Well, we think, we still think it's a bifurcated market, meaning the really big are going to do well and the really small are going to do well. That's why I think the in-between, we're going to have a lot of, we're going to have mega mergers of these regional banks because they can't compete with the big and they can't compete with the small. Yeah. That's coming. I just saw one. Who was it like two weeks ago? Fifth Third and something. Is that a lot? Yeah, someone else. Yeah. Oh, Comerica. They bought Comerica. But there's going to be more coming.

30:56There's going to be more coming because they can't compete with the really big. Now, honestly, too, here's some perspective. Think about the financial crisis, but even in the early 2000s, would you ever thought that Goldman Sachs would be talking about private wealth in the early 2000s? Yeah. No way. What do they talk about now all the time? Right. So I think that the big banks with the multidivisional assets of wealth, consumer, commercial, institutional, very well positioned, right? The medium-sized banks, what we used to call the regional banks, it's going to be hard for them to compete. I think the brokerage business is still a great business because it's scalable.

31:35The asset management business is scalable. But the small banks, these guys are cranking on earnings. And we think that they're going to continue to be a beneficiary, let's say, of volatility in the market. You have a year-end price target on the S &P 500. at 7 ,000. I know you've consistently been more bullish than the pack in the last 10 years. In the last couple of years, you've sort of been still bullish, but like not quite as far ahead of the pack because everyone else is caught up to you. How do you think about just the idea of an S &P target? Do we even need to do that anymore? Being more on the asset management side versus the brokerage side?

32:14What are your thoughts on where we are? You know, it's a great question because we've written this piece called the year ahead piece. And I think I've written like 26 of them. In last year, you have to do it every year. Yeah, I got to do it every year. Are you done? I don't. Listen, man, that thing is 40. I mean, it's the smart guy piece. I don't, you know, more for institutions, but we put our piece out earlier as we do usually, following presidential election years because we wanted to give more guidance. And so we put it out in early November, right? A week after the election. And our bull case for 2025 was 7 ,000.

32:54So a year ago, going into the election, where were you? 7 ,000 for the bull case for 2025. All right, so 68.56 today? So we're here. We're here. But I'm not saying that to do this. I'm just saying that. No, you did nail it. Well, I mean, but what we said is that a lot of things have to happen. Now, we put it out earlier. The good thing now that we're going to be a portfolio advisory business, we can watch all the other people kind of put theirs out and see what, because in the past it was Belsky puts us out early. And I'm not saying people, I'm not saying people copy me or anything, but we, for a reason, we put it out early.

33:30It's impossible for other strategists to not shade themselves with things that their colleagues think or say publicly. Of course. And I was, we're all human, right? We're all human. That's exactly right. And when everything was going down in April, we said very clearly that if you're an advisor, man, right, and you're basing your business on a strategist target, come on, don't. Targets are an academic practice. They're an academic practice and they're a have to versus a get to. We get to put out a target going forward. We don't have to put out a target and we will put out a target. But what we said in April is we own what we own, man.

34:08We own what we own and we didn't change anything. And we were very, very, very lucky. So you, you, uh, you deserve the commendations. Um, you were one of the few that did not come out in the, in the heat of battle in April and say everything we told you three months ago, throw it out, stuck to your guns. I think investors were well-served paying more attention to you than anyone else. Um, so congratulations on that. Thank you. Thank you for that. Um, What are you, let's just close here. You're starting a business. It's the first business you'll ever be running. How excited are you? How, like, what are some of the first things that you think the public will see as a result of you being in this new position?

34:50Well, one of the interesting things is I have an aura ring. In my, in every morning I wake up in about three out of the last four mornings, it says you have major signs of whatever because of the stress and you don't sleep. and it's very exciting. It's butterflies. It's anxiety. It's everything. I'm telling you, man, on Friday when we changed our LinkedIn and we put our website up live and we have people signing up for our research, we'll have research and we'll have our portfolios up soon. It was, try not to be emotional, it was overwhelming, the response. And when you're in the weeds, man, and you're working hard, you have no idea what you're doing and your impact on other people.

35:33And I've heard from people, from William O 'Neill, Dane Bosworth, early 90s, from Piper, a lot of people from Merrill. Like your fans come out of the woodwork and say, I've been waiting for you to do this, right? Yeah, yeah. Congratulations. And then my great partnership at BMO. I mean, the brokers and the advisors up there are just amazing and sending me great well wishes and everything. It's so gratifying. But I don't, I'm not doing that for that. I'm doing it because I wanted, a new chapter in my life and I'm super excited about being off on my own and doing this and being able to do what I love.

36:06How excited are you for Brian on a scale of 1 to 10? 11. Yeah. So what are you going to be doing for people that want to learn more about your services? So we have our website up, humanlessinvestmentstrategies.com. Look it up. And we will be - H-U-M-I-L-I-S. I-L-I-S dot com? Nope, can't do that. But Humilis, I-N-V dot com or Humilis Investment Strategies dot com. Perfect. Okay. And we'll have our portfolios up and running soon. And we're hopeful to have BMO as a wonderful partner still in Canada. We're hopeful to have some great partners in the U.S. as well. And we're going to be portfolio advisory delivery only.

36:53We're not going to compete for assets. We just want to help people and run the portfolios. And I don't know if you know this about me, but I'm kind of an old school guy. Like I believe that this business is all about relationships. If an advisor trusts us or broker trusts us to help them run their equity and they have some great clients, we will go out and meet that client because I think that's important. And I don't think a lot of people do that as much anymore. That's how I learned the business. And so I think we're kind of going back to that. Ladies and gentlemen, audience, fan favorite, Michael and I one of our favorite people we've ever met on Wall Street we're so proud of you we're so happy for you I am proud listen I could you guys have been amazing like seriously amazing Barry and team the entire the entire family here has been so supportive of me thank you and it means the world to me for everything you've done for me and we're going to be great partners going forward dude so excited for you you guys check out Humulus.com Humulus INV.com.

37:57That's it. Let's subscribe to Brian's stuff. Let's get on the list. And my man, good luck to you. Wish you all the best. And I know we'll see you soon. Thank you, man.

38:24you ready absolutely born ready let's go all right ladies and gentlemen boys and girls children of all ages welcome to an all new edition of what are your thoughts your thoughts the longest running uh show on our youtube channel the compound youtube channel um michael and i have been at it since 2018 in this format some of you remember there was a time we used to surprise each other with topics I forgot about that. Not our best content.

39:00No, no big deal. We did it for four years. Guys, on this show, we talk about all of the most important things happening in the market, in the economy, in the financial news. We stay in our lane. We don't veer off into directions where we don't belong. I thought we were doing the race today. We're not opening up with the race? What's the race? The mayoral race. I thought you were starting the show with that. No, we stay out of that. I, for one, embrace our new socialist leadership. And I don't know. I'm out. I'm at lost words. All right. Anyway, we're going to stay in our lane. We're going to do stocks.

39:37We're going to do bonds, interest rates, tech, all the stuff that you count on us for. I want to say hello to some people in the chat. But first, a word from our sponsor. Michael, tell us about the sponsor. Today's episode is brought to you by CranShares. Morgan Stanley, ticker MS. Now they hear no there. They project the humanoid robotics industry could grow into a$5 trillion market by 2050 and investors are taking notice. Crane shares KOID ETF. I call it COID, COID, COID. Provides equal weight exposure to the companies powering this revolution. All right, I'll keep going. It's equal weight methodology avoids.

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41:28It's an exciting time. I was saying to Michael before we came on, when it's not earnings season, I don't even know what we talk about because when it is earnings season, there's almost too much to talk about. It's just a deluge, if you will. What do you think? You know what? I'm here for it because August in particular, sometimes it's just boring. There's nothing to talk about. Stocks go up 40 basis points every day, whatever, until you hear from the companies, and we're going to get into it today. In between times, when there's nothing, when there's no macro news going on really, like a little Fed stuff here and there, it's just boring.

42:02We're saying the same shit every week. So I'm here for it. I'm excited. There's new stories. There's news to talk about. Let's talk about it. I agree. Even the stuff that goes down that I own, at least it's like a little bit of variety. Because that rally from July into year end was sort of relentless, or year end, into the fall was sort of relentless. And now there's opportunities being created. Finally, yeah, let's go. All right, so Palantir is the big one. I can't believe it's the big one. Because like, comparably speaking, it's financials. It's not that big of a company. It's not small. They're on a run rate that's like four and a half to five billion in annual revenue.

42:37and they're growing faster than almost any company I could think of. Maybe any company I could think of, not only growing, but growing profitably. And a lot of knocks on the company about its lack of profitability when it came public now look absurd in hindsight. This company is minting money. For a$500 billion company. Now, obviously the question is, is that valuation justified? And we'll find out in due time. Yeah, it's 450, holy shit. That's the other thing. Dude, it was$500 billion. Yeah, it's huge. I mean, they've been – all right, so they're only public for two years, but they've been in business for 20.

43:15I think it's worth – the company was founded in 2003. So it might seem more absurd than it actually is, like how quickly this company got to a half a trill. But be that as it may, this is a huge business or a huge market cap and a fast-growing business would be the way I would phrase it. Do you think it's weird how defensive he is and combative he is? I do. I do. I don't think it's a great look. In particular, I think – I don't know if he's talking to Burry directly, but he's yelling at the shorts. There are no shorts. I think we have a chart up. Throw the chart up of the shorts. There's like 2 % of the float is short.

43:55There are no shorts. There's nothing here. So I don't know who he's talking to. Now, I think – you know what he's doing? He's galvanizing his base because his base are retail holders. and even if the shorts are imaginary, they're not imaginary because Barry just said he's short. It's like, fuck those guys. We're in this together. We're saving America. We're making money. Why would anybody be short this company? Now, I'm kind of sympathetic to like, why would you be short this great American company that is trying to defend our nation? It's doing all of these great things. Because it's not personal.

44:22Because it's not personal. That's why you'd be shorted. I understand why people are short the name and I understand him as the leader of the company. If this was you, you maniac, you would be relentless if there was anybody shorting your stock, your company, and you were the - All right, so that's, all right. I'm glad you said that. I do think when you're running a business for 20 years, something that you built with your bare hands, and you've had criticism the whole way up, not from the investor class, but from political people, journalists who hate his message, his America first message. And I guess like a lot, so he considers himself to be center left.

45:03In today's America, he's obviously not. But I do think he gets a ton of criticism from the left where he's a war profiteer and they're spying on everybody. And he's like almost too gleeful about helping the Pentagon drop bombs in other countries. And there's just this like distrust on the left of the military. There always has been, this is nothing new. And he sort of became the face of that as the AI enabler of the US military. For better or for worse, I would point out, he's doing a ton of work with militaries and governments all over the world, including in Europe. He sees himself as somebody who's helping to erect a bulwark of technology against the enemies of the allied countries, what we think of this traditionally.

45:51So he's kind of got that chip on his shoulder where they've been giving him shit in the press even before he was a public company. so I understand the aggravation like why do you guys keep betting against me I totally get that but that that's one side of it right it's the political angle and then the other side of it are the professional investors I'm using air quotes who think a stock is expensive he's like you guys you've been calling my stock expensive for the last 100 percent and meanwhile and meanwhile Meanwhile, fine. And meanwhile, my investor base, the quote, dumb money, look how much money they're making.

46:28You arrogant pricks are talking shit about us. I also think it's really hard as a founder who's still the CEO to disentangle people's skepticism about your stock from being like skepticism about you. Yeah, it's him. It's his baby. It's his entire being. Right. I think he like thinks of Palantir and himself as interchangeable. And obviously – They are. They are – right. They're forever entwined. Where does the person and then the company begin? There's no line because that's what it is to be an entrepreneur and to build something. He wasn't a hired CEO. Well, and guess what? You're 100 % right.

47:10And the reason why you can't untangle the man from the company or from the stock is because part of the thesis for shorting the company has nothing to do with the fundamentals. We're about to get into it. They are firing on all cylinders. The company is on fire. But the people that are short would say it is a great company, but it's not a$500 billion company. Oh, that's the question. Okay. And the reason why it's a$500 billion company is because you are pumping the stock to retail investors. So that's a really great point. Like Burry does all this cryptic shit. He's like Drake with the tweets.

47:46He doesn't actually come out and say what he wants to say or he drops hints that he might be long or short something. I wonder if you sat down with Michael Burry, would he say exactly what you just said? Yeah, of course the company is doing great. So I try to make that point on TV today. The bears aren't saying this is a bad company. It's just too expensive. They're just saying like investors today are paying for like growth from 10 years from now. Like it's been pulled forward. I don't hear anyone. This is not. All right. Well, you know what? This is not. It's not valiant. No. Okay. It's a really important distinction because in that case, if people were saying Alex Karp is a fraud, Palantir is bullshit, then his combativeness would be fully understandable.

48:36Like, how dare you say that? People are saying the opposite. it. They're saying investors are way too excited about this company despite the fact that things are going really well. Let's get to some of the fundamentals. Pull up their first slide that talks about some of the growth.

48:53All right. US revenue grew 77 % year over year. I think the overall company revenue was up 63 % was the number I heard. Dude, 20 % quarter over quarter is wild. Sequential. So this quarter versus the prior quarter, not last year, 20%. It's explosive. Well, that's the rule of 40. But look at – okay, so they closed 204 deals of at least$1 million in revenue, 91 deals of at least$5 million in revenue, and 53 deals of at least$10 million in revenue. So this idea that it's just government spending, it's all government contracts, not true. Just not true. No. They're adding corporate customers, what they call commercial customers.

49:31Um, here's the, the total contract value TCV is the, is the number they use is$1.3 billion up 342 % year over year. That's, I don't care what business you're in. If you're adding contract dollars at that rate, you are doing something very right. He obviously is the best version of a company helping other companies implement AI hands down. And also a lot of traditionally the highest growth companies are doing so because they're giving the store away, right? It's either negative value contracts or whatever. They're doing it with a margin rate that is off the charts. So they're obsessed about the rule of 40, which is this term in enterprise software that measures how profitably you're growing.

50:23So your growth rate and your profitability. And they're off the charts. John, throw some charts on. A hundred and fifty, 114%. Their rule of 40 score. So this is them compared to enterprise software companies that have over a billion dollars in revenue. The next chart shows them compared to, I think, the top 25 companies around the world. Who's even close? Who's next? NVIDIA. NVIDIA. And who's underneath them? I can't make that out. It doesn't matter. The point is, they're off the charts. it looks like that is uh rocky mountain chocolate factory that's exactly i don't dude i don't know what that says l i can't say l l is that lily could be it could be right um go back to the prior there's nobody no one more one more back no this is the rule is it oh this is it the rule of 80 frontier.

51:18So where like the 80, the 80 comes from, or the rule of 40, the 40 comes from that combination of profit margins and revenue growth. So like what they're doing is not being done by anyone. And when he says that he's not lying. And it's accelerating. So we have one more chart. Look at this. Look at this. It's accelerating. It's at the point where every large company and every government around the world is going to be doing tens of millions, or if not more in Palantir business. If the, if this continues and he knows it. And so he's basically like, okay, let me get this straight of the 5 ,000 or 3 ,000, 4 ,000 publicly traded companies in America, us and Nvidia, that's who you want to be short.

52:06Like literally the two best companies on earth. In the chat, people are pointing out, Barry talked about getting short the semiconductor stocks last year. Not a great idea. Shorting NVIDIA at different times. But it doesn't matter what he tweets because we see his performance and this is a great lesson. Forget what they say. All right. They could change their mind. It doesn't, you look at the 13Fs, it's in the past. His performance has been kick-ass. He's been doing really well. So don't worry about what he says. Ignore it. What if he bought puts two days ago and he covered them today? The stock went down 8%.

52:45He probably would have made money. So how do you know? That's one. Two, obviously, we've talked about this before, the dollar amount. People are calculating the notional value of what those options contracts stand for. And they're saying, oh, it's half his fund is in puts. I very highly doubt that's the case. It's not how to calculate what his actual financial exposure is. Yeah, it's leverage. It's because it's leverage. Okay. Look, I think there's room for both of these guys to be right. This stock could pull back 20%. I think not even violate its 200-day moving average. Dude, it's up still 100.

53:25Barry can make money and then it could rebound. What is it up year to date? I mean, first of all, The pullback is a baby pullback. It's up 116 % year to date. So here's the other thing. 8 % of its highs, big deal. They're buying back stock. Really? Yeah. So if you're buying back stock, don't you want there to be short sellers knocking the price down? You could just buy them out of their positions on the way back up. He said he has$880 million left on an existing buyback authorization. Do you want to buy your stock at$200 or you want to buy it at$180? Yeah, I don't know. $500 billion market cap.

54:04That's nothing. Understood, but I'm just making the point. He's buying – they bought back stock last quarter. They did not buy back stock. So if that's what you're doing – He's rallying the troops. That's all. That's what all the rhetoric is. I do think he is very wisely creating this retail army of people that he has made a lot of money for. I think you're right. He's galvanizing that base. And I'm seeing a lot of CEOs get religion on this. Netflix just announced the 10 for one split after a really long time of not doing splits. And then I saw the guy from ServiceNow on with Kramer, the CEO, and he was saying explicitly, we're doing this split because we want to make it so that our fans in the retail investor audience can continue to fight with us and be on the team.

54:55and buy more shares. I do think that that's now part of the playbook post GameStop, post 2020. I think technology CEOs in particular, but not only tech CEOs, recognize the value in having a vocal retail shareholder base to counteract some of the narratives coming out of Wall Street and institutions. I think they like having a rabid army. You better deliver. There's not too many Alex Carps. I agree then there's not too many Palantins well the ServiceNow guy has made a lot of money for investors too and obviously so is Netflix and I think deliberately like catering to that retail investor with a lower share price is part of the modern CEO playbook not dumb I like it we should split our stock what do you think do a 5 for 1 what's up do a 5 for 1 alright let's see what else Let's put up the price reaction.

55:59This is Got back into the gap I mean, it's actually nothing. It's down, it's in, I mean, okay. Stock's up 300 % of the last year. It pulled back 8%. Who cares? Wait, the point is it pulled back to the level it was trading at on October 29th. Yeah, who cares? It's nothing. It's nothing. Total return, give me it. Yeah. Next chart. So this is 160 % since Christmas. Like, I think you could live through a couple of pullbacks. I would hope so. it'll work out his opening statement on the conference call was as livid as what he did on CNBC after on Squawk I asked Sean to grab this this is how he opens the call greetings by any normal or even reasonable standard these are not normal results these are not even strong results these aren't extraordinary results These are arguably the best results that any software company has ever delivered.

57:04And that's not hyperbolic, despite what your analyst friends may want you to believe, because they've been wrong at every price. They're wrong in every single round. But of course, they're perspective and they're not investing their own money. But a normal enterprise company should not have a rule of 40 above 100. He goes on. I'm not going to read the whole thing. But basically like his entire tirade at this, this is the beginning of the conference call, not the end is like, everyone who doubts us. And I do believe there's a certain component of the shareholder base that loves that. And he knows exactly who – he knows exactly – Joe Altamore in the chat saying he sounds like Trump.

57:49Yes, deliberately. Actually, Venn diagram of MAGA, Trump, stock market investors, and Palantir shareholders is probably 100 % overlap. Well, how about Tesla shareholders? Yeah, what's Elon going to do to catch up to Karp at this point? I feel like he's got to throw some punches too. All right. It's an interesting story. Yeah, very. We had a video clip. I'm going to skip it. I don't think it's that important. Let's go into AI generally. You're up next. Yeah, before we get there, to set up some of the things that's been happening in earnings season, the stocks that are beating, whatever, they already got rewarded.

58:34Not shocking. We were talking about the setup going to earnings season. The bar was high. But the stocks that are missing, oh, boy. It's ugly. So misses have traded 5 % lower on average the day after reporting, which is steeper than any other quarter in the history of our data, which goes back to, it looks like 2016. Yeah. Okay. Now, listen. So I love this. I love a healthy reset. I love stocks falling even as they beat. I don't like to see anybody lose money. I'm not bearish by any means. I don't celebrate this. But there is obviously a lot of optimism baked into the market based on whatever you're looking at, option activity, sentiment.

59:18It's all saying the same thing. A healthy reset, just blowing a little foam off the top of the beer. Let's reset. Let's everybody take a beat. I like it. I like where we're headed. Oracle stock closed the gap after that 25 % pop after the open AI announcement. We're about to close the gap. Like a lot of the, holy shit, this is like scary vertical price stuff. That's all gone. So now we can move forward, hopefully in a healthy way. All right. Anything else? We're getting a heads up. Axon Enterprise, which is taser and body cameras for law enforcement. Huge blow up after hours. That stock had been rallying up until late summer.

59:58I don't know anything about that name. It started. So it's like part of this like military industrial complex, like law and order, Trump trade kind of thing. They sell a lot of equipment for military, for police, for law enforcement. Stock had been doing really well until late summer. It broke down in September technically. And I guess now we know why. It broke its 200 day three weeks ago. And after hours tonight, it's down$150 a share. It's down 21 % on earnings. I haven't seen the earnings themselves, but not great. So topic two is a bit stale at this point. I put this in the doc, I guess, like a week ago.

1:00:43So whatever. There's an interesting thing going on in the market where you're going to see this for the next, I don't know, three years. Because the stock market is so concentrated, you're going to see a lot of very bizarre days, whether it's equal weight outperforming or underperforming, like in a dramatic way. So for example, last Wednesday, I believe it was, or Tuesday, it was the day last week, Bespoke tweeted this, where they showed it was the worst breadth for an update ever for the S &P. So there were only 200, I guess there were 300 more stocks were down than up, which off the charts, to which you would say, oh my God, breadth, the divergence is 2 ,000 all over again.

1:01:31It's being lifted by a handful of stocks while the rest of the stocks are crashing. Not so fast. Next chart by Duality Research. So, okay, it was last Tuesday, as you could see. But also, look at all the odd days in 2025. This is the opposite, okay? These are when you see a lot of stocks that are actually advancing, but the index isn't moving. Well, how could that possibly happen. John, we could skip the next chart. Go to my MAG7 chart. So here's the deal. This is wild. The MAG7, the MAG7, the market cap of these stocks are equal to the bottom 449 stocks in the S &P, which is stocks 52 through 500.

1:02:16Stocks 52 through 500 are as big as the MAG7. So you're going to continue to see these really weird days inside the market where you could have a lot of stocks that are down, but the MAG7 has a great day and the index is up. Conversely, you could see the MAG7 drag the index down with a lot of advancers. So not to throw out this breadth data, but just it needs context when you see it going forward because we're going to continue to see it. Yeah, I see it differently. I think the market is secretly getting killed below the surface. And I think it's a function of a couple of things happening. Wait, hang on, hang on.

1:02:49I'm sorry to cut you off. You can't, this is not, you think the market is secretly getting killed because there's data. The market is not secretly getting killed. If you look at the equal weight, NASDAQ 100, Russell 2000. Stop looking at that. Stop looking at the equal weight stocks? What do you mean? How much should I look at it? How is the market secretly getting killed? Look at the internals. Okay, those are internals, but what internals are you talking about? 31 % of the S &P 500 are 20 % or more below their 52-week highs. That's a third of stock. I have this data from a chart. Okay. I have this chart too.

1:03:24And I didn't put it in the doc. You know why? Because there's nothing there. It's average. It's average. There's nothing there. No, your data is wrong. Your data is wrong. You're wrong. Average is 25 % since 2018. So it's above average. It's not 30%. 31 % of the index is down what? 20%. You said 30. It's a big difference. 20 % or more. 20%. I have more. It's basically average. It's average. 6.5 % of the S &P is now at a 52-week low, and I bet today it's worse. That's as of yesterday. That is the highest level of new 52-week lows since Liberation Day. The average is 2%. It's 6.5%. I know there's nothing there until there's something there.

1:04:01There's nothing there, bro. I had him chart this, and I didn't include it because there's nothing there. There's something there for me. There's nothing there for you. There's nothing on the chart. Keep going. Okay. Median RSI in the S &P, not average, median is 44. This is not consistent with bull markets. Median percentage of stocks below 52-week highs is 15%. Look, oh, this is the one actually. This is the only one I care about. Because I keep this best stocks in the market list and it's shrinking. And 66 % of the S &P 500 is actually down over the last month. It's nothing to be alarmed about.

1:04:44Oh my God. Nothing to be alarmed about, but it's also to your, the way you say it, it's also not nothing. We have a chart. Hold on, hold on. I'm just saying, you said the stock market is secretly getting killed. Can we just - Secretly getting killed. Okay. Dude, dude, Pinterest is blowing up right now after the close. I know Pinterest doesn't matter. I'm not saying it's nothing, but no, but words matter. You said secretly getting killed. Secretly getting killed. UPS, Nike, The list of brand name stocks, while they're not important in dollar terms relative to Microsoft, the list of stocks that are important to other people that are breaking down slash crashing slash making new lows for the year is alarming.

1:05:28It is. It's notable. Alarming? Well, we're different people. We have different biochemical situations. Notable. It's notable. For me, it's alarming. Throw up the nearing historic extremes. The way that I see it, Josh, is that the stock market was max long complacent and max above its 200-day moving average. It was 13 % above. So we're just getting a little reset, a little foam beam blown off the top of the beer. And you're right. There are a lot of names. We can go down the list of Starbucks, of Nike. There's a million of them. There's a million names that are getting leveled. My friend, you are in a kayak heading over Niagara Falls, talking about a little reset.

1:06:15Stocks are secretly getting killed. You are not, we're not experiencing it as a market-wide disruption yet because the stocks that really matter are holding up. Apple. Okay, but Josh, there's an index for this. It's called the equal weight. This weights all of the stocks equally, dude. And it is down 2.4%. So shut the f*** up. This is the data. The median stock is down 2.4%. The equal weighted stock market is down 2.4 % from its all-time highs. So when you say the stock market is secretly getting killed and it's alarming, you need to relax. I'm going to tell you the greatest thing about this show is we'll be back here next week.

1:06:57And then we'll see who wants to relax. I'm not making any – hold on. I'm not saying any predictions about what's going to happen next week. Now, here's what I want to say that's constructive. We needed this to happen. it got too easy people are walking around with their big giant balls in a wheelbarrow they're not afraid they're not afraid of they're not afraid of a goddamn thing investors were definitely feeling themselves and then when you look at like the strategies of the world some of these um uh some of the smaller ai names and you look at like some of the things that people have made money in the OCLOS.

1:07:33I don't think it's negative. I don't think it's negative to see 30, 40 % strategies down 200 points before 50 to 250 in like six weeks. I don't root for people to lose money. I just think like some of these types of things needed that correction for people to calm down, like relax with the level of risk that they're assuming it's not risky. A healthy correction or what did I say? Healthy pullbacks only look, pullbacks only look healthy in other people's stocks. But it is true in my estimation. Now, again, it's not a prediction of where we go from here, but this is normal. This is normal. You can't go up every day forever and ever.

1:08:20You can't have these pre-revenue companies at 30 billion dollar market caps up a thousand percent without any pullbacks. It doesn't work like that. So this is the way it works. All right, before we have a few more charts, I want to call this one out. I did it with Ben on - Wait, wait, but I'm not done. Do you know what went up today? What? I do know what went up. Not a rhetorical question. Oh, Apollo went up 6%. They rallied financials. Home Depot went up. This is what gives me hope. They rallied the defensives, which, no, not looking for. Healthcare went up. Consumer staples went up. But the financials were the best sector on the day.

1:08:54Yeah, yeah. Up a half of 1%, no big deal. But like - And home builders. That tells me that we're not just throwing out the baby with the bathwater and giving up on the bull market. What we're doing is we're tamping down some of the more egregious, silly stuff. And then like Berkshire went up today. I should say. Goldman Sachs went up today. Home Depot went up. Like there was some good stuff happening today that I like to see and I think is healthy. Healthcare. rotation is who said is this jc rotations of the lifeblood of a bull market i don't know somebody doesn't sound like a jc somebody said it is that ralph akampora who cares all right so i i got to share this chart because i blew my own face off with this i had chart kid yeah i think that was a akampora but maybe not okay all right so um four trillion dollars for apple it's a lot of market cap and i think it's easy to just look at like the numbers and not really appreciate the underlying businesses of how large they are.

1:09:57So I had Matt show me their segments broken down and compare that revenue to other giant companies. So let's start at the top, the iPhone, which is basically half of the revenue of the company. Over the last 12 months, the iPhone did more revenue than Bank of America, not a small company, and Meta, also not a small company. Services, which is the crown jewel, it's the entire growth engine, in the entire margin expansion engine of Apple. Services did more revenue than Target,$107 billion. Wearables, which is the watch and the AirPods and home accessories, I don't know what that is. That did as much money as Starbucks almost and almost as much money as Salesforce.

1:10:42All right, now you're going down to the computers, the Mac. The Mac did more money than Schwab, significantly more money than Schwab. And the iPad, which I can't believe this. I don't know, I guess I would have guessed. I don't know what I would have guessed. The iPad did$28 billion over the last 12 months. That's more revenue than AMD. Holy shit. So keep that chart up. This is my takeaway. This is how crazy this is. AMD has a market value of$406 billion. Now, we know it's growing faster than iPad. But the fact that those two companies are revenue parity is bananas to me. We could say the same thing with Schwab.

1:11:18So just for people's context, Schwab has a market cap of 170 billion. Mac, just Mac alone is a bigger business than Schwab. And obviously, you know, the example with Target, the example with, this is the, this is still the best business in the world. It's just not the fastest growing anymore, but it's still the best business. And Apple is the best business in the world. They're making money in year 20 of a product like an iPhone where most consumer technology companies, at best, they've had like a three-year run, a five-year run. Think about Japanese companies selling VCRs. Like they have extended the lifespan of consumer technology devices.

1:12:07It's miraculous. And found a way to keep these things at 40, 50 % profit margins. I guess the other two that I would say are competing and whatever we're splitting hairs would probably be Microsoft and maybe Google. I think this is a better business than both. It's not growing as fast right now, but it's just bigger and it's better. And it's global and the margins are still there. Yeah, it's wild. It's really impressive. And they just keep coming up with new things to sell the same customers, keep charging the same customers more money for the same product, keep improving the products. They have this consumer lock-in and people are like, oh, why is Apple 35 times earnings?

1:12:48Because, because, you know how hard it is to shock a company like Apple in like off its game? They just continue to deliver. And the buybacks and the dividends. Yeah, but I'm saying people look at it like a consumer staple. It's a consumer luxury slash consumer staple. Well, it's the same story as Costco. Why are people paying 50 times earnings for Costco? I'm not saying it's justified. Because they know the customers are going to show up every week. It's consistent. You know what you're getting. There's no downside surprises. People are paying up for that consistency. Even if it's not fast growth, it's going to be there tomorrow.

1:13:26It's going to be there the next day. People drop an iPhone, break it. They're not switching to another phone. They're locked in, and that's worth a lot to an equity investor. All right. we had one more thing in that in that market so they're getting killed we have the quotes from no I don't want to I don't want to skip the next chart it's a lot of charts the thing from Sam Rowe or the thing about you want to let's save the ultimate let's save the ultimate stuff for TCAF all right Sam Rowe I woke up to see almost every financial news site I read feature essentially the same alarming headline here's a partial roundup Goldman Sachs and Morgan Stanley CEOs warn of possible drawdown, Wall Street Journal.

1:14:11Just seven more of those. Here's some quotes. Quote, it's likely there'll be a 10 to 20 % drawdown in equity markets sometime in the next 12 to 24 months. Oh my God. All right, Kreskin. Things run and then they pull back so people can reassess. A 10 to 15 % drawdown happens often, even through positive market cycles. It's not something that changes your fundamental or structural belief as to how you want to allocate capital. It's David Solomon from Goldman. The Morgan Stanley CEO, Ted Pick, said, I think they were at the same event in Hong Kong. We should also welcome the possibility that there would be drawdowns, 10 % to 15%, that are not driven by some sort of macro cliff effect.

1:14:54It would be the best thing ever. If we get a 10 % to 15 % pullback on no tariff nonsense, no, oh no, the Fed is going to start hiking again. If it's just like, hey, we were over our skis and let's just reassess. Wonderful. Let's set up for the next leg higher. That's healthy. What's not healthy are no pullbacks. What's not healthy is up 25 % every year with no. That's what leads to a crash, okay? You need pullbacks. You need doubt. We need the wall of worry to be rebuilt so that we can climb it. This is all good stuff. Wall Street Journal, Bloomberg, CNBC, Reuters, Business Insider, and Fortune all wrote the same article based on those comments from the two Wall Street CEOs.

1:15:30Yeah, you're not going to not write it. I guess you have to write it. They must know better that they're basically saying nothing. They're saying water is wet. They must know that. Like the editors at least who are. Yeah. But I guess. David Solomon, the stock market goes up and down. Write it. You know, it's an act. You know, it's an article. Ted pick of Morgan Stanley. No correction in sight. That's an article. But, you know, that's not what happened. These guys are these guys are saying, look, it's a bull market. But so what? You know, what's Buffett's problem? Get involved. Get involved. Don't just sit there.

1:16:09Do something. All right. Great segue. Buffett is still a seller. Reported earnings like a gentleman on Saturday. No fanfare. No conference call. Just almost like a handwritten note. And we like it that way. Yeah. Yeah. Berkshire was a net seller of stocks. They now have$380 billion in cash and cash equivalents or treasuries. And they bought back zero shares of Berkshire Hathaway during the quarter. And they're obviously still not paying a dividend for the 70th consecutive year. Let's put this chart up. Not huge sales. They did that already in 24 when they liquidated two-thirds of their Apple, but still selling.

1:17:02We don't – now, we don't know what they sold, chart off, because that will come out in the middle of November with the 13 Fs, right? The quarter ended September 30th. They have 45 days. Typically, they nail it to the day. All of these big investors will come out with their 13 F filing in about a week and a half. Then we'll find out if they sold more Apple. Did they sell more financial stocks? What, if anything, did they net buy? Yeah, but who cares? They didn't sell anything. At least the net. The net is nothing. $380 billion. I saw an analysis where it's like really$360 billion because of the way something's being calculated.

1:17:42It's like, dude, what are we doing here? Chart on. This is Berkshire versus the S &P. So Josh, we were talking about this with Belsky yesterday. Look at how wild Liberation Day was. Berkshire was flying high. The stock was up like 15 % while the S &P was down about the same. And this was like the anti-AI trade, right? And then sentiment flipped, big time. Heather M42 in the chat is saying, BRKB is my cash equivalent. You know, it's sort of like a joke, but it sort of actually is. No, it actually isn't. Just stop. I know what she's saying. I know, but it's just - No, but it's - I'm saying the market cap is increasingly becoming dominated by this almost$400 billion in cash.

1:18:24And when the market dislocates and has an event, people understand the potential for Berkshire to actually turn that into an opportunity for itself. They haven't yet. If you are like, oh my God, just AI everything. I can't escape it. It's 40 % of the index. This is the anti-AI. If this is a bubble that pops, whatever, whatever, I think Berkshire will do just fine, better than just fine. They don't really own anything. They don't own enough of anything that requires this AI splurge to continue, although they are absolutely involved from the perspective of the utility. They are obviously supplying power to a lot of data centers.

1:19:07They don't mean to. That wasn't the idea when they bought up all these utilities, but they're not not involved. They're just not directly involved. All right. Can we talk about some of the blowups from last week? Yep. So this is one of the reasons why I love earnings season so much. You got to hear from the people in charge because I listened to some of the Chipotle call. And we spoke a couple of weeks ago. And I can't remember when I said if I was like probably – I think it was probably like, yeah, Chipotle might be – there might be some value here. I'm not touching that stock. I don't believe this guy.

1:19:45I just – I don't believe what he says. I think he's, I don't know that it's full of shit. It might be too strong. I just, I don't trust him. I don't like what he said on the call and I don't buy the turnaround. I'm not buying the stock. I don't care how low it goes. It's not a turnaround. Like it's like statistically, this is not a turnaround. It's getting worse. So here's the story. The increase in total revenue, it was not a big increase, was driven by new restaurant openings and a 0.3 % increase in comp restaurant sales. Yuck. due to a 1.1 % increase in average check, partially offset by lower transaction of 0.8%.

1:20:22Nobody wants to pay$14 for a ball anymore. And this guy had the gall to say, this is like he opened it with this. Earlier this year, as consumer sentiment declined sharply, we saw a broad-based pullback in frequency across all income cohorts. Since then, the gap has widened with low to middle income guests further reducing frequency. Okay, so all this might be true. But then he's talking about like a particularly challenged cohort. It's a 25 to 35-year-old age group. It's like, dude, yeah, fine. There's some challenge here, but they don't want your slop anymore. They don't want it. There's no value there.

1:20:56And in terms of like their stories and the metrics for what they're going to be doing to turn it around to get people back to the store, I don't buy any of it. It's not going to work at all. And the stock is getting creamed. It's down to 54 % drawdown. Throw this chart on. And the whole sector is falling. It's not just them. So three years. Throw the chart on. This is them versus their peer group. So the peer group is not doing great either, but nobody wants this. Who is this? This is Charter had a great chart, the Slopole Economy chart. It shows the year-over-year comp store sales. So what this is measuring is like, all right, store X, how do they do one quarter to the next?

1:21:30Forget about new store openings. So Sweetgreen, Chipotle, Cavo, all of these Slopoles, and I'm here for the stop. I don't mind the food. Nobody wants it anymore. Preferences are changing. So don't tell me about the consumer. Nobody wants this. All right. So a few things are going on. Number one, the relentless price hikes are completely out of control. I can't speak to kava. A sweet green salad with like an extra protein or something. It's like a$20 meal in Midtown Manhattan. It's obscene. And it's a bowl of slop. It's not good. The ingredients are ice cold. It just, there's nothing appealing about it.

1:22:03I had kava once. It's good. Chipotle, everyone knows the food has gone downhill, but nobody can pinpoint how they know it. I've never liked it. I've eaten it. I just, I never thought it was good, but now people that love it are, my kid is a great example. He and his friends, they're off it. They just, they don't think it's good. It's by the time they serve it to you and you pay, which takes 30 seconds, it's already lukewarm, getting cold. They're banging you out for guacamole. That used to be cute, guac is extra. In this economy, it's not cute anymore. Nobody wants to hear it. They're not in on the joke with you.

1:22:37And it's too much money for what it is. They overexpanded perhaps. And now that it's all met, we opened 64 Chipotle lanes. What is that? The drive-thrus? That's the drive-thru? Imagine eating this shit in your lap while you're driving. Are you f***ing kidding me? So I'm not buying the turnaround either. If I want to bet on a turnaround in this space, I'm Starbucks. I'm not Chipotle. Or there's a lot of opportunities. Starbucks for sure. Or Domino's. Like not this. Not this. All right. What do you think? Is it going lower? I'm not buying it. Is it going lower or is it just not going to go up? Chipotle.

1:23:23I have no interest. Yeah, I'm looking right now. So there's no balance. Is this alleged turnaround artist buying any stock? What's his name? Scott Boatwright? Any insider buying to speak of or probably not, right? I doubt it. I don't like this guy's voice. I don't like what he's saying. I'm not buying what he's saying. I'm not buying the stock. You know what? Honestly, if it went to like$20, I would just be like, all right, fine. There's an activist coming in. Yeah. Number of open market buys last three months, zero. But last 12 months, 24. Okay. 55 sells. No, no. Hold on. If it continues to get smashed, an activist will get involved.

1:23:59Is Bill Ackman still in this name? Taco Bill might have to ride again. I don't know if he's in it. Okay. You know what? I'll buy it at$20. In fact, I would buy a lot of$20. But we'll see. But for now, no, I'm not interested. All right, let's talk about Fiserv. So Fiserv is one of the biggest financial technology companies that you probably don't know what they do. They're in a lot of behind-the-scenes processing stuff. But one of the things that you do know what they do is you tap on the phone. So it's a Clover competitor. The stock absolutely - No, it is Clover. It's a toast competitor. My bad.

1:24:35Okay, my bad. Fiserv owns Clover. It's called point-of-sale payment system. and you see it in a lot of stores and restaurants. So ChartGoat, and he is a goat, made me a chart showing, so the stocks that are in the S &P 500 today, okay? He went back to 2007. So we're not saying that this is a top 10 blow up since 2007. It's just that of the 500 names today, this is a top 10 blow up of the names that are in the index today. So chart on, please. So AIG on a one day basis fell 61%. Josh, I know you remember that. Oh shit, yeah. I remember almost all of these. So a lot of these were from the GFC, of course.

1:25:13But look at FISA. You don't see this that often. And why did this happen? Because the results were an abomination. And what is hilarious to me, I mean, there's a lot of things that stood out. They repurchased 7.2 million shares in the quarter, returning a billion dollars to shareholders. Excuse me. Excuse me. Excuse me. You bought 7.2 million shares knowing full well that this is going to be an absolute annihilation catastrophe? What are you, mental? This is the most irresponsible, reckless behavior I've seen from a company in a long time. This is nuts. The numbers were atrocious. The core business is challenged.

1:26:02The growth part of the business, which Clover is part of that, has challenged the payments. they had the CEO basically running and gunning this thing with buybacks and bravado then he parachutes out I don't know if he sold all his stock or I know he was able to he did didn't he do it tax free because he's now in the administration now the new guy who's running this has to deal with it it was a disaster the fundamentals are horrific right I don't even know I don't even know if this is a buy. There's no balance here. It's not a bank. It's like a paper pusher. It's like an information solution for financial companies.

1:26:49So Clover is the crown jewel of this business. This was the growth engine. And they kept stuffing fees and stuffing fees into it. And matter of fact, Toast, which is a stock that I own thanks to you, got killed on the back of this because it just threw into question the whole economics of this business. toast we found out is just fine but they pissed off their customers so badly that it actually i think i think toast is a big beneficiary of this blow up there's a great article this week there was only one analyst who had a sell rating on fiserv before it blew up and it's a 26 year old kid that no one's ever heard of before great story and i loved it i love the story i'll just give people a little flavor of it fiserv's only bear is a bloomberg story fiserv's only bear is a 26-year-old analyst who beat Wall Street.

1:27:38And then, of course, I hit a registration wall. And I am a Bloomberg sub, but it doesn't matter. The stock in the group that he really likes is Toast, which I like to see. So we'll see if this kid is two for two. You know what's hilarious? Throw up this chart. So, all right, I get it. It's hard to see the future. There's no sell ratings on Wall Street anyway, whatever. But look at the hold ratings. I guess it went up a lot but like how are you still how are you still saying to your clients why didn't these people cut it to a sell because you know why I know who does that help no I know who does that help in other words a lot of the buys became holds but none of the holds became sells yeah or how about this if you were a hold if you were a hold and a stock falls 44 % you better be up to a buy unless I guess you say no the story's completely changed but finally but then go to a sell the thing is you don't want to go to a buy because you don't want the salespeople at the brokerage firm to start calling hedge fund clients and being like hey we're a buy on this today so you can't really yeah you can't really do that right if you think that there are systemic problems at the company you know this is like a three or four quarter penalty box yeah this is you don't want your salespeople taking a buy rating out to right because this is about trading activity on the desk.

1:29:00That's what they're paying you to cover these companies for. You don't want to encourage the institutional customers of your broker dealer to start buying this thing. I get it. I get going to a hold. It's four days removed from that bomb and the stock has no bounce. It's another 52 week low. It's so bad. This gap will never get filled. right i don't this is this becomes a stock that you just remove from your life basically just get rid of it just get rid of it actually josh but we've been to the fissor forum twice in milwaukee uh oh right they don't own the stadium they just paid to name it yeah great investment great investment like ftx paid to uh paid to sponsor where uh the miami heat play all right It's a shit show.

1:29:49Thank God. Thank God. Toast reported and was a good report because this thing got lumped in with that piece of shit. I bought more toast on the day of that Pfizer report because I just wasn't buying that there was systemic issues in the industry. I haven't had a chance to digest the toast numbers. But for people who are long-term viewers of the show, I am an investor, not a trader. I've been accumulating stock in the mid-30s. I think it's going to 65, 70. And I think it's one of the most exciting opportunities in software because of the degree to which they can truly own this TAM. Here was the report.

1:30:29Beat on revenue,$1.63 billion versus$1.58 expected. Slightly missed on earnings. They did$0.16 versus$0.24. ARR, which is the most important number, annualized recurring revenue, was up 30 % year over year to$2 billion. So that ARR is almost like annuitized revenue, provided they don't have high churn and lose a lot of restaurant customers. That's the best kind of software business there is. You can budget based on that. You can build on that. You find other things to sell those same customers. They have a lot of different verticals that they've expanded into. It's not just payment processing.

1:31:07They're helping restaurant owners with staffing and what hours which employees are working, different software. They're helping the chefs order ingredients. They're making loans to restaurants in some cases, and that's a business now. And they are the most important provider of AI to the restaurant industry. Believe it or not, these companies are anxious to learn how AI can help them save money and toast us on the front lines of getting these companies' data ready to be used in various AI strategies. So they own that customer and they added 7 ,500 more net locations. There are now 156 ,000 locations all over the world.

1:31:56And they partnered with Uber to help them expand that international TAM. I think Uber's in a hundred countries. So there's a partnership that was just announced yesterday where Uber Eats is going to pull in Toast data and help the Toast customer restaurants with their online ordering. And Uber is going to help push Toast out to the rest of the world. So I love that partnership. I own both stocks. Put up the Toast chart. Look, man, like this is volatile. It always will be. And it trades on rumors and innuendo and they make a change to the pricing on their website and people start dumping the stock because they think there's like weakness in the market.

1:32:44It's all stupid. My opinion is the long-term trend is for restaurants to use more digital technology, not less, in order to remain competitive. And this company has the industry on smash right now, especially if Clover is going to be f***ed up for the next few quarters. So I'm staying long here. Do Uber real quick. This is another name we've talked about, ad nauseum on the show. My biggest position personally. Stock fell 4 % or 5 % today by the close. Had an amazing report. 22 % year-over-year trip growth on the mobility side. 21 % gross bookings growth. Three and a half billion trips in the quarter.

1:33:28$50 billion in bookings. Revenue was up 20 % to$13.47 billion. Cross-platform, which is the most important thing. Uber eats people using rides and vice versa. Cross-platform users spend three times as much as everyone else. What else did they say? Oh, monthly active platform consumers are now at 189 billion. Next quarter, they could have 200 million monthly actives at this pace. How many companies in the world have 200 million people using their product or service every month. It's a small list. It is not a lot of people. Not a lot of companies have that level. They also announced the deal with NVIDIA.

1:34:18They're talking about having 100 ,000 autonomous cars on the road, Uber powering the rides part of that business, connecting drivers with consumers, NVIDIA providing the technology. And basically what Dara has been saying is they don't think owning the fleet is the opportunity. They think that's going to be a private equity business, much like real estate investment trusts own a lot of buildings. They think the cars will be owned in fleets by private equity, and it'll be like an income play. And the actual growth and value will accrue to the software and the technology, not the cars. The cars are rolling toaster ovens.

1:35:03So they are not pursuing that ownership strategy of the cars. They're sticking to what they do better than anyone, which is connecting users with the services they want. Who's going to make the cars? They have a deal with Lucid. So what they're doing is making deals with AI, with the autonomous vehicle technology companies who are in turn making deals with OEMs. So like everybody's going to make. Look, in five years, every car sold will be preloaded with this equipment to be level four autonomous. It'll be the ultimate commodity. It'll be like cup holders. I can't wait. Yeah. You're looking at the end of drunk driving arrests and accidents.

1:35:46It's phenomenal. Phenomenal. So Uber is going to play a really big role there. And I think the stock belongs over 100. If today were a better day in the market, I think it'd be higher. Definitely. All right. I was going to do Live Nation, but nobody cares. Okay. But let's do – make the case and then we'll do mystery chart. We'll get out of here. All right. I'm going to go fast. These are three companies that I own. There are – so for index investors, there's no opportunity yet, right? Like if you own the Qs, if you own the S &P cap weighted, there's nothing there, right? Whatever. But as we mentioned at the top of the show, albeit a little bit hyperbolic from Josh, There are a lot of names that are pulling back, a lot of really great names that are – I'm not talking about Nike and Chipotle and Lulu.

1:36:36Great businesses that are firing on all cylinders that are getting whacked for various reasons. One of them is Blackstone, a stock that I own that I think is going to continue to work, is going to be a secular winner for the next decade. They are the premier name in private investments. The stock is in a 24 % drawdown. I think they're getting caught up in some of the news over the last couple of weeks. I didn't even realize that. Yeah, dude, 24%, not nothing. I think that news is blowing over. In fact, not I think. I know it is, at least in the BDC land. All of those names have bounced pretty dramatically, but the private equity names and the private credit names, the asset managers have not.

1:37:14So I think that's a great opportunity in Blackstone. S &P is basically a monopoly. I don't know if the story there, so that's only 11 % off its highs. I don't know if the story there is a lot of these lower grade companies are getting rated by not the big three. So maybe that's hitting it a little bit. And then ICE, which is the listing business, New York Stock Exchange. I think maybe, Josh, I'd be curious to hear your take. I wonder if this is getting caught up in the prediction market, maybe taking some market share, which I do not think is going to happen. But either way, there is - ICE just made a huge deal with Shane Copley at - Polymarket.

1:37:54At Polymarket, which is coming back to the US. I think ICE is like spreading its bets on the roulette table. And if this is really going to be a big chunk of financial activity in the prediction markets, they want to have a dance partner. I don't know. That doesn't look like that severe of a pullback compared to how much it's – is it? Yeah, dude. Which one are we looking at? Oh, the orange one? Yeah, it's not nothing. I got to dig deeper into that then. I don't know what's going on. These names are down a lot. So I think there's opportunity there. I'm holding these hands. Oliver Ruff says it's a Mom Donnie crash.

1:38:33Yeah, the New York Stock Exchange is now. Oh my God. The New York Stock Exchange is now centrally located in the People's Republic of New York City. All right, well, if you believe that. Maybe there'll be a transaction tax. If you believe that's the story, then buy this with both hands. Josh, make the case. I'm sorry, mystery chart. What do we got? All right, I'm long this stock. We haven't talked about it in a while. Let's go. What is it?

1:39:01I love it. Let's go. All right. Give me one clue. How about this? How about this? Market cap. Is it over or under$25 billion? Way over. Okay. Okay. All right. I need another clue. It's an ARR story. Okay.

1:39:24is this this is as of today basically yeah look at the dates on the bottom i'm not checking you just i'm just not checking all right uh one more one more clear so it's an ar story it's a large very large stock what else i own it basically i own it basically since inception i'm one of the first people to own the stock and i have a four four or five x return okay nvidia no oh okay uh review Reveal. Too many clues. Reveal. Can't win them all, Michael. Crowd strike. I should have known that. This thing hit 551 today. Good for you. This is unbelievable. Good for you. Great, great, great. I have a post reveal chart I want to show you.

1:40:05Great winner. So the stock is up 852 % since the IPO. That's a 42 % annualized return. Market cap is now 140 billion. And I have to tell you, I don't own enough of it to like really take a victory lap. I own a bunch. But like this was the most obvious bull market to have foreseen in advance. You didn't know that CrowdStrike would win. They obviously are amongst the winners. That you couldn't have known. But I think the takeaway here for me for the future, when you see an obvious bull market and you're not sure who's going to win, but like take a shot. because like you had to know that cybersecurity spending was going to be in a bull market for at least the next half decade to decade.

1:40:53You had to know it. And if you knew it, I'm talking to myself, should have been way more aggressive. I should have owned five of these things and never sold. All credit to you. Can I ask you one thing before we head home? What's the next one? Please, I need it. Dude, I don't know. The next thing I buy, I'll probably get cut in half. This is a great trade. I'll credit to you. Not trade, hold. And shout out to a friend of the show, George Kurtz. And I know he listens. And what an amazing job this guy has done. Not without hiccups and setbacks along the way. But like, man, you talk about a company come public and just absolutely crush it for public shareholders.

1:41:32This is, and by the way, in his spare time, he won the Le Mans. I don't know if you know that. Hey, wait, Josh, Josh, Josh. Literally won the race. So when was the massive outage hiccup? Was that last summer? two years, two summers ago. I think it was summer 23. The stock has definitely doubled, maybe even tripled since then. And I remember you were on TV. You sounded like Alex Karp. You were so mad at people selling the stock. Well, it's, so I guess I was just saying like, okay, so now you're going to sell it? Like they made a mistake. They have to clean up the mistake. It'll be a financial fix.

1:42:06They'll call their customers. They'll apologize. Maybe there'll be a fine. Life will go on. You're going to sell it today? You sell it 30, 40 % in the hole? oh and you know what that outage actually should have taught you about the company how important they are that glitch in a software update disrupted the entire planet so it was the summer of 2024 so the stock got as low as 200 the stock's at 532 today so again you nailed it good for you I mean I can't sell it now I can't sell it like I look at that chart but one more time with the chart. No, but this is why you're good. You're very good. I know.

1:42:47I know. Look at, look at how severe some of these pullbacks have been. Yeah. So, but like, so, so what? Not, I'm not, I'm not selling. Not so what? Not so what? It went from 300 to one to 120 and you held it. I know. That's, I know. Good for you. What'd I tell you about the wheelbarrow? All right, guys, we, we appreciate everybody who joined us for the live. We love you guys. Thank you so much. We miss you when we're not here. I want to remind everybody tomorrow's Wednesday. It's an all new edition of Animal Spirits with Michael and Ben Carlson. We'll do Ask the Compound later this week with Duncan and Ben.

1:43:20And then it's an all new edition of The Compound and Friends. And boy, do we have a special guest on tap. You guys are going to love the show this Friday. I guarantee it. Thanks so much for being here. We'll talk to you soon.

1:43:42Thank you.

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