Stocks in Pre-Crisis Mode, Multiple Compression, the Citrini Crash, Halo Goes Viral

16:23Downtown Josh Brown:a there's a there's a conspiracy theory about why he's the one saying that. And a lot of people are saying what he's really trying to do is entrench himself. See, one of the interesting things about what happens with big tech and regulation, the more regulation you have, the harder it is for new entrants to come along because the cost of complying with that regulation is insurmountable. Great example of that would be the banks after the financial crisis. They made the rules so impossible that only five banks had the ability to grow. You could also look at Meta, Alphabet, et cetera. They're entrenched further by regulation.

17:00Downtown Josh Brown:They may be hemmed in about what they can do, but the silver lining is there is no other Meta. Nobody could afford it.

17:08Michael Batnick:Anthropoc just raised$30 billion. There's not a lot of companies on the planet that could do that. They already have it not to themselves.

17:13Downtown Josh Brown:I'm just saying like Claude is cool. The products are great. I use OpenAI all day long, ChatGPT all day long. It's fine. But like, guys, can you shut up for a few minutes? All right.

17:26Michael Batnick:Getting back. That's all I'm saying. Getting back to the multiple compression. The thing, the real thing that worries me that's not on here is what if multiples are peaking? And so stocks might look reasonably priced on a forward basis. What if the earnings aren't$290? And what if they're actually 270 in two years?

17:46Downtown Josh Brown:Like what happens to price?

17:48Michael Batnick:No. Well, we know what happens. It comes way down. Yeah. I mean. The thing that I also take comfort in is look at the global market. Look at the global stock markets. They're all red hot on fire. I think a lot of the earnings benefits are accruing to other places of the market. And on the one hand, there's only so – so I love the broadening. I think everybody does. But there's only so much selling pressure that the market can take before the 493 come down with it. So right now, the MAG7 are in a 12 % drawdown. The market could swallow that. but NVIDIA reports tomorrow on bombs and the Mac 7 is down 15, 18, 19.

18:24Michael Batnick:The rest of the market's going to follow suit. Unfortunately, yeah.

18:29Downtown Josh Brown:So I actually think that's unavoidable. Which part? The sentiment hit from an event like that. I don't know that anyone's really spared from that. It doesn't have to last long, but that'll definitely be the story of the next day.

18:44Michael Batnick:All right, so here's a weird thing. This is from Bespoke. Look, 2026 has seen the narrowest spread between the year-to-date high and year-to-date low through 220 since 1966. So if you look at a chart of the S &P, it's going nowhere fast. It's very bizarre.

19:00Downtown Josh Brown:Yeah, because I just think it reflects like the extreme uncertainty right now. And some of the biggest stocks that matter the most to the index are caught in that uncertainty. It's hard to be bearish on these companies. They're going to have 29 % earnings growth this year. Okay. I'm glad you said that.

19:19Michael Batnick:So how do you get like completely out? You can't. So as I'm wearing this t-shirt for the first time, Markets of Turmoil, as all that we're talking -

19:29Downtown Josh Brown:That's such a great shirt, by the way. Thank you.

19:32Michael Batnick:Or you're welcome.

19:34Downtown Josh Brown:You built this. Now available at idontshop.com in the compound store, by the way.

19:40Michael Batnick:All that the market is talking about right now is risk. Rightfully so. everybody's talking about it you and i know how fast sentiment can turn one earnings report one piece of regulation one whatever it doesn't matter it doesn't matter so what do you think is more likely in december um that lol the chase is back on we are we actually are going to get some sort of AI melt up, or man, we could have gotten out so easily in February. Markets were within 2 % of an all-time high. All the warning signs were there, and we ended up having it down 25 % a year.

20:18Downtown Josh Brown:Do you know how hard that is? I mean, do you know how much we have to get through between now and your end? I'm just asking. No, dude, this is an impossible rhetorical question.

20:30Downtown Josh Brown:I think it's going to be a bifurcated market. I'm on record. We'll talk about Halo in a second, but I really think that like half the stocks in the market, and they're not gigantic, but there are enough of them, are going to have a good year.

20:44Michael Batnick:But I don't think this is a bad thing. I feel like everybody is extrapolating the last four weeks until the rest of the year. Everybody is saying the same thing, that this is going to last. Avoid the junk. Buy the Halo stocks. And not just because you coined it, but like everybody seems to be guilty of extreme recency bias, which we all are. I mean, myself too, but it really feels pronounced now. Yeah.

21:08Downtown Josh Brown:The more interesting question is like, is it realistic? If there's a serious problem in tech, like if there's a serious problem with these software companies now actually coming out and one by one, I know we got a warning from Workday. It seemed like a pretty mild guidance miss. It didn't seem like that big of a deal. It wasn't that bad.

21:27Michael Batnick:Well, let's actually go to Workday. Next chart. So here's part of the problem. So these stocks, like these weren't cheap stocks to begin with. That's the problem. So look at the non-gap operating margin. Okay, great. It's accelerating. But look at the blue line. Like, are you freaking kidding me? With these software multiples, like your actual cash on cash margin is like 6%.

21:50Downtown Josh Brown:What are you doing? AI. They're building their own agentic AI, they said. They should. What else are they going to do?

21:58Michael Batnick:Anyway, so we're like, oh, these stocks are risky. Oh, wow. That's so insightful. Workday's in a 60 % drawdown at the open tomorrow. It's not to say that it can't fall 80%. I don't know why it can't. But these stocks are so bombed out.

22:13Downtown Josh Brown:Yes, but the problem is everything was fine until – and now you're starting to get – if you start to get earnings warnings from not just one of them but like 10 of them, if that's what we're going to start getting, then people are going to say, oh, that sell-off made perfect sense and probably it shouldn't be over yet.

22:31Michael Batnick:So Salesforce reports tomorrow night and that's going to be a big one, obviously.

22:35Downtown Josh Brown:They're reporting the same time as NVIDIA. Tomorrow night's going to be low-key like fireworks.

22:40Michael Batnick:I bought it. I should probably just sell it at the open. I'm down 3%. I'm down 3%. Who cares? I should just sell it at the open.

22:46Downtown Josh Brown:Let's do a thought exercise. What could they possibly say that would have the stock go higher?

22:51Michael Batnick:Beat and raise? No, their AI product was at a$500 million run rate? Like not nothing. And it doesn't matter what they say. I don't care what they say. I care how the stock reacts. Right, but I'm saying, what would be the thing that gives you the reaction of the stock that you want? It doesn't. Dude, I don't know what they're going to say, but stocks do bottom on bad news. It's not like, right? Like it just does. So I'm not saying that tomorrow is the bottom for Salesforce. It probably is. It's probably going to go down 15 % for all I know. All right, so on software. So Warren Pies said, software has been a high margin, high multiple cornerstone of the S &P.

23:29Downtown Josh Brown:Yeah, very important.

23:31Michael Batnick:It trades at roughly three times the index's price to sales multiple and has margins that are more than twice the index. If AI disrupts software, then the overall market will have to derate. Using this model, try it on, please, a 50 % reduction in software margins suggests that the group must trade down from a 10 times price to sales multiple to five times. Oh, my God. Yeah, not great. So what we're looking at here on the horizontal axis are software margins. And of course, the higher the margin, the higher the multiple. But Warren's saying that software has gone from overvalue to fair value. But that's assuming that the margins don't deteriorate, which maybe they will, maybe they won't.

24:14Michael Batnick:It's hard to see how they don't. Can we safely say rest in peace to software is eating the world?

24:24Downtown Josh Brown:2011 to 2026, RIP. Great run. Great run, though. I mean, one of the all-time greatest runs. And I don't know what the next thing is going to be. I think AI is eating software is like a little too cutesy. But it's a new era. There's no way around that at this point. So it's a full-blown bear market in software.

24:47Michael Batnick:So the unknowable question is, so software is having an IGV. It's having the worst month since 2008.

24:53Downtown Josh Brown:Yeah.

24:54Michael Batnick:So investors are acting like there is a systemic risk in software stocks. And yeah, they're probably right. Right.

25:00Downtown Josh Brown:So I think the way to people, when people, so just to wrap up this multiple compression slash software segment of the show, and then we'll move on. Oh, no, we won't. I've got one more piece. To something even worse. All right. But I think the thing to say is like when you're paying 30 times EBITDA for a software stock, that's like annual cash flow. You're paying 30 times. That means, give or take, like you feel pretty comfortable that that cash flow is coming in for at least the next 30 years. And you think it's going to get bigger. No, I know. I know. But I'm just – I'm going through a theoretical exercise because I think it's important.

25:38Downtown Josh Brown:So like you're saying like for the next 30 years, I'm not worried about this company's cash flow coming in. And of course, I think the number is going to go up. If you're like – now I know people don't invest for 30 years, but I'm just – I'm doing this because –

25:52Michael Batnick:Conversations that happen when software companies are at a 60 % crash.

25:57Downtown Josh Brown:Right. But if you're now taking that multiple down from 30 to 15, which is effectively what's happening, in some cases worse, it's not that you're saying, oh, I'm only comfortable with the next 15 years worth of cash flow. It's just a demonstration of a change in confidence. And that's like the best way to explain what's happening here. I wish I could tell you it's because these companies' earnings suck, but it's not. It'd be easier that way.

26:25Michael Batnick:So when software was eating the world in the pre-COVID era, okay, so forget about 2021, Salesforce was trading at nine to 10 times earnings, eight to 10 times earnings. It's now on its way to four. And is that the right number? Who knows? I guess there's nothing profound to say about these names. That are down 60%.

26:44Downtown Josh Brown:Revenue, multiple revenue. Sales. Four times sales. All right.

26:48Michael Batnick:All right. So Adam Parker weighed in. Really good stuff here. He said, we looked at the last several times the software industry, EV to sales multiple have contracted sharply over a rolling six-month period. All right. So there's nine periods since 2000. He said, we then observed after these periods how valuation worked for picking software stocks following these sell-offs. I thought this was really well done. For the last 20 years, buying the most expensive software companies outperformed buying the cheap for the six months following these valuation corrections. So Adam's saying if you want to add a software name, add a fast-growing expansive one like Palo Alto, not Salesforce because it's cheap.

27:29Michael Batnick:So next chart. These are the numbers. The most expensive quintile, that's the blue highlight. And he's looking at the spread between the most expensive and the least expensive. And interesting thought exercise here.

27:41Downtown Josh Brown:Oh, so you got paid better in forward-looking returns if you bought the more expensive software stocks?

27:47Michael Batnick:Yeah.

27:48Downtown Josh Brown:Okay. I bet you that would hold this time. Because you go through the mental exercise of saying, well, why is it expensive? And when you do that, you end up with the stocks that have the best growth outlooks. The market's not stupid. They have those high valuations in some cases relative to their peers for a good reason.

28:09Michael Batnick:So here's what I'm struggling with. I take the stock market very seriously. It's not perfect all the time, obviously. But I genuinely believe, and I think you do too, that there is a lot of information in stock prices and you would be foolish to ignore them. You agree?

28:25Downtown Josh Brown:Well, I never ignore stock prices. I don't know. I don't have to agree with what the market's doing. I might have a different perception.

28:32Michael Batnick:And also, sometimes the market is drunk. And I think the market is drunk right now. So I bought CrowdStrike yesterday, a stock that you've been a long-time proponent of. Just bombed out. I don't know anything about their business and cybersecurity and privacy. I know nothing about it. But this idea that Claude is just going to disrupt this monster of a business because they put out an agent? Like, I just, come on.

29:00Downtown Josh Brown:No, nobody actually thinks that. They just think other people are going to think that and they're selling. If you understand what CrowdStrike does versus what Claude put out, Claude put out a bug finder. It's a product that allows you to detect bugs in a security network. That has nothing to do with CrowdStrike. CrowdStrike is literally incident response. I'm sniffing the risk. I know. It's like protecting companies. It's not searching for bugs. It's so far beyond that. And it doesn't matter. They took, I don't know,$15 billion out of the market cap or whatever. Like it's bonkers.

29:43Michael Batnick:Well, Schwab too. I mean, you and I know that's wrong. Yeah. But it doesn't matter that you can make money on it on the long side.

29:48Downtown Josh Brown:That's right. All right. We have to get to this. I know a million things have been said about it already. but this is the thing that everyone's been talking about for 48 hours. The Citrini research, I don't even know what people call it a report. It's not. It's a very well done creative writing exercise where these two guys put their heads together and tried to picture a worst case scenario two years from now and then write a history of today to then. I don't know, prospectively, like act as though it's 2028 and they can go back two years and they paint this sort of stair step down downward into hell.

30:36Downtown Josh Brown:All of the various things that blow up along the way. And this piece has everything. It has a white collar unemployment surge. It has mortgages blowing up. It has the credit market seizing. It's got like every possible domino falling because the lifeblood of the economy is people doing knowledge work. The upper carry. Right, at a white-collar salary and just having those jobs vanish. And what are all the knock-on effects? I wanted to get your take. We haven't spoken about this, but I know you had a pretty strong response to it. I think you probably didn't sleep well last night if what I heard is true.

31:22Downtown Josh Brown:So it really bummed me out.

31:24Michael Batnick:Chris said you were crying a little? No. It really bummed me out to the point that Robin said what's wrong. Like it really f***ing bummed me out. Number one, it was a great piece and it was really well done. Why didn't you just call me? Well, because I want to save it for the show.

31:38Downtown Josh Brown:Okay.

31:40Michael Batnick:And this is not some bullshit perma bear guy who you could safely discard. He was very clear that this was like – I don't know if he called it science fiction. But the part that bummed me out the most, not like the market lens, and I was shocked at the market's reaction, like American Express and Capital One fell 8 % because of this report, like legitimately. Those stocks would not have done that absent support. That blew my face off. Here's the part that bummed me out, the human element of it. there are factually, unfortunately, people in my life and in your life and in everybody who's listening, there are people whose lives are going to get blown up.

32:22Michael Batnick:And they're going - Blown up? Blown up. There are people that are white collar workers that live around us who are going to lose a job, lose a spouse, lose a family. Like, I'm not saying that it's - that happens anyway? What do you mean? In general?

32:40Downtown Josh Brown:This is a constant in our lives.

32:43Michael Batnick:Stop, stop, stop. Yes, that happens. It is always a part of life. But it's going to... I'm not hyperbolic like we're going to get 10 % unemployment overnight because I reject it. I genuinely don't think that it's going to be mass unemployment, mass hysteria. But shit, dude, I could think of people that are expendable and it really bums me the f*** out. Like, seriously. Did you text any of them? No, but seriously, there's a lot of people who just don't know what's happening. And it's inevitable. And that part of it.

33:14Downtown Josh Brown:That part is true.

33:15Michael Batnick:That part of it like really, really made me sad.

33:21Downtown Josh Brown:So this is like, all right, let me just react to that really, really quickly. I think that that happens every day in America, in different industries, in different. Now, you and I live in an upper middle class suburb in a place, probably one of the most expensive places to live in America. And the reason it got that way is because there are huge employment opportunities in this area. And that's why so many people want to be here. And the employment opportunities pay very high salaries. That's like part of the territory living in places like Westchester, northern New Jersey, Nassau County, Long Island.

34:00Downtown Josh Brown:we happen to live in a place where it costs a lot to live um and i think as a result of that we very acutely feel these like tremors because it's almost impossible if you're like on a six hundred thousand dollar salary and you're at the top of the range for what you do because you're in new york and then they tell you like a machine that's plugged in somewhere in cincinnati is faster than you at what you do and you're out, you're probably not going to get that level of income back. You will get another job probably doing something else, maybe in the same field. Maybe you have to reinvent yourself.

34:37Downtown Josh Brown:It's very hard to replace a$600 ,000 annual income. So I'm with you there. I just don't think -

34:45Michael Batnick:I mean, that's very high. I'm just talking about like regular people in our town. That is right. Dude, that's not regular. What are you talking about? That's absurd.

34:54Downtown Josh Brown:Okay.

34:54Michael Batnick:You're on another planet.

34:55Downtown Josh Brown:Why is it$300 ,000? Yes. For a family household. Fine. Everything I said is still true. Yes. It's hard. It's really hard. You can't replace that with what? I'm agreeing with you, though. But we're saying the same thing. Like somebody making$120 ,000, it sucks. They get laid off. It's an easier income to find a place that will replace that. Even within the same sector, you get to the point where it's much, much, much harder. and I don't know where that threshold is, but I'm making the same point that you are. I just think it happens every day anyway. Does this accelerate it? Does this put more people in the line of fire?

35:33Michael Batnick:Yes. Yes, of course it does. All right. So that, to me, there's a lot in there that, again, is probably above what I could understand, but that really hit.

35:46Downtown Josh Brown:All right, I get it. There's a rhetorical trick being played here, which is piling up every possible negative, stacking them one on top of another with no positives and no offsets and absolutely no beneficial, you know, bends in the story. And I remember 2011 watching people do this with the European debt crisis where, and it was not guys on Substack, it was guys working at SockGen, but it's the same bullshit. and the general idea was like sub stack is a new sock gen basically it can't be worse than sock gen so they would have these british guys do these like purposely do these like thought exercises where they would extrapolate out first greeks defaults i saw that with you live in 2011 well these guys are doing this they were doing this shit professionally scared the bejesus out of me.

36:42Downtown Josh Brown:But that's what they were doing. Like they were like they were coming up with like the dominoes. Yeah. And it was every single day. And they were having op eds published at the Financial Times. The Financial Times like was almost rooting for this. So they like wanted they wanted literal economic implosion. I don't know why to this day, but it was maybe it was just about the clicks or the FT Alphaville subs. But for whatever reason, it was like this cabal of the economist FT Alphaville Louisville, British strategists working at French investment banks, and they would just hit publish and publish and publish.

37:18Downtown Josh Brown:And it was just like the Citrini piece. It was like this domino and not domino, then civil war in Germany, then the Italians ally with the Chinese. And it was like one after. It never plays out that way. There are positive externalities, even in a debt crisis. I I know it's hard to believe, but it's actually true. So things got really bad in Southern Europe. And I know people went through a lot of hardship, but the world didn't come to an end. And so I don't like this sort of like domino effect think pieces where the only externalities are possibly negative. And so that was the first thing that jumped out at me.

37:57Downtown Josh Brown:The second thing was they had Discover card blowing up. Does anyone know that Discover doesn't even trade publicly anymore?

38:04Michael Batnick:Whatever, whatever.

38:04Downtown Josh Brown:I'm just saying like there's a lot. All right. It doesn't matter. It was really well written. And I think that's why it got the reaction that it did. The stock market fell like 1.8%.

38:16Michael Batnick:Dude, American Express fell 8 % Capital One, which is like I've been pointing this entire run up when people are saying one thing, but the data shows another thing. I'm like, I understand people are bummed out. But don't tell me that consumers are under pressure when Capital One Financial, the most credit exposed company maybe in the country, is at a 52-week high. It fell 8 % yesterday.

38:37Downtown Josh Brown:Sorry, I got to address this in the chat. Asaro 631. Josh, could you please give a take on toast? What are you, are you listening? No offense. Like, do your ears work? Do you understand what's going on? You're asking me about a small cap software company in the midst of the biggest software crash in history. What would you like to know, sir? Do they still make software?

39:01Michael Batnick:All right, stop, stop, stop. Don't talk to the crowd.

39:04Downtown Josh Brown:All right. So, JP Morgan. All right. So, Jamie Diamond. What is this about? Is Brian Sazi eavesdropping at cocktail parties? Apparently.

39:17Michael Batnick:What is this? Here's what Jamie said. What is he doing? What if, I think there are 2 million commercial truckers in the United States, and there are lots of other examples you can give. There's a thought exercise. You could push a button, eliminate all of them, and they make$120 ,000 on average. Save fuel, save lives, time, blah, blah, blah. would you do it if you put 2 million people on the street where even if there are jobs available that next job is$25 ,000 a year stocking shelves I was saying that's kind of really bad civilly should we as a society agree to that I don't think so I was talking about the business and government and they should start thinking today not when it happens to deal with the issue it's got to be the business and government I don't think anybody has faith in the government it doesn't matter what side of the aisle you're on but I do have faith in humanity So for as much as I'm scared of the individual level and nothing will change that because I think that there's an inevitability to that, I believe strongly in humanity that, yes, we will solve this.

40:12Michael Batnick:There will be all sorts of amazing, amazing things that come out of AI, medicine, and a million things that we can't predict. But I'm worried about between now and then.

40:22Downtown Josh Brown:I really am. What's more likely to you? Two million commercial truckers lose their job in the next five years, or we have a missing generation of new truckers who just never go into that job because there are less opportunities over the next five to 10 years. And it just sort of fades away as a job option. Because I'm going to tell you, for most of these things, that's actually how it works. It's very rare that a new innovation comes along and everyone gets displaced at once. It's more likely it just becomes an industry that shrinks and we have less people go into that, but they don't do nothing.

40:59Downtown Josh Brown:They leave. They go do something else. It's not pleasant. Okay. I'm not going to say it's been pleasant for coal miners over the last 30 years. But when was that a good job? When was climbing down into a coal mine ever pleasant? So I think this is more gradual and it does not just place 2 million people. But the good jobs are going to be under assault too. Says you. And are all these email bullshit jobs that we're saying are good jobs good just because they pay a six-figure salary? Are they definitely good? Is it a good job to sit there and spam people's emails all day? Is that – we think that's a good job because it's air-conditioned?

41:43Downtown Josh Brown:I don't even know that I agree with the premise that all of the jobs being disrupted, like that we're not doing certain people a favor. Well, what's good?

41:53Michael Batnick:A good job is a job that puts food on the table and security for your family. That's a good job.

41:56Downtown Josh Brown:Oh, all right. Well, if that's the only baseline, then yes, a lot of good jobs are going to go away. But I just don't, I don't know that I agree with that's the baseline.

42:05Michael Batnick:Let's talk about Hala.

42:08Downtown Josh Brown:Are you ready to jump out that window

42:09Michael Batnick:behind you yet yeah i'm i don't like this let's all right let's move well here's the good news uh josh went viral i am the smartest man alive

42:26Downtown Josh Brown:yeah good luck disrupting the genius that is me because this week i went viral all right so i'm not going to do this whole discussion of what halo is we did that already we've done it a few times. Heavy assets, low obsolescence risk is the theme of the year. I said at the beginning of February, still believe it. Everything that's happened since has only confirmed how brilliant I think I am. I want to put this table up real quick. This is yesterday. This is what the stock market looks like this year, but this was just yesterday. This is a perfect halo day. Look the leadership. Consumer staples, one.

43:05Downtown Josh Brown:Healthcare, two. Utilities, three. Energy, four. Real estate, five. Materials, six. All six are the only sectors green. What was red? Communication services, industrials. That one you can go either way with. Technology, consumer discretionary financials. John, throw out my chart from later. This is what the end of the year. Wait, I just want to say, this is what the end of the year is going to look like, just so you understand that, okay? Well, I don't know that. I know. Nobody knows that. I know that.

43:36Michael Batnick:So I made the same chart, the same table. I made it into a chart. John, just throw that up. Where's the leadership coming from? Just so we could look at this one more time. This is so nuts. Look at where the S &P 500 is. It's up 80 basis points.

43:50Downtown Josh Brown:Yeah. And look at everything to the left. Energy is 1 % of the S &P. It's up 24%. Materials is, I could even be smaller. It's up 17 and a half percent staples plus 15 industrials plus 14 and when sean and i are doing our best stocks in

44:09Michael Batnick:the market research these are the stocks okay chart back on chart back on the thing that scares me or worries me about the stock market itself and listen i'm not overly concerned i know this isn't a popular thing to say out loud stock market falls 10 this year who cares right like we're in a massive, massive bull market. It's fine. Nobody's going to die. But the red bars, comm services, tech, discussionary, financials, you need these to participate for a sustained bull market. You just do. Now, maybe you don't. Maybe you don't. Maybe you don't.

44:43Downtown Josh Brown:It's just mean reversion within a bull market and it's sectors that had lagged for three years, catching up, getting re-rated. Well, that is what's happening. Fine, how about the set differently? I like it. Why do we not like it?

44:56Michael Batnick:No, dude, I love it. It's great. If those four bars stay where they are, we could still rock. But if the Mag 7 implodes, then everything else is coming down with it. That's all I'm saying.

45:08Downtown Josh Brown:Okay, let's hope not. I don't think it will. All right. I just want to show off the recognition that my brilliance has received. John, can we roll through some websites and some media outlets? Here's the Wall Street Journal. Wall Street's latest bet is on Halo companies with AI. You spoke to the journal for this, no? Yeah, I talked to her name is Hannah Lang, a great reporter at the Journal. Here's the next one. Financial Post. I think this is like the WSJ of Canada, if I'm not mistaken. Halo Stocks. AI may be a threat to some stocks, but investors should be watching for this Halo effect. Bang!

45:45Next one, CNBC.com.

45:48Downtown Josh Brown:All right, that's the home team. Josh Brown's Halo Stocks. They can't be disrupted by AI and will get more profitable because of it. That's February 9th. Look at the date on that. Here's Goldman Sachs research today. Strategy matters. This is some high-end luxury shit from Goldman. They might have put you in the footnote, but come on. I know. Literally, they're spelling it out. Focus on halo, heavy assets, low obsolescence. Literally, nobody could give me attribution. Should I email Tony Pasquarella? Yeah. and break his balls about that, right?

46:22Michael Batnick:Can I say one more thing about the current stock market? So I also, I don't think, I think you would agree with this. Nobody likes the fact that discretionary is underperforming staples in a serious, serious way. Even the equal weight looks disgusting. That is not a risk on appetite. But look at small caps. Look at the Russell 2000 hanging right near 52 week highs. Small caps are most,

46:41Downtown Josh Brown:small caps set by industry designation are mostly halo. Don't interrupt my ticker tape parade. Barron's put this up. Want stocks with AI immunity? Think halo next market watch go fire market watch. Why the halo trade boosting hard assets is no fluke. According to Morgan Stanley, also no attribution. That's all right. Dude, show the cover of good housekeeping. He's here's Axios. Anything but AI is giving rise to the halo trade. Michael, I am famous. I don't know. All right. Let's let's play this video real quick.

47:16Michael Batnick:Taxi drivers and accountants both got automated. One group got poorer, the other got richer. And the reason why is probably the most important idea for understanding what AI is about to do to your job. Before Uber, London cabbies spent years memorising 25 ,000 streets. It's called the knowledge. That expertise was the entire job. You were paying for what they knew. Then GPS automated the expert part, the hard part, the thing that took years to learn. Suddenly anyone with a car and a phone could do the job. Employment and ride services went up 250%. Wages? Ayo! Because the hard part was gone and anyone could do what was left.

47:54Michael Batnick:Now look at accountants. Computers automated the routine part, the data entry, the bookkeeping, the repetitive calculations. The easy part, what was left? The complex analytical work. The judgment calls that required more expertise, not less. So wages went up. The job got more specialized and more valuable. Same story. Technology automates part of a job, completely opposite outcome. The difference is whether the technology took the hard parts or the easy parts. If the technology takes the hard parts, the things that took years to learn, the expertise that made you worth paying for, you're heading towards more competition and lower wages because the barrier to entry just disappeared.

48:34Michael Batnick:Machines can come in. If the technology takes the easy parts, the routine, the repetitive, the stuff that you didn't need much training for, you're heading towards more specialization and higher wages because now you spend all your time on the work that actually requires you. This is the question you need to be asking right now, not will AI take my job. That's the wrong question. The right question is, in my job, is AI taking the hard parts or the easy parts? Think about what you did last week, the tasks that AI could already handle. Were those the tasks that took you years to learn or were there the parts they could have taught, you could have taught one new hire on day one?

49:14Downtown Josh Brown:Because - All right. That's a, I mean, that's a really great point, that juxtaposition between taxi drivers and accountants. The technology with taxis took the hard part. The drivers knew where everything was. And then once the machines did, there was nothing for them to do. Were they just like on the steering wheel? The thing with accountants though, It's the opposite. All the rote, annoying task stuff, the calculations, a machine could do that. That's not the thing that makes an accountant an accountant. The thing that makes the accountant the accountant is that specialized knowledge and that ability to communicate options with customers and lifelong clients.

49:58Downtown Josh Brown:So and that's why accountants get paid more since TurboTax came along. But taxi drivers get paid less or nothing since the advent of Uber. And I think it's a really important way of understanding what's about to happen. You don't seem convinced. I'm not. Is that because she's from Middle Earth? Talks like a hobbit? What is the reason? Where is that accent from? That's Australia.

50:25Michael Batnick:Or maybe New Zealand.

50:26Downtown Josh Brown:We need to find out what's going on. That was classic. Oh, no, you know what? That could have been South Africa. All right. Well, I thought she made a really important distinction between does the AI do the hard part or the easy part? now there's people in the chat saying, what if it does both? I don't know what to tell you. Move to New Zealand. Ask her.

50:45Michael Batnick:All right. Next. All right. Hard to believe, hard to believe that the cumulative advanced decline line for New York Stock Exchange listed stocks hit a new all-time high the other day.

50:55Downtown Josh Brown:Nobody would know this.

50:56Michael Batnick:Like what?

50:59Downtown Josh Brown:These are Halo stocks. That's it. Well, what else do you want me to tell you? It's, anything but software and information technology.

51:07Michael Batnick:All right. So this makes me feel a little bit better about the state of affairs. Next chart, please. Look at chart goat Matt doing his thing. Expensive stocks are underperforming. So Matt is looking at median price of sales based on 10 equally weighted buckets of stocks. And it's very clear. This picture picks a very clear story. The stocks that are getting smoked are the stocks that were expensive to begin with.

51:29Downtown Josh Brown:So how do you not look at this and say it's just mean reversion? And it's just like the counter trend to answer to correcting what's gone on for the last three years. Sort of how it seems to me. Right? Yeah. It's like, all right, we had this one group of stocks. They were expensive at the start. They got even more expensive. And that ran its course. And now there's concern about their future earnings cash flows. Let's sell those and buy these cheap ones. And now the cheap ones are getting expensive. I did a thing on the air today at CNBC about the oil stocks, the huge re-rating in those multiples.

52:05Downtown Josh Brown:People don't even understand. Like, you got stocks now. Oxy is trading 32 times trailing 12-month earnings. Yeah, that makes sense. Exxon Mobil has gone from 14 to 22. Chevron has gone from, I think, 16 to 28.

52:20Michael Batnick:What's the expected earnings growth for these companies?

52:23Downtown Josh Brown:It's got to be - The 5 %? Really? No. No. No. In most cases, not even close. Well, why would it be? WTI crude is like 60. It's gone nowhere. That's what a re-rating looks like.

52:35Michael Batnick:This is the funny thing about valuations. Like, does this make sense? Oh, you're paying for the next 24 years worth of – like, give me a break. Nobody cares.

52:41Downtown Josh Brown:All right. I'm sorry for doing that. But I'm just saying like that's what it looks like. All right. Let's move out to better news. Yeah. Pre-crisis parallels. All right. we did a whole thing with Diamond but I did want to take one more quote of his John give me this screen grab this is Bloomberg Diamond sees pre-crisis parallels as rivals do dumb things so now we come to the private equity private credit portion of this which is its own story somewhat connected to the software crash this is Jamie unfortunately we did see this in 05, 06 and 07 almost the same thing. The rising tide was lifting all boats.

53:28Downtown Josh Brown:Everyone was making a lot of money. I see a couple people doing some dumb things. They're just doing dumb things to create NII. That's net interest income. And then they do all this like 2008 stuff. Did he name names? Yeah. When auto lender Tricolor Holdings and Car Parts Supplier First Brands Group imploded last year, he said seeing one cockroach meant more would likely crop up. And then he said, quote, there's always a surprise in a credit cycle. This time around, it might be software because of AI. Hold that thought. Lloyd Blankfein off the top rope, coming in to trash whoever's running Goldman Sachs and whoever's running all of these private credit firms.

54:16Downtown Josh Brown:Look at this guy. Blankfein has a book coming out on March 3rd. That's why he's talking. Just in case you were wondering, oh yeah, whatever happened to that guy? What happened was he crushed it and he sort of retired. And now he's in that mode where, hey, I got something to say. So here's what he said. Is a crisis brewing in private credit? Quote, the people who run these firms have had great lives and made a lot of money. These firms are very successful, very lucrative, not content with the market that they have. and as big companies they have, they wanna make them bigger. How are they making them bigger?

54:53Downtown Josh Brown:By finding new outlets of capital. What are they going to? Retail, consumers, 401ks, insurance companies. If something blows up and big institutional investors lose money, does the public sector care that much? Not really. If a bunch of individuals start losing their 401k plans and their money, does the public sector care? Does the government care? Yes, a lot. I think it's crazy to put those assets there. And I think it's crazy from their point of view. They have nice lives. They make a fortune. Their companies are huge. They already own their yachts and whatever it is they want. Why are you going into this dangerous territory just to make your business a little bit bigger when that represents such a big potential problem?

55:38Downtown Josh Brown:All right. Team blank find on this.

55:40Michael Batnick:I mean, I wish you just would have answered the question. Seriously. It's the answer. No, it's not. He didn't answer. Is a crisis brewing in private credit?

55:51Downtown Josh Brown:Yeah. He answered a different question. Well, the answer to the question, well, I think that's what he sees as the crisis, dude.

55:57Michael Batnick:I think he speaks for all of us. And I think this is actually a good thing, that this is happening before, not after these things are in 401ks.

56:05Downtown Josh Brown:He said in a financial crisis, a trader would say, I think an investment is worth X. And I'd say, go out and sell it. And they couldn't. These private credit investments are illiquid. So how do they find out what the true value is? We don't know what something's worth for sure unless you try to sell it and somebody buys it. I think something will occur and we'll say, I can't believe there's gambling in the casino. I can't believe my predecessors let this happen. And then I'll have to get fixed and it will be more conservative than it happened. And he's almost like, what is he lobbying to come back and run an investment bank?

56:38Michael Batnick:No, he's writing a book. So the story with private credit is that in the spring fall, these BDCs and these stocks started to go lower as interest rates are coming down and these are floating rate loans. And so the investors were going to earn less interest income. And therefore, all things equal, these were relatively less attractive than they were in 2022 when interest rates were killing bonds and these things were floating higher, no duration. Like it was kumbaya. It was a perfect storm for greatness. So first it was the rates coming down that said investors, hey, you know what? I don't think we'd like these things anymore.

57:16Michael Batnick:And then it was the tricolor and first brands, which by the way were syndicated loans. Those weren't even private credit things. And then there's like, eh, maybe these are more - Those weren't poorly underwritten. Those were frauds. Frauds. Again, not private credit frauds, just frauds. Right. And so I was able to hand wave a lot of that away. What I wasn't able to hand wave away was the tidal wave of money coming into the space Like there can't be this many good loans available. There just can't be. So a sloppy underwriting, which we're going to find out about in – I don't know. Give it a couple of months.

57:45Michael Batnick:Give it – Now. Now. And the thing that for me just is like makes this really hard is the software part of it. So Bcred, for example, 26 % of the book is in software loans of middle market software companies.

58:00Downtown Josh Brown:And that doesn't mean they were bad loans or anything – anyone did anything wrong.

58:04Michael Batnick:The world changed.

58:04Downtown Josh Brown:It's a private, illiquid investment, and the world changed. The world changed.

58:08Michael Batnick:So if the equity, and yeah, these could have been made a proper loan to values, and there's plenty of equity cushion, or there was. Well, guess what? The publicly traded stocks are down 60%. What do you think the privately traded businesses are worth as a percentage of what they were worth? Way less, OK? Yeah. So I don't know what the portfolios look like. Who the hell knows? But investors aren't waiting. These names are getting murdered. Blue Owls in a 60 % drawdown. The publicly listed BDC is getting murdered. And again, the worst part of it is, Josh, we haven't even seen the cycle turn. There's no distress.

58:43Michael Batnick:Like everything is fine.

58:45Downtown Josh Brown:Again, it's multiple compression, but in a different arena. It's the same concept. We know these companies are worth less. None of them have, there's literally no problems. None of them are filing chapter seven, chapter 11.

58:59Michael Batnick:That makes it more scary.

59:00Downtown Josh Brown:But it's the same concept. We're just not willing to agree that they're worth what they were last year. Put a pin in that, though, because we're going to revisit that at the end. Ten-year treasury rate, Neil Dutta, quote, In the last couple of weeks, we have seen stronger than expected employment and firm core PCE inflation. We might even get a politically pliant Fed chair. There's also quite a bit of enthusiasm out there as financial market conditions have eased and the tax refund season expected to be stronger relative to last year is in full swing. Despite all this, 10-year yields have actually been sliding.

59:37Downtown Josh Brown:I am not sure what the right level of the 10-year should be, but there's every reason for longer-term yields to be rising right now. It's notable that they haven't been. 10-year hit 4 % today. Do we need to read more into this?

59:51Michael Batnick:I don't know. This is such a weird market, dude. If you hear like the way that we're talking, just our tone and what we're saying, you would just assume the market's at a 15%, 20 % drawdown and we're right near all-time highs. Now, I don't know if that makes me more or less confident. I'm honestly not sure.

1:00:07Downtown Josh Brown:That's why I call this episode pre-crisis vibes because that's what it feels like. Like it feels like everybody sees a crisis about to unfold, but it hasn't started yet. Okay.

1:00:19Michael Batnick:So I love that you said that because going into 2023 and 2022 during the rate hiking cycle, everybody had the ability to brace for impact. Everybody got religion and did what they had to do with their balance sheet and then this or that, and they braced for an impact that didn't come. Now, I'm not saying that because it didn't happen the last time. It won't happen this time. But I think what's a Trini did in service to society for everybody focusing, like everybody is bracing for impact. And I think that changes the nature of risk. Now, I'm not saying that we're going to eliminate it, of course, but I like that everybody's sort of feeling anxious about the future.

1:00:53Downtown Josh Brown:That's not a bad take. Like, in other words, he told everybody, he told everybody, like, put your pads on. And if enough people do that, some of the recklessness that maybe we were worried about last year is not going to manifest itself. Done. All right. It's not a bad take.

1:01:09Michael Batnick:All right. Let's talk about an area of the halo trade that's not working. US pending home sales. Holy mackerel. Off a cliff.

1:01:19Downtown Josh Brown:Okay. That's part of that 10-year though, falling to 4%. People are not bullish on the economy right now.

1:01:26Michael Batnick:Let's look at pending home sales. the, yeah, not great. Like this, this is a very seasonal chart. Like it goes for the last three years, the lines all move together and the red line for 2026, it's diverging big. We're looking at, at four week rolling average of week depending sales and it does not look like the others. And then the roll four week rolling average on the bottom chart of median days in the market. Like this is bad, dude. Houses are just not selling. So pool corporation reported, The stock is getting murdered. Swimming pool builds are down 50 % since the pandemic. Now, obviously, a lot of this is pulled forward, but still.

1:02:06Michael Batnick:In 2025, we estimate that just under 60 ,000 new pools were built in the US, a mid-single-digit decline. This is about half of what we saw at the height of the pandemic and 40 % lower than 2022. Holy shit. One other, floor and decor, murdered. Murdered. Oh, what is this?

1:02:25Downtown Josh Brown:Like carpets and wood floors?

1:02:26Michael Batnick:I'm guessing it's like floor and probably some decor just destroyed.

1:02:32Downtown Josh Brown:Chat, would you have guessed you would see floor and decor and pool in drawdowns of this size? Is that anecdotally what you – I think I would have. I feel like everybody shot their shot from 2020 till 2024, 25-ish. And then like if you were going to do something, you're going to redo your house or dig a pool. Like you already did that. But we were bullish. And now it's a retrenchment.

1:02:58Michael Batnick:We were bullish on rates coming down and the housing market. Well, they have to come down. But they have come down. The 30 years below 6%. Home, like, rocket, like, these stocks are not working.

1:03:10Downtown Josh Brown:People are not spending money. Sean Graylish in the chat is saying the sellers have to bring their prices down. Yeah, we know, but they're not going to.

1:03:16Michael Batnick:It's a buyer's market where nobody's buying or nobody's selling. It's not good.

1:03:22Downtown Josh Brown:I grabbed this. I wanted to share with you. Home Depot reported this morning. Adjusted earnings, 272 versus consensus, 253. Topping estimates despite year-over-year pressure. Revenue actually beat. Same-store sales were up 0.4%. In the US, 0.3%, which reversed prior declines. And it beat the forecast, which were for a drop. So somehow, and Lowe's is tomorrow. Oh, yeah, and the stock still could have barely bounced

1:03:50Michael Batnick:and closed on the Lowe's of the day.

1:03:52Downtown Josh Brown:um or no lows is tomorrow before the open so we'll see any coverage then one more thing here's a uh skeet from sean broderick a skeet a blue sky tweet i don't know what are we calling it we don't call them skeets all right um google search this is a chart of google searches for quote can't sell house absolutely skyrockets the highest level in over a decade isn't this a great chart what is going on you can't sell your house because it's because it's not worth what you think it is what like do you need somebody to hit you over the head with a baseball bat you can't sell it because the price is wrong isn't that it there's more than that that's it if you if you

1:04:34Michael Batnick:were able to afford a house you probably already bought a house well i think that's the same thing

1:04:41Downtown Josh Brown:as the put in the pool we do the floors i agree with you i totally agree with you right the people that wanted to did it. All right, let's do make the case. Then you're going to do a mystery chart and then we're going to let everybody out of here. You call yourself a contrarian, you son of a bitch? Well, let's see. Chart on.

1:05:01Michael Batnick:Now, I don't give a... Dude, I bought Blackstone on Friday and then it fell 8 % the next day.

1:05:06Downtown Josh Brown:No, I said a real contrarian. No, you know what? I just... Blue owl.

1:05:10Michael Batnick:I just... Go ahead.

1:05:12Downtown Josh Brown:I have things to say. Go ahead. I listened to your episode of Talking Wealth today, and I thought it was great. And you got into – who is the guest again? Brian Moriarty from Morningstar. All right. Guys, if you're a financial advisor or interested in wealth management topics, we have a weekly podcast called Talking Wealth. And the latest episode is about the Blue Owl and the OBDC saga. I thought that was really good, Mike. Thank you. Your takeaway from that is even at$10 a share, this blue owl is not yet safe to buy. Okay. Or maybe more dangerous than even when it was at 20? It probably is.

1:05:48Michael Batnick:It probably is. Probably is what? It probably is okay to buy. There's not investment advice. I don't want to invest in this company. I don't trust management. I was on the call yesterday talking to their investors about what happened. And I just, I don't like what they're saying. They're acting like it's all fake news. It's like Mark Lipscholz is saying that he sees green flags, not red flags. It's like, bro, your stock's down 60%. Now, maybe the FT is inaccurately reporting some of the things, but don't act that there's no smoke, okay? You just voluntarily gave your investors back 30 % of their money.

1:06:21Michael Batnick:Like, and oh, we sold it for 99.7 cents on the dollar. Nothing to see here. People aren't dumb. And the fact that they were blindsided about the stock market's reaction tells me all I need to know. I have no faith in them. No faith in them. I don't think anybody else does either. All right.

1:06:35Downtown Josh Brown:I 100 % agree with you. So this is make the case. And normally we talk about something I'm bullish on, but I really wanted to show like the sentiment on these names could not be worse. And if you're really one of these people who thinks you're Warren Buffett and you run into a burning building with your wallet open and blah, blah, blah. Here you go. Wait, dude, I bought Blackstone on Friday.

1:06:58Michael Batnick:And yesterday it was down 8%. All right.

1:07:01Downtown Josh Brown:This one I actually own. I own Carlisle Group. It's in a 26 % drawdown, which makes it one of the better, one of the stocks holding up best in the space. I really do trust management of this one. And I am not selling it. I wouldn't say I'm adding to it. I'm still long, Carlisle, for those who are wondering. Let's do the next one. This is Apollo. 36 % drawdown. I trust them. Looks like you trust this company?

1:07:28Michael Batnick:To the extent that you could trust any of these companies, I think that Mark Rowan tells it like it is.

1:07:33Downtown Josh Brown:you hear him i like that i like that i like that guy he tells the truth all right he's gonna come back to bite us in the ass if he's hiding some cockroaches and uh but i trust that guy listen is that what we're saying like we trust the guy or we don't trust the guy that's it everybody

1:07:47Michael Batnick:knows that there's risk okay what do you think a stock down 40 is telling you that everything's

1:07:52Downtown Josh Brown:great uh oh that's risky no shit steven harman in the chat is pointing out um blue owl is bailed out by their own insurers last week. So that's a whole other story. That's a whole other. We're not going to get into that. All right. Aries, 41 % drawdown. I don't know anything about this company at all.

1:08:13Michael Batnick:So Aries has the biggest BDC. I think it's, I mean, it was$14 billion. All right.

1:08:17Downtown Josh Brown:Forget it. Next. Blackstone. This one you bought. I bought it. This is a 42 % drawdown. This is the black. I think you're going to make money in this one.

1:08:25Michael Batnick:This is the black rock of private equity. And I know the story is not pretty right now. And yeah, it could definitely, definitely get a lot worse. Could it get cut in half? Yeah, sure. Maybe. Fine. Why not?

1:08:35Downtown Josh Brown:I remember the IPO of Blackstone and I'm going to tell you it fell 70%. They went public in like 06. Horrible timing for new investors. But this one was the first to come back and it came back the biggest. And I think they've been through credit cycles. They've been through moments where investors don't trust private assets. I think they're going to live.

1:09:00Michael Batnick:Yeah. Everybody knows that flows are going to slow down. Like that's not – it's not going to surprise anybody. It's not going to surprise anybody. It's in the price, okay? And these are, for the most part, illiquid vehicles. We know the fee-related earnings. Like, all right.

1:09:13Downtown Josh Brown:Yeah, disgusting. Here's KKR. Disgusting. 43 % drawdown. This one is in every way, shape, and form as illustrious of a history as Blackstone, as Aries Apollo.

1:09:28Michael Batnick:They invented the LBO.

1:09:29Downtown Josh Brown:Great reputations. I don't know. What do we – I don't know what to do.

1:09:38Michael Batnick:You don't have to buy these stocks. In fact, you probably shouldn't.

1:09:40Downtown Josh Brown:I'm not going to.

1:09:41Michael Batnick:But if you're selling these – if you're panic selling today, you're never allowed to quote Warren Buffett ever again, okay? Ever. Those are the rules.

1:09:49Downtown Josh Brown:Does Berkshire step in and look at the loans and say 50 % discount? Yeah, I'll buy 10 % of this piece of shit.

1:09:57Michael Batnick:So Boaz Weinstein yesterday said that he's a long Blue Owl and he's trying to buy. I think that's what he tweeted. And he's looking at the other assets.

1:10:04Downtown Josh Brown:Is he buying the BDC or is he buying the equity of the corporation? The equity. Two very different things. The equity. So he's invested in the stock of Blue Owl? Yeah.

1:10:14Michael Batnick:Let me not miss.

1:10:15Downtown Josh Brown:He knows more about this stuff than we do.

1:10:17Michael Batnick:He said, the way the wheels are coming off the car and the equities of private credit managers and the investors who hold them. Look at LNC today. Public credit looks absurdly rich. this might surprise but saba capital is long stock in bx aries apollo and also owl we sold down we sold down a lot of cdx high yield at the same time okay so he's hedging out the

1:10:41Downtown Josh Brown:credit risk and buying the equity what he's like his his claim to fame and he's really good at this maybe the best in the world at this is uh closed end funds well that's what these are selling at a discount today. And that's effectively what these are. Closed end funds selling at such a huge discount that he buys them. And in some cases, I think he is an activist and he makes the things shut itself down so that he gets par on the underlying investments.

1:11:06Michael Batnick:Or it's like, listen, this portfolio is trading at a 23 % to your bullshit nav. Maybe it's only trading at a, I don't know, a 14 % discount or whatever it is. And I can make money that way.

1:11:17Downtown Josh Brown:Okay. Well, better him than me, because I don't know what I'm doing in that space. I really, this is not, nobody should listen to me on whether or not it's time to buy them. I just wanted to get your take. All right. You have a mystery chart?

1:11:28Michael Batnick:I do. Let's do the first one, please. I forgot even what I shared. What is this? Okay. This is five years and this shouldn't be that, that hard. You and Ben were speaking about this last week. But what, like, what is it? It's stocks? Well, you should know, you should know what the purple line is. The purple line is, it's American index. But look at the spread. So five years, 89 % versus 59%.

1:11:55Downtown Josh Brown:What's up 89 %? What's up 59 %? Okay. Let's say that emerging markets is yellow. Close. China?

1:12:08Michael Batnick:Close. China? The purple is the S &P, obviously. Okay. But look at this spread, dude. This is not insubstantial. What is it? You could say it's quite substantial. This is international small cap value stocks.

1:12:22Downtown Josh Brown:Oh, international small cap value. Tip of my tongue. Why didn't I get that? Isn't that wild? Yeah.

1:12:30Michael Batnick:40 points. But can I tell you? Not 40. Not 40. My bad. That was really. Wait. I'll tell you one thing about international small cap value.

1:12:40Downtown Josh Brown:You want to know? It's all halo. The whole thing. All of it. I got one more for you. There's no disruption in international small-cap value.

1:12:49Michael Batnick:There's no mystery here. I'll just tell you. This is emerging. John, reveal it, please. This is going back to October 2022.

1:12:57Downtown Josh Brown:EM versus SPUI. Isn't that wild?

1:12:59Michael Batnick:Going back to October 2022, the S &P has lagged emerging markets? How?

1:13:05Downtown Josh Brown:Just what's gone on in the last month.

1:13:08Michael Batnick:Chart back on. It really, it's from the Liberation Day bottom. Smoking them. Unreal.

1:13:14Downtown Josh Brown:Yeah. look and it's and you know you don't know when you're in an outperformance or an underperformance regime in any asset class versus another until enough time goes by that you can look back yeah like yeah like right now we could be in a regime where people are going to be blown away by thing x is outperforming thing y but like you need enough time to go by in order it's all hindsight like all of it correct so very difficult game to play all right guys i want to mention uh first First of all, thank you guys so much for joining us for the live. We appreciate it. Make sure you hit that like on your way out.

1:13:49Downtown Josh Brown:It means a lot. Helps us for the algorithm. I want to mention tomorrow's Wednesday, All New Animal Spirits with Michael and Ben. We'll do an Ask the Compound later this week. I always forget what day, but it's always good. I think it's Wednesday. I could be wrong. And then it's an all new edition of the Compound and Friends on Friday. New guest. Two friends, both new guests coming by to hang with us. Maybe just one. We're about to find out for sure. Either way, you're going to love the show. Thank you. Thank you again. See you soon.

1:14:32Michael Batnick:Ritholtz Wealth Management is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Ritholtz Wealth Management and its representatives are properly licensed or exempt from licensure. Nothing on this podcast should be construed as and may not be used in connection with an offer to sell or solicitation of an offer to buy or hold an interest in any security or investment product Past performance is no guarantee of future results Investing involves risk and possible loss of principal capital No advice may be rendered by Ritholtz Wealth Management unless a client service agreement is in place