Time to Sell Nvidia? Plus A16Z on Stablecoins and a Netflix Earnings Preview

29:34So in countries with high inflation, they're holding stablecoins directly and they know that they're doing this. They want that dollar product. for international money sending, remittances, B2B, so forth. They know stable coins are sort of involved, but they're using a new application that gives them a better price and a faster, better experience. And so it's kind of on their mind. In the US, I think it's going to be more silent where we all have the - It doesn't matter. It doesn't matter. It's a stable coin. It just matters that they're moving the money. And the next great fintech you hear about is going to be powered by stable coins and it's going to allow them to offer you a really great product that just like wasn't possible and you didn't know why it wasn't possible.

30:15But now you've got a fintech app that's – it's three times better at sending money internationally. It's two times better in terms of the UI. It's a little bit better at giving you a better interest rate and so forth. So you'll just use a fintech app and you're like, this thing rocks. I wonder how – Do you have a sense of how many people are sending international remittances either from the United States or just globally? Like what's the TAM of something like a really cheap stablecoin remittance? Well, as I mentioned, we met with a bunch of companies this winter and spring, and all of them are growing 10 % a month.

30:55So whatever the number I'm going to give you, I think it's going to be 10 % to 20 % higher next month just based on the early stage startups that we're talking about. So this is like an Uber driver in Miami whose family is in Venezuela. and every week, whatever he takes home from Uber, he wants to move a portion of that from, like however they pay him, he wants a way to send that value back to his family in Venezuela and not get raked over the coals for 7 % by a traditional remittance. That savings, that 7 % of, I don't know how much he's sending home, $1 ,500,$2 ,000. That's a big deal. Often it's$100 or$200.

31:37Wow. And the less money you send, the worse rate you get. But actually with stable coins, it's often a flat fee and it's a very low flat fee. And so that also makes a big difference because now you can do more smaller transactions rather than trying to scrape together to 300 to save five bucks, which actually matters to your mom in Venezuela. Like people are distorting the market right now because of the expense of these remittances. So earlier we showed charts of Visa at MasterCard and said, do these look like companies that are worried about being disrupted by stable coins? What we should have shown was Western Union.

32:11The stock is down 50 % in the last three years, and it's at a 52-week low. And this is certainly evidence of, yeah, there's something there. They might have no business. Visa and MasterCard actually do have something really impressive, which is their merchant network. They work with millions of businesses all over the world they help build that terminal you know that you everyone knows you swipe tap whatever scan to pay and um they've helped bootstrap this this trust network where you can go i was just in italy over the last two weeks and i tapped to pay not to brag oh wait where were you i was in positano on the mouth oh i did that two years ago i loved it it was amazing awesome well Well, they accept my credit card there, and that's because Visa helped bootstrap this trust network.

33:05Did you stay at El San Pietro? No, I did not, but I saw it. It looks like it. Did you have a drug there? It's pretty impressive. Okay. Go on. Well, anyway, I mean, look, I could spend my money there partially because of Visa's work. But that same trust network could probably be re-leveraged to actually support stablecoins. So actually, this is actually no Amex in Europe. You can use it, but you shouldn't because they're charging you an international fee. I've never used my Visa so much. I only use Amex here, and I only use Visa when I'm overseas. Now, if there's this third thing, I could tap my phone, and it's connected to an app that allows me to pay a stable coin to a – but like MasterCard and Visa, I guess, have to agree that they want to introduce that into the merchant network that you're talking about.

33:57Yeah, well, that part is really interesting. And again, I am an engineer. That's why I kind of geek out on this stuff. You could repurpose that payment terminal to just accept stablecoins natively. And there's some fraud steps that go away with a stablecoin transaction because the money is sent instantly. There's no way to undo it. So if I'm buying a drink and I see the bartender is making it, I'm happy to send them a dollar. And the bartender is happy to accept the dollar. And we don't actually need to have quite the same trust network that we have with Visa and MasterCard, which are operating on credit and therefore need to have the guarantees they can actually trust me.

34:33And that'll be good for my money. Are you surprised at the valuation that Wall Street has given Circle? I think it effectively 10x from its IPO price, not the opening price, but like the price was offered at. Mike, did it do a full 10x? I mean, I don't know if a 10x, but let's see. It certainly went bonkers. That's the technical term. So it came out at like, I think they priced it at 40, came out at 70. Is that something about$6? I thought it was$31 for some reason I have in my head. It ran to$300. You might be right. Are you surprised, Sam? What do you think? Buy, sell, or hold. These guys know I'm an RIA, so I'm like, there's not so much I can say on the matter.

35:16All right, fine. But let's put it this way. The underwriters, had they had any idea about the true demand for this stock, would not have priced it where they priced it. Because by accident, I assume, they left a ton of money on the table. So Wall Street was definitely surprised by the fervor to get in on a crypto infrastructure play. It's effectively what it is. They're not bullish on stablecoins. They're bullish on the usage of stable coins, I guess, would be the way to phrase it. So what do you say from Silicon Valley? Were you like, holy shit, they really want this circle stock. What's going on?

35:57Well, for me, it's obvious. I spend all day talking to early stage companies and they're all saying - So you're not surprised. Well, what I'm not surprised about is that Wall Street's a little bit late to pick up on a new, better way to move money. and that people who are really using the stuff get it and know that this is the future and they they want access you know a way to invest in that but the key thing is that people just have recognized that stable coins are likely going to be a big part of how payments work going forward um and circles one of you guys so of course you guys know more about it than we do um you so you guys are funding it the the best analogy that i give people for silicon valley and i know you're New York versus Wall Street.

36:40You guys are the elves. We're the orcs. But the orcs really wanted in on this particular stock. And now, this morning, I saw Grayscale just filed for a confidential IPO, a confidential filing for an IPO. And it looks like we're going to get a whole host of crypto infrastructure plays to come to the New York Stock Exchange and the NASDAQ. So like this is a really hot theme now, even for the non-crypto native. Even for the non-crypto native. But again, I'll just go back to the fintechs. I think a lot of regular fintechs and regular payment companies, they're going to be using stablecoin rails and stablecoins as the basis for their new products because it just is a better way to build what they're already building, what they want to build, what consumers want.

37:29And so I don't want to spend too much time building a delineation between a stablecoin company and not a stablecoin company when I think a lot of the financial companies out there are going to be using better infrastructure, not because of any speculative. I don't care about that. What I want to see is better products that make payments cheaper and faster. And that's happening. Star Wars guy? Oh, yeah, a little bit. Okay. So it occurred to me, this sounds like it could turn into a galactic credit standard. So whenever there's an exchange of value in the Star Wars universe, they talk about credits.

38:07And they don't talk about what country the currency is from. They're not talking specifically about any one planet's monetary system. These are just the galactic credits. And how many credits will you pay me to take the Millennium Falcon on your suicide mission? Like that's – if we do increase the penetration of the dollar by means of getting everybody comfortable with stable coins, we could end up in a one, two, or three currency – not one. A three or four currency world versus a ten currency world. I don't think we're going to end up in a three currency world. I do think as a consumer, we don't always realize just how much of the world is already priced in dollars.

38:54I mean, that's what B2B payments are priced in. It's the global unit of account to some extent. And maybe that will grow. I think that dollar penetration will grow. And I think there's this huge structural demand for dollars. Consumers everywhere, especially in high inflation countries, want to be saving in dollars. businesses want to hold money in dollars because they're buying goods in dollars because that's the unit of account um it'll get it dollar penetration will will continue to grow but i don't think we'll have a hegemonic currency uh just because the value of controlling your own currency is pretty high like if let's say there's a some sort of supply shock in a local industry maybe you're uh export a lot of wood and there's a big uh forest fire well you might need to induce more credit to help businesses bridge that production gap.

39:46And if you're all on the dollar, it can be harder for countries to be responsive to their own local needs. And so there's a lot of reasons to have a local currency, but also there's a lot of reasons to have people have access to the dollar so they can participate on the global stage more readily as well. Does the stablecoin ecosystem rely on people's enthusiasm for Bitcoin continuing? I know these I know these are not speculative per se, but the continued use of this does rely on people remaining interested in the whole crypto ecosystem. Or is that not anything worth worrying about at this point?

40:24Speculation has, of course, been a big part of crypto's history. That's not why I'm – and that's actually not why A16Z is excited about crypto. We think it's a better way for people to coordinate. No, that's why Michael is excited about crypto. That's why Michael is nodding over here. No, it's the reason why we like it is because crypto offers a better way for people to trustlessly collaborate. And it's a better technology stack for building financial products. And so that reason is why we see all these fintechs getting into stable coins. And so I think the two issues are fairly unrelated. Michael, do you have anything else?

41:01I have one more for Sam. I'm finished with this guy. No, I'm good. So for the crypto skeptics who watch our show and we have, you know, we have both. But for the people that are just uneasy about, you know, spinning up an entire new financial architecture for the world with up until three weeks ago, no regulations. What do you think is the biggest risk? Systemic risk, not risk to any one player or coin. But what is the biggest systemic risk that could arise from the mass adoption of stable coins as kind of like a foundational financial services system? What do you worry about or what do people worry about?

41:45What I want to see is I want to see tight integration with existing financial institutions because there's a lot of implicit knowledge. knowledge there is a lot of knowledge that's been built up over years of how to manage risk, how to do like distribution, how to educate customers, how to get merchants and suppliers to coordinate effectively. And I'd like to see stable coins have access to the people who know those systems really well so that stable coins aren't just sort of a new rail. They're a rail that can really move forward the existing important industries that are out there. And so a risk would be that traditional payments companies don't adopt stablecoins fast enough.

42:30And we end up with people reinventing the wheel in a way that's slow and just doesn't benefit the consumer as much as I think stablecoins should and will. So you don't think there's a risk to the banking system, let's say, or a risk to the credit card system that could potentially be introduced if something goes awry? You think the bigger risk is just that we move too slowly? I think there's going to be a lot of competition. I think if I was an incumbent in payments or in banking, I'd be – certainly then I'd be worried I'm not moving fast enough and I might get my lunch eaten by a savvier startup.

43:08But no, I'm not very worried about, I think, the existential risk that you're getting at. I'm worried that stablecoins and traditional finance aren't going to collaborate enough to get the best of both worlds. Sam Broner, this has been super helpful for Michael and I, and I know for the audience as well. I want to thank you so much for joining us. Let's tell people where they could learn more about the A16Z house view on stablecoins and other crypto topics. Where would they go? You can follow me on Twitter at Sam Broner or, and more importantly, go to A16ZCrypto.com or follow us on Twitter. You're the man.

43:44We'll come back. We'll come back to you someday in the future. Let's revisit. I'd love to get up to you. Thank you, guys. Really nice to meet you both. All right. Awesome. Hey, guys, thanks so much for watching. Thanks for listening. Smash that like button. Subscribe. Tell your friends, et cetera. And we'll talk to you soon.

44:19Oh, my. George Takei voice. Oh, my. It's, hey, guys. What are your thoughts? It's Tuesday night, 5 p.m. We are back with an all new edition of What Are Your Thoughts? My name is downtown Josh Brown. My co-host, Michael Batnick, is with me as always. Michael, please say hello. Hello, hello. All right. We have an action packed show. We are just getting into the heart of earnings season. We're about one week in. Today we had all the banks report and, you know, tech is on the way and we're going to get into a whole lot of stuff related to earnings and so many other topics. We're super excited to have you guys here.

45:02And thanks to everyone who is joining on the live stream. You know, we appreciate that so much. Tonight's show is brought to you by Public. Public is the investing platform for those who take it seriously. You can build multi-asset portfolio of stocks, bonds, options, crypto, and more on public.com. So, you know, Ben and I, you mentioned for those who take it seriously, that's not just our tagline. That's like real shit. Ben and I had life on the other day on the podcast to talk about what differentiates them from their competitors. And it's not like this swipey app. It is really the modern 21st century, maybe even 22nd century, dare I say, custodian.

45:42Yeah, I use Public Every Day. It's on, I think it's on the front page of my phone. And it's a really easy way to transact. And I also do some DCA stuff there. And we're going to talk about that later on in the show. Find out more, public.com slash W-A-Y-T. paid for by public investing, full disclosures in podcast description. All right. Here's where I want to start. The number one, so I'm walking on Halyard with Sprinkles the other night. And this happens, so she pointed this out to me and I didn't even realize it. She's like, Josh, every other person that comes up to you asks you the same exact question lately.

46:25Have you noticed? And I said, you know what? I think you're right. What do you think the number one question people ask me is? Besides what's Michael Batnick like in real life? What else do you think I get asked? Is it too late to buy Nvidia or should I sell Nvidia? Should I sell Nvidia? Everyone owns it already. Maybe like three years ago, it was, hey, would you still buy Nvidia here? The number one question that I get asked over the last couple of years and really increasingly in the last couple of months. Hey, love you on the show. Love you on CBC. Listen to your podcast, whatever it is. Hey, what do I do with this NVIDIA?

47:03Should I sell it? It's unbelievable. And she picked up on it because I'm oblivious. I'm in my own world. People are asking me this shit in the airport, on the street. We're in stores. It's what do I do with NVIDIA? Should I sell some. And I want to start, we have a one-year price. Let's put a price chart. I mean, look, obviously the stock pulled back during the tariff tantrum from March and April, had a pretty good pullback, got down just below$100 a share. Here we are two months later, it's$170. So just when you thought everyone that wants to buy NVIDIA already bought it, It's just not how markets work.

47:46Apparently, there were plenty of people that still didn't own enough of it that wanted to own it because when you're talking about a$3 trillion stock going to a$4 trillion market cap in two months, that's an insane amount of buying power on the sidelines. I assume you agree with that so far. Nothing that you said is controversial. I'm very excited to offer an alternative view, but you're cooking, so keep going. All right. Well, I want to get into the news today. One of the biggest overhangs on NVIDIA, not that it really hurt the stock, but it's definitely like the thing that one of the most bearish things about NVIDIA was the problems they were having with selling their chips in China.

48:29it's not that there wasn't demand it's that the united states imposed rules that kept them from selling their highest end chips then they were having problems selling all chips then there was concern that chinese competitors would come along and fill that vacuum and um we'd be in this bipolar world of two different versions of the gpu and nvidia would lose dominance blah blah blah blah so there's a whole like um line of thinking where china was going to be this massive headache for NVIDIA. The news today is that the Trump administration said, do what you need to do. Howard Lutnick was on CNBC with us a little while ago, talking about the need to get the Chinese addicted to building their tech stack on American AI chips, and that that supersedes any of the issues around trade or tariffs.

49:22Strategically, We want NVIDIA to be dominant around the world, and we want every technology company to be building around American AI. So that obviously sent the stock significantly higher. This is Tay Kim at Barron's. NVIDIA is back in China in a stunning turn of events. The chipmaker says it expects to soon be able to sell its H20 AI chip in the country, sending shares sharply higher. It's up like 4 % today as we're talking. And that is a big about face from the administration. And that removes this bearish overhang about whether or not NVIDIA is going to be able to operate as successfully in Asia as people had hoped they'd be able to.

50:09So it's a big development. Just to give you an idea of the scale of what we're talking about, Bank of America says that Chinese AI sector spending in this year, 2025, will be$98 billion, which is a 48 % increase over what they spent on AI last year. And you could just mentally extrapolate that number in your mind and picture how much of that is going to NVIDIA and get an idea of why this is so important. So that's just China. Wow. So, right. So here's the bottom line. And then I want to get your take on this. This is the number one question I get, and I understand why everyone has made so much money in the stock.

50:55It's$4 trillion. I've become very much associated with NVIDIA in the minds of people who watch CNBC. Could be worse. Could be worse. And I want to tell you, I've spent the last 10 years saying no as my answer to that question, or not yet, or I don't know. A lot of times I'd say, I don't know, which is the truth. Or I'll say to people, it depends on your time horizon or it depends on your risk tolerance, whatever the f*** that means. And now you're saying short it. Now it's it. My new answer is, yeah, sell some. And I still think that I'm not selling. Let me preface this by saying, I think the stock gets into the 200s.

51:39It could take five years. It could happen three weeks from now. I have no way of knowing, obviously. But when you look at the new spate of analyst price targets and you think about some of the news flow, Meta, talking about building Titan clusters, and you think about last earnings quarter, how powerful all of the AI spending reaffirmations were coming from Alphabet, Meta, Amazon, Microsoft. I don't think any of those companies are about to get on a conference call in the next three weeks and say, we were just kidding. One of the things about AI spending is it doesn't work the way people think it should.

52:22It's not like you could spend like a trillion dollars amongst 20 companies and be like, all right, we're all set. The spending is required now to maintain the spending that you had already done. So I think when you get that wave of announcements on the earnings calls of the hyperscalers, it's probably very supportive of NVIDIA's recent rally, at least maintaining these levels. So I'm not saying, yes, you should sell it because I think it's going to be a bad quarter or I know something that anyone else knows. I'm just saying if you're in the stock for a really long time, it's likely it has far outgrown most or all of your other investments.

53:10Even if you also own like a 401k with a balanced portfolio, you have a ton of NVIDIA there too. And so if you're coming up to me, a stranger on the street and asking if you should sell it, then the answer is probably yes, because you probably own enough of it that you're nervous. It's probably become a huge part of your portfolio. And yeah, what's the, cause what is this business, Michael, the business of owning stocks? It's about regret minimization. I knew you were going to say that. But because, so what will piss you off more? you sell none and the stock has a 30 % drawdown or you sell 20 % and the stock doubles.

53:51Yeah, it's obviously A. It's not even close. Obviously A. This is Daniel Kahneman stuff. We know. It's basic. It's basic stuff. We know that the anger over not having sold is going to be way worse for most people than the, oh man, I shouldn't have sold any. It's no question. It's, oh, I'm such an idiot. I was a greedy pig. Yeah. So my new answer, when people walk up to me on the street, it's like, dude, if you're asking me, then yeah, you probably should sell some. And that's where I'm at with this thing at this point. All right. So NVIDIA is large. Chart on, please, John. We made this chart last week, but the story remains.

54:30It's bigger than the entire staple sector. Those are not small companies, okay? It's bigger than the entire energy sector and utilities and REITs and materials, not all of them combined, but each of them individually. This is crazy. Can we pause on this? Please pause. Not only is it bigger than all of these sectors, if you add up all the utilities, all the REITs, and all the materials companies, they're at 75 % of the market cap of NVIDIA. It's completely insane. And I'm not saying it's not justified by the profits at NVIDIA and the expectations of profit. I'm just saying any good thing you could possibly say about how great this company is.

55:20We know. We know. Look, everyone, everybody knows. So is there like another level to unlock? What if they discover AI? Dude, if people start curing various cancers because of AI being inserted into like the clinical trial process and being able to speed up the time to market for a promising drug by 50 % or something, like these are all within the realm of possibility. And if it's – if NVIDIA is the indispensable company sitting at the center of that, yeah, I could see the stock tripling. but like what is the likelihood that 4 trillion goes to 12? Okay. So you know what is not only in the realm of possibility, but in the realm of guarantee ability is that there will be a large to quite large drawdown at some point in the near future, because that's what always happens with NVIDIA.

56:28And there's no reason to think at$4 trillion that this time is different. So chart on please, John. Josh, what are we looking at here? This is so important. Great, great, great tee up. So I asked Sean to, all right, so I buy the stock in the summer of 2015. I go on CNBC. Netflix is struggling at that time. And I make the argument that the N in Fang, before we were saying Mag7, we were saying Fang. The N in Fang should maybe be NVIDIA. and I'm talking about at that time machine learning AI things that nobody things that like didn't they existed but they weren't a stock market story they were more a computer science story and look I'm not somebody that was like predicting what's going to happen or someone's going to launch chat GPT I have no idea the one thing that I know about NVIDIA is that all the people in Silicon Valley on the tech podcast that I listen to are talking about it Wall Street has video game analysts covering the stock.

57:30Wall Street has no, Wall Street is not even thinking about parallel processing as a means toward augmented reality, virtual reality, AI, machine learning, because there's no earnings coming from that yet. It's not commercialized yet. So they're thinking, so Wall Street's looking at this company, the same people who are covering like Take-Two Interactive and EA and Activision are the people commenting on NVIDIA. And then I'm listening to guys like Andreessen saying, we can't get our hands on enough of these GPUs because we have to fight with Xbox to get them. But this is the way that we're going to do.

58:09So that's the only insight I'm armed with. I don't know anything else. I'm long the stock. But the more I'm reading the news, because you're an investor, so you keep, you say, oh, people are starting to wake up. And then there was this whole crypto debacle. And so put that drawdown chart back up. That's 22. Can you fathom? Look at this 2017. So in 2017 is, I think, the first crypto crash. so that's the that's the year where thanksgiving dinner everyone's talking about bitcoin like the nephew is telling the uncle about bitcoin a week later it makes an all-time high and then it completely crashes and they sold off nvidia because nvidia is the main chip being used in mining operations for bitcoin so like some of these drawdowns were based on like absolutely absolute nonsense.

59:03But I guess at that time it was meaningful. The mining companies were heavy buyers of GPUs at a time before chat GPT. So being a shareholder all this time in NVIDIA, even though it's up 10 ,000 % plus, there have been some massive L's along the way. And if I were to have this chart handy, when somebody says, should I sell some NVIDIA? I feel like it would be very illustrative. How many people could reasonably, if they have a ton of money on the line, live through drawdowns like these, even given all those gains, it gets harder and harder as the dollar amounts go up. That's a great point, but it's worse because they don't have the conviction that you do.

59:51You can't export your conviction because they don't know the name as well as you do, so they know that the price goes up. and they're much more likely to get scared because they don't know that 25 % isn't going to go down to 40%. And they don't know how they're going to behave if and when it goes down to 40%. So I love this for you. I love that you are giving people who have been with you for a long time and all credit to you for riding this buck and bronca because Lord knows I couldn't have done it. So I love that you are giving people their permission to sell because your answer has been not yet.

1:00:23I want to talk about some alternative views, not disputing nothing that you so eloquently said, but this is just some more information that I think is important. So Mark Zuckerberg today said, we are also going to invest hundreds of billions of dollars in the transcript into compute to build superintelligence. We have the capital from our business to do this. Beth Kindig this morning said via the daily chart book, Goldman Sachs sees hyperscaler CapEx increasing sharply through 2027, CapEx is projected to be 1.15 trillion from 05 through 27, more than double, more than double the 477 billion spent from 22 to 24.

1:01:06So chart off please for a second. These numbers are so insane. The market is not dumb. It's the opposite. It's very smart. Let's just not say that it's all knowing, but it's close. It's pretty damn good. The returns that we've seen in NVIDIA are justified in then some, who knows where it's going to go from here. But also if you zoom out and you take out the last 30 days or last 60 days off the bottom, whatever it was, do you know that from July of 2024 through, let's say, where did I pull this up? Through mid-May of 2025, the stock was up 4 % NVIDIA. So it went a whole year with doing nothing but getting sideways chop.

1:01:44You could say consolidating gains, but it went a whole year. So all of these questions that you're getting are A, from people around this neighborhood that follow you, okay? And B, it's happening because the move off the lows are astounding. But prior to that, it had done a whole lot of nothing. So let me give you some less anecdotes from our hometown, from people that follow you, and some more data that shocked me and also supports this rally. Okay. This is from Schwab. the largest or second largest pool of investor data in the entire planet. They said that NVIDIA, this is from their S-Tax report, NVIDIA set new highs in June, but Schwab clients net sold shares of the AI giant by a large margin for the second month in a row.

1:02:30NVIDIA, which enjoyed net buying from clients in late May, leading it to its earnings report, was the biggest net sold stock every week of June. Oh my God. That's why I'm getting all these questions. Every week of June. This is what people are doing. So dude, think about the rally from June to today. Every single week of June, it was the largest net sold stock. And so the market, NVIDIA is climbing a wall of worry. It is proving that - Who's buying it? It's gotta be institutional. I don't know. Because Schwab is, dude, Schwab's everyone. I mean, it's the biggest pool of investors in the world.

1:03:07And so I have no idea whether or not this quarter is going to disappoint these lofty expectations in the short term. I also don't know if it's outrun the potentials and the fundamentals in the long term, but everything that it's done to date is justified and then some. But nevertheless, you're not going to feel like an idiot taking profits at 4 trillion, even if it goes to five or six. The whole thing to me here is just to remind people, even if you're right on the fundamentals, you still don't know how the market's going to react. So look, the earnings estimates continue to go higher for this name.

1:03:43And then they keep coming out and destroying those numbers. What happens if the analysts finally catch up and they put out a lofty estimate and NVIDIA comes out and does the estimate? Yeah. And then people are like, wait, wait, wait, wait. This company used to beat their expectations by 80 % and now they just did a penny better? So you could nail the fundamentals, but the sentiment, you could lose 20 % after an earnings report. Easy. It takes nothing. And so people need to be reminded that this is the difference between investing in individual stocks versus the market. You're not going to lose 20 % in a market-wide portfolio overnight.

1:04:25It's the difference between investing in bonds versus stocks. Like the individual volatility of one name, you could have the fundamentals perfectly nailed and still experience a bigger drawdown in a single stock than in almost any other investing endeavor, maybe outside of crypto. Yeah. Like this ain't going to happen to a house that you own. Guess what? At some point, at some point, Bitcoin will, I'm sorry, NVIDIA will report record quarter, meaning the best individual quarter that has ever been reported in the history of Wall Street. And it could fall 15%. Yeah, and it won't be enough. Yeah.

1:05:05It won't be enough. Last thing on this, I was talking to, I was talking to ChatGPT this morning, just trying to share my feelings. And I have a partial list but worth running through of all the competition. even if you think nvidia will maintain 85 of the market for uh graphics chips right even if you understand how much more advanced blackwell is than everything that than everything else on the market and even if you believe that they will remain at the forefront of innovation and that the massive investments that everyone has already made in nvidia will keep them in their market position, there is a world in which people find that cheaper chips can be used to supplement their NVIDIA spend and help them with efficiency.

1:05:56And I don't mean efficiency like a better chip. I mean like a dollar spend efficiency. And that's no matter how great Jensen Wang is or NVIDIA, I almost feel like that's inevitable. So here are a couple of companies that are working on their own chips or already have their own chips out there in the market and understand that they're not slowing down the pace of their innovation. Obviously, AMD, the MI355X launched this month. It's said to rival NVIDIA's Blackwell. I doubt that it's the first choice of a lot of buyers, but again, it's a competing chip and it exists and it will ultimately build its own ecosystem.

1:06:38Intel has the Gaudi 3. They position this as an AI training chip or application-specific integrated circuit slash GPU-like chip. So it's got a lot of niche uses. They claim that this thing is competitive with the H100 in terms of performance and power. And then you've got Broadcom. They launched something in July this month called the Tomahawk Ultra. Then you've got Tranium 2 chips coming from Amazon, Google's TPU architecture. And these are all NVIDIA customers, mostly NVIDIA customers, by the way. When we talk about the Amazons, the Googles, they're coming up with some of their own in-house chips.

1:07:25Grok has the LPU or language processing unit. There's a company called Cerebrus. They've got a wafer scale engine. Huawei is out there in China. Meta is building chips. The MXC is their training chip. the MXN and the MXG. Those are their inference chips. These are all GPUs. It's not Blackwell. But again, at the edges of the architecture, there's a place for this stuff. And then of course, Marvell, which is the application-specific integrated circuit champ, they're out there building stuff for data centers. And that's just a sampling. So I think there's a world in which Nvidia remains every bit as dominant as it is, but Wall Street starts to ask more questions about the infringement of other competitors.

1:08:11And what does that do to the multiple? You could still have a company reporting record earnings, but the street starts to value it less. It gets derated by some degree. So these are the risks if you're going to stay long. I've chosen to stay long. I've already sold a bunch along the way. My average cost, it doesn't matter what I do at this point. But I'm telling people, if you're concerned, you should be concerned. You've made a ton of money and it ain't always going to be as easy as it's been. And maybe you should take some off. That's my new, it's my new stock answer for, and don't walk up to me on the street and ask me because I don't want to, I don't want to do this 10 times a day.

1:08:47All right. I love it. Okay. All right. Let's talk, let's talk about the bull market. I love this chart. I love Grant Hawk Ridge's work. Throw this on, please. So he has a risk on risk off ratio. And inside the, so it's one divided by the other. And in the numerator, the risk on, we're looking at copper, high yield bonds, the Aussie dollar, semiconductors, and high beta stocks. These are all things that go up when risk is on and down when risk is off. Okay. The risk off bucket, we have gold, US treasury bonds, the Japanese yen, utilities, and staples. and this looks about as clean as you would want this to look in a bull market.

1:09:31It is at the highest level that it's been since early 2024. What are the arrows, Michael? What are the red arrows? They're tops. So there's just market tops. Yeah. All right. So this is not an index of stocks. This is a ratio of risk on versus risk off. That's right. And it looks like it wants to break out above the congestion dating back to what is that early 20 mid 24 yep okay well it certainly feels like it already has it's doing so i would agree that's that's pretty clean this is a great chart i like it love it um you take issue with any of the things that are in that basket no no the aussie dollar i would like explained to me that's interesting um that yeah that's probably the one that stuck out that that but yeah i love something to do with mining yeah maybe um all right todd soan keeps a chart of levered long uh etfs versus inverse and we're looking at the aum and then he's got a ratio and we're not quite at all-time highs but we're getting there uh 128 billion dollars in levered long etfs just wow how fast could i mean this could unwind really fast because the people that are in this, this is not set it and forget it.

1:10:50It's fast money. It's really fast money. I wonder if it's grown big enough where it will start to enact itself on the actual market, or maybe it's already doing that on the way out. You know, this is like beyond my pay grade. I'm not a market structure expert, but how could it not be? So do you think at an individual stock level, there's like a large portion of the recent gain in stocks like Palantir that's coming directly as a result of all the buying coming from the leveraged ETF? I wouldn't be surprised. I'm looking at NVDL right now. Oh, interesting. This is not even close. Not even close to reclaim.

1:11:29NVDL is the 2X NVIDIA? Yeah. So this peaked in November 2024 at$6.4 billion in assets. Not even close. It's 4.1. How does it get its leveraged exposure? Through options? I don't know if it's options or swaps. Or margin? I don't know, honestly. Okay. But it's not even close. It's not even close. So again, people are, I know, forget the market cap, the price. The sentiment, at least from my perch, is not nearly as bullish in NVIDIA as it was in the run-up in 2024 when there was watch parties. But the price action is telling you somebody's buying. Well, the price action. Obviously. Well, yeah. But also, it was the largest net sold stock every week in June at Schwab.

1:12:14So maybe these are people that sold and are like, oh, shit. Because take me back. Take me back. All right. This surprised the Dickens out of me. This is from Sean made this chart for us. He looked at the rolling 64-day semiconductor performance. Why that? Because that's when it bottomed in Liberation Day. And the thing that surprised me is that the rally off the lows, off the Liberation Day lows was more powerful than the rally from the COVID bottom. How about that? Holy shit. I mean, this is pure Broadcom NVIDIA. I don't know. Like, I know there's other important chip names, but like, what's driving this bus?

1:12:55It's GPUs. Yeah. Like, obviously, it's nothing to do with cell phones. Like there was a time where the semiconductor index was dominated by what was going on with PC shipments, PC sales. And they used to report that number on CNBC on a monthly basis as breathlessly as anything that they report ever. Like that was such a hugely important number for the whole tech sector and especially for the chip stocks. And if you looked at the composition of the SMH at that time, it was a lot of CPU and DRAM companies. Well, of course, Intel was the biggest. Intel, AMD was still knocking around. But then you had companies like SanDisk, which was memory.

1:13:47And you had – so there were NAND flash companies. Remember Cirrus Logic? Yeah, of course. I remember all of it. I'll never forget. LSI Logic was big. So that PC shipment number drove the semi-index for the first third of my career. And then, like, obviously they stopped reporting it because it stopped having an impact on the market. It became less important. And what took its place was cell phones. And then it was Qualcomm became the dominant – Qualcomm alongside Intel. And it was about handset shipments. And these are the early – this is BlackBerry, early days iPhone. um this was really really important to the semiconductor sector because it would the shipment numbers would be why you would get bullish or bearish on the cap equipment names in the space the kla 10 cores the applied materials so you had this whole cascading effect where the handset shipment numbers from at &t would come out and you would see these chip stocks rise and fall on something like it sounds ridiculous to us now wait people used to care about how many phones AT &T sold in a month yeah so really back then in my day it wasn't AT &T it was singular people don't even understand how long I'm doing this was Bell Atlantic it was Bell Atlantic pre-Verizon and it was singular wireless um but like now so you look at this, the biggest, what is this?

1:15:20The biggest 64 day rolling semiconductor performance, put that back up. Nothing in here has anything to do with Intel or Qualcomm or PC shipments or handset sales. None of it. iPhone, it's not, none of that's in here. What's driving the bus here very clearly is GPUs and the CPUs that are related to the cloud build out. And that'll go on for a while. And someday it'll be some other category that drives the performance of semiconductors. But man, this is a really remarkable time to be in the game. No doubt. All right, on the flip side of the coin, things that nobody wants, again, bull market behavior.

1:16:04Throw this chart up from Todd. Healthcare, holy mackerel. This is wild. So healthcare had a 15.9 % weight in the S &P 500 in 2022, towards the tail end of 2022. So it's called beginning of 2023. And it's now down to 9.3%. I mean, for crying out loud, NVIDIA is 8 % of the market. NVIDIA is going to pass healthcare. If I'm a value investor - You're looking at your chops, right? This is the only sector on my screen. If I'm a value investor, I'm combing through the rubble. You're coming to desert. You're looking at the worst performing large caps in the whole market. And low valuations, justifiably low.

1:16:51There's very little in the way of organic earnings growth. The only companies that have any kind of growth are the ones selling weight loss shit. That's become increasingly crowded. Outside of that, you got basically old line farmers that have to acquire very expensive biotech assets just to rebuild their pipeline. You've got regulatory issues with conspiracy theorists running the health and human services department. You've got like God knows what's going on at the FDA these days. I think it's Dr. Oz is I mean, literally like you could not get worse sentiment. And it's if you're a value investor, the bet that you have to make, I alluded to this earlier.

1:17:35something with AI is going to transform the economics of this industry and make and make these companies significantly more profitable. They spend tons of money on marketing, but the real spend is in drug development, drug discovery, clinical trials. And so if you believe in the AI theme, you have to believe these companies are going to spend tens of billions of dollars in order to become more profitable faster on new drugs and that that's going to ultimately benefit the share prices. You're not interested in anything, are you? No, I don't do this stuff. I want the best stocks in the market, and I'm happy to be late.

1:18:17All right, let's talk about your old ass. I had my dalliance with Pfizer. Complete waste of time, misallocated capital. When this sector wakes up, I'll pay attention. All right. Gen X. Michael, do you know the years during which Gen X was born? I'm going to say it ended with my sister. She's 1979. And it started, I don't know, 1971, 1972. Okay, close. The official is the boomers go until 1964. No. So, yes, the boomers are 45 to 64. And I don't know why, but this is the official, I think it may be the Beatles came to America. And that was like the, that was like the, the end of the baby boom and the start of something new.

1:19:12I don't really. So when's X, what's the, what's, what's the generation years? Starts in 65 ends at 80. So I'm born in 77. I'm your pure uncut among I'm among the last of the, but I actually have always thought my thought of myself as an Xennial. Yeah. because I have a lot more in common with the millennials in many ways. Yeah. Yeah. Like the early, the, the early extras were born in the mid sixties. That's like a Barry's Barry's generation. They, um, they're really into Caddyshack Steely Dan. Yeah. They think like stripes is the height of comedy. Terrible. there's not one laugh out loud in that movie.

1:19:51No. So that, that's not, I don't associate, I don't associate myself with that generation that kind of grew up watching like Good Times and Sanford and Son. Like even their shows are alien to me. So like I just – I don't – I see myself as more of an ex-annual. Be that as it may and who cares. Cerulli put out a huge report this week that everyone is writing articles about and I thought we would just take a look at it because it's about the forgotten generation who are now my age between the ages of 45 and 60. And Cerulli says they stand to receive 1.4 trillion annually over the next decade as their boomer parents get older and pass away.

1:20:40Millennials are still going to inherit way more over the next 25 years. But Gen X members will receive more money than any other generation in the near term. So obviously, this is just like chronology. The number that I thought was interesting is$39 trillion for Gen X, and they peg the millennial inheritance at$45.6 trillion. Do you believe any of these numbers or not really? What's the difference? I mean, 39, 30, 26, who cares? It's a lot of money. It's a ton of money. Gen X made up, did you know this? As of the end of 2023, Cerulli says Gen X made up a quarter of U.S. advisors clients up from 20 % in 2021.

1:21:28In comparison, only 9 % of advisors clients in 2023 were millennials or Gen Z. Don't you feel like you and I and everyone in the wealth management industry is constantly hearing about preparing for millennial clients and nobody's talking about preparing for Gen Z Gen X clients. But Gen X clients are only 25%. For me, that's the fat pitch that's right in front of us. I think that we are swimming every day in Xers. No, but there's no media. I understand. There are no articles. It's always about how to cater to millennials, which is so weird because you still have 75 % to go of Gen Xers that haven't yet hired a financial advisor.

1:22:16And they're in their peak earning years right now. And this is it. Yeah. So like they're in their peak years, career years from many perspectives. Like why isn't anyone talking about serving Gen X clients? I found that interesting. I want to share a couple of other stats with you. The percentage of people who are viewed as advisor reliant goes up substantially as Gen Xers move from their 40s to 50s. Like this is the key thing that I'm talking about. So really completed a survey last year that said a third of people in their 40s are advisor reliant. So two thirds of people in their 40s don't have a financial advisor.

1:22:59One third does. By the time people reach their 50s, that one third goes to one half. That's like tens of millions of households. The last thing I wanted to share, Gen X is a battered generation to some extent. We all are. Stop being a baby. Between 07 and 2010, it's estimated that Gen X lost 38 % of their collective, of their median net worth, or$24 ,000 per person, more than any other age cohort. How old were you in 07? You were fine. I was 20. Again, I'm a young Xer, but I could have been 30 and still been an Xer. And those are the people. Anyway, interesting that not a lot of content is being made deliberately geared specifically toward like Gen X.

1:23:51Meanwhile, that's the fat pitch over the next five to 10 years. I don't know why people are skipping ahead and talking about how do I serve Gen Z. You don't even know how to serve me. Let's talk about a Gen Xer that I know you closely identify with. I'm talking about Elon Musk. So he had a very busy week. This was, this may be a lull. Our boy Dan Ives tweeted, Tesla board of directions, take the following three steps in our view. Number one, new pay package, getting Musk to 25 % voting control, clears the path for the XAI merger. Number two, guardrails established for an amount of time Musk spends at Tesla as part of pay package.

1:24:31And number three, oversight on political endeavors. And Elon replied, shut up, Dan. all right so knowing dan the way that you and i do i know that was his favorite tweet he's ever seen he's probably framed that it's amazing like shut up dan that's even better than elon musk like quote tweeting it and putting a check mark or something like shut up dan it's not even like dan you're wrong it's just like shut up stop talking about my shit you know dan i know i i I mean, I haven't spoken to him, but I know deep down Dan loved it. So it's influence. Yeah, it's great. Dan's an influential guy. I think we're seeing Dan next week.

1:25:12We'll ask him. All right. SpaceX,$400 billion. This was an insider round. This would mark the largest ever valuation for a privately held company, passing only their last round. $400 billion. That ain't nothing. if if you're an elon hater the way that you're referring to what's going on is three card monty the cups are being moved around you don't know which cup the ball is under but basically he saved himself in the invest wait hold on just this is not even we haven't even gotten to the monty put a pin i will unpin in one second so here's the monty the monty because everything that we just read is kosher, right?

1:25:55That's above board. The Monty is this. There was chatter earlier in the week, speculation that Tesla is going to invest$2 billion into XAI. Now, I kind of forgot about this. First of all,$2 billion investment into these hyperscalers is nothing. You might as well piss into the ocean. But I forgot, dude, you probably did it, that XAI and Twitter and X merged. It just happened. Okay. So I forgot about that. So here's the part that's like, wait, what? So in March, Musk merged XII and X together in a deal that valued the artificial intelligence company at$80 billion and the social media company at$33 billion.

1:26:29The tech billionaire also said this from CNBC. Also said last week that Tesla vehicles will host XII's chatbot, Grox, which has gone amazingly well. All right. Back to you with the three-car Monty. What the f*** is going on? Okay. I predicted this. And everyone said, no. That's not – I told you Tesla would bail out Twitter. I didn't know that SpaceX would be part of it. And I didn't know that the AI business was going to be part of the rescue. But people that were like, oh, Twitter is really going to sink him. Nope. Because we already saw him do this with SolarCity. What happens is - Which was way more egregious, by the way.

1:27:10Yeah. Right. Well, it was a public company and X isn't. so x has like private shareholders but mostly private bond creditors right um and there are all the big investment banks that were happy to they would have taken 100 cents on the dollar loss if they had to because what they're really at the table for is underwriting fees related to starlink and then spacex okay so that i don't nobody cares if morgan stanley loses money on their Twitter bonds. It doesn't matter. Which I didn't. But the genius of Musk, and if you're short one of his endeavors, you would say the larceny. But I'll just say the genius of Musk is at any given time, some of his businesses are doing really well and some of them aren't.

1:27:57And he's able to fix or mask or address problems in one business utilizing the strength of another. And that's clearly like the case with X itself. A lot of the data that the AI thing was utilizing was coming from the Twitter platform anyway. And again, it's not even a public company. It's not like there's any conflicts of interest. He's the shareholder. He owns it. So he decided this is what's best for both. Smash them together. And I think like that's a win. If you're part of the AI part, you're like, hey, great. We now have the former Twitter platform now X that's now part of this thing that I invested in.

1:28:39They love it. So this is why I think Elon's shareholders love him is because he comes up with really creative solutions and the cult like following that he has in the markets enables him to do this and his ability to outrun FTC concerns regulator. He basically could just do whatever he wants at this point. As long as Trump doesn't step in and intervene, he could do whatever he wants. So that's that. I don't want to do the anti-Semitism grok stuff because I think it's not really part of what we do here on the show. We don't like do political stuff. People that think that that's somehow going to negatively impact the valuation of XAI are smoking crack.

1:29:25Nobody, everyone already understands that the AI, the Grok, and the Grok product is going to be a little bit more unhinged than whatever Gemini does. Everyone gets this. Like if that's too shocking for you and you can't handle it, I don't know what to tell you. XAI will be absolutely fine. So it's not three-card Monty in the sense that like it's somebody on the street is being scammed. I'm just saying the ball is under one of the cups. You keep moving around the cups. Ultimately, you get to the point where like SpaceX bails out, you know, this one and this company gets a contract with another related company and he controls both companies.

1:30:08And it's just like this spinning plate routine. And so far, most people are benefiting from it. So I don't really know how else to describe it, but that's how I see it. All right. You described it well. Real quick. Let's talk about cash finally. Oh, shit. I forgot to put this in the dock. Oh, well. Cash is finally coming off the sidelines. So the thing that I forgot to put in here is we have$7 trillion in money market funds. Money never came out, kept going in, not just the reinvesting of it and then the compounding, but actual flows into it. Just why not? It's good money. So, all right. Kevin Gordon tweeted, the AAII cash allocations fell by three percentage points in June.

1:30:49That was the largest decline since December 2020. So let's assume that it's probably going into stocks and not long-dated bonds, although I guess who knows. But it's moving. Interesting. But this isn't what you're showing me here with the bars. It's not cumulative. This is just each reporting period. It's monthly change. It's monthly change. But it's the biggest cash decline since December 2020. It's interesting. I suppose it's interesting. I suppose it's notable just given how long it's been, how many months it's been since the last time we saw one, and how big the drawdown is. Drawdown is the wrong word.

1:31:23The withdrawal, how big it is. But when I stare at this chart, it looks like whatever happened last month bears absolutely no relation to what might happen next month. So you could just have people pulling money out of money markets because they're chasing tech stocks. And then next month they decide not to do that. And we'll find out, would be the way I would phrase it. what jumps out to you in this chart other than the big red withdrawal last month? I'm not going to over-index on one thing. This is a very specific set of investors. I don't know where the money is going, but it's interesting.

1:32:01As much as I described this rally as a nervous rally because there are still a lot of people that are doubting it, and there's obviously euphoria in a lot of different places, I thought it was just notable. That's all. Interesting. I've noticed that the rally has gotten narrower. other than tech stocks and companies that are in tech and industrials and maybe a subset of the consumer discretionary names that we actually consider to be tech, like Amazon, there are less stocks going up right now. So if I had to poke one hole in the rally, it would be that even though the SPY or the cap weighted index made a new all-time high, the equal weight is rolling mildly.

1:32:44I don't want to be dramatic, but the equal weight did not take out its previous highs. And so if that is a lower high, and again, it is very early, but that would, but you're right. You're right to point out that the RSP SPY has made a new cycle low, but that's been happening this entire time. Right? Like, so. Well, the problem is there's only one investing theme right now and it's AI. Yeah. So I looked at the results from JP Morgan and Citi and Wells Fargo. And they're good. They're great. These companies, by and large, had a lot of good things to say. But when you look at the business unit performance, all of this is about booming markets.

1:33:26It's not about housing. is not about, it's not like above trend growth for business lending, like none of that. This is all about booming asset values. And those booming asset values are booming as a consequence of the AI build out. And it's not just tech stocks. Industrials are playing a really big role in this build out. Whatever we have 11 ,000 data centers and we need 30 ,000 in the next five years, whatever the number is. That's a lot of earth moving. That's a lot of metal and material usage. It's a lot of transportation. Then you've got the tailwind of defense, and that's also an industrial subsector.

1:34:05But by and large, everything that's going on that's good right now in the economy is either directly or indirectly benefiting from the AI boom. And there is no other story. There's no second story right now. And we should admit that to ourselves. Not to belabor the point, but all of the expected earnings growth for the S &P, it's coming from AI. So it better. Yeah, no shit. All right. It better. And it better. All right. Real quick, Netflix is reporting earnings on Thursday after the bell. And we talk about the stock a lot on the show. So I just wanted to do a little bit of a preview. I saw that chart up while I'm talking.

1:34:41Netflix is in like a seven or 8 % drawdown right now. And I would phrase it like that. Well, from the record high that it's set in June. I'm not saying like it's a cat. I'm long the stock. I'm bullish. the expectation is a 15.7 % year over year jump in revenue, 11.1 billion for the quarter, earnings per share of$7.09, which would be a 45.3 % jump versus the same quarter last year.

1:35:15Obviously, let's just do the stock price reactions. Put this table up. so i asked sean to put together uh what's happened over the last four quarters and what was the stock price reaction more importantly and as you can see um they beat all four of the last four quarters uh revenue growth has been high to low teens percentage but nonetheless still growing even at its increased size and the two-day stock price reaction last four quarters last quarter plus 6.9 % quarter before that plus 13.2 % quarter before that 12.3 % I remember that well that was last October and then this quarter last year which they reported on July 18th plus 0.7 % so shareholders have been rewarded over the last four quarters staying long into the print I can't promise that that'll be the same outcome obviously this time so So I think the thing to say is they have utilized those twin tailwinds of the password sharing, turning that into revenue.

1:36:25They've done a really good job with that. And the advertising supported tier. Those aren't new stories. So now the story has to be becoming more profitable. If you're going to continue to get 40-something percent earnings growth, there's not a new gimmick coming along. You just have to show that you're increasing profitability as revenue grows. And Netflix is up 620 % over the last three years. It's up 94 % over the last 12 months. I don't own the stock. I wish I did. I sold it too early. It's had an incredible run, and I think you're 100 % right. I would not at all, at all be surprised to see this go back to$1 ,000 on no news.

1:37:08Yeah, this has been on our best stocks in the market list for a while. And what I said today, it talks about it on TV, is just like if you don't own it, I would not buy it ahead of the print. Like be willing to miss out on a 5 % jump. If it gets annihilated, I'm going to get back in. That's my point. I like this as a better react to the print than anticipate the print. Totally agree. Just given like the way it's been acting over the last two weeks and the fact that the stock is up 40 % year to date. I would let the print happen and then decide what you want to do. So if you're not in the name.

1:37:47Amen, sister. All right. I'm going to make the case for CMA, a stock that we had spoken about a lot over the last couple of years, and it just never gave you a chance to buy it. I did buy it. Before we get to CMA, actually, let's just talk about Robinhood real quick. So Robinhood is obviously on an epic, epic run. Try it on, please, John. The price is$101 a share. It is a$90 billion market cap. Holy shit. They are executing. They deserve it. Let's compare that to CME Group, please. CME has a$98 billion market cap, which is wild when you consider that it is an incumbent, a storied franchise, and it is about a bad week from being passed by Robinhood.

1:38:38Now, I did some fundamentals. Let's show the next chart, please. I did some fundamentals. We are looking at the revenue of the two companies. Did you make some fundamentals? Yes, I did. I made the fundamentals. Robinhood has$3.26 billion worth of revenue, about half of the CME group. And if you look at free cash flow, it is about one third of the free cash flow. And I'm not saying that the market is wrong or dumb. This is what happens. Robinhood is obviously growing at a much more rapid clip than CME is. However, if you want exposure, chart off, please. If you want exposure to the degen economy, the gamblification of the stock market, but you missed Robinhood, and I would not recommend buying Robinhood here, I think you get it through CME Group.

1:39:22It pulled back, and it's giving you an opportunity to get along the degenification of this economy. Okay. I like it. I don't love it. And I'll tell you why. The reason why Robinhood has, I think, earned this premium to its own fundamentals versus CME, CME is already as dominant as it gets. Robinhood is still a minnow relative to its competitors, which are Fidelity, Merrill Lynch, Bank of America, Merrill Lynch, JP Morgan, Schwab, Vanguard. Like Robinhood is tiny. And that's what the market is giving them credit for. the opportunity to grow into that TAM that CME doesn't have. So here's, hold on.

1:40:06But here's something maybe I failed to mention. You're right. You're totally right. These are apples and oranges. My point is that CME benefits from futures and options and trading, and they are a big beneficiary of what Robinhood is doing. So I'm not comparing the two in that sense. I'm just saying if you want to get exposure to the Robinhood stock and you feel like you missed it, you could do it more sustainably, less risk in a name like CME. Yeah, I agree with that. And CME is obviously more facing commercial hedgers and facing institutional investors. And Robinhood is pure, pretty pure retail.

1:40:47There's two sides of the same coin. The name I actually like better than both right now is IBKR. Pull up this chart. I know we don't have it for the show. So Interactive Brokers is on the best stocks in the market list. This is going. So today it broke out. But it had this resistance level at 59. It's been consolidating beneath for a long time. Today it went. They report this week. If you look at the account growth that they put up, their last two earnings reports, they're growing their account base at a 30 % clip each quarter. What type of investors are they getting? Like professionals, quasi-professionals?

1:41:24Glad you asked. 55 % of their commissions come from retail, 45 % come from institutional. So they have a lot of RIAs on their platform. They have a lot of hedge funds, not the biggest ones, but where the growth is, they are catering to a very high growth segment of the investing public and they're kicking ass. They added 750 ,000 accounts last year. And it looks like this year they're on pace to add even more. And the better the markets act, the more pro cyclical this IBKR story is. And this is a breakout in progress. So this is on my best stocks in the market list. Robinhood is too. It's just that Robinhood just doubled.

1:42:05And this thing is breaking out for the first time today. But I think you're fishing in the right pond. Okay. Thank you. I'll take it. All right. We got a mystery chart? Yeah, you are going to get this one because I'm forced to give you a clue that it's just it makes it too easy but i don't know how else to clue you okay hold on hold on oh i know what this wait is this ethereum no okay go ahead well i'm gonna tell you it's crypto so you're probably gonna get it it's solana look at you smartest guy i know i do look at charts many charts all done so um i might i might be losing my mind And the more I, the more information I consume about Solana and the more I think about the tokenization of traditional finance, the more bullish I get.

1:42:56This is, this is basically, this is, this is the layer one, the base layer that was built for the tokenization economy. It has the highest potential throughput. I think it could accommodate 600 ,000 transactions a second or something like that. It's far and away the best version of what you'd want in a layer one. Obviously, there's a lot of layer twos out there that enable tokenization. But as a pure play on tokenization, we already saw the efficiency of Solana in the NFT mania. And those are obviously nonsensical assets. But imagine real assets and Solana as the blockchain that is most effective at having there be a huge marketplace of these assets changing hands.

1:43:49Put up my chart, guys. So I'm going to school you a little bit on my flavor of technical analysis. I see three things going on here that are bullish. First things first, pay attention to the yellow lines. This is a clear trend breakout. We are leaving the prior short-term downtrend channel and breaking away into something new. Pay attention now to the stars. This is an inverse head and shoulders setting up. You see the left star is the left shoulder. The lower star is the head. We're in the process of forming this right shoulder now. And I don't have to tell you what happens next. and then just if you were to pull back a little bit with your eyes and just look at the entirety of the chart it's cup and handle forming it's not quite there 180 would be my trigger i think 180 185 a convincing breakthrough there that is the completion of the cup and handle formation technically i'm showing you technicals because there are no fundamentals i could tell you that that as use continues of Solana and grows, obviously there's more fees and more burning, but you know that.

1:45:08So what this is really bad for me is just supply demand. I could envision a scenario where this thing breaks 185 and you see a lot of investment accumulation. The last thing I want to tell you is of the big three, this is the only one without an ETF. There are several ETF filings. Everybody wants to do this. Obviously, it makes sense for this to be the next one to happen. It was a good catalyst for Ethereum. It was an amazing catalyst for Bitcoin. If we get approval from the SEC for ETFs surrounding Solana, you're going to see investors come in from traditional finance, just as we've seen in the past.

1:45:47So that's my catalyst. I don't know when it happens, but I'm accumulating Solana on public. Hey, I bought more Solana last week. I DCA? You're a good company. Yeah, I'm not really trading it based on technicals. I'm DCAing, but getting more and more interested in seeing if we really are going to start tokenizing traditional assets, which is something that I believe in. So we'll see what happens. How was the show for you? Good? I thought it was a great show. I love. Any parting thoughts? I love that you're giving people permission to part with some of their NVIDIA. All credit to you. One of the greatest investments of all time.

1:46:26So, you nailed it. Good stuff. All right, guys. That's why you say thank you. Thank you, buddy. You're welcome. Guys, we thank you so much for joining us on the live. Thank you, everyone, on YouTube land. If you're listening on a podcast, please make sure to use that podcast app to give us a like. And God forbid, leave a review. Tell other people how you feel about what are your thoughts on the compound and friends. Tomorrow's Animal Spirits, all new edition with Michael and Ben. We'll have an Ask the Compound, so if you want to submit questions, you can. And Ben and Duncan will tackle those on Thursday, Wednesday, Thursday?

1:47:03Wednesday. And then at the end of the week, it's an all new compound and friends and it's a very, very special edition. And we can't wait for you to join us there. So thank you guys. Have a great night.

1:47:22Thank you.