Vanguard’s Joe Davis on AI vs Debt, NVDA $4 Trillion, the US Dollar Plunges, Next Hot IPOs

25:11I don't think most small businesses could say that right now, but we see B2B uptake amongst larger publicly traded companies. And what I'm focused on now, so I look at the stocks that are leading the market. It's the prism through which I look at stocks. I'm finding companies like Viva Systems. This is a healthcare software company that's been around forever. all of a sudden they look as though they will be the key implementer of AI for their healthcare industry customers. You are absolutely seeing that uptake in a major way when you view it through that prism. So I don't think it's reached me yet.

25:50We're playing, we have all the tools, we're doing all the things. That's what I'm seeing from a macro perspective. You're from the investors perspective. Looking at it from companies that are not in the AI business and making chips, but implementing. It has to happen if AI is going to be transformational. And on defensive, if you think AI is hype. So let's say you're skeptical. Well, you're running for the 493 on the S &P to diversify. And I'm not picking on the MAG-7. I'm truly not, because they're doing amazing things from an innovative standpoint. I'm thinking about second half of chess board.

26:24Where are people not talking about the investment opportunities three years from now? Because if If we're talking about AI now, if I just woke up today, it's like too late. Too late, Joe. Yeah. Think about it. You think about the underperformance of small caps, the underperformance of non-U.S. companies. You talk about U.S. exceptionalism. It's all been driven by the top seven. And then also the value space. Massive 100-year relative differentials. Now, I'm not saying all those sectors, all those areas I just mentioned, non-U.S. equities, value-based companies are in ETF, and non-MAG7. are all going to outperform the future because they underperformed the past.

27:01This is the most interesting thing. Like the most out of consensus thing you could say is that from a stock investor's perspective, the biggest beneficiaries of the AI boom going forward will not be GPU and chip manufacturers like Amazon, Alphabet, NVIDIA, Broadcom, and will not be the cloud service monopolies, Amazon, Microsoft, Alphabet, but will instead be companies that have their profit margins expand by 500 basis points in the next two quarters because they're implementing AI. That's wrong, Matt, Josh. You could get a re-rating in small cap value. You could get a 20 % re-rating with no change whatsoever to the economy.

27:44And I'm saying it's not just simple mean reversion, which is a dangerous, you know, you know that, Josh. So it's like, no, this is how economic growth and cycles work during transformational change. It's got to unleash. It's got to spread and we got to go from producing to tech. And I'm not saying those companies are going to crash. And it's a bubble. We don't have to get into that debate. I don't have to drag Bob Schiller in here from you. You don't need to answer that question. All I'm saying is what the next phase is. And that is the phase that, and you don't have to pick sides. Because if AI is a dud, like social media, we all use it, but doesn't really lift growth.

28:16Okay, well, the MAG-7 is going to come back down to earth. Well, I think the physical AI is really going to be the thing. But I think you're on to something. And he's like, tell me how. And I think we have a little time on this. I don't see it like in the next six months. But yeah, there's going to be a consciousness that's consistent with other market cycles. And I at least didn't see this until we got into this work. You see with electricity, see with the combustion engine. And I'm not telling history just for nice stories. I'm talking about from an investment standpoint. What do we talk about the next four or five years?

28:45It's actually pretty exciting. And I think that's good for the durability of the equity market because it's so concentrated right now in more of a handful of sectors, I think it would be healthier. And that's, I think, for your listeners just to consider, like, what's the next opportunity set? Knowing the MAG-7 have done fantastically. The MAG-7 were a much bigger proportion of the S &P 500 in February during the last high versus now. So now the S &P has broken through to a new high, but the MAG-7 as a percentage have declined in importance. They're still gigantic, They're still dominant. But we are seeing an S &P that's less concentrated this time than it was four months ago.

29:28I think it's a really good development. If I had to pick one of the market indicators to continue to be looking at, is that share that you just mentioned, Josh, going down in an upmarket. That means this J-curve is spreading. And this is not a six-month cycle. These things that you don't have to be obsessed every single day to watch the news. You can think, oh, this is a four or five years. It's a trend that can be at a tailwind. And you don't have to be cute trying to time it. But I think the answer that we're giving people, if this is the era of AI, aren't I making a mistake sitting around in mid-cap value, small cap, bank stocks, other companies that are not playing in AI?

30:05And the answer, hopefully, is no, because you own the beneficiaries. The Mag7 have nothing but CapEx bills in front of them for as far as the eye can see. And they're going to lower the cost. The cost of technology is going to come radically down. I think people on the tech side, they just underestimate. There's some stars that emerge. You know this, Josh, but they underestimate new entrants. I want to talk about one of the other megatrends, which is inflation. Oh, yeah. One of the things that I think you do really well is debunk a lot of false perceptions that people have. And one of the biggest ones is that we had this era of globalization, specifically the entry of China into the WTO.

30:47Yes. which had this like massive impact on keeping inflation subdued because everything, they were exporting deflation effectively from China to our shores. And that's what kept inflation in check. And now the result of the trade war is that inflation is going to be with us in a major way because we no longer have cheap goods coming from overseas. Sure. You sort of say the China shock, while noticeable in the data, is not as pronounced as people think in terms of keeping prices low. Therefore, may not be that important going forward if we have this bifurcation of the two economies. Let's do a good summary, Josh.

31:31I mean, again, all we're trying to do is quantify these issues in a complex system. And the key insight is that we're allowing all the other factors in the horse race to hit inflation, too. Because it's not just globalization that can drive prices up and down. You've got technology that can move stuff. How about the Fed? We've got deficits that can lead to higher inflation. So we're letting the data speak. And what I found is globalization, yes, the more we globalize, which means the more we trade and have more imports and exports coming into the US, yeah, you have cheaper goods. It's a comparative advantage.

32:04But it's been 22 basis points. So 0.2 % of inflation with the acceleration of globalization over the past 25 years. In other words, we would have had an inflation of 2.2 % rather than 2.0%. If that sounds like a small difference, then bingo. Globalization hasn't affected inflation. That's important because some people are out there saying, we're in a deglobalizing world. Ergo, which I'm not cheering for, by the way. Ergo, we're going to have a high inflation future. And you hear it and it's like, what do you mean? 6%, 7%, 8 %? I would ask the question differently. Yeah. I would argue if the China shock was not really that big of a shock and did not give us as much disinflation as people think it did, probably it was more damaging from a societal standpoint.

32:56Politically, maybe it would have been better if it never happened. And Trump is right. And we should - Here we go. I'm just asking the question because it's a logical conclusion. Well, I know I don't talk about some of the paper, but I started talking about in the book. And, you know, listen, there is definitely when you find that when you when you globalize more, open up your markets, your own domestic investment rate goes down. And that's what happened this time. And that's what happened this time. And I found that. We find 150 years has been happening. And you boost the profitability at the same time.

33:25Yeah, so are there signs of, ooh, a little bit higher income inequality, lower domestic investment, which could have had the manufacturing sector, the middle class? Yeah, it's in the data. And there's not, I mean, for my perspective, as a macro economist, there's not a debate to that. Now, question, this is like not just that open-ended question, Josh. I would just rephrase a little bit to say, well, like what's the alternative and what other policy measures are we talking about? If I'm going to say, you do not want to, what's going to happen is you don't want to just cut off your borders. I think it is, is like, where are those pockets of production?

33:57Where are they going to move? And most economists, myself included, have done a poor job. Like they, everyone says, economists, oh, we believe in free trade. Yeah, but there's an asterisk there. It's a level playing field. It has not been level. There's been abuses made across multiple countries for 100 years, by the way. And so I think we have to, we do have to count for it. And some of that is coming up in the current dialogue. These are all trade-offs. They're all trade-offs. And the idea that one is right, the other is wrong is not true. No, no. Okay. No, you don't want to push people on. I always worry about what's called corner solutions.

34:26You know what I mean? Like it's all right or all wrong. It's like this is a complex web, but I'm not going to back away. Yes, there are trade-offs. I think what most rational people would say at this point is, yes, there were trade-offs. We can now look back and study them. And the reality is that in some cases the pendulum went too far. Where we got too little benefit for giving up way too much for working class people. Or you got concentrated gains versus spread out losses that a lot of people see. I think that's the other thing. Yeah, I would agree with that. Let's talk about demographics. You find this to be important, but not as important as the people who have made a career of studying demographics seem to say.

35:09When I say important, I mean the impact on inflation, on the economy, on the stock market. So what's the Vanguard house view based on this research about the impact of demography And where do we stand from a demographic standpoint? Well, you know, there's that old phrase, demographics is destiny, which means it determines your fate for growth, inflation. But it doesn't. It doesn't. It's actually not true. So nobody should say that anymore. It's not true. Okay. And so I'm going against a lot of studies who have looked at some of these issues in isolation. When you put them all up against each other, I'll think of inflation.

35:40People say, oh, well, fewer people. Oh, so we're going to have high inflation because we have fewer workers. Simple econ 101 would tell you, Josh, if you have one fewer worker, you'll probably also have one less consumer. That's right. Supply and demand moves that way. Prices are unaffected. Right. So this is actually econ 101, but it's become this narrative. I mean, I even heard the Federal Reserve talking about, we have lower interest, neutral interest rates because the demographic, it's amazing how the R star and all these neutral rates have risen, yet the demographics haven't changed in the past 10 years.

36:09I would say I've seen more people have wrongheaded ideas about investing as a result of demographics than maybe any other source. I know. I don't know why that is. Well, I think they look at Japan. Yes. And I think they see this kind of sclerotic generation of less and less younger people. And they match it up against this endless disinflationary, deflationary cycle. And they say these two things explain each other. Therefore, if we find other countries with this demographic problem, the returns in the stock market will be weak. And I tell you, listen, if you have a slowing population growth, or even goes negative, like parts of Europe are, right, or parts of Asia.

36:52Listen, I'm not cheering for poor demographics. It's a part of growth. Like GDP growth at Dende, which is like earnings growth loosely, GDP growth equals the number of people changing plus the technology. But it's that last one, Josh, we were just talking about. 97 % of the ups and downs of GDP growth over a five-year base, 97 % are correlated with technology. Effectively, zero correlation with demographics. So yeah, we want skilled immigration. Yes, we want also equal higher population growth. You have a little bit higher economic growth, but there's no correlation in the investment outcomes we care about.

37:26Right. It's just, and actually it's never been true. And in fact, here, I'll give you a little factoid. Some of the greatest periods of technological, you know, just acceleration were periods when demographics were worsening. I'll give you four. The Renaissance. I was going to say, let's start with coming out of the bubonic plague. The bubonic plague, the Renaissance, Industrial Revolution, the roaring 1920s. And if AI is correct, we're going to have another one added to the list. When you say weakening demographics, you mean a larger portion of aging people? Both. I mean, we look at both dimensions.

38:02It's either aging of society, like the percentage of—it's not. I mean, to be blunt, the mankind's been aging since we've been on planet Earth. I'll give you a concurrent example. a lot of headlines last year about the Korean, South Korean population going negative. Yep. Effectively, young single people are just not marrying each other and starting families. There are a lot of societal, cultural reasons for that. We're not going to get into today. The COSPI is up 30 % year to date this year. And the, I think it's called the 2550 index, which is like their NASDAQ is up 42%. Yeah. There's absolutely no correlation whatsoever between South Korea's demographic problem and the returns of their stock market, the profitability of their companies.

38:50It's just not a thing that exists. It's just not there. And again, all sequel, you're going to lower GDP growth or raise it a month. But all the big moves up and down are around the technology side. The only time that demographics become an issue, and that's hence my deficit-dominant scenario, Josh, is if you tie the aging of society to your debt burdens. Which we are doing. Which we are doing. And so, again, I'm not saying it can't matter, but it's going to be now through debt and deficits, not because we have an aging society per se. Yeah. Okay. Let's do another myth bust. Inflation is entirely monetary phenomenon.

39:24Rising fiscal deficits don't matter. That's a common perception right now. What's wrong with it? Well, it's just that what I find and what we find, and there's some academics who wouldn't disagree with my statement. And that is if deficits, the gap between revenues and tax revenues and spending, if they're chronic. So they're not just because of COVID or because the global financial crisis and, you know, deficits blow out. A deficit every year forever. Yeah, it's just every year forever. It just keeps rolling over. You can start to raise inflation expectations. John Cochran at Chicago talks about this.

39:59It's called the fiscal theory of the price level. We weren't looking for it, but we find modest evidence of it. Now, it's small in the United States right now. But remember, we're attributing underneath the surface. We have like, this is like a sonar radar system. We can see what's driving inflation, not just the cyclical stuff, but these forces. And it's starting to modestly put up inflation. It started during COVID. The last time we saw this was in the 60s and 70s when we started at the rise of inflation and hence interest rates. So I'm not saying that the 70s is coming. What I'm saying though is you can have high deficits that people, and why does inflation expectations start to go up?

40:31It's because you and I start to think, you know what, Congress is never going to raise taxes or rain in spending. Now you start to see pressure in the U.S. currency, and you have some out there talking about the potential of a fiscal crisis. I think some of those are overblown, but that dynamic is why deficits, fiscal deficits, can matter for inflation. This is when you hear the Fed say things like, inflation expectations are well anchored. Well, they're well anchored. And again, the Federal Reserve has them, but that doesn't mean that they're omnipotent. Now, those that want to paint a fiscal crisis picture, and they're out there, there's a probability.

41:07In fact, we've quantified it in the book. It's 5%. That literally, the US currency goes through massive depreciation. We have a really spike in interest rates because of our debt levels, high inflation. It sounds like an emerging market. Why they're not that high and not higher is because you have the Federal Reserve. To your point, Josh, where I'm going, the Federal Reserve is going to try to fight this, whether the inflation is from COVID and supply change or it's Congress continuing to print money from a deficit side. But that's, I think, thematically what we're going to see. I think we're living it a little bit this year.

41:38We're going to pass potentially another fiscal package. Deficit is going to go up. Yeah, you have the Federal Reserve on hold for longer. That's a little bit of a little tension there. And now specifically saying they're on hold because of developments on the fiscal side. And there's tension. You see the headlines. There's tension. That, I think, is one of the thematics here. You can navigate it. That's the deficit world that we could be in. The last thing I want to tackle from the paper is this idea, as America ages, U.S. debt is projected to set record highs. You have a chart in here, and we'll add it.

42:13But effectively, you're showing these spikes in U.S. debt throughout history. And you're showing the one that's coming soon, 2024 to 2054. 1954. The next was 30 years. And according to the CBO forecast, that would land us at about 171 % debt to GDP. Okay. Which is not good. Not good. Is there any way out? Yes, there is. There is a way out. Does it rely on Democrats and Republicans to agree to something? Well, which may not leave you a great deal of confidence. Okay. That's why you've had your bets a little bit outside, invest outside the U.S. And I'm not joking. That's, it's always been a core.

42:53Compromises the way out or? No. We're not outgrowing that. You can get, you can get a little bit on the growth side. You can buy time. And when I talk about, listen, yeah, whether or not we'll get the political sort of meeting in the middle, I don't know. That's why I think, you know, you could see a little bit of pressure in the bond market. Not tomorrow. This is probably 27, 2028 issue. Not to put a timestamp on it, Josh. I'm not complacent on it. It's just, but yeah, the bond, I mean, if the bond market, you know, applies a little bit of pressure, that's where you start to see some of the interest rate pressures, not tomorrow.

43:29We generate scenarios where interest, the 10-year treasury yield is six or 7%, not four and a half. This is not for tomorrow. Yeah. And I don't mean for people to be scared of their fixed income investments. The irony is if you're in this world and AI doesn't sort of unleash growth. You're going to see a lot of demand for bonds. A lot of demand. Right. I mean, you got real rates, so a rate of inflation of 4 % or 5%. It'll count through itself. Well, this is an awesome paper because you did something that, I see a lot of people have opinions. Not many people have opinions and they can say, but this is what the data said and this is why this is my opinion.

44:04Oh, thanks. On the drivers of all of these things. So I want to congratulate you on that. Before we let you go, let's talk about the book. So it's called Coming Into View. Very clever cover. I like what you guys did there. and the subheader is how AI and other megatrends will shape your investments. What's the premise of why it's a book and what people, very tough to write about AI in book form, I would point out. Why would AI write the book? Because it moves very quickly. The technology moves very quickly. Well, actually, it's what we were just talking about, Josh, we took the paper and the eye-opening results of the economic diagnosis and the investment opportunities, only reason why we felt compelled to write the book and, and to write it for a broader audience.

44:50The paper you mentioned, I mean, you know, again, Josh, you have a deep, and your listeners have a deep investment background. Well, what if I'm just reading the wall street journal a little bit? I'm watching my typical person at an airport. So if I sound like an economist in that book, people can take that, that book and smack me in the head with it because I tried hard to take those papers and just put in digestible form. I don't want to read all these white papers. Just tell me like, so demographics, does it matter or not? And we, and we use some stories. People like the story. We looked at, so we use that as some stories.

45:23De-globalization. Is it, and they say, no, it's a fallacy. We're not de-globalizing. Not in the, in the dimensions that matter most. Yeah. So like, but we're just all the, the data framework you talked about in the paper, that's the same empirical engine we're using behind the book. And we talk about, uh, portfolios that investors could think about. And I channel Jack Bogle. You saw, and where we started, you talk about 50 year anniversary and so forth. And, you know, I'd be remiss as a Vanguard employee, not representing Jack. So in fact, I lead the group Responsible Thought Leadership. You know, we have over a hundred people now.

45:58It probably takes a hundred people to fill Jack Bogle's shoes. I think we only got one shoe. But it's just people, for someone who don't want to go on all the technicals, but the hept is behind in the paper. So the book concludes with a couple of chapters. And this is like, I love when books do this. It's like, okay, I just gave you a lot of information. Now, what do you do with it? What do you do with it? So the last two chapters, chapter nine of Victor's Portfolio, act one, divide and conquer. Chapter 10 of Victor's Portfolio, act two, choose wisely. Without ruining the end and telling us who dies or spoiling, like what is the investor walking away from the book, having learned?

46:37Well, I think you're saying, listen, the future is not going to be the recent past, but here's an investment portfolio where you don't have to be heroically smart and pick sides. Can you hedge regardless of which path unfolds? Because it's going to be an optimistic or pessimistic one and you don't have to bet the ranch on it. And so this is around diversification and risk management, Josh, and some of the things we talked about today on the equity, on the stock side, it's not all tech, even though it feels like it now. And on the fixed income side could be a source of ballast, despite the concerns of deficits I mentioned today.

47:11And I talk a little bit about the role of active management for those, yes, from Vanguard. The role of active in a low-cost way to amplify some of the risk mitigation you want to think about. So there's opportunities ahead. It's not just mitigating the risk. There's opportunities emerging that are not apparent right now. And I'm glad that you talked about some of them today. Now, who will play you in the Netflix movie version of Coming Into View? Oh my goodness Economist I'm just happy I have a job Can I give you I got one for you Guy Pearce You know the actor Guy Pearce Oh yeah Terrific actor You got a little Facial structure Oh I don't know I feel like I feel like that works I don't know Who's gonna play me Listen I'm excited I'm gonna read this This summer And I wanna tell people They can get Coming into view On Amazon Barnes and Noble Wherever Fine books are sold At the airport So I find most people Buy my book at the airport Yeah it's at the airport I enjoy it Alright this is awesome Any parting words for the audience of investors, advisors, people that follow your work?

48:09What do you really want to land on them as a result of this? Well, again, I think start thinking about living in a deeper AI world and what's the next investment opportunity. That's awesome. Joe Davis, thank you so much. And where can people follow your work other than buying the book? LinkedIn. And you guys, right? You're talking to all the investment, the smart investment folk out there. Absolutely. All right, Joe, thank you so much for doing this. We appreciate it. Thanks to all of you for watching, listening. We'll see you soon.

48:58Welcome back. It's another all new edition. of what are your thoughts? First time viewers, first time listeners. My name is Downtown Josh Brown. I'm here with my co-host as always, Mr. Michael Batnick. Michael, say hi. Hi. All right. I do what you say. The usual suspects are behind the scenes making magic for us all. Nicole is in the chat. Duncan, John, and the team are on the ones and twos. We have a packed show for you guys tonight. I want to say a couple of quick hellos to those who are joining us in the live chat, which we always so much appreciate. Giancarlo, Georgie, Ben, Cliff, Jack, Chris.

49:36All the regulars are here. Magnus is back. James Dell, I see you. Let me see who else. Steve S. Tuesday Routine for me too. What a coincidence. Lance Howe is here, Banzai fan. We appreciate you guys. Thank you so much for coming. Biff, I see you as well. Jackie Sosa, The Racers Bank. Patrick Othrow. All right. We got a whole squad, Mike. What's with the Pink Pony Club? This is not... I'm not online enough, I guess. What are you talking about? It's just stuck in my head. I just can't stop. I sing it to myself in the shower. It's the strangest thing. Who's the artist? I don't know that song. Chapel Rowan.

50:19It makes perfect sense for my whole persona. I think it's about a girl singing about... All right. I'm sorry I asked. being in like gay clubs in Hollywood and coming out to her mom or something. I don't know. It makes perfect sense. I can't stop f***ing singing this song. All right. We have a sponsor. Let's tell everybody who's sponsoring the show. We do have a sponsor. Today's show is sponsored by Public. It is the investing platform for those who take it seriously. Me. So let me tell you something, Josh. AI and Aoi, it's not just a feature. This is like what they do. It's woven into the entire experience.

51:00Portfolio insights, all recaps. They give you smarter context at every single touchpoint. Yeah. They also have a 1 % match on IRA deposits, IRA transfers, and 401k rollovers. You know, a lot of people watching the show or listening probably have an orphaned account out there or an account that's sitting somewhere for no particular reason, just because that's where it started. Public might be a great destination for you to consider moving it over to. It takes five minutes or less to move an account. Funding an account is even faster. Find out more at public.com slash W-A-Y-T. Huge thanks to Public.

51:40All right. We are going to start with IPOs. And I think that the most exciting thing – hang on. Let me hold that thought. Look who's here. It's Aaron Dillon, you guys. Do you need to borrow a cup of sugar? We're back, man. We're back. IPOs, baby. Come on. IPOs. All right, guys, for those of you who aren't familiar, Aaron Dillon is our resident IPO and pre-IPO venture-backed startup expert. Aaron knows more about this topic than anyone that I know. And we're super excited to have him back on the show to fill us in on what's going on. Summer is En Fuego in the IPO market again. It's cool. You excited?

52:26Oh, yeah. Very excited. It's go time. What are you most excited about? Tell us what's going on. Well, I mean, first of all, IPO window definitely has opened back up. I mean, Corrie's - Flung open. Ripped. Yeah. Open, right? I love it, man. So there's a buzz, but there's a lot of really interesting things happening in the private market too, right? Which I know most people in the public markets don't talk about this stuff a whole bunch, but it's in the news all the time. But yeah, I mean, it's good. It's really encouraging to see like a circle come out and rip, a core weave come out and rip, right?

53:00And those are kind of playing in two major emerging tech themes. Which of those are more surprising for Michael? Which of those were the most surprising to you? The success of core weave or the success of circle? Both. Can I say both? I mean, not just, not the success, but the degree, the magnitude of the success. I thought that CoreWeb was the only pure play AI company to come out. So that wasn't super surprising. But from 40 to a buck, where did it go? Like, I don't think anybody had. Yeah, I mean, wild. I don't think anybody saw that coming. Aaron, what about you? I mean, listen, Circle was like, talk about timing.

53:36Timing's everything, right? With the Genius Act. I mean, that was incredible. I don't know if they dialed it up that way, But man, that was perfect timing. So, I mean, if that genius act doesn't come out or doesn't, you know, get close to being passed and signed into law, I'm not sure. I feel like the market understood that that was going to happen. Oh, yeah. It's the only explanation. Like that wasn't a it wasn't an upside surprise to anyone, really. But smart bankers, right, Josh, to pull the trigger right when that's happening. I read a severely caustic take about how Circle employees and shareholders were effectively robbed by the IPO process.

54:15And I mean, look, you have an IPO. What did it go up? 7X? Yeah. What was the? Yeah. Okay. I mean, that's if you sold at the IPO, that's tough, right? Well, so you have a company. Well, no, it's about how much cash was left on the table. Right. That should have been in the hands of shareholders. Now, I understand this is an imperfect process. I also understand anything crypto. It's like triple suspect on Wall Street. but still if you have a stock come out at 30 that's trading at 300 within two weeks right you sort of have a right to be a little bit angry like why didn't this come out at a hundred dollars a share yeah right like okay so the speculators buy it they get it they get a triple why do they get it but this is impossible because for every circle there is a weeble that prices at uh wherever it did it ran to 76 and then ran back down to 12 we only say this with the winners it's crazy how they have no idea.

55:09Yeah. Because one of the, because right, Aaron, one of the things you always hear is like, oh, such and such deal is 2x or 4x oversubscribed. Yep. Okay. That's, is that always just a lie by the underwriters to keep people excited? Because they said it about Facebook and Facebook bombed on the first day. So they don't even really know. Yeah, it's marketing. I mean, I suppose if you're putting together a book, there's a spreadsheet somewhere, right? With people's names and numbers next to it. And you can only fit in so many people with so many shares being sold at the IPO, but still, I mean. Well, how would they know?

55:40I mean, how would they know? They do the best they can. They obviously talk to - Indications of interest. It's a process. IOI, you do a roadshow. Well, it's obviously - And then a salesperson follows up with the people that were at the roadshow. It's obviously a highly imperfect process. Maybe a bad analogy, but NFL scouts and analysts, they have all the data in the world and they still can't figure out who's going to be a good quarterback. Like those things are just, predicting the future is hard. Okay. I want an AI program that tells me where to price an IPO. And I want to run that alongside the actual IPO, the debut.

56:10And let's see who gets closer. I don't know. Will AI do that for you yet? Or did all the platforms make it so they can't? I'm sure someone's going to have an agent soon that will do that. I mean, I get it's an imperfect process, but like, does it have to be as imperfect as it was 50 years ago? Seems absurd. OK, let's put up your slide. Yeah. So these are the top 10 pre-IPO stocks and some of the names that you think compound viewers and listeners should be paying attention to before they come out. Run these down for us. Let us know what's happening. All right. So a lot of the names on the left-hand side here on this table on the left, the top 10 companies by valuation.

56:54So these are all private companies, venture capital-backed private companies. You're probably reading about these in the news all the time. Every day. Right? So you're seeing some familiar places there. One name that maybe people might not have seen on this list is Safe Superintelligence. So that's Ilya Skutskavir. He was a senior guy, co-founder at OpenAI and Split when Sam Altman and crew kind of had the blow up a year and a half ago. Right. And then Altman came back like after the weekend was over. Ilya left and he started Safe Super Intelligence. And that was right out of the gate at a$32 billion valuation.

57:30Believe it or not. Dumb question. Dumb question for me, Chartoff. my understanding was he quit because sam altman was becoming too capitalist and wanted to convert to a for-profit and take even more money from microsoft and now here he is a year later readying his own ipo which i would imagine is a for-profit enterprise yeah so maybe he didn't like shortcuts open ai was taking or yes i don't know maybe he changed his mind maybe he changed his mind. Zuckerberg at Meta just tried to buy safe super intelligence and they said no. So he was good. I mean, think about it, Josh, you and I start a company.

58:07The three of us start a company, right? $32 billion valuation. Zuckerberg shows up six months later, wants to buy it for $32 billion and you say no. Yeah. Right. So I think this guy's operating on a different, you know. Yeah. Also, I'm not interested in backing anyone who's doing this, who's doing this shtick with like, oh, no, we're like here to save the world by making AI safe. Get out of here. You're here to sell ads. Shut the f*** up, just like everybody else. All right. Let's put the chart back up. For the listeners, let's run through some of these names. SpaceX,$400 billion. Implied valuation.

58:41Open AI,$315 billion. These are not nonsensical because this is the price that these shares are currently changing hands at. Do I have that right? Yeah, there's an active secondary market for all of these companies. That's right. Right. So you might say they're overvalued, but they're not made up. Like people are buying and selling these shares. Proper volume, Josh. Like I would say this stuff trades like fixed income. It's like a who you know market, right? So you can definitely buy it, but you got to have relationships and there has to be trust and then you can get access to the stocks. OK, let's do let's let's do a few more.

59:14XAI, we don't have to talk about. That's Elon Musk's company. They just raised$10 billion yesterday. Yeah. They're also raising debt capital, which I find interesting. and I think they're working with like Morgan Stanley. Do I have that right? You got that right, yeah. A lot of these guys are doing debt for the data centers like CoreWeave did. That's one of the reasons CoreWeave went public. They're buying chips. Can you pause on this? Why would a company opt for that? For debt, yeah. So I think it's you literally have customers on the, like CoreWeave, for example, right? They can't build these data centers fast enough.

59:47There's so much demand for AI compute, right? Whether it's training or inference compute. So like training a model or running AI models that they can't build the data centers fast enough. So use that. I got the contracts, revenue contracts already lined up. But why? It's quicker? Well, you're not diluting your shareholders, right? Your equity shareholders. And you know it's revenue good on the other side. You got these multi-year data center contracts. So you just finance it, right? You need a lot of capital. But the equity guys can't keep putting up money at that rate. And they don't want to get elbowed aside on the table.

1:00:19I think they could, Josh. There's plenty of money that wants to go into these companies. I think it's a smart way to manage your cap table. And the debt's coming from where? Blackstone and the like? You got it, man. What actually ends up happening is Elon goes to the debt holders, if he has to, and says, rather than make the next interest payment, let's convert you guys. And who says no? Because it's a gigantic firm. They have equity. They also have debt. It's like, all right, fine. Shift it over. Now we're shareholders. Elon Musk takes care of it. He did that. He just did that with Twitter, did he not?

1:00:52He did it with Twitter. And SolarCity did it with SolarCity and Tesla. Like, that guy takes care of his investors. He makes sure that they make money. They all come back for the next deal. You could say whatever you want about him, but they come back to the table. Even when he loses, he still finds a way to win. That's right. And there's a lot of duplicate. There's a lot of people on the Twitter cap table that came right back in for SpaceX, Starlink. They want it. Oh, yeah. And they make money. They always make money with him. All right. Chart back on. All right, these next two have been venture-backed private market startups since I was a young man.

1:01:26Stripe and Databricks. Why do I feel like I've been hearing about these two for my entire life, like my entire adulthood? What is the story here? Yeah, the Coulson brothers started Stripe a long time ago, right? It's$100 billion. If this comes public tomorrow, it's probably$150. What do you think? Listen, so the Coulson, I agree with that. Okay, plus all this stuff, again, with crypto. Like all fintech companies are crypto companies, in my opinion, now that this Genius Act got blessed by the government, right? So that's going to happen. But the Colson brothers, the guys that started Stripe, they basically came out and said, we're never going public.

1:02:00Okay. So we'll be hearing about this forever. Databricks is snowflakey? Correct. That's exactly right. Yes. That's right. All right. Anthropic, there's talk of Apple maybe plugging into Claude. and obviously Amazon's a really big backer of Anthropic, 75 billion. Revolut is European fintech or no? What is that? You got it. Yep, online banking. All right, is Anderil? So the last one we'll do from this side of the thing. Chart off, Anderil being valued at 42 billion. Is this gonna be the hottest deal of the year? I think it is. Oh, for sure. This seems like the stars are aligned to this. First of all, it's an AI play.

1:02:44Yeah. Yeah, yeah. It's an AI play. They have this lattice AI system. It controls all these autonomous robots. That's effectively what it is. It's autonomous warfare. It checks every box. It's founder-led. It's got a long history. They didn't start the company last year, right? It's physical, but also AI, because they're building military equipment and hardware. It's defense tech, which is the hottest flavor of tech. It's private Palantir. right thanks to Palantir it just and and then the pedigree on the cap table it just it checks every box for an IPO that you could possibly want that's right I think the so Palmer Luckey's the fellow is the CEO right he's the guy that created Oculus and then sold it to to Meta so he's already a billionaire right but he came out and said they're not going to go public and do an IPO until the market really understands their business model, right?

1:03:42So I think this idea of like AI controlling drones and then those drones being used in warfare is obviously a new thing. I think, you know, not to be cheeky, but you're seeing it in the Ukraine war, right? What drone, like the power that drones can have on the battlefield. So that might actually pull the IPO forward a little bit because I think people are starting to get it. Yeah, I think investors fully understand they completely bought into Alex Karp and this idea like, look, somebody's going to have the best technology in the world backing up their military. It should be the United States. I think there's widespread approval of that concept.

1:04:20Is this going to be a direct listing, or are they actually going to sell stock and raise money? Oh, I think my gut is everyone's going to be doing regular traditional IPOs. They're all doing regular IPOs. That's what I'm hearing, right? But again, I think Andrew's like a 2027. That's where I'd put it. All right, what are your other stocks to watch and tell us why? OK, I love this stock, Rock, J-R-O-Q. It's the private market Nvidia. OK? So really? Yeah. Jonathan Ross. That's like a crazy statement to me. Jonathan Ross is the CEO. He created the Google TPU, Tensor Processing Unit, the AI chip at Google.

1:04:59Like from a sheet of paper, this guy built it into a big business, ran Google Cloud segment of it and then decided I'm out. I'm going to do it myself. He started Grok. Okay. I love this company. So it's chips. So it's chips like a semiconductor, but it's for, for inference running AI models, right? They fab them here in the United States, no tariffs. They use like kind of old tech. So they store memory on chip. It's I'm telling you, these guys are so dialed in. I love this company. Do people get this one confused with the Grok that XAI owns for AI? Cause it's That one's with a K. You got it. This is with a Q.

1:05:35With a Q. That's right. GROQ. That's the one. What stage is that at? Early. They're early. So it's$4.6 billion secondary market valuation, right? But I'm like hearing buzz that these guys are going to go to like a 9, 12. I wouldn't be surprised to see these guys. I have one advisor I work with. He thinks it's a$100 billion company. All right. Give me that at four. Yeah. Can we have it at four? So you have a bunch of these in funds, and you're doing single stock funds so that investors in the private market can access these. What's the most in demand, like other than SpaceX and OpenAI, which I think for obvious reasons, what are you getting the most calls about from either wealthy people or financial advisors?

1:06:20What do they want to own? Yeah, so we build like, so we do these single stock funds, right, Josh? And then we help people build portfolios. I'm a big believer in like diversification, right? But some people like love Elon Musk and they want a lot of his stuff in there. And some people don't like the guy. They don't want any exposure. So these are kind of tools you can kind of build what you want. I get tons of demand for Andrew right now to answer your question. So that's what I would have guessed. That's why I think that's going to be the big one. That's right. That's right. And then listen, the Elon Musk stuff, XAI, you know, and the like, SpaceX and the like, those are all big ones as well.

1:06:55Can you tell me about Harvey? This is AI for law firms? AI for law firms. That's right. Yeah. So it's an AI app. So just 30 seconds on how I think about AI. There's AI infrastructure, chips, electricity, data centers, et cetera. There's AI platforms. It's OpenAI, XAI, Anthropic, et cetera, right? And then there's AI apps. And AI apps are just starting to come out. So those are apps that are built on top of an OpenAI, an XAI, and Anthropic, right? Okay. So Harvey uses Anthropic and OpenAI, okay, to deliver solutions specifically for lawyers. Okay. Right? So it's an app. It's surprising that that's a pre-IPO startup.

1:07:38That's right. Law tech, I guess, is what they call it, right? 100%. So you take the model, and then you train and fine-tune the model on a specific law firm's data, right? And that's what Harvey does. So you take a great law firm, whatever, Davis Polk, right? They go in, I don't know if they're working with them, just an example, right? And they train all, they take all Davis Polk's data, they train the AI, and then the associates and everyone can use Harvey AI when they're writing contracts, reviewing contracts, et cetera. And it's trained off of their unique data. Oh, interesting. So you're still getting the Davis Polk like advice, legal advice, but it's codified in an engine that anyone working there can access.

1:08:22That's hot. All right, let's do a lightning round and then we're going to let you go. You got it. Calci versus Polymarket. I read that Calci is twice the size of Polymarket by valuation because Polymarket can't work with Americans as clients and Polymarket and Calci can. Do I have that right? Yes. You got that exactly right. That's right yes well front just filed and calci's also got a lot of connections calci's also got a lot of connections into the broker dealers like robin hood and and other broker dealers so they got like distribution channels set up too got it josh okay um we've we've we've talked to those those guys we like them um well front just filed so this is kind of a retread they tried to get acquired by ubs ubs paid the breakup fee and walked away four years went by i'm sure they've raised a little bit of money since then, but this does not seem like anything that people are terribly excited about, or maybe I have that wrong.

1:09:22What do you think? I mean, first of all, I wish them the best. I hope they kill it in the IPO. I just, I'm a little, I'm a little leery. Like my understanding is half their assets are in a cash product, like a high interest savings account product. Is that, Michael, is that true? Can that really be real? They were aggressively promoting that early on. Not in a bad way. It's cash. It's yields. But that's hard to believe. So they should just call themselves a Bitcoin treasury then. All right. Meta bought half of Scale AI. They bought it. They wanted the founder. The Aqua hired for the founder. Can you imagine the cocktail party talk?

1:10:00I'm a$15 billion man. That's pretty impressive. Okay. What's this poached chart? These are all the people Meta has stolen from other AI startups. It's like the who's who of AI, man. These people have like built a lot of the tech that everyone's using and excited about. And Meta's got a lot of them, right? It's pretty impressive. So Mark Zuckerberg is personally calling people and emailing people and poaching them out of these companies. Yeah. And paying like hundreds of millions of dollar packages, comp packages for these guys. If you're not bullish on AI, just look at the way this guy is operating right now.

1:10:41Yeah. I mean, listen, it won't be for lack of effort. If Meta doesn't win the AI race, it won't be for lack of effort or trying. They're going for it, right? Tell us what Cluely is. Okay, Cluely. So first of all, I'm a big believer that in a couple years time, we're literally going to have AI devices listening, seeing, hearing everything that we're doing. It's going to be like, you know, not the phone, something else, whatever it is. I'm not, I'm not sure what that is, but if you know what it is, Josh, tell me, cause I want to invest into it. Okay. So there's that, but something's going to come out and devices will be listening to everything that we say we'll be, we'll be getting it.

1:11:20Clearly it's like a first sign of that. It's tech, it's tech. You download it on your desktop computer. It sees everything that you see on your, on your screen and it hears everything you say and it listens to everything everything but here's the thing this is so google's talking about this every michael is so out everything so so here's the thing though guys everyone's talking about this google's io conference right their developer conference their talk they're using the term personalized context yeah personalized context is code for i the ai sees everything that you do creepy that's what that is so once you got that The AI is like your, that's your personalized assistant that everybody loves.

1:12:01So clearly does that. So maybe we'll all grow more accustomed to that. But at first blush, I don't love it. Last slide, high potential second half 2025 IPOs. This is what you think is coming like now. You have Klarna, which is buy now, pay later. Kraken, which is crypto, Gemini crypto. What's Nirvana? That I never heard of. That's the old Trip Advisors, right? They rebranded. So that's like corporate travel. solutions. Yeah. All right. And you think, and you think these, this is the class of a second half 25. That's, that's right. Yeah, that's right. So listen, I just, parting thought opening the IPO window is open, but here's the rub.

1:12:41Like a lot of these companies do not want to go public. Yeah. They're not, I guess their founders are not pushing, uh, excuse me. Their backers are, are not pushing them to. Oh, Josh, we could go have a beer, man. I could talk to you for hours about all the different like structural, really solid structural things that are happening in the private market that's generating liquidity for employees, early investors. It's all very organized, very thoughtful. Like these companies can raise billions of dollars in weeks. And maybe at high valuations. So who needs to hire? And it's all very orderly, Michael.

1:13:14That's a good point, right? It's all very orderly. So there's not a lot of volatility. It's like very thoughtful. It's all institutional. Well, we're going to talk about the tokenization of private company stocks later on in the show. And maybe that's the monkey wrench. If you have a de facto public company and all the scrutiny that comes along with it, you might as well just have a public company. And that's something that's coming in the second half of this year as well. So, Aaron, you're the man. Tell people where they can visit to learn more about what you do. Yeah, so go to agdillon.com, right?

1:13:46And just agdillon.com slash subscribe. We send out a research report every Saturday morning. That's the best way to get in touch. All right, awesome. And Nicole will throw that link in the live chat for everyone watching. Thank you so much for joining us. We're going to goodbye you and move on to the next thing we're talking about, which is the big, beautiful bill. Is this already in the market? You had to guess who knows, but. I don't think that this is moving the market to you. No, I think it's a, I think it's like in the minds of the investor class, they've already decided this is going to happen.

1:14:20I don't know. I don't follow this stuff closely. I spoke to Bill before we hopped on and I said, hey, what do I need to know about this as far as impacting investors? And he said, it's a snoozer. There's really not a lot in here. I could tell you some minor things, but nothing with nothing. It would have impacted the markets if it looked like it was going to fail, but it doesn't. I think it would have been a negative because Because a failure to pass this bill, at least now, would have meant a sunsetting of some of the tax cuts from 2017. That's why it matters to investors. But as long as it's going to go through in some way, shape, or form, I don't think the details are important to the market.

1:15:05And I don't think investors are hanging on every word. It's a weird thing. So because it's predominantly a bill about the federal budget, they were able to push it through the reconciliation process, which is kind of like a parliamentary trick where they don't need a two thirds majority vote in the Senate. They could just get a simple majority. So like 5150 using J.D. Vance as the tiebreaker. And that's what they did. That's that's what they accomplished today. So they basically they hold up in the Senate. They had like draft legislation from the house. They kept everybody there for 24 hours straight.

1:15:45Nobody could leave. Some of these people are 120 years old. And basically the whole thing came down to whether or not they could convince Lisa Murkowski from Alaska to sign on to this and agree to it. And in order to like shore up the Republican votes, they were, they're cutting a ton of money from Medicare, which is not going to be popular, but everyone will find out about this later. Um, but in order to shore up the vote from states like Alaska that are like, wait a minute, my people are not going to love how much you're cutting. They they're doing this rural health fund, which will be like hospitals for red states, basically, like basically just bribes.

1:16:26Um, and both parties play this game, but it's just like, when you read the details of how they got this through, it's kind of remarkable. I think the, the way that this became a market story was the Elon Musk angle. because he decided he wants some more smoke. Let's put up these Elon tweets. Says this started last night. It is obvious with the insane spending of this bill, which increases the debt ceiling by a record$5 trillion, that we live in a one-party country, the Porky Pig Party. Time for a new party that actually cares about the people. How can you call yourself the Freedom Caucus if you vote for a debt slavery bill with the biggest debt ceiling increase in history.

1:17:10Then he starts threatening every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame and they will lose their primary next year if it's the last thing I do on earth. Chart off. How do you think Trump responded? Deported. Chart on. Elon Musk knew long before he so strongly endorsed me for president that I was against the EV mandate. It's terrible. It is ridiculous. It was always a major part of my campaign. Electric cars are fine. Not everybody should before. Anyway, I'm going to deport Elon.

1:17:54I'm going to shut down his rocket launches. No more subsidies for satellites or electric car production. And we're going to save a fortune. perhaps we should have Doge take a good, hard look at this, money to be saved. That's the Trump reaction. Tesla stock sort of reacted. It was notably red in a green tape yesterday. And I'm really surprised that he wants to do this again. It looked like they were literally going to come to physical blows. The last time they had a fight, was that two weeks ago? and apparently Elon wants more smoke. The stock went down 5.5%, now back at 300. What are your thoughts?

1:18:43It's fucking nuts. I don't know. I have nothing to say other than the obvious. This is insanity, that there is political fighting that is causing tens of billions of dollars to swing around in market cap. It is not normal. if you're a shareholder of tesla and a donald trump fanatic you just treat this like a comedy right you don't pick you don't like you don't pick sides you just like all right i'm backing the president on this i want his big beautiful bill to pass but i also want tesla stock to go up so you're like rooting for them to start laughing and stop fighting with each other What do you think?

1:19:23I have no idea. Okay, great. All right. All right, sorry. You want me to just make up thoughts? I have no thoughts. Let's fucking move on. This is boring. That's my thought, asshole. I think if you're a long Tesla, it's not boring. Unfortunately not. I don't think you are either. If you're a Tesla shell, this is not boring. It's annoying. This is an absolute distraction. It's a clown show. Yeah. I wonder if it gets worse. How? What does worse look like? Well, the House is now going to vote on this. And the majority of the House is fairly slim. Republicans controlled by maybe 10 votes, 9 votes.

1:20:04And a lot of House Republicans are making noise that the bill in its current form is not signable. And Elon seems like he wants to be part of this process. What is his involvement with this? He's passionate about not raising the debt by$5 trillion. No, but legally, what's his involvement? That part doesn't matter. He owns Twitter. He has the biggest megaphone on the planet. So he's decided that he's against this bill and that he's willing to risk the market cap of Tesla in vocally being against it. so he has no involvement his his involvement is like as a as a peanut gallery but it's the loudest he he is the loudest person in the country when he wants to be he's louder than kanye he's louder than obama he's louder than like a former president does nobody has does trump have a nickname yet for elon what oh i bet he does but i bet he does privately no i bet privately Yeah, Mushroom Jones or something.

1:21:12I don't know. It's probably something. Can we talk about the bull market? Can we do that? Yeah, go ahead. OK. All right. We're chart heavy here. So we're going to run through some stuff. All right. Chart on, please, John. So the S &P 500 is at an all-time high. And the first half of the year is in the books, as they say. So I had Sean make us a table of the top 60 performing stocks in the S &P. And number one should be no surprise. It's Palantir. what else jumps out to you in this group, Josh? This is pretty diverse. I mean, that's my first. Sorry, Matt Furlong in the chat says, Elon's nickname is Special K.

1:21:49Oh, that's good. That's good. All right, continue. So the thing that jumps out to me right off the jump is this is a diverse list. If you look at the top 10 names, we've got Palantir, NRG Energy, Hammond Aerospace, Seagate, GeoVernova, Supermicro, Newmont, CVS, Uber, General Electric, Philip Morris, Dollar General. I mean, we're all over the place here, Josh. It's a mix of like stocks that have been going up for years, like Micron, CrowdStrike, you know, like the tech names. But then you also have stocks that just got so crushed last year that it's not surprising. I mean, it's still surprising, but it's not insane to find them in the top 20 performers because like some of these were in 70 % drawdown.

1:22:39CVS, an obvious example. Some of these like DoorDash, I think was not a great stock last year. So this year is a recovery. So I think there's like a, I think there's a mosaic definitely had not been having a great time up until recently. So I think there's a mix of like comebacks and then stocks that have been trending higher for years now. Okay. Next 20. Let's take a look. We've got, oh, Royal Caribbean's on the list. Oh, IBM. We've been speaking a lot about that. Okay. Again, I just see a lot of diversity. There's a lot of information technology, but there's a lot of discretionary. Anything here for you, Josh?

1:23:22almost all of these names, if they're not consumer, are AI. It's just one thing that jumped out at me. Vistra is a utility on the surface, but it's the utility supporting all the inferencing and AI and cloud stuff. Amphenol is connectors, cables and chips and all the AI stuff has to be put together, like has to work together in rugged conditions. And that's Amphenol. Sean and I wrote this up in the best stocks. KLA is chip equipment, Western Dig, obviously. So a lot, like a lot of the IBM, Oracle, these are like all feeding into the same AI spend. All right. Lastly, the next group, what I see here is just a lot of financials, which is interesting.

1:24:13We've got, let's see, we've got WR Berkeley, not a name I'm super familiar with, Northern Trust, Goldman, Schwab, Intercontinental Exchange, Citigroup. A lot of things are working this year. For the listener, this third group of 20 best performing stocks, so number 41 through 60, they're all up between 23 and 30%. These are way better than the S &P, would be the point I would make. and if the market closed tomorrow, nobody that owns these stocks would be upset. Like if the market ended the year tomorrow, I made 24 % in Charles Schwab this year. Yeah, I'm happy. You know what I mean? Like think about that.

1:24:57I made 26 % in Meta. Like it's great. So being number 40 through 60 is not bad. It's really good. All right. This next chart has some face blowers on it. I want to show you the sector performance with the maximum entry year drawdown, which was a big kick in the teeth. And the one that jumps out to me, and there's many, is technology. So information tech had a 26 % drawdown that happened mostly in the month of April. And yet, it's still up 8 % year to date. Wild. I don't even think anybody would know that. I know it, but I don't even know that. I mean, seeing it this way. Do you think the average person would even believe you if you said the tech sector at its worst point this year was in a 26 % drawdown?

1:25:48No way, right? The average person. No, it's just like, there's no way it felt like that to somebody who casually observes the market. Yeah. It just, because it was too fast. Yeah. Like how long was it in a 26 % drawdown? 10 minutes? It was fast. It was over before you knew it. Okay. All right, this is what jumps out at me. This is exactly the way that it's supposed to be. The least painful drawdowns were in utilities, negative 8%, now up 9 % on the year. Staples, negative 9%, now up 6.5 % on the year. So this is the minimum variance. Am I saying that term right? Defense was defensive. Defense was defensive.

1:26:34And even like healthcare, healthcare sucks, but negative 13.6 % is not as bad as tech. Now, the thing is, you're still not making any money. Healthcare is one of only two sectors that's still negative year to date. But like the defensive sectors did act defensively when they were supposed to. Yeah. John, we could skip the next chart because we have something similar coming up. Let's throw this chart up by Eric Soda. So I saw Eric tweet this last week, and I thought it was really interesting what we're talking about. And we got some follow through today. So the tweet is this. The surprise to me is that with a NASDAQ at a new high, only 10 % of the index of stocks are at a new 52-week high.

1:27:19They have a lot of room to run to reach your 52-week highs. Can you say bullish? So throw up today's heat map. Today, we saw a wildly rotational day. I love today. out of mega cap tech. So NVIDIA was down 3%. Broadcom was down 4%. Palantir was down 4%. Tesla got pounded. And look at not just the green across the screen, but the absolute bright green. And I think we've got a chart from ChartKid. John, did we have that one? Boom. Thank you. So we're taking a look at, for those of you who are listening, the S &P 500 daily return against the S &P 500 equally weighted daily return. And there is obviously a highly, highly correlated data set here.

1:28:04But there was a big outlier today because the cap-weighted index was actually down three basis points, dragged lower by the giants that we just mentioned. But the equal weight, holy mackerel, the equal weight was up 1.17%. And this is something that you don't see too, too often. On really no news. Quarterly rebalance. Today's July 1st. Yeah. Well, that would be probably the most prominent explanation. It's the only answer. Big money. Maybe it's institutional. Maybe it's wealth. Like whatever channel people looked at first, second quarter performance or first half performance said, all right, halfway through the year, we got to add to whatever's been lagging and we got to take some profits and whatever's been going up and that's it.

1:28:51And the effect of this will probably last another half a day and that's back to business as usual. Don't chase small cap rallies. The most improbable part of this bull market that we experienced in the first half of the year, and it's hard to say that it was a bull market because obviously there was a bear market in between, but nevertheless, we're sitting at all time highs. The US is up 6 % on the year, but the rest of the world, my God, John, please. Josh, thoughts? Let me take a look. Yeah. I told you and Ben two days ago, I was looking at my 401k, which I almost never do. And it said like the S &P was up 4.75 % on the year.

1:29:35And my 401k was up nine and a half percent. And the reason why was a 39 % allocation to international stocks. And I had to like rub my eyes because it's been so long since I've seen international stocks help an equity portfolio. But this is it. So for the listener, Europe up almost 24 % year to date. International developed, which I guess includes Europe, but then is also Japan and select countries in Asia up 20. international emerging, which is China, India, Brazil, blah, blah, blah, 16 and a half. And then US stocks, 6.2. I don't know. It's been a minute. I think this is the biggest outperformance for international versus the S &P going back to 2001.

1:30:28So it's a quarter century since we've seen a first half like this. And people are taking notice. I don't know if you're going to see that in the fun flows. Are people going to chase this? What do you think? Nope. No. Why? Because they won't believe that it'll sustain itself. It's just too short. That's not enough time. If you zoom out of the US divided by the rest of the world, it's still a blip. Do you think international stocks will finish the year ahead of S &P 500? Yes. So why? The gap is too wide to close at this point, in my opinion. It would be weird if this whole thing reversed. What would have to happen?

1:31:06in a land war in Europe, something in Ukraine spills over into Poland. Then you could kiss the whole thing goodbye. It'll be gone in two seconds. But absent that, Sean and I were looking at earnings growth for the different regions of the world. I didn't get around to this on CNBC today, but I wanted to make this point. I ended up talking too much about something else. But you've got earnings. You've got not just the dollar falling, which we're about to get to, but you actually have earnings growth in a lot of these places that it's just like, it's been a while and not small. So let's look at the dollar.

1:31:54Thanks, Chart Kid. Matt, what are we looking at here, Michael? This is the worst performance for the dollar at this point in the year, through the end of June in 50 years. It's been, and this has been a tailwind, obviously, for US investors that are invested in foreign stocks. Yeah, but it's not the whole story. And I think that's kind of, I think that's kind of, because people knee jerk like, oh, international stocks went up. I guess that's because the dollar. Yes, in part. So it's the worst first half of the dollar in 50 years. But you have expectations now for earnings growth, 13 % for Japan next year, Europe 11%.

1:32:43Wow. EM earnings are growing already this year, 15%, and are expected to grow by 12.4 % next year. And again, that's versus US earnings expected to grow 8 % year over year. So if you actually pull out the impact of the US dollar, Sean did this work for me, international stocks would still be up 11 % year to date. So the weaker dollar added 7.3 percentage points to international performance. So it's a factor, the weak dollar, but there's more to the story. Yeah. You want to laugh? Go ahead, please. I love to laugh. This is October, 2024. uh wow this is if the economist cover with rolled up hundred dollar bills blasting off like a rocket ship yeah and it says the cover the economist the envy of the world you know we've said a million times over the years to be careful of magazine indicators and they're only obvious yeah this is a good one though and that's still true but man the economist in particular has a knack for really nailing tops and bottoms.

1:33:56Do they not? Maybe, or maybe their covers are just so aggressive that the stupid one they do every year or two just becomes like - Perhaps. So pronounced in our imagination. It just feels like it's always the economist. All right, I want to end with this. Two more quick charts. Number one, it's not just the US, as we're discussing, obviously, but 55 % of global markets, this is from Willie Delwish, 55 % of global markets made new 52-week highs last week. That's the best level in over a decade. You love to see it. And then finally, there is this tendency for people. I would put myself in this category.

1:34:37There's like the antennas go up a little bit at an all-time high. Is this too good to be true? When does the crash happen? Like when's the next shoe to drop? For whatever reason, our antennas go up. We feel like we're going to be rug pulled. And that is just not true. Stocks don't make all-time highs because everybody is dumb and the world is about to end. Chart on, please. So this is on Exhibit A via ChartKid. We're looking at the average one-year forward return, one, three, and five years after an all-time high. And guess what, folks? Ah, identical. No, even better. You are better off investing at an all-time high than all other days on average.

1:35:19So it seems so counterintuitive because of the gambler's fallacy. We've talked about this before. Like you go up to the roulette table and it's red, red, red, red, red. And you happen to walk up and see five in a row. Bet red. No, it's going to be black, of course. And there's like, it's not totally insane. Because if you think about like a hundred coin flips, it's of course, probabilistically, it could be a hundred heads. It's just unlikely. so you think this is the time it's it's about to flip too many reds right so so that's why you see a new all-time high or you see a string of new all-time highs you're thinking like it's about to be black um the problem is most new all-time highs aren't the all-time high well the other thing when you think about it this way what does all-time highs do it sucks in buyers um yes well Well, of course.

1:36:15Yeah. It sucks in people that are worried about missing it. And that's what gives it that momentum all to itself. All right. I think Robinhood just checkmated the entire industry with what they announced this week. And I want to get into this. Are you serious? Yeah. I'm super bullish on this. I know. It's surprising. It's surprising. I really think that they just cracked the code on something that probably other firms aren't going to be able to follow them quickly into doing. And it's going to give them a huge advantage. You think tokenization is that much of a game changer? I think building the rails for tokenization puts them in a position to be at the front of the tokenize everything movement that is clearly coming.

1:37:06I think doing this with traditional financial assets is really powerful. And arguably, they're the only firm that could have done it. I don't think Coinbase has the TradFi bona fides to be screwing around with stocks. In fact, we know that they – regulatorily, they can't. Robinhood is the only firm that could have done this, or the only firm that wanted to. but I really, really feel like what the market response to what they just did is not carried away. Let's do this chart. This is... This is mine. Oh, okay. I asked for a chart. I don't see it here. I wanted to see Robinhood versus the broker-dealer industry group index.

1:37:53I don't have it. All right, well, let's do yours. Put that chart back on because this tells the story better than the bullshit chart that you were asking for. No offense. Thanks. All right. So I'm looking at it. I've shared this chart before. It is wild. So in 2023, way back in 2023. Okay, so what are we talking about? Two and a half years? Two and a half years ago, Schwab was 22 times the size of Robinhood. 22 times. And it is now only twice as big. Holy shit. Yeah. So Mark Aguilar in the chat is saying they are the Uber of investing. I agree. Don't hate it. Jay Ford points out they also announced mortgages.

1:38:32No brainer. I don't know why other people haven't thought of connecting those dots. People in their 20s eventually are going to want mortgages. Why wouldn't Robinhood give them a way to do that? I don't know the specifics of it. But why do you think, tell me about the checkmate. Why do you think the tokenization thing is such a big deal? Okay, a couple things. The first thing is they took shares of OpenAI and they took shares of – I think this is how it went. And they took shares of SpaceX and they dropped them on their users for free. Smart. To gift. Okay. So they had a million dollars worth of one and a half million worth of the other.

1:39:07And they tokenized them. They used the Arbitrum layer two, which is like effectively built on Ethereum. and they basically said, you now have tradable shares of private companies that other people can't get access to or have to buy a big chunk of in order to qualify for a fund or blah, blah, blah. So they're basically saying, look, you're accredited. You wanna be involved in private companies. These private companies aren't public yet, but you wanna have access. Here you go, can't have the shares. We built a tokenized version of those shares and you can have them, you can sell them, buy them. The rails that they're built on are specific to Robinhood's platform.

1:39:53So you can't move them out of your account, but that's all coming. Robinhood has talked about, you know, working with other blockchains and interoperability and making it so you can transfer stuff in and out, self-custody assets. Yeah, I believe that you can transfer in, you're not gonna be able to transfer out. I can't even get my Bitcoin off Robinhood. No, no, no, I'm saying the share, the tokens of the, There's no one else that could take those tokens from you. So if you want to sell them, you have to find another buyer on Robinhood. It's in its infancy. But ultimately, what this does is it paves the way for other assets that are not currently traded to become traded using Robinhood's protocol on their platform.

1:40:34That's number one. Number two, it's 24-5 trading. Remember that. So not only are they tokenizing private companies, the next phase is tokenizing public companies, which multiple brokerage firms are currently working on, multiple asset managers are working on. Wait, you said it's 24-5. It's already 24-5. It's going to be 24-7. It was 24-5. It'll be 24-7. But like having tokens representing company stock that are tradable all the time that are available in the crypto ecosystem at Robinhood, I feel like it's a gigantic leap to where stocks and crypto are completely blurred. And this is the thing that Robinhood has been working on for 10 years, and they're actually doing it.

1:41:17I'm surprised to hear your posture because I feel like like six months a year ago, you would have been like, this is bullshit nonsense. Well, it's traditional financial assets that are now easier to access and fractionalize. And I don't need to need it. I don't need the service. And actually, one of the points that Vlad made, I thought very successfully, somebody from the crypto world said, well, why is this a big deal? Who really needs this? And he's like, you know what? You're right. For a US investor, we're already 24-5. We have markets that are liquid. We already have medium speed rail. So me showing you high speed rail, it's not that impressive.

1:41:58It's not that meaningful. European investors or investors in other continents, other countries that can't access US stocks with the ease that we can in a tokenized crypto environment, they can or they will be able to. And that's game changing. There are a lot of countries where their local investors, they have to buy funds in order to get access to the US stock market. Now, they'll be able to buy the tokens that represent these shares. Think of this like ADRs here in the United States for European companies. Now, it's hard for you to understand why, for people to understand why this is exciting, because we don't care about other countries' stocks.

1:42:36Like, we're not dying, oh my God, I wish I could buy LVMH. Well, you can, it's an ADR and nobody wants it. So if you're from another country and you're watching Palantir, NVIDIA, all these stuff, you're like, oh my God, I can't believe I can't buy these things. Robinhood's got a huge audience in Europe. They are now opening up tokenized versions of US companies to everyone. So when you hear people say, we're democratizing this and that, you and I, we laugh, LOL. This is like, actually, they are democratizing access to US stocks and to private company stocks. And I think where this will go by the end of this year, I think you'll have probably that whole list that we did with Aaron Dillon of all those pre-IPO startups.

1:43:26There'll be a token for each one of those. And why that's exciting is because when they do go public, you'll have people involved that ordinarily would never have been able to get involved. Yeah. I will say this humbly because this is not my lane and I can't see the future any better than you can, but I don't know. I know that there's going to be a supply of tokens. I'm not sure that there's going to be the demand. Okay. Here's a token that represents a share of Anduril. You think there's going to be a demand problem for that? Anduril go public in 2026 or 2027. Think there's going to be a demand problem?

1:44:00I don't. I think people are going to lose their minds for this. Well, guess what? But my understanding is you still need to source the shares. You can't just create tokens out of thin air. Correct. You convert. Correct. A lot of these startups that we just talked about, OpenAI, they have hundreds, thousands of employees. Some of these employees are vested. They have their stock. They can do what they will with it. So here's where tokenization makes a lot of sense to me. Let's say that you have a lot of money at Coinbase, for example, and you sell some Bitcoin or whatever it is. You don't want to transfer out to a different brokerage account.

1:44:34You're on the blockchain. You want to stay there. Tokens there make a lot of sense to me. Yes. The tokens at Robinhood? This is the first time that Robinhood has leapfrogged Coinbase. Robinhood has been chasing Coinbase. Yeah, wow. They did this first. And again, they're uniquely positioned because they're in the TradFi world. They're FINRA members. Coinbase could not have done this. Listen, it's interesting. I'm very, very curious to see where it goes. I didn't read this yet, but Jenny Johnson had a headline in Fortune. I'm the CEO of a Fortune 500 company and we're going all in on digitization.

1:45:11or tokens or something along those lines. Yeah. Wisdom Tree's got something they're doing here too. Yeah, they're involved. Everyone is all in on tokenization. Yeah, yeah. All right. The idea is it lowers costs and it speeds up. Settlement is instant. And with tokens, the transaction happens. It's on the blockchain. That's the end of it. There's nobody filing paperwork in a manila folder. Put up this thing from Dan Dolev, please. So, nope. The Mizuho. Mizuho. So this is Dan's take. Party like it's$99. Get it? Raised his price target on Robinhood. Dan's friend of the show. He's kind of our informal fintech analyst.

1:45:51On balance, we believe hood should get re-rated. Unmatched product velocity. Availability in 30 plus countries. Myriad of new products, including stock tokens, staking, advanced charts on mobile. Crypto perpetual futures, which we don't have time for today. We'll talk about that another time. They are just innovating in multiple lanes 100 times faster than the incumbents. They are. They are. Let me just, one final thought here. The stock has gone absolutely vertical on gigantic volume. They put in a potentially gnarly candle today. If you want to buy the stock, you can buy it back at 70 bucks.

1:46:28How do I know that? I don't, but we'll see. Yeah. The route, look, I'm not saying the price should be the price. I'm just saying the rally is justified in terms of the excitement. I always have the posture, for the most part, that the public is not stupid. This stock is rallying for a reason. Yes. Anyway, I have one more. This is tokenized real-world assets. You know how small the tokenization of stocks is? It's zero. It's zero. You can't even see it on this chart because it's one of the few things that hasn't been done. Well, this entire thing is zero. It's$15 billion. I know, but it's early, and someone's going to own it, I think is the point.

1:47:07Yeah, no, I'm not fighting you. I don't disagree. Let's do NVIDIA. Okay, NVIDIA. This is funny. So throw this chart up. Chart Kids shared this today. Remember this chart? Because I do. These charts have a tendency of disappearing when they don't work out. And what we're looking at for the listeners is the price of Cisco and the price of NVIDIA. And of course, what they have in common is they both went up to the right. And I'm only teasing. They're both the giant behemoths of their day. Okay, and we know what happened with Cisco. What if NVIDIA is the same as Cisco was in 2000? Yeah. That was the thing.

1:47:40So ChartKid was kind enough to update us. And here we go. So now, I guess NVIDIA did follow the path, like kind of, but it blew past it today. So there we go. Yeah. There we go. Sorry, the matchy match chart didn't stay matched. Matchy match. So anyway, NVIDIA is a$3.89 trillion company. I mean, it's going to four. Where does it ultimately go? You think this thing gets to 10? Is that crazy talk? Well, let's just start with, can it go to four and hold four before we start 10? There's a lot of T's in between$4 trillion and$10 trillion. $4 trillion. It's only$150 billion away. Come on. It's like one day.

1:48:21Barron's did a piece. I put this on LinkedIn and people got upset about it. Which part? Who cares? Nvidia, if it gets to$4 trillion, will be 36 % higher than the entire FTSE 100, which is the Dow Jones of Great Britain, and only 18 % short of Japan's entire Nikkei 25. Wow. um it would look it's uh biggest company in the world um it's not it's not that crazy that it's now the biggest company in the world considering how important its product is it's crazy and uh i mean it's always going to be crazy but somebody has to be the biggest um so beth kindig tweeted in october 2023 nvidia was expected to generate 96.6 billion dollars in revenue in fiscal year 26 and 112 billion in fiscal year 27.

1:49:17Now it's expected to generate $200 billion and$250. So just in October 23, expectations for 26 were 96. They're now 200. And for 27, it was 112, and it's now 250. So again, the market is not dumb. They were 50%. Right. In October of 2023, when NVIDIA is already the hottest stock in the world, The expectations were still 50 % below what they are now. But at the time, they were scorching hot. They seemed unrealistic. Right. And that's because the big thing that people forget is it's not just how many chips can we sell. Once people have spent a trillion dollars on these chips, they're locked in to that architecture, and they have to continue to pay NVIDIA.

1:50:04Yeah. Because it's a platform. It's not just a chip. And people forgot, like, people forgot, like, how much more there was behind the sales of the chips. Yeah. All right. All right, Josh, we're already an hour in. So let me just move on to this last part real quick. So you and I spoke about this with Cole. I mentioned the Bloomberg article that, for those who missed it, this is, like, actually, I'm reading this. This is not me making this up. I'm not on mushrooms, ketamine, or acid. Here's the quote. A footwear startup is teaming up with two space companies to design a shoe in orbit as part of a mission to make artificial intelligence and blockchain less expensive and more eco-friendly than it is on Earth.

1:50:39Yeah, sure. Why not? AI-enabled computer sneaker. Yeah, sure. We have the SIBO files 19B4 for first of its kind Pengu and Pudgy Penguins NFT ETF. Sure, why not? Buy. And then we saw an article in the FT. This is hilarious. OpenAI's former chief technology officer has raised$2 billion for her new artificial intelligence startup in a deal which values the mysterious six-month-old company at$10 billion. Basically, this is getting funded at$10 billion. Nobody really knows what it does. I'm in. It doesn't matter. So here's the point that I want to make. Anytime you have all-time highs in the market, it is a green light for stupid behavior, right?

1:51:21By definition. You will never not have dumb behavior in a bull market, especially at the top. I think one of the big takeaways for me with my maturation as an investor over the years is that this dumb behavior that you see at the margins, and maybe this is a little bit less marginal, it doesn't matter. It is a distraction and a sideshow. Now, it is like sort of a temperature on the market maybe, but all of these micro bubbles within a bull market, noise, as dumb as they are. Chris Hayes says, hold on. Sodak Jackson says, Boiler Room Josh would have loved pitching those companies. Oh, man. I'm writing the pitch in my head right now.

1:52:01Space Nikes.

1:52:05All right. Make the case. All right. This is not as exciting as the stuff Michael just walked us through. People think that being a professional investor or being a good investor means you have to have a new idea every day. And it's just not like that. In the real world, you should have a few really core insights and just follow them through to their conclusion. And you shouldn't have a new stock every five minutes. That's wise. Well said. I want to revisit Toast because I think we're on the verge of the next breakout. I think you're right. I want the pitch because I told you I was going to buy it.

1:52:39I didn't buy it. And it is hanging so high I have to buy it. Dude, it's just going to go. It won't relent. One day it's just going to go. I agree. This is not investment advice for those of you within earshot of my voice. Please, I don't know you. Okay. Basically, for people that have never heard of this company, if you go into a restaurant these days, there's like a one in five chance or one in three chance that the waiter or waitress comes to your table for the check and they have a device in their hand and they hand it to you or they just take your credit card from you and do it table side.

1:53:12If you go into a place that sells food without a waiter or waitress, there's a very good chance toast is the screen in front of them at the counter. Their products range from point of sale hardware, which is what I just described, but also kitchen displays, payment processing, supplier and invoice management to payroll, delivery, delivery management, menu consultation, marketing programs. They have an AI program called sous chef that helps restaurant owners become more efficient at running their business. They have a hundred something different products that they sell you as a restaurant owner.

1:53:48Once they get in there and they get you using their payments terminal. Their takeaway is about 50 basis points. Okay. It's a lot of money they're making and their gross value across their platform. What is it? As they add more restaurants, it's just, it's absolutely booming. The March quarter was a breakout quarter because it was their first profitable quarter. And from here on out, hopefully you're going to see gross margins rising, net margins rising. In Q1, gross margins hit mid-20s. Net profit hit mid-single digits, like 4 % or 5%. That's versus big losses the year prior. They spent a lot of money up front to equip restaurants with these handheld devices, but then inertia takes over and it becomes like a sales force.

1:54:37You can't get rid of them. Restaurant owners are not ripping this equipment out ever. So it starts with point of sale. and it ends with Toast selling you every other software service that you need to run a profitable establishment. This is a$25 billion market cap, not yet in the S &P because it hasn't been profitable for long enough. Just announced enterprise deals with Marriott, Applebee's, Topgolf, anywhere that they're selling food or hospitality, there's a Toast machine in the building. We're talking about 130 something thousand customers businesses all over the country now standardized on toast.

1:55:19UBS just upgraded it. A bunch of upgrades recently. Annual recurring revenue, which is the only number that really matters, rose 31 % in Q1. It's now 1.7, I think that's supposed to say billion, which is explosive growth for a company in this business. live customer locations are now 140 ,000. So this is, in my opinion, let's put this chart up. Look, guys, not complicated. The share price is following the growth in trailing 12-month EBITDA. So you're literally witnessing a company go from losses to growing cash flows every quarter, I think going forward now, will be a better earnings picture as they keep adding locations.

1:56:14Two potential negatives here, worth talking, three potential negatives, chart off. One is the whole restaurant business slows down because of a consumer-driven recession. Okay, fine. It's the same risk for every other stock you own. Grow up. Two, competition, Clover. Clover. Square, which is called Block now, but Square. And, you know, other like other payment. OK, every company has competition. Grow up. And then number three, their costs are rising because they keep adding all these new services like AI and all this stuff. The market doesn't care about that right now. Grow up. Well, that one I kind of get.

1:56:57The P.E. is at 45 times earnings. So the market's telling you, don't worry about that. It won't matter until it does. But the bottom line is, if anyone's equipped to deliver AI to the hospitality, travel, and leisure industry, Toast is the best position player to do that. It's also a payments player. They also, since 2020, have been making loans to restaurants, which is hugely profitable. Tokenize them. Tokenize these loans. Strategically important. They should tokenize. Anyway, the stock rocketed up to 45, which was a new 52-week high. it's backed off a little bit. I think it's biding its time.

1:57:38They'll report again in August. And I think if that's a good report, and I don't know if it will be, this name gets into the 50s or 60s. So that's my make the case. What are your thoughts? You had me at Applebee's. Great. I like it. I do like it. I do like it. And why don't I own it? Coward. Basically. Oh, sorry. I thought that was your inner monologue. I was just vocalizing it. Okay. All right. I've got some mystery charts. All right. Let's hit it. We're going to zoom out. Okay. This is a decade. Needless to say, this is not a great stock. Is this a price? In fact, yeah. It's the opposite of a good stock.

1:58:22It's a horrible stock. Okay. This is the price of a stock. Yeah. Can I have one clue? I'll give you two more clues or two more looks. Let's zoom in, please. All right. This is the last five years. not great and year to date please a little better would you buy this do I own this is this Pfizer could be no this looks as shitty as Pfizer we spoke about this last week this is a great American this is a great American stock that I threatened to buy which I haven't bought I'm probably not going to but I kind of wanted oh Intel yeah that's the one look i'm sure it'll look just rewind just rewind two charts please john at some point of the recover i just don't i don't know when there's just no more sellers well my argument is like why wouldn't you just buy it why wouldn't you just buy it when it breaks the downtrend and not get it at the all-time low yeah yeah fair like that's how i i'm not saying like never own intel i'm saying like why put yourself through that do you have to have the bottom I will say it's not, but I will say it's gone sideways literally since August of 2024.

1:59:36It has gone sideways so far that it is now above its 200 day moving average only because it just stopped going down by accident. Just for getting out of bed. I could picture this at 18. Could you? Well, I think it's binary. I mean, it's not going to go sideways forever. I think it's going to either be at 30 or 15. Yeah. It looks bottomy, but there's no, but there's no fundamental story for why it's going to turn yeah you know like maybe wait for i'd rather buy it up 10 points after they crush an earnings report like dell just did or like um see that's a difference between you and i i don't wait one thing though one thing though is these things do sneak up on you like cisco looks amazing ibm this guy the worst ibm looks amazing ibm looks amazing these are stocks that went sideways for 10 years.

2:00:25Yeah. So, but I'm not, I'm not doing it. All right. It's a pink pony, huh? All right. Guys, thank you so much for joining us for this extra long edition of what are your thoughts? It's been a pleasure for Michael and I to see you here for the live. Those of you listening in podcast land, please give us a like and subscribe to the channel for God's sake. Also want to mention tomorrow's and all new animal spirits, Michael and Ben, and we will be back later this week for The Compound and Friends. Other than that, wait, we're not back? I'm back. I'm so back. You're back. Okay. Michael will be back with an all new edition of The Compound and Friends.

2:01:05I will be on my fourth bowl of pasta. Buongiorno. Guys, thanks again. Have a great night.

2:01:16Whether you're just getting started as an investor or you're managing a multi-million dollar portfolio, Ritholtz Wealth Management has the solution for you. It all starts with building the right financial plan. To speak with a certified financial planner today, visit ritholtzwealth.com. Don't forget to check us out at youtube.com slash the compound RWM. Make sure to leave a rating and review on your favorite podcasting app. If you love investing podcasts, check out Michael and Ben every Wednesday morning on Animal Spirits. Thanks for listening. Bye.