Why Nvidia is Going to 10 Trillion Dollars with Adam Parker⁠ and ⁠Rob Sechan

13:14So you're just going to pay CrowdStrike or Palo Alto or whatever, just because you have to have an expert in case something goes wrong. Like you may get some of that happening in software for sure, but the ones that are more expensive are more expensive for a reason. And that reason is they're less likely to get disrupted.

13:28Downtown Josh Brown:It's got to be hard because I know you're Claude coding your face off. I know your team is like my team, like every firm. The people that are involved with tech are going crazy right now at every company in America. It's hard to then look at the board and look at stock prices and be like, I want to fade this. I'm close with a number of his employees. And one of his guys who's a stock picker comes to a lot of our events. And he won the best stock picker at our main event last year and has crushed it in tech. All technology-based, too. He has crushed it. I hope he listens to this. I hope he listens to this.

14:03Give him a shout-out. So Jay is his name. He's unbelievably talented. But we've leveraged tech throughout the start of our ecosystem. It was a tech-enabled solutions firm. We built New Edge on top of institutional-grade infrastructure. We didn't start it out of a private bank. It wasn't an idea in my basement. It wasn't built upon my practice. It was built on infrastructure, on rails. And that infrastructure allowed us to bring in technology, plug and play different things, and try them religiously. We rolled out Claude Enterprise to everybody a month ago. So we're trying to be on the front edge of kind of everything we do.

14:42In portfolio management, we have a very quantitative approach. approach. You know, I slept at a holiday inn last night when I go on TV because the reality of it is we're sometimes reverse engineering the story out of the math that drives the positioning that we're going into. And you can see a lot of these things, but I am amazed. It's like I have 15 analysts working for me at my fingertips. So when I was a banker back in the days at Morgan Stanley and doing analysis, some MD would come to me that we'd iterate. And then I'd go back to him two days later. I am doing that same thing. We're working on an acquisition right now, several, and I'm doing that same thing.

15:27And it's instant feedback. So you can, you can kind of interact. You know what you make me think about? He's probably like me. We're like, I just have too many interns, right? Cause I say, yes. Can my daughter, can my nephew, the problem is like, they don't have any skill. It used to be, I'd be like, Hey, go, go tell tell me all the acquisitions Microsoft made in the last five years and summarize what technologies are buying itself. Now they do. Two seconds to go back. So I don't know what they're going to do for the other nine days and nine hours and 48 minutes.

15:53Downtown Josh Brown:The intern fans the machine. I would tell you that the intern now, the average is going to be good to great, and the great is going to be game changing for the enterprise. I just can see efficiency happening all over the place. So while we might not lay anybody off as a result of this, I can tell you our pace of hiring will slowly slow. I'm hearing this everywhere. And then ultimately profitability is going to explode as a result of productivity. And I think that's endemic. So here's the market. Here's the problem then. So then here's the problem. You have, I don't know what it is, 150, 200 enterprise SaaS companies in the public markets.

16:39Downtown Josh Brown:Forget about pricing because no one's, no one's going to be able to pull off a big enough increase. The real problem is most of these companies are selling by headcount. And what we're all saying here is headcount may not shrink, but it ain't going to grow to the extent that it used to anywhere. I'd like to know his view on that, because the reality of it is what does that mean for profitability for these companies? If they still have essential kind of infrastructure and tools, doesn't that ultimately make their profitability explode as well? And isn't that a positive thing at some point? And so shouldn't we just watch the earnings?

17:20Wait, hold on.

17:21Michael Batnick:We have charts for this. John, so ironically, throw up chart five. So ServiceNow reported this morning down 18%. Not bad. We have their headcount by department. It was my final trade two days ago or yesterday. You dumb bastard. Did you see the earnings?

17:34Downtown Josh Brown:Have you learned nothing from me? I do it all the time. Oh, my God.

17:37Michael Batnick:Yeah, we've all been there. Q1 2025, 26 ,698 employees. Q1 2026, 29 ,732. John, go to the next chart. Their stock-based comp is exploding. Like, have they not gotten the memo at all that the street does not like this? Look at that.

17:56Downtown Josh Brown:It's breaking out. SBC didn't matter until it really mattered. Yeah. Stock-based compensation is, now we're going down like the twig, down the branch, down the tree. But like, it's just a beta factor. So when tech outperforms, the ones with lots of stock-based comp outperform. When underperforms, the ones with lots underperform. So it's just a beta factor because it's like an R &D intensity factor. But, you know, you could have died on that hill. You would have lost a lot of money on the stock-based comp hill over the last 15 years. So I got – you got to manage risk around it. But, like, I kind of agree with Rob's point or big time I agree with it.

18:25Like, it's about productivity. And the question is, like, what's in the price? Look at Walmart maybe as the ultimate poster child. Like, what would make the market go parabolically higher? One of the things would be Walmart gets on. It says, in 2030, we'll have less employees than we have now. which might actually end up being the case. It might, and there's a reason it trades at, whatever, 38 times forward earnings. It's not because they have 3.5 % net margin or whatever the number is now. It's because you're in the prices five or six eventually. They're going to nail predicting how many jugs of milk are in every - I think that's too early.

18:52His point, we are at the tip of the spear for these companies figuring out whether they can make that migration, figuring out the implications for the business. You guys probably are too. We are too. We're learning as we go, and we're learning at a pace that I've never seen before.

19:12Michael Batnick:Gee, I wonder why Wall Street hates, why the country hates Wall Street. You just said, what would make Walmart really go parabolic if they come out and say, by 2030, we're going to have less employees? So economists and stock people have never been more incongruous. Like if you, I remember when I was at Morgan Stanley, our economists would say stuff like, I want capital spending and I want hiring. And I'm thinking, if I own a stock and they announce either of those two things, I'm selling it immediately. Right? Like there's a giant disconnect between. That doesn't sound good. Right, right. Like I don't want hiring at my company.

19:41Downtown Josh Brown:Well, it's more potential customers with higher paychecks. Yeah, that's all bad. Is one. More healthcare, you know, more, right. But so they, the GDP and the economy are kind of different than picking stocks, right? I mean, look, you had a guest on last week or the week before, a personal friend and favorite. Encore Crawford. Do you know 70 ,000 people and counting have watched that episode? She is such a star. I know her for a really long time. I met her through you. And you skipped a couple things about her in her bio, one of which is she has a PhD from Stanford. And the other is she has the number one performing growth fund in the last 12 months in the entire of all growth managers.

20:12All right. But we gave her a protest. But she said – yeah. She said something that is totally awesome, okay? And I've stolen it from her for the last week, which is people who are like bearish on AI don't get it. Like they – if you think like it's a bubble and it's over. She said nonsense. She said it's nonsense. Yeah, yeah. And everything sounds smarter when she says it for sure. But like, I just feel like, you know, we're on the precipice of this. Like, you know, the reason there's earning estimates that are 18 % for the S &P this year and 17 next year and 43 in tech this year and 25 next year is because you're just, you're like in the, we might be in the fifth inning of the stocks, but we're in the first inning of like hitting the numbers.

20:51Michael Batnick:You think that's why small caps are breaking out? Part of the reason?

20:56Yeah, maybe.

20:58Downtown Josh Brown:You know that the S &P 493. So NOMAG 7, earnings are supposed to be up 15 point, let's call it 16%. There's got to be some AI productivity. There's got to be. Has to be. There's got to be. Why else? Why else would that happen? No, there is. It's not 8 % GDP growth. But there is underlying economic strength, right? You can definitely, just if you look at the price action of just about everything, whether it be spreads, it is telling you that there is a miss between positioning and what's happening in the underlying economy. I don't think there's anybody better at reading the tea leaves than Tom Lee.

21:38I think we could all agree that this is the best data guy out there. Tom Lee sees around corners. It's freaking unbelievable. And how does he see around corners? He's watching these cross-asset movements, right? And, you know, one thing that scared me, you might've said it on your show, is he kind of thinks there's going to be this like mid-year pullback that scares the shit out of everybody.

22:02Downtown Josh Brown:He thinks they're going to test the new Fed chair at some point. Yeah. So, and - Meaning if - I don't know why Mr - That the market doesn't expect, there'll be a big overreaction. Yeah. Okay. Yeah. So, but when he's looking at these things and seeing what's happening in, you know, quality names like the semis and what's happening in software. He's listening and many don't, right? Many get sucked up in the headline narrative of what's happening in the war. And they start to think second and third derivative effects of what that could be. But what is it today? What is it? Yeah, I mean, I think if, like the way to think about it might be if the street's got 43 % earnings for tech, and yeah, a lot of it's micro and video, but let's just say it's got 43 % growth.

22:55And let's say the real number is 30. And it's got 25 next year, the real number is 15. Tech's not going to be 45 % cheaper a year because it stayed flat for the entire next 12 to 18 months. Like unless there's a much bigger growth scare coming in 28 or 29 or something, but like the odds are just the absolute level of growth is high enough that things work. And so I think the market woke up to that a few weeks ago, but like where could people be complacent like i did a big risk dinner this week with a bunch of risk officers and like excited nobody thinks yeah you know it's not it's not exactly rob wasn't invited to that no okay i wasn't yeah this rob not his not his crew but like annual value at risk what people are like if you say what are people complacent about it's probably that everybody thinks oil eventually is going to come lower and probably faster so like right now nobody's taking their numbers down for input costs in industrials or for, you know, select, um, you know, um, energy sensitive consumer, because they just think, ah, you know, second root of Hormuz news is positive.

23:58If I get bad Hormuz news, markets down 40 bps. If I get good, it's up 150. So like, you know, whatever it's like, nobody wants to look like an, nobody wants to look

24:06Downtown Josh Brown:like an asshole again, going risk off. You called 17 to last zero like tariff problems. So I'm not being the Hormuz problem guy, right? So people are a little bit – so I'm not saying that's going to happen, but I just think people are playing for – so on the Fed, I'm not sure cutting rates is going to be bullish for multiples like it was for years ago. And frankly, how can it even happen? It creates an inflation expectation problem that is going to be pretty dramatic, I think. It's why you have to own some energy in the portfolios. It's kind of like a tail hedge to this. Do you think most market participants would prefer the price of gasoline go back to three and change versus another 25 basis point rate cut?

24:48Downtown Josh Brown:I do. I do, too. Yeah, for sure. Yeah. Yeah. No doubt. Well, there's a higher likelihood of that, to Rob's point. But also, like, it depends where you're on the cycle. Like, when it was the end of 2022 and you perfectly covered your NVIDIA, Tesla, and Meta Shorts, which are all down 65%, and you started buying them max long on Jan 1, you're logically— Actually, it was December that I bought the 30 Shorts. You run a lot. You got to get a bet. Okay. So then your logic was, well, the Fed's closer to the end of the hiking cycle than the beginning. Eventual accommodations coming. The Fed action is going to be super bullish for multiples.

25:20Nailed it. Right? But the question is now three plus years later, if they get incrementally dovish, is that really like all awesome? Or is it because like stuff's slowing and therefore like at some point - Yeah, it comes to growth. Yeah, it's a little bit different. Right.

25:31Downtown Josh Brown:I'd rather have the gas price come down. Is the semiconductor rally the most out of control thing you've ever seen? No. It's not? No. I think it's completely - I do. Is it the most out of control? I've seen a lot of out of control stuff. I think it's so completely out of control, the pace of it and the relentlessness.

25:46Michael Batnick:Micron is bigger than Johnson & Johnson.

25:48Downtown Josh Brown:Okay, so look, I'm a, you know, I used to be a semiconductor analyst. Hold on, last 16 days, 35 % for the semis, 16 days. It is the best rolling 16 day, I know it's a random number, best rolling 16 day period in the history of the SMH. never before yeah uh and i understand the reasons i'm not i don't live in a cave but like i mean people are will just buy anything semi-related i think when you look when you look at semis and you look at tech you really have to look at it like even software look at software x microsoft and with microsoft when you look at semis you know your tech book is going to look like it grows more slowly and is more expensive than the tech index unless you're overweight micron because micron trades at four and a half times next year's earnings and is growing like a hundred percent Right.

26:37So, you know, we know it's cyclical, but. You got to see something that comes along and challenges that probability of that outcome. And I don't know. Of them earning enough. Right. That is right. I don't know what that thing is. It's hard to see right now, but, you know, the pianos don't hit you in the face. They hit you in the back of the head.

27:00Downtown Josh Brown:NVIDIA has grown earnings substantially in each of the last four quarters. Stock has not gone up. I think the stock will go up and go up a lot. I know, but I'm saying two things can be true. You can have a stock price that just refuses to go along with incredible fundamental news, which is all we've ever seen from NVIDIA. But Mike Rens estimates, plus or minus, I don't know if somebody can, I'm sure somebody will comment on this, but like there were roughly 50 bucks in earnings per share for next year before they reported, and they're roughly 100 now. Yeah, it's unbelievable. So the magnitude, one of the things we're doing right now, we're researching is look at all the companies where two years earlier the analyst estimates were most off like ever on earnings is high on the list those are the best stocks and this guy yeah in both directions look at the ones where they're way off too high too just to see if there's a pattern but like this is one of the bigger free cash flow estimate misses ever in 25 years in the market i want to so when you say it's crazy like yeah the price action is massive but it's also one of the crazier it's crazy because it's such a huge change and nobody knew what was coming.

28:01Like rough, rough order magnitude people had like, like a billion and a half in free cashflow for next year. And it was like three and a half billion over two years. And now it's 80 billion over the two, like the magnitude is like zeros off.

28:13Michael Batnick:Yeah. I want to do one last thing on, on software before, before we leave that. So you talk to a lot of, you have a lot of hedge fund customers. I'm imagining that nobody wants to touch software, although I'm sure there's a lot of dip buyers that got their hand burned, but service now, for example. So they report this number, a number of customers with$5 million ACV, John chart three, please. And they went from 434 customers paying$5 million up to 630 in Q1 with a 97 % retention ratio. Now their margins came down, but this is still a good business. The problem is nobody sits on the macro. I mean, you're going to have to manage all this, but the stock is down 18%.

28:51Downtown Josh Brown:They did 22 % revenue growth. they hit the numbers and the stock still lost 20 % of its value after being down 50 something percent. Isn't that scary?

29:03Michael Batnick:So when you talk to your clients, like, are they, what's their view? Is everybody like, I can, this, I can, this is uninvestable. How do I, how do I buy this? So the only thing I'd parse in what you asked me is I think it really depends if you're a long only or a hedge fund, right? Most hedge fund money, like they don't have to own any of this stuff or they can pair off. Right. So it's really more the long only guy who's, you know, is what he is. He's a software analyst. Like, why does GM make cars? Like, you know, like the software analyst, he's got to pick winners, losers in the group and identify how to like outperform the software benchmark.

29:33Right. And the PM's job is to figure out what exposure to the aggregate group should be. So I think most analysts are going to say, I want to own stuff where the revenue is accelerating. And, you know, if you look at a two by two grid of like, you know, beat on revenue, beat on earnings, missed on rep, the worst bucket is what now reported, which is you find on revenue when you miss on earnings, because the market doesn't know where the clearing margins are, but you just exposed the fact that like your margins in the out year are lower. And margins came down. Their guidance from margins came down.

29:59So it's not trading 18 % lower today. It might be trading 4 % lower on 2030. Like you have to warm yourself up to that idea of like the uncertainty on the margin profile just change. There are assets, including now could be one of them. And I'm just not smart enough to know that this could be like a great entry point in a two or three year, but I need to see some price action that we all know are going to shake our head yes, where a company misses and doesn't go down. I haven't seen a single penalty for missing that hasn't been harsh. Today was the first day where I thought a couple of beatings were good.

30:33URI, Texas Instruments up massive. But if we track this thing, the penalty for missing versus reward for beating ratio, and not only has it been very skewed toward the penalty harsher, but it's like cheap stocks missing are going down more than expensive stocks that are missing.

30:47Michael Batnick:So what type of market does that happen in? A toppy market. Like, yeah, I think the good news, I guess, is more companies are beating than missing. So that's why the market's fine. But like if more companies start missing, like we can't buy stuff where we don't have any evidence. Like the best thing ever is like, you know, the old days, like Caterpillar misses and it's unch. And you're like, all right, game on. Like, I mean, missing is unch. Missing, yeah. But we're not seeing it. Missing is annihilated, right? Yeah. Yeah.

31:16Downtown Josh Brown:Put this tech multiple compression chart up. This is a thing. What do you guys make of this? I think it's seven. Here we go. So let me narrate this for the people that are listening, not watching. We're starting in 2020, right around COVID time. We were at 16 times for tech's forward PE ratio. Peak out in the 2021 bubble at 28.7. Fall to a low of 18 and a half during the year of efficiency, 2022. Then we rally through 2024. We hit an all-time, not all-time, all-time in this chart, 32 times forward earnings. Drops early 2025 to 21. Back to 31 at the end of 2025, one of the best years ever. And now here we sit at 19.

32:03Downtown Josh Brown:Huge D rating on forward earnings. Very quickly. Very fast. Very unexpected. I don't remember reading any strategists saying - Micron's estimates are up 100%. I mean, is that all this is? Is the growth rate growing faster than people can - If the estimates are for 43 % growth in earnings this year, then you can have multiple being high because the E went down or because the E was not, and the P went up. And in this case, it's more the E. The E is going up really fast, and pricing isn't keeping up with it. I'll give you one nugget. If you look at the S &P 500, the whole 500, Q126 versus Q125, year-over-year growth, 45 % of the entire S &P 500's growth was from Micron and NVIDIA.

32:41If you believe this geopolitical risk leads to slower economic trajectory, markets are going to pay up for that growth and you're going to see that go right back up.

32:52Downtown Josh Brown:Because if there are less companies growing, they'll go right back to the old playbook. Or if the E comes in and it's Anshan multiple, the stocks will be 40 % higher. Or Micron will be up or whatever. So it's a multivariable world and you just showed one variable or whatever the criticism is.

33:09Michael Batnick:What were you telling clients? What did you make of the stair step lower during the war? The fact that the market just wouldn't puke. What was that telling you? I know it's hindsight now, but. It made me more bullish. Same.

33:22Downtown Josh Brown:Yeah. We didn't have a panic. We went lower. I came into the year. So that's actually what kept us invested completely through that. Now, we did upgrade quality. Like I said, when you get any volatility, it's a great opportunity to kind of pivot to a higher quality name in the same sector that's not getting derated as much or has shown more resilience in their in their earnings. Oh, because you say, wait a minute, we can now own this. Yeah, especially if you're a long-only relative investor in a certain class, whether that be dividends, value, growth, and you're kind of managing to a benchmark in a portfolio construct, and you can say, okay, now I can own this.

34:04I could never own this. I mean, for so long, And we never owned NVIDIA until it traded below 30 times earnings. We waited and we missed a lot in doing that. But boy, did we buy it at the right time. So if you can still employ your discipline and when volatility creates the opportunity to upgrade quality and you can move from X to Y, you do it. And that leads to a lot of outperformance.

34:30Downtown Josh Brown:Volatility, though, to your point, within a reasonable. Within a reasonable band. Like not a free fall where all of a sudden it's like, wait a minute. That's that whole different atmosphere thing. We didn't get that this year. We didn't get that this year. And you won't get it from geopolitical. You get those from financial issues, right? So this credit issue that we kind of, I don't really believe, you know, I know a lot of people do, but I've been an ardent defender of the equity that sits beneath it and the economy being strong enough that these private equity firms are not walking away from these businesses and the credit's going to be fine.

35:07And the market's kind of telling you a little more, at least the more public markets, that spreads are remaining contained. And listen, a lot of the credit in private credit sits at the highest tier of the capital stack. So you got to wipe out a lot before they're wiped out, right? So from my lens, it is that that is more of a concern than anything, because that's the liquidity that feeds the ecosystem that we all thrive off of. Now, I will say that if you cannot raise money going forward, we talked about this on the other show. The reality of it is, is if your forward ability to raise capital from private investors has been impaired, and that was your growth strategy, right?

35:55Toast. And though they're not coming back right away, but the institutions are staying in because they see the value of this. You're going to be more discerning because you have to be, because you don't have as much capital. And so the strong are going to get stronger. They're going to get financed in the week are going to require more investment. Some of them will get it. Maybe buy some KKR or something. Maybe buy some KKR. I've thought about those. Look at this. So Blackstone. Yeah. I mean, maybe. Blackstone. I didn't know which one you're going to show. Blackstone report. I tax loss sold, not me, the team.

36:31Tax loss sold Blackstone. I got a lot of shit on it on the show because I was such a champion of these things. But it was just tax loss. So you bought something else? we didn't buy something else in the space, but we would likely go back in to Blackstone.

36:44Michael Batnick:All right, so Blackstone got whacked off today. It's down 6%. And this is the private credit fundraising on a gross basis by quarter, okay? Down almost in half, not quite, 3.3 billion in the prior quarter, down to 1.9 billion. This is gross, not net, okay? So I don't think they're outflows. So a dramatic, dramatic slowing, but not to zero.

37:03Downtown Josh Brown:This is the media narrative pausing people who are about to allocate. 100%. Of course. And it's also human nature and advisors, we're advisors, to say, hey, do I want to try to take advantage of this and steer into the eye of the storm? Most people don't do that. Most investors, the success that we've had as a company, period, is identifying areas where forward returns are headed higher. But pricing has not come down. Right, we're not even in the storm. It's a flow storm. That's it. So that's right. But let's use a different example in when we had the tech crisis and in venture companies having trouble raising money and it re-rated down and they pivoted to venture debt.

37:51There was an enormous opportunity in venture debt because they didn't want to sell equity at those levels. And if you steered into that storm just in a different way, right, what it led to is higher forward returns. And you see that episodically in markets. So I think one of the great challenges that advisors have is keeping investors invested. And how you do it is by identifying the high optionality within the underlying crisis. They will have a greater probability of success on the other side. But if I read a headline that said six months from now, great news, or it would say horrible news, all of these leveraged loans are now trading 20 % cheaper than where they

38:43Downtown Josh Brown:were. The thrust of that article would be written as a way to bash the private credit industry. And you go right in. But then I would say, I love it. I haven't bought any of this shit yet. This is my opportunity. 100%. I don't think – I agree with you. I don't think most people think that way, number one. And for financial advisors in particular, what do you think most of their clients would say back to them? Hey, let's buy some of this asset class that the Wall Street Journal is screaming bloody murder over on the cover of the newspaper. Why would we want to do that? That sounds crazy. And I would say, did you see Blackstone's partners step in to buy, you know, take a gigantic chunk of their own money and buy this?

39:24you think they're doing that because they have massive concerns about the asset class no kkr so you just bought 10 million bucks a stock that's why i mentioned kkr i didn't know the box and so but you know my pushback i got was somebody was like yeah well the guys got a billion dollars i'm like yeah but people don't like throw 10 million out on purpose like you know the person's signaling

39:44Downtown Josh Brown:but right now the pricing the price with a few obvious examples it's not like that leveraged loan market is in distress it isn't it's not like there are these massive discounts but the narrative gets sucked in and pushed out so quickly i like the equities better than the products would be my would be my comment oh for sure i would like the equities better i'd rather be a gp that's i mean if i could buy kkr and blackstone like 25 i got like pitched a year ago from somebody on a private credit pocket and i was looking at it was like it was like unlevered um 13 private credit return and And I was like, sorry, I don't want to be like the annoying client, but who's lending to me at 13 % unlevered?

40:26Because like how many, I mean, what is this? Is it like nail salons and orange count? Like who needs 13 % from me? Like this math doesn't make sense. So like the stocks are probably, you know, a two-year view, you know, better.

40:37Michael Batnick:But the stocks are cut in half. The private credit is still trading one for one. That's my point.

40:41Downtown Josh Brown:You're not getting a discount in the underlying. You sure are getting a discount if you come in at the GP level, buy the stocks. So, all right.

40:49Michael Batnick:You want to do this chart with the highs? Yeah. So part of the narrative over the last couple of weeks is, yeah, we're hitting all-time highs, which is awesome. Feels good. Feels better than being down. But there's not a ton of stocks making 52-week highs. So this chart is from Jason Gepford, sentiment trader. So he's looking at the S &P 500 return after the first record—it's specific, but whatever. After the first record high in one month and under 5 % of issues are at a 52-week high. That's kind of odd, under 5%. And it's a mixed bag to down. It's not great. Positive 33 % of the time, one month out, 33 % of the time, two months out, 42 % of the time, three months out, six months out.

41:31Michael Batnick:I mean, these are not great numbers. And it's not like one time. This happened, oh shit, in 29, all right. 83, 90, 93, 95, 2000, 15, and 20. Do you want me to shit on this? Yeah, please. Go ahead. Okay. Okay. I'll just start by saying I don't think this kind of stuff is helpful for predicting subsequent return. This is not statistically significant. The market's way more concentrated, different than it used to be. You guys are financial advisors. I'm not. But I can empirically show you that any kind of breadth metrics do not effectively help you make money. They're usually volatility gauges. So if I were one of Rob's advisors or Rob, and somebody said, I'd like to time my market entry here, I would say you will destroy value using this kind of data over your career, whether it's VIX or moving average convergence versus - You don't like probabilistic forward return studies in general.

42:21I know this isn't significant. I know it's not. It's all like, how relevant is the 1929 data to 2026? All you really said is that there's some big stocks that are up a lot, and not all of them are.

42:33Michael Batnick:Okay. Good. Good debunk. Let's take a quick look. But I want to just caveat, that could work right now. I'm just saying if you gave me a thousand of these charts over the next few years, I'll take the under on more than 500.

42:44Downtown Josh Brown:I actually don't think anybody invests based on that. I think people use that. You want to be fully invested in equities. You don't want to make one month market calls. I think people use stuff like that to justify something that they're already going to do anyway. When it comes time to buy, I promise you, when it comes time to buy, none of your clients are going to want to buy. So if they were super smart and got out at exactly the right time, they've got to stay in the game. The question is how you're positioning within staying in the game. And I think it's gotten a little tougher because of the index concentration.

43:18You have markets, so you can't kind of pick your spots within that in many cases. And so a lot of times you can use math to marry both technicals and fundamental factors in a way that can maybe put you in a better position on either side of that move. And you guys know better than me, like it all is a function of like how rich the person is and how much assets they don't want. You know, if you got Mr. and Mrs. Rich bags who are 80 with 200 million bucks at Microsoft stock, like they're solving a different problem than some guy. You know, it's all a function. What's the charity? What's the taxes?

43:50Like, so it's really hard to make a blanket statement about that. But like, I definitely wouldn't be deploying saying, like, let me sell my S &P exposure. Let me give us the breath metric from 1929.

44:00Michael Batnick:You might like this. You might not. Tell me if this makes sense to you. John, chart time. Todd Soane shared this. the semiconductor sector is 16 % of the market, the S &P. Energy, healthcare, staples, and utilities are 19%. Talk about touching tips. These things are very close. Why isn't that rational? Why is this not rational? Right now. I'm asking you guys. What is the profitability of these staples

44:33Downtown Josh Brown:and utility stocks versus the -

44:35Michael Batnick:Well, if, okay, I would guess, you would know better than me, that if you add up the profitability, just the earnings, and maybe that's not the right metric, of energy, healthcare, staples, and utilities, especially healthcare in there, it would dwarf semis. But maybe not because of Nvidia. Well, here's the thing. I'm sorry. No, you didn't. I love it. I love it. I didn't mean it. It is, what is happening to forward guidance is really what is the driver. The prices are following. What's the 2030 distribution of outcomes? Yeah. And what's the constitution? The S &P is a quirky index. Like, you know, it's 35%, the grade eight, you know, Broadcom plus the other seven.

45:13It's probably 60 % an AI ETF, semi ETF. I mean, if you take like G, Verova, and Vistra, and Constellation, and Eaton, and Electrification, and Cat. They are derivative beneficiaries, tons of industrials. Well, he said, sorry, it's about the forward expectations. Like, that could be wrong. It could modify itself. But like, yeah, what you just said is semis have been better than energy stocks. Yeah, no shit. so but like is there an upward is there an upward probability you were going to show a chart that i

45:39Downtown Josh Brown:wasn't going to shit on was incredibly low especially from a competitor is there is there an upward bound to to this of course what is it six months before semi estimates uh to prove to be too high okay i have to disclose that we are happy consumers of strategic yeah tredd's a great guy and i like i'm not there's no there's no credit i'm there's a big world lots of people doing interesting stuff. But like, I just think when it comes to like statistical significance or this kind of, it's an interesting observation, but like, it kind of makes more sense to me. Like you said, you asked me a while ago, like, is this the craziest thing you've ever seen?

46:13Like, I've seen a lot of crazy stuff. Not really. It's more crazy to me when like zero revenue stuff goes crazy or, you know, like that's a little bit more weird to me than my crunch rates at four and a half times next year's earnings. The earnings are a hundred percent higher than they were a few weeks ago. And there's a shortage as far as I can see in their core product. And

46:30Michael Batnick:How does a price find balance? Like, I know it's when buyers and sellers, you know, sort of match up. But like, how should investors think about, I can't buy this now?

46:39Downtown Josh Brown:So, SanDisk, Micron, like, how do we show that? Usually, this is just the fact of the matter. The price movement, once it starts, until something knocks it off that trajectory. You say this all the time. I do. I do. And it's absolutely true. You know what I say all the time? And I say this on the show, especially people say, I took a profit. I took a profit. Nothing wrong with taking a profit. And then I look at the chart. Sure there is. You pay taxes. That's a great buy signal. I look at the chart and the chart always looks like this grind higher. And my comment is like, okay, but why today? Why don't you just trail it?

47:19Downtown Josh Brown:If you're nervous, throw it, throw it like a 10 day moving average stop loss, trail it behind the share price and let the market take you out. Why are you deciding that this is over? You know, just evaluate the sell ex post and say, did my sell work versus some comparable basket bait adjusted? And that destroys value. I was not even English. I love that one. I'm saying like, do real work. Like do real work. Evaluate whether that trading decision makes sense. Like I'm, we're all agreeing. I just, you know, we do this for a living. I get people's portfolio. I'm just saying you have a stock that's been going up for three years.

47:49Downtown Josh Brown:Today's the day you took a profit. I'll say it differently. I'll say it differently. Do you think if you buy stocks that were just up a hundred percent today, you'll make more money or should you buy stocks that were just down 50 % the previous one? Up 100, obviously. Up 100, obviously. For sure. Obviously to who? Not obvious to everyone. Who cares what it already did? All you're trying to think about is what do I do today and what's going to happen in the foreseeable future? You care what it already did if it's gone parabolic and you're the last asshole buying it. If it's a grind higher that took time, I can buy that chart.

48:24Downtown Josh Brown:And I do, and I do.

48:25Michael Batnick:Not a stock that doubles in three months. That's different.

48:27Downtown Josh Brown:It's the rate at which it went up. Actually, I'm not saying I'm surprised, so there's no surprise in my voice, but you actually had a good idea there, and we'll study that. We can look at like stocks that have gone up. Oh, I've already done this work. 100%. I will send you my work on the subject. It's called the best stocks in the market. I will not get bullish on a stock that just went from 30 to 60 in a week. I understand it could go to 90, but if you just don't do those and focus on the stocks that climb, that's institutions.

48:55Michael Batnick:You know why you can't study that? because a lot of the stocks that go from 30 to 60 today, that's the meme shit. And that didn't exist in the back test. Okay, so we can study that. We can study every stock ever. No, no, no. I'm just saying. Don't challenge me. I'll make some stuff that makes sense. My point is,

49:09Downtown Josh Brown:the Reddit boards were not here in the 80s. Can we do something that you just wrote up? Spin off playbook? Yeah. Okay. This is original Adam Parker research. All right. Variant. I'm going to quote you to you. and then I'd love for you to, I'd love you to go off, King. Hopefully this isn't as bad as my healthcare call. All right. No, no, no, no, no. You said in 2025, the median spinoff reached a 26-year peak transaction size of$3.3 billion across 11 transactions. So far this year, only one spinoff has been completed. Comcast, spun off, Versant. Right. Okay. Channel you and I both go on. That's right.

49:51Downtown Josh Brown:But two have been announced. MSGS and GPC, which you'll tell us about. Several more are rumored. 20 spinoffs were announced in 2025 that have yet to be completed. And six of these companies are mid cap or larger. In today's research, we provide context around the spinoff performance, analyze historical market reactions and supply our playbook for the future. I want to say one thing before you go. What is a spinoff? I love spinoffs dating back to my time as a retail broker, telling stories, begging for money. we pitched the parent companies of spinoffs ritualistically almost didn't matter what it was because the pitch to the people on the other end of the phone was you own three com guess what you also going to get palm like that would be and people what way they get people love catalysts i get to love a catalyst and i get two stocks for the price of one they didn't understand the fact that the price of the parent would adjust on ipo day they just love they love the idea

50:51Michael Batnick:Remain Co. Wait, Rob, for Adam, for real, I know I have a problem. Adam, why do people, why do companies spin off companies? Usually I think the primary - Unlock shareholder value! Would be a tax reason, right? It's usually a tax reason. So like, if you, meaning like if I'm, we both used to work in Morgan Stanley, if I'm Morgan Stanley and I sell Discover because I made a ton of money on it, if I sell it to somebody else, I have to pay taxes on it. If I spin it, there's a massive tax. So there could be, I would say that's the primary driver, but it could be unlock value you think there's an underappreciated asset it could be that there's a

51:26Downtown Josh Brown:new management of the spin code which would be more focused on that one capital structure optimization disynergy like there's a list but valuation but I would say yeah I would say taxes are usually the driver now I guess like there's there's a lot of things first of all like what you used to sell I would say I can empirically show is not a good idea the spin codes do better than the main codes I'll go back to 1998 and apologize to people. The spin codes typically on average do better than remain codes. But, you know, it's an interesting point you're making. You made me think of something really kind of interesting, which is one of the signals that works in quant, and it's kind of pesky and it works, is a signal called low price.

52:06So we think about how stupid that is. Like low price means it's no denominator. Like just generally like stocks with a lower price, stocks with a higher price. And you could study that. Because retail people like to buy low price stocks. I think it's like$2 is better than$4, independent of like denominator. Yeah, buy low. So you're like, you're going to get two stocks instead of one. It's kind of funny and probably used to work. It did work. Yeah. But recently, in the last decade plus, since there's been like computers, you know, the spin codes usually do better because typically when they spin them, they know the numbers and the estimates are pretty achievable for the next couple quarters.

52:42They have a path toward margin expansion or something the market likes. And usually they're spinning something in a different industry. So, you know, there's some, some rationale. I think, you know, we have a lot of clients that are law firms and, and boards and managements of companies. And I think they're just all looking to unlock value. If you're a 40, 30, 50 billion market cap company, 20, 30, 40, you're sort of thinking like, is there a plan I can get like big? Can I get to a hundred billion someday? How do I do it? How do I unlock value? And so you're just looking at transactions. You're just saying like, can I buy something?

53:08Can I sell something? Can I do something with my capital structure? And I think more importantly, if you're a good person, you You probably want to be perceived as a good steward of capital over your tenure managing the company. So I think spin coals are topical. So you're saying the spin is better than the parent or the parent's better than the spin? On average, the spin's better than the remain co.

53:24Downtown Josh Brown:But on average is tricky because some of these are so specific. Generally, you want to buy the spin co, not the remain. Okay. Yeah. I mean, it makes sense to me just anecdotally thinking about some of the big winners from spinoffs that I like. Zoetis coming out of Pfizer. G. Vernova. G. Vernova's a monster. Like some of these I think of are 10 baggers. And I remember what they came out of. The original 12-month performance out of the UTX spin where you got, you know, Carrier and Otis. Sandisk was a 2025 spin or 2024? Maybe. 2022, I think. Yeah, a couple of years. Okay. I mean, this is. But we just think generally, like if you're a human being analyzing stocks, like where can you add value?

54:05Machines are going to kill you in a lot of places. But humans are going to add value whenever there's like a management decision making, creating or destroying value. So I love analyzing stuff like M &A. Can we show your charts? Can we show? We got them. I know you had any.

54:16Downtown Josh Brown:All right, John, let's go through this. You could just narrate for us like briefly what each of these. I'm surprised you find this is super interesting. I just, I mean, thanks for any time you throw our work on the screen. Try that, ladies and gentlemen. I'm all in. Thank you. All right. No, I just, I guess I just think that like the law firms and the bankers are pitching management teams on doing stuff. and one of the things that they can point to success for is spinning. And I'm just surprised there haven't been more. You can tell on the left there's been 20, 30 of these things a year and there's only been a couple recently and I just feel like there could be a wave of these things going forward.

54:50Generally, mid-cap companies do it, not mega-cap companies. It's kind of the usual. Look at the returns.

54:56Downtown Josh Brown:Spinco is black. Remainco is blue. Yeah, maybe – I don't know what the next slide is. Can you show me what else you download? A couple more maybe. Flip ahead. How many did you put? Every single thing that you ever did. Keep going. Keep going. and I'll show you the written one. Even the ones you didn't publish, I found them. One more, keep going. We'll see what you have. Keep going. So I think there's like a line chart. Yeah, the one on the right here is the mean industry group relative return. So this is how the stock did versus its industry. Because I didn't want it to be like Sandisk was awesome and you're not normalizing for the industry, right?

55:23So the black line is the typical spin call performance and that x-axis is the number of days. So like kind of 250 trading days in a year. So two years out, the average spin beats its industry by 10 % and the average remain kind of lags by a couple. I mean, that is statistically significant. Yeah, it's a real number.

55:38Downtown Josh Brown:And that's robust across sectors. Pretty much, yeah, pretty much. I mean, okay. Yeah. Love it. Well done. Well done. Now, Rob, would you like to unveil your research on spinoffs? We don't have that in the bag. It's trivariance research. No, but you know, whatever. Why would we do it twice? I wanted to ask you about some of your favorite stocks this summer. um so let's you you you and your team gave us a couple to talk about let's let's hear what you

56:06Michael Batnick:hold on we're skipping spring is this like these are only going to work in the summer

56:09Downtown Josh Brown:yeah only for only for the summer i don't know i don't know if i can operate with that level of precision however i think it's a balanced way to think about how you invest at this time in possibly going in the summer and it's a marriage of you know putting together the highest conviction names that are at their all-time highs. No question. Married with some beneficiaries of that in energy, NRG specifically, and married with energy producers that I think could benefit from further crisis in the Middle East. And then for the sake of Adam, we put in Gilead because we think you got to have a healthcare name in there.

56:56And so you're putting weight on two different skis and adding something a little different that I think is reasonably attractive.

57:03Downtown Josh Brown:Yeah, Broadcom here. This is from your team. King of custom silicon, data center networking infrastructure, positioned to win as hyperscalers spend more. I mean, this stock has obviously been a huge winner. I know you guys have made a lot of money with it. You still like it here? We do. It's the object in motion stays in motion. They're on track for 60 % revenue growth this year. They have industry-leading profitability. They're a leader in both custom silicon data center networking hardware. The market is not stupid. Could you have more? Taking this stock to where it's taken it. No, not at all.

57:39I think where the market was stupid was in April of 23, where you had all the other names doing what they were doing, and this one was left behind, and it was trading as a teenager. Oh, my God. I just said it's at a trillion. It's two. Yeah, it's unbelievable. Lamb Research. NVIDIA is 4.8. I love this.

57:58Downtown Josh Brown:I love this stock. It's up. We wrote it up for best stocks in the market last August. I think it's up 170 % since then. I want to point out, we wrote it up at an all-time high. People were angry. Like, now you're saying you like it. It's up however much. It's up another almost too much. I always like stocks at higher prices than I used to not like them. It's up 297 % over the last year. I mean, they basically control their entire business. They're quasi-monopoly. They're essential in the chip manufacturing equipment. What is NRG? So NRG's a derivative beneficiary of what's happening in AI. Power's the bottleneck.

58:39You know, Vistra Energy as well. We were on Vistra. We had such a move. It was, I think, the number one performing stock. I'm trying to think of the year. VST, that thing. It was insane. And we bought it in January. At the end of the year, it moved so much that we decided to diversify because NRG was lagging. So we kept Vistra. We added NRG under the same portfolio theme. It's down from its highs in February. It's down about 20%.

59:05Downtown Josh Brown:It's taking natural gas and getting that into the electricity that the data center needs. They need it. And they're big in this bring your own power deals where they sell directly to the data centers, which is kind of a unique and novel strategy. And I think it's going to work. And it's trading at 16 times right now. APA. APA is more of a - Blast from the past for me. Yeah, just an E &P name. It is up 58 % year today. It's off 14 % from its recent high. Do you need Iran to stay f***ed up to stay long this stock? Or do you like it either way? You need things to not open quite as quickly. I think this is going to be a beneficiary of America doing what we're doing from a production standpoint.

59:53And it's a great combination of a lot of diversified production across regions, products. They have a healthy total yield, 12 % between buybacks and dividends. It trades at seven times. It's crazy. This is an interesting business to us. And then lastly, Gilead, which has - You did that for Adam? Well, yeah. Diversification.

1:00:17Downtown Josh Brown:Diversification. No, the stock looks great. It's actually been a strong, in this group, the group has sucked for a while. But this is one of the winners. I think you have to have some exposure in this space. Again, this is the upgrade in the quality. They're dominant in HIV. They're doing unbelievable things in oncology. They have 50 drugs in various stages of development. They're enormous, and you have to be enormous. to be able to do what they're doing. And there's upside in their pipeline based on progress. So we tried to think, I asked the team, this is not me. I'm going to take no credit.

1:00:55This is Jay Peters. This is Cameron Dawson. This is Brian Nick, our investment team. They're super. And I asked him, I said, I want a balanced view where you have options. We can ride the current wave we're riding. You have optionality to the crisis. So three names ride the current wave, right? power and then the two semis. You have option to crisis in the Middle East. And then we get some stability where you're not going to have a lot of price performance. We want a healthcare.

1:01:22Downtown Josh Brown:Are you surprised that the healthcare stocks aren't getting any credit in advance of being perhaps the biggest beneficiaries of utilizing AI? So look, it's been - Why aren't people figuring - It's been a barriers-overweight call. It's been a terrible call, unlike the software one. This It's been a bad call. And I'm trying to figure out, like, what could untether me from the thesis. I'm trying to be, like, intellectually honest. Like, could anything change my mind? Long term should be no, by the way. Yeah, and I'm worried about it because I don't want to be the jerk. Is that your thesis? That AI is going to be bigger for these companies than most?

1:01:59So what the market's telling me is there's a 0 % chance healthcare is the best performing sector over the next five years. And I think it's, like, 30 % or 40%. I just start with, like, I want to arbitrage that difference. I think the whole point of all of this shit is that we live longer and we're more productive while we're alive. So if I take that premise, I don't understand how healthcare revenue per share is going every year, 30s in a row in SB500. We have lots of old people that demand services, tools, diagnostics, drugs, managed care, hospitalization, whatever. That's steady. We have tons of businesses with lots of employees, low margin, and lots of revenue, meaning as long as I can predict my customer employee behavior, margins should go up.

1:02:35It's a classic AI productivity potential. They do, as he just pointed out beautifully, have low correlation to AI semis. So you don't want to buy low correlation, meaning like they suck, but there are a bunch of healthcare stocks, Lily and others that are up 10 % or more in the last six months and are uncorrelated. There's a good stock. So there's some of them could work. I'm very tethered to the thesis and bullish. And I do think - It makes sense to me. Which names do you like? It's just not working. McKesson, Cardinal, Sincora, Quest, LabCorp, you know, even stuff that blew up recently because like you're still young.

1:03:04How about the big one? You can't go to the doctor and not end up sending something to LabCorp request. There's zero chance they won't grow above GDP. And there's still dudes with like when we were kids with the glass microscope. But the thing like the efficiency potential is massive. Yeah. Right. And I would even say managed care. UNH had a good point this week. Stock was finally up. Like I run a business. Let me tell you. I'm not brave enough. Let me tell you who raises pricing on me 9 % every year. And guess who doesn't give me 9 % more services. So like I think they're going to earn more money in 2030.

1:03:31And I don't think there's any political will from either side to change the algo. If you tell me that some party's going to come in and implement massive austerity, then I'll change my mind. So it sounds like healthcare away from big pharma. I think there's still some good big pharma. I mean, I'm not against, you know, Lilly and Merck and other stuff. Lilly's unbelievable. But I'm not embedding yet. What I'd like to do is be correct on a five-year view. And then there's all kinds of, like, computational chemistry ETFs that retail guys are buying. And I'd like to sell my correct overweight into that euphoria five years from now.

1:04:04But that's – a lot of good shit's got to happen before I get to that call.

1:04:07Downtown Josh Brown:I want to ask you about New Edge and founding the firm. And Adam, by all means, chime in. Like when I first met you, you were UBS. You had one of the biggest teams in the firm. You were not talking about going independent, but I'm sure you were thinking about it as most people at large firms often do. what have you learned since coming into the RIA space obviously you've built a massive platform big firm hired a lot of people met a lot of people what are like some of the things that you you think uh you've you've learned in the last couple of years since doing that well first off four years ago uh five five years okay five five years ago and we've grown from eight billion to 105 billion in assets so amazing it's been it's been a it's not as good as micron It's not as good as micro-economics, but it's pretty good.

1:05:01But I think the things that I've learned are, one, there's a lot of noise in the ecosystem. Not everybody says it can do what they say they can do. And what that does is it creates a lot of paralysis in this migration that we're seeing from advisors at big firms to advisors at more entrepreneurs. I mean, look at what you've done here. I walk into this office and think, oh, my God, this is great. I mean, you're adding value in a different way and you're adding value by sitting center. And when you're a client of the street versus a competitor of the street, you have a structural advantage that's very meaningful.

1:05:44You don't have one arrow that you can pull out of your quiver. Let's say you were doing a loan for somebody. You're going out to multiple providers. You have tools.

1:05:53Downtown Josh Brown:So if you're sitting at Goldman Sachs, you're doing that loan through Goldman Sachs. If you're a customer of Goldman Sachs, give me a quote. Okay, I'm going to go to RBC, see what they say. You're not with them. Yeah, I agree with that. You're across from them. And yet, NewEdge is a gigantic client of Goldman, JP Morgan, all the different banks, all the different capital markets groups, all the different asset managers. And I do think size and scale matters. There's something else that's kind of happened in the industry. And I don't want to mask the good fortune and luck that I had in doing this in 2000, just as this was taking off at the higher end, not 2000, 2020, at the higher end of the market during COVID.

1:06:34It looks easier than it is.

1:06:36Downtown Josh Brown:Oh, I couldn't agree more. Say more about that. And you need a good partner. So I did not start NewEdge. We did an LBO of a business with a tremendous partner in Parthenon Capital. And that operating business threw off cash flow. Again, it was an infrastructure business providing institutional-grade infrastructure in the 401k industry to Fidelity, John Hancock, Paychex, Creative Planning. And they had a great business, but they wanted to do something else. So we bought the business, and we built a wealth business on that same infrastructure that was bulletproof, cheating, starting halfway up the mountain.

1:07:18I didn't have to go in and worry about, dude, I had a tech team. I had not only a tech team, but I had profitability to hire the best and brightest. Okay. So the good fortune that came from that simple decision of not worrying about how my computer was going to turn on in the morning. That's why I love these entrepreneurs that do this grassroots and bootstrap this unbelievably hard.

1:07:40Downtown Josh Brown:It's way harder than it looks. And now you have partners that can help you get from A to B. So when I think about what we do is we have a fully evolved ecosystem where you can join us and use the platform turnkey. Here's everything. You got all the support, the compliance, the anything you need. Or we are going to sponsor you in your entrepreneurial endeavor. And we have the best business in the world to do that. That's run by my partner, Alex Goss. We also had some very fortunate hires and partners in this business. Chuck Worden, who was the founder of the business that we bought. Parthenon, who's the private equity firm.

1:08:17John Strauss, who ran every major private bank on Wall Street. J.P. Morgan, Morgan Stanley, UBS, ran them all. Bob McCann joined us. So we had UBS and Merrill Lynch. So we had these credentialed folks that when you're looking off the cliff and you're an advisor and you're getting ready to jump, you still can't see the bottom. Okay. And you want to know that there's knowledge, know-how in people down there that are going to help you navigate every decision, whether you're starting your own thing on our platform that's run by Alex Goss.

1:08:55Downtown Josh Brown:To that point, like somebody coming out of an environment like a Bank of America or a Morgan Stanley, there might be things they don't love about those banks, but the one thing that's undeniable is they have a ton of support. Like they don't wake up in the morning. Like it's my whole. That's what was missing in the marketplace is this fully supported DNA. And so I'm no longer the CEO. You introduced me as the CEO. I am the founder. Okay. So I made a big hire last year. You hired somebody to talk to, to speak to that CEO role so that you could be Rob Seachin. I can be Rob Seachin. I did the same thing.

1:09:34So it is a great thing. We hired James Jesse. You know him from Morgan Stanley days, I'm sure. James Jesse ran Morgan Stanley International, but then he went with Devesh and helped start Iconic. Okay? Wanted to come back East Coast. That was our good fortune. We also, because of the profitability from the business that we bought, were able to hire people like Cameron Dawson, who I think is one of the most fascinating thought leaders in the industry. So when you marry all those things together and you can create an entrepreneurial environment that is doing the right thing, and trust me, net present value of doing the right thing creates more value than anything.

1:10:16So great technology. They're not rolling out enterprise Anthropic. Not a single firm yet. They're trying it. We are fully rolled out. They're not using tech that betters price, execution, visibility, and assets. They're not partnering with Adam. They're not partnering with Tom Lee. They're not working with families. They're not surrounding those families with high-end intellectual capital. And they don't have access to each other's shit. And we have access to everything. And so when you have a better mousetrap, it is undeniable that the migration will happen when there's more confidence and less confusion.

1:10:56But everybody tries to tell that story, and not everybody can deliver that story. And as such, advisors haven't moved in mass yet. Once a few of the big ones fall, as you know, Josh.

1:11:08Downtown Josh Brown:You think the wire house exodus hasn't even really started? It's here. Wow. So the corner office. I know five guys that were$5 billion plus teams, duos, just at one firm that have left in the last two years. How many more can there be? That started about two years ago. you can't believe our pipeline. Yeah. You just can't. And the one thing that I would say is firms that can't address the entrepreneur that wants to have their own CIO, not Cameron, and others that want to have that. Yeah. We have those bookends in a leader that is operated in the wires and in the, probably one of the best firms in the independent space and iconic.

1:11:56I think that is confidence inspiring. And I think, you know, we've become a partner of choice. I mean, it's growing. It's 70 % per year.

1:12:05Downtown Josh Brown:If you have advisors in your ecosystem, let's say you had - By the way, I just want to say that was like a highlight of this. Great speech. It was just electric. Yeah. I'm just saying. I'm really passionate about this. No, no, I loved it. I just think like you, I'm not saying the stock part wasn't great, but I'm just saying like the EQIQ combo that just came out from describing this business was electric. That's why I do more of that. I'm about to be serious. You felt it, right? It was all of a sudden a fuse got lit. It was cooking. It was awesome. If you have an advisor who's a card-carrying, new edge, like all the way in, who comes to you guys and says, you know what?

1:12:39Downtown Josh Brown:This has been great, but what I really want is to have my firm under its own name. We do. Have my own CIO. So now you have a place where that person can go where they don't have to leave. Come in straight. So I think that's powerful. Right turn, left turn. We have businesses over here that we bought into card-carrying businesses. Remember, when we buy you in, you are owning the same stock that we did in the LBO. No difference. Not like some of the firms that had failed in the past. We have the advantage of being the vitamin water versus the Gatorade, right, and all this. We second mover advantage.

1:13:16And, you know, it's been pretty powerful to identify the flaws of our predecessors. and what ends up happening is if you just do the right thing for the advisors, meet them where they are. I think you're advantaged in this too, guys. You're a firm that was started by advisors for advisors. That is a huge advantage because why are you going to do something that damages yourself? Now, what I recognized is there could be a better day-to-day nuts and bolts leader than me. I am a champion of the organization. I have one concern. How do those advisors that believed in this field of dreams that we bought and built, how do we drive value for them both in their practice, in serving their clients, and then ultimately in the equity value that they've taken on in our company?

1:14:08And I take that very seriously. And if it means shooting myself, I don't care.

1:14:14Downtown Josh Brown:So this is a very big thing. It's a very, it's a very, by the way, very well done. Thank you. It's a very big thing. At a certain point, you have to make the decision. What is my highest value to the firm? Is it sitting in eight meetings a day and micromanaging 50 people? Or is it being me and bringing in professionals to handle the details? I think no matter what you do, you have to think about that right now. Like, like, you know, obviously it's, I'm a different business and it's a small scale, but like we have guys who like whenever i've become very self-conscious about this when i'm in front of my computer typing and one of the quant guys that works for me is standing behind me i know they're thinking like this guy doesn't know how to use a computer like the best use of trivariance time is not when i touch the keyboard not when you are when i'm physically doing if i am doing something they're like don't do that and so i started realize like all right like we got And it's like, and all this AI stuff too.

1:15:11Like it's, it's like, we gotta be, you know, so I don't know. I, I, I mean, that's an, honestly, I, I never, you like, but I never really like heard you articulate that. I'm not surprised at all, but it was awesome listening to that.

1:15:22Downtown Josh Brown:You like the entrepreneurial part though, of what you're doing. I love it. I totally love it. I don't like, um, you know, you're not one of these guys that's like, just let me do my research. Like you actually enjoy building the business. I like thinking about what the enterprise is going to look like. You know, we have this newsletter business that you know about Trivector. We've got, you know, we'll probably end up doing, you know, some stuff on the asset management side. I'm doing some stuff with investor relations. I do stuff for law firms and boards. I'm joining the board of a public European company next week is when it's official.

1:15:50So, like, I'm just always trying to do new stuff and learn stuff. And I'm like kind of a – I like doing the work and I like talking to people.

1:15:56Downtown Josh Brown:Do other guys who sit in your old seat as chief strategists on Wall Street come to you and say, hey, what's it like being independent? It's a little bit like your conversation you were just having, which is like you don't – you might have disgruntled issues with the big firm and the bigness disease of the big firm you work at. But you're getting a lot from them. But you're also getting a lot. And so when you go on your own, like you're going to be washing the dishes and putting the mayo on the sandwiches the first couple of years. And like you've got to decide like, hey, am I rich enough to take the risk?

1:16:28And if it doesn't work and be like – or whatever. There's like considerations that go into it. Michael and I were literally licking envelopes. like in real life. We don't have a dishwasher at Tri Barrett and like all the young kids don't understand that like I'm the one who washes their mugs and that's like today. That's still like, like so, you know, so like, you know, whatever, like you gotta, you gotta do that. But like at the end of the day, for me, it was worth it. I was a point where I wanted to take a shot and I love it. But like, I love listening to you, you guys talk about, you know, a five-year plan.

1:16:57Everybody does it differently. Yeah. But I don't know anybody that would say, anybody, I want to go back

1:17:04Downtown Josh Brown:I wish I could go back I've never heard it It's like moving to Florida Does anyone say Shit this is terrible You're talking to You're talking to a guy Who's on a 720 tonight No I know Hey last Last thing we wanted to Last thing we wanted to get to BMNR You are Okay so Tom Lee launched What is How do I explain it

1:17:21Michael Batnick:It's an Ether Treasury company Yeah It's like It's like a microstrategy But for Ether

1:17:25Downtown Josh Brown:Alright so Tom Lee launched You You got added shortly after

1:17:29Michael Batnick:And they're Right That's what they're doing Right It's a digital asset treasury company. I think Ethereum's a bit different than Bitcoin.

1:17:41BMNR is BitMine. You know, when I looked at this, I thought this was a charlatans game for a long time. I even shit on it on TV.

1:17:50Downtown Josh Brown:And then you said, let me in. Well, then I started to do some work. I started listening to Tom and seeing the things. You thought micro strategy was bullshit. No, I just thought the whole ecosystem. I was a non-believer. I still think that. Now I'm an evangelist. What changed? And I'll help change your mind. What I'm seeing is a misunderstanding of what certain parts of the crypto ecosystem are. And I think people think crypto is like a coin. It's infrastructure. It's a value-added network that you build apps on. And anytime you drive usage, which is why BMNR bought Mr. Beast, disability usage to the network, you can profit from the network.

1:18:38And when you think about what's happening in traditional finance, it's fragmented, it's intermediary, and it's slow. And it doesn't run 24 hours. And every one of them is trying to figure out how do we get to tokenization, digitization, and they don't know how to do it. And Ethereum flips that. It's the safest of all of them. It's programmable. It's real time. It's always on. And BMNR is a holder, and why they got me involved is there's a huge gap between institutions that have capital, and they need help to translate it, structure it, and make it usable for them in traditional finance. And the next phase isn't about speculation.

1:19:31It's about integration of the financial services platforms onto an entirely new architecture. Okay? And when you start to see what's happening in that community, and you start to see how it's being ignored by TradFi, is what they call it. DeFi being ignored by TradFi. and there's a bridge of the gap between the two. I keep hearing this.

1:19:57Downtown Josh Brown:The New York Stock Exchange just says they want to be the capital of tokenized assets, right? So they'll build that on Ethereum. They will. So why not just buy Ethereum if you're bullish on it? You can't. And that's the beauty of it, right? That's the beauty of it. Because what you're becoming when you buy, let's say, BMNR, and I'm not promoting BMNR, any source of Ethereum, but that's what I know because that's the company that I'm the lead independent director on. They are doing things so that you can earn what is called a staking yield. You can make investments into businesses that are going to be beneficiaries.

1:20:33They call it moonshots. They invested in Mr. Beast. Got a lot of credit.

1:20:37Downtown Josh Brown:So if you own BMNR, you get the benefit, if there is one, of the investments that the company is making. Yes. It's not just the price of ETH going up. And by the way, when you validate, and they have a whole business that they call Maven, which is a validator of transactions and you get paid to validate, you are getting a 4%, 3%, 4 % yield. And so - You're earning the gas fee. You're earning the gas fee. As a node. So you're becoming a toll road. And then what you want to do is ensure usage. And that's why I use this as the example. Apps are being developed. So layer zero is kind of the foundational layer.

1:21:18Security and transactions happen on that layer. Then layer two, or apps or dApps is what they're called. Sorry, I didn't mean to spit on everybody, are being built to do functional things, specialty nodes on that. And it's going to happen quicker, more safely. So when you think about the threat that AI has to everything in technology, wow, Wouldn't it be great to have this immutable safety layer that sits beneath that? And so I'm going to tell you, I believe in this wholeheartedly. Now, there's others like Solana that are trying to do this more cheaply. But the bulletproof version of this is this.

1:22:04Tom Lee sees around corners. We already know it. He's seen this years ago. So Ethereum as an asset, you can own the token, which will give you that yield to your point, Michael. Adam, how out are you? He's not in yet. He's not out. I'll go with a crazy pitch of a different kind. What does that mean? I'm going to pitch a stock of a different kind. I think NVIDIA will be worth$10 trillion market cap by the end of this decade. What is it now? 4.8. Okay. And I think like it's misunderstood a little bit. I think it's a sector. It's not a stock. I think it's really hard to get off the CUDA platform.

1:22:42I think it's really hard to get off the CUDA platform. I don't think that you can do anything modeling-wise and AI of scale without... Everyone working in AI is on that platform. They lost money for 15 years coding this CUDA stuff. The amount of install base that's there, they're moving full speed ahead. It's just going to be hard to get off it. They're going to grow 15 % a year for five years. The revenue is going to double at least. The cash flow is massive. And anytime you get one of these like 12 month periods where it like pauses out, it's a good time to buy some before it like flies. I'm not selling any.

1:23:13Yeah. So I, I, I just. You and me got on that. I don't see. Never selling it. Like my, my, my view is like, yeah, sure. Tactically, I don't like it when they blow out the quarter and the price of sales comes in and tax. But like, I just think they're going to grow way faster than people think.

1:23:30Downtown Josh Brown:Do you think they're going to ever buy back a meaningful amount of stock? It seems like it's the lowest valuation NVIDIA has traded at in a while. Just keep investing upstream and downstream. The trade is the power side, right? Like we talked about earlier. So they got to make sure. But like how can you function and do anything without their infrastructure? So like just think of it as a sector. Like stop telling me it's$4.8 trillion and it's bigger than the energy, healthcare, and utility. That doesn't matter. What matters is it's a sector that's massively fast growing to the technology that matters the most.

1:23:56Downtown Josh Brown:The bare case on NVIDIA was all these deals are circular, blah, blah, blah. No one's saying that anymore. The bear case is now Google's… How about all the big companies? The bear case was, I think, one of the bear cases that I don't like is like, oh, all the CapEx comes from hyperscalers, and it's like six companies. It's like, no, it's not. AWS, like Amazon isn't one company. It's thousands of companies. So it's not the right way to think about it. The bear case is that TPUs from Google and other competing things will be… They're not on CUDA. It doesn't matter. It's like, it's great. Like, you know, look, those of us who have followed Jensen for 25 years would say, like, sure, there's a lot of, like, bullshit that he spewed in the 25 years.

1:24:37Like, I'm not saying, you know. But, you know, I think there's really somebody, just the installed base of folks who are on this platform and the investors they made up and downstream. So, like, yeah, I don't see how you could be bullish on the S &P 500 in a three-to-five-year view and not be bullish on Nvidia.

1:24:53Michael Batnick:Well, I was going to say, if you think Nvidia's$10 trillion, then surely you think S &P's going to$10 ,000. Yeah. They're both, I wrote, the S &P was under 10 ,000 three years ago. I wrote three years ago, 20, 30, 10 ,000 S &P. And I think it's not even conservative. It's not even like weird math. It might be conservative. I mean, where are we? You're talking 30, 35 % in four years. That's like, that's the S &P long-term returns at. Right. All right.

1:25:16Downtown Josh Brown:Just sounds like a headlining number. Guys, did we have fun on the show today or what? We did. Hey, I heard at the beginning of the show with Tom Lee, you were making a little fun of me with my accent. I'm wondering where it was from. He does get Rob Seachet. I do an amazing situation. Do it, do it, do it. Come on. I heard at the beginning of the show with Tom Lee, you were making a little bit of fun of me. Did you get, by the way, did you get, well, you're from Pittsburgh. It makes no sense. I am from Pittsburgh. Why do you talk like your foghorn leghorn if you're from Pittsburgh? I don't even understand what, you know, we haven't got to see here.

1:25:49That's got to be the title of the, you guys are always looking for a title. I think foghorn leghorn, I think you just got it. So what happened is I got very confused. I'm allowed to do it. I got very confused. I grew up 26 years in Pittsburgh, and then I moved to Connecticut, and they didn't mesh well. So I was a yinzer that kind of de-yinzed my language. Josh, I win our side bet on the number of times he was going to mention Tom Lee on this call. I had nine, and so I get a little big.

1:26:20Downtown Josh Brown:Can I say one thing to you? This is a true story, and I never told you. You and I have had some of the all-time great brawls on Halftime Report. All in good nature. Is that right? Yes. I didn't know that. I know that because I keep track. I write them down each day. We've never had – you and I have never had one. No, no. You and I are golden. No, but Rob and I are good, too. Is Rob a dick? Is that what you're saying? Is this coming out? No. Is there a lead? Sometimes – listen. Is this where I get body slammed? Yeah, what's going on here? No, no, no. You've been on the show for a long time, since we were in Englewood Cliffs.

1:26:52Downtown Josh Brown:Yeah, 13 years. There was one time where you were saying something, and I wasn't even on the f***ing show. But I was, like, tweeting at the judge. And the judge texts me, goes, why don't you come on, and you and Rob can have this. You and Rob can have this. I don't know if you remember this. I was, people won't believe me what I'm saying. I was literally in the gym at a hotel. I must have been in like Arizona or something. So I remember looking outside. It was a sunny day, 12 o 'clock in the afternoon. I swear I was working out. I swear to God. I go live on the show. Other people are in this hotel gym looking at me.

1:27:32Downtown Josh Brown:Wearing like Lulu. And I'm debating you. Anyway, this is the point of the story. Somebody that I'm friends with texted me and said, when you and Rob go at it over a stock, nothing ever besides a stock. He goes, it reminds me of fighting with my brother. You guys are like brothers. I never told you that story. That's really cool. But I truly, I think you're a brother. I really do. I appreciate that. I love the debates that we have. Me too. It sounds like these days we agree on a lot of things. I agree with almost everything you said today. And thank you so much for doing this show. You know what I agree with?

1:28:03I agree with$105 billion and a lot in the pipeline. I agree with that. I very much agree with that. Do you agree with that? Who can deny the success? Do you agree with that? I agree. Fully agree. Thank you so much. It was really fun being here with both of you. This is a great program.

1:28:19Downtown Josh Brown:All right, well, we're going to come back from dinner. We're going to do the second half of the show. Guys, we appreciate you. I want to let everybody know they should follow Adam and check out Trivariate Research and Trivector Research. Who is that for? Trivector Research is for advisors and individuals. It's a$1 ,200 year. We do a lot of ETF analysis, insights, videos, talk about what we learned from institutions. So I'd love for people to join. Awesome, dude. And if you want to learn more about New Edge, go to newedge.com. www.newedgewealth.com. Newedgewealth.com. All right, guys. Thank you so much for watching.

1:28:52Downtown Josh Brown:Thank you for listening. Special thanks to Adam Parker. Love being here. Rob Seachin. Thanks all. See you soon. Take it easy. Is that good? Yeah. What a blast. That was a fun show.

1:29:12You