The Compound and Friends - CEOs and Trump with Jeff Sonnenfeld, quantum computing, Hawk Tuah coin

Episode Date: December 11, 2024

On this TCAF Tuesday, Josh Brown is joined by Jeffrey Sonnenfeld to discuss: President Trump's economic policies, his relationship with the business community, the impact of tariffs, deregulation, and much more! Then, at 40:20 hear an all-new episode of What Are Your Thoughts with Josh and Michael Batnick with a special appearance by Caleb Silver, Editor in Chief at Investopedia! This episode is sponsored by Public! Visit: https://public.com/wayt and lock in a 6% or higher yield with a Bond Account. WAYT survey: https://www.surveymonkey.com/r/ZH7WNM7 Sign up for The Compound newsletter and never miss out: https://www.thecompoundnews.com/subscribe Instagram: https://instagram.com/thecompoundnews Twitter: https://twitter.com/thecompoundnews LinkedIn: https://www.linkedin.com/company/the-compound-media/ Public Disclosure: A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 investment-grade and high-yield bonds. As of 9/26/24, the average, annualized yield to worst (YTW) across the Bond Account is greater than 6%. A bond’s yield is a function of its market price, which can fluctuate; therefore, a bond’s YTW is not “locked in” until the bond is purchased, and your yield at time of purchase may be different from the yield shown here. The “locked in” YTW is not guaranteed; you may receive less than the YTW of the bonds in the Bond Account if you sell any of the bonds before maturity or if the issuer defaults on the bond. Public Investing charges a markup on each bond trade. See our Fee Schedule. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. See https://public.com/disclosures/bond-account to learn more. Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Ladies and gentlemen, welcome to the compound and friends. Tonight's show is brought to you by public. Time could be running out to lock in a historical yield at public.com, but you can lock in 6% higher yield with a bond account. So public does all this stuff for you. If you're looking for an alternative to cash, you're willing to take a little bit more risk. 6% yields are probably going to be better than whatever the yield is on cash once the Fed is finished with its cutting cycle. The bond account is treasuries and investment grade

corporates. They do all the work for you. They handle the tickers, the QCIPs, the allocation. It's really easy and I think it's something worth checking out. You can go to public.com forward slash W A Y T as in what are your thoughts? This has been brought to you by public investing member FINRA and S I P C as of 926 24. The average annualized yield to worst across the bond account is greater than 6 percent. Yield to worst is not guaranteed, not an investment recommendation. All investing involves risk. Visit public.com slash W A Y T for disclosures. Okay. Tonight's show is pretty cool. We talked to Professor Jeff Sonnenfeld at Yale, and Jeff is one of America's foremost authorities on all things, chief executive officer.

He speaks with CEOs in every industry, every region of the country. And he wanted to talk about how CEOs are preparing for the next Trump presidency. There's a lot of inside baseball stuff in that conversation, things that you've probably never heard before. And I think you'll get a lot out of it immediately following. It's what are your thoughts with Michael Batnick and I, you'll get a lot out of it immediately following it's What are your thoughts with

Michael Batnick and I? And we had a lot to do tonight. We talked about quantum computing, because of course we did. We talked about the new momentum stocks. We took a look at high beta versus low volatility. Some commentary from BlackRock about the end of boom bust cycles, which I thought was really provocative and I pitched Michael stock. Michael hit me with a mystery chart.

We talked about the Hawk to a coin. So much stuff in here. Hope you enjoy it. Thank you so much for listening. Duncan and John will send you directly into the show starting now. Welcome to the compound and friends. now. and should not be relied upon for any investment decisions. Clients of RIDHOLDS Wealth Management may maintain positions in the securities discussed in this podcast. Okay, we are here with Professor Jeffrey Sonnenfeld.

Professor Sonnenfeld is the Senior Associate Dean for Leadership Studies and Lester Crown Professor in Management Practice at the Yale School of Management, as well as the founder and president of the Chief Executive Leadership Institute, a nonprofit educational and research institute focused on CEO leadership and corporate governance. I've asked Jeff to come back and tell us a little bit about what he's hearing, what he's seeing in terms of CEOs of publicly traded companies preparing

for Trump 2.0. Professor, thank you so much for coming by. We really appreciate it. Thanks Josh. It's an honor to join you again. The loyalty and vocality of your following is fantastic. So I'm thrilled to join your community. Yes, the compounders love you.

Um, let's start with the tariff announcement. So we all knew something was coming. We all knew tariffs would be central to the Trump vision for how we quote unquote, make America great again. Again, uh, there was a tweet or I think it was on truth social, uh, about a week ago that I thought would have a bigger impact on the market than it actually had. But the stock market shrugged that off within, I don't know, 12 hours.

And it just seems to me that everyone on the street is now starting to figure out, oh, here's the story with the tariffs. It's really more of a negotiating ploy. It's the way that he opens up these conversations with the world, and then he allows leaders to come and negotiate their own separate situations. Am I reading that Wall Street response right in your view? You are.

There's a lot of subtlety and nuance that you captured with amazing efficiency, because you're exactly right. The CEOs instinctively don't like the tariffs. However, they selectively do appreciate certain ones, and we can talk about which ones they are. And then there's the overall approach that Trump has negotiated. The CEO community, the major CEOs of the largest companies throughout American history or just the last 150 years since the creation of the Republican Party have overwhelmingly been

supportive of the GOP, the Republican candidate, so much so that publicly, the Fortune 100, since Fortune's been around and the predecessor lists of the largest companies have more than half of them have regularly endorsed vocally, but financially supported the GOP candidate. They came to a halt in 2016 and went to zero. In 2020, it was only two. And right now until Elon Musk signed on post the horrific shooting attempt, and well, it was shot, but an assassination attempt in Butler County in July this summer,

there was nobody, including Musk. Then now, Steve Schwartzman, of course, was there, but it's not a Fortune 100, 200, 300, 400 company. It's Blackstone's a hugely significant force. But they were leery. They were leery before, but they came rushing to him in 2017 in January when he came into office because they're patriotic and they also recognize there are many fine qualities to work with

him that they could try to develop. That's where they were now, the trade issues before, when they saw what happened. So there's some history here, Josh, just on tariffs and trade issues. In 1962, there was legislation, well, predates us on this, but it was the Section 232 of the Trade Expansion Act that gave the president national security opportunities to not rely on an act of Congress to make trade sanctions happen. Wilbur Ross then, who is a good friend of mine, as periodically President Trump has just posted something

very favorable to my surprise on me on Truth Social two nights ago, is we actually have a library that Wilbur Ross, who are right behind me, dedicated. He came out with some tough metals import that supposedly threatened the national security in March of 2018 with a 25% tariff on steel and 10% on aluminum. And a lot of this was going after China, but actually NATO has been doing a lot of, you know, some of the EU countries doing a lot of metals dumping here. And the Republican party used to be very protectionist until the early 1950s. Then they flipped Senator Charles Percy,

who was the first CEO Senator from when Bell and Howell's real company, led the party to switch and they became very free trade oriented. Well, these trade sanctions kind of backfired because China stopped buying grain and that's what's been repeated a bit lately, but that was the context.

And Trump to the surprise of many wilted. He has a fantastic special trade representative and yet because of the blowback of China's stop buying $300 billion worth of goods that we put on China is that they stopped buying beef and pork and corn and soybeans. Farmers revolted, so we kind of quietly backchanneled and they said they'd massively increased their buying of farm products, and we lost everything that Bob Lighthizer was negotiating for fairly toughly. So they've seen that sometimes it's a tough bar and then he's relented.

He did some of the military grade chip issues that actually President Biden intensified were pretty good and selectively we've needed them. And candidly there has been a problem, say with autos getting into the EU, our vehicles have to pay a 10% tariff. Our makers coming into the US, they only have a 2%. However, the way we went about it backfired so much for the Harley Davidson couldn't get product in the EU, not because of inflation issues,

which our economists tell us there'd be 16, 18, some say 20%, but because of reciprocal trade barriers, Matt Levittage of Harley had to shut down, you know, 100% of his bikes of Harley were made in the US. He had to shut down a plant in Kansas City, an open one in Thailand. President Trump went nuts over that and said, don't buy Harleys. What are you doing? What about back? So that led, you know, and only two or 3% of the international motorcycle market are, are Harley's.

In fact, it's all non-U.S. pretty much competition out there. And the Harley is the American icon. It's the logo is the America is the, it's the bald eagle. Like, what are you doing? So yeah, there was some backfires on trade policies. So they think his bark is worse than his bite. But that negotiating strategy to punch somebody in the nose and then everything

else seems reasonable afterwards backfires sometimes. And so they just think it's just, it's more bark than bite and they could be wrong. So, Jeff, it sounds like, here's what this reminds me of. You ask people, what do they think of Congress, the lowest possible rating in the world. It's like infectious disease and then Congress. That's the favorability rating. But then you ask people about their own Congress person, and they tend to be a lot more positive. That's what this reminds me of.

You say to an American CEO, How do you feel about tariffs? Oh, tariffs are terrible. What about in your industry? Well, actually, there are some real trade issues here, and maybe Trump is the right guy to solve them. It sounds like there's some of that going on. Yeah, there is some of that going on. And it's just that we've relented.

And the most important fronts, Huawei, for example, you remember when, because of national security issues, if there was anybody on this call, on this podcast that works for Nortel, they're lying, because Nortel doesn't exist anymore. Any Nortel employee would tell us, this was the biggest telecom company in Canada, that Huawei stole all their trade secrets.

And Mike Rogers, who is a great Republican, he was running for Senate and lost, but he was a congressman, led the Intelligence Committee for Congress to find that in fact the claims against Hawaii by North and others were very legitimate as they've been stealing, but they actually, Trump put in prison, or at least the Canadians at the request of the US, put in a luxurious detention, the CFO of Hawaii, who is the daughter of

the founder of Hawaii. And meanwhile, the Defense Department was horrified about non-proliferation problems with Huawei. Also, but we relented, we let her out because they captured two Canadians unjustly and the whole thing dissolved. So that bark dissolved against a huge trade problem. Similarly with ZTE, an electronics company,

where we know their parts were going into Iranian drones and other weapons and North Korean weapons. Trump was going to shut them down with sanctions. And Xi Jinping complained. Next thing we know, there was a $900 million, or $800 million loan to bail out an Indonesian resort that the Trump organization had from China. Now it turns out when that went public, the Trump organization surrendered it, but they'd already given up the deal on going after sanctions against ETE saying, oh, Trump himself said,

oh, that'll be too severe against China. It'd be 50,000 jobs. What are you talking about? Like, this is a huge trade problem affecting national security the way this the law was supposed to be. So people are confused that in reality, it hasn't worked out that well and going after China going after Canada and Mexico right now, when he talked about the trade deal of the USMCA, the reborn NAFTA deal, that he's attacking the parties on that.

He said, well, wait, but you just said this was the greatest deal ever. Why are you attacking Canada and China, Canada and Mexico over this? So people are confused now. Um, we'll see what rolls out. Bob Lighthizer was a really good negotiator and, um, Peter Navarro, who I actually introduced to Trump, believe it or not, uh, will be part of the trade negotiation team, Peter takes no prisoners. He, although he was, he was one briefly because he was a prisoner recently,

is that he, he has these seven deadly sins. And I think he'll hold the ground more. These seven deadly sins include things like the forced technology transfer to Chinese companies, like all data originated in China has to stay in China. US companies have agreed to that. Peter won't be silent about that. So it sounds like from what you've described, the lack of typical CEO support for Trump from the Fortune 500, it sounds like we've come a long way just in terms of CEOs willing to come out publicly

and say, look, I don't agree with everything Donald Trump says, but he's our president and I want to work with him. Last night at the Dealbook conference in New York, uh, Jeff Bezos got on stage with Andrew Ross Sorkin and the actual quote was he's optimistic about Trump's second term, expressed some excitement about potential regulatory cutbacks. He said, quote, I'm very optimistic this time around. He seems to have a lot of energy around reducing regulation.

If I can help do that, I'm going to help him. We do have too many regulations in this country. Okay, so there's that wing of CEO desire about limiting regulation, deregulation, et cetera. Kara Swisher said Jeff just wants a space contract. That was her reaction. But that might be too cynical. I actually think people like Bezos like some of Trump's policies. You've got Zuckerberg having lunch at Mar-a-Lago last week. You've got the Coinbase CEO doing the same. There's an unfreeze happening.

So it just seems like the tone now is we're not afraid of Twitter. We will do a photo op with the president. We will do lunch. We will go to Mar-a-Lago. It seems constructive, even if you're a Democrat, just the fact that We will do lunch. We will go to Mar-a-Lago. It seems constructive, even if you're a Democrat, just the fact that we're not going to be perpetually at war, Wall Street versus the White House. Is that your read on the tone and the vibe right now?

To a person, regardless of what their sentiment was pre-election. I think you're exactly right. And, you know, I always encourage Kyra Swisher to be as cautious and cynical and even fun and flamboyant as she can be. And I believe that Bezos' agenda is a complex one. And the coincidental time, you know, the meeting that he had of his space executives the same very same day that they pulled the editorial that was going to support for Harris.

Not a great look, it was a timing issue. Sure, there are plenty of publications that don't do the Wall Street Journal, has never done endorsements and things like that. Bezos' timing was the issue, not his decision per se. But the CEOs all came together in 2017 and what discouraged them, even though they didn't support him.

I brought Donald Trump to one of our CEO summits, for example, many of the names that you and I would talk about on this show and other discussions we'd have as the top tier, they'd said, if he's bringing it, if I'm gonna bring him into the Waldorf, we're walking out. That whole top tier did walk out when I brought him in.

Uh, and he, you know, he was offended by that. And, uh, if, uh, if your life depended on it, uh, you can't name a single CEO that, uh, of a major company that Donald Trump knew before he became president. He did not know them. He wasn't accepted by them. You could say he wasn't part of the club. He's an outer boroughs guy with resentment. I don't know what it is,

but he was running what they saw as a family tribal enterprise that had some global, uh, uh, anchoring, but it was mainly a regional player and, and, uh, and not a public company and not part of that either their, their, their scalar size issues. But they decided when he got elected, as, as Trump told me, cause he said, you know, all those guys that rat walk out of the meal on the wall door, he said, they're all coming by here elected, as Trump told me, because he said, you know, all those guys that walk out at the meal on the Waldorf, he said, they're all coming by

here now. I said, well, gee, I wonder why that is. And he thought he'd win them over by getting Rex Tillerson, for example, as one of that crowd in his, you know, secretary of state that Stephen Colbert called him tech drillers. And as you recall, that didn't work because what he did is they fought to join these business advisory councils. There are the press things, there were two of them, there are three of them, and they wanted to be on them. A manufacturing council, one was cross industry and stuff, is that he started his habitual modus operandi, which sometimes works for him, sometimes backfires, which is the divide and conquer scheme.

He used it in the schoolyards as a kid, he used it in New York development circles, which is why a lot of his peers resented him. And he used it to create chaos in the Republican party. But he also used it to try to divide Canada and Mexico in negotiations or Germany and France, because he didn't like the EU, NAFTA, NATO and all that. He hates collective action and he knows that a bully gets beaten if there's collective action. So he went in

with not liking the business roundtable at all, he wanted to break them into pieces. So we had Ford and GM fighting with each other. You remember they come out in the White House lawn, it was really awkward. But publicly, publicly over chocolate cake, literally at Mar-a-Lago, he had the CEO, and I've got their emails to show you how often, which I probably shouldn't show you, but if I had the posting opportunity, the CEOs of Boeing and Lockheed bewildered and Raytheon, as RTX was known at the time. Drug pricing stuff on Twitter. Did J&J, Merck and everything. Yeah.

Is highly sensitive things that they're battling. And they hated that. So when it rolled around to, and they started becoming increasingly resentful. So by August of 2017, after the Charlottesville, you know, last, they got tired of these national infrastructure weeks while we had him using them as photo ops, Ken Frazier walked off of Merck and it started a mass

exodus of CEOs and they never came back. We've, and they, we never had in American history, anybody who refused a national call to service by the commander in chief, even JFK who called the business community, a bunch of SOBs had a better rapport. So he alienated them, but it's divide and conquer stuff. They decided, okay, maybe he won't do it in a second round. If he starts it again now, it's not going to work. Yes, we have Tim Cook and we have a Jeff Bezos. We have, uh, you know, uh, Mark Zuckerberg showing some efforts

to try to get a fresh start. Hopefully it'll work. But if he goes bad. Can we double click on Tim Cook? From my uninformed perspective, he seems to have been the CEO who most had the Trump thing figured out in the first term. You would have thought a tariff war with China would have been as disastrous for Apple as it would have been for any other American public company.

Apple both relies on China for manufacturing and it's Apple's second largest market to sell iPhones into. And for whatever reason, Cook very skillfully was able to thread the needle of being a paragon of, I don't want to say liberal, but let's just call it, um, unoffensive centrist, uh, creativity. And it didn't lose that community, but he was also able to sit down with Trump and get what he needed for the benefit of Apple. And uh, I don't know, is there a CEO who played it better, uh, last time? Is that the playbook this time?

Tim Cook is, is extraordinary with none of the flamboyance of, of Elon Moscow, Mark Zuckerberg, or other very impressive technology leaders that some may consider wisely as some of the most creative leaders we've ever had in technology. Tim Cook is one of the most artful. He suspends his ego. He is otherworldly humble. I confess, I have some holdings in Apple stock, but he's also going to be our Legendary Leader. We all do, and it's a good thing. He's going to be our Legend of Leadership winner in two weeks at our upcoming CEO Summit,

which he is reluctantly accepting. Some of these guys lobby for it. He is reluctantly taking it. He has managed to begin a process of trying to take about 25% of the 90% of his production, which is in China, and try to take 25% of it towards Vietnam. He's not there yet, but his ability to work with Donald Trump quietly, you know, when he, at the White House, when Donald Trump would call him

Tim Apple, rather than make a joke about it, he'll go by Tim Apple when, you know, instead of Tim Cook, you know, is that he, he's not trying for cheap shots. There's no grandiosity about him. I think you're right. It is interestingly how he's done it. Now Vivek Ramaswamy and Peter Navarro have been very critical. So we'll see if they go mute on this and tow the line with Trump to work with Jim Cook.

And I think they will, but I think you're exactly right. And it's to see that the business community just can't be though going through a divide and conquer again. Or else we'll see through collective action. This is again, is how they take down the bullies. They believe in the rule of law more than the law of rulers. And that's where they invest. And they just can't stand these wedge issues,

these sort of the bathroom bill type issues that are just created to divide society. They don't like that. Trump is not, and I'll tell you this, I've known him. I was the first one to be critical, even before Tim O'Brien, now Bloomberg, when he was back at the Times, critical of the first run of the, uh,

of the apprentice, uh, the wall street journal had me write a weekly column that NBC would give me the show a day in advance. And Trump got pretty defensive when I called it a, uh, a musical chairs game at a Hooters restaurant and wanted to tear up the deal. Uh, so he said he can't write a second column. So, uh, the wall street journal was so happy about the traffic. They said, well, maybe son of film will rescind. They't write a second column. So the Wall Street Journal was so happy about the traffic. They said, well, maybe Sonneville will rescind. They gave me a second shot. I said, would President Trump, or he wasn't President Trump,

Mr. Trump want to know if I would recant what I'd said? I said, I wouldn't. He's right though. I do recant. Last week I said that was the worst possible episode on TV I could imagine to portray business leadership. I hadn't seen this week's episode yet, so I recant. But we wound up burying the

habit, a hatchet and we've become friendly, but, um, is, um, I do, you know, worry if he goes back into the divide and conquer scheme, he shouldn't do that, but he can't help himself on that. But he, he, I would bring leftist, uh, oriented sociologists, political scientists to see him, uh, Trump tower. And he would confide in us. I could show you the text where he was looking at going to the left of Bernie Sanders. He is not a right-wing idol. He's, you know, he's supported more Democratic candidates and Republican candidates through his

career is that he was looking for anger in society. And what's the hidden truth here And what's the hidden truth here is that some of the strongest supporters of the pro-regulation and pro-antitrust policies of Biden have been some people on the MAGA right, including the vice president, Designate Vance, and Matt Gaetz and others, and supported by of all things, AOC and Elizabeth Warren, and what it is, they go back to populist roots. It's anti-authority, anti-corporate, anti-religion, anti-government. And that's a really important point.

This is not a slam dunk for big business just because Trump is back and he's talking about deregulation. There are a lot of reasons for why companies like Microsoft and Alphabet are not out of the woods in some of these antitrust battles that predate Trump 2.0. Even if Lina Con goes, some of these things are actually favorable to Trump world To have these these very powerful businesses on the defensive and answering to the government So this is not going to be an across-the-board. Hey, it's a Republican administration. Don't worry about antitrust

I don't I don't picture any of this stuff going away overnight. Do you? No, not not at all. He Trump likes the anger that antitrust. I don't, I don't picture any of this stuff going away overnight. Do you? No, not, not at all. He, Trump likes the anger and there is resentment about the privacy issues, about, you know, anti-trust concerns about, you know, promotion of hate speech or the opposite, the censoring of of conservative speech or whatever it is is out there. There's a lot of resentment of big tech and some other large enterprises.

So the pharma people, of course, are quite nervous. And we could talk about the RFK Junior nomination, some of these other cabinet picks that have the business community quite alarmed because they're anything but pro-capitalist and they're very much pro-regulation to be wanting to endorse the nanny state as RFK wants to do it. Well, let's do the cabinet.

So you wrote in Fortune, Trump has, this is you, Trump has designed most of his choices for his management committee and cabinet, but they vary in skill, experience and temperament. Which of these lieutenants hold primary influence with Trump will determine whether he builds on the great economic momentum handed to him or squanders it. We have classified these players into three groups. The fortifiers, the good, the detractors, the bad, and the unknowns, mercurial influencers who might do good or harm. All right.

Let's start with the fortifiers. Who do we like if we're in the pro business camp? Who are the fortifiers? Is somebody who's stable for markets understands business and finance is not a flamethrower, but is very loyal to Trump. It's Scott Besson. Okay. Scott Besson was a great choice.

Uh, Howard Ludnick is, uh, is a very smart guy, extremely successful, but he's a far more volatile personality and, uh, who is quite divisive, even in the Wall Street crowd, as the people who know him best. That's his commerce, and they're gonna have him involved in the China conversation for some reason? This is a big question. If he was merely sidelined the way Vivek Ramaswamy was happily

by putting into an advisory role, that would be fine. Commerce, you would say, was less threatening unless we have another Sharpie example where they, you know, which reports to commerce where the national weather service was being told to lie and to say a hurricane is going into Alabama because president Trump mistakenly said it was, or the US census that reports to commerce. Commerce, you can't do a lot of damage other than some of those areas. However, Lutnick wants the special trade rep

to report to him. Of course, Bob Lighthouser would never have taken that position, but one of his deputies was very good, did. And that's gonna be awkward. I don't know how that can report to commerce, given that it was a congressional creation that it reports to the president. So we'll see how that gets worked out legally.

But is that the special trade wrap can be very effective here. Ludnick's bravado can be problematic, but fortunately he's not in the treasury role. His treasury is the one who actually, instead of designs it, they're the ones who execute. You like, you like Bassett though. Bassett is very good. There was a big snow shovel in the face of Elon Musk who very much did not want Bassett and he lost on this one.

He wanted Lenin. So, you know, Musk has lost many of his fix. He wanted Gates that didn't work out. Putting in, I think as secretary of state, Senator Rubio, is an excellent choice. A lot of my friends here in academia wouldn't like him. So what? The president gets to pick somebody who's consistent with his views. Marco Rubio is a very good proposal, a very sophisticated, very smart guy.

Representative Stefanik would be hugely unpopular here on campus, but still she's what he represents in terms of president Trump's points of view and what may have his voters, if not all of his voters want to be represented in the United nations. And sorry to be sliding around here as sun lights coming in here as I take us to these controversial campus positions, there's a beam coming through that's suspicious, but is that she's a great choice for what he wants. However, uh, uh, well, I don't want to anticipate you, but

well, let's, let's go to, let's, I guess, let's go to, so, all right, let's go to the people that you would say, uh, that you would say are the detractors. I don't, do you have Tom Homan as a detractor or? This is, it's, you know, it's, it's not that well known. I think, I think, I think he certainly would be consistent with what Trump was. You know, we could in fact have a whole discussion of immigration policies and what this means, you know, in, in, again, in the interests of full disclosure, I'm on the board of Lenar and what this means, again, in the

interest of full disclosure, I'm on the board of Lennar, one of the nation's premier, I would say the premier home builder. As we take a look at what the ripple effects of immigration can be, we can't pull out 10 million people just at once, or we've now gutted the agriculture business, which is conservatively 30% undocumented immigrants in so much of the... Let me quote you.

You say 30% of farm workers are US born. Only 30%. 40% have no work authorization. More than 20% of the 1.6 million construction workers in America are foreign born. And in some cities, 40% are undocumented. The American tech workforce, 25% are immigrants. It should go without saying that you get a lot of applause at a rally for talking about removing 10 million undocumented people or illegal immigrants. But the reality on the ground, trying to run a business in America becomes really difficult

if these things were to come to pass. Like the extreme version. Yeah, if they were to pass. There needs to be a pathway for legitimacy. I mean, the Washington Post have actually shown that the first 10 jobs that Melania Trump had, she was an undocumented immigrant at the time. Big deal, they work it out. She's certainly not a threat to American society and is a good person.

Is that the hardworking employed people that are sometimes resented by many immigrants who did the proper process and came here legally. So that was a big mistake the Democrats had to think that there was going to be a national kinship between all Hispanics, let's say, were those who were abided by the law laws and those who didn't. But still, just moving to the economic impact, we can't destroy the agriculture and construction industries. But even in technology, Stephen Miller was taking such a tough line just between us and your viewers.

I'll name some names. In the summer of 2019, because I'm pretty close to Jared Kushner, I went to him and I went to two other, actually three other cabinet secretaries that I've known for a very long time. And they just said, we can't get around Stephen Miller. He has a Rasputin-like grip on Trump. to two other, actually three other cabinet secretaries that I've known for a very long time. And they just said, we can't get around Stephen Miller.

He has a Rasputin-like grip on Trump on the immigration issues for the H-1B visa. So we're gonna train these people and not hold on to something, gonna send them back to China. We were sort of, no, we wanna keep this talent here, is two of the big tech companies that you mentioned 10 minutes ago, uh, gave me the answer that was working with the business round table.

Uh, Doug McMillan, who was chairman at the time said, look, this is not my primary issue. I don't know, but he created a committee led by Chuck Robbins, the CEO of Cisco. This story not been told publicly before. Chuck Robbins was fantastic working with other members of the business round table who were going to be severely hurt by the loss of great tech talent. They found that several of their members were already leasing space, not in some distant seaports with different time zones, in Toronto and Vancouver.

And we're now negotiating the infrastructure to support that leased space. So these jobs are going to just hop over the border. That's what convinced Trump to get around Stephen Miller and dial back some of the hostility H-1B visa issues. Literally half of Fortune 500 companies, half, 50% are led either by immigrants or first generation CEOs. Similarly, a third of tech companies that are tech startups that are worth over a billion dollars are created by immigrants. That's tens of millions of jobs. And we just need to work out the

immigration front. We'll see. Obviously, there's been a problem, but the numbers tell a little bit different story than what some of the campaign trail understood. It got out of control under Biden with 200,000 a month, but basically the last six months, it's been down to 40,000 a month. Well, what was it under Trump? 50,000 a month. So actually though it took Biden too darn long to get the executive order in place

because they thought they'd have by-parts and legislation that failed, but ultimately they got it worked out in these last six, 10 months. But under Obama, it was less than was, uh, less than that. It was around 30,000 a month and shot up to 80,000 actually under, under Trump. So, you know, it's, it's, it, this has not been as easy as some people think. And it is definitely a problem though.

Jeff, I want to ask you about one more, and this is breaking news as of this morning. Um, I wanted to ask you about the new SEC chair. Trump has nominated former Securities and Exchange Commissioner Paul Atkins to replace Gary Gensler. Gensler, very notably last week, as Bitcoin approached $100,000, said he would step down when his term was up. Paul Atkins, obviously pro crypto, but also obviously someone who has spent a lot of time in securities regulation.

So this is not one of those picks where it's coming from outer space. This was somebody who was widely expected to be in the conversation. What do you think the Wall Street take is on bringing Atkins in for this role? Well, I have a point of view here. It's an informed one, but it's a biased one. There are people might wonder if it's biased. So just to get in the interest of full disclosure, I'm mentioning I own Apple stock and I'm on the board of Lennar.

I'm also on the board of an exchange called IEX that only your viewers would know about, the general public wouldn't know. It's a fantastic exchange that is, I think, more transparent into who's pays who's and all the rest, and they don't have a payment for order flow. This is the exchange that Michael Lewis wrote about in his book on high frequency trading. Right. And Paul Atkins was not wildly in favor when he was an SEC commissioner of that before.

And yet everybody at IEX, I probably shouldn't be speaking off, you know, on the record on this, they're actually quite enthusiastic about Paul Atkins because they think even though he wasn't their big apostle and was, he has questions about the flow of information. He has questions about the free flow markets. He's hugely sophisticated point of view. He absolutely understands crypto cryptocurrency opportunities. So we think that a lot of innovative deals will pass through faster. Currency exchanges, I think, will be properly overseen. So there's a lot of encouragement, surprisingly, even from IEX, that is quite excited about

working with Paul Atkins. I think that, um, there's a little bit of fear that, uh, there's, uh, you know, just between us, uh, there's, there is one player in the space tether that people don't have the same level of confidence for various reasons, uh, and that Howard Lutnick, uh, has a significant stake there and some relationships there that might have been worrisome to some that Paul Atkins doesn't have these kinds of conflicts. I think he had a consulting firm that was close, I don't think it was the high frequency traders or the exchanges or whatever.

He just has actually real knowledge in this space, even though he has very strong points of view how markets should work. I think it's hard to do better than that choice for sheer knowledge and expertise. He's not a flamboyant, a flamethrower. So I think he'll be a very good problem solver. Even if I don't like all of his decisions, I think they're going to be based on fact and reality and not on superstition. Well, Jeff, we're going to be based on fact and reality and not, not on superstition. Well, Chafford didn't believe it there. I'm like JFK or RFK Jr.

who thinks, you know, drinking water can determine gender. I think the pharma companies are, are really worried, but they're, they're going to be able to work with them. I think some of the pharma companies are already, uh, feel realizing there's a way to explain the science of vaccines, uh, to him and they're, they're hopeful. There's a way to explain the science of vaccines to him and they're hopeful. I very studiously avoided including JFK, RFK Jr. stuff in the pre-show notes today because I know that could be its own 45-minute discussion. So I want to be respectful of your time.

We're going to leave it there. I just want to say thank you so much for updating us all on all this activity. It's a whole new world and you're super informed about all of the players and the various interests competing at this point. So could not have thought of a better person to bring into the discussion. Thank you so much for joining us, Jeff. And hopefully we can check in with you soon. Anytime. It's a huge honor. And when I start hearing from everybody's lawyers that we talked about, I'll send them your way.

Ha ha ha ha. Feel free, feel free. You leaving already? What are you going on? This guy. You really are, you really are a trained professional. Ladies and gentlemen, welcome to another all new live edition of What Are Your Thoughts? My name is Downtown Josh Brown, here with my co-host, as always, Mr. Michael Batnick.

Make some noise in the chat for Michael, everybody. Michael, say hello. Can I make some noise for myself? Yeah, let's do it. Josh, I'm fired up for the show. You know, who was I talking to last week? I swear we still love doing this. I was on, in the airport getting ready for the show,

and I was like, turn my mic on! I wanna do I was like, I would say, turn my mic on. I want to do it right now. I'm fired up. Let's go. Well, here we are. And the chat, I got to tell you, is especially lit today. I see a lot of new faces and names, a lot of old school, day ones. Jerry Gould is here. Matt Stevick. What's up, man? Greg Jones. We see you. Possum nation is back. Chris Hayes. Uh, who else is here? Dr. Horton's here. You know, it's going to be a good show. Jay Luther, Donna. Hello. All right. Uh, I'd love to say hello to everyone individually, but we've done this before. It's the doctor Horton is this stroke. The stroke is not lost on you, right? That is Dr. Horton. I know you know that. I love it. Akbar Mohammed, welcome.

Thanks for joining us. Tom Lombardazi. Love having you here. All right. We have a sponsor tonight. I want to tell you about a very special sponsor. You know them, love them. It's public.com.

Michael, what do we have to say about public today? Listen, here's a deal. Here's the deal, folks. Right. Listen up. Cash. It's so it's so 2023. Am I wrong? It's over. Like that already.

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Yield to worse not guaranteed, not a recommendation. All investing involves risk. Visit public.com slash W A Y T for disclosures and more information. Okay. I saw somebody out on the front lawn and I have a sneaking suspicion that outside your house. Here we go. I had a feeling.

Look who's here. Guys. We have a very special guest with us today. Allow me to welcome in Mr. Caleb Silver, the editor-in-Chief and Senior VP of Content at Investopedia. Everybody knows and loves Investopedia. Caleb, how are you? I'm so good. So good to be here. I've been out on the lawn since lunchtime. I thought this thing started five hours ago and I thought it was catered, but good to be welcomed on inside. So

good to be with you guys. We're thrilled to have you. And every year, you guys do this thing in Investopedia where you take the most searched for terms and create a list. And we have a graphic of the entire list, which we'll show first. John, if you would. All right. So walk us through the list. These are the top 10 terms of the year on Investopedia. Yeah, let me bring you through it. So we have millions of visitors coming to our site every

month searching up something or following a trend or a theme. And then at the end of the year and throughout the year, we look at what trended for how long, when it trended, sort of what instigated that and how sustained was the interest. And there you have it, the top 10. No one's going to be surprised by one and two inflation and tariffs. That was the dominant narrative really this year. I would have guessed that. Wait, hang on. I'm sorry.

I am kind of surprised because chart off for just one second, Caleb. John, so Caleb, the tariff part, that's only like the election was a month ago. So the volume of searches for tariffs must have just absolutely gone vertical. Yeah, but they campaigned all year. All year. Josh, you do have a good point. Yeah. All year. And don't forget, the Biden administration added tariffs on top of the Trump

tariffs. So tariffs never really went away, but they got a lot of heat under them, obviously, when the campaign started. And the closer we got to election day, the hotter they got. And then since election day, you better believe they've been hot to trot in the early lead for 2025 term of the year. But inflation was obvious, but it was not only the dominant theme. First time in a long time, it felt like that was not only the dominant theme, and it was what we were thinking about in the investing ecosystem, but it was on the mind of voters, or they said it was on their minds when they went into the voting booth.

So you couldn't knock it. You can't knock it when it's number one. It was number one from day one, January one, all the way through to today. Caleb, in the chat, Greg Jones wonders why Hawk2 didn't make the list. I guess they're not hitting Investopedia when they search for that. Yeah, we're still copyediting that term and it's going through legal and compliance. I can understand. It's still a very risky security. One more for you. Basil Lomachenko wants you to know you look like Mori Povich, which is a compliment. I've gotten that before.

It's a broadcast legend. Yeah, it's not bad. I've gotten that before. And I wouldn't say thank you, but Mori's 78. Hashtag Young Mori. You are not the short seller. I get Jeff Goldblum from time to time. I'll take it. I would take that.

Anyone would take that. I'd take that height. I could still finger roll. I get powder. We have a graphic for term of the year inflation. We'll just roll this up. Do you think this will still be in the top 10 next year? Probably because I don't think it's going away.

And I think if you think about tariffs and what they could potentially mean for inflation, if you think about a lot of the policies that the incoming administration has promised, a lot of them speak to more inflation. And even if you look at what consumer confidence looks like, they still think inflation is going to be around, you know, we don't want deflation. We want a little bit, a little Goldilocks of inflation. I think it's going to be there. Obviously, we've got the Fed meeting coming up next week, but what the future of the Fed

is going to be interesting. Is the Fed going to be looking at that going forward in the Trump administration? All these things are up in the air and fascinating. And it's interesting to see how people dive into our terms. But where they go once they get into that term is also pretty interesting because a lot of people went into the inflation term and they were searching for it to make sure they understood it. And then they started looking at inflation by president and what was the inflation rate during Trump's presidency.

They were doing a lot of comparisons. So the educational journey for us is fascinating to watch. And if you looked at a lot of some of these other terms, there were some interesting stuff popping there that you know, some things you would absolutely. So let me ask you about that. Let's talk Nvidia and stock split probably being searched for for the same reason, right? Wasn't Nvidia's big split this year? I know they've done a few. Yeah, Nvidia had a big split. Walmart had a split. I think there was over 300 odd companies

that had big stock splits and you had a couple hundred reverse splits, but Nvidia was the big stock split. You have a chart. I'm sorry to interrupt. You have a chart that shows when these terms bubbled up and it looked to me that the Nvidia stock split coincided with the search volume for split. So that was, okay, that's a big story. Everybody owns that stock.

It's the biggest company in the world. And a lot of people may not have, you know, it's a lot of young people, I assume, that have never owned a stock going through a split and they want to know what the hell is going on. Right. And for a lot of people who don't understand that you could buy fractional shares or maybe they don't have a broker that allows it, you know, the price tag on a stock like Nvidia pre-split was way out of reach, right?

So I think a lot of people were learning about what that actually means, what it means for value creation. I think that's fascinating, especially for young investors, who a lot of them were probably looking this up for the first time. And once you know it, you know it. But a lot of people were learning this for the first time. That's good news, right? We love that. But it's also rare to have a company be on the top 10 of our terms, but Nvidia is just so big. It made its way up in the top five. I mean, it's definitely the story of the year. Once again, it was last year. It is this year in terms of individual stocks.

I want to drill into one of these before we let you hop because I was surprised to see this. Throw that top 10 up one more time. Money line bet. Why do you think people are landing on Investopedia to learn about money line bets? And why is this an investing topic to begin with? Well, isn't it so interesting that this was one of the first years

where you could bet on the presidential election outcome before this year, but it was the first year where it kind of became mainstream and it turned out that the betting markets, if you look at Polymarket and you look at even the betting that was going on in Robinhood and overseas, actually was a little bit closer or even on the money compared to polling. So a lot of people, the betting culture is big, obviously, through betting on sports. But I think this is what the

first year we saw this crossover, and I was talking to Kyla Scanlon, good buddy of ours, real smart financial explainer out there. And she said, this is really the beginning of this meshing of betting, investing, politics. It's all coming together in this weird tapestry right now. And there's no backing out. People love betting. They love watching people bet. You saw that there is talks that Robinhood is going to allow sports betting on the app. And of course they are. Why wouldn't they? It's a great idea. It's the same people. Right, exactly. It's the same people doing one or the other.

Yeah. Can I money line whoever the giants are playing with a parlay of Nvidia options that expire on Friday? Let's go. Write that down. That's a great idea. What are we gonna name this company? Let's book it right now.

That is a terrific idea. What are we going to name this company? Let's book it right now. That is a terrific idea. Robinhood has millions and millions of daily actives, people that log in every day to see what's going on with their account. And it's a safe bet if somebody is very aggressively trading options on Robinhood, they probably also have a bet MGM account or something where they're also betting games.

If they can do it all in one app and not have to move money around, I see that as being something that will get adoption. In the early days of Robinhood incorporating crypto, which they did almost from the beginning, I said to myself, it's like somebody that trades a lot of stocks probably is also trading crypto. So of course, these things make sense. It's obvious. And this is the direction we're headed in and we think we'll probably see Moneyline pop

in again next year because you can pretty much bet on anything right now, but I love Michael's idea. Mix it all up. You know what's going to pop in? Parlay. First year it's Moneyline, next year it's Parlay. Next year it's Parlay. It's only going to get more extreme.

Right. There'll be points now and people will be learning about integers finally again. So this is a return to our algebraic roots. Like the second time somebody wins a sports bet, the third bet is a 10 team bird cage. And it's all right, Caleb, we're gonna let you go. But I wanted to say thank you so much for stopping by. And thank you for all that you've done throughout the year. 2024 has been a great year for Investopedia and thank you for all that you've done throughout the year. 2024 has been a

great year for Investopedia and for you personally and it's just so great to have you in our orbit. Thank you for stopping by and let's tell the folks they should go visit investopedia.com and read more about the list for themselves. Yeah, thank you. The honor is mine and ours and it's my honor to be the editor here and to be buddies with you guys. Thanks for having me on the show. Let's go, Nick's and have a great rest of the year. All right. Don't let the dogs out on your way out. Those are indoor pets. All right. All right. Let's goodbye, Caleb. And let's get into topic one. Michael, this is yours. All right, Josh. I want to talk about what's happened in the stock market the last two years,

what that might mean for 2025 as the calendar turns over and we start thinking about what might be possible for next year. So 2023 was a year where famously everybody came into the year bearish, consensus was bearish, stock market expectations, S&P 500 expectations, the average was negative, which had never happened ever. And of course, the market did the exact opposite. Fooled everybody, was up 20%. And then you come into a year like today, like 2024, and boom, even more gains. Wonderful. So up 20, now we're up 30.

What's next year going to be like? So Ed Klesselt from Ned Davis Research pulled out an interesting stat where he looks at what happens in a year after there are 50 record highs in a year. Now not a tremendous list, but it's not great. The average is negative 6%. The mean is negative 3%. Only positive 20% of the time. It's generally, you generally have this type of year in what's known as a blow off top where all of the good news is being pulled forward.

Obviously, we hope that's not the case for next year, but what's your knee jerk reaction to this sort of table? Well, I lived through a bunch of these years, 2014, 2017, 2021. So they didn't all feel blow-off-y at the time. Like I could specifically describe the experience of 2014. That was a grind higher though. 2013 was amazing.

And then 2014 was really just the market consolidating its gains and inching higher. But the thing to remember is that 2013 was the first record high after the 2007 peak of the prior bull market. And this year looks nothing like that. So like, I just always, when I look at these types of stats, I want to know them. I want to be aware of them, that the likelihood is negative. Is that what we're saying? Or what did you do, the median return? You're not saying likelihood.

All we're saying is historically. It says nothing about next year. No, no, no. So historic probability. We're saying the median return for a year like 2025, given the fact that we've just had 50 record highs this year, the mean return is 3% and the median is minus 3%. That's exactly right.

The median is negative 6%. So the next chart shows it initially. And 2 thirds are negative. Yeah. I mean, it's not great. Thank thank God you have a sample size of 10 and not 10,000 years so I was I was talking with with Ben today to animal spirits about this and I said I Really do not want another 20 or 30 percent up here in the stock market Not because I don't want people to make money

Of course, but we all want to make money But because I don't think that would be helpful, and I think that would potentially set us up for something really nasty, unless, huge caveat, I think what would be wonderful is if the S&P 500 gets a 15% earnings growth, and you get more margin expansion, if that's the situation, we get a 30% year, hallelujah, that would be wonderful, right?

We'd all take that. What I don't want to have happen is you have more multiple expansion, more hype being pulled forward. Nobody should want that. I always think of this selfishly in terms of like what we're doing at the firm, at Red Holtz Wealth. The way I think about the markets

in the context of our business, yes, of course, when the market goes up, clients make a lot of money, we make more money, but I think of like a plane that's flying around the world and it has to land periodically. And when the plane lands, whatever empty seats you have on the plane, you gotta fill those seats.

And we did that in 2018 when the market was effectively flat with two big corrections. We did that in 2022. Market was down 18%. Bonds were down 16%. We onboarded so many clients in that year. So that when the, and then the plane takes back off and you have more seats filled. Right. And it's just like, it's so selfishly like, yeah, it's great. We're allocating everything's working fine. I don't mind another, I don't need 2022. I don't need to be down 18%, but like, I don't must feel like let's fill some more seats

in the plane. Let's come in for a landing. Flat market minus five, minus 15. It's survivable. Please. And, um, you know, nobody wants to hear that obviously, but the thing that I want everyone to hear years like 2022 are the years that set us up for 23 and 24. We're, we're up, we're, we're up massively in 23 and then again in 24. And you don't have that

if you don't have that 2022 set up and the deck's being cleared, you need earnings estimates to come down in order for stocks to rise when they get ratcheted back up. You need that planeland moment. Planes just can't keep flying forever. So I'm kind of cool with next year not being up 30%. I'm sure it will. I want to show you one more thing on this topic. It's only sort of on this topic. I couldn't ignore it. We don't spend a ton of time on this. John, pop this Bloomberg article up for me. Chasing dumb money. Hedge funds target mere mini millionaires.

I mean, this is like, I know we don't believe in headline macro. We don't do magazine coverage. This is crazy, right? Who talks like this? I don't know the authors of this. Explain what's going on in the article here. I don't get it. Hedge funds are going down market for their next pot of money. Quote, mini millionaires. Can you imagine the nerve?

The trend to attract doctors, lawyers, business owners, or anyone with seven or eight figure fortunes has been gaining velocity as the usual hedge fund clientele of big institutions and the ultra wealthy become more reticent. All across Wall Street, velvet ropes are coming down. Stop right there. That should tell you all you need to know. All you need to know. These are just like, I think we're good here.

Why don't you give a pass? Please land the plane before these mini millionaires are completely fleeced. You know what this sounds like to me? All of the traditional hedge fund clients have buried all their money in private equity and private credit. So the hedge, like the long short guys are like, call some dentists, I guess? But they cite some examples, big funds like Viking

and like some name brand operators, Elliott, Jane Global. These are not bullshit funds. They are setting up new vehicles where they can take $50,000 checks from the millionaire next door. Here's my comment. Have fun with that in the next bear market. I don't exactly think these hedge funds are equipped to take phone calls from people like this. I also think, God knows how these people are being sold. If they're looking at historical track records, which of course they are,

probably some disappointment coming up. So that's the latest. But I thought of that headline, couldn't be ignored. I wanna show you two charts from Ari Wald at Oppenheimer. Ari put out a note this weekend screening for new momentum. And I thought this was sort of notable. So he's saying, where's the momentum? We reiterate that the momentum factor typically

outperforms in the period between the cycle's broadest moment and its final peak. This week, we screened for new momentum coming into our calculations in September, along with a new all-time high for the S&P 500. Notable action last week included the high beta versus low volatility ratios ability to reclaim its 200-day moving average for the first time since July. He's using this as a proxy for cyclical versus defensive equities. And what he's basically saying is this is a good sign because people are going into high beta and people are buying the cyclicals.

And the next chart, I'm just going to show you one versus the other. Do we have that second chart up? Let's say. Yeah. And the next chart, I'm just going to show you one versus the other. Do we have that second chart up? Cyclicals and Defensives rallying together. So although Cyclicals haven't recaptured the relative losses endured between July and September, we reiterate Q3 leadership was catalyzed by an LV breakout rather than an HB breakdown. So it's a catch up, not a catch down. He's saying the Lowval names are catching up to high beta. That ratio is not changing just because high beta is falling because it's not.

And so I think when you have participation this broad and you have both styles of investing working at once, it augurs well, at least in the short term for momentum being okay. Now he put this note out over the weekend, but you know what happened yesterday, high momentum did sort of break down. I don't think it's technically broken, but the MTUM ETF was down 2% and all of the biggest winners so far on the year were negative big time. So is that is my question. Is that the beginning of a high beta slash high momentum breakdown or just a blip along the way?

What do you think? Well, the answer is of course, we don't know, but I will give you my opinion. What do you think? And I will give you my opinion. The show is called What are your thoughts? I will give you my thoughts. Okay. And my thoughts. And my thoughts are that nothing goes straight up forever.

And this is necessary and healthy. We do need pullbacks along the way in bull markets. And I think that's all that this is. So they took Applovin out to the lake and ripped its throat out like Patrick Swayze in Roadhouse. I mean, these were. Not bad. But that sucks up what? 300% in the last two weeks. You know what I mean? I mean, I'm exaggerating, but good.

Yeah. The Chasers got paid. The Chasers got paid yesterday. Listen, the market has to keep you honest. I'm not speaking to Apple oven specifically or any of those stocks, but nothing can go up forever. And so I view all of these slap on the wrist as healthy and necessary. And this is what the market does.

Micro GX in the chat is saying we need a 10% pullback or some sort of reality check. Benjamin Lupu reminds us Nvidia is now down 11.8%. Well, the reality. What constitutes a quote unquote reasonable pullback from momentum stocks? Listen, I don't know. I think it's like 20%, honestly. It depends on the stocks.

It depends on the stocks. You're talking about Apple and Nvidia? You're talking about AppLovin. These are different companies. But the market, the reality check is that earnings are on an all-time high. So I think that the market is behaving as it should. Are areas like App of an extended? And of course, should they get slapped?

Yeah, of course. But yeah. You know what, Halladot? Three really important names. Apple. Alphabet, which now looks good again. How you like that? Apple is knocking on a $4 trillion market cap.

Stock is just, it's like 250. It's just, it's a freight train. No one could explain it. They think the AI was a flop. They think the phone is a flop. It doesn't matter. The stock's going higher. And Amazon is the best looking stock

in the entire S&P 500 right now. Which we did make the case on, both of us did. But that stock just is, it's untethered from the Earth's gravitational pull. By the way, meanwhile, RRP is having the sort of, that's the equal weight, is having the sort of pullback that you can only dream of. It's like a severe, severe, strong, super strong uptrend. And then you've got like a little drift lower. I think it's down a couple of days in a, not nothing major, but this is, you love to see it.

This is, you gotta take one step back to take 19 steps forward, anything else here Josh? We didn't mention Tesla, Tesla is both high beta and mega cap, and I mean, I guess, like if you were ever bullish in Tesla, right now would not be the time that you would be on bullish. The guy is pulling the puppet strings for as long as that goes for. It seems like that's going to be pretty good.

One of the top three to influential people on the planet. Yeah. So the stock is working. Okay. Um, here's a, here's a something from Black Rock, their 2025 outlook that Josh, you, who, who did you ask about this? Was it, was it Dr. Kelly? Sembalist? Who did you ask about this? I asked Dr. Kelly of JP Morgan and he did not dismiss you. All right. So I said, are we in a post-cycle economy? Not that we're not going to have ups and downs, but like we did a chart.

Chart kid Matt made this for us. He was showing recessions and he was showing the manufacturing data. And then I said, why don't you overlay that with a chart of how big manufacturing is in terms of the overall economy. Manufacturing in the last 50 years has declined from being 20% of GDP to 10%. It's cut in half. So tell us what BlackRock had to say. All right.

So before we get to this, I think just because you asked the question, are we living in a post-cycle world, and just because BlackRock is about to argue what we're about to talk about, I don't think you nor I nor BlackRock is saying recessions can't happen. That's not what they're saying. No, that's not what we're saying. What they're saying, and I think we agree with this, that the, man, it is hard to say this out loud, but the boom bust nature of the cycles, that part of the cycles might be a thing of the past. Enough thorough clearing, here's what they said.

This is from BlackRock. We have argued since 2020 that we are not in a business cycle. By the way, I don't remember reading that in 2020, but fine, let's just assume that they did. Historical trends are being permanently broken in real time as mega forces like the rise of artificial intelligence transform economies. The ongoing outsized response of long-term assets to short-term news shows how unusual this environment is. We stay risk on as we look for transformation beneficiaries and go further

over what US stocks is the AI theme broadens out." Josh. He said all that just to say buy the Max 7. So Josh, somebody built us this really nifty website where you get to hit a button and it pulls an old chart from podcasts that Ben and I have done over the years. And I was playing around with it, new chart. I'm like, holy shit, this is wild. It's a walk down memory lane. And we shared one chart on animal spirits today that's going to come out tomorrow.

And this chart was in 2018. It was basically a recreation of the famous pie chart that I created. It showed, again, this chart was f***ing six years ago at this point. It showed the weight of the top five stocks in the S&P 500 compared to the weight of the bottom 50. This chart showed them touching each other, just the tips. And at the time, myself and Ben and the rest of the world were saying, you've got to be kidding me.

Five stocks? Five stocks are equal to the bottom 50%. You think this makes sense? You want to belong this market? Now it's the bottom one. It's, I don't know, 67? I don't know. I'll update the pie chart.

But here we are, dude, six years later. We're still having the same sort of conversation. BlackRock also goes on to say, mega forces are reshaping economies and their long-term trajectories. It's no longer about short-term fluctuations in activity leading to expansion and recession. 2024 has reinforced our view that we are not in a business cycle.

Now listen, I don't like this either. Okay. I know exactly how this sounds, but you really do have to balance this with like, you guys sound so toppy with the fact that these guys have been talking like this since 2018 and maybe shake off the cobwebs and understand and see what's going on. This shit is different, okay? There is a, I was thinking about this weekend as I'm watching, as I'm watching The Agency, my favorite news show on Amazon. I'm in, I'm in, I'm in, I'm in. Okay, and I'm thinking, we don't even talk about this

anymore that like Amazon and Apple and that all these, these companies are now controlling the media too. Like we don't even, we just take it for granted. Yeah, yeah. Because we've become accustomed to it. Here's what I would say. Nobody is suggesting that we don't have the potential for recession. We're talking about the source of the next market crash.

And the boobs of the boss. Listen to me. It's coming. We're talking about the source of the next market crash. And the booze and the boss. Listen to me, is coming. We're talking at the source of the next recession, which is coming. It's unlikely to come from the types of cyclical drivers that most economists follow. It's unlikely to be an issue of automobiles piling up on lots. Too much inventory.

That shit is gone. That shit is gone. That's not what we're doing now. But also, Josh, I want to let you cook, but just one thing on this. There's also, we have too much data. These companies know too much about their customers, the business cycle. There won't be this sort of, to your point, absent the pandemic, obviously, this gigantic glut or shortage of too much or too little of inventory because we couldn't see something happening.

So back to you. I'm gonna say it's gonna be a global macro thing that nobody sees coming like a pandemic or a war that has the potential to drive the recession because it will be unexpected enough that no preparation that companies have done will be enough to save their earnings power. That's where it's coming from. It's coming.

We're not saying, oh, there's no more negative, there's no more bad times. The point is, if the things that you're following have anything to do with ISM surveys, you already don't get it because or you have this belief system where you think that companies haven't gotten better at forecasting or companies haven't gotten better at just in time delivery. Like companies know better than companies did 50 years ago. It's all software. They could turn it up and down in two seconds. So all right, here's Megaforce Exhibit A.

From Sundar Pichai from Google, Alphabet. This was yesterday. Introducing Willow, our new state-of-the-art quantum computing chip with a breakthrough that can reduce errors exponentially as we scale up using more qubits, cracking a 30-year challenge in the field. In benchmark tests, Willow solved a standard computation in under five minutes that would take a leading

supercomputer over 10 to the 25 years, whatever the f*** that means. That sounds like gazillion. It's a septillion years, whatever the f**k that means. That sounds like gazillions. It's a septillion years, which predates the age of the earth. I'm going to tell you right now, let's put up this golden octopus. Ladies and gentlemen, this is the buzzword of 2025. Okay? You heard it, maybe not here first, but relatively first. Do we have this picture, John? You see this thing?

I'm long. I don't know what this is, but I'm in. This is a quantum computer. Google does not have the only one. IBM has one and several other entities. Chart off off please. Is that real? Yes, that's the actual, that's what it looks like, but you wouldn't see it in that form

in a laboratory because it will be encased in a outer shell that keeps the interior at the same temperature as outer space. Quantum computing is effectively turning electrons, turning molecular material into ones and zeros where it differs from... So traditional computer, you give it instructions of something that you want solved and it will complete operations in order. They'll try this, this, this, this, this, this, this until it gets to the answer. That's why you could take septillion years to calculate something algorithmically. What we're doing and that's using bits and bits are pieces of silicon.

What we're doing with that with that chandelier we just showed you is we're using qubits and I'm not a scientist but qubits different than bits. Bits are ones and zeros. Qubit can be either or. So people are joking around. It kind of exists in an alternate universe. Each one of those pieces of material that we're using to compute can go either way. Think of a highway with cars driving in one direction or the other, being classical

computing, quantum computing, the cars are going in both directions at the same time. And that is how they are arriving at the end of these calculations faster and the meaning to the economy. If you're one of these people walking around thinking that you know, my God, we're talking about, I know crypto is the first thing people are worried about. Will these machines be able to break the algorithm? I couldn't tell you. Some people say yes next year. Some people say never.

The real stuff that we're talking about is creating drugs that enable us to live forever. And you want to tell me about business cycles? Yeah, Josh, you know, what's a DeNiro meme? And you're laughing. What is that from? Do you know what's a DeNiro meme and you're laughing? What is that from? Do you know what that? What? They've got septillion things years here

and you want to short the market? Well, look, we will overpay for these stocks ultimately. Of course. All right, here's what I'm gonna tell you. Google's Willow completing that calculation in under five minutes. By the way, Google announced that they had quantum computing supremacy in 2019. This is not like some bullshit they pulled out of their hat to excite everybody. Like, oh, us too? Right.

No, no, no, no, no, no, no. That's number one. Number two, what you can do with quantum computing is simulate nature. Okay? You can literally simulate nature. So we have no idea what this is going to mean, but what we should do is not have the arrogance to say, nope, according to my historical economic model from the 1900s, I'll tell you exactly what stage the economy is in. That's all we're saying. Be humble, not be so sure of yourself at a moment like this, because it's very difficult to understand the impact something like this could potentially have all over the world. So in 2023, early in the game, if you understood that AI was about to lead to this massive

capex boom, you were way ahead of the game, even if you didn't buy enough. I think what you're going to see now is people say that quantum computing is the key to unlocking the true AI, and you're going to see people look for ways to make money from this. And you could sit on the sideline and say it's all bullshit and what do you mean simulate nature or you could be curious. I'm very curious. Josh, on tomorrow's Animal Spirits, Ben and I take a trip down memory lane. When we, the three of us, were rightly questioning the luminaries of our profession, of our industry back in 2017, talking about the cape ratio and say you guys are looking at

Bells company belts compared to today and Feel very no I do I'm wrong about a lot of stuff throughout the course of the year every year It's totally got it. We got the own my L's, but for the last 12 years, we've been pissing all over the CAPE ratio talk, and we got that so incredibly right. OK. Yeah. Last one.

Two more charts. Just two more charts. Oh, do it. Do it. Do it. All right, so the Google real quick. All right, we know Google's acting better. Yeah, look at this.

The people like quantum computing, it turns out. Yeah. OK, so here's another one just to support this whole type of dynamic of where we are, what type of economy we're living in. This is a chart of materials divided by the S&P 500. So of course, the S&P is at an all time high relative to materials, as said differently. We don't need materials anymore.

And I'm being facetious. Of course we do. But my point is, this is not a manufacturing based economy anymore that is so prone to booms and debuts. All right that's it that's the last thing I want to say. Did you say the booms and debuts? The booms and the buzz I might have I might have. All right materials interestingly might be one of the first areas where quantum computing makes a tangible impact in our lives. This is about battery science.

This is about creating new versions of existing products that are more durable, more sustainable. Because what they're essentially doing is manipulating chemistry in order to do this sort of computing. And when we talk about simulating nature, material science is probably going to be one of the first applications for the sort of thing. So, uh, my, my suggestion is stay curious and don't listen to people who have economic models on an Excel spreadsheet. They don't know shit either. Um, and that's gonna, that's going to save you a lot of time and aggravation. All right.

Can we talk about the hop to a token? Yeah, I don't know the story here, so please enlighten me. I'm going to tell you the story. You're familiar with the lady? Sure am. Huk girl? I'm a fan. I don't hate her. Social media influencer launched a cryptocurrency because of course she did called Huk, which

crashed by 95% in value just hours after its launch. Who could have seen that blue chip wiping out and wiped out retail investors? The crash has led to accusations of a pump and dump scheme with evidence suggesting that insiders offloaded their stakes, of course they did, for huge sums and buyers quickly amassed and unloaded coins for instant profit. Her name is Hie Welch, and her team faced criticism for their handling of the situation with some calling for her

to take accountability for the harm caused to her fans who lost money. The incident also raised concerns about influencers entering the crypto space without proper understanding and due diligence put in their audience's risk. I have a problem with every one of those sentences I just read to you. Her fans should thank her for teaching her about risk and reward. What are they her fans for? Fans of what? Her music? Her poetry? Okay. So that's one.

You're saying I'm a hawk to a fan mean, what, will you drop on your head? Okay. That's fine. Second face criticism for their handling of the situation. What is the situation? She dropped the, she dropped the crypto coin and you thought it was going to result in what exactly? Wait, did you say, did you say the words due diligence in that paragraph?

Literally. Did you say the words due diligence in that paragraph? Literally. What the fuck is going on? Due diligence? Yes. People who become famous. What do you think it's backed by? Her saliva?

Yeah, no. We need due diligence. This is the biggest problem in the economy today. We need due diligence when it comes to securities being issued by people who got famous for spitting on genitals. This is, I cannot tell you how paramount this should be in the regulatory regime coming up. Look, this is like to me, nobody is like seriously buying this coin with money that they need. No.

Everyone's in on the joke, right? Yes, yes, yes. OK. So all this hand wringing, like, oh, she did this irresponsibly. Is there a responsible way to do this? And should there even be? This whole thing's a joke, right? Nobody's actually mad about the coin going down.

I don't know. You think so? People are performatively angry on social media, as they always are. About what? A coin going down. Oh, you think so? People are performatively angry on social media, as they always are. About what? A coin going down? I don't know. Oh, this is funny. Wait, this is the last thing. Being a meme herself, it was perhaps inevitable that crypto entrepreneurs would see the opportunity to leverage Welch's brand for a new coin in a similar vein. And so on Wednesday, get ready to laugh, she and a team of advisors launched Hawk on the blockchain platform Solana while promising that it was compliant with securities laws

and not a cash grab. If it's not a cash grab, then what is it? It's a joke within a joke within a joke? Well, of course it's a cash grab. And then you buy it and you tell people, yo, look what I just bought. And she gets the money, you get the lulls, and everybody moves on.

I mean, am I saying anything that's not true? Hello? All right. No, no, I have no, I am without words, dude. There's nothing what? Yes. Sure. Michael, would you like to disclose your long position in Hawk?

So I'm one of those disgruntled customers. How dare she? Customer, you're a customer. How dare she? Customer, you're a customer. How dare she? Yeah, yeah. This is kind of funny. Keno Pravda in the chat said, Michael Saylor announced MSTR bought a billion dollars of walk.

Sure. Sure. Probably he did. Why not? I don't know. Why not? Okay. Last topic. Let's get a little serious here.

So by the shout to Andrew Vosorkin, I listened to Alex Cooper, Jerome Powell, Jeffrey Bezos, and Ken Griffin. Phenomenal. And I was saying, again, Ben and I spoke about this, but it was just very uplifting. I felt inspired by these conversations. Like there's so much garbage negativity out there,

but there's so many people doing so many incredible things. That it was hard to- So for the audience, you're talking about the Dealbook Summit, which they made available every one of these interviews as its own 20 minute or so podcast. On Spotify, check it out. Bezos went for an hour. Yeah. Phenomenal. Sam Altman was good. Sam Altman as well. Yeah, it was great. Yeah. I thought

Andrew O'Sorken is an incredible interviewer and journalist. And if you like listening to podcasts, this is as good as it gets. Yeah. It's really, truly worth your time, better than this garbage that we're talking about. All right. So anyway, Jerome Powell said something and it was like the, you know, the Leo scene. Yeah, yeah, yeah, that's it. That's how I felt listening to this. So if you'd all just bear with us and stick around for a minute, John, click please. So curious how you think about that, which is this idea of communicating and some people, by the way, would argue over communicating in terms of the way the Fed approaches its

job today, sort of post-financial crisis, there really was a move to try to tell the public what was going to happen, to try to tell everybody where everybody thought the Fed was about to go, and whether you think long term that that has helped you or long term whether you think that that has to be rethought. You know, so go back 50 years and central banks were mysterious and, you know, there was a lot of lore that that was the right thing to be. Then there was a bunch of academic research by people like Alan Blinder and others which came to the view, which is, I think, clearly correct, that if the market and the public

understand how you will react to incoming data, then they'll do your work for you. So today, when some economic event happens, markets adjust immediately, long before we take any policy action. So the whole modern theory is to be as transparent as possible. And we've greatly increased transparency. People do make the argument that enough transparency, maybe it's too much, but I think generally the overall trend over 40 years of history has been very constructive. So I think you and I both didn't agree with all of the policy decisions that Powell made,

but what an incredible, in my opinion, public civil servant, the work that he's done over the past six years, however long he's been in office. But this remark in particular, we've spoken so much about this over the years, how transparent they are, how they're not going to shock the market. But to hear him talk about it, I thought it was so awesome. And you think about, oh, look where the two-year-olds compare to where the Fed is. They're behind the curve. Yeah, they know.

They're letting the market do the work for them. I'm on the other side of you on all of this. Interesting. Yeah, I don't think he's done a good job at all. And I think if he were grading. Wait, hold on. At all? At all?

Go ahead. No. I think if he were grading, if he were a professor and another Fed chair was running this and it was his student, I don't think he would give that person an A. I think if Powell objectively were to look at what the Fed has allowed to go on, inflation is so incredibly negative for not just the economy, but for society. This country is fucking tearing itself apart. We have people assassinating CEOs over the cost of healthcare in the streets of New York.

Kind of. We've had, we've, no, no, no. It never had to get this bad. The Fed was stimulating, knowing that there was a fiscal stimulus taking place right alongside them. They continued to buy mortgage bonds, which kept the housing market absurdly unaffordable. It made no sense at the time. They saw transitory elements within inflation and assumed the rest of inflation would also be transitory when there were secular reasons for why inflation would be sticky.

And I just don't think on balance, Powell's going into the Hall of Fame. I'm sorry. Hold on. I think he works hard. I think he means well. I think he's well intentioned. I don't think past Fed chairs, if they like come back from the dead and look at what the central bank had been doing over the last four years, would be like, oh yeah, well done, high five. I just don't. And

Volker is dead, so we don't know what he thinks, but take a guess what he thinks. Wait, dude, hold on, hold on. You and I both were critical of Jerome Powell before he had- In real time. In real time, OK? We were critical of him continuing to buy mortgage bonds in real time. Before he raised rates, he was- Brian Deal in the chat calling me Monday morning quarterback.

Listen to Michael. Listen. Josh and I, go back. Josh and I were both yelling, why the f*** are they buying mortgage bonds? What are we missing? So we were critical of him then, and we were critical of them for not raising rates

until March of 21, Jesus. And also, we were critical of them for keeping rates for so long. So I am not here to defend this record. One more thing, one more thing. You were very impressed with his explanation for why they communicate so much and how they try to use forward guidance to get the markets to fall in line. Well I believe that he believes that's true.

Unfortunately, it actually does not work that way. He comes out and says, we're not considering a 50 basis point rate hike. Then he does 475 basis point rate hikes in a row. Okay, he has no idea what he's gonna do, is my point. That's number one. Number two, not only does the market not fall in line after the Fed does what it does, actually the market forces Jay Powell to do something

that he's been saying he wasn't gonna do. And I'll give you a great example. Think about 2018. In the first half of the year, all we heard about was rates are going higher. Then in the second half of the year, he continued to say it, and he came out toward the end of the year and said, we're nowhere near normal, like where the rates were going to be. The stock market crashed so hard into Christmas. I promise you, the president had him on the phone. What the hell are you doing? And within two months, he had completely reversed himself. Not only were we very near normal, he started cutting. We had three rate cuts in the first quarter of 2019.

He does not utilize forward guidance the way he thinks he does. He follows what the market is telling him. He has already gotten wrong. And I think he's done the best he can in a really tough situation. No Fed chair ever has had to face down a pandemic. The Fed is, remember, 1913. So it's not something that anyone's ever had to deal with. But he really did not, in my view, merit this kind of Jay Powell was right all along. It's been an absolute roller coaster for the average household that literally, it's not a meme that they can't afford groceries, they actually can't. Not all of it is his fault. But he they can't afford groceries. They actually can't.

Not all of it is his fault, but he certainly didn't help matters. And I think that that's the way we're going to remember this particular period of time. All right. So I didn't think this would turn into a comment on Jay Powell's legacy. I was merely talking about that soundbite. And I think you and I both agree that we don't have to re-linigate this. But I do think that Jerome Powell was dealt a hard hand. I think that he made a lot of wrong decisions. Yes. And I wouldn't have done better. And I wouldn't have to re-litigate this. But I do think that Jerome Powell was dealt a hard hand. I think that he made a lot of wrong decisions.

Yes. And I wouldn't have done better. And I wouldn't have done better. And I don't belong in that seat. I'm just saying the idea that he's using this transparency the way Alan Blinder intended it with an op-ed 10 years ago. You know what? It's too much talking.

Way too much talking. Too many people talking is another problem. We don't need 12 of these people running around making speeches, contradicting each other all over the country. I'm one of these people who's been around long enough to have seen both versions. I remember when they didn't say shit and now they're saying way too much and probably the right amount of transparency is somewhere in between. And now they're saying way too much and probably the right amount of transparency is somewhere in between. Alright. Make the case.

And by the way, I don't think, you and I are definitely not saying, I don't think anybody is going to say that Jerome Powell belongs in the Hall of Fame of Fed Chairs. Nobody's saying that. You seemed pretty laudatory coming out of that clip. I thought it was a good clip. If we had another 10 minutes here, I would make you reconsider. All right. Hold on, no, no, no, fuck that. I thought it was a good clip.

I am not going- It was a good clip. Do not put thoughts into my brain. You and I, I was screaming at the time about him buying mortgage bonds, and I was screaming at the point about him, what is he waiting for, not cutting in June. So let's not play provision of this history. I am not putting Jerome Powell in the hall of fame. I like the clip

We agree. I like the clip too because it really let you know it let you in on how he thinks about his role Unfortunately, I think he does think that he's just he's missing the bigger picture and I have to tell you When Biden passed that absurd, absurd stimulus package, a month into his presidency. Called what? The Inflation Reduction Act? But it was $1.7 trillion of new spending. That was the signal for the Fed.

It was a joke. The Fed is not in charge of that, but the Fed has to react to that, and they did not. Everyone knows it, and it'll never change. Can I pitch you a stock? Please. Chart on. You know what this company does? Hold on. I need to make my screen bigger because I am on dual screens. Let's see. What is this? Emerson. Oh, yeah. No, I don't know what it does. It was a utility.

They do the internet of things, SA. And let me tell you one other thing about it. This used to be an industrial. This is a company that is transitioning from industrial to technology right before our very eyes. This is one of the best, almost pure plays on robotics and automation. And this stock has broken the hell out. I love it. I don't own it. I think it's going to consolidate this massive gap. It is. I think it's going to consolidate this massive gap. I think it's going to hold the gap and if it does and allows those moving averages time to catch up, I think it's going to be setting itself up. I want to tell you the last time they reported earnings, $4.62 billion versus $4.56 billion expected. This is early November. Still have another earnings report in February.

Earnings $1.48. Let's put some of these graphics up from the company. So basically, this is a story of a hundred and, from 1890, it's a 130-year-old industrial business that used to be heavily reliant on oil and gas, that is now buying software companies and increase and buying. They bought national instruments and they just bought a massive software company that they already had a piece of. They are transitioning to more and more robotics as a result and factory automation.

Next one. This is just a look at gross profit margins as a result of getting more into software and as a result of getting... This shit is real. Shit's getting real. Wow. They have a CEO... Look at those gross margins.

That's amazing. Dude, because the mix shift is changing. They're not selling heating and air conditioning systems. They're selling literally stuff to Amazon and other companies that need automation in their factories. So if you think, Chardof, if you think tight labor market and you think like a lot of these forces that are causing the inflation are going to be with us for a while, this is one of the ways that companies are going to react to that. They're going to automate more and more of what they do.

And that's not just hardware, that's software too. And this company is becoming a very serious player there. They have a CEO who took over in 2021. The outgoing CEO invited this guy into his office and said, you're a lifer at Emerson Electric, tell us what we're doing wrong. And he laid out in a screed every single thing that's wrong with the company and that he would change. This company has been-

Where the f*** are you getting this from? Where are you getting this from? I'm telling you a true story here. No, but how do you learn about the story? You have all the resources. Do dilly, bitch! He delivers this screed to his own CEO and says, this is wrong.

This is wrong. We should do this. We should do this. CEO said, I don't really agree with everything you're saying, but I feel like you're supposed to be the next CEO. He's been in the seat for almost three full years. And when you look at a chart, chart back on, you can see the street is now paying attention. Let's see the stock.

Not that, stock chart. You could see this, almost, thank you. You could see the street is now woken up and it's paying attention. So I'm not saying buy it, I'm saying put it on your radar. I love it, I love it. Chart back on, I want to talk about the chart for one second. So there's that massive gap at the beginning of November.

I assume that's earnings. But then there's a second gap higher. That is unusual, super unusual. And the fact that it has not even come close to getting into that gap is super impressive. And this looks like a buy. Well done. Good pitch.

Yeah, we're going to let this thing marinate. Thank you so much, Michael. I'm sorry. I'm sorry I said bitch. Bitch. I didn't hear you. Oh, OK, good. Just, poof.

No biggie. All good. Well done to the bridge. You have a mystery chart for me? I do have a mystery chart for you, Josh. Chart on, please. I saw Mike Zaccardi tweet this. And there's no way in the world that you're going to guess it,

although maybe you will. Because it's a ratio chart of two companies that are diametrically opposed. One makes a fat, one makes a skinny. So that's a pretty good clue. OK, can I ask you what those numbers are on the chart? Don't worry about the numbers. No, it's just a set. They're there to screw with me?

No, no, no. Okay. So this is one stock priced in another stock. Correct. Okay. So I'm going to say, I want to say McDonald's, but it's probably not, is the denominator, right? Is that the right way to say it?

Yeah. And the numerator is probably the stock that's going up, which would be Eli Lilly. Yeah. I got them both. Yeah. I am the smartest man alive. Chart on, please. I want everyone to get a look.

This is what it looks like. This is what true stock excellence looks like, ladies and gentlemen. I feel like every time I give you incredible clues, you act like you're the smartest man alive. Were those really incredible clues? I mean, I said one company's trying to make you fat, one company's trying to make you skinny.

Yeah, those were pretty easy. Lily was easy. Give it to me that McDonald's was not obvious. That was good, that was good. I could have said Hershey, I could have said Young Brands. That's a good chart, though. Shout out to Mike Sucarty, good chart. That's what that's actually really interesting. They should chart that next to my weight and, uh, and see what, see what ends up

happening. All right, Josh. So in conclusion, I was fired up for the show because I knew we were going to have fun. I know we were going to bring it and, uh, the Jensen Wang. What are you doing in Vegas tonight? What are you doing in Vegas tonight? I'm going to Papi steak.

Oh, you go Papi steak in the fountain. Blue. Yeah. I went to the one in Miami with my wife and kids. They had the best night of their lives. They had so much fun there. You know what the deal is, right? I don't know the deal. Now I'm going to you go. I remember somebody's going to order somebody's going to order the thousand dollar steak. They bring it in a gold briefcase and like every waiter in the restaurant comes running over the DJ takes over this thousand dollar stakes and drawing powers lowering rates. All right, ladies and gentlemen, thank you so much for tuning in tonight. I want to remind you tomorrow is Wednesday, which means it's an all new

edition of animal. And then my favorite podcast later this week, ask the compound with Ben and Duncan and me. I'm on that. Oh, shit. I'm on that. So look for that. And then the compound and friends at the end of the week.

And once again, we have an awesome guest. Thank you so much for watching and listening. We appreciate you. Hit the like button. We're out. Whether you're just getting started as an investor or you're managing a multi-million dollar portfolio, Ridholtz 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 ridholtzwealth.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