The Compound and Friends - The Biggest Winners and Losers of 2024

Episode Date: December 31, 2024

On this TCAF Tuesday, hear an all-new episode of What Are Your Thoughts with Josh Brown and Michael Batnick! Happy New Year Compound Nation!! Thanks for rocking with us! This episode is sponsored by Public! Fund your account in five minutes or less at Public.com/WAYT and get up to $10,000 when you transfer your old portfolio.   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: All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC.  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. The 6%+ yield is the average, annualized yield to worst (YTW) across all ten bonds in the Bond Account, before fees, as of 12/13/2024. 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. *Terms and Conditions apply. 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 a supersized edition of What Are Your Thoughts with Michael Batnik and I. We roll through the biggest winners and losers of 2024, the people, the stocks, the investment opportunities, and a whole lot more. Do not miss it. Stay tuned. I'll send you there right now. That's it. Stay tuned. I'll send you there right now. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Badnick, and their castmates are solely their

own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Alright, ladies and gentlemen, welcome to the final edition of What Are Your Thoughts of 2024. Thank you so much for joining us. Thank you for coming to the live. Love to see you here. I want to tell you about our sponsor and then get right down to business because man, we

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We are coming to Naples, Florida. We're going to do a live edition of The Compound in France. It's Michael. What is the meaning of this? It's macro inferno. It's Michael. It's me. Michael is I think that's Robin Gibb. I'm not sure. I'm not sure who's who in this. I know I'm Barry. Nice bulge. You like the bulge, right? What is this? Literally, I don't know plays this before my time Yeah, clearly macro inferno stars myself Michael Batnick and our

Extremely very special guest mr. Brian Belsky you can come you can hang with us We're gonna do a cocktail hour. We're gonna do a live tape and I won't have any cocktails before the show We're gonna do a live tape and I won't have any cocktails before the show And then drinks in and mingling after so if you are a fan of the show and you're in Western, Florida Or you're in East East Coast, Florida And you want to make the drive across alligator alley come see us at the Alamo draft house For a special live edition put that back up. What's the date? February 20th. I wanna say it's not limited to Florida residents because last time we did this,

or one of the times in North Carolina, we had people from all over the country come see us. That's right, Michael. And in Florida, in February, there are people from all over the country. On the West Coast, it's a lot of Midwest, I feel like. So it's February 20th, 5 p.m. And man, are we gonna have a great time?

Belsky is gonna come fully loaded with his outlook. Yeah, tanned of course tanned and I'll be tanned too and We'll listen we'll we always have such a great time hanging with the fans So if you are gonna be in Florida this February and you want a ticket, let me tell you how you get one. Send an email right now. Ask the Compound Show at gmail.com. We have a very limited quantity of tickets available, but if you're a fan of the show, we want you to grab one.

So ask the Compound Show at gmail.com. All right, let's start off. We're going to do 2024 by the numbers sort of a year in review Um just to bring everyone up to speed on what actually transpired this year This was an incredible year for so many reasons. I want to start with the major index returns throw this chart up Michael what jumps out at you here? Uh a continuation of the past couple of years dare dare I say, decade plus of large tech leading the way.

That's exactly what I was going to say. If you were looking for some sort of a mean reversion, you didn't get it this year. I feel like as the calendar turns, it's cute to be a contrarian and think that just because it's January 1st, everything that happened over the last 12 months will stop and the trend will somehow magically reverse. Maybe 25 is the year, but maybe it won't be. I think continuation is the right way to put it. The NASDAQ did 32% this year. The S&P did 27. The Russell did 12, not bad by the way. So maybe that was the mean reversion. Can I say one more thing? One more thing that stands out. So of course, large tech is the clear standout, but I also want to point your attention to

the fact that for all the hemming and hawing and the bemoaning of emerging markets and international stocks underperforming, who's mad about 9%? Now I know it's not 32, but 9 is not that bad. What's 9%? Emerging markets. I mean, 9% after nothing for two years is not, but small caps like oh small cap on the performance. Yeah, I don't perform 12%. I'll take it.

Bloomberg Global Aggregate Bond Index negative 1.8%. Is that surprising? Is that about what people should have expected? Well, I think it's because of the run-up in rates over the past couple of weeks prior to that it had been positive. Yeah. run up in rates over the past couple of weeks. Prior to that, it had been positive. Yeah, so look, I still run into people that ask, are bonds worth owning here? Are they a helpful part of the portfolio? Absolutely.

I mean, that was a positive number, but the purpose of the bonds is that it wasn't a guarantee that you were gonna get 32% of NASDAQ this year. If we knew, then no, Why would you have owned bonds? Right. If I know what the stock market's gonna do next year, I could tell you whether or not you need to own bonds. But because I can't, I think that's an important caveat. Let's do factor leaders and laggards. So Chart Kid Matt and Sean did a lot of work on the show to get us ready for this.

And I just want to, I'll, I'll go through these numbers out loud for those who aren't looking at the chart. Momentum is the clear standout factor for 2024. It now has a 20% annualized total return over the last five years. This is as good of a run for any factor as any of us alive have ever seen Momentum did another forty eight point four percent this year growth was to thirty eight point six percent quality twenty seven not bad

Only only in a rip-rope bull market. Could you say twenty seven's not bad? I know Low valve did fourteen point nine percent. So you made money if you were a conservative this year Just didn't make as much that's the trade-off. Yeah Value thirteen point four which we're gonna talk about later Yields, so if you were a dividend specific investor seven point eight percent anything anything here worth Talking about it's a mirror of the previous slide. Okay. I got no nothing else to add. Let's look at the dogs. So remind people what this is.

So the dogs of the Dow are the highest, the 10 highest yielding stocks in the Dow. So the strategy is you buy, you buy the 10 highest yielding Dow stocks because generally the highest yielding means that their share prices have not kept up with the market over the prior year. That's exactly right, Josh. And if you were looking for some mean reversion, or a trend change, it's been painful for five of the last six years. And Dogs of the Dow had been a winning strategy. It's very much a value strategy. And as we all know, it's been out of five of the last six years and dogs of the Dow had had been a winning strategy It's very much a value strategy and as we all know it's been out of favor for the last five years It won't be forever. But for now it is the dogs of the Dow is a really tough strategy

during times of Massive technological transformation and that's what we're living through and as you can see you had one Positive year out of the last six. Which year was that? Was that 20? It wasn't even 22? Yeah, it was 22. Okay. 22.

So, the dogs have trailed the actual Dow by 14 percentage points this year, which is the fifth weakest performance in the last six years. Yeah. And after 2022, we forget that people were all about this. Think about how well value stocks did relative to growth And everything else and you piled in 23 and you got your face ripped off. Let's do sectors 7 out of 11 s and p 500 sectors had double digit returns in 24 if you Lost money because of your sector waiting you had to really go out of your way and try hard because the biggest sectors. So communications, that's meta and alphabet and I think Netflix

is in there, did 36.6%. Financials though did 32%. Hell yeah. And consumer discretionary which is Amazon and Tesla did 29.5% and then tech was the fourth. Tech did 24.2%. Tech would be like software semis, Apple's in there, Microsoft's in there, Nvidia's in there. But your top four sectors all did what the market did or slightly better. And those are also where the biggest market cap stocks are. So you had to be really pursuing a bizarre

like cap weight, inverse cap weighted strategy to have screwed this year up. And some people, I suppose, manage to. But I feel like most investors had a great year. What do you think about that? Yeah. Well, you took the words right out of my mouth. I was going to point to the opposite side of the chart, which is three of the four worst sectors are three of the smallest sectors in the market, materials, energy, and real estate. So yeah, they were horrible performers, but the index didn't really seem to mind. Healthcare was horrific this year. I have one healthcare standalone stock, Pfizer, and I think it's my worst performance. After I made the case for Moderna, I did it.

I pulled the trigger. Did it go up? A little bit. Okay. My machine won't let me type that took a symbol in. All right. Let's put this healthcare chart up. What do we think? This is Ned Davis research.

So this is a really clever chart. I've never seen anything like this before. This line chart shows all the previous bull markets for the stock market. And it shows the relative performance of health care in those previous runs. And this by far has been the weakest performance for health care relative to the market in a bull market. The red line. Just off the charts. Disgusting. So I think that if you're looking for some sort of regime change or maybe you want to get queued in 2025, this is pretty much blown all the way out. I had dinner with a very good friends of ours and the husband works as an investment banker in specifically healthcare and biotech. And he travels all over the country talking to companies, not talking to investors,

but like management teams of companies that are either doing an IPO or considering M&A. And his comment was basically like GLP ones sucked all the air out of the room and anybody working on any kind of drugs that's not related to the weight loss, diabetes stuff. It just, it's not that they're not doing well, it's they just can't get anyone's attention. They can't get portfolio managers' attention. Yeah, nobody really wants to hear about it.

So there's a lot of obviously great work. By the way, Il Milino Roslin, I'm gonna go on the record right now. I'm just gonna tell you it's the best Italian restaurant on Long Island. And there are many, many very good ones. No, that's a right now. I'm just going to tell you it's the best. It's the best Italian restaurant in Long Island. And there are many, many very good ones. No, that's a good take. I like it a lot.

I especially like the, the bricks of Parmesan cheese they put on the table in the beginning. So they start the meal with the thin sliced eggplant marinated in olive oil and garlic, the bruschetta, like the tomato and onion. And, and then they, they drop, they drop that Parmesan wheel on the side of your table.

It's like a Flintstone, like it's gonna tip the table over and they take a little spade and they chunk it out for you. So good. Why doesn't every restaurant rev my engine like that when I sit down? I'm a huge fan of you go to the table and boom, there's something for you. Something to let the whistle. So to speak.

Anyway, so how healthcare bait, it's not that they're look, if you owned Lily this year, um, or you owns like Novo Nordisk, like you made money, but what if you own CVS remember that, that whale hedge fund manager? Yeah. Uh, United health had a horrendous year for obvious reasons. It's just a lot of the large caps in the healthcare sector just were MIA and they're not part of the bull market that we're currently experiencing, at least not yet. ETF AUM broke a record, right?

I think it was a trillion dollars in inflows across the board. Do I have that right? Yeah, wild. What is this chart showing us? That $10 trillion now in US ETFs, which is enormous. So we're looking at passive to active. It's like 10 to 1 passive versus active. Flows or AUM? AUM. universe is $897 billion.

But let's also point out that that universe had a hell of a year because a lot of it was things that were getting influenced for the first time in a long time. So even though it's just a fraction, these are wildly profitable. This was a great year for active ETFs. And even fixed income,

is that 1.7 trillion an active fixed income Yeah, well Todd Todd stones all over this. He has a chart showing the Explosive rise in fixed income ETFs versus mutual fund counterparts and it's uh, it's doing what you think it would be doing Well, we had we had Rick Reader on the last compound and friends. That was so second, you know, it's like a blur We did Rick Reader and Harvey Schwartz back-to-back, which is insanity And do we do cliff before that and then we might have we had Nicholas and cliff Asked this like the last four shows. We are on a heater Sick, it's crazy. All right. This comes from the JP Morgan guide to ETFs. What are we looking at?

The milestone 10 trail it's kind of hard to believe I mean when are we looking at? The milestone, 10 trillion. It's kind of hard to believe. When were we at 5 trillion? Not long ago. 2020. No, we crossed 5 trillion in 21. It's unbelievable. So we know where the money is coming from. I mean, it's coming from everywhere. But a lot of it is leaving the active mutual actively managed mutual fund. And a lot of it is leaving the active mutual actively managed mutual fund and a lot of conversions. Yeah. So a record year of actively managed outflows like the FT wrote about this. And it's still it's like one of the biggest trends of the year is people just saying even if they're allocating through active, they just do not want mutual funds. ETFs are the biggest, not want them. The biggest story in financial markets, in my opinion, of the last of the century.

Um, bitcoins ETF is a record launch. Not even close. No, it's a, it's a record. And there's not even the number two. I don't even know. Number two is so far behind. Nope. Right.

Nobody has ever launched an ETF in any category that has raised assets at the rate that the BlackRock. And I'm going to go out. I'm going to go out on a limb and say never is a long time, but I don't think we'll ever see anything like this ever again. Wait for Solana. Okay. IPOs. So I thought this was interesting. This is the last piece of the puzzle and maybe we get it this year. And there are structural reasons why we're not getting a boom in IPOs alongside of the stock market, which historically you always would have gotten. And those structural reasons include how easy it is to raise money

in the private market, how easy it is to stay public, how much liquidity there is for people that want exits while private, and just a host of other factors too numerous to mention. But we did get a lift. So this year we did 146 IPOs worth $29.6 billion. Last year it was 108 deals worth 19.4. That's a 50% increase. If you're anchored to that

2021 number you might never see that again when we got almost 400 deals raising 142 billion that was SPAC mania on The thing to keep in mind with this the dollar amounts those are gonna be heavily affected by like the big big big deals and You think what do you think we see like a giant one next year? Stripe SpaceX anything like they say SpaceX end of the year big deals and you think what do you think we see like a giant one next year? Stripe, SpaceX, anything like that. They say SpaceX end of the year, uh, 25. We're, we're going to bring out Aaron Dillon back to ask these questions of, but I think Stripe, SpaceX, Databricks, open AI. There's like, uh, there's,

there are companies that people think are $500 billion or more companies at some point. They won't come public necessarily at that valuation. But when those deals come, you're going to see that blue line pop up. And maybe that'll be the signal that, OK, this thing's gotten carried away. We're starting to peak in IPO terms. But that didn't happen. We got an improvement. But that that's pretty much it I want to show you M&A Hold on hold on before that can I can I give the credit to you did you buy you bought Reddit

after the giant gap higher? I bought it at 112 it's 170. So that's a pro move so on Tuesday October 29th Reddit closed at $82 a share. And the next day after a blow at earnings release, it closed at 116. So from 82 to 116. And that's a hard buy. That's not, it's not though.

No, it is not. No, I know this. I'm saying for most people, you're like, oh, I missed it. And professional investors buy that, so credit to you. So you bought it after whatever, 30% move, whatever it was, and now it's up another gazillion percent. I'm up 50%, very fast. And so what I did after that gap, here's what I did.

I loaded up the last four podcast appearances that the CEO of Reddit made. He talked to Kara Swisher. He did like he had and these are not necessarily recent, just anything from the prior year and a half, two years. And I listened to him talk about the opportunity in Reddit before they crushed earnings. So I listened to like three or four interviews. Then I listened to the conference call itself that produced that gap. And I walked in and I bought the stock because I understood that I understood that what's happening at Reddit is it why am I told like Dan Ives?

What's happening at Reddit is like a delayed reaction to the groundwork that they've been laying for 20 years. Now, there are serious contender in the advertising business when before it was just kind of like a hobby. Well, Twitter's lost. Twitter's lost has been Reddit's gain. Yes, the deal with Google putting Reddit results as the top three search results on Google

led to this massive influx of traffic and now. Dude, me, that's how I found Reddit. Yeah. Like I know I'm 15 years late but I was never a Reddit user until Google put it up. Right. And by the way, one of the things that Steve Huffman was talking about, and by the way, Steve Huffman is a founder of Reddit. He's not like an installed CEO they got from McKinsey. And this is really important. The reason he's the CEO of Reddit is because Sam Altman Basically begged them to come back to the company they were in the wilderness prior to coming public and Altman was on the board and just was like you got to come back and do this

they they are now striking deals with people like Sam Altman all of the LLMs want to incorporate Reddit data into their training because that's 20 years of user-generated content. Some of the richest informational content that exists anywhere on the internet, the sheer volume of it dwarfs whatever the New York Times is selling because it's millions of people commenting about their lived experiences with products, with services, with events and expertise and all of that, that is becoming I think like the weapon arsenal for large LLMs, large

language models that want wanna have useful results. So they struck a deal, I think, with Alphabet, but I know they're talking to everyone in Silicon Valley about what their data costs. And that's like a huge line of business for Reddit. And every day, the sun comes up and a hundred million DAUs come on the site and add more content to that already incredible library of information.

So did you ever add to your position on the way up? I don't need to because the market, the market edits my position. Great trade, great trade. Still long. All right. But I have a stop loss in because it's gone up a lot. So I just want to full disclosure. All right.

M&A. This is just North America, so consider this just United States. We haven't had a bubble here. So if you're one of these people, it's like, oh, they don't ring a bell at the top. Well, they're not ringing a bell here. We did, what is that number?

1.9, excuse me, trill. 1.9 trillion 17,5744 transactions M&A-wise, which is about the same as last year. Slightly elevated, but not really. I think you're more likely for this to be 50% higher next year than IPOs. So I'm going to make that call too. I don't think that Trump 2.0 means the floodgates open with IPOs. I think they'll go higher. I think where you're really going to see the sex is media companies and tech companies

that have not been allowed to merge effectively, like for five years, nobody's even attempted anything. That's really going to change here. And I think you're going to see all kinds of sp-offs. You're going to see acquisitions. You're going to see mergers of equals, more private equity activity as well. So I would, I would look for this to be where you see evidence of, um, you know, overly bullish sentiment. I agree. All right. Household wealth, new record hundred fifty nine trillion dollars in US household net worth The sense in tears. Yeah, okay. I

Guess I don't how do you how do you look at this chart and say America is fucked up? Well, you you have to you have to go to the second derivative and say well, what's the distribution? Well, that's what I was going to say. Yeah. Fine. We agree. Yeah. We agree. Inequality.

There's always inequality, though. So the world's 500 richest people. I saw this other from Bloomberg this morning just hit 10 trillion. Yeah, that's normal. Let's see. Is it is the is the is the concentration of the wealth of this country ideal? No. But please understand inside of this hundred and $159 trillion in net worth, that's net of

debt, there are a lot of average, ordinary people who have done very well for themselves as investors over the last few years. I was reading a book on vacation that's from 2012. And the number that stood out to me was there was 400,000 Americans almost 15 years ago that had a net worth of $5 million more. And that number is obviously significantly higher today. It's millions now.

Millions. Yeah, next chart. Average US 401k balance by age. Great job on this chart, kid. Matt. So as you might imagine, people above the age of 55, you know, through 70 and higher are all about $250,000 in, again, average 401k balance. But what's more interesting to me is looking at this cohort, 30 to 50. These are the working on

their way to becoming wealthy people. And if they keep going, they will join that cohort with an average balance of 250, but it'll probably be higher then. It'll probably be like in 10 years, those numbers at the top end will probably be $300,000 to $350,000 average balances. And this is how it's supposed to work. So anything in here that surprised, I guess maybe I'm a little surprised, $7,200 for 20 years old to 24 years old. I feel like that's like not enough. Listen, this is the epitome, as Nick Medjuli would say, of just keep buying. Like it works. And it doesn't mean that stock markets go up every time or all the time, but you just keep buying.

It flatlines at 65 because people are taking money out. Yeah. Or retiring and not contributing anymore. We still on topic one. Let's keep moving. Okay. Five best S&P 500 stocks this year. Palantir. This is the stock of the year. 360%. It is the best performing stock in the S&P 500, but the caveat is it wasn't added to the S&P 500 until September. Okay. Look at the chart.

I am. That's when you buy it. That's when it breaks out to a record high above the August high, added to the S&P, and then it just goes from 30 to 80. It just goes vertical. I mean, in hindsight, this is so easy. That August retest was perfect. Yep.

All right. This one's interesting. Vistra, BST. Yup. This is up 266.1% year to date. This, this is the, this is the best performing S and P name. If you only use the companies that were in here the whole year, and this is a utility and we're going to talk about that in a minute.

Third best stock is Nvidia up 176 front-loaded look at that amazing. I don't know my first half the year basically, but oh my god. Yeah. Oh my god fourth best stock GeV what is this? You know this name is this a spin-off. How is this just? Where's this got Why does this chart start April? It It's because it's the energy business of General Electric. Yeah.

So it's called GE, Vernova and spin-offs are good, dude. We underrated. Fifth best United Airlines. Look, this just speaks to the underestimating of what the consumer would spend money on this year or how much they would spend. People just continued to travel. I don't think we can call this pandemic like people being held back by the pandemic.

It's five years ago. Yeah. So one of my worst trades of the year was selling. So Delta looks similar. I sold Delta on the nasty puke in the summer. That was fun. Delta still looks great. Okay. Worst stocks, Adobe. I don't really understand what's going on here. It's down 25%. It's a software company that's involved in AI. Either people think AI is going to take away some of the human driven workflows, design workflows that people are using Adobe products for,

or I don't know, this seems like they need a CEO change. What do you think about this chart? I don't know, okay, I would say, I don't know anything about the company, but the chart looks viable. It's like a very, very, very, very, if you zoom out, which we don't have, it's a very easy stop below 440.

So I like the risk reward here. You do. I do. You don't care about what's plaguing the company. You don't want to dive into that. Bro. Okay. Fine. JC. All right. Second worst stock AMD. This is a shocker to me. I'm not in it. I just bought it. All right. We're going to talk more about what's going on there. But we did a deep dive into the AI related semiconductor stocks a couple of weeks back. So for people that want more They can go find that but I can't believe that Nvidia did plus 176 and the stock was down it really goes to show

That this idea of like by the second best company or by the competitor It's just like it's sometimes it works, but just in general, it's like a flawed concept. Totally. Like, oh, if you miss this, buy this. So just for the record, if this rolls over again and takes out those laws at 118 ish, I'm out. Which probably will. Yeah.

Just what a disaster for the longs there. Third worst stock in the market, Pepsi. I guess it's understandable. I think in 23, you pointed this out in a previous show, they had gotten by with price increases, which masqueraded slowing growth, masqueraded, which masked slowing revenue growth. There's only so much more you can add on price without volumes being affected. And I think volumes were affected. And when you stop raising prices, this is what it looks like.

I think the data point that I gave on one of the earnest calls last year, or maybe two years ago, I can't remember, was like sales were up 11%, but transactions were up like 0.1%. So to your point, people just stopped buying or slowed down. All right, let's do Merck. We spoke about healthcare, not to believe with a point, down 6% disaster. Next stock is J&J.

You know, it's funny down 5%. These companies are nowhere in terms of GOP, semiglutide, terzepatide. They're just not, they don't have anything. What are you, a chemist? What they have, yes. What they have is a dividend and as we pointed out earlier, dividend was the worst factor to wait on. Josh, I'm looking at a long term chart. This thing is hanging on by a thread. Which one, J&J?

By a thread. If it, if this, I mean, this has been, there's a lot of prior support at 144 and it is hanging on. If this breaks 144. Yeah. You know what? I think the narrative on these stocks now is yes, they're cheap, but under a Trump regime, like is a limit to what they're going to be able to get away with in terms of drug pricing. And he loves sending tweets at these companies, CEOs, and it's just like, of all the things, you really need a catalyst to get bullish on these stocks.

It's not good enough that they're cheap, I think. And I'm in another piece of shit Pfizer which I've been in since last November and again my worst stock of the year it's not down it's just not up yeah and for me that feels that feels just as bad all right you're up all right I'm gonna we're gonna move quickly here because that was a long one all right let's go consumer trends so there there's this sub stack that I subscribe to. It is called, what is it called? It's called The New Consumer by Dan Fromer. He's a former consumer analyst. I believe it's pronounced From-ay. From-ay. Okay, maybe. This is really amazing. So we're looking at the e-commerce share of US retail sales.

And of course, we all remember that when the world shut down, we were buying everything on the internet. And that pulled back, but we're basically back to new highs. So this is a secular trend, the percentage of things that we buy off of the internet. I don't know how high this is going, but it's going much higher. Right. So that step back after 2020 was not really a step back. It wasn't like it peaked and then fell. It just kind of like bided its time and then people went right back to internet purge. So the next one is great.

Even after the reopen. E-commerce spending has more than doubled in the past five years. More than doubled in the past five years. That's a holy shit. Over the last 12 months, at the end of September, 1.16 trillion, again, going higher. And one of the big places where people are buying is TikTok. So TikTok shop is already bigger than Shine, Sephora, and how do you pronounce this? Curate, which is HSN and QVC. I mean, just an explosion from zero.

And those comps make sense because what they're buying from TikTok is the clothes people are wearing and the makeup on the girls' faces. Like the girls are doing these makeup tutorials, the products they use, and then they'll link like a regular affiliate link. Like if you want to be as pretty as me, click here. And yeah, and that's obviously not going to stop. regular affiliate link, like if you want to be as pretty as me, click here. And yeah, that's obviously not going to stop. The other thing I'd point out on this e-commerce thing before we move on, Walmart and Target,

like when you listen to their earnings report, that's all they want to talk about. I'm in the Target parking lot three times a week picking stuff up. Yeah. All right. Let's keep going. Okay. One of the charts of the decade that has potentially enormous ramifications for every part of the economy The prevalence of obesity among us adults aged 20 and older which was in a secular bull market

Finally has a finally peak perhaps so 40% of us adults 20 and older over 40% were obese Now it's back down below 40 percent and I think it falls from here. Yeah. I think we're undergoing a health care revolution with this new class of drugs and there's no going back. Nobody's nobody's given up the nobody's giving up the lifestyle improvements that they've experienced. So pills Viking therapeutics is the stock that you want to watch if you

think the pills are going to be the next stage of this. That's obviously a rock and roll stock. Oh my God. Yeah, they have and I don't think they have a partner on this drug either. They have the closest version of weight loss pills based on the the GLP-1 agonist stuff. And if those hit the market, it lights out for obesity. So this stock went from 17 in January up to 100, and now it's back down to 40. That's a massive gap filled. Wow.

It's a crazy stock. All right. This is a bit depressing, but we know what it is. 60% of Americans think the US is currently in a recession. Obviously, it isn't. And 17% thinks it's in a bad recession. Wow. So the people saying this, either they're

politically unhappy with election outcomes, or they're generally in a position where they're struggling with high prices, and they're no longer getting the wage gains and it feels like shit Yeah, and uh, you know if you're not in the investor class all this stuff that we're talking about just washes over you Yeah, I learned my lesson. I'm not dismissing how people feel anymore. No, like people are People people that are not like sitting in cash Getting the high yields all they're facing down is higher debt rates.

They're not enjoying that. And people that don't have 401k balances, they don't understand why everyone else doesn't feel as angry as they do. Yeah. Okay. Let's end on a high note. Holiday e-commerce spending set new records and it's accelerating over last year. So they're showing Cyber Week, Black Friday, Cyber Monday, and the holiday season shopping. And it's all 7 to 10% higher than it was a year ago. So

and this isn't just higher prices. This is people that are spending more money, buying more things. We spent $131.5 billion between November 1st and December 2nd. Yeah. And what do you think it was? 9% versus December 2nd through the end of the year. Probably even more than that. Oh, it's got to be more than that fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun.

I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun.

I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot of fun. I think it's going to be a lot the topic, I just wanna talk about Harvey for a second.

I think you and I were talking about this on the walk back. His story might not ever happen again in the current world that we live in. This idea that this guy could buy the skin of his teeth, somehow somebody taps him on the shoulder, saves him, gets him into college after having a pretty rough high school education. And then all of the breaks that he got along the way,

all the breaks that were fortunate, all the breaks that he made happen. That can't happen in today's world where it's all about resume screeners and whatever, whatever. The CEO of Goldman Sachs in 30 years or Carlisle for that matter will not have gone to Rutgers and had that sort of path. So really incredible story. I think in finance, yes. I think in tech, they're all still going to be college dropouts that are too smart to be sitting through these classes.

Yeah, I'm talking about finance specifically. Yeah, I think in finance, you're right. I think if you ask me, what will the pedigrees be of the top five private equity and Wall Street executives in 10 years, they're all going to be Harvard, Yale, Princeton. There's no question. So it's a miraculous story. As far as the topic goes, I think that we are in the early innings of a secular shift from public to private and the lines being blurred and private market investments getting

to publicly traded vehicles and getting tos, and getting into wealth managers. And I understand that at first, there's going to be a skeptical, maybe even a cynical eye towards this. You've got guaranteed higher prices. That's a fact. The expenses of the cost of these products are higher. They're less liquid, if not fully outright illiquid. And so it's fine.

And you probably should be very careful and thoughtful about how you think about allocating to these assets. But I think the explosion is on balance going to be a good thing, even though I think returns are going to be lower in the future than they were in the past just because there's so much more capital. And the illiquidity premium that you used to get was in part because of lower valuations and all that good stuff. That obviously isn't here anymore. But what you're also going to get is professionalization of the asset class, which obviously existed for institutional, but it's coming for the RA market and you're to get lower fees because there is so much competition and the costs are going to come down and the access is going to get easier.

And so of course, it's not going to be all good or all bad, but it's coming. You could fight it. You might not like it, but it's here and it's coming. So that's what I think. I think so too. But my version of that is like, there was a moment 10 years ago where we thought venture was going to make a really big dent in wealth management. And you saw Fidelity and a lot of big mutual funds like open-end 1940 Act mutual funds

incorporate 10% or less privately held growth companies. And the theory was in a normal environment, these companies would already be public and not giving people exposure to them is going to reduce their potential upside. So you have to. So now, Fidelity is going to go out and buy private market stakes in these companies before they come public. And I like the idea. I like the theory of it. I don't I didn't love the execution because the markdowns were like bewildering. But then you realize that's the nature of the asset class. From my perspective, that was the wrong starting point.

I think private privately held, professionally managed companies, not venture backed startups, is a better entree to private markets for a mutual fund structure. 100%. Yeah. Think about the fact that 88% of the businesses in the United States that are generating $100 million in revenue are privately held. Is that true? 88%.

88% of $100 million plus. So only 12% of the available investing opportunity is covered by the NASDAQ and the New York Stock Exchange. Correct. Yeah. You're also seeing the exchanges make a big push into private markets because they see this coming to NASDAQ's going all in on this. So the future for wealth managers, I think, is model portfolios and BlackRock is making a big push into that. All of the other asset managers are going to follow suit. So it's coming. Well you know who's skeptical. Our friend Jason Zweig. On screen please. Jason published

this on December 20th. You're invited to Wall Street's private party. Say you're busy. Subheader. Small time investors may soon gain access, easier access to so-called private markets. That usually means higher fees, greater risk, more conflicts of interest, and a harder time selling. All true. All true. All true so far.

But to your point, we know the fees are coming down because there aren't going to be 100 winners in the asset management landscape providing these products to retail, there's going to be like 10. And those 10 are going to lower prices in order to gain share because they can afford to. And so I don't think the traditional fee structures that have been, let's face it, not great for small investors are going to stay where they are. I don't know if they'll get great, but they'll be better.

It's a spectrum. Jason's also right. There's going to be a proliferation of really shitty products and really bad investor outcomes and people that don't understand what they're getting themselves into. So, yeah, you have to be careful for sure. Jason said, hold on to your wallet. Wall Street is gearing up for a sales push that could enrich the middlemen and impoverish you.

I'm talking about private or alternative assets, investments outside the public stock and bond markets in the right hands These assets work wonders in the wrong hands They wreak havoc this coming year with Wall Street and Washington likely opening the floodgates in unison Your financial advisor may inundate you with pitches to buy private assets definitely You should evaluate them with more skepticism than ever. All right. If you're getting pitched, he's 100% right. Yeah. If you're getting sold something, it's not great. This is the one thing I would say.

What's the worst reason to invest in private assets? 14% yields. Right. Not realistic. What's the second worst reason? What's the second worst reason to invest? Second worst reason to invest, I would say non-correlation. Oh, it can be a f***ing break. Bullshit. It's only not correlated until they re-mark the portfolio next quarter. Listen, private equity and public equity, they're both businesses, right?

So one trades every day and one trades whenever one gets marked. Well, this is what I want to say. If we're going to blur the lines in terms of allocation, we're going to have to blur the lines in terms of how we look at the performance and the way they measure performance in private market assets is very different than the way we measure. How did the S and P 500? Yeah, I was, I was listening to a podcast, Michael. Oh my God. All it goes mainstream,

why am I drawing a blank in his name? Arrow Eddie? No, I listened to three of his podcasts on the beach. I'm sorry. I talked to this guy, I'm drawing a blank in his name. Hold on a sec. No, no, no, I'm worried. He's not listening. All right, his podcast in his name. Hold on a sec. No, no, no. I'm worried. He's not listening.

All right. His podcast, it's just Michael on a sub stack. What's your last name, Michael? Forgive me for drawing a blank. Anyway, listen- Michael Private Assets. My God, I can't believe I can't remember his last name. All right, whatever. Somebody was on his podcast saying that in 2023, private equity marked down their portfolio, I'm sorry, in 2022 by like 8%. And we know 2022 is a really rough year. Yeah.

In 2023, they only marked it up by 2%. So now in 2023, you might be an investor saying, what the hell, the S&P's up 26%, how are you up 2%? It's a delayed reaction. Exactly. All right, we'll have more to say on this. What's this? Let's just do this really quickly. What's this chart? Challenges for financial advisors and... Okay, so...

Oh, Michael Stigmore. My God. Sorry, Michael. So there were... Okay, so grand assault because of the context of this survey. This is the state of alternative investments and wealth management from Mercer and Case. All right, so these are people that were at a Case Alternative Investment Summit, so they're probably more likely to be invested in ALTS anyhow. But these challenges remain, challenges for financial advisors and adopting alternatives. And the number one is high level of administrative and paperwork, lack of liquidity, and concerns around due diligence and compliance. And I think the third one is really what hits home for me.

And then fees and expenses are only number four. That's interesting. So we might feel very comfortable with some of these giant asset managers doing the diligence on our behalf for our clients, but how do we really diligence the investments? I understand the story. I understand what they're doing.

I might look at the documents, even if I was, what am I looking at? You can only do we really diligence the investments? I understand the story. I understand what they're doing. Am I looking at the documents even if I was? What am I looking at? You can only do your due diligence on the manager. And that's why I think the established firms have a really big advantage, like the Apollos and the Aries. Blackstone. I like Blackstone.

You probably. KKR. So there's a lot of this talk about like a lot of the alpha is from emerging managers. That might be true in venture. That's not what we're looking for. Not here. You want scale.

All right. Next chart, current allocation to alternatives. Most people, at least the majority of respondents are at one to five and six to 10. And listen, this is no secret. This is why they're here, right? The runway for them, they're already at 30% to 40%, in some cases, higher of institutional investor portfolios. The runway that they have to hit the wealth managers is miles and miles and miles long. So they're hitting it. And then lastly- I think it's a trillion dollar opportunity.

More, more. Just know like in the opening innings of this. And then lastly, current allocation to alternative asset classes. What stood out to me here are hedge funds. So most people, the majority of respondents that have at least more than zero. So some allocation is private debt and private equity, which makes sense to Josh's point as a starting point. And the number of investors that have more than 10% in hedge funds is down to 2%. So this is the idea of an experiment for alternatives coming to wealth managers that did not work out very well. Can I tell you like the do diligence conversation between a wealth management firm, CIO and whoever is selling them an alt from private equity? Here's how that conversation ends.

You think you're doing due diligence, but come on, these companies are investing in companies that don't file SEC paperwork. What are you going to fly out to the f***ing mill, paper mill? So what it's really going to boil down to is, remember the scene in Almost Famous where William has his story, he's going to leave the tour, and the Stillwater guys are like, it's almost like, what do you want me to write or whatever? And I think Russell Hammond says to him, he's like, just make us look cool. If you're an advisor, the worst thing that can happen

is you look like an asshole in front of your client. So you just say to like the private equity, it's like, am I really gonna do this? Like push me over the edge. Can you make me look cool? Don't blow me out. And if BlackRock and Carlisle can say to the advisor, we're going to make you look good. Like that's, that's probably where the due diligence is going to stop.

I hate to say that out loud, but I know, I know, I know how people work. All right. Uh, let's move on again. Try and move fast here. All right. There was a story in the journal, another one about, about the, one about the explosion in options. About 48 million options contracts have changed hands daily on an average this year. On pace for a record in data going back to 1973. That is up 9% from last year.

And when Mark the fifth straight year of fresh all-time highs, the irony here, and they pointed this out as options, like traditionally at least have been like hedging instruments, right? Like I want to protect this position. I want to protect my portfolio. No, they're prop bets now. They're prop bets. That's exactly right. Amateur traders made up 29% of US options activities as of September up from 23% at the start of 2020. So it's we're all in and Josh, I was at Bahamar over the last week by the way

Future proof is doing Bahamar in October and what an incredible venue. I that is my my happy place I was there in April. I was there in April So I'm waiting. I'm at there's only there's two kiosks for for bets and There's these two knuckleheads in front of the sportsbook. I at the Hyatt? Yeah. Yeah, it's not that big. Yeah. So there's two dudes that are just taking forever. And I'm looking over their shoulder. And this one Jackaloon is placing a bet

for the first player to hit a TD. Now, that's usually like plus 400 to plus 800, depending on who you're betting on. If you're betting on Seiko to get the first touch out of the game, it's probably plus 400, something like that you're betting on right like if you're betting on Seiko want to get the first touchdown of the game it's probably plus 400 something like that this guy did four of those and the odds were astronomical for four players in a parlay to hit the first touchdown it was probably like plus it was probably 20 000 to one it's never going to happen but this is what we do we're a gambling nation not we we is going a little no no no no

dude fine they they we don't do that, but we are a nation of gamblers. So, you know, if I want to scare any if I want to scare any of these options, people straight. Like very simply, I would just show them the real estate portfolio of Ken Griffin in Brickle Key in Miami. They don't care. They're that's where their money is. That's where their money is going.

But this didn't every building in Brickell. This dude in front of me was spending 15 bucks. And so a lot of these people, it's literally gambling. So that's what it is. You know what? If that's what it takes to get you going, I guess. All right, let's move on. What's the harm?

What's the harm? I don't care. Who had the best and worst year this year? Winners and losers. So these were the obvious ones to me. Elon Musk. Well, wait, before we put that up, take that off. I think Elon Musk is what most people would guess.

Basically, he elected the president single-handedly swung Pennsylvania. He now inhabits the little bungalow next door to the dining room at Mar-a-Lago. He can basically sleep there anytime he wants. He can walk in unimpeded on conversations between the president. There was a story where Trump was meeting with Jeff Bezos in the dining room at Mar-a-Lago. Oh, no. And Elon just fucking sashayed in like he owns the place. Bezos must, must.

By the way, an extension winner is Donald Trump. Obviously. Yeah, but I'm trying to stick to somewhat investing in finance. But yeah, obviously. Peter Thiel, Palantir, best stock in the market. That's one of his babies. He's got another one called Anderol that'll probably go public in the next year or so. Defense Tech is red hot. Anything to do with AI.

And Peter is also very heavily involved in conservative politics. And I just think it's like very obvious that this was an amazing year for Peter Thiel, Michael Saylor. Well, how about this, just for billionaires? Like I said. Billionaires in general, sure. 500 billionaires added $10 trillion,

or now have $10 trillion in assets. Undeniable. Michael Saylor, I think this was, I think he's one of the biggest winners of the year. Monster. This is insane trade that doesn't sound so insane now that it's worked out. We don't know where it ends, but I think right now, even if you've been a critic of Bitcoin or of MicroStrategy or of Michael Saylor, You have to at least tip your hat to the fact that he's got investors chomping at the bit anytime he wants to sell stock.

And every time he sells stock, he buys even more Bitcoin, which then almost immediately rewards the existing shareholders who were just diluted. They're thrilled with the dilution. And this thing is still trading at a premium to NAV, which I am completely shocked by given that we have ETFs. It's not like micro strategy up until the ETFs was like the best way to express a long position in Bitcoin in the public markets. Now it's definitely not.

And guess what? Stock just had the best year it's ever had. So this is just a remarkable wind ship for a sailor. Let's put this chart up now. This is micro strategy 422 and a half percent this year added 56 billion in market cap Palantir added 139 billion in market cap Tesla only up 73% added 548 billion. It's not at 548 billion. That's what it added this year. But you know what's nuts? Prior to the election, Tesla was in the dumps. Yeah, no shit. Like in the summer, it was in a 30% drawdown from its highs or whatever. Like it was bad. I think he spent $30 million to make $300 billion.

It's weird. Like Tesla had a bad year, but Elon Musk had a great year. I know Tesla stock had a good year, but like the company. Well he's got a much bigger stake in SpaceX. And if you listen to certain people who are in the know, talk about the opportunity in SpaceX, they think it makes Tesla look like a joke. So that's a little kernel. He's also got his own AI thing, XAI.

Yeah, they just announced their monster race. So they're raising money or something. So Elon could pick up the check. All right, Jamie Dimon. Financials were the best sector overall, other than communications. Even the big banks, they acted like fintech stocks. Let's put this chart up. I'm showing you JP Morgan Chase total return, including dividends, versus the S&P 500's

total return, 45% versus 27%. Just an incredible year for a relatively conservative banking giant and I mean Jamie did not pursue higher office. He wasn't, doesn't appear that he was looking to be the treasury secretary or anything like that. He just did what he's always done and this stock is one of the biggest blue chip winners of the year. Mark Rowan at Apollo chart on Apollo went up 85 and a half percent this year.

Blackstone went up 34%. By the way, KKR, this is exactly what we were talking about earlier. KKR has been investing heavily in the RAA market from early the early days and obviously a huge beneficiary. So, all right. So KKR up 80%, Goldman up 53, Aries up 54. Mark Rowan is becoming a little bit of a household name in private equity and now has crossed over.

He's like now a Wall Street name in the way that Steve Schwartzman from BlackRock already is. Blackstone. Blackstone, excuse me. I think Apollo is going to make a lot of noise this year. I think we're only seeing the very beginning of how big and important this firm is becoming on the street. Sam Altman we have here in the winner category.

Open AI raised the largest venture deal in history raised six point six billion. Open AI is now valued at $157 billion. Last week he said no end in sight to the deficit spending, I guess you would call it, because there's no way they're making that much money. If it were public, it would be number 60 out of the top S&P 500 market caps. As a comparison, BlackRock is worth $157 billion. So OpenAI and BlackRock are worth the same. Does that sound right to you? Yes? I'm gonna say no. So, OpenAI's valuation is up 1700% in the last two years. They launched GPT 4.0, which was a huge success and Chat GPT hit 3.6 billion

Visits in the month of October alone as a comparison Instagram is 6 billion So it's a man. I mean, it's a massive platform Zuckerberg big year for a meta stock Andy Jassy big year for Amazon big comeback. I should say let's put this chart up Andy Jassy, big year for Amazon, big comeback, I should say. Let's put this chart up. This is the last three years annualized. Amazon nowhere near the gains in Metta, but both good stocks this year. Metta's total return this year is 67%. Total return from the lows in 2022, 567%.

I have Bob Iger on the list. What do you think about that? I don't know. Can I make the case? Yeah, go ahead. Pull up the chart. This is a five year chart, but pay attention to 2024. You see this big rally in the spring.

This is where he tells Nelson Pelts to get the fuck out and wins the proxy fight in April. No notable box office bombs this year. The biggest movie of the year, you might not know this, Inside Out 2. I do know that. I don't think Mufasa's doing very well. Nope, doesn't matter. Inside Out 2 is the big box office winner.

He bent the knee to Trump and the shareholders and stakeholders didn't didn't flip out on him. He kicked the can on Snow White into next year. Could not have that bomb this year with the proxy fight. Couldn't afford it. No more woke problems. They're done making content that pisses off half the country. They're done replacing all the traditional Disney characters with other genders and races. They're gonna stop all the traditional Disney characters with other genders and races. They're going to stop doing that stuff because it's not working at the box office and it's not helping in the fight against activists. Disney Plus is a winner for sure. Cash flow

positive. So I was going to say Disney Plus generated a quarterly profit of $47 million. First time ever Disney's direct toto-consumer streaming was profitable. If you pull out ESPN+, it's a slight loss. But overall, Disney streaming is doing much better now and nobody's complaining about it. Also, they're done with the multiverse Marvel bullshit. So they figured out in Deadpool 2, there were some big jokes about what a bomb that's been They're putting a lot of problems behind them I think Iger won this year wait, but wait, but wait, but wait there but they had a good year And I own the stock, but they're still not out of the woods. They're not sure what to do with ESPN yet

They still have the bleeding. There's still yeah, they still have a succession question for sure borderline problem What are they gonna do when he's done and then the slate for next year on the on the movies is not looking great at all well, they need Captain America to work this spring and I'll take the under on that Okay, and then they need this Thunderbolts thing to be like a Guardians of the Galaxy type of an unknown breakout thing which might work They still have content problems though, you're right. The Acolyte, which is the Star Wars show, was a bomb. The new Marvel show, Agatha, all along, did not connect.

And Netflix beat the shit out of them on sub-growth and revenue growth, which brings me to Netflix. Reid Hoffman. Fastest subscriber growth and revenue growth since 2020. Launched Christmas Day NFL Acquired and launched WWE raw on Netflix Mike Tyson versus Jake Paul was the biggest live sports spectacle of the year

Yeah outside of the Super Bowl gotta say Netflix is a big winner. Hold on. That's not Reid Hoffman. It's Hastings and We'd hasten it. No, no, no, no, no, it's Sarandos and Greg Peters. Sarandos. Yeah, I guess on the programming side is where you would put the credit. Sarandos, just another year of masterful performance. To have them accelerate on subs this year is just crazy to me. And the content was awesome. And now they're a serious player in live sports, maybe the most serious player that everybody else has to worry about.

Vistra, we talked about it earlier, pulled off a feat that no other utility stock has managed since 2001. It topped the leaderboard of the S&P 500 index. Again, plus 264. We have never had a utility in the last 20 years be the best performer. And I think in 2001, it might have been Enron. I'm not a thousand percent sure, but I think. Oh boy.

I'm not sure. I might have just pulled that out of my ass, but I think it's true. Can we just do this Vistra versus Nvidia? You see what I'm saying? Yeah. This is nuts. All right. Worst year.

Gary Gensler was the first name that came to mind. Yeah, that works. The election pushed him out of the SEC, but it wasn't going well anyway. The ETFs came public, became the most popular ETF launch of all time. They lost a whole bunch of court actions against various crypto players.

It just, it has not gone well for Gary. Elizabeth Warren I think is a big loser too for a lot of the same reasons. The banks have never been bigger. They had an incredible year and she's not getting her way. You know who else? Some losers to add to that. Polsters and mainstream media. Yeah, so a little bit a little bit further away from our area, but you're right. Um, Lisa Sue, just, uh, the CEO of AMD. Wasn't she on the cover? Uh, was she, what was she on the cover of? Everything. She's, they love putting these people on the cover, but like, like Mary

Barra, she was like, was always being celebrated for some reason, the stock price never goes up. So I think Lisa Sue had a really good 2023. This was just not a great year for AMD shareholders. What actually happened is people are like, oh, if you missed Nvidia by AMD, the reality is the trade was by Broadcom. Let's put this chart on.

I'm showing you AMD versus Broadcom this year. The orange is Broadcom. Bottom pain is market cap. Broadcom's now a $1.1 trillion company. AMD is under $200 billion and lost market cap this year. Permabares, we're not going to name anybody publicly. I would just say if you have to issue a mea culpa every 24 months your approach to market insight probably just isn't good You may want to consider doing something else with your life

So if you're always looking for asterisks or cherry picking things From your commentary that you were right about or doubling down out of spite It's not helping other people and it's not going to help you. So this was another year the perma bears lost. The last one is, last couple here, sorry, value investors chart on self-explanatory 13.9% in the Russell 1000 value this year. Not catastrophic but just another year of lagging performance. Let's do this large cap value versus growth. Next chart.

Here's the long term. So, so like, I'm not cherry picking, I'm taking you back to 2006. This is not a good strategy to invest in companies on the basis of which are the cheapest stocks. It's just it's not like you could say, well, it's going to mean revert. Dude, I'm showing you 20 years. How like how how much how much more evidence is required? 50 years, you'll be dead. You'll be dead. What else do we have?

Oh, I'm going to skip this one. Carl Icahn, probably the worst year, probably one of the big losers of the year. Last year the stock IEP fell 59%. This year it fell another 36%. No comeback. IEP is now 87% below the all-time highs. Next chart, it lost $14.8 billion in market cap. Carl Icahn has personally lost $15 billion in net worth and going out this year on the absolute low.

So definitely one of the people that has not won in 2024. Thoughts? Let's keep moving. Rough year for Carl. All right. All right. I thought this was a useful analog from Bespoke. I'm generally not a fan of these overlay charts,

but I thought this was good because there was context involved. The last year for the S&P 500 is most similar to the year leading up to mid-June 1996. This ties into the chat GBT Netscape analog we've been discussing in our research. So if you think about where we are, not just on the line chart, but in terms of the hype cycle and the technological revolution, I thought this jive. And I think as we go into 2025 and you think about where we are, where we

came from, where we're going, we're on track for a third straight year of 20% gains. And the only other time this happened, you got close a few times actually in the in the 40s and 50s, but we had this in the 90s. You actually had five years in a row of 20% returns and we're on track to do that again. So the question is, is this sustainable? What happens next? And of course we don't know, but here's what history says. So these are the years after 20% back-to-back gains Okay, so we've had a bunch of those so it's mixed. I mean on average. It's a 7% higher

So we'll see what happens next year. Oh my god that nothing that negative 9% in the year 2000 is so misleading. It's scary. Yeah, that is a year where value did incredibly well Because the Nasdaq fell 80% so if if you threw away all of your non-tech stocks at the end of 1999 because they were getting in your way man did you pay for it the stock of the year 2000 I think was Berkshire Hathaway well to your previous comments let's hope that that does not happen again. I would agree with that. All right, what are you making the case for? We'll make the case, and then we'll wrap the show with a mystery chart.

Since inception in 1980, when Nike came public, this is the first time Nike will have had three consecutive negative years. Earned. Put this chart up. Look at this dude. Three straight years of negative returns. Do we go for four or is this the year to take a shot at Nike on a potential turnaround?

That's not for me. I think it bounces around all year. It goes nowhere. I mean, I just like I think it bounces around all year. Goes nowhere. I mean, I just like, I've, I know it's not believe how bad the story is, but it's not just the price. Mike, isn't it? Cashier question. Cashier question. When this is at a hundred halfway through next year, aren't we going to look back

and say that was the time to buy it? Perhaps. I kind of think that that's what might happen. Okay. I just think, I just think think they I don't own it They blew it like okay This one I do own Starbucks. I don't start this is the first time since inception in 1992 that Starbucks will have had three

consecutive negative years assuming Assuming nothing this is the last day of the year. So negative years, assuming nothing. This is the last day of the year. So this is as bad as it gets for Starbucks. Never had three down years. They also blew it, but they got rid of the perpetrator. And I think technically I like what it's doing. It got into the gap, it held, who knows if it rolls over, but we'll see. I'm making the case that if you just buy both stocks, one of them is gonna have a turnaround that, maybe both, that negates whatever the downside is in the other one, if there

even is. So I think, I think most pair trades you buy one sell another. I think you buy both of these and one of them is really gonna work big and I do own Starbucks. Okay, all right, my mystery chart. Um, this is a stock that I don't think we've spoken about once this year. Is it still in the Dow? Let's see. Um, this is a, an old tech company. It's been around forever. It had been a leading stock forever. It definitely was in the Dow. Uh, and it made a new all time high this year.

So why am I bringing it up? It made a new all time high this year and I know it Packard. No good guess, but I don't think this Hewlett's still in the Dow. Dow transaction average components. Keep keep you're close. No it's not. It was in the Dow. Yeah, you're close.

Hewlett Packard was in the Dow longer than most. Yeah, it's still is this IBM? It's still in the Dow. Yep, it're close. Stuart Packard was in the Dow longer than most public trade companies. Yeah, it's still in the Dow. Is this IBM? It's still in the Dow. Yep, it's IBM. Okay. Kind of interesting. We haven't mentioned it once this year and hit an all-time high.

Yeah, and I know they're obviously a player in AI and they built Watson 20 years ago as like a kind of sort of proto version of what is being built now. I don't really follow it. Maybe I should start following it. Up 35% all time high. Nobody talks about it. I'll wait till it gets to a trillion and mark a cap again and I'll start following it. Alright guys, thank you so much for listening and watching a supersized version. This is maybe the longest one we've ever done of What Are Your Thoughts? But we really wanted to do justice to the year that was. Michael and I appreciate so much all of the likes and the shares and the

subscriptions and all the stuff that you the audience do so please let's keep it rolling into the new year. Thanks so much to the crew and everyone who helps put the show together. And we will see you guys in the year 2025. Whether you're just getting started as an investor or you're managing a multimillion dollar portfolio, Ritholz 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 riddholtzwealth.com.