All right, gangsters. Welcome back. It's another all new edition of What Are Your Thoughts? First time viewers, first- time listeners. My name is Downtown Josh Brown. I'm here with my co-host as always, Mr. Michael Batnik. Michael, say hi. Hi. All right. I do what you say. The usual. The usual suspects are behind the scenes making magic for us all. Nicole is in the chat. Duncan, John, and the team are on the ones and twos. We have a packed show for you guys tonight. Want to say a couple of quick hellos to those who are joining us in the live chat, which we always so much appreciate. John, Carlo, Georgie, Ben, Cliff, Jack, Chris, all the regulars are here. Magnus is back. James Dell, I see you. Um, let me see who else. Steve S, Tuesday routine for me, too. What a coincidence. Uh, Lance How is here. Bonsai fan, we appreciate you guys. Thank you so much for coming. Biff, I see you as well. Jackie Sosa, the Racers Bank, Patrick Aro. All right, we got a whole got a whole squad. Mike, what uh what's with the Pink Pony Club? This is not I'm not uh online enough, I guess. What are you talking about? Stuck in my head. I just can't stop. I can't stop. I sing it to myself in the shower. It's the strange song. Who's the artist? Who's the artist? I don't know that song. Chapel Rowan. It's I mean, it makes perfect sense for my for my whole persona. I think it's about a girl singing about All right. I'm sorry I asked. being in like gay clubs in Hollywood and and coming out to her mom or something. I don't know. Makes perfect sense. I can't stop singing this song. Uh all right. Um we have a sponsor. Let's tell everybody who's sponsoring the show. We do have a sponsor. Today's uh show is sponsored by Public. It is the investing platform for those who take it seriously. Me. So let me tell you something, Josh. AI and AOI it's not just a feature. This is like what they do. It's woven into the entire experience. Portfolio insights, call recaps. They give you smarter context at every single touch point. Yeah. They also have a 1% match on IRA deposits, IRA transfers, and 401k rollovers. I know a lot of people watching the show or listening probably have an orphaned account out there or an account that's sitting somewhere for no particular reason just because that's where it started. Public might be a great destination for you to consider moving it over to. Takes 5 minutes or less um to to move an account. Funding an account is even faster. Find out more at public.com/wyt. Huge thanks to public. Um all right, we are going to start with IPOs and uh I I think that the most exciting thing Whold thought. Look who's here. Y, it's Aaron Dylan, you guys. Do you need to borrow a cup of sugar? We're back, man. We're back. IPOs, baby. Come on. IPOs. All right, guys. For those of you who aren't familiar, Aaron Dylan is our uh resident IPO and preIPO venturebacked startup expert. Aaron knows more about this topic than anyone that I know, and we're super uh excited to have him back on the show to fill us in on what's going on. Um, summer is and Fuego uh in the IPO market again. It's cool. You excited? Oh, yeah. Very excited. It's go time. All right. What are you most excited about? Tell us what's going on. Well, I mean, first of all, IPO window definitely has opened back up. I mean, core ripped. Yeah. Open, right? I love it, man. So, like there's there's a buzz, but there's a lot of in really interesting things happening in the private market, too, right? which I know don't most people in the public markets don't talk about this stuff a whole bunch but it's in the news all the time um but yeah I mean it's good it's really encouraging to see like a circle come out and rip a core weave come out and rip right and those are kind of playing in two major emerging tech themes which of those are which of those are more surprising for Michael which of those were the most surprising to you the success of coreweave or the success of circle both can I say both I mean not just not the success but the degree ree the magnitude of the success. I thought that coreweave was the only pure play AI company to come out. Um so that that wasn't super surprising but but from 40 to a buck where did it go? Like I don't think anybody had Yeah. I mean wild. I don't think anybody saw that coming. Aaron, what about you? I mean listen circle was like talk about timing. Timing is everything right with the genius act. I mean that was incredible. I don't know if they dialed it up that way but man that was perfect timing. So, I mean, if that Genius Act doesn't come out or doesn't, you know, get close to being passed uh and signed into law, I'm not sure. I feel like the market the market understood that that was going to happen. Oh, yeah. Like, it's the only explanation. Like, that wasn't a it wasn't an upside surprise to anyone really. But smart bankers, right, Josh, to to pull the trigger right when that's happening. I read a severely costic take about how circle employees and shareholders were effectively robbed by the IPO process. And I mean, look, you have an IPO, what did it go up? 7x. What was the Yeah. Okay. I mean, that's if you sold at the IPO, that's tough, right? Well, so so you have a company Well, no, it's about how much cash was left on the table, right? That should have been in the in the hands of shareholders. Now, I understand this is an imperfect process. I also understand anything crypto, it's like triple suspect on Wall Street, but still, if you have a stock come out at 30 that's trading at 300 within two weeks, right? You sort of have a right to be a little bit angry like why didn't this come out at $100 a share, right? Like, like, okay, so the speculators buy it, they get a they get a triple. Why? But this is impossible because for every circle there's a Wee Bowl that prices at uh wherever it did it ran to 76 and then ran back down to 12. We only say this with the winners. It's crazy how they have no idea. Yeah, cuz one of the cuz right Aaron, one of the things you always hear is like, "Oh, such and such deal is 2x or 4x overs subscribed." Yep. Okay. That's is that always just a lie by the underwriters to keep people excited because they said it about Facebook. Yes. And Facebook bombed on the first day. So, they don't even really know. Yeah. It's marketing. I mean, I suppose if you're putting together a book, there's a spreadsheet somewhere, right, with people's names and numbers next to it. You can only fit in so many people with so many shares being sold at the IPO. But still, I mean, well, how how would they know? I mean, how would they know? They do the best they can. They obviously indications of interest. It's a proc II. you do a road show and a saleserson follows up with the people that were at the road show. It's obviously a highly imperfect uh process. Maybe a bad analogy, but NFL scouts and analysts, they have all the data in the world and they still can't figure out who's going to be a good quarterback. Like some things are just predicting the future is hard. I want an AI program that tells me where to price an IPO and I want to run that alongside the actual IPO, the debut, and let's see who gets closer. I don't know. Will AI do that for you yet or did all the platforms like make it so they can't? I'm sure someone's going to have an agent soon that will do that, right? Yeah. I mean, I get it's an imperfect process, but like does it have to be as imperfect as it was 50 years ago? It seems absurd. Okay. Um, let's put up your slide. Yeah. So, these are the top 10 preIPO stocks and some of the names that you think uh compound viewers and listeners should be paying attention to before they come out. Run run run run these down for us. Let us know what's happening. All right. So, a lot of the names on the left hand side here on this table on the left, the top 10 companies by valuation. So, these are all private companies, venture capital backed private companies. You're probably reading about these in the news all the time, right? Uh so you're seeing some f yeah some familiar uh some familiar places there. One name that maybe people might not have seen on this list is safe super intelligence. So that's Ilyascover. He was um a senior guy co-founder at OpenAI and split when Sam Alman and crew kind of had the blowup a year and a half ago, right? And then Altman came back like after the weekend was over. Ilia left and he started Safe Super Intelligence. And that was right out of the gate at a $32 billion valuation, believe it or not. Dumb question. Dumb question for me. Chart off. Um, my understanding was he quit because Sam Alman was becoming too capitalist and wanted to convert to a for-profit and take even more money from Microsoft. And now here he is a year later readying his own IPO, which I would imagine is a for-profit enterprise. Yeah. So maybe he didn't like shortcuts OpenAI was taking or Yes. I don't Or maybe he changed his mind. Maybe he changed his mind. Zuckerberg at Meta just tried to buy Safe Super Intelligence and they said no. So he was I mean think about it Josh. You and I start a company. The three of us start a company, right? $32 billion valuation. Zuckerberg shows up 6 months later wants to buy it for 32 billion and you say no. Yeah. Right. So I think this guy's operating on a different, you know. Yeah. Also, I'm not interested in backing anyone who's who's doing this uh who's doing this this with like, oh no, we're like here to save the world by making AI safe. Get out of here. Um, you're here to sell ads. Shut the up. Just like everybody else. All right. Um, let's let's put the chart back up for for the listeners. Let's run through some of these names. SpaceX 400 billion. Implied valuation. Open AAI 315 billion. These are not nonsensical because this is the price that that these shares are currently changing hands at. Do I have that right? Correct. Yeah. There's an active secondary market for all of these companies. That's right. Right. So you might say they're overvalued, but they're not made up. Like people are buying and selling these these shares. Proper volume, Josh. Like I would say this stuff trades like fixed income. It's like a who you know market, right? So you can definitely buy it, but you got to have relationships and there has to be trust and then you can get access to the stocks. Okay, let's do let's let's do a few more. XAI, we don't have to talk about that's Elon Musk's company. They just raised $10 billion yesterday. Um they're also raising debt capital, which I find interesting. And I think they're working with like Morgan Stanley. Do I have that right? You got that right. Yeah. A lot of these guys are doing debt for the data centers like Cororeweave did. That's why one of the reasons Core We've went public. They're pausing this. Why why would a company opt for that for debt? Yeah. So I think I think it's it's you literally have you have customers on the like Corey for example, right? They can't build these data centers fast enough. There's so much demand for AI compute, right? Whether it's training or inference compute. So like you know training a model or running AI models that they can't build the the data centers fast enough. So you use debt. I got the contracts revenue contracts already lined up. But why? It's quicker. Uh well you're not diluting your shareholders, right? Your equity shareholders and you know it's revenue good on the other side. You got these multi-year data center contracts. So you just finance it, right? You need a lot of capital, but the equity guys can't keep putting up money at that rate and they don't want to get elbowed aside on I think they could, Josh. There's plenty of money that wants to go into these companies. It's just I think it's a it's a more um it's a smart way to manage your cap table. And the debt's coming from where? Blackstone and the like. You got it, man. What what actually what actually ends up happening is Elon goes to the debt holders if he has to and says rather than make the next interest payment, let's convert you guys. And they also and who says no because you know it's gigantic firm. They have equity. They also have debt. It's like all right fine, shift it over. Now Elon Musk takes care of He just did that. He just did that with Twitter, did he not? He did it with TW. They And Solar City did it with Solar City and Tesla. Like that guy takes care of his investors. He makes sure that they make money. They They all come back for the next deal. You could say whatever you want about him, but they come back to the table. Even when he loses, he still finds a way to win. That's right. And um there's a lot of duplicate. There's a lot of people on the Twitter cap table that came right back in for SpaceX, Starlink. They want it. Oh, yeah. And and they make money. They always make money with him. All right, chart back on. All right, these next two have been uh venturebacked private market startups since I was a young man. Uh Stripe and Data Bricks. Why do I feel like I've been hearing about these two for my entire life, like my entire adulthood? What is they've been around forever? Yeah. The Coulson brothers started Stripe a long time ago, right? It's a hundred billion dollar. Um it if this comes public tomorrow, it's probably 150. What do you think? Listen, so the Coulson I agree with that. Okay. Plus all this stuff with again with crypto, like all fintech companies are crypto companies in my opinion now that this Genius Act got blessed by the government, right? So that's going to happen. But the Coulson brothers, the guys that started Stripe, they basically came out and said, "We're never going public." Okay. So we'll be hearing about this for the forever. Data Bricks is um snowflaky, correct? That's exactly right. Yes, that's right. Okay. All right. Um, Anthropic, there's talk of uh, Apple maybe plugging into Claude and obviously Amazon's a really big backer of Anthropic 75 billion. Revolute is European fintech or no? Yes. What is that? You got it. Yep. Online banking. Okay. All right. Is Ander Last one we'll do from this side of the the thing. Uh, chart off. Anderoll being valued at 42 billion. Is this going to be the hottest deal of the year? I think it is. Oh, for sure. Yeah. It seems like the stars are aligned. It's an AI play. Yeah. Yeah. Yeah. It's it's an AI play. They have this lattice lattice AI system. It controls all these autonomous robots. That's effectively what it is. It's autonomous. So, it's it's in it's checks every box. It's founderled. It's got a a long history. They didn't start the company last year, right? It's physical, but also AI because they're building military equipment and hardware. It's defense tech, which is the hottest flavor of tech, right? Thanks to Palunteer, it just and and then the pedigree on the cap table. It just it checks every box for an IPO that you could possibly want. That's right. I I think the So Palmer Lucky is the fellow who's the CEO, right? He's the guy that created Oculus and then sold it to to Meta. So, he's already a billionaire, right? But he came out and said they're not going to go public and do an IPO until the market really understands their business model, right? So, I think this idea of like AI controlling drones and then those drones being used in warfare is obviously a new thing. I think, you know, not to be cheeky, but you're seeing it with the in the Ukraine war, right? What drone like the power that drones can have on the battlefield. So that that might actually pull the IPO forward a little bit because I think people are I think investors fully understand they completely bought into um Alex Karp and this idea like look somebody somebody's going to have the best technology in the world um backing up their military. It should be the United States. I think there's wide uh spread approval of that concept. Is this going to be a direct listing or are they actually going to sell stock and raise money? Oh, I think they'll my gut is everyone's going to be doing regular traditional IPOs. They're all doing regular IPOs. That's what I'm That's what I'm hearing, right? But again, I think Andrew is like a 2027. That's where I put it. All right. What are your other What are your other stocks to watch and tell us why? Okay. I love this stock. GRLQ. It's the private market Nvidia. Okay. So, really? Yeah. Jonathan Ross. That's like a hu that's like a crazy statement to me. Jonathan Ross is the CEO. He he created the Google TPU, tensor processing unit, the AI chip at Google, like from a sheet of paper. This guy built it into a big business, ran Google cloud segment of it, and then decided I'm out. I'm going to do it myself. He started Grock. Okay. I love this company. It's chip. So, it's chips like semiconductor, but it's for for inference running AI models, right? They fab them here in the United States. No tariffs. They use like kind of old tech. So they store memory on chip. It's I'm telling these guys are so dialed in. I love this company. Do people get this one confused with the Grock that XAI owns for AI? Cuz it's that that one's with a K. You got it. With a Q. With a Q. That's right. GRQ. That's what st What stage is that at? Early. They're early. So it's $4.6 billion secondary market valuation, right? But I I'm like hearing buzz that these guys are going to go to like a 91 12. I wouldn't be surprised to see these guys. I have one adviser I work with. He thinks it's a hundred billion dollar company. Oh, come in at four. Yeah. Can Can we have it at four? Um do you have So you have a bunch of these in funds and you're doing single stock funds so that investors in the private market can access these. What's the most in demand like other than SpaceX and OpenAI which I I think for obvious reasons, right? What are you getting the most calls about from either wealthy people or financial adviserss, what do they want to own? Yeah. So, we build like So, we do these single stock funds, right, Josh? And then we help people build portfolios. I'm a big believer in like diversification, right? But some people like love Elon Musk and they want a lot of his stuff in there and some people don't like the guy, they don't want any exposure. So, these are kind of tools you can going to build what you want. I get a tons of demand for Andrew right now to answer your question. So that's that's what I would have guessed. That's why I think that's going to be the the big one. Um that's right. That's right. And then then listen, the Elon Musk stuff, XAI, you know, and the like SpaceX and the like. Those are all big ones as well. Um uh like can you tell me about Harvey? This is AI for law firms. AI for law firms. That's right. Yeah. So it's an AI app. So So may So just 30 seconds on how I think about AI. There's AI infrastructure, chips, electricity, data centers, etc. There's AI platforms, that's open AI, XAI, anthropic, etc. Right? And then there's AI apps, and AI apps are just starting to come out. So those are apps that are built on top of an open AI and XAI and anthropic. Right? Okay. So Harvey uses anthropic and open AI, okay, to deliver solutions specifically for lawyers. Okay. Right. That's an app. surprising that somebody that like that's a that's a preipo startup. It's like law techch I guess is what they call 100%. So they you know like you take the model and then you train and fine-tune the model on like a specific law firm's data right and that's what Harvey does. So you take a great law firm whatever Davis Pulk right they go in I don't know if they're working with him just an example right and they train all they take all Davis Pulk's data they train the AI and then the associates and everyone can use Harvey AI when they're writing contracts reviewing contracts etc. And it's trained off of their unique data. Oh interesting. So, you're still getting the Davis Poke like advice, legal advice, but it's codified in a in an engine that anyone working there can access. That's hot. All right, let's do a lightning round and then we're going to let you go. You got it. Um, Koshi versus Poly Market. I read that Koshi is twice the size of Poly Market by um by valuation because Poly Market can't work with Americans as clients and Poly Market uh and Koshi can. Do I have that right? You got that exactly right. That's right. Yes. Okay. Wealthfront just filed. And Khi's also got a lot of connections. Khi's also got a lot of connections into the broker dealers like Robin Hood and and other broker dealers. So they got like distribution channels set up too, right Josh? Got it. Okay. Um, we've we've we've talked to those those guys. We like them. Um, Wealthfront just filed. So, this is kind of a retread. They tried to get acquired by UBS. UBS paid the breakup fee and walked away. Four years went by. I'm sure they've raised a little bit of money since then, but this does not seem like um anything that people are terribly excited about. Or maybe I have that wrong. What do you think? I listen, I'm I'm I mean, first of all, I wish them the best. I hope they kill it in the IPO. I just I'm a little ner I'm a little leery. Like my understanding is half their assets in a cash product like a high interest savings account product. Is that Michael? Is that true? Can that really be real? They were aggressively promoting that early on. Not in a bad way. It's it's cash, you know, it's yield. It's yields, but uh that that's hard to So they should just call themselves a Bitcoin treasury then. Wow. All right. Uh Meta bought half of Scale AI. Um they bought it. They wanted the founder. They aqua hired for the founder is is Can you imagine the cocktail party talk? I'm a 15 billion dollar man. That's pretty pretty impressive. Pretty impressive. Okay. Uh what's this poached chart? These are all the people Meta has stolen from other AI uh startups. It's like the who's who of of AI, man. The these people have like built a lot of the tech that everyone's using and excited about and Meta's got a lot of them, right? It's pretty impressive. there. So Mark Zuckerberg is personally calling people and emailing people and poaching them out of these companies. Yeah. And and paying like hundreds of millions of dollar packages, comp packages for these guys. So if you're not bullish on AI, just look at the way this guy is operating right now. Yeah. I mean, listen, it won't be for lack of effort. If Meta doesn't win the AI race, it won't be for lack of effort or trying. They're going for it, right? Uh what's tell tell us tell us what CLY is. Okay. Clo this is so first of all I'm a big believer that in a couple years time we're literally going to have AI devices listening seeing hearing everything that we're doing. It's going to be like you know not something else whatever it is. I'm not I'm not sure what that is but if you know what it is Josh tell me because I want to invest into it. Okay. So there's that, but something's going to come out and devices will be listening to everything that we say will be will be getting it. Clue is like a first sign of that. It's tech. It's tech. You download it on your desktop computer. It sees everything that you see on your on your screen and it hears everything you say and listens to everything. Everything. But here's the thing. This is so Google's talking about this. Every Michael so out everything. So, so, so here's the thing though, guys. Everyone's talking about this Google's IO conference, right? Their developer conference. They're talk they're using the term personalized context. Yeah. Personalized context is code for I the AI sees everything that you do. Creepy. That's what that is. So, once you've got that, the AI is like your that's your personalized assistant that everybody loves. So, clearly doesn't. So, maybe we'll all grow more accustomed to that, but at first blush, I don't love it. Um, last slide. high potential second half 2025 IPOs. This is what you think is coming like now. You have CLA which is buy now pay later. Kraken which is crypto, Gemini crypto. What's Navan? That I never heard of. That's uh the old trip advisor, right? They rebranded. So that's like corporate travel solutions. Yeah. Text. All right. And you think And you think these this is the class of uh second half 25. That's cor that's right. Yeah, that's right. So listen, I just parting thought opening the IPO window is open, but here's the rub. Like a lot of these companies do not want to go public. Yeah, they're not I guess their founders are not pushing uh excuse me, their backers are are not pushing them, too. Oh, Josh, we could go have a beer, man. I could talk to you for hours about all the different like structural really solid structural things that are happen happening in the private market that's generating liquidity for employees, early investors. It's all very organized, very thoughtful. Like these companies can raise billions of dollars in weeks and maybe at high valuations. So who needs markets? And it's all very orderly. Michael, that's a good point, right? It's all very orderly. So there's not a lot of volatility. It's like very thoughtful. It's all institutional. Well, we're going to talk about the tokenization of private company stocks later on in the show. And maybe that's the monkey wrench. If you have a de facto public company and all the scrutiny that comes along with it, you might as well just have a public company and uh that's something that's coming in the second half of this year as well. So um all right, Aaron, you're the man. Tell people uh where they can visit to learn more about what you do. Yeah, so go to agdillan.com, right? You can uh and just agill.com/subscribe that as we send out a a research report every Saturday morning. That's the best way to get in touch. All right, awesome. And Nicole, we'll throw that link in the live chat for everyone watching. Thank you so much for joining us. We're going to goodbye you and uh move on to the next thing we're talking about which is the big beautiful bill. Um is this already in the market if you had to guess? Who knows? But I don't think that this is moving the market. Do you? No, I think it's a I think it's like in the minds of the investor class. They've already decided this is going to happen. I don't know. I I I don't follow this stuff closely. I spoke to Bill before uh we hopped on and I said, "Hey, what do I need what do I need to know about this as far as it impacting investors?" Um, and he said, "This is it's a snoozer. Like, there's really not a lot in here. I could tell you some like minor things, but nothing with nothing. It would have impacted the markets if it looked like it was going to fail, but it doesn't. I think it would have been a negative because it it a failure to pass this bill at least now would have meant a sunsetting of some of the the tax cuts from 2017. That's why it matters to investors. But if as long as it's going to go through in some way, shape or form, I don't think the details are important to the market and I don't think investors are hanging on every word. Um it's a weird thing. So, because it's predominantly a bill about the federal uh budget, they were able to push it through the reconciliation process, which is kind of like a parliamentary trick where they don't need a twothirds majority vote in the Senate. They could just get a simple majority. So, like 5150 um using JD Vance as the tiebreaker. And that's what they did. That's that's what they accomplished today. So, they basically they hold up in the Senate. They had like draft legislation from the house. They kept everybody there for 24 hours straight. Nobody could leave. Some of these people are 120 years old. And basically the whole thing came down to whether or not they could convince Lisa Mowski from Alaska to sign on to this and agree to it. And in order to like shore up the Republican votes, they were they're cutting a ton of money from Medicare, which is not going to be popular, but everyone will find out about this later. Um, but in order to shore up the vote from states like Alaska that are like, "Wait a minute, my people are not going to love how much you're cutting, they they're doing this rural health fund, which will be like hospitals for red states, basically like like basically just bribes." Um, and both parties play this game, but it's just like when you read the details of how they got this through, it's kind of remarkable. I think the the way that this became a market story was the Elon Musk angle because he decided he he wants some more smoke. Um, let's put up these Elon tweets. Says this started last night. It is obvious with the insane spending of this bill, which increases the debt ceiling by a record $5 trillion, that we live in a one party country, the Porky Pig Party. Time for a new party that actually cares about the people. How can you call yourself the Freedom Caucus if you vote for a debt slavery bill with the biggest debt sealing increase in history? Then he starts threatening every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame and they will lose their primary next year if it's the last thing I do on earth. Chart off, how do you think Trump responded? uh deported chart on Elon Musk knew long before he so strongly endorsed me for president that I was against the EV mandate. It's terrible. It is ridiculous. Was always a major part of my campaign. Electric cars are fine. Not everybody should. Anyway, I'm going to deport Elon. I'm going to shut down his rocket launches. No more subsidies for satellites or electric car production, and we're going to save a fortune. Perhaps we should have Doge take a good hard look at this. Money to be saved. That's the Trump uh reaction. Tesla stock sort of reacted. Um it was notably read in a green tape yesterday and uh I'm really surprised that he wants to do this again. It it looked like they were it looked like they were literally going to come to physical blows. Um the last time they had a fight was that two weeks ago and apparently Elon wants more smoke. The stock went down 5 and a.5% now back at 300. What are your thoughts? Um it's nuts. I don't know. What are your I have nothing to say other than the obvious. this is insanity that there is political fighting that is causing tens of billions of dollars to swing around in market cap. It is not uh normal. And if you're a shareholder if you're a shareholder of Tesla and a Donald Trump fanatic, you just treat this like a comedy, right? You don't pick you don't like you don't pick sides. You're just like, "All right, I'm backing the president on this. I want his big beautiful bill to pass, but I also want Tesla's stock to go up. So, you're like rooting for them to start laughing and stop fighting with each other. What do you think? I have no idea. Okay, great. All right. Uh All right. Sorry. You want me to just make up thoughts? So, I have no thoughts. Let's move on. This is boring. That's my thought, I think if you're long Tesla, it's it's not boring. Um I'm fortunately not. I don't think you are either, but if you're in Tesla Sh, this is not not boring. It's it's a it's annoying. This is an absolute distraction. It's a clown show. Yeah. Uh I wonder if it gets worse. I guess I What does What does worse look like? Well, the House is the House is now going to vote on this. And the majority of the House is fairly slim. Republicans control by maybe 10 votes, nine votes. And a lot of House Republicans are making noise that the bill in its current form is not signable. And Elon seems like he wants to be part of this process. And he seems What is his involvement with this? He's passionate about not raising the uh debt by $5 trillion. No, but legally, what's his involvement? It's not is that part doesn't matter. He owns Twitter. He has he has the biggest megaphone on the planet. So his he's decided that he's against this bill and that he's willing to risk the market cap of Tesla in vocally um being against it. So he has no involvement. His his involvement is like as a as a peanut gallery, but it's the loudest he he is the loudest person in the country when he wants to be. He's louder than Kanye. He's louder than Obama. He's louder than like a former president. Does Trump have a nickname yet for Elon? What? Oh, I bet he does. PI I bet he does privately. No, I bet privately. Yeah. Mushroom Jones or something? I don't know. It's probably something. Can we talk about uh the bull market? Can we do that? Yeah, go ahead. Okay. All right. We're going to uh we're chart heavy here, so we're going to run through some stuff. All right. Turn on, please, John. So, the S&P 500 is uh at an all-time high. And the first half of the year is in the books, as they say. So, I had Sean make us a table of the top 60 performing stocks in the S&P. And number one should be no surprise. It's Palanteer. Uh what else jumps out to you in this group, Josh? This is pretty diverse. I mean, that's my first Matt. Uh sorry, Matt Furlong in the chat says Elon's nickname is Special K. Oh, that's good. Um that's good. All right, continue. So the the thing that jumps out to me right off the jump is this is a diverse list. If you look at the top 10 names, we've got Palanteer, NRG Energy, Hammet Aerospace, Seagate, Geo, Vernova, Super Micro, Numont, CVS, Uber, General Electric, Philip Morris, Dollar General. I mean, it's we're all over the place here, Josh. It's a mix of like stocks that have been going up for years like Micron, Crowd Strike, um you know, like the the tech names, but then you also have stocks that just got so crushed uh last year that it's not surprising. I mean, it's still surprising, but it's not insane to find them in the top 20 performers because like some of these were in 70% draw down. CVS CVS an obvious example. Um some of these like Door Dash I think uh was not a great stock last year. So this year is a recovery. So I think there's like a I think there's a a mosaic definitely had not been having a great time up until recently. So I think there's a a mix of like comebacks and then stocks that have been trending higher for for years now. Okay. Uh next 20. Uh let's take a look. We've got uh oh, Royal Caribbean's on the list. Oh, IBM. We've been speaking a lot about that. Uh how? Okay. Again, I just see a lot of diversity. There's a lot of information technology, but there's a lot of discretionary. Um anything here for you, Josh? Almost all of these names, if they're not consumer, are AI. Like, it's just like one thing that jumped out at me. um like Vistra is a utility on the surface but it's the utility supporting like all the um inferencing and and AI and cloud stuff. Um Amphenol is like connectors like cables and chips and all the the AI stuff has to be put together like has to work together in rugged conditions and that's amphanol. Sean and I wrote this up in the best stocks KLA is chip equipment. Western Dig obviously. Um, so a lot like a lot of the IBM, Oracle, these are like all feeding into the same AI. Yeah. Uh, spend. All right. Lastly, the next group what I see here is just a lot of financials, which is interesting. We've got uh let's see, we've got WR Berkeley, not a name I'm super familiar with. Northern Trust, Goldman, Schwab, Intercontinental Exchange, Croup. Uh, a lot of things are working this year. For the listener, this third uh group of of 20 best performing stocks, so number 41 through 60, they're all up between 23 and 30%. Yeah, like these are way better than the S&P would be the point I would make. And um if they if the market closed tomorrow, nobody that owns these stocks would be upset. Like if the market ended the year tomorrow, I made 24% in Charles Schwab this year. Yeah, I'm happy. You know what I mean? Like think about that. Um I made 26% in meta. Like like it's it's a it's great. So being number 40 through 60 is not is not bad. It's really good. All right. This next chart has some face blowers on it. I want to show you the sector performance with the maximum intraear drawdown which is a big kick in the teeth. Uh and the one that jumps out to me and there's many is technology. So, information tech had a 26% draw down uh that happened mostly in the month of April and yet it's still up 8% year-to- date. Wild. I don't even think anybody would know that. I don't even I know it, but I don't even know that. I mean, seeing it this way. Uh do you think the average person would even believe you if you said the tech sector at its worst point this year was in a 26% draw down? No way. Right. the average person. Yeah. No, it's just like there's no way it felt like that to somebody who casually observes the market. Yeah. It just because it was too fast. Yeah. Like how long was it in a 26% draw down? 10 minutes. Um it was fast. It was over before you knew it. Okay. The here. All right. This is what jumps out at me. This is exactly the way that it's supposed to be. The least painful draw downs were in utilities negative8% now up 9% on the year. Staples negative9% now up 6 and a half% on the year. So this is the minimum variance. Am I saying that term right? Defense was defensive. Defense was defensive. And even like um healthcare healthcare sucks but negative3.6% is not as bad as tech. Now the thing is you're still not making any money. healthcare is one of only two sectors that's still negative year to date. Um but like the defensive sectors did act defensively when they were supposed to. Yeah, John, we could skip the next chart because we have something similar coming up. Let's throw this chart by Eric Soda. So I saw Eric tweet this uh last week and I thought it was really interesting, worth talking about and we got some follow through today. So the tweet is this. The surprise to me is that with a NASDAQ at a new high, only 10% of the index's stocks are at a new 52- week high. They have a lot of room to run to reach our 52- week highs. Can you say bullish? So, throw up today's heat map. Today, we saw a wildly rotational day. I love today out of mega cap tech. So, Nvidia was down 3%, Broadcom was down 4%, Palunteer was down four, Tesla got pounded. And look at not just the green across the screen, but the absolute bright green. And I think we've got a chart from Chart Kid. John, do we have that one? Boom. Thank you. So, we're taking a look at, for those of you who are listening, the S&P 500 daily return against the S&P 500 equally weighted daily return. And there is obviously a highly highly correlated uh data set here. But there was a big outlier today because the capwitted index was actually down three basis points dragged lower by the giants that we just mentioned. But the equal weight, holy mackerel, the equal weight was up 1.17%. And this is something that you don't see too too often on really no news. Quarterly rebalance. Today's July 1st. Yeah. Well, that would that would be probably the uh the most probably explanation. It's the only answer. Big money. Maybe it's institutional, maybe it's wealth, what like whatever channel people looked at first uh second quarter performance or first half performance said, "All right, halfway through the year, we got to add to whatever's been lagging and we got to take some profits and whatever's been going up and that's it." And uh the effect of this will probably last another half a day and that's it'll back to business. the most business as usual. Don't chase small cap rallies. The most improbable part of this bull market that we experienced in the first half of the year, and it's hard to say that it was a bull market because obviously there was a bare market in between, but nevertheless, we're sitting at alltime highs. Um the the the US is up 6% on the year, but the rest of the world, my god, John, please. Josh, thoughts? Let me take a look. Yeah. Um, I told you and Ben two days ago I was looking at my 401k, which I almost never do, and it said like the S&P was up 4.75% on the year, and my 401k was up 9 and a half%. And the reason why was a 39% allocation to international stocks. and I had to like rub my eyes cuz it's been so long since I've seen international stocks help an equity portfolio. Um, but this is it. Uh, so for the listener, Europe up almost 24% year-to date. international developed which I guess includes Europe but then is also uh Japan and uh select countries in Asia up 20 international emerging which is China, India, Brazil blah blah blah blah 16 and a half and then US stocks 6.2 too. Um, I don't know. It's been uh it's been a minute. Um, I think this is the biggest outperformance for International versus the S&P going back to 2001. So, it's a quarter century since we've seen a first half like this. And um people are people are taking notice. I don't know. I don't know if you're going to see that in the fund flows. Are people going to chase this? What do you think? Nope. No. Why? because they won't believe it'll they don't they won't believe that it's it it'll it'll sustain. It's just too shortlived. It's not enough time. If you if you zoom out of the US divided by the rest of the world, it's still it's a blip. Um do you think international stocks will finish the year ahead of S&P 500? Yes. The gap the gap is too wide to close at this point in my opinion. It would be we it would be weird if this whole thing reversed. What would have to happen? A land war in Europe. Something in Ukraine spills over into Poland. Then you could then you could kiss the whole thing goodbye. It'll be gone in two two seconds. But absent that, I we Sean and I were looking at earnings growth for um the different regions of the world. Um I didn't get around to this on CNBC today, but I wanted to I wanted to make this point. I ended up talking too much about something else, but like you've got earnings, you've got not just the dollar falling, which we're about to get to, but you actually have earnings growth in uh in a lot of these places that it's just like um it's it's been a while. So, uh and not small. So, let's look at the dollar. Thanks, Chart Kid. Matt, what are we looking at here, Michael? uh this is the worst performance for the dollar to at this point in the year through the end of June in 50 years. It's been uh and this has been a tailwind obviously for US investors that are invested in foreign stocks. Yeah. Um but it's not the whole story and I think that's kind of I think that's kind of because people knee-jerk like oh uh international stocks went up. I guess that's because the dollar. Yes, in part. Um so it's the worst first half for the dollar in 50 years. But um you have expectations now for earnings growth. Um 13% for Japan uh next year, Europe 11%. Wow. Um EM earnings are growing already this year, 15% and are expected to grow by 12.4% next year. And again, that's versus US earnings expected to grow 8% year-over-year. So, if you actually pull out the impact of the US dollar, and Sean Sean did this work for me, um, international stocks would still be up 11% year-to- date. So, the weaker dollar added 7.3 percentage points to international performance. Um, so, so it's it's a factor, weak dollar, but there's more to the story. Yeah. Um, you want to laugh? Go ahead, please. I love to laugh. This is October 2024. Uh, wow. This is The Economist cover with rolled up $100 bills blasting off like a rocket ship. Yeah. And it says the cover, The Economist, the envy of the world. You know, we've said a million times over the years to be careful of magazine indicators and they're only obvious and hard and that's still true. But man, The Economist in particular has a knack for really nailing tops and bottoms, do they not? Maybe. Or maybe their covers are just so aggressive that the stupid one they do every year or two just becomes like perhaps so pronounced in our imagination. It it just feels like it's always The economist. All right, I want to I want to end with with this two two more quick charts. Number one, um it's not just the US as we're discussing obviously, but 55% of global markets. This is from Willie Dish. 55% of global markets made new 52 week uh 52 week highs last week. That's the best level in over a decade. You love to see it. And then finally, there is this tendency for people uh I would put myself in this chart off for one sec. I would put myself in this category. There's like the antennas go up a little bit at an all-time high. Is this too good to be true? When does the crash happen? Like when's the next shoe to drop? For whatever reason, our antennas go up. We feel like uh it's going to we're going to be rugpulled. And that is just not true. Stocks don't make all-time highs because everybody is dumb and the world is about to end. Chart on, please. So, this is on exhibit A via Chart Kid. We're looking at the average one-year forward return, 13, and five years after an all-time high. And guess what folks? Folks, identical you. No, even better. You are better off. You are better off investing at an all-time high than all other days on average. So, it seems so counterintuitive. It does because of the gamblers fallacy. We've talked about this before, like you go up to the um roulette table and it's red, red, red, red, red, and you happen to walk up and see five in a row. No, it's going to be black. Of course. And there's like it's not totally insane because if you think about like a 100 coin flips, it's of course probabilistically it could be a 100red heads. It's just unlikely. So you think this is the time. It's it's about to flip. Too many reds, right? So So that's why you see a new all-time high or you see a string of new all-time highs, you're thinking like it's about to be black. Um, the problem is most new all-time highs aren't the all-time high. Well, the other thing, when you think about it this way, what does all-time highs do? It sucks in buyers. Um, yes. Well, of course. Yeah, it sucks in people that are worried about missing missing it, and that that's what gives it that momentum uh all to itself. Um, all right. I think Robin Hood just checkmated the entire industry with what they announced this week. And I want to get into this thing about serious. Yeah, I'm super bullish on this. I know. It's surprising. It's surprising. I really think that they just cracked the code on something that uh probably other firms aren't going to be able to follow them quickly into doing and it's going to give them a huge advantage. You think tokenization is that much of a game changer? I think building the rails for tokenization um puts them in a position to be at the front of the of the tokenize everything movement that is clearly coming. I think uh doing this with traditional financial assets is really powerful and arguably they're the only firm that could have done it. Uh I don't like I don't think Coinbase has the trady uh bonafides to be screwing around with stocks. In fact, we know that they they they regulatory they can't. Um Robin Hood is the only firm that could have done this. Um or the only firm that wanted to um but I I really really feel like what the market response to what they just did is not carried away. Um let's do this chart. This is uh this is mine. Oh, okay. I asked for a chart. I don't see it here. I wanted to see Robin Hood versus the broker dealer industry group index. I don't have it. All right. Well, let's put yours. Put that chart back on cuz this this tells the story better than the chart that you were asking for. No offense. Thanks. All right. So, I'm looking at I've showed this chart before. It is wild. So, in 2023, way back in 2023. Okay. So, what are we talking about? Two and a half years. Two and a half years ago, Schwab was 22 times the size of Robin Hood. 22 times and it is now only twice as big. Holy Yeah. So, Mark Aguilar in the chat is saying they are the Uber of investing. I agree. Jay Ford points out they also announced mortgages. Nobrainer. I don't know why other people haven't haven't uh thought of connecting those dots. people in their 20s eventually are going to want mortgages. Why wouldn't Robin Hood give them a way to to do that? I don't know the specifics of it. But why do you think Tell me about the checkmate. Why do you think the tokenization thing is such a big deal? Okay, a couple things. The first thing is they took shares of um Open AI and they took shares of um I think this is how it went. And they took shares of SpaceX and they dropped them on their users for free. Smart gift. Okay. So they had a million dollars worth of one and half a million worth of the other and they tokenized them. They used the arbitum uh layer 2 which is like effectively uh uh built on Ethereum and they basically said you now have tradable shares of private companies that other people can't get access to um or have to buy a big chunk of in order to qualify for a fund or blah blah blah. So they're basically saying, "Look, you're accredited. You want to be involved in private companies. These private companies aren't public yet, but you want to have access. Here you go. Can't have the shares. We built a tokenized version of those shares, and you can have them. You can sell them, buy them. The rails that they're built on are specific to uh Robin Hood's platform. So you can't move them out of your account, but that's all coming. Robin Hood has talked about um you know working with other blockchains and interoperability and making it so you can transfer stuff in and out self-custody assets. Yeah, I believe that you can transfer in. You're not going to be able to transfer out. I can't even get my Bitcoin off Robin Hood. No, no, no. I'm saying the share the tokens of the of the there's no one else that could take those tokens from you. So, if you want to sell them, you have to find another buyer on Robin Hood. It's in its infancy. But ultimately what this does is it paves the way for other assets that are not currently traded to become traded using Robin Hood's uh protocol uh on their platform. That's number one. Number two, it's 245 trading. Remember that. So not only not only are they tokenizing private companies, the next phase is tokenizing public companies, which multiple brokerage firms are currently working on. Uh multiple asset managers are working on. Wait, you said it's 245. It's already 245. It's going to be 247. 20. It was 245. It'll be 247. But like having tokens representing company stock that are tradable all the time that are available in the crypto ecosystem at Robin Hood, I feel like it's a gigantic leap to where stocks in crypto are completely blurred. And this is the thing that Robin Hood has been working on for 10 years and they're actually doing it. I'm surprised to hear your posture because I feel like six months a year ago, you would have been like, "This is nonsense." Well, it's traditional financial assets that are now easier to access and fractionalize and I don't need to need it. I don't need the service. And actually, one of the points that Vlad made, I thought very successfully, somebody from the crypto world said, "Well, why is this a big deal? Like, who really who really needs this?" And he's like, "You know what? You're right. For a US investor, we're already 245. We have markets that are liquid. Um, we already have medium speed rail. So, me showing you highspeed rail, it it's not that impressive. It's not that meaningful. European investors or investors in other continents, other countries that can't access US stocks with the ease that we can in a tokenized crypto environment, they can or they will be able to. And that's gamechanging. There are a lot of countries where their local investors, they have to buy funds in order to get access to the US stock market. Now, they'll be able to buy the tokens that represent these shares. Think of this like ADRs here in the United States for European companies. Now, it's hard for you to understand why for people to understand why this is exciting because we don't care about other countries stocks. Like, we're not dying. Oh my god, I wish I could buy uh LVMH. Well, you can. It's an ADR and nobody wants it. If you're from another country and you're watching Palunteer, Nvidia, all these stuff, you're like, "Oh my god, I can't believe I can't buy these things." Robin Hood's got a huge audience in Europe. They are now opening up tokenized versions of US companies to everyone. So when you hear people say we're democratizing this and that mean you know you and I we laugh lol democ this is like actually they are democratizing access to US stocks and to private company stocks and I think where this will go by the end of this year um I think you'll have probably that whole list that we did with Aaron Dylan of all those uh preipo startups there'll be a token for each one of those and why that's exciting is because when they do go public, you'll have people involved that ordinarily would never have been able to get involved. Yeah. I I will say this humbly because this is not my lane and I can't see the future any better than you can, but I don't know. I know that there's going to be a supply of tokens. I'm not sure that there's going to be the demand. Okay. Here's a token that represents a share of Anderl. You think there's going to be a demand problem for that? And will go public in 2026 or 2027? think there's going to be a demand problem. I don't I think I think people are going to lose their minds. Well, guess what? But but but my understanding is you still need to source the shares. You can't just create tokens out of thin air. Correct. You you convert. Correct. A lot of these startups that we just talked about, OpenAI, they have hundreds, thousands of of employees. Some of these employees are vested. They have their stock. They can do what they will with it. Here's so here's where here's where tokenization makes a lot of sense to me. Let's say that you have a lot of money at cryp at Coinbase for example and you don't want you you sell some Bitcoin or whatever it is. You don't want to transfer out to a different brokerage account. You're on the blockchain. You want to stay there. Tokens there make a lot of sense to me. Yes. Yes. The tokens at Robin Hood. This is the first time that Robin Hood has leapfrogged Coinbase. Robin Hood has been chasing Coinbase. Yeah. Wow. They did this first and again positioned because they're in the Trady world. They're FINRA. They're FINRA members. Coinbase could not have done this. Yeah. So, it's Listen, it's interesting. I'm I'm very very curious to see where it goes. Uh I didn't read this yet, but Jenny Johnson um had a headline in Fortune. I'm the CEO of a Fortune 500 company, and we're uh going all in on digitization or tokens or something along those lines. Yeah. Um Wisdom Trees got something they're doing here, too. Everyone is Everyone is all in on tokenization. All right. Um, the idea is it lowers costs and it speeds up. Settlement is instant and with tokens the transaction happens. It's on the blockchain. That's the end of it. There's nobody filing paperwork in a Manila folder. Put up this thing from Dan Doev, please. So, uh, nope. Um, the Mazuo uh, Mizuo. So, this is Dan's take. Party like it's $99. Get it? Raised his price target on Robin Hood. Dan's friend of the show. He's kind of our informal uh, fintech analyst. Um, on balance, we believe Hood should get rerated, unmatched product velocity, um, availability in 30 plus countries, myriad of new products, including stock tokens, staking, advanced charts on mobile, crypto, perpetual futures, which we don't have time for today. We'll talk about that another time. They are just innovating in multiple lanes 100 times faster than uh the incumbents. They are. They are. Let me just one final thought here. The stock has gone absolutely vertical on gigantic volume. They put in a potentially gnarly candle today. Uh if you want to buy the stock, you can buy it back at 70 bucks. How do I know that? I don't. But we'll see. Yeah, the route. Look, I'm not saying the the price should be the price. I'm just saying the rally is justified in terms of the Yeah, I'm I I I always have the posture for the most part that the public is not stupid. The stock is rallying for a reason. Um yes. Anyway, uh let's I have one more. This is tokenized real world assets. You You know how small the tokenization of stocks is? Yeah. It's zero. It's zero. You can't even see it on this chart because it's one of the few things that hasn't been done. Well, this entire thing is zero. It's 15 billion bucks. It's I know. But that like it's it's early and someone's going to own it, I think, is the point. Yeah. No, I'm not I'm not fighting you. I don't disagree. Okay, let's do Nvidia. Okay, Nvidia. Um this is funny. So, throw this chart up. Chart Kid shared this today. remember this chart because I do. Uh these charts have a tendency of disappearing when they don't work out. And what we're looking at for the listeners is the the price of Cisco uh and the price of Nvidia. And of course, what they have in common is they both went up and to the right. Now, I'm only teasing. They were they're both the the the giant behemoths of their day. Okay. And we know what happened with Cisco. What if Nvidia is the same as Cisco was in in in 2000? That was the thing. So, Chart Kid was kind enough to update us. And uh here we go. So now uh I guess Nvidia did follow the path like kind of but but it it it blew past it today. So there we go. Yeah, there we go. Uh sorry the matchy match chart didn't stay matched. Matchy match. So anyway, Nvidia is a $3.89 trillion company. I mean it's going to four. Where does it ultimately go? You think this thing gets to 10? Is that is that crazy talk? Well, let's just start with can it go to four and hold four before we start 10. There's a lot of te's in between four trillion and 10 trillion. 4 trillion. So, it's only 150 billion away. Come on. It's like one day. Uh Baron's did a piece. Uh I put this on LinkedIn and people got upset about it. So, which part? Who cares? Um Nvidia if it gets to 4 trillion will be 36% higher than the entire Footsie 100. Wow. which is the Dow Jones of Great Britain and and only 18% short of Japan's entire Nikk25. Wow. Um it would look it's uh biggest company in the world. Um it's not it's not that crazy that it's now the biggest company in the world considering how important its product is. It's crazy. And uh I mean it's always going to be crazy but somebody has to be the biggest. Um, so Beth Kindig tweeted, "In October 2023, Nvidia was expected to generate 96.6 billion in revenue in fiscal year 26 and 112 billion in fiscal year 27. Now it's expected to generate 199 200 billion and 250. So just in October 23, expectations for 26 were 96. They're now 200 and for 27 it was 112 and it's now 250. So again, the market is not dumb. High expectations 50% right there in in in October of 2023 when Nvidia is already the hottest stock in the world. Yeah. The expectations were still 50% below what they are now. But at the time they were scorching hot. They seemed unre unrealistic, right? And that's because the big thing that people forget is it's not just how many chips can we sell. Once people have spent a trillion dollars on these chips, they're locked in to that architecture and they have to continue to pay Nvidia. Yeah. Because it's a platform. It's not just a chip. And people forgot like people forgot what like how much more there was behind the sales of the chips. Yeah. All right. All right. Josh, we're already an hour in. So, let me just move on to this last part real quick. So, you and I spoke about this with Cole. Um, I mentioned the Bloomberg article that for for those who missed it. This is like actually I'm reading this. This is not me making this up. I'm not on mushrooms, ketamine, or acid. Here's the quote. A footwear startup is teaming up with two space companies to design a shoe in orbit as part of a mission to make artificial intelligence and blockchain less expensive and more eco-friendly than it is on Earth. Yeah, sure. Why not? AI enabled computer sneaker. Yeah, sure. Um, we have uh the SIBO files 194 for first of its kind Pangu and Pudgy Penguins NFT ETF. Sure, why not buy? And then we saw an article in the FT. This is this is hilarious. OpenAI's former chief technology officer has raised $2 billion for her new artificial intelligence startup in a deal which values the mysterious six-month old company at $10 billion. Basically, this thing's getting this thing's getting funded at $10 billion. Nobody really knows what it does. Doesn't matter. So, here's here's the point that I want to make. Anytime you have all-time highs in the market, it is a green light for stupid behavior. Right? By definition, you will never not have dumb behavior at a in a bull market, especially at the top. I think one of the big takeaways for me uh with my maturation as an investor over the years is that this dumb behavior that you see at the margins and maybe this is a little bit less marginal. It doesn't matter. It is a distraction and a sideshow. Now, it is like sort of a temperature on the market maybe, but all of these micro bubbles within a bull market noise as dumb as they are. Chris Hayes says, uh, hold on. Sodak Jackson says, "Boiler room Josh would have loved pitching those companies." Oh, man. I'm writing the pitch in my head right now. Space Nikes. All right, make the case. Uh, all right. This is not as exciting as the stuff Michael just walked us through. Um, people think that like being a professional investor or being a good investor means you have to have a new idea every day. And it's just not like that. Like in the real world, you should have a few like really core insights and just follow them through to their conclusion. And you shouldn't have a new stock every five minutes. That's wise. Well said. I want I want to visit revisit toast because I think we're on the verge of the next breakout. I I think you're right. I want the pitch because I told you I was going to buy it. I didn't buy it and it is hanging so high. I have to buy it. Dude, it's just going to go. It won't go one day. It's just going to go. I agree. This is not investment advice. For those of you within within earshot of what of my voice, please. I don't know you. Okay. Um, basically for people that have never heard of this company, if you go into a restaurant these days, there's like a one in five chance or one in three chance that the waiter or waitress comes to your table for the check and they have a device in their hand and they hand it to you or they just take your credit card from you and do it tableside. If you go into a place that sells food without a waiter or waitress, there's a very good chance Toast is the screen in front of them at the counter. Their products range from point of sale hardware, which is what I just just described, but also kitchen displays, payment processing, supplier and invoice management to payroll delivery, uh, delivery management, menu consultation, marketing programs. They have an AI program called Sue Chef that helps restaurant owners become more efficient at running their business. They have a hundred something different products that they sell you as a restaurant owner once they get in there and they uh and they get you using their payments terminal. Their take rate is about 50 basis points. Okay, it's a lot of money they're making and their gross value across their platform as they add more restaurants, it's just it's absolutely booming. Um the March quarter was a breakout quarter because it was their first profitable quarter. And from here on out, hopefully you're going to see gross margins rising, net margins rising. Um in Q1, gross margins hit mid20s, net profit hit mid single digits, like four or 5%. That's versus big losses the year prior. They spent a lot of money up front to equip restaurants with this these handheld devices, but then inertia takes over and it becomes like a sales force. You can't get rid of them. Restaurant owners are not ripping this equipment out ever. So, it starts with point of sale and it ends with Toast selling you every other software service that you need to run a profitable establishment. This is a $25 billion market cap, not yet in the S&P because it hasn't been profitable for long enough. just announced enterprise deals with Marriott, Applebee's, Topgolf, anywhere that they're selling food or hospitality. There's a toast machine in the building. We're talking about 130 something thousand customers uh um uh businesses all over the country now standardized on toast. Um UBS just upgraded it a bunch of upgrades recently. uh annual recurring revenue, which is the only number that really matters, rose 31% in Q1. It's now 1.7 mil uh 1.7 I think that's supposed to say billion. Um which which is explosive growth for a company in this business. Uh live customer locations are now 140,000. So this is in my opinion, let's put this chart up. Look guys, not complicated. The share price is following the growth in trailing 12 month IBIDA. So you're literally witnessing a company go from losses to growing cash flows every quarter. I think going forward now will be a better earnings uh picture as they keep adding locations. Um two potential negatives here worth talking three potential negatives chart off. One is the whole restaurant business slows down because of a consumer-driven uh recession. Okay, fine. It's the same risk for every other stock you own. Grow up. Two, competition. Clover. Clover. Um, Square, which is called Block now, but Square and um you know other like other payment. Okay, every company has competition. Grow up. Um, and then number three, their costs are rising because they keep adding all these new services like AI and all this stuff. The market doesn't care about that right now. The stock is at Well, that one I kind of get. The the the PE is at 45 times earnings. So, market's telling you don't worry about that. It won't matter until it does. Um, but the bottom line is if anyone's equipped to deliver AI to the hospitality, travel and leisure industry, Toast is the best position player to do that. It's also a payments player. They also since 2020 have been making loans to restaurants, which is hugely profitable. Tokenize them. Tokenize these loans. Strategically important. They should tokenize. Anyway, the stock rocketed up to 45, which was a a a new 52- week high. It's backed off a little bit. I think it's biting its time. They'll report again in August. Um, and I think if that's a good report, and I don't know if it will be, um, this this name gets into this theif 50s or 60s. So, I that's my make the case. What are your thoughts? Um, you had me at Applebee's. Great. Uh, I like it. I do like it. I do like it. Um, and why don't I own it? I uh coward basically. Oh, sorry. I thought that was your inner monologue. I was just vocalizing it. Okay. Um All right. I've got some mystery charts. All right. Let's hit it. Uh we're going to zoom out. Okay. This is a this is a decade. Um needless to say, this is not a great stock. Uh is this a price? In fact, yeah, it's the opposite of a of a good stock. It's a horrible stock. Okay. This is the price of a stock. Yeah. Can I have one clue? I'll give you two more clues or two more looks. We'll we'll let's zoom in, please. All right. This is the last five years. Uh, not great. And year to date, please. A little better. Little better. Would you buy this? Do I own this? Is this Fizer? Uh, could be. No. No. We We This looks as shitty as Fizer. We spoke about this last week. This is a great American This is a great American stock that I threatened to buy, which I haven't bought. I'm probably not going to, but I kind of want to buy. Oh, Intel. Yeah, that's the one. Look, I'm sure it'll look Look, just rewind. Just rewind two charts, please, John. At some point, it'll recover. I just I don't know when. There's just no more sellers. Well, my argument is like why wouldn't you just buy it? Why wouldn't you just buy it when it breaks the downtrend and not get it at the all-time low? Yeah. Yeah, fair. Like, that's how I I'm not saying like never own Intel. I'm saying like why put yourself through that? Do you have to have the bottom? I will say it's it's not, but I will say it's gone sideways literally since August of 2024. It has gone sideways so far that it is now above its 200 day moving average only because it just stopped going down by accident. Just we're getting out of bed. Um I could picture this at 18. Could you? Uh well, I think it's binary. I mean, it's not going to go sideways forever. I think it's going to either be at 30 or 15. Yeah. Um, it looks bottomy, but there's no but there's no fundamental story for why it's gonna turn. Yeah. You know, like maybe wait for I'd rather buy it up 10 points after they crush an earnings report like Dell just did or like um See, that's diff that's the difference between you and I. I don't wait. One thing though, one thing though is these things do sneak up on you. Like Cisco looks amazing. IBM the worst. IBM looks amazing. These are stocks that went sideways for 10 years. Yeah. So, um, but I'm I'm not I'm not doing it. It's a pink pony, huh? All right, guys. Thank you so much for joining us for this extra long edition of What Are Your Thoughts? It's been a pleasure for Michael and I to uh see you here for the live. Those of you listening in podcast land, please give us a like and uh subscribe to the channel for God's sake. Um, also I want to mention tomorrow is an all new animal spirits, Michael and Ben. And we will be back later this week for uh the compound and friends. Uh, other other than that, wait, we're not back. I'm back. I'm so You're back. Okay. Michael will be back with an all new edition of the compound and friends. I will be uh on my fourth bowl of pasta. Bonjour, guys. Thanks again. Have a great night. Heat. Heat.