All-Time High Stocks… Bitcoin About To Explode?

[0:00] From a technical perspective and an
[0:01] Elliott Wave perspective, I believe we
[0:03] have just finished a correction and I've
[0:06] been waiting patiently to kind of build
[0:08] off the lows we made in in in
[0:11] at 60,000. The ecosystem of the direct
[0:14] relationship between Bitcoin and the AI
[0:17] world is starting to act well. When you
[0:19] run out of compute, that is important
[0:21] for Bitcoin. That fits in with the
[0:23] scarcity argument. So, do I think we're
[0:25] just going to jump out of here?
[0:27] What's going on, guys? In this week's
[0:28] conversation with Jordi, we talk about
[0:29] the commodity bull market, why stocks
[0:31] are at all-time highs, how he's thinking
[0:33] about inflation, deflation, and various
[0:35] other metrics in the economy. We then
[0:37] talk about the psychology of the
[0:38] individual American and how much that
[0:40] matters for asset prices. Talk about
[0:42] Bitcoin starting to surge back and why
[0:43] he's so bullish there. And then we talk
[0:45] about scarcity. Where is scarcity in the
[0:47] market? What is Jordi actually going and
[0:49] buying himself? And how should you think
[0:51] about putting scarcity into your
[0:52] portfolio versus maybe some of the major
[0:55] indexes. This conversation's got a ton
[0:57] of great insights and at the end, Jordi
[0:58] shares a couple of things that he's
[1:00] built that are pretty cool and I think
[1:01] that you'll enjoy it. And Jordi gives
[1:03] out his email address, so you may want
[1:04] to pay attention at the end. That's it.
[1:07] Here's my conversation with Jordi
[1:08] Visser. All right, Jordi. You told me
[1:10] that you didn't think stocks were going
[1:11] to get to all-time highs this year.
[1:12] We're sitting at all-time highs right
[1:14] now. We also saw an 11-day advance
[1:16] before the new all-time high. And now
[1:18] stocks seem to be exploding as we open
[1:20] up the straight and kind of gangbusters.
[1:22] What you got to say for yourself there,
[1:23] big dog?
[1:25] Yeah, that's my opinion. It was wrong.
[1:27] Uh I didn't think there was a bear
[1:29] market. I didn't think there'd be a
[1:30] recession, but I also didn't think that
[1:32] the market could look through uh the
[1:35] inflation, the credit, and all of that.
[1:37] But
[1:38] as this market has proven time and time
[1:40] again over the course of the last I
[1:41] don't know, what's it been since 2019
[1:43] that no matter what takes it down, a
[1:45] pandemic, tariffs, Silicon Valley Bank,
[1:48] now shutting down the most important um
[1:51] crossing for oil,
[1:53] uh it just doesn't seem to matter.
[1:55] It hasn't been um
[1:58] it hasn't been a broad thing. It has
[1:59] still been led by the things that I am
[2:01] bullish on and I've said repeatedly,
[2:04] we are in a secular bull market in
[2:06] hardware, in commodities, and in
[2:08] semiconductors.
[2:09] And this did and this was led by them. I
[2:13] also did a, um,
[2:15] I did a video. I don't think I sent it
[2:17] to you. Sorry if I didn't. Um, I did a
[2:19] video on Tuesday about Oracle. Mhm. And
[2:23] there's an important message in that
[2:25] which I'll let you kind of double click
[2:26] on a little bit for people, but I did
[2:29] that on Tuesday which to me opened up a
[2:32] little bit more of the upside because
[2:33] there's a change that's happening within
[2:36] side AI that I think has become critical
[2:39] and all of the news this week under the
[2:42] surface since people are so focused on
[2:43] oil
[2:45] has been about a an enormous shortage
[2:47] that is starting to become more and more
[2:48] evident within inside the AI world. So,
[2:51] I want to talk about a couple of things
[2:52] here. The first is, um,
[2:54] I have now said for years that we have
[2:57] outlawed prolonged bear markets, we have
[2:59] outlawed multi-year recessions. I don't
[3:02] think in the rest of my life, and I know
[3:03] this is bold to say, but I don't think
[3:04] in the rest of my lifetime we will see
[3:06] either one of those things. And mainly
[3:08] it's because two components. One is the
[3:10] Federal Reserve has perfected the QE
[3:12] playbook. The second we have cracks in
[3:13] the system, they rush in and, you know,
[3:15] they start printing money, drop interest
[3:17] rates, all that kind of stuff. The
[3:18] second though is I actually think in a
[3:20] hyper-connected digital world investors
[3:23] have amnesia. And, you know, I was
[3:25] joking this morning like investors are
[3:27] going to forget where Iran is on a map
[3:28] by the end of the year. Like they're
[3:30] they're just not even going to Maduro
[3:32] happened what was it? 12 weeks ago?
[3:35] People don't even remember that he's
[3:36] sitting in MDC, you know, jail here in,
[3:39] in New York City. And so, I do think
[3:42] there's this element of you get the
[3:43] amnesia from investors and then just the
[3:45] constant what's the next narrative,
[3:46] what's the next story.
[3:47] But then you also compare that with the
[3:49] QE from the Central Bank and to your
[3:51] point doesn't mean that the stock market
[3:52] can't go down 10 or 15%, you know, in a
[3:54] in a given time period.
[3:56] >> Mhm.
[3:56] But it just doesn't last very long, and
[3:58] you get these kind of V-shape type
[3:59] recoveries.
[4:00] Yeah, just remember um earlier in the
[4:03] year before Iran, so in the first we're
[4:05] we're now almost
[4:07] So, Iran
[4:09] started in in like the first day of
[4:11] March.
[4:12] So, we're about 6 weeks into that. The
[4:14] market was having trouble before that,
[4:16] and that was due to
[4:18] what I'll talk about this the super
[4:20] sonic tsunami.
[4:22] That's getting worse.
[4:23] So, remember
[4:25] if you strip out semiconductors and you
[4:27] strip out energy
[4:29] which is a
[4:30] it's an inflationary reflationary
[4:32] situation. Anything related to the
[4:34] consumer
[4:36] has had trouble.
[4:37] Um this has been about commodities. This
[4:39] has been about PMIs. And I've been on
[4:41] this for a while, and I've talked about
[4:43] these where your investments need to be.
[4:45] So, this is the problem of talking about
[4:47] the market. The market has lots of
[4:50] names. It has lots of components. It has
[4:51] not been a good year for financial
[4:53] stocks. It has not been a good year for
[4:54] software stocks. It has not been a good
[4:55] year for the hyperscalers. Those facts
[4:57] are still in place. And those are the
[5:00] companies that have suffered the most
[5:01] from the power and the disruption of
[5:04] artificial intelligence. So, my issue
[5:06] comes back to the same thing. People
[5:07] also at the same time get caught in new
[5:09] all-time highs, that means everything's
[5:11] good.
[5:12] You can't get rid of the problems of the
[5:14] deflationary pressure. So, let's put
[5:16] those three components in in in
[5:18] in context.
[5:20] AI is getting power more powerful. Mi-
[5:24] Whether it's mythos or mythos, I've
[5:25] heard like 20 different people say it
[5:27] different ways.
[5:27] >> The scary one. Yeah.
[5:29] The It seems like the people with the
[5:31] best educations say mythos, and I I'm
[5:33] assuming
[5:34] >> It's like fi- finance versus finance.
[5:36] Yeah, exactly. I So, I've kind of said
[5:38] since I since my father was a
[5:40] construction worker, I'm going to stick
[5:41] with mythos for me. Um
[5:44] You've got a problem where AI is
[5:46] accelerating even faster. These problems
[5:48] run into hacking risk, they run into
[5:50] jobs risk, they run into all of the
[5:52] things that were already a problem
[5:54] before we started this whole thing with
[5:55] Iran. So, I think another thing is
[5:57] happens is people get hyper-focused on
[5:59] the event, and yes, it goes away, but
[6:02] there's always a new event that comes
[6:03] out of it. The new event to me that is
[6:06] absolutely going to be here as far as
[6:08] I'm concerned is that we've reached the
[6:10] physical limits of AI.
[6:12] The commodity and semiconductor shortage
[6:15] has become
[6:16] real.
[6:17] And this only started
[6:20] honestly
[6:21] October, November, December. The
[6:24] shortage has really started around the
[6:26] end of the year with memory. So, DRAM
[6:28] prices had gone up, but we also had
[6:30] silver going up. Now, you've got oil,
[6:32] even with it falling on the straight
[6:34] opening, it's still higher than it was.
[6:37] Fertilizer, plastic, we don't know how
[6:39] long that's going to take to get those
[6:40] shortages back in. So, when you get
[6:42] caught, "Hey, the straight's open."
[6:43] That's all well and good. We did a
[6:45] tremendous amount of disruption to
[6:47] inventories, to a whole bunch of things,
[6:49] which just mean our line of safety for
[6:51] inflation
[6:52] is gone. So, we're going to have more
[6:54] volatile situations when it comes to
[6:56] that. The deficit and the debt is worse
[6:59] because of this whole situation. And
[7:01] with inflation at high levels
[7:03] higher than they were and higher than
[7:05] what was expected, which everyone has
[7:06] the same forecast on that
[7:09] you're left with negative real rates, as
[7:10] I said. Once we get into What's the Fed
[7:12] going to do? We're going to have a new
[7:12] Fed chair. There will be a new story
[7:14] that comes out. Earnings are good, as I
[7:17] said, I believed earnings would be good
[7:18] this year. I believe the economy will be
[7:20] good this year.
[7:21] I'm not sure the multiple compression
[7:22] story, which has been the big thing, is
[7:24] gone yet, and I would continue to focus
[7:26] your attention
[7:27] on places where there's scarcity, and I
[7:29] would avoid places of abundance because
[7:31] God forbid we start seeing the
[7:33] disruption to software names, because as
[7:35] of now, we've had no bad news in
[7:37] software. This was all about hype over
[7:39] the future. What if a company like
[7:41] salesforce.com actually highlights in
[7:43] their earnings coming up that they are
[7:45] seeing a loss of seats?
[7:48] This will start another wave of this.
[7:50] >> Watch out below. And we haven't gotten
[7:51] rid of the connection of how big
[7:53] software was in terms of the debt and
[7:54] everything associated with it. So, I
[7:56] just want to make sure people realize
[7:57] this is a trading market. Stick with the
[7:59] things that are in a secular bull
[8:01] market. Don't get caught in the S&P 500
[8:04] in this thing about, you know, stocks
[8:06] bull market bear market. There are lots
[8:08] of names that are up 100% this year.
[8:09] There's lots of names that are down 20%
[8:11] this year. That means there's an
[8:12] opportunity for picking your names. I
[8:13] would stick with the scarcity names.
[8:15] Okay. I want to talk about first, let's
[8:16] just talk about the V-shaped recovery in
[8:18] the market. Um we've got this thing Pro
[8:20] Cap Insights. We've got this AI system
[8:22] goes finds uh uh
[8:24] the agents go and find insights. And one
[8:26] of the things that it found this week
[8:27] that that was very interesting is since
[8:29] Q4 of 2018, there has been at least five
[8:32] V-shaped recoveries. And the V-shaped
[8:34] recovery is basically defined by a
[8:36] material drawdown in the stock market
[8:37] that's called 10% or so. And then in a
[8:39] very short period of time it comes back,
[8:41] right? In a matter of months. Um when
[8:43] that has happened all five times in the
[8:45] last 10 years, we have seen the stock
[8:47] market rally significantly from there.
[8:50] Since Q4 of 2018, every single time the
[8:53] lowest return that you got over the next
[8:55] 12 months was 20%. The highest I think
[8:57] was somewhere in like 70 plus percent.
[8:59] When you see that, it reinforces you and
[9:02] I have talked about in the past the data
[9:03] point of buying the all-time high stock
[9:05] price in the S&P is usually the best day
[9:08] to buy compared to any other day because
[9:10] momentum begets more momentum. And over
[9:12] a 6-month, 3-year, you know, 5-year
[9:13] period, you get this thing.
[9:15] What you're talking about though is
[9:18] actually, if you take the S&P uh as an
[9:20] example, there are some names that are
[9:22] going to outperform. There are some
[9:24] names that are going to suffer. And so,
[9:26] I know that you personally are looking
[9:28] at, okay, what are the sectors where are
[9:29] the scarcity? I'm going to go and invest
[9:31] there. But let's say that there are
[9:32] people who say, look, I you know, I'm a
[9:33] teacher, I'm a fireman, I'm a
[9:35] accountant, I uh have a regular job, I
[9:38] don't do this for a living.
[9:40] I just have been trained to buy the S&P
[9:41] 500. How do you think that performs over
[9:44] the next 12 to 24 months? Do you think
[9:46] it's something where it'll have like a
[9:47] negative to flat return, or do you think
[9:49] that it's just going to underperform the
[9:51] scarcity verticals? Well, I definitely
[9:53] think it's going to underperform the
[9:54] scarcity verticals. I So, we can
[9:58] the beauty of of using AI is to go back
[10:01] in history, but if I
[10:04] said did my specialty, which is when an
[10:06] analyst would come in. I have a good
[10:07] brain for like
[10:08] I used to memorize baseball cards when I
[10:10] was a kid. It was a little parlor trick.
[10:12] I had a lot of like little nuances of
[10:14] ridiculous things that I could do. Play
[10:16] Space Invaders blindfolded and stuff
[10:18] like that. Like I could get the
[10:19] patterns. Um
[10:20] you're not talking about a lot of data
[10:21] points in your back test. So, maybe
[10:23] there's four.
[10:25] Um the one thing that I I can guarantee
[10:27] you was not consistent with what is
[10:28] about to happen.
[10:30] Uh inflation is going higher, meaning
[10:32] it's moving higher.
[10:33] We haven't been above 4% at any point in
[10:37] history where it's been a good time to
[10:38] be involved in stocks. And I've
[10:39] highlighted those numbers. When we get
[10:41] the next CPI print, we will be above 4%
[10:44] most likely.
[10:47] Unless people think that
[10:49] fertilizer is not going to have impact
[10:50] on food prices, that diesel prices that
[10:53] are sitting up where they are is not
[10:54] going to feed through the economy.
[10:56] Headline inflation is going to be high.
[11:00] The silliness of people arguing whether
[11:02] inflation is high or not when
[11:04] surveys for Americans say that their
[11:07] finances are horrible
[11:09] is ridiculous to me. And that gets into
[11:11] the thing again of numbers. I deal in
[11:13] the reality of the way people think.
[11:15] >> but hold on. The survey
[11:18] complete lie, in my opinion. We got to
[11:20] debate this. Okay. So, Tom Lee is the
[11:22] one who went and did the research on
[11:24] this.
[11:25] I actually did not believe him. I told
[11:27] him this. I said, I I don't believe the
[11:29] conclusion. So, I went and I looked at
[11:30] the data, and Tom was right, so
[11:33] the Michigan consumer survey, I think it
[11:35] was two or three years ago, switched
[11:37] from their traditional methodology to
[11:39] now they do a lot of it online. In that
[11:41] switch, I'm going to give them credit
[11:43] and say this was not intentional, it was
[11:44] not nefarious, there's no kind of, you
[11:46] know, grand conspiracy theory, whatever,
[11:48] but they publish Republican and Democrat
[11:51] breakdown of the survey pool. It used to
[11:54] be almost dead 50/50. They're very good
[11:57] at surveying, I think it was a very
[11:58] reliable metric.
[12:00] It appears, let's call it two years ago
[12:02] when they switched the survey
[12:02] methodology, that now, in the data that
[12:05] they report, they survey 2/3 Democrats,
[12:08] 1/3 Republican. Now, the reason why Tom
[12:11] called this out was he said, "Look,
[12:13] forget all the politics nonsense. It's
[12:14] just that at the time when he published
[12:16] his report, Democrats were saying that
[12:18] inflation was going to be over 5%,
[12:19] Republicans were saying it was going to
[12:20] be under 2%." So, like, the political,
[12:23] you know, bias drastically, uh, changed
[12:26] the way that people looked at the future
[12:28] of inflation and at the consumer
[12:29] sentiment.
[12:32] I don't I'm I'm not able to say that the
[12:34] survey is, uh,
[12:36] right or wrong. What I think that I've
[12:39] come to the conclusion of is it's not a
[12:40] reliable data point.
[12:42] How do you think about it? Do you still
[12:44] use it? Um,
[12:46] first of all, to to get rid of a data
[12:48] point and try to explain out to me is is
[12:51] is crap.
[12:53] Um, all data matters. You can explain
[12:56] any one data point away. So, I'm not
[12:57] saying that this data point by itself
[13:00] Mhm. But if I said to you, is
[13:01] affordability a major issue in the
[13:03] political parties?
[13:05] Well, it dep- it depends. For half the
[13:06] country, the other half, no.
[13:08] You think there is half the country that
[13:10] is not saying that affordability is not
[13:12] an issue, that young people don't feel
[13:14] like they
[13:14] >> Oh, oh, oh, you're saying are they talk-
[13:16] I'm saying that half of the country does
[13:18] not have affordability issues, the other
[13:19] half of the country does, but I think
[13:21] both political parties are very focused
[13:23] on cuz they understand that they need
[13:24] the votes from that group that is
[13:25] affected by it, and so it is a major
[13:27] political issue.
[13:27] >> Yeah, I mean, again, if
[13:29] >> Mom Donny and Trump both are talking
[13:30] about affordable.
[13:30] >> Exactly, on both sides. Yeah, I agree.
[13:32] It It's in the Venn diagram of politics,
[13:35] affordability is a major issue in the
[13:37] Agree with that, yeah.
[13:38] Are job fears a major issue? Of course
[13:41] they are. That's all I need to know.
[13:42] That is that chart broken out by the two
[13:44] components.
[13:45] >> But our job But are the job fears rooted
[13:47] in data, or they rooted in narrative?
[13:49] And maybe it doesn't matter. It doesn't
[13:50] matter to me. Again, I So, surveys are
[13:53] feelings. Mhm. They're not facts.
[13:55] Agreed. Um and how people feel to me
[13:59] they're scared of AI. They don't like
[14:00] AI. Okay, that's a problem. They may not
[14:03] like the war. They may not like this. Is
[14:04] gas at the pump much higher than it was?
[14:07] Of course. Yeah. So, that's not a po-
[14:10] You can go through things, but if I look
[14:12] at the Michigan finance thing, I look at
[14:15] since gas at the pump went up, it's by
[14:17] tire. If I go overlay those things with
[14:19] gas, if you try to argue away things,
[14:22] you get in this very dangerous game. I
[14:24] don't view any one data point by itself
[14:26] as mattering.
[14:29] I see what's happening in the country. I
[14:31] see what's going on through the
[14:33] politics. I see what's happening in the
[14:35] way people think about things. I hear
[14:37] them. They're not happy.
[14:40] And so, yes, I do believe it's 50/50 in
[14:43] the country, and I think it'll stay that
[14:44] way. And if we switch parties, then the
[14:46] other party will go down to hating
[14:47] things, and I agree with that. And that
[14:49] Michigan stuff has always been that way.
[14:51] And I think that just shows how
[14:52] polarized the country is. But
[14:54] polarization to me comes to a large
[14:56] degree with the way that the blue states
[14:58] and the red states are trying to handle
[14:59] the problems. Wealth taxes are going up.
[15:01] Like Yeah, yeah. So, the anger, no
[15:03] matter where you fit in, is the
[15:05] distribution of wealth problem in the
[15:06] country.
[15:06] >> You mean the mayor of New York City
[15:08] standing outside of one of the
[15:09] residences one of his citizens'
[15:11] residences
[15:12] explicitly calling him out is is new.
[15:15] So, my my view on this as someone who
[15:17] who does not focus on politics for my
[15:20] decision-making in in in how I invest.
[15:23] Technology is a very disruptive force
[15:25] and it forces politicians to give money
[15:27] to people. It forces politicians to take
[15:30] money from people, but those problems
[15:31] get worse when the size of the deficit
[15:33] and the debt is at levels that is
[15:36] normally associated with a recession.
[15:38] So, no matter how you go through the
[15:39] University of Michigan thing, the fact
[15:41] of the matter is because of the debt and
[15:42] deficit problem, that's why we're in
[15:44] this we're in a recession for the bulk
[15:46] of the country. For semiconductors, no,
[15:49] but for consumer goods, for housing and
[15:51] all that stuff, autos?
[15:53] It's a recession. Clarify this a little
[15:55] bit. So, when you say recession,
[15:57] if I look at the data, it shows that
[15:59] home prices have essentially top-ticked
[16:01] and have now turned over and are
[16:03] starting to come down. Now, it's not 10%
[16:04] drops in home prices, but if you go if
[16:06] you look on, you know, home volume sales
[16:08] are at like 9-year lows or something. If
[16:11] you go and you look at one of my
[16:13] favorite things is to go to different
[16:14] locations on like Zillow and just look
[16:16] at, "Hey, how many homes have dropped
[16:18] more than, you know, 5 or 10% over the
[16:19] last 12 months, whatever."
[16:21] Pretty significant, you know, when you
[16:22] look at different areas. You're talking
[16:24] about a recession in the sense of prices
[16:26] are coming down the same way a stock
[16:27] market recession would be or are you
[16:29] talking about something else? No, and so
[16:31] just like a depression is a
[16:32] psychological thing, I'm not a big thing
[16:35] on a recession for anything that is not
[16:37] growing to me is in a recession. The
[16:39] housing market is not growing. We're
[16:41] near all-time lows and things. People
[16:42] can't afford housing. They're trapped in
[16:43] housing cuz their mortgage rates are low
[16:45] and if they go out. So, there's nothing
[16:47] happening there. There's nothing
[16:48] happening in autos. Um commercial real
[16:50] estate's in a recession. Like software's
[16:52] in a recession now outside of AI. So,
[16:56] there's plenty of places. Now, this
[16:57] always happens in an economy. So, you
[16:59] can't say that GDP's not good, which is
[17:01] why I say GDP will be fine, but the
[17:03] problem is for people who are consumers
[17:07] that are not in the top 10%.
[17:10] Their wages are not growing and the
[17:13] inflation was reset at higher levels and
[17:15] any part of inflation that ticks up,
[17:18] even if it's only for 3 to 6 months,
[17:20] unless their wages move up at the same
[17:22] time,
[17:24] it's an issue. Now, if this comes at a
[17:26] time when the AI agents are getting
[17:29] here, meaning digital employees are
[17:30] there, it puts pressure on this. And
[17:33] that voting block, particularly the ones
[17:35] in New York City,
[17:36] highly educated or educated,
[17:39] who have student loans, who can't afford
[17:42] to live in a city where they can get
[17:44] paying jobs, which is what their vision
[17:45] is. So, again, this is more
[17:47] psychological, but this is the reason
[17:49] why I focus my attention on Bitcoin is
[17:51] because at some point these pressures
[17:53] grow, and I believe that the ultimate
[17:55] time was when number one software or
[17:57] growth assets were no longer an
[17:58] investable place. I think we're there.
[18:00] Number two, if we get to the point where
[18:02] inflation is above interest rates,
[18:05] that's really a representation of
[18:07] something very different than where we
[18:08] were in 2021 and 2022. The Fed raised
[18:11] rates,
[18:12] but the job market was insane. Labor had
[18:15] the advantage over capital. YOLOing was
[18:18] a big thing. People were You had to beg
[18:19] people
[18:20] >> had three jobs. Exactly. You had to beg
[18:22] people to come back to work.
[18:24] It's a completely different scenario
[18:26] now. All right, but I want to talk about
[18:27] this inflation thing. So, I actually
[18:28] think you and I disagree on this, which
[18:29] is good. Um
[18:31] I don't think we actually do.
[18:33] No, maybe not. That'd be even better.
[18:35] Um
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[19:23] I'm a very big believer that there are
[19:26] certain things that are definitely
[19:27] experiencing inflation in the economy.
[19:28] Gas is up, right? Things like that.
[19:31] But I believe that the structural more
[19:33] macro trend is deflation via tariffs,
[19:37] deportations, AI, robotics.
[19:40] And I know you may not be the biggest
[19:42] fan of Trueflation. I use that as my
[19:43] main metric. That has spiked from the
[19:47] 0.8, it went all the way up to like 0.1
[19:49] 1.7. It has now come back down and
[19:51] settled somewhere like the 1.2, 1.3
[19:53] range. Um so I agree that CPI is likely
[19:56] to go higher as it did, but it's not
[19:57] going to go nearly as high as everyone
[19:58] thinks it is.
[19:59] What I find
[20:00] >> you think it's not going to go to? So we
[20:02] can you you you made a vague statement.
[20:04] I've already said it's going above four.
[20:05] Where do you think it's not going to?
[20:06] Headline inflation.
[20:08] Not Trueflation, headline CPI.
[20:10] I think that there is um
[20:14] if I use Trueflation, 98% correlation
[20:16] with CPI with a one-month lag, then the
[20:18] next CPI print as of today, we're only
[20:20] halfway through the month, so it let's
[20:22] see what happens the rest of this month,
[20:23] but as of right now, inflation will
[20:25] basically be flat to where the
[20:28] uh the latest print is. What is a little
[20:30] we have to go back and look is um
[20:32] at the beginning of April, the
[20:34] Trueflation number actually went from
[20:35] 1.7 to 1.2, it dropped.
[20:37] >> Mhm. And so there is a good chance that
[20:40] the next CPI print that we get in March,
[20:43] April uh time frame um
[20:47] will be flattish, right? And that could
[20:49] be plus or minus, let's say plus or
[20:50] minus 0.5.
[20:52] Which what? Inflation was 3.3.
[20:55] >> Three.
[20:55] So we wouldn't get over four in the next
[20:57] one. Now, I could be wrong, but I think
[21:00] that band, somewhere in the like let's
[21:02] call it three to four percent range, but
[21:04] pretty much flat, it's not going to in
[21:05] my opinion spike over 5%. Now, could the
[21:08] correlation break between Trueflation
[21:10] and CPI? 100%, right? There are certain
[21:12] things that they do in their calculation
[21:14] that CPI doesn't, and vice versa,
[21:16] whatever. But, what I find the most
[21:17] interesting about thinking through this
[21:19] right now is
[21:21] let's give credit to Trueflation and say
[21:23] that they are accurate in the consumer
[21:24] inflation measurements that they use.
[21:26] It's real time, it's blah blah blah,
[21:27] whatever.
[21:28] And let's say that it is going to
[21:30] somewhere in the 3.3, 3.5 range is where
[21:33] we're going to kind of hang out for a
[21:34] little bit.
[21:35] Commodities are exploding higher. Some
[21:39] of these things are doubled in price
[21:40] very, very quickly. And so, what I then
[21:43] started to think about is have we ever
[21:45] had a situation where consumer inflation
[21:47] did not spike,
[21:49] but commodities did spike higher? You've
[21:51] been doing this longer than I have.
[21:52] Like, can you think of a single time
[21:54] where that's actually occurred?
[21:56] Well, first of all, you've left
[21:57] something really important. All right.
[21:58] When you say commodities,
[22:00] um
[22:01] the most important commodity in all of
[22:02] our lives over the last, and again, I I
[22:04] I I'm not going to
[22:06] I I don't want to pick on Trueflation.
[22:08] Okay? I'm a professional who's had many
[22:10] quants come in and give me their back
[22:12] test, so it's all well and good.
[22:13] >> Mhm. Um
[22:15] let's just say I I differ in where
[22:17] inflation is going to be on headline
[22:18] inflation.
[22:19] Um
[22:20] and again, I admit when I'm wrong, so if
[22:22] I'm wrong, I'll be wrong.
[22:23] >> Um the most important commodity in your
[22:25] life
[22:25] >> The Jordy Pom betting market on
[22:27] inflation.
[22:28] Um the most important commodity in your
[22:30] life that has occurred over the course
[22:31] of the last 17 years is semiconductors.
[22:35] True. They're in everything. Yes.
[22:38] Everything in your home, everything in
[22:40] your car is loaded with semis.
[22:42] We're out. Mhm.
[22:44] So, import price and export price
[22:47] inflation for South Korea this week,
[22:51] above 18% and above 20%.
[22:54] >> Mhm.
[22:55] We don't make semis here. Mhm.
[22:57] >> We import them. They import them price
[22:58] inflation. So, I think this whole nuance
[23:01] of people is
[23:03] we've never seen anything like this.
[23:04] This is why back test do not tell you
[23:06] what the future
[23:07] >> basically making the argument just to
[23:07] make sure I understand. You're making
[23:08] the argument that or part of the
[23:10] argument
[23:11] take semiconductors which is a small but
[23:14] very important component of inflation.
[23:17] You're almost saying hey it is spiking
[23:18] so aggressively that even if everything
[23:21] else appears to be okay, this huge gain
[23:24] in this one area could substantially
[23:26] impact headline inflation.
[23:27] >> It's more than that. We all pay for
[23:28] Wi-Fi. We all pay like every single
[23:30] thing in our life to some degree has
[23:33] associated with it. The electricity
[23:34] prices, the power, all of that stuff. So
[23:38] at some point you you have to look at
[23:39] inflation and go when you say a consumer
[23:43] a consumer buys semiconductors every
[23:44] day. Their phone is arguably their most
[23:46] important thing. True. We have a
[23:48] shortage of
[23:49] this stuff. Like I'll be showing this
[23:51] weekend that inflation
[23:54] and I mean this is I mean I hate to say
[23:56] it but
[23:57] we can't make as many phones. Now phones
[23:59] are not being purchased right now in any
[24:00] big way but the reason is cuz the prices
[24:02] are going higher. So this doesn't change
[24:04] the fact that if you take an iPhone and
[24:06] you change the price from let's say the
[24:08] lowest end 500 to 550 once, it's a 10%
[24:12] rise that happens in a month. It doesn't
[24:13] mean that every month it's going to go
[24:15] higher. So it's one of the things about
[24:17] this. But when silver prices go higher
[24:19] and they're involved in every semi you
[24:21] know in every semiconductor then
[24:22] semiconductors continue in tire memory.
[24:25] I think people just have to go through
[24:27] debating whether inflation is going
[24:29] higher or lower for the next few years.
[24:32] You mentioned humanoids. To get to the
[24:34] deflationary part of humanoids, we have
[24:36] to have inflation.
[24:37] Because we need to buy all the
[24:39] semiconductors. So when Elon Musk says
[24:41] I need 5 to 13 trillion dollars worth of
[24:46] semiconductors to be able to do what I
[24:48] want to do
[24:49] we're not built for that. And so the
[24:51] commodity thing cannot be minimized.
[24:53] Your your question is valid. The
[24:55] transfer mechanism and this is one of
[24:57] the reasons why if I were to sit and
[24:59] intellectually go back and forth with
[25:01] the way they thought about trueflation,
[25:03] if you try to backtest things and I've
[25:04] seen the correlation. I've seen the
[25:06] overlay. It looks perfect up until COVID
[25:09] and then it starts to break away a
[25:10] little bit. What happened in COVID is
[25:13] very different than the prior decade.
[25:15] And it's not to say that they're they're
[25:16] not right and I'm not wrong. But I've
[25:19] just been through a bunch of these that
[25:20] if in if commodities are in an
[25:22] inflationary period where the the bottom
[25:24] of crude is now up here. We were just in
[25:26] a commodity bear market for a decade. If
[25:29] we're in a bull market for commodities
[25:30] for a decade, I think the historical
[25:31] correlations of people that fitted
[25:33] things to a very good correlation, they
[25:36] might break down a little bit. And
[25:37] again, I could be wrong on this, but I
[25:39] think for certain we have shortages of
[25:41] semiconductors and commodities for the
[25:43] foreseeable future and I think that's
[25:44] going to translate into
[25:47] less predictable inflation that happened
[25:49] in the past. So,
[25:51] earlier this year, I think you and I
[25:52] talked about like this is kind of
[25:54] uh the tariff tantrum all over again.
[25:56] Everyone's freaking out. It's going to
[25:58] be fine. Relax, you know, see through
[25:59] the noise.
[26:02] If I go back and I think about and try
[26:04] to be as intellectually honest as why
[26:05] did I think there wasn't going to be
[26:06] really high inflation when the tariffs
[26:08] were there? One was actually had nothing
[26:10] to do with data. It was all about like
[26:12] there was consensus and out and dissent
[26:14] was outlawed and so just like there's no
[26:16] way that everyone got it right all
[26:17] together at the same time. So, there was
[26:18] something about that that like gave me
[26:19] the spidey sense of hey, the consensus
[26:21] is probably wrong. The second thing was
[26:24] I always think back to it and it's so
[26:25] funny. I don't know if you've ever seen
[26:26] the uh Bill Ackman video on YouTube of
[26:29] like the complex economic machine.
[26:31] Right? And he pulls off all these things
[26:32] or whatever. It's a very good video if
[26:34] like if you're starting from zero,
[26:35] right? But if you've been doing it for a
[26:36] while, you're like hey, this is not
[26:37] really designed to, you know, for me. Um
[26:40] but in that he does talk about the
[26:41] complexity and there's a lot of moving
[26:42] parts and and all this stuff. And if we
[26:45] think back to that moment, why did
[26:47] inflation not explode higher? First of
[26:49] all, there was the whole like taco, you
[26:50] know, hey, there's a 20%
[26:52] tariff. let's bring it back down. But
[26:54] two was there was a ton of other moving
[26:55] parts, deportations, AI, all this stuff.
[26:58] So, it's very hard to say, hey, what is
[26:59] the impact of this one thing?
[27:01] Right now feels like a similar thing.
[27:03] So, take semiconductors as an example.
[27:06] I look and and it's not perfect because
[27:08] there's all these people attacking it
[27:09] from different angles. But now the world
[27:11] realizes we need semiconductors. And so,
[27:13] you have some people who are trying to
[27:15] build chips, you have some people who
[27:16] are trying to build, you know, the fabs,
[27:18] terrafabs, you know, type stuff,
[27:19] whatever. You have people in the United
[27:21] States, outside the United States, it's
[27:22] like the gold rush is on. And the thing
[27:25] is different than software is it's much
[27:27] harder to build hardware, right? It's
[27:29] that much harder to design things. And
[27:30] so,
[27:31] um
[27:33] I wonder how sustainable or resilient is
[27:37] potential inflation in these products if
[27:39] there is massive competition on the way.
[27:42] Now, does the competition actually have
[27:44] a product that they can bring to the
[27:45] market in 12 months, 18 months, 5 years?
[27:48] I I I'm not an expert on, you know, what
[27:49] those timelines look like.
[27:51] But you would think that, okay, there's
[27:53] this inflationary thing, which means the
[27:55] economic reward is increasing for
[27:56] whoever can supply the market with this
[27:58] product. Here comes all this
[28:00] competition.
[28:01] Shouldn't they bring the price back down
[28:03] as that competition comes to market? Or
[28:05] do you think that the demand imbalance
[28:07] is so great that even if all of these
[28:09] people are successful, we still get, you
[28:12] know, the inflationary pressure on those
[28:13] prices?
[28:15] So, let let me let me react to what you
[28:18] said about last year and give give you a
[28:20] little bit more on my thoughts last year
[28:21] about why we agreed on on the inflation
[28:23] front last year.
[28:24] Um
[28:26] there were three components that were
[28:27] important to me with with the tariffs.
[28:29] Number one, wages were in decline.
[28:31] Number two, housing was in decline.
[28:33] Uh and number three, oil was not moving
[28:36] and I didn't think was going to move.
[28:39] So, last year at this point and even
[28:41] coming into this year, I was not
[28:42] concerned about
[28:44] the things I'm concerned about now.
[28:46] What is a mistake is when you get new
[28:48] information. The whole part of having a
[28:50] Bayesian mind
[28:52] is you have to think about what happened
[28:54] and whether it matters longer term. Mhm.
[28:57] What happened in the Straits of Hormuz
[28:59] has changed the world. Anyone who
[29:01] doesn't agree with that, in my opinion,
[29:03] is just wrong. Mhm.
[29:05] Now, does it mean that the world's going
[29:07] to end and that everything should be on
[29:08] fire? No.
[29:10] But does it reset oil higher than it was
[29:12] at the beginning of the year? Does it
[29:13] mean the thing that I thought was never
[29:16] going to be a a part of this because oil
[29:18] was a archaic thing that was more
[29:20] necessary for Where did we start the
[29:21] year with oil? 55? Uh 50, 60, something
[29:24] something like that.
[29:25] >> it was 63-ish.
[29:26] >> 60 Okay, so let's just call $60.
[29:27] >> Yep. Right now, uh as of the recording
[29:30] of this, we're around uh 80 bucks. 80 83
[29:33] dollars we crashed down to uh as the
[29:34] Strait got opened. Where do you think we
[29:36] end the year? Is it like
[29:38] 80 is a pretty good spot and that's, you
[29:40] know, 30% higher than where we started
[29:41] the year, or do you think it goes down
[29:42] from here, up? Like, what's your kind of
[29:44] call?
[29:44] >> So, let's Let's do it. By the end of the
[29:46] year, I I'm going to guess that the
[29:48] normal progression of this is that
[29:49] somewhere around 80 to 75, even, is is
[29:53] where it is. So, higher than
[29:54] >> but still higher. 25% higher. Here's the
[29:56] thing I would say. I think there's going
[29:58] to be more episodic spikes.
[30:00] >> spikes.
[30:01] >> Like, the volatility frequency will
[30:02] increase.
[30:03] >> I I And here here's the thing.
[30:06] Number one was the disruption where we
[30:07] got rid of the
[30:09] the available barrels that were out
[30:11] there.
[30:12] The other issue that comes out is
[30:15] this was a warning sign to Asia in
[30:17] particular.
[30:19] They need more energy.
[30:21] So, the hoarding aspect of it won't go
[30:23] below a certain price. So, if anything,
[30:25] I'd err on higher. I don't think we're
[30:27] getting back to 63. Second thing is,
[30:29] remember, PMIs are going higher.
[30:31] Transportation stocks are on fire. So,
[30:33] the economy is actually growing on the
[30:36] part that is very intensive for oil. So,
[30:39] I always thought, I mean, historically,
[30:41] if PMIs are up high, oil follows. So, I
[30:44] thought it was good to have energy
[30:45] stocks for that reason. So, when you
[30:47] look back to last year, we've changed
[30:48] the oil component. We haven't changed
[30:50] the housing component. We haven't
[30:51] changed the wages. That's why I can live
[30:53] with core inflation and service-based
[30:55] stuff doesn't spike as much as energy. I
[30:57] also I'm fine with the fact that we're
[30:59] not going back to 8 to 9% CPI in the
[31:01] headline. Do I think we'll be above
[31:03] four? Yes. Do I think we'll be volatile
[31:06] above four? Yeah. I think we're going to
[31:08] be seeing prints that are no longer zero
[31:10] and point two, because I think when you
[31:12] move oil to a higher level and you
[31:14] combine it with what I said in the
[31:15] shortages and AI that are only
[31:17] intensifying. We haven't talked about
[31:19] it. We are out of CPUs. A year
[31:22] >> Explain that. Explain that. So,
[31:24] we've heard, I mean, Nvidia's been
[31:26] making GPUs and we hear about, you know,
[31:29] Hoppers and Blackwell and Vera Rubin and
[31:32] fighting over tariffs. Are we going to
[31:33] give them chips? CPUs last year were a
[31:35] dead thing. The thing that's mainly used
[31:37] in phones. Old school stuff. Intel was
[31:41] trading at $20.
[31:43] Literally, there were worries that it
[31:45] would go out of business. The government
[31:47] made an investment in it a year ago.
[31:50] The stock's now at all-time highs.
[31:52] In a span of 1 year. And if you go into
[31:55] any place and type in, "What's the
[31:58] situation in CPUs?" There are none.
[32:01] Just like there was no DRAM. So, we've
[32:03] now gone to where memory. That's all
[32:05] because of the agentic world. So, the
[32:08] problem is what was unexpected again
[32:10] from an inflationary component for this
[32:12] year was how fast AI agents would take
[32:14] over. That is the supersonic tsunami.
[32:16] That is the point of Claude Opus 4.5 to
[32:20] 4.6 and now 4.7 mythos mythos. All of
[32:24] them accelerated to a point that people
[32:26] didn't expect. And so, there is nothing
[32:28] happening. When you throw in what Elon
[32:30] Musk said, Elon said,
[32:33] "I need an enormous amount of CPUs and
[32:36] there are three foundries in the world.
[32:38] So, so people realize how long it's
[32:39] going to take to fix this problem.
[32:42] You need lithography.
[32:44] Well, that's controlled by one company
[32:45] on the planet, ASML. Currently, they can
[32:48] only make a certain amount. These are
[32:50] massive things that take a lot of money.
[32:53] Num- You have three foundries that are
[32:54] the ones that are actually making the
[32:56] final chip.
[32:59] Samsung, Taiwan Semi, and Intel.
[33:03] Elon did a deal last year secure all his
[33:06] chips from Samsung on things he
[33:08] designed.
[33:10] Now, he's doing He's He wants to do a
[33:12] terrafab because he's like, "I'm I can't
[33:14] have this. The supply chain that's
[33:17] necessary for lithography, for the
[33:18] designs, into the foundries to get my
[33:21] chips for my humanoids, my automobiles,
[33:23] and my space stations,
[33:24] I'm not going to have enough. This would
[33:26] be way too much." So, Elon Musk is
[33:28] telling the world with his terrafab
[33:30] announcement,
[33:31] "I'm glad you guys are worried about
[33:33] semis today. This is because digital
[33:35] employees came out of nowhere, but the
[33:36] next stage is not just the digital
[33:39] employees, it's the physical digital
[33:41] employees, and for those, I need an
[33:44] enormous amount of chips. And so, the
[33:46] CPU rise is not something that is going
[33:49] to be solved quickly. And so, you end up
[33:51] in a situation where everyone is trying
[33:53] to get AI, and for AI, they need a
[33:55] combination of
[33:57] GPUs or TPUs or some form of that, but
[34:00] at the same time, they need this memory
[34:02] side, which is part of the issue we've
[34:03] had, and we need CPUs. So, we've already
[34:06] been out of transformers, we've already
[34:07] been out of gas turbines, we're out of
[34:09] switching gear.
[34:10] I mean, how many times do people need to
[34:12] hear this stuff and not realize
[34:14] this is not 2010 to 2020 when inflation
[34:18] was low and consistently low. This is a
[34:21] completely different period. We have
[34:23] reached the physical limits of what AI
[34:26] needs to accelerate to the deflationary
[34:28] part we're talking about. You need to
[34:30] build stuff on mass scale to get to
[34:33] deflation. So, every Eric Schmidt's
[34:35] talked about it, Elon Musk has talked
[34:37] about it. They're way smarter than you
[34:38] and I in this. I just listen to them and
[34:40] hear what they have to say. Yeah, I am
[34:43] uh
[34:45] I might be too bullish, but I am very
[34:48] bullish on the fact that competition is
[34:51] coming in all these different sectors,
[34:53] and Elon is obviously, you know, pushing
[34:55] the pace here. Um but another component
[34:58] we don't really talk a lot cuz we spend
[34:59] so much time on stocks and and Bitcoin
[35:01] and stuff like that. In the private
[35:03] market, the amount of capital that's now
[35:05] available is enormous compared to what
[35:08] it was 10 15 years ago. And I think that
[35:11] the venture capitalist have
[35:12] psychologically switched from go find
[35:15] the B2B SaaS tool that's got, you know,
[35:17] very kind of capital-light type model to
[35:20] now they are very open to kind of
[35:22] returning to where venture capital
[35:23] started, which is like let's go invest
[35:24] in the hardware, let's go invest in all
[35:26] these things. And what that is allowing
[35:29] are kind I I know multiple companies
[35:31] that are doing very hard things, whether
[35:33] it's compute, whether it's chip stuff,
[35:35] what you know, with something in the
[35:37] stack of AI.
[35:39] They're raising out of the gate hundreds
[35:41] of millions of dollars. Doesn't mean
[35:42] they'll be successful, but does mean
[35:44] that as they kind of hit the market over
[35:47] the next, let's call it 5 years,
[35:49] that impact is really hard to predict.
[35:51] And so, I just become this believer of
[35:53] like, will the price of semiconductors
[35:55] be higher or lower 5 years from now? I
[35:56] think they'll be lower.
[35:58] Now, I could be wrong.
[36:00] And it really just comes down to like,
[36:03] is there more competition or not? If we
[36:05] stay with three, you know,
[36:06] producers, we stay with, you know, one
[36:08] company that can do the lithography,
[36:09] etc. Like, no, of course they're going
[36:11] higher.
[36:12] And to me, that is the hardest part
[36:13] because there's not uh a lot of
[36:15] transparency into how many of those
[36:16] companies are there,
[36:18] how successful are they going to be,
[36:19] where's their technology at, how good
[36:20] are their BD? Like, there's all of these
[36:22] components to underwriting that unless
[36:24] it is your full-time job,
[36:26] you kind of hear, okay, there's a couple
[36:27] of companies doing this. This one's
[36:29] interesting. This one's interesting."
[36:30] I don't know. Elon's probably the
[36:32] closest thing, and he's very public
[36:34] about what he's trying to do. So, we
[36:35] know that.
[36:37] But to me, that's actually the question.
[36:39] It's less about what happens to the
[36:40] existing guys, and it's more about are
[36:42] these, you know, kind of early-stage
[36:43] bets going to pan out or not?
[36:46] So, on the Dwarkesh Patel interview with
[36:48] Jensen Huang, Jensen made it very clear.
[36:53] If you take Anthropic's needs
[36:55] >> Yeah. Now, when you see a revenue run
[36:56] rate that looks like this, that is about
[36:58] demand. Mhm. Insane. So, demand is going
[37:01] at a pace we've never seen before. The
[37:03] reason we're running out of chips is
[37:05] because of that chart.
[37:06] Well, that chart can only slow down
[37:09] because we don't have enough AI compute.
[37:11] So, when we say chips, I don't have a
[37:14] problem cuz Elon has said, "We're going
[37:16] to have a bunch of idle chips that
[37:18] people have purchased
[37:20] sitting around this year." But that's
[37:21] not because of
[37:23] price coming down. Mhm.
[37:25] That's because we don't have the power.
[37:26] >> Power. Yeah. So, again, when you say all
[37:28] these things, I'm going to bring it back
[37:30] to
[37:32] in the history of mankind, you need
[37:34] whatever innovation happens, eventually
[37:36] you're turning electrons into some
[37:40] output. In this case, it's tokens.
[37:42] >> Mhm. So, Claude is raising the prices of
[37:44] tokens right now for enterprises.
[37:47] And you had the Uber CTO basically come
[37:49] out and say,
[37:51] "We can't afford this."
[37:53] That never happened. I'm running out of
[37:55] usage. So, we're clearly at that compute
[37:57] shortage time. Now, you can say chips,
[38:00] that's great. But what Jensen said,
[38:02] there's three components to this.
[38:03] There's the chips, there's the engineers
[38:05] that make the chips more efficient,
[38:07] which is what the Chinese did with Deep
[38:08] Seek. But at the end of the day, you
[38:09] need the power.
[38:11] Like, you need the power. Power is the
[38:12] most important component, and that's why
[38:14] Elon is focused not on getting away from
[38:17] the foundries. And again, he's going to
[38:18] build the foundry. Who's the fastest,
[38:21] most capitalized builder of competition?
[38:23] It's Elon. 100%.
[38:25] >> And he's saying it's going to I mean, he
[38:26] needs to do a massive size. That's why
[38:28] to your point
[38:30] I forget anyone who's raising VC money.
[38:33] VC money was meant for software. These
[38:35] are large-scale investments. Part of
[38:37] that interview with Jensen Huang, he
[38:39] talks about his biggest regret. His
[38:41] biggest regret was not investing in
[38:43] Anthropic. But the reason he didn't
[38:45] invest in Anthropic at the time, as he
[38:47] talked about, was I didn't have that
[38:49] kind of capital that they needed because
[38:51] the dollars that OpenAI just raised $122
[38:54] billion. It's bigger than most S&P 500
[38:58] companies. So, those dollars being
[39:00] raised are because we need hardware. We
[39:02] need power. We need data centers. And
[39:04] those data centers are being delayed by
[39:06] politics. They're being delayed by
[39:07] energy. They're being delayed. So, the
[39:09] bottlenecks that you're talking about to
[39:10] get to there, that's all well and good.
[39:12] It's far more complicated and it goes
[39:14] down. And if the Chinese say, "No rare
[39:17] earth
[39:17] for anybody."
[39:19] That's why this thing is a geopolitical
[39:21] game of commodities that I don't want
[39:22] people to under
[39:24] I don't want them to underestimate the
[39:26] risk associated with supply shortages at
[39:28] a time. We have not lived in that world
[39:31] for most people managing money or going
[39:33] through. Most people are sitting in
[39:34] growth assets.
[39:35] If we can't get enough compute
[39:38] what happens to these companies that are
[39:40] spending all of this money? And those
[39:42] bottlenecks can be power, they can be
[39:44] GPUs, they can be CPUs, they can be
[39:46] DRAM. It sounds like what Jensen is
[39:48] saying, "I got plenty of GPUs." GPUs are
[39:50] not the issue.
[39:51] The issues are the gas turbines, the
[39:53] politics of where the data centers are
[39:54] going to be. We need more power. And
[39:56] that's why when you go through Terafab,
[39:57] Terafab is to make chips to supply
[40:00] humanoids, autonomous vehicles, but also
[40:05] space data centers.
[40:07] He wants to go raise this money in terms
[40:09] of SpaceX to take that money, go build
[40:11] the Terafab because he knows we don't
[40:14] have enough power on the earth for what
[40:17] I need and I need to go into space to
[40:19] get it and he's not the only one that's
[40:21] saying that. This is a very complex
[40:22] thing.
[40:22] >> It it it's so funny to me to hear him
[40:24] talk about the
[40:25] the
[40:26] like small nuclear reactors or whatever.
[40:28] He basically is like that's cute. Yeah,
[40:30] he's very dismissive and
[40:33] it is not lost on me that Sam Altman is
[40:36] the backer / co-founder of one of the
[40:38] most popular companies in that space and
[40:40] those two guys there's no love lost.
[40:42] It's going to be a summer to remember so
[40:44] let's unveil Uh but you know he's very
[40:46] dismissive of that idea and his whole
[40:48] thing is like hey in you know the sun is
[40:50] available 24/7 what are we talking
[40:52] about? It's the greatest you know
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[43:30] I have a friend who runs a business and
[43:33] they sell a lot of the hardware
[43:35] components that are used in the
[43:37] electrical industry. So, if you run a
[43:40] data center, they sell to you. If you're
[43:41] an AI provider, they sell to you, right?
[43:43] And they are not trying to at least as
[43:45] of now go and actually, you know, build
[43:47] the the full data center, go and get the
[43:49] power, etc. They are, you know,
[43:50] essentially selling you all of the
[43:52] component parts that are used.
[43:54] Great business.
[43:56] He and I were recently talking about uh
[43:59] just talking about his business,
[44:00] catching up, and he said to me, he goes,
[44:01] "Yeah, the other day I was uh I was I
[44:02] was Googling what's needed for a space
[44:04] data center."
[44:06] And I was like, "What do you mean?" And
[44:07] he was like, well, I sell parts to data
[44:08] centers on Earth. If this is going to be
[44:10] a thing, I want to be the person selling
[44:12] components here. And you know, he's like
[44:14] telling me about radiation and this and
[44:15] that. And I was like, oh.
[44:18] Elon kind of decreed, and now you
[44:20] actually are seeing through the entire
[44:22] supply chain people are preparing. Now,
[44:24] do we get there? Do they actually do it?
[44:25] You know, there's a lot of questions,
[44:26] but
[44:27] that to me was I mean, he is literally
[44:30] the last component, you know, like like
[44:33] the smallest component
[44:35] uh supplier. Yep.
[44:36] All the way up to Elon, if everyone
[44:38] starts saying, "Hey, space data
[44:39] centers." Like it's coming. Yeah. And
[44:41] and
[44:43] to that point, I I I wrote a report this
[44:45] week, which I'm releasing on
[44:47] the subscriber website this weekend,
[44:51] which is all about edge devices, which
[44:52] is So, he talks about the need for edge
[44:55] devices. And what people need to realize
[44:57] is we're transitioning away from just
[44:59] cloud data centers. And things like
[45:01] Methos Methos make it more important for
[45:03] you to have both on premise and edge
[45:07] approaches, because if everything's in
[45:09] the cloud, everything's going to get
[45:10] hacked. So, people need things secure
[45:12] and on their own thing. It's why Mac
[45:13] Minis and um and Mac Studios and all
[45:16] these things are gone, partly because of
[45:18] the CPU needs, but partly because of the
[45:20] demand from open cloud on the agentic
[45:22] side.
[45:23] This report was meant to show people.
[45:25] And when I went through it, I think
[45:26] there's 13 verticals of investments, and
[45:29] there's about five names per. So, I have
[45:31] about 68 names within there. Some of
[45:34] them are very similar to the thematic
[45:36] portfolio list I have that people have
[45:38] seen, but a lot of them are names like
[45:40] you said. There's chips that have to
[45:42] deal with radiation, cuz the one thing
[45:44] that's constant in space or down here,
[45:46] you may not need the same sort of
[45:48] you don't need gas turbines, you don't
[45:49] need things like that. You have the sun,
[45:51] but you still need semiconductors. You
[45:52] still need chips, which is why it's
[45:54] called a terrafab, because he's trying
[45:55] to replicate very quickly or as fast as
[45:58] he can what Taiwan semi He wants to get
[46:00] started right away. So, he's out there
[46:02] saying and I mean, I'll show this over
[46:04] the weekend. He's trying to secure the
[46:06] parts already. So, number one, is he
[46:09] going to be capitalized? SpaceX is going
[46:11] to be
[46:12] fully capitalized and whether he takes
[46:14] 75 billion or 100 billion, the estimated
[46:17] cost of the terrafab is about 25
[46:19] billion. So, he just knows in his mind
[46:22] how many humanoids he thinks he's going
[46:23] to be producing and what he wants to be
[46:25] able to produce each year. What people
[46:26] have to realize about the the part that
[46:28] you were mentioning, which I believe in.
[46:29] So, I believe eventually when enough
[46:32] investment happens and we actually have
[46:33] humanoids, we will solve the the
[46:35] hardware issue. But, we have to get to
[46:37] the point where we have enough chips to
[46:38] be able to feed the humanoids to be able
[46:39] to do this. We need a power to be able
[46:42] to do all of that. And so, what Elon is
[46:44] saying is, I know how many humanoids I
[46:46] need. Once we get into space, it'll be
[46:48] much easier to secure the commodities
[46:50] that we need, whether it's on an
[46:51] asteroid, whether it's on the moon,
[46:52] wherever it is. And you're starting to
[46:54] hear these conversations more and more.
[46:56] I think the most important thing of
[46:57] listening to Elon Musk at this point is
[47:00] two things. One is, he believes that and
[47:03] most people do at this point. For the
[47:05] next phase of all of innovation, space
[47:09] is critical to that. So, that's the
[47:11] first thing. The second thing is, when
[47:13] you read through it, his timeline is
[47:16] just compressed. And that means from an
[47:18] investor standpoint, I like to find
[47:20] situations where there's a problem of
[47:22] supply and demand because at the end of
[47:24] the day, companies make money on
[47:25] margins. And if supply and demand is out
[47:27] of balance, then you get margins. That's
[47:28] what Nvidia has lived on still with 70%
[47:30] margins. So, I care about margins, but
[47:32] what I really care about is, what is the
[47:34] likelihood of this particular trend
[47:35] lasting for an extended period of time.
[47:37] So, I don't need to be bailing out of
[47:39] things. I want secular movers. Apple was
[47:41] a secular mover. The The Mag 7 were
[47:43] secular movers. I believe that hardware
[47:46] names that have a dominance in this,
[47:49] that have an isolated thing,
[47:51] lithography, very tough to have
[47:52] competition. The semiconductor makers,
[47:54] very difficult. Um I think it was Dylan
[47:56] Patel said,
[47:58] "Because we've run out of chips, we
[48:00] every chip is going up. It doesn't
[48:02] matter which semiconductor thing." Now,
[48:03] is there a bubble component of this?
[48:05] Episodically, these things will fall 20,
[48:07] 30% like Micron did. And then Micron run
[48:10] right back to the highs very quickly.
[48:11] So, I think people just have to get used
[48:13] to a market that trades differently. In
[48:15] a 1970s
[48:17] style scarcity market, you get violent
[48:19] moves down, you get violent moves up.
[48:21] That's why when you give a data point
[48:23] that's from 2018 to 2025 and I go,
[48:26] "We seem to be in something that's a
[48:28] little bit different just because of
[48:29] what's happening with semiconductors,
[48:31] but what do I know?"
[48:32] Bitcoin, we didn't spend that much time
[48:34] on. Um, Bitcoin has been rallying. It is
[48:36] up 16, 17% since the start of the year
[48:39] on war. It's up about 26, 27% from the
[48:42] bottom of the 60K uh
[48:45] um
[48:46] fall. We still though are
[48:48] 38 to 40% off the all-time high.
[48:52] Are you
[48:53] getting more bullish? Are you worried
[48:55] that maybe this has outrun itself a
[48:56] little bit?
[48:58] So, I think because there's not a single
[49:02] let's say asset that I talk about more
[49:04] in on on this show over the last year
[49:07] than Bitcoin. I'm going to give you a
[49:09] I'm going to give everyone watching my
[49:10] rationale behind this. So,
[49:12] number one, um
[49:14] I am I have a macro belief that the end
[49:18] game is about AI disrupting everything
[49:22] and people getting angrier about the
[49:24] destruction that comes from deflationary
[49:26] innovation impacting their jobs and
[49:28] their abilities five and the
[49:29] government's need to provide the debt to
[49:31] keep them happy, but that debt keeping
[49:32] inflation at higher levels. So,
[49:34] everything we talked about today,
[49:36] if I'm right, we're at a critical
[49:37] moment. That critical moment is that if
[49:39] inflation goes above where the Fed has
[49:41] rates, this is a new situation again. I
[49:43] mean, we're back in the 2010 to 2019
[49:46] period where we had zero rates and
[49:49] inflation was 2% and that's when Bitcoin
[49:50] thrived. So, I believe the conditions,
[49:53] which are not about negative real rates,
[49:55] but they're about a situation The only
[49:56] way you have negative real rates
[49:58] is kind of this dystopian type situation
[50:00] where people are not happy, and they're
[50:02] not making as much money as they think
[50:03] they should. That's the first thing.
[50:05] From a technical perspective and an
[50:06] Elliott Wave perspective,
[50:08] I believe we have just finished a
[50:10] correction, and I've been waiting
[50:12] patiently to kind of build off the lows
[50:14] we made in in in
[50:16] at 60,000.
[50:18] But, it was correlated with software.
[50:20] And the reason this is important for
[50:21] everyone listening is I believe that
[50:23] Bitcoin from a
[50:24] an investor standpoint is most similar
[50:27] to
[50:28] technology.
[50:29] Even though it has a scarcity component
[50:31] would make it much more like
[50:32] commodities, it's still viewed
[50:35] until, let's say, now, in my opinion, as
[50:37] a growth asset. So, it was correlated
[50:40] with software on the way up from the AI
[50:42] movement, and it was correlated on the
[50:43] way down.
[50:44] Something changed in software this week,
[50:46] and that's why I did this video. The
[50:47] subscribers who are in there, if you
[50:49] haven't seen it, go look at it. And I
[50:51] talked about we've hit an inflection
[50:52] point in software. And the reason is
[50:53] because Oracle's not a software name
[50:55] anymore.
[50:56] Oracle is a compute name.
[50:59] Yes, it is archaic in terms of it being
[51:01] software, but Oracle has something
[51:04] happening now because we've seen Nebius
[51:05] go up. We've seen Coreweave go up. We've
[51:07] seen Coreweave's CDS come down. We've
[51:10] seen the Bitcoin miners lead out. The
[51:12] ecosystem of the direct relationship
[51:15] between Bitcoin and the AI world is
[51:17] starting to act well. When you run out
[51:19] of compute, that is important for
[51:21] Bitcoin. That fits in with the scarcity
[51:23] argument. So, do I think we're just
[51:25] going to jump out of here?
[51:27] No. Did I buy call options on
[51:29] MicroStrategy this week? Yes. Did I buy
[51:31] Bitcoin this week? Yes. Did I buy it
[51:32] last week? Yes. And the reason is
[51:34] because I believe that we're in the
[51:36] beginning of an upswing. MicroStrategy
[51:38] just broke above its 50-day moving
[51:40] average for really the first time since
[51:41] Oracle fell. It also has its 50-day
[51:43] moving average pointed upward for the
[51:45] first time since October. This is the
[51:47] way that I trade markets, it's the way I
[51:48] look at them. Could I be wrong and could
[51:50] we go through 60,000 again? I guess, but
[51:52] I'm less worried about software having
[51:54] another every name falls, and I think
[51:56] we've now got to the idiosyncratic thing
[51:58] where the market is starting to separate
[52:00] scarcity software, which is what Oracle
[52:02] is because of compute, it's what the
[52:04] miners are because of them having the
[52:06] compute. That's a very powerful sign
[52:08] that you're seeing scarcity be treated
[52:10] differently. I think the software names
[52:11] are going to be under attack again, but
[52:13] this time when they go down, I think
[52:14] Bitcoin is going to be going higher.
[52:16] I am I'm very bullish on Bitcoin through
[52:18] the end of the year.
[52:20] Um
[52:21] it does feel like to me that
[52:25] the four-year cycle got broke in the
[52:27] sense of you did not get the 85%
[52:29] drawdown, it did not take nearly as
[52:30] long, you kind of short-circuited this
[52:32] whole thing, and you get this persistent
[52:34] bid now in the market, and um I wrote
[52:36] yesterday about
[52:38] uh
[52:39] stretch, STRC, from uh MicroStrategy or
[52:42] from Strategy.
[52:43] Record inflows, billion-plus dollars of
[52:46] daily volume, not moving off par,
[52:48] impressive. Second is Morgan Stanley
[52:51] launched the ETF. Um they had over $100
[52:54] million of inflows in the first week,
[52:56] single most successful ETF launch in the
[52:58] history of a 100-plus year-old firm. And
[53:00] then third is Charles Schwab just came
[53:02] out and said that they're going to
[53:03] empower people to directly trade Bitcoin
[53:05] in the product, uh and they reportedly
[53:08] are doing this as a response to
[53:10] Robinhood, and Robinhood has been
[53:11] growing, you know, at least twice as
[53:13] fast in every major metric compared to
[53:15] Charles Schwab.
[53:17] It's just like Wall Street Wall Street
[53:18] is now like this thing is safe. This
[53:20] thing is the thing that I can go and I
[53:22] can let my clients buy it, I we should
[53:23] get in the game, we should do this, and
[53:25] Morgan Stanley has historically been,
[53:27] you know, kind of a little bit slower to
[53:28] do this stuff, and so now that we're
[53:30] seeing these people come in, it just
[53:33] feels like that persistent bid is going
[53:35] to be there, and it that is a five- or
[53:37] 10-year trend. So even if you don't pay
[53:39] attention to anything else in the world,
[53:41] it's just like you a scarce asset,
[53:43] you're turning on all these new capital,
[53:45] you know, faucets that can pour into the
[53:46] asset,
[53:48] it's got to go higher cuz there's only
[53:49] so many of them.
[53:50] So, I'm going to direct this to anyone
[53:52] who's a running a private wealth
[53:54] management shop, an RAA. Any FAs that
[53:57] are watching. Um by the end of this
[53:59] year, I do believe that you will need to
[54:01] have a very good narrative as to why
[54:03] this should be 3 to 5% of your
[54:04] portfolio. And I think the world is
[54:06] heading that way.
[54:07] You and I do this weekly thing, but when
[54:09] we started this, it there was a mind
[54:12] share of, okay, you've been in one silo
[54:14] over here and I've been in the other
[54:15] silo and we both believe that the
[54:17] merging of the silos is about to happen.
[54:19] I think you guys watching that enjoy the
[54:22] show should have the two of us come to
[54:24] your
[54:25] RAAs and FAs and sit in front of them.
[54:27] We can do the show together, but make it
[54:30] 100% about why Bitcoin. Because I think
[54:34] we talk about it as part of the context
[54:36] in here, but we're getting to a point
[54:38] now where we both know the network
[54:40] effects are kicking in. We both know
[54:41] that stable coins are accepted. We both
[54:43] know what's going on. I mentioned
[54:44] Bitcoin miners, they are a part of the
[54:46] equation. And for the people that run
[54:47] the Bitcoin miners, trust me, this is a
[54:49] good thing now that the world is out of
[54:51] compute. So, I say this again, at some
[54:53] point you reach an inflection, the
[54:54] inflection of demand and supply.
[54:56] Anthropic goes through the roof. Their
[54:58] revenue to to actually hit the 10 times
[55:00] that they're talking about, they need
[55:02] more compute. They just did a deal with
[55:04] Google. They did a deal with Broadcom.
[55:06] They don't have the compute. That's not
[55:07] compute that's as good as Nvidia's
[55:09] compute. Why did they need it?
[55:11] Because it's already built. They need it
[55:13] now. We are at a point now where Bitcoin
[55:15] should matter, the Bitcoin miners should
[55:17] benefit, and they should benefit because
[55:18] the world needs to find things that are
[55:20] scarce when we're truly entering a
[55:23] period of abundance because of mythos.
[55:25] So, that's my cry out to them.
[55:27] Listen, I think that um I I see it,
[55:30] right? And we talked to a bunch of these
[55:31] RAAs um and we see it in the sovereign
[55:34] product with the portfolios, etc. Is I
[55:36] always laugh that
[55:38] when the market goes down Mhm. if Silvia
[55:40] is still growing assets on platform,
[55:42] that's a really good sign cuz when the
[55:43] market goes back up, it's a lot hell of
[55:44] a lot easier.
[55:47] And so, when the market goes down 10%
[55:49] the stock market, Bitcoin goes down, you
[55:50] know, 50%, you're like, man, this growth
[55:52] thing, you know, how do we get these
[55:54] numbers to go up? All right, what what
[55:56] are you going to do for your video this
[55:57] week?
[55:57] Uh it's it's a ton on the compute
[56:00] shortage. It's a lot on what I talked
[56:02] about with edge devices and Terafab. Um
[56:05] the main theme is that. The other thing
[56:06] I'm going to highlight, um and I hope
[56:08] you don't mind me bringing it up. There
[56:10] there's been a lot of outreach around
[56:12] the globe for the stuff that I do,
[56:13] particularly the videos that I do during
[56:15] the one I did during the week.
[56:16] >> Oh, you got to tell them what you built.
[56:17] Yeah, and that's what I did. So, in
[56:19] particular, I've had a lot of interest
[56:21] out of Asia with some firms. And so, I
[56:24] took my video this week uh and I
[56:26] converted it into Chinese and Japanese
[56:29] with video dubbing.
[56:31] So, it's me speaking Chinese and
[56:33] Japanese. So, I saw a preview. It's
[56:35] awesome. So, if you guys around the
[56:38] globe have any interest in having my
[56:41] content on your platform,
[56:43] reach out. I think this is going to be a
[56:44] big thing going forward. Uh
[56:47] I was able to kind of work through it
[56:49] over the last couple months, and now I
[56:51] think I'm ready to do it in whatever
[56:52] language people want to do it in. Uh
[56:54] should we give out your email address?
[56:56] Uh you can reach out to me at
[56:58] jordy@visserdashlabs.com.
[57:00] All right. All right. Easy enough.
[57:03] Jor- jordy@visserlabs.com
[57:05] visserdashlabs.com.
[57:07] All right, we'll put in the description
[57:08] if you
[57:10] That's a dangerous thing giving out your
[57:11] email, but let's see what happens. I You
[57:13] know what? People that watch this show
[57:15] have been very, very nice to me. You've
[57:16] been nice to me. Um
[57:18] not you, Matt.
[57:21] No, you've been okay, too.
[57:22] >> Jor- Jordy's going to get a bunch of you
[57:24] up 2:00 a.m. emails.
[57:27] Yeah, I Trade out hyper liquid on
[57:28] Saturday night. I'm always grateful.
[57:30] Don't overwhelm me, guys, please. Just
[57:32] you'll you'll stop my off to change my
[57:34] uh my business ad.
[57:37] Amazing. All right guys, thank you so
[57:38] much for watching. We'll see you guys
[57:39] next week.