Burbujas, parábolas y desplomes relámpago: el fin de la estructura de mercado humana

[0:00] Saturday morning. Um
[0:03] first of all, thanks to everyone who's
[0:05] been reaching out, gone to the site, um
[0:08] particularly the financial advisors, uh
[0:11] and recently a lot of conversations with
[0:13] family offices and um it seems to be
[0:17] helping to get people to think
[0:19] differently. Um today, the best thing
[0:21] you can do to help me is forward this
[0:24] along to anyone that you think should
[0:27] hear it. Um, I'm covering in my opinion
[0:29] something very important because it's
[0:31] become uh obvious that with all of these
[0:35] parabolic moves combined with the
[0:39] condescending comments that are going
[0:42] throughout X from people who have been
[0:45] wrong about tariffs, wrong about oil and
[0:49] wrong about Bitcoin and wrong about
[0:51] passive in wrong about so many bubbles
[0:54] quote unquote and bubble thinking that I
[0:56] just want to take you through this
[0:58] because I am not someone who is just
[1:00] uber positive. I try to bring you guys
[1:02] the differentiating facts in what's
[1:04] going on and hopefully at the end of
[1:08] this the tools that you need to do your
[1:10] own homework and especially in AI. And I
[1:14] ask you just one thing for anyone who is
[1:16] negative on what is happening in the
[1:18] market. Uh just ask them how much they
[1:20] use artificial intelligence. That's it.
[1:23] Um I'm trying to do this from a
[1:24] perspective of wisdom everyone. And I
[1:27] saw something this week where someone
[1:29] called basically people either idiots
[1:32] for buying into this uh and
[1:35] professionals and that was the word that
[1:37] was used know what's going on. So I'm
[1:41] definitely a professional. I've been
[1:43] involved with markets for a long time.
[1:45] Many of you who are responsible for
[1:47] people's money or professionals as well.
[1:49] Uh the word bubble gets used way too
[1:53] much and so I want to basically spend
[1:55] the time at the beginning taking people
[1:57] through
[1:59] the Kindleberger book because we are
[2:02] changing the market structure as we
[2:03] speak and it's really important for
[2:05] people to comprehend what's going on
[2:08] because this is not some innovation.
[2:10] This is not railroads. This is not the
[2:13] internet. This is not the buildout of
[2:15] the internet. This is the buildout and
[2:17] scaling of intelligence that for every
[2:21] year going forward will change our lives
[2:23] and already has. And that's why I said
[2:25] if you're not using it, you're not a
[2:27] professional. You're actually someone
[2:29] who's still stuck in mania panics and
[2:31] crashes. Mania panics and crashes is
[2:34] about human beings dominating the market
[2:37] every day going forward. And this has
[2:39] been going on since the great financial
[2:40] crisis, which is why I brought up all of
[2:42] the bubble talk that has gone on since
[2:44] GFC. If you don't think every the same
[2:46] people saying AI is a bubble weren't
[2:48] saying QE was a bubble and all of the
[2:50] other things that I mentioned, it's
[2:52] because historically up until the great
[2:54] financial crisis when the Fed started
[2:56] printing money and QE started happening,
[2:58] but also at the same time we had the
[3:00] rise of exponential innovation and for
[3:02] the only time in the history of mankind,
[3:04] we had a growth of companies that are
[3:06] equivalent to about $25 trillion bigger
[3:08] than most all countries on the planet
[3:10] except for the United States had no debt
[3:13] until recently. So now that they're
[3:15] taking on debt to fund the AI bubble. So
[3:18] it's not coming from bond issuance like
[3:21] telecoms. It's not coming from oil
[3:22] companies going out to raise money. It's
[3:24] actually coming from free cash flow or
[3:27] bonds at yields that are basically
[3:29] better than where the US is with better
[3:31] balance sheets than the US government.
[3:33] This is not the same as before because
[3:35] Mania's panics and crashes was about
[3:37] human beings. We made things for humans.
[3:40] We had no information
[3:43] between the two. So when supply and
[3:44] demand got out of whack, we had a
[3:47] problem. Supply and demand, we know
[3:49] everything that's happening. So we
[3:51] shouldn't have panics, manas, and
[3:53] crashes. That being said, we absolutely
[3:56] have parabolic charts. Now, this one,
[4:00] you know, calling it a gamma squeeze,
[4:02] the one thing I notic is market
[4:04] structure has been changing. Guys, don't
[4:07] talk about this move. Just talk about
[4:08] how this has been trending. I heard this
[4:10] was a bubble back here. This is when we
[4:12] had COVID. Everyone sat at home. It
[4:15] started to trade like crypto, I heard,
[4:16] which is true. But it keeps m going
[4:18] higher and higher. And part of the
[4:20] reason is because retail trades
[4:22] differently than professionals. And the
[4:23] market has changed. The capital
[4:25] structure and the market structure has
[4:27] changed. And guess what? Almost all the
[4:29] money being managed by funds at this
[4:31] point in terms of hedge funds in some
[4:33] way, shape, or form uses artificial
[4:36] intelligence as a major part of it. And
[4:37] I'll get into why that's so important
[4:39] when we go away from manx mania panics
[4:42] and crashes. Uh Cantro put this out
[4:45] again, another bubble chart,
[4:48] the biggest bubble chart, and this is
[4:50] the one that has everyone freaked out. I
[4:52] read someone this week, this is a bubble
[4:55] when you go from 20 to 125. And I agree.
[4:58] When you get this kind of move, which is
[5:00] far faster than anything that happened
[5:02] during the dotcom bubble, when you get
[5:03] these two sticks of something moving up,
[5:06] I agree that historically would mean
[5:08] that we'd crash all the way back to here
[5:10] because remember we crashed all the way
[5:11] back. So, do you think Intel's coming
[5:13] all the way back here? If you do believe
[5:15] that, you actually believe that AI is
[5:18] going to fail and that demand is not
[5:20] higher than supply, we are going to run
[5:22] into problems. And I'm going to go
[5:23] through the way that I see this
[5:24] happening. But the issue is, and this is
[5:26] the problem with the memory that human
[5:29] beings have. Everyone who's a
[5:32] professional by definition is wealthy,
[5:35] they can't imagine missing out on
[5:38] something
[5:40] that they didn't think of themselves. So
[5:42] remember this whole thing. And if you
[5:44] haven't read this before, I'm going to
[5:46] read some of it, but this is Duck, the
[5:48] greatest investor, the smartest
[5:51] psychological person when dealing with
[5:53] markets. And basically as you fast
[5:55] forward this whole story of how in 2000
[5:59] he bought the top.
[6:01] Anyway, I pick up the phone finally. I
[6:03] think I missed the top by an hour. I
[6:04] bought six billion worth of tech stocks
[6:06] and in six weeks I had left Soros and I
[6:08] had lost three billion in that one play.
[6:10] You ask me what I learned. I didn't
[6:12] learn anything. I already knew that I
[6:14] wasn't supposed to do that. I was just
[6:16] an emotional basket case and couldn't
[6:18] help myself. We have all read that. It
[6:21] has an influence on me. It has an
[6:22] influence on every person that has
[6:24] managed money because that story
[6:26] resonates. FOMO is a very bad thing to
[6:29] have. The problem is in this period of
[6:31] time if you just associate what's
[6:34] happening in a few names because it's
[6:36] not happening at the market level. The
[6:38] S&P 500 is up 7% but we're talking about
[6:40] bubbles because they're isolated. I
[6:42] heard the same people saying that
[6:44] software was a panic move back in the
[6:47] first quarter and that continues to suck
[6:49] as an investment. So those same people
[6:52] and I'm telling you go into Twitter the
[6:54] great thing is go into X and if they
[6:56] said this is a bubble I know it's a
[6:57] bubble just go back and see what they
[6:58] were saying about IGV in the first
[7:01] quarter and most of them were saying I'm
[7:03] shorting SMH here and legging into IGV
[7:06] that is the story that goes on when you
[7:09] go back. So here's my version of the
[7:10] book. We will consistently as AI starts
[7:15] to take over and remember every day AI
[7:17] agents are managing the market. They are
[7:20] dominating markets and they will
[7:22] dominate the labor force. AI agents have
[7:25] no emotion. They have no memory of drug.
[7:28] They have one goal, make money. Human
[7:31] beings, especially people that are
[7:33] saying it's a bubble, remember in their
[7:36] mind they're wishing it's a bubble.
[7:37] They're hoping it's a bubble. I've said
[7:39] this for 16 years that the recession
[7:41] calls are hope because most people that
[7:44] have money make tons of money after
[7:47] recession. So they root for incessions.
[7:49] They're not the levered ones. They're
[7:50] the ones with lots of cash that when
[7:52] things collapse, they get to be value
[7:54] investors. If we stay in bubbles, if we
[7:57] stay in parabas, they never get an entry
[8:00] point. We do have speed crashes. And I
[8:02] do believe semis are going to fall. By
[8:03] the end of this, I'll tell you that I've
[8:05] now sold out of twothirds of my micron.
[8:07] I still think it's going higher, but I
[8:09] think there's other bubbles and parabas
[8:11] I'd rather be involved in than micron at
[8:14] this point because things have lagged
[8:15] behind. Gold never called a bubble ever
[8:20] by the same people who think this is a
[8:22] bubble. So when gold was going up at a
[8:24] pace last year that is equivalent to
[8:25] what the semis are when it's vol
[8:27] adjusted,
[8:29] not a not a single sign. The market will
[8:32] no longer be dominated by human beings
[8:34] who get emotion anchored devaluation and
[8:37] comfort. AI agents every day will manage
[8:40] more. So when that happens, we are
[8:42] moving too fast. Right now the demand
[8:45] side is too strong. And so you know what
[8:47] we're going to end up with instead of
[8:48] recessions? We'll have crashes based on
[8:50] bottlenecks. We'll have crashes based on
[8:52] inflation spikes. That's what will
[8:54] happen. That is what has happened. Since
[8:56] 2020, we've had multiple 20%
[8:59] corrections. all during the AI phase. So
[9:03] once we came out of COVID and we printed
[9:04] all that money, just go through what
[9:06] happened in 2022, then go through what
[9:08] happened during the tariff year. Just
[9:09] continually look, we're getting crashes.
[9:12] They just don't last for seven years.
[9:16] Tai Kim, I was shocked when I saw this,
[9:19] but this just goes on again after just
[9:21] 30 minutes of using OpenClaw. Now, I
[9:23] wrote a paper this week where I talked
[9:25] about it. I got a lot of people reaching
[9:26] out. OpenClaw is the most amazing thing
[9:28] I've ever used. And I'm telling you, if
[9:30] a bubble person has used OpenClaw, raise
[9:32] your hand. It just doesn't make sense
[9:35] how you can't see how being able to
[9:37] communicate with something while you're
[9:38] on an airplane doing extensive work for
[9:40] you on your computer at home 24 hours a
[9:43] day. Token consumption is about to go
[9:46] exponential.
[9:48] So, here's what we finished.
[9:51] This was GPUs. This was Nvidia. This was
[9:53] the building of the IQ stage. And during
[9:55] that, because it was so small,
[9:59] PMI stayed below 50 the entire time. The
[10:01] entire time of the IQ stage, we enter
[10:04] the agentic stage at the end of
[10:06] November. And when Open Claw came, it
[10:09] was the end of January. That's how long
[10:11] ago, how short a time period we're
[10:12] talking. Um, that's when OpenClaw went
[10:15] viral. And I read more things where
[10:17] people loaded it uh up during that
[10:20] period. I was at an event speaking and
[10:22] that's when I got it, too. This is
[10:24] what's needed for the agentic stage.
[10:25] You're talking about 15 to 50 times
[10:28] more. And this is how you see as I go
[10:32] through this the parabolic supporting
[10:35] evidence of this stage. We are in the
[10:38] first inning, guys. Remember, it was a
[10:40] bubble in October because we were never
[10:42] going to get the revenues. Now that we
[10:43] got the revenues, it's a bubble because
[10:44] the hockey sticks have turned into
[10:46] polls.
[10:47] What's coming after it? For all the
[10:49] people that are bubbleistas,
[10:53] we still have to do autos, phones,
[10:55] computers, humanoids, robotics, all of
[10:57] the upgrade of the war side. This is a
[11:00] global race with China and the US as
[11:02] well as obsolescence for the
[11:04] hyperscalers. So, you're trying to
[11:06] handicap the likelihood that we're going
[11:08] to have a dot bubble. The money is
[11:11] coming from the people who have from the
[11:13] companies who have the most money.
[11:14] They're betting on this, which is still
[11:16] 3 to 5 years away. We're in this stage
[11:18] for the next three years and we don't
[11:21] have enough compute. So you get back to
[11:23] what Jensen Yuang put in. It's a $90
[11:26] trillion AI upgrade. You want to really
[11:30] really fade that. The same people faded
[11:32] this back in the 2010 period during QE.
[11:35] These companies were growing in the same
[11:37] way. This is no different than any
[11:39] bubble you've ever heard of. And I bring
[11:42] this up because this is where I do
[11:44] agree.
[11:46] There's a bubble. So, everyone that's
[11:49] sitting in passive investing, which is
[11:51] everything, the majority of money is now
[11:53] in passive investing, which means it is
[11:56] benchmarked. Now, again, this was 2019,
[11:58] and his argument was you go buy small
[12:00] caps. So, every time I hear this guy who
[12:03] makes, I don't know, $20 million a year
[12:05] writing a substack just being bearish
[12:07] all the time. He's called every single
[12:09] bubble that hasn't happened for the last
[12:11] 15 years. But more importantly, the
[12:12] passive investing side, he said, "By
[12:14] small caps, you couldn't have been more
[12:16] wrong."
[12:18] I wrote this this week. I published it
[12:20] on Substack because I had a lot of
[12:21] people reach out that den subscribers,
[12:24] the benchmark arbitrage of the AI
[12:26] buildout. And this is what I believe is
[12:28] happening. If you are long the S&P 500
[12:31] through passive investing, by
[12:33] definition, you are underweight Intel.
[12:36] You are underweight. every single name
[12:38] that is going higher. So this is not
[12:40] just a gamma squeeze done by retail that
[12:43] jumps on because they see the earnings
[12:45] grow and the upgrades happening.
[12:47] Finally, this is a benchmark arbitrage
[12:49] where every mutual fund, every pension
[12:51] fund, everyone who has moved into
[12:53] passive investing, Msei World being 70%
[12:56] the US, they are screwed.
[13:00] if they want to outperform the
[13:02] benchmark, which some of them that's
[13:04] their job, they have to get long the AI
[13:06] names. So, it only just recently
[13:09] started. So, my whole thematic portfolio
[13:12] coincided in terms of this parabolic
[13:14] move
[13:16] when we got the agentic world. It just
[13:20] started, guys, in November. The AI agent
[13:23] world just started. So, again, I've
[13:25] shown this before. Remember when you
[13:27] talk about mania, panics and and
[13:30] crashes, you are literally talking about
[13:33] something that moved slowly. It was
[13:36] linear. It was human emotion driven in
[13:39] this world of this massive force that is
[13:42] funded by the wealthiest companies in
[13:44] the world that are bigger than countries
[13:47] along with a race between the two
[13:48] biggest countries for military
[13:51] dominance. Whether or not you believe in
[13:53] AGI or all that, that's not important.
[13:55] But the buildout is happening and the
[13:57] revenues associated with it are already
[13:59] going on. If you want to go listen to
[14:02] something this week, Greg Brockman from
[14:04] OpenAI gave an interview with uh Sequoia
[14:07] Partners.
[14:09] And again, OpenAI's business very simply
[14:12] acquire compute, build on top of it, and
[14:13] resell intelligence at a margin. His
[14:15] main point is that demand for
[14:17] intelligence is effectively unlimited.
[14:20] So just remember that the demand for
[14:23] intelligence, people looking to buy,
[14:25] companies looking to buy intelligence, I
[14:27] pay lots of money for the intelligence,
[14:30] it is far cheaper than the hundreds of
[14:32] employees that I have worked for me over
[14:35] the course of 30 years. This is a
[14:38] replacement. It is far cheaper. The
[14:40] margin for them, for me, is phenomenal.
[14:43] And I find cheap ways to use it all the
[14:45] time. OpenAI still does not have enough
[14:48] compute.
[14:49] His advice to startups is to lean into
[14:51] the tools. Now, by the way, the other
[14:53] funding for this buildout for the Morgan
[14:55] Stanley, the Goldman Sachs, the Eli
[14:56] Liies, the Mercs, name any company you
[14:58] want, United Healthcare, any company you
[14:59] want, they need to have their own data
[15:01] centers as well. This demand for
[15:03] intelligence, this demand for this,
[15:05] every company needs to compete with them
[15:07] because if they don't, their margins
[15:09] aren't good enough. They won't get
[15:11] investments. So the people investing
[15:15] in a capitalist system force people to
[15:18] buy more AI. So again, the future
[15:22] belongs to the people who actively use
[15:24] the technology and keep pace with
[15:26] change. That goes for your kids as well.
[15:28] Again, if you're fading this, you are
[15:30] not helping them all. Even if you've
[15:31] made tons of money, you're not helping
[15:34] your kids by not preparing them for a
[15:36] world that is far different than the
[15:38] world you were used to with the
[15:39] Kindleberger book. Dario Modi this week
[15:41] we plan for a world of 10 times growth
[15:43] per year in the first quarter of this
[15:45] year we saw 80 times so this is a
[15:48] trillion dollar company which as I'll go
[15:50] through this people are arguing will be
[15:52] the biggest company in the world within
[15:53] the next three years they had demand
[15:56] they were planning for 10 times growth
[15:59] per year instead in the first quarter
[16:02] they saw 80 times annualized growth per
[16:05] year that's the reason why we had
[16:06] difficulties in compute so what have
[16:08] they done they're buying compute from
[16:10] Amazon Amazon from Google and and in the
[16:12] last week, XAI, Elon Musk, they're
[16:16] getting whatever computers available.
[16:18] Oh, earnings. That's another good way to
[16:19] look at see if this is really a bubble.
[16:22] How in God's name, this is an
[16:24] unbelievable move in year-over-year
[16:26] earnings growth, 27.1%.
[16:29] The S&P is up seven year to date. Look
[16:33] back. Look how big this number is. Look
[16:35] how big every quarter has been. Now, the
[16:37] only quarter to compare this to are the
[16:39] ones coming out of recessions. That's
[16:41] it. This is coming out of co. This is
[16:43] after we reopen. This is not a reopening
[16:45] trade, guys. And if you think it's just
[16:47] tech, it's not just tech. Here's the
[16:49] earnings growth. These blue ones are the
[16:52] quarter.
[16:54] Here were the estimates as of March
[16:56] 31st, less than five weeks ago. Look at
[17:00] these things. Every single one of them.
[17:02] every single one of them except for
[17:04] energy. Magically enough,
[17:08] revenues, the same story.
[17:12] Mike Wilson showed this again. If you're
[17:14] not looking on a sector basis, maybe
[17:15] it's just large cap. Nope. Median stock
[17:17] up. Small cap up. Huge numbers
[17:22] reacelerating at a pace. I mean, again,
[17:24] Warren Pis has shown this there. Ford
[17:26] estimates now up 25% year-over-year. So,
[17:29] it's not just the actual earnings
[17:31] year-over-year, it's the estimates going
[17:33] forward. That's how shocking the numbers
[17:35] were to analysts.
[17:37] 320 companies out of the S&P 500
[17:39] reported earnings. Out of 320, the
[17:40] average earnings surprise has been 20
[17:42] 20% so far.
[17:46] Here it is again. Again, stuff that
[17:48] hasn't happened. This is the historical
[17:50] average of what happens to revisions as
[17:53] we start a year.
[17:56] Here are the profit margins. Here's
[18:00] semis. Total semiconductor sales grew
[18:02] 88% year-over-year in March.
[18:08] And semis have gone up in this quote
[18:11] unquote parabolic bubble the same as
[18:14] earnings.
[18:18] Uh unlike the.com bubble, there's
[18:20] actually revenues. This will upset many
[18:22] people and of course it will. This is
[18:24] Anthropic's latest number. So again last
[18:29] year right around here is when 4.5 so
[18:34] again they were going at five billion 7
[18:37] billion 9 billion and then opus 4.5
[18:41] comes out and we jump to 14 jump to 19
[18:44] jump to 24 jump to 30 and now another
[18:47] step higher unbelievable
[18:50] at this pace Joseph Janthropic will
[18:53] surpass alphabet in revenue by mid 2028
[18:56] just think about that a company
[19:00] that wasn't even close to Open AI a year
[19:03] ago,
[19:06] OpenAI's financial projections from the
[19:08] Wall Street Journal. Again, you just go
[19:10] through this the revenue stuff in terms
[19:12] of what's people's forecasting. So, if
[19:13] you don't believe in that revenue, well,
[19:15] the confirming numbers would be the
[19:17] demand for the cloud. And so, here's the
[19:20] backlog that we just got in the most
[19:21] recent earnings. $1.3 trillion to 1.4 4
[19:25] trillion of a backlog. And again, this
[19:28] yellow line here, that's when the
[19:30] agentic world started. It started in
[19:33] November, guys. If you don't have open
[19:35] claw, you haven't even joined the party
[19:36] yet. That's like not using ways, not
[19:39] using it for three years. You'll have to
[19:42] use it eventually,
[19:44] and it's not coming anytime soon, as far
[19:46] as I can tell in any of the models. Um,
[19:49] Edardenni puts this, and I think it's
[19:51] important, and I use this for
[19:53] subscribers this week. I think you'll
[19:54] like what I built. The PEG ratio, so the
[19:58] uh ratio of the growth to or PE to
[20:02] growth, which is the forward PE divided
[20:04] by the long-term growth, is now down to
[20:06] 1.03. The market looks cheap unless
[20:09] earnings growth expectations for the
[20:10] rest of this is what he's calling this
[20:12] period get bashed.
[20:15] That's what happened in 2000. So again,
[20:19] you're forget the price. If you bet this
[20:22] isn't going to happen, you are betting
[20:23] that earnings are growth is going to
[20:25] collapse. Now, I've shown something like
[20:28] this before, I'll show it again. Here is
[20:31] the S&P 500 PE chart going back to the
[20:34] bubble. Here we were at the peak. I want
[20:37] you to see it's correlated with the um
[20:39] mesh consumer confidence level. I came
[20:41] back from Brazil. I remember how stupid
[20:43] this was. I remember how obvious it was.
[20:46] I was in drugs camp along with every
[20:48] other quote unquote professional. You
[20:50] had four-letter names that had no
[20:53] earnings. Never I just jokes of
[20:55] companies. They were popping up
[20:56] everywhere and all they needed was a
[20:58] website. And the S&P was up here and
[21:00] every person in the country was
[21:02] involved. Every person in the country.
[21:05] Here we are now. The S&P 500 is not
[21:07] anywhere close. It's the same PE. It's
[21:09] basically been since COVID when we
[21:11] printed all that money. And here's mesh
[21:14] consumer confidence. This what didn't
[21:15] include this week. This is lower now.
[21:18] Don't use the excuse that this is a
[21:21] polarizing survey. You guys are wrong.
[21:24] If everyone was making money right now,
[21:26] we wouldn't have a polarizing politics
[21:29] situation. This is a problem of the
[21:31] distribution of wealth. And remember
[21:34] before COVID, we were up here at the
[21:37] same time as pees. The correlation only
[21:40] broke honestly
[21:43] right around here. It just continued to
[21:45] go down. So again, we're in a very
[21:48] different situation where affordability
[21:50] is a major issue in the country. The
[21:53] leading stock for the bubble, Cisco back
[21:58] here, their PE was 130 at the peak. You
[22:01] can't see it over here. Nvidia,
[22:04] the lead dog here is the gray line.
[22:07] Here was Nvidia's PE back then. It was
[22:10] in the mid60s. Their PE right now is the
[22:12] lowest of the last decade. They are the
[22:16] most important company in AI. This is
[22:19] not a bubble. These companies are making
[22:22] money. And the reason these pees are low
[22:24] on Nvidia and on Micron and everything
[22:26] else is because the quote unquote
[22:28] professionals
[22:30] can't buy them. And I say they can't buy
[22:32] them. The majority of money at the hedge
[22:34] fund world cannot have a concentrated
[22:38] position in one of these names for a
[22:40] variety of reasons.
[22:42] You have to think about this in terms of
[22:44] what's gone on. Retail is playing a
[22:46] party right now with names that are
[22:47] trading. Micron is still has a six and
[22:49] change PE. I'm selling some of it
[22:50] because I've got the hangover of
[22:52] believing I've seen this before. Um, so
[22:55] I'm even doing the same thing. I'm just
[22:57] looking for other names. Goldman Sachs
[22:59] report going through. I'm not going to
[23:01] go through all the details, but tracking
[23:03] the trillions. And again, I'm bringing
[23:04] this out so you guys can go through and
[23:06] see the numbers from every single major
[23:08] firm. They were all saying that it was
[23:11] bubbleicious back in 2000. They are all
[23:14] saying there's nothing that is going to
[23:16] stop this. It is going to happen. What
[23:20] will stop it? In the stress case, delays
[23:22] become severe enough that investors
[23:24] start questioning whether AI revenues
[23:26] will rise fast enough to justify the
[23:27] capital. This is the reason why I am
[23:30] reducing my positions on the memory
[23:32] market. I think that particular market
[23:35] because it started in September of last
[23:37] year is further ahead than the optical
[23:40] market for Marll than some of the other
[23:42] places that I've talked about in written
[23:44] papers about in chemicals and empower. I
[23:47] believe we're at the part where the
[23:48] bottom end of the five layer cake, the
[23:50] energy power thing is going to be a
[23:52] problem. I believe inflation is going to
[23:53] be a story for the second half of the
[23:55] year. So I think you start to have
[23:57] issues with the momentum trade. That's
[24:00] what I believe is going to happen. Here
[24:03] are the numbers. Again, you guys can
[24:05] read this on your own, but these are
[24:06] staggering amounts of numbers that are
[24:08] expected over the course of the next six
[24:10] years. And guess what? They're getting
[24:12] bigger every single year.
[24:16] The amount of CPUs, the amount, you guys
[24:19] can go through this on your own. It is
[24:20] gigantic what you need.
[24:24] Nonwork agent workloads. Okay, this is
[24:27] where the trigger point was. This is
[24:28] when we get into consumer agents and it
[24:30] just grows continuously. This is the
[24:32] inference side, but you're also leaving
[24:34] out the enterprise agent side. It's just
[24:37] a dramatic amount of token use that's
[24:39] needed. Tokens are the food of these
[24:42] digital employees. Imagine if all of a
[24:44] sudden 8 billion people on the planet
[24:46] became 16 billion tomorrow. That's
[24:49] what's happening with digital employees
[24:51] and those digital employees eat the
[24:53] commodity that is tokens. Tokens are
[24:55] power plus chips. End of story. They are
[24:58] commodities. In fact, everyone who
[25:00] believes that oil is going to infinity
[25:02] but doesn't believe that semiconductors
[25:04] are going to infinity. Ask them the
[25:06] question why. We have a severe
[25:08] bottleneck in the same way the straight
[25:10] is shut down. Demand is severely above.
[25:13] In the case of oil, we are managing
[25:15] demand lower through the digital economy
[25:17] through countries seeing the video game
[25:20] of the ships going through the straight
[25:21] of Hormuz. You couldn't see that 15
[25:24] years ago. Everyone sees how many ships
[25:26] are going through. So if you're a
[25:27] country that depends on oil, then you
[25:29] switch your your car plates on who can
[25:31] drive those days. You make it more
[25:33] difficult. You raise you do whatever you
[25:34] need to do to kill demand in a
[25:36] manageable way. The same way when
[25:38] Silicon Valley Bank goes out of
[25:39] business, we immediately do something in
[25:41] that framework. We live in the digital
[25:43] economy where information is exchanged
[25:45] instantaneously.
[25:47] The 1970s, we didn't have a video game
[25:50] of the straight of Hormuse.
[25:52] Goldman goes through this thing and
[25:54] talks about the compute intensity. It is
[25:56] insane how much we need. Morgan Stanley
[25:59] agrees.
[26:02] Black Rockck Tony Kim spoke at Milin.
[26:04] The AI cap inflection will continue.
[26:06] This is the new reality. Year-to- date.
[26:08] The compute and model layers have added
[26:09] 8 trillion in combined market cap while
[26:11] the service apps that make up twothirds
[26:13] of today have lost 1.2. This is the
[26:15] benchmark arbitrage, guys. 8 trillion in
[26:18] combined market cap, while the service
[26:19] apps that make up twothirds of GDP
[26:21] today. So, we're getting an unwind in
[26:24] things that make up twothirds of GDP
[26:26] today. We're taking the small things.
[26:29] This is benchmark arbitrage. Tony Kim
[26:30] agrees with me. You guys need to make
[26:32] sure you're preparing for this because
[26:35] I'm telling you, this is the beginning
[26:37] of it. So, bubbles will last and they
[26:39] will tell you, well, I know I don't know
[26:41] when it'll end, but I know it will end.
[26:43] And I believe that at some point here,
[26:44] AI is going to gobble up everything.
[26:46] It's a super supersonic tsunami. But our
[26:49] job is to make money today. So, if you
[26:51] want to sit there and say, "I'm not
[26:52] getting involved in this because the
[26:53] bubble's going to end at some point. I
[26:54] just don't know when." You're assuming
[26:55] two things. One, it does end sometime in
[26:58] the very near term. And number two, that
[27:00] it's going to go all the way back to a
[27:02] level you would buy. And what I think
[27:03] will happen is something goes from 100
[27:05] to a,000, it corrects back to 650. The
[27:07] people never buy it at 650 because
[27:09] they're waiting for it to go back to
[27:10] 100. That is the way this thing works.
[27:12] Larry Frink predicts birth of futures
[27:14] market for computing power. Again, what
[27:16] I said, if the if this already existed
[27:19] and we had charts of it, then it would
[27:21] make people think differently. This is
[27:23] the oil of going of the intelligence
[27:26] world. This is the oil of it. Power plus
[27:29] chips. That's why Jensen Wong said this
[27:31] is a $90 trillion change. The massive
[27:34] increases in AI related capex estimate
[27:36] will also pull in the S&P earnings. This
[27:38] is coming from Jim Chenos. Given, and
[27:41] again, he's just stating a fact, the
[27:42] accounting mismatch for revenues and
[27:44] profits. immediate recognition and cost.
[27:47] This all fits in with the one big
[27:50] beautiful bill. They put in the bonus
[27:53] depreciation to allow this magic to
[27:56] happen and to incentivize the capital
[27:57] spending. I don't make the rules. I just
[28:00] watch the rules and play by them. That
[28:02] is the reality. So, will we have too
[28:05] much spending? Not relative to the
[28:08] demand, but we will have too much. Right
[28:10] now, we have too much demand for the
[28:12] physical infrastructure. And that's why
[28:14] I'm rotating out of semis and moving
[28:16] into the power side which includes
[28:19] silver. I think we're entering into a
[28:21] new regime. I'll get into that. STRL a
[28:24] must readad for sterling infrastructure
[28:25] just to go through and see this. I'm not
[28:27] going to read this but you guys should
[28:28] pause it here and just read through it.
[28:30] These companies are just starting to see
[28:32] the demand. It's spreading. You had the
[28:34] battery names. Fluence which is part of
[28:36] my power basket. Go read their earnings
[28:38] call. It was a dead stock. It was down I
[28:41] don't even know 50 60% year to date.
[28:44] Well, most of that was made back in the
[28:45] day. Go read the battery stuff. We're
[28:47] going to need tons of batteries. Every
[28:49] single part of the power trade is there.
[28:51] Now, if you want something negative, uh
[28:54] Robin Wigglesworth,
[28:55] FT, someone I've got to know over the
[28:58] years, had a great article in terms of
[29:00] one of the places, and to be fair, he's
[29:02] not bearish. He's just writing the
[29:03] reality, which is true, which is you've
[29:05] got all this spending going on by the
[29:07] hyperscalers. you had this massive
[29:11] income move which again this boost will
[29:14] not happen in the next quarter. So don't
[29:17] be surprised if the 27% year drops down
[29:20] a little bit if it's for no other reason
[29:22] just because we don't have this because
[29:23] a lot of this
[29:26] is related to the ins the the
[29:28] interconnectedness of all of these
[29:30] companies. Uh a lot of this was Google
[29:32] investing in anthropic and it being
[29:34] marked up at whatever number it was
[29:35] marked up at. Now, if it keeps getting
[29:38] marked up, yeah. So, we talk about this
[29:40] as being some kind of, you know,
[29:42] everyone's dependent on everything, but
[29:44] just remember these companies bought
[29:47] hundreds of companies which are now
[29:50] Google. You're watching this on YouTube.
[29:53] Go to Instagram. Go to all of these
[29:54] places. Those would have been standalone
[29:56] companies. They were purchased.
[29:59] So for the week, here's this bubble that
[30:03] everyone's talking about where it was
[30:04] unchanged for six months and actually
[30:06] down over six months as that I I had
[30:08] highlighted and we came out of there
[30:10] like a racehorse. So yeah, we're up but
[30:12] again we didn't have a huge year in the
[30:14] S&P last year. We're not having a huge
[30:16] year so far this year. Uh Q's which were
[30:19] down here because of the hyperscaler and
[30:21] the semi stuff. They've flown up. You
[30:23] know what hasn't flown up? Oh yeah, all
[30:26] the place that people wanted to go buy.
[30:27] So, here's IGV relative to NDX. When
[30:30] anything positive happens in IGV right
[30:32] now, see, I told you data dog was up
[30:34] 40%.
[30:35] Guys, it's not worth your time. And if
[30:37] you take out the Bitcoin miners out of
[30:39] this, which I'll show later, we'd be at
[30:40] new lows.
[30:42] IWM
[30:44] not going as fast here. Um, I I'll get
[30:47] into a little bit here. The breath of
[30:48] the market is really becoming more of an
[30:50] issue. Um, that is because of oil. That
[30:53] is because of what will be food prices.
[30:55] And I do think that that becomes part of
[30:57] the midterms. And I think as the
[30:58] inflation thing goes higher, that's why
[31:00] I think the market will start to become
[31:02] a little dicey in the things that are
[31:04] leading my thematic portfolio
[31:06] outperforming all of them. Again, from
[31:08] the March lows, you're talking about a
[31:11] 30 some odd percent rally. Uh again, a
[31:15] ton of them in there. Now, if you're a
[31:17] macro person, just like oil's been
[31:20] unchanged since the day of the bombing,
[31:22] effectively. It's traded in a range, but
[31:24] every time I look, we finish a week
[31:26] somewhere around 95 to 100. Uh here's
[31:28] 10ear rates.
[31:30] Again, we're the same price we were in
[31:32] 2022 when Chat GPT started. Yes, we are
[31:35] at the same yield. Now, we have no rate
[31:38] hikes or cuts in the market.
[31:41] The move index all the way back down,
[31:42] which means as bad as private credit is,
[31:46] spreads aren't widening. Mortgage
[31:47] spreads aren't going crazy. There's no V
[31:49] in the in in the rates market. That's
[31:52] going to have to change if you're going
[31:53] to get anything in the equity market. Um
[31:56] RBC lifts S&P target to 7,900 on
[31:59] twospeed economy view. It is. We're in a
[32:02] very bifurcated market right now. The
[32:04] distribution of wealth issue, the
[32:06] winners and losers are showing up again.
[32:08] And here's a couple charts to show it.
[32:10] So I believe that small caps would
[32:12] outperform large caps because that's
[32:14] what's happened every time we've seen
[32:15] the PMI go higher. And that's what we
[32:16] got with equal weight S&P relative to
[32:19] cap weight that collapsed right back
[32:22] down. Um, this divergence here to the
[32:24] PMIs is telling you something. And
[32:26] again, what it's telling me at this
[32:28] point is that there's a lot of losers on
[32:31] the this all started with Iran. So
[32:33] again, I think one of the things that
[32:35] people have to realize there's a lot of
[32:37] companies based on that manas,
[32:40] panics, and crashes book. And all of
[32:44] those companies, the Fords, I'm going to
[32:46] take you through some of them. Anything
[32:48] that's not AI, the past is going through
[32:51] what it should go through. And that's
[32:53] been happening. We have rolling
[32:54] recessions, but the market cap in those
[32:56] is so tiny that they just don't matter.
[32:59] Here's credit spreads relative to that.
[33:01] So, we broke this exactly at Chat GPT.
[33:04] That relationship has broken down. And
[33:06] that's because we don't have any
[33:09] companies taking any debt that matter.
[33:11] The companies that are taking debt have
[33:13] better balance sheets than the United
[33:15] States of America.
[33:19] Consumer PC laptop market collapse worse
[33:21] than 2008 financial crisis. And the
[33:24] reason is because AI is moving the cost
[33:27] of all of that stuff higher. Whirlpool
[33:30] says appliance demand hasn't been this
[33:32] low since the great financial crisis. So
[33:34] now you have PCs, phones, autos, take
[33:38] what you want. appliances, housing.
[33:42] That's what the Kindleberger was book
[33:44] was about. It wasn't about digital
[33:47] employees replacing humans. Think about
[33:50] what happens. We don't have that. And
[33:53] the money being managed now is by people
[33:55] that don't have emotions and their one
[33:58] goal is to make money. It's not to be
[34:00] right. Everyone saying there's a bubble
[34:02] is trying to be right. They're not
[34:04] trying to make money.
[34:06] Today will be the second consecutive day
[34:08] where the S&P closes at a record high
[34:09] with more than 4% of stocks down the
[34:11] last time since 1929. We are getting all
[34:13] kinds of breath signals which are bad.
[34:15] The problem is there's such a small
[34:17] waiting in this at this point that we'll
[34:20] see what happens. 47 stocks in the are
[34:22] currently at or within 2% of 52- week
[34:24] highs. 31 of them are AI sensitive
[34:26] industry groups roughly 2/3. So again uh
[34:30] interesting thing in the payroll
[34:31] numbers. So two things. one, we've
[34:32] created two back-to-back situations at
[34:35] more than 100. If we keep getting
[34:37] 100,000 and we've now accepted that 0 to
[34:39] 30 should be the number, you're going to
[34:41] start to see some wage inflation. You
[34:43] get wage inflation along with the
[34:44] commodity inflation, that's going to be
[34:45] a problem for the Fed. Also, remember,
[34:48] it's going to be very difficult for the
[34:50] Fed to not turn hawkish. If we're
[34:52] getting these, I don't think they're
[34:54] going to raise rates because Kevin Worsh
[34:55] is taking over. But if you have
[34:57] inflation going higher and you're
[34:58] creating jobs, and the reason this print
[35:00] is important is because unlike every
[35:02] other time during this where all of job
[35:04] creation was basically isolated to
[35:06] health care and professionals, here are
[35:09] the ones you should look at for the AI
[35:10] knowledge work disruption, information,
[35:13] jobs, and financial activities. They're
[35:15] negative again. They've been negative.
[35:17] AI is having an impact here. You know
[35:19] what's amazing is two months in a row
[35:21] now we've created lots of jobs in trade
[35:23] transportation and utilities mining man
[35:27] construction everything up there
[35:29] manufacturing that top end is starting
[35:31] to show positive numbers it's never
[35:33] going to drive this number very high
[35:34] because we don't need a lot of these but
[35:36] the reality is if this is growing 50,000
[35:39] a month and these start growing as
[35:41] opposed to being negative 40 a month
[35:43] they're growing at 30 a month then all
[35:45] of a sudden you have a 60 to 70 shift
[35:48] you'll start doing a hundred a month.
[35:51] Not saying it's going to happen, but I'm
[35:52] saying in the nonAI related job side,
[35:55] we're actually starting to see creation,
[35:57] which would be more of an inflation
[35:58] thing. That is why I believe we're going
[36:00] into a regime shift. Everyone who writes
[36:02] me and says you're wrong on
[36:05] transportation. I have no idea what you
[36:08] are doing and where this bias comes
[36:10] from. The March logistics managers index
[36:13] reads in at 69.9, the fastest level
[36:15] expansion since March 22, reading 76.2
[36:19] as logistics movements are now knocking
[36:21] on the door of 70. Transportation prices
[36:23] continue on their sharp upward
[36:25] trajectory.
[36:27] As mentioned above, the biggest
[36:28] movements this month come from
[36:29] transportation metrics is capacity was
[36:32] the biggest mover dropping. There's no
[36:35] capacity. There is an extreme rate of
[36:38] contraction in the second load in
[36:39] reading in the history of this metric
[36:41] ahead only by 23.8 from September 2020.
[36:45] So we're at a point where the only time
[36:47] we've seen strength like this where you
[36:49] take the need versus the capacity
[36:53] is in 2018 during the tax cuts and 2020
[36:57] coming out of COVID which means the one
[36:59] big beautiful bill and all of the AI
[37:01] spending is causing it. This just
[37:03] started guys. Here are flatbed spot
[37:05] rates. I heard people tell me this isn't
[37:06] real. You're full of it.
[37:10] The ism still hasn't gone up to 60. I
[37:13] believe it is heading up to 60.
[37:16] Remember, we just came out of the
[37:18] longest period of the PMI being below
[37:22] 50. So, this right here is the 20-month
[37:25] moving average. Again, we've been below
[37:29] since coming out of it in the great
[37:31] financial crisis, the longest period in
[37:33] history. This will not be resolved
[37:35] quickly. Have your PMI trades on and
[37:38] make them all related to AI. And if you
[37:39] don't believe me, John Rog from 22V, uh,
[37:42] one of the best technical people out
[37:44] there to look for long-term trends. Big
[37:48] baseball fan he is. He has releases each
[37:51] week right now a frozen rope, a chart
[37:54] that he loves. Uh, started in early
[37:56] first week of January. These are the
[37:58] ones that he's saying. And again, a
[38:00] frozen rope for him is something that
[38:02] has a very long base and is about to
[38:04] break out and the chart looks like it's
[38:06] going to be a frozen rope, meaning it's
[38:07] going to go up and it's not going to
[38:09] look exactly like a parabola, but he's
[38:11] kind of saying these are great
[38:12] riskreward type scenarios. So, I just
[38:15] went in and said, "Okay, what type of
[38:17] regime AI is this likely when we just
[38:19] take all of his names?
[38:22] power, copper, grid, equipment,
[38:24] utilities, natural gas, transportation,
[38:25] capital goods, agriculture, food
[38:28] inflation, higher long-term yields, blah
[38:29] blah blah. It's a PMI sensitive thing.
[38:32] It's an AI sensitive thing. John's just
[38:35] picking charts on that he likes. The
[38:37] beauty of what I'm doing here is I'm
[38:39] giving you data on things that have
[38:41] nothing to do. I'm shaping my views
[38:43] based on the facts that are happening in
[38:44] the market. A bubble is not a fact,
[38:47] guys. It is not. It's a gut instinct
[38:49] based on the Kindleberger book. It's
[38:52] based on druck. It's based on things.
[38:54] It's like you guys being scared of
[38:56] having Jägermeister because you remember
[38:58] those horrible shots from college. There
[39:00] are plenty of memories you have. AI
[39:03] agents don't have those memories. Retail
[39:05] risktakers, they're in this to make
[39:07] money. They're trying to make money. The
[39:09] people trying to make money are trading
[39:10] the bubble. The people who are smarter
[39:13] than the markets are calling it a
[39:15] bubble.
[39:17] More stuff on this.
[39:19] Power shortages. This is the power
[39:22] demand thing. Goldman put out a big
[39:23] report on this in terms of the data
[39:25] center growth. Again, it matches up with
[39:27] what we're seeing from the compute needs
[39:29] and you're going to start using more
[39:31] even if it's just anthropic using up all
[39:33] excess capacity. That's why they're
[39:35] going to Amazon. That's why they're
[39:36] going to Google. That's why they're
[39:37] going to Colossus. That electricity will
[39:40] be needed now because there's compute
[39:41] that wasn't being used. Well, now it's
[39:43] going to be used. So, it's going faster.
[39:45] They're not using it as fast. It's going
[39:47] faster. Grid under pressure. AI demand
[39:50] forces redesign.
[39:53] Guggenheim Schwarz warns power crunch
[39:55] imperils US and AI race. Goldman Sachs
[39:58] on how AI is making your life more
[40:00] expensive. Again, it's doing it on every
[40:03] single thing. It's doing it on the
[40:05] electronic side. It's doing it on the
[40:07] electricity side. It's doing it on
[40:08] smartphones, on computer prices.
[40:10] Software is going higher for the bolt-on
[40:12] AI. AI prices are going higher.
[40:16] Here is the second half of the year
[40:17] reality for food prices. This is a
[40:20] 25-year chart of gas at the pump. That's
[40:22] the yellow line. This is where we
[40:24] currently are at 456.
[40:26] And this is the BCOM
[40:29] A index,
[40:32] the white line. It takes a little while
[40:33] for this to catch up. And the reason is
[40:36] because the fertilizer prices just went
[40:38] higher. Chevron CEO says global oil
[40:40] shortages are starting. Prices could go
[40:43] even higher. Jeff Curry reminding people
[40:45] oil oil storage tanks in the US will run
[40:47] empty. So, there's a difference um in
[40:49] listening to the doomers from oil. We
[40:52] have a problem in oil. I show it every
[40:54] single week. We still have no ships
[40:55] going through the straight. It just
[40:57] won't end overnight. And prices will
[41:00] stay higher for longer and there will be
[41:03] rebuilds. Even if we reopen it,
[41:06] countries just learned a lesson.
[41:08] Whatever inventories they had before,
[41:09] you don't think they're going to fill
[41:10] those up and more. They'll be a bit
[41:12] under oil for a long time. Uh just a
[41:15] reminder that China and the US are
[41:16] getting together. Uh I think at this
[41:19] point no one's worried about this. I
[41:21] can't imagine it ending with some grand
[41:24] bargain at this place. So I don't know
[41:26] what's going to happen in terms of come
[41:28] out and maybe it's a a positive. But
[41:31] again,
[41:32] any delays or any issues at this point,
[41:36] you're looking for anything that could
[41:37] slow things down. I'm not too concerned
[41:39] about it at this point, but I I I
[41:41] definitely think it's something to keep
[41:42] on your radar. I'm back to the capex
[41:44] thing just to remind you that we're
[41:47] going for this and Renmac
[41:51] socks has hit our bubble watch
[41:53] threshold. So bubble watch um in their
[41:56] mind just highlighting again they're
[41:58] doing it purely technical. I care more
[42:00] about that than people saying there's a
[42:01] bubble. Um I care more about this DRAM
[42:04] is the ninth most traded ETF. It traded
[42:06] over 1 billion each in the past two
[42:07] days. Absolutely unheard of. This is
[42:09] these are the reasons why I'm reducing
[42:11] my my micron significantly. because I do
[42:14] believe in bubbles, parabas, and speed
[42:15] crashes. When AI agents dominate market
[42:18] forces, remember, I completely subscribe
[42:20] to this. The difference is it's a speed
[42:22] crash. We go faster up, we go faster
[42:25] down,
[42:27] and it stays that way for the next
[42:29] decade. So, you either adjust to this
[42:31] and get this book in 10 years or you get
[42:33] the advanced copy right now and you read
[42:35] that this is the world we're in, guys.
[42:37] The mania, panics, and crashes was a
[42:40] world for professionals. It's not for
[42:42] one for traders.
[42:44] The $90 trillion AI physical upgrade
[42:47] cycle. This is one of the things that I
[42:48] wanted to highlight to subscribers. I'm
[42:51] building a re a rebalancing thing. So,
[42:53] I've done so many things in the past two
[42:55] weeks for the subscribers re re uh
[42:57] related to the thematic portfolio to
[42:59] give you guys ways to be able to trade
[43:01] it. We're in the bubbles, parabas, and
[43:03] speed crashes. You need information real
[43:06] time. This is the way I'm incorporating
[43:09] it into a rebalancing for people who are
[43:12] looking at it as more of a model
[43:13] portfolio where I will be changing the
[43:15] weights. The stuff I'm giving you guys
[43:17] the names for the thematic portfolio,
[43:20] but what I'll be rolling out for the
[43:22] topend subscribers is something more
[43:24] fixated for them to be able to rotate
[43:26] the portfolio. less about trading, more
[43:28] about thinking of like a a reweing with
[43:31] inside a portfolio, a rebalancing that
[43:34] happens using early cycle, midcycle,
[43:36] late cycle. I believe right now we are
[43:38] entering into more of a late cycle
[43:40] situation. Late cycles always involve
[43:42] bottlenecks. They always involve
[43:44] inflation.
[43:46] Here's the rack. I wrote this report
[43:50] basically right in here. This was after
[43:53] an early March. This was before the
[43:55] rally. Uh and that's because it
[43:57] coincided with the Morgan Stanley uh
[44:00] event, technology event that they had
[44:03] and you had Lisa uh Sue who spoke from
[44:06] AMD. You had Intel speak if you would
[44:09] have just followed my report there. Both
[44:11] those names are in that uh you would
[44:13] have caught it.
[44:15] Here is soyc
[44:21] know when I went through it at the
[44:22] beginning of the year. at the beginning
[44:23] of the year after Nvidia bought Garac
[44:25] that they were going to benefit
[44:25] dramatically. That was in December. I
[44:27] wrote that paper. This is a French
[44:29] company. Uh most of the people that were
[44:32] looking for names, they were looking for
[44:33] lagards. This was a lagard once it broke
[44:35] through this moving average, which is
[44:37] now turning up. You got this rally.
[44:38] We're still not above the 2021 highs.
[44:41] This name has gone up five-fold in three
[44:44] months. It's part of the advanced
[44:45] packaging one. I get back to the PEG
[44:48] ratio. Edard Denny triggered something
[44:50] and I thought this was a a good way to
[44:52] give you guys something uh on the
[44:54] valuation side. So basically I want you
[44:57] to build me a specialized output I can
[44:58] run every week with fundamentals with my
[45:00] thematic model portfolio attached is the
[45:02] portfolio. I want the columns to
[45:05] basically go through and give me peg
[45:07] ratios. So you will see on the website
[45:11] hopefully this weekend if not Monday.
[45:13] Chill out guys. If something's not up
[45:15] there it will be up there. If I'm
[45:17] showing it here, it will be up there.
[45:18] What I did is take all of the names and
[45:21] basically go through and do peg ratios
[45:23] for them. And I just want to highlight
[45:24] right off the bat. So earnings growth
[45:27] for Kamores expected to be 60% based on
[45:30] analysts. And remember these are the
[45:32] numbers and we're beating numbers
[45:35] constantly. This is the forward PE.
[45:38] So the PEG ratio, this number divided by
[45:41] this number gets you to 0.2.
[45:43] Very low peg ratios. Now I want to show
[45:45] you high peg ratios. Oh, this is the
[45:49] benchmark arbitrage.
[45:51] So you're long Microsoft, you're long
[45:53] Amazon. Microsoft has collapsed. Look at
[45:55] it. It still has a 1.4 peg.
[45:58] Amazon 1.66. Meta 1.96. Apple three.
[46:03] Alphabet almost five.
[46:07] So you're telling me these names are
[46:09] expensive in my thematic portfolio? Here
[46:12] we go. Here are how many names? 30 of
[46:16] the 95. I took out the five that are in
[46:18] the the the macro satellites. 30 of the
[46:21] 95. So about a third are less than one.
[46:27] Less than the hyperscalers, more than
[46:28] half.
[46:30] So again, 1.03 is where uh Edardenni
[46:35] talked about and that's a long-term
[46:36] growth rate. Again, you've got plenty of
[46:39] these. The thematic stuff, it's not
[46:41] fundamentally expensive. So go through
[46:43] the list for the technical sheet.
[46:45] Remember I give you a technical recap.
[46:47] Forget the scoring guys. Don't follow
[46:49] this blindly. I put together an
[46:51] algorithm so you guys can have a
[46:53] spreadsheet. What you should be doing is
[46:55] knowing that you have this data.
[46:58] I I I check it as best that I can in
[47:00] terms of random numbers just to make
[47:02] sure. But there's a a possibility that
[47:04] some of the numbers are wrong. Don't
[47:05] treat this as investment advice. Don't
[47:06] treat it as I should go buy this because
[47:08] he's got a 100 score on this. This is
[47:10] just to show you the strength of the
[47:11] trend based on these things. If you want
[47:13] to know what each of the columns is, go
[47:14] back to the trend score thing and you'll
[47:16] get to see it. But I give that every
[47:18] week. And this sheet to me is the most
[47:20] important because you can look what
[47:22] percentage of them are above the 50-day.
[47:23] What percent are above the 200 day? If
[47:25] you want to go play for mean reversion,
[47:27] then I would look further down here.
[47:29] What's the average RSI? Okay, you get to
[47:31] see the ones. What's the score? Strong,
[47:33] strong, strong. These are constructive.
[47:38] But I also added something new. This is
[47:40] a creation that I'm very proud of. So I
[47:42] wanted to put some exhaustion things in
[47:44] there. So um I do believe I'm an Elliot
[47:46] Wave uh technician. Uh that's what I
[47:49] look at. It's very hard to bring Elliot
[47:51] wave to this because I'd have to go
[47:52] through every one and I would never use
[47:53] AI for it because I do believe it's very
[47:55] difficult. Although I'm trying to do
[47:57] that as well. But for extreme
[47:58] exhaustion, if you guys are looking to
[48:01] see RSIs above uh 14-day RSIs, 5day
[48:05] RSIs, you guys can go through a list. It
[48:07] includes some of the demarc stuff and
[48:08] then I just take an aggregate number for
[48:10] exhaustion. So you can see which ones
[48:12] are the most stretched on an exhaustion
[48:14] and highly likely. So look at these. All
[48:17] of these right now are in the very very
[48:20] red zone of exhaustion. The Intel, the
[48:22] Micron, part of the reason I sold the
[48:24] Micron. Um exhaustion to me means we
[48:27] could be having a speed crash in these.
[48:29] Not saying it's going to happen, but if
[48:30] you're a trader, it's the exhaustion
[48:32] thing. It gives you every name on that.
[48:34] So then what I did is say and this is
[48:36] what I would do if you guys you have
[48:37] access to these files. Go through these
[48:38] three Excel files. They rank a 100 name
[48:40] portfolio based on technical strength,
[48:42] fundamental valuation seen through peg
[48:44] ratios and exhaustion. Give me a ranking
[48:45] of the top 10 based on finding names in
[48:47] here that are trending well not yet
[48:48] exhausted blah blah blah. So when you go
[48:51] through this these are this thing is
[48:54] really smart. In fact I want to read you
[48:56] something. I have three the three files
[48:57] loaded match cleanly by ticker across
[48:59] 100 names. treating good PEG as a within
[49:01] theme ranking because a semiconductor
[49:03] peg and a utility energy peg should not
[49:06] be compared.
[49:08] This is high IQ and something that again
[49:13] I don't know how many people if you just
[49:15] hand them three spreadsheets would be
[49:16] able to do that. This thing has 140 IQ
[49:19] right now guys. You're going to get
[49:20] phenomenal answers with the top one and
[49:22] this is the top 10 ranking or at least I
[49:24] showed you the top four. I can't give
[49:26] everyone the where it is but it goes
[49:28] through. Look, peg ratios, the technical
[49:31] score, composite, theme rake, blah blah,
[49:35] like go through it on your own, figure
[49:37] it out if you guys haven't gone there
[49:40] yet. And again, where you're going to
[49:41] find all this information is in the
[49:42] thematic research and ideas, okay? It's
[49:44] going to be the weekly technical sheet,
[49:46] the weekly fundamental sheet, or weekly
[49:48] PEG ratio sheet, and the weekly
[49:49] exhaustion sheet. And again, for those
[49:51] of you who haven't subscribed yet,
[49:53] again, I don't know what you're waiting
[49:54] for. AI22vresearch.com.
[49:57] You guys can go see the information, do
[49:59] it on your own. This is the performance.
[50:01] This is the S&P at up 8% and this is
[50:03] each of the baskets. And again, you got
[50:05] power, you got the whole rack, which
[50:07] again is going to become more important
[50:09] uh because of the enterprise buildout.
[50:11] The chemicals, which I think are
[50:12] replacing oil as the commodity of the
[50:14] future aside from semiconductors because
[50:16] you need chemicals to go into
[50:17] semiconductors. You got the optical
[50:19] fiber side in the package. These is this
[50:21] is all the agentic stuff. So the things
[50:23] I'm giving you, the reason they've
[50:24] worked so well is because I created
[50:26] things purely based on the agentic side.
[50:29] Every other thematic basket I see gets
[50:31] into they break them down into certain
[50:33] things for the portfolio waiting. Just
[50:35] to give you guys a teaser on this and to
[50:37] show you how much thought I'm putting
[50:39] into it. The AI regime I showed you the
[50:41] circle I have to identify. I think we're
[50:43] in the late cycle. I think this is the
[50:44] bottleneck side that we're entering
[50:45] into. Then I go into theme first and go
[50:48] through each of the themes to level out
[50:49] the weight, the peg ratio to get make
[50:52] sure I'm getting names that are
[50:54] logically in there from a fundamental
[50:56] basis. There's a two-stage optimization
[50:58] process that I'm working on. One at the
[51:00] theme level and then one at the uh
[51:02] portfolio level. And also something I've
[51:05] always wanted to do which is to show
[51:07] subscribers and especially the people
[51:10] that are now starting to uh invest in
[51:12] this uh via swaps is to make sure that
[51:15] you get a sense as to if you wanted to
[51:17] optimize this particular portfolio what
[51:19] would the ups and downs be of every
[51:21] single name. That is something to that I
[51:24] basically uh have always said
[51:25] optimization when you're running
[51:27] something your your job in bubbles
[51:30] parabas and speed crashes is to rewe
[51:32] into something your your job is to
[51:34] minimize draw downs not to go into cash.
[51:38] So again if you're in a parabola in a
[51:40] bubble and things just keep getting away
[51:41] from you if you believe in the 10-year
[51:43] cycle and that any correction that
[51:45] happens will be months not years then
[51:47] what you want to make sure is that
[51:49] you're never ever ever stopping. you
[51:52] just want to slow down like you're
[51:53] driving a car and then speed up again.
[51:55] Optimization will do that and then
[51:56] there's the cycle map which goes through
[51:59] earning surprises and things like that.
[52:00] So that's everything I'm working on. Um
[52:03] a few more things in terms of what has
[52:06] happened and places for you to look.
[52:08] Hanhai came out and I think this is
[52:09] important because a lot of you uh have
[52:11] asked me about Vistra.
[52:13] These are names which haven't moved now
[52:15] for a while. Hanhai was one of them. And
[52:18] when I say haven't moved, all four of
[52:20] these names, Nvidia, Vistra, Eaton, and
[52:23] Hanhai. To me, they fit into the GPU
[52:26] data center trade. They all did well
[52:28] from Chat GPT. And then they
[52:30] consolidated for a period of two years.
[52:32] I think the GPU trade now is a lower
[52:35] beta one, meaning the data center
[52:37] buildout. These are all names associated
[52:38] with it. So, Hunh High coming out. I
[52:41] sold out of Micron and part of what I
[52:43] bought was Nvidia this week. I'm looking
[52:45] at Vistra. You'll probably see me buy
[52:47] that. And for those of you in the in the
[52:49] uh space there for it have been
[52:50] frustrated. I hear you all the time. IPs
[52:53] the same thing. If I'm right, I'm going
[52:55] into the energy side. The IPs, it's the
[52:57] bottleneck side, guys. And eaten fits in
[52:59] with that as well. Um ABB
[53:01] electrification. I just wanted to show
[53:03] you how I can go from an interesting
[53:05] data point from semi analysis on their
[53:08] stuff. take this image,
[53:11] bring it into here, create a visual on
[53:14] it, break it down, give me all the names
[53:16] associated with the different
[53:17] components, and basically
[53:20] then go look and realize how many of the
[53:23] names on this list created from AI or in
[53:26] my model portfolio list related to this
[53:29] acceleration that is happening. 12 of
[53:31] the 21 names. This is the way I make
[53:33] sure that I'm covered in the electrical
[53:35] stack visual that I just saw.
[53:38] Here's the place where I put most of the
[53:40] money that I got from Micron. So again,
[53:42] I'm not going to cash. I'm moving into
[53:44] rotating into something that I think is
[53:46] lagging behind. This is silver relative
[53:49] to gold, the white line overlaid with
[53:51] micron going back since 2024. So this
[53:55] has gone parabolic. We're still sitting
[53:58] here on silver verse gold.
[54:02] And here is LME metals versus gold
[54:05] versus silver. So the metals are
[54:07] breaking out. You have silver here. And
[54:08] I want to make sure people know that
[54:10] China has increased their purchases of
[54:12] gold significantly in the most recent
[54:14] month compared to when silver peaked. So
[54:17] I believe we're entering now an
[54:18] inflation stage. And if you didn't
[54:20] believe me, CPI print, this is the
[54:22] current forecast for this week on I
[54:24] believe that's Tuesday 6, which would
[54:26] take us up to 3.7. And the reason that
[54:28] is important is because that will move
[54:30] three-month bills below the CPI for the
[54:33] first time guys since the inflation
[54:36] error back here. And remember I've shown
[54:38] this before this line here this is when
[54:40] Bitcoin started. We are going back into
[54:42] negative yields. I believe Bitcoin will
[54:44] start to become something along with
[54:46] silver along with gold. Now for those of
[54:48] you out there who keep reaching out
[54:50] asking how you can help me. I am
[54:52] starting now. I was building a dashboard
[54:54] this week on on crypto. This is the
[54:56] original one. I am going to start doing
[54:58] a video, another video a week sometime
[55:00] before the end of the year. I'm working
[55:02] on it now, but to do that, it needs to
[55:03] be predominantly crypto translated back
[55:06] into macro and AI. So, where this video
[55:09] is mainly the AI connection to macro,
[55:12] this is going to be the crypto uh
[55:14] connection back. And the reason is guys
[55:17] because we are entering the most
[55:18] important stage and I've said it before,
[55:20] AI agents are the most important part of
[55:22] crypto. If you don't believe me, the end
[55:24] of human trading, Raul Pal and Yonius
[55:27] Assia, great interview. Highly recommend
[55:29] it. Um, if you haven't thought about
[55:32] this bubbles, parabas, go read this.
[55:35] We're going into the velocity of money,
[55:37] guys. You're already seeing it. You see
[55:39] it with Kshi. All of this stuff aligns.
[55:41] Crypto aligns. AI agents and crypto
[55:44] collide by moving finance from human
[55:45] speed to machine speed. Agents can
[55:48] trade, allocate, hedge, and shift
[55:49] capital. This is already going on. This
[55:50] is why you need to listen to it. will be
[55:52] going into wallets, exchanges. The
[55:54] reason this is important and the reason
[55:56] you need to listen to this is because
[55:57] what's coming now tokenization when
[56:00] ownership becomes programmable. This is
[56:02] what we're entering into the AI agents
[56:04] connect with crypto over the summertime.
[56:08] I'm going to be down in Fort Lauderdale
[56:10] for May 13th to May for uh I believe the
[56:12] 15th. I will be speaking about
[56:14] tokenization at the II event. This is my
[56:17] third III event this year. I've done
[56:18] endowments and foundations and I've done
[56:20] pension funds and now I'm going to do
[56:21] whoever comes into this one. This will
[56:23] be mainly about again AI macro what I do
[56:26] here but going into this part the
[56:28] tokenized asset rollout scheduled for
[56:30] July 26th. I don't think people have
[56:32] thought hard about tokenization yet. I
[56:35] think you need to. Another person you
[56:37] can listen to on that front who I
[56:39] recently had a conversation with, Bill
[56:40] Barhide. I think uh Abra and all of
[56:43] these companies that are thinking about
[56:45] this, I think you guys need to start
[56:47] having them into your office,
[56:48] particularly the RAAS are the ones that
[56:50] I'm most worried about because this is
[56:51] going to be a big big deal. Wall Street
[56:53] clearing giant enlist 50 firms for
[56:55] tokenization launch. Everything's
[56:57] getting prepared. Thinking about
[56:58] tokenization, real world assets, and
[57:00] stable coins in a more cryptonative way.
[57:02] We've seen strong interest from banks,
[57:04] fintexs, and asset managers to bring US
[57:06] equities, commodities, indices, and
[57:07] other traditional assets online.
[57:10] This is from
[57:13] A16Z.
[57:15] So this they wrote about in December
[57:17] 11th. You should go read it. A16Z is not
[57:21] some place to minimize. Final few charts
[57:24] here. I know Bitcoin is grinding. It's
[57:27] not sexy. It's only up 33% since the
[57:29] lows uh recent lows, but I just want to
[57:32] highlight what has happened with the
[57:34] Bitcoin ETFs. We have made new highs in
[57:38] outstanding shares. If you were worried
[57:40] how the wealth managers were going to do
[57:41] putting money into Bitcoin, this is the
[57:42] Black Rockck ETF. Forget the fact that
[57:44] there's competition war. Morgan Stanley
[57:46] issued a very successful one. You've got
[57:48] Goldman issuing thing. Everyone's now
[57:50] involved. The move from money managers.
[57:53] The boomers are allocating to it. This
[57:55] is going to accelerate at the end of the
[57:57] year, guys. The end of this year is when
[57:58] people have to rewe
[58:00] in this crappy software. The benchmark
[58:02] arbitrage again is impacted. The reason
[58:05] you watch this, Bitcoin will be a
[58:07] growing part of everyone's portfolio
[58:08] over the course of the next decade.
[58:12] Here's Bitcoin relative to the
[58:14] eyesshares. Outstanding. So, my IPO
[58:17] story still sits here. OG sold it down.
[58:20] Hedge funds sold it down. People hedging
[58:22] growth assets sold it down. Well, get
[58:24] ready to be buying some. Here's
[58:26] something I created this week. Um,
[58:29] because I'm looking for all things. The
[58:31] blue line here is an advanced decline of
[58:34] just closing above the opening versus uh
[58:36] the close higher than the opening. So
[58:39] what I wanted is any day where the close
[58:41] above the opening is a plus one.
[58:42] Anything that closes below the opening
[58:44] is a minus one. And here's what we got.
[58:49] Lagging behind but hanging in there and
[58:52] trending higher slowly. Uh I love
[58:55] looking at these. You guys have seen
[58:56] these before. I believe there's always
[58:58] catch-ups here. The red line here is the
[59:00] Morgan Stanley Bitcoin miner ETF. The
[59:03] white line here is the JP Morgan crypto
[59:06] ETF, which includes things like Coinbase
[59:07] and the miners. The yellow line here is
[59:09] the Schwab crypto index. All three of
[59:13] these way above where they were here,
[59:15] and associate prices of Bitcoin 90 to
[59:19] 120. And here's Bitcoin and here's
[59:20] Ethereum. Bitcoin and Ethereum were the
[59:22] other two places outside of silver and
[59:24] Nvidia that I put money into this week
[59:26] as a replacement for Micron. Here is the
[59:29] chart on the Schwab one. Looks like a
[59:31] breakout is close. And here is the
[59:34] miners which remember are part of the
[59:36] IGF. So they've been dragging the IGF
[59:39] along with some of the names on the
[59:42] model portfolio. Look where I
[59:43] recommended Cadence Design Systems. Look
[59:45] where I recommended Synopsis. Look, when
[59:47] I did the video on Oracle and go look
[59:50] when that was, which was right here.
[59:52] We've moved higher, but a lot of the SAS
[59:55] names are still down here and lower.
[59:57] You've got the pure AI names in. That's
[60:00] it for this week, guys. The longer one,
[60:02] uh, I'm here to help. Hit the subscribe
[60:04] button, forward it to family, forward it
[60:06] to friends. If you're an RAIA, family
[60:08] office, whatever, reach out. Uh, pension
[60:11] fund, mutual fund, whatever it is, reach
[60:14] out to Jordy. Um,
[60:16] Jordy at visser-labs.com.
[60:19] You guys can find me there.