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Avoiding the Stocks Melting Ice Cube Trap - Kim Iskyan #6396 · Financial Survival Network

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  Speaker 1: You are listening to Carrie Letz's Financial Survival Network, where
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  Speaker 2: Welcome you are listening to and watching the Financial Survival Network.
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  Speaker 2: I'm your host, Carrie Lutz. You know all this talk
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  Speaker 2: about AI removing jobs, recreating industries, destroying industries, totally transforming
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  Speaker 2: society as we know it. Well, that's true to a point. However,
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  Speaker 2: there is a new ETF out that I think you
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  Speaker 2: want to take a look at. It's called HA l
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  Speaker 2: X and it's Tuttle Capital Heavy. It's low obsolescence ETF
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  Speaker 2: h A l X and as the name would imply,
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  Speaker 2: these are companies that are not going to be adversely affected.
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  Speaker 2: They're kind of impervious to the AI boom. And Kim
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  Speaker 2: is again is with us now at Tuttle Capital Management. Kem,
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  Speaker 2: it's great to have you on the show. So how
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  Speaker 2: did you come up with this ETF. It's it's almost
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  Speaker 2: like it's atavistic hearkening back to times when life was
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  Speaker 2: simpler and an AI chatbot wasn't going to take your job.
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  Speaker 3: Kerry's that's great to be here, and that is actually
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  Speaker 3: kind of accurate. What the kind of concept is that
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  Speaker 3: a lot of investors, a lot of investment advisors today
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  Speaker 3: look at markets and they break it down still, you
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  Speaker 3: have growth and value, you have international stocks, domestic and
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  Speaker 3: we put the whole market in these neat little boxes.
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  Speaker 3: But that box is kind of it's getting unpacked and
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  Speaker 3: the contents are just being strewn all over the place.
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  Speaker 3: And what's replacing it is the whole idea that either
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  Speaker 3: you're on the right side of AI or you're on
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  Speaker 3: the wrong side of AI, and that's you know, those
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  Speaker 3: are two enormous buckets, of course, and the risk from
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  Speaker 3: an investment perspective is that you think that you're safe
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  Speaker 3: because you have a lot of value, you have a
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  Speaker 3: lot of cheap stocks, but the reality is that what
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  Speaker 3: you own, our stocks are going to get run over
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  Speaker 3: by AI. And the whole idea behind HALO is essentially,
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  Speaker 3: if let's pretend that cognition, that intelligence was free, right,
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  Speaker 3: so all of the brain work that goes into something,
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  Speaker 3: let's say that was costless, would this particular holding or
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  Speaker 3: that particular holding in your portfolio be hurt by that environment?
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  Speaker 3: So we're talking about I mean, we've seen any number
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  Speaker 3: of sectors just get decimated when Claude or Rock comes
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  Speaker 3: out with something new. Software apocalypse and that sort of thing,
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  Speaker 3: and that sort of environment I just described. If intelligence
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  Speaker 3: is free, that's actually we're reaching that place. And then
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  Speaker 3: the question is, well, what are the survivors what cannot
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  Speaker 3: be replaced by cognition, And the answer there is heavy assets.
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  Speaker 3: So that's everything from energy producers to railways, to power grids,
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  Speaker 3: to mining companies. These are too heavy industry industrials, other
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  Speaker 3: energy companies, those are all companies that they have. They
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  Speaker 3: can't be replaced with a few lines of code on
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  Speaker 3: Cloud Cowork. They have actual physical assets. The intangibles on
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  Speaker 3: their balance sheet is probably going to be pretty low.
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  Speaker 3: They spend a lot of money on capex, that is
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  Speaker 3: actual capex into the earth into physical assets, and and
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  Speaker 3: we think that that's going to be one of the
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  Speaker 3: increasing bifurcations of markets going forward. And that's kind of
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  Speaker 3: the thesis of the halo portfolio and of HLX.
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  Speaker 2: Got it so, so like UH, when when you're looking
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  Speaker 2: at companies that you think will get ripped apart or
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  Speaker 2: decimated by the AI, what companies come to mind.
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  Speaker 3: Well, what we don't have in UH in the portfolio
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  Speaker 3: is any sort of technology because an argument can be
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  Speaker 3: made a lot of the technology darlings of the past
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  Speaker 3: a few decades are susceptible. And it's not necessarily going
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  Speaker 3: as you They're not going to be a race tomorrow,
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  Speaker 3: but their margins are going to going to contract. Their
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  Speaker 3: really their competitive moat is going to be increasingly under
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  Speaker 3: attack U. So we're talking about a lot of software companies,
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  Speaker 3: we're talking about consulting firms. We're talking about a lot
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  Speaker 3: of anything that you don't hold in your hand that
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  Speaker 3: has a that's pretty likely to be on the wrong
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  Speaker 3: side of this trade.
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  Speaker 2: Okay, and give us a couple examples. You know you
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  Speaker 2: mentioned oil, But you know what industries do you think
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  Speaker 2: are the most impervious to AI most comferviously.
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  Speaker 3: AI are going to be industrials. They're going to be
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  Speaker 3: energy companies, utilities. Those three sectors are some of the
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  Speaker 3: biggest sectoral holdings of HLX. To some degree, Pharma pharmaceuticals
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  Speaker 3: also some consumer durables.
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  Speaker 2: Just because you.
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  Speaker 3: Know, you can AI your way out of an oreole
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  Speaker 3: and people are still going to go to Target and
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  Speaker 3: you can buy your buy your sheet somewhere, and those
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  Speaker 3: are but but it's really a pretty heavy emphasis on
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  Speaker 3: uh power, on energy and that see the the flip
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  Speaker 3: side of that also, not only are those companies impervious
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  Speaker 3: to being taken out by AI, but they are also
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  Speaker 3: the downstream beneficiaries of or upstream beneficiaries of AI, because
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  Speaker 3: all those data centers, they're not going to work without power,
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  Speaker 3: They're not going to work without without oil and gas.
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  Speaker 3: So the other side of it, uh, you know, there's
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  Speaker 3: also a lot of talk about AI bottlenecks and how
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  Speaker 3: there are production bottlenecks of memory, of photonics and there
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  Speaker 3: just isn't enough being produced in order to support growth
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  Speaker 3: and AI. Well, the flip side of that is there's
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  Speaker 3: not enough electricity, which is also a fairly well recognized reality.
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  Speaker 3: But that's kind of an additional driver behind this portfolio
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  Speaker 3: and it's another way of an indirect way of playing
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  Speaker 3: the entire AI thesis.
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  Speaker 2: All Right, so like this just started trading yesterday. You said, correct,
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  Speaker 2: that's right, and you've gotten good interest on it.
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  Speaker 3: It's the we've got had a lot of interest, and
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  Speaker 3: there's some there's some ETFs carry where people say, holy smokes,
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  Speaker 3: what a fantastic I gotta buy this right now, because
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  Speaker 3: you know, you have your your big splashy sectoral ETFs,
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  Speaker 3: your two x ETFs of leis hot stock, and then
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  Speaker 3: you have some ideas that are much more. It takes
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  Speaker 3: some time to become part of the zeitgeist. It takes
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  Speaker 3: some time for your investor advisors to say, Okay, I
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  Speaker 3: kind of get this, and I can see how this
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  Speaker 3: is really going to evolve, and how this might be
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  Speaker 3: a few steps in front of where the market is going.
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  Speaker 3: I think also this opens up a bigger picture about
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  Speaker 3: the whole notion of value investing, and value investing is
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  Speaker 3: predicated on finding cheap stocks that no one else or
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  Speaker 3: that a few other investors have really understood. There are
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  Speaker 3: a few problems with that though. For one thing, the
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  Speaker 3: whole information edge doesn't really exist anymore. Between Bloomberg and
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  Speaker 3: the Internet and increasingly AI, everybody has a massive research
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  Speaker 3: database at their fingertips for free. And the second thing
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  Speaker 3: is that a lot of those value chrote unquote value
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  Speaker 3: stocks that seem cheap. They may well be pricing in
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  Speaker 3: their margins and their businesses slowly evaporating. Do AI, So
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  Speaker 3: why it worked in the past, You saw a stock
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  Speaker 3: that's undervalued relative to comps, relative to historicals, and can
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  Speaker 3: say what a great, what a great opportunity. Today there
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  Speaker 3: might actually be instead of a cyclical shift to an
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  Speaker 3: actual structural shift. And those stocks, some of those are
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  Speaker 3: their melting ice cubes, and they're not going to bounce back.
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  Speaker 3: They are in structural decline. So I think you know
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  Speaker 3: what I was saying earlier about the whole paradigm of
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  Speaker 3: value versus growth. If someone is building their portfolio and
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  Speaker 3: part around that idea, that's increasingly dangerous. And I think
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  Speaker 3: an idea like h l X and the whole halo trade. Uh,
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  Speaker 3: it's less of a trade, more of an investment. And
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  Speaker 3: it's also something that that is as I said, it's
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  Speaker 3: kind of where the puck of the market is.
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  Speaker 2: Got it all right? So Hey, we want to connect
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  Speaker 2: with you on the web, find out more about what
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  Speaker 2: you're doing here. How do you how do you do that?
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  Speaker 3: We are at tuttlecap dot com t t t l
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  Speaker 3: e cap dot com and we have a. We have
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  Speaker 3: a daily newsletter that's it's a fantastic source of of
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  Speaker 3: inside about markets, about this sort of thing that I'm
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  Speaker 3: talking about, and it's free to h anyone who goes
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  Speaker 3: to tell cap dot.
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  Speaker 2: Com excellent and links in the show notes of this
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  Speaker 2: interview on Financial Survival Network dot com. If you have
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  Speaker 2: any questions comments for Kim myself, shoot me an email.
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  Speaker 2: We'll get you an answer back from Kim real quick.
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  Speaker 2: Kim really appreciate you coming on. It's a fascinating concept.
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  Speaker 2: It's like so simple and so obvious, and that's probably
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  Speaker 2: why it's been completely overlooked. In a market where Wall
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  Speaker 2: Street looks for the newest, shiniest thing, this is the
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  Speaker 2: old standard. It almost sounds like a Warren Buffett type
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  Speaker 2: of you know, you're still going to well, maybe you
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  Speaker 2: won't need car insurance and maybe Geico will go out
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  Speaker 2: of business, but I think we got some time before
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  Speaker 2: that's going to happen. And you know, there's certain things
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  Speaker 2: that just they have to We're going to need them
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  Speaker 2: no matter what the technology does. You still need a
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  Speaker 2: roof over your head. The roof's got to get built.
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  Speaker 2: Maybe it'll be built differently, but it's still got to
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  Speaker 2: get built. Appreciate you coming on well twiks see right,
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  Speaker 2: rank you.
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  Speaker 1: Thanks for listening to Carrie Letz's Financial Survival Network, your
• 11:07
  Speaker 1: solution to today's trying times. For the latest, go to
• 11:11
  Speaker 1: Financial Survivalnetwork dot com. Financial Survival Network now more than ever,