Latest / The Financial Exchange Show / Should you be worried about the market's ‘invincibility syndrome’?

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Should you be worried about the market's ‘invincibility syndrome’? · The Financial Exchange Show

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  Veterans Development Corporation. This is the Financial Exchange with Chuck
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  Zada and Mike Armstrong.
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  Speaker 2: Stocks are mixed as we continue through the day today,
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  the Dow Jones Industrial Average off one hundred and three points,
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  the smp is up fourteen, the Nasdaq, led by Netflix,
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  up one hundred and seven points. Right now, we've got
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  the ten year US Treasury down three basis points to
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  four point zero six, So seems like we've established a
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  little bit of a trading range between four and four
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  point one. Nothing really moving it off that in the
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  last week or so. Oil West Texas Intermediate back below
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  seventy a barrel to sixty nine oh six, down about
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  two and a quarter percent. The TRIPA national average for
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  gas prices also sliding another half a cent today down
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  to three nineteen and one tenth of a cent. And
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  when we take a look at gold, it's up twenty
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  four to fifty an ounce to twenty seven hundred and
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  thirty two dollars even, Mike, anything else catching your eye
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  as we go through the morning here, No but.
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  Speaker 3: The the again relentless optimism about markets, at least continuing
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  right through the month of October. As we head into
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  I don't know, at least in my circles, the relentless
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  pessimism when it comes to the upcoming election.
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  Speaker 2: So that's why they call it October. Right, Sure, you
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  haven't seen that. No, I've seen a few people reference
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  it is October.
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  Speaker 3: It's interesting.
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  Speaker 2: Actually, some of the seasonality that you get is because
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  September is prone to sell offs in the stock market.
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  October October is prone to rallies. Yeah, and so October
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  is uh, except we didn't get a sell off in September,
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  So you mean September got it? Yeah, you got sup. Whatever,
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  Let's move on. Amazon.
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  Speaker 3: Uh.
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  Speaker 2: They are a company that sells everything, and.
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  Speaker 3: I'm trying to think what they don't sell.
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  Speaker 2: Actually, I mean, my buddy who works there calls the
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  everything store drugs.
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  Speaker 3: Houses. You need to rephrase drugs, legal prescription gigs. What
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  don't they sell? I don't know.
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  Speaker 2: Yeah, like I hesit. I struggle to come up. I'll
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  tell you, I'll tell you what they don't sell. I'm
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  trying to get a Halloween costume for this year. My
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  daughter is a big Doc McStuffins fan. Okay, and there's
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  a stuffed dinosaur on it called Stuffy. There are no
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  Stuffy costumes on Amazon. It's not Amazon's fault because they
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  don't exist in the world, because Disney does not make
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  adult sized stuffy costumes, which is a problem.
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  Speaker 3: Can someone texts the show at six one seven three,
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  six two thirteen eighty five and tell me one category
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  of things that they don't sell. I don't mean specific
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  like child et doc mcstuffan's costumes, but like, don't make
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  that a category of items that Amazon doesn't sell. I'm
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  genuinely fresh seafood. Yes, they do, because they own whole Foods.
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  It's true. I don't know if they sell everything.
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  Speaker 2: Moon Rocks probably can buy way they can find on Anyways, Amazon,
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  the head of their cloud division, Matt Garman, had an
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  all hands meeting at their what.
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  Speaker 3: I just this whole story just kind of made me laugh.
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  His entire attitude, it's the whole thing. I think it's
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  entirely predictable.
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  Speaker 2: So they had an all hands meeting at their remember
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  Amazon HQ two, how big of a hype cycle that
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  was at their second headquarters in Arlington, Virginia.
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  Speaker 3: And I'll read his quote, if there are people who just.
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  Speaker 2: Don't work well in that environment, saying, you know, coming
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  back to work and don't want to. That's okay. There
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  are other companies around. At Amazon, we want to be
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  in an environment where we're working together, and we feel
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  that a collaborative environment is incredibly important for innovation and
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  for our culture. So a couple things here. First, when
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  Amazon announced that five day a week return to work
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  thing a month or.
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  Speaker 3: Two ago, you had a walk out.
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  Speaker 2: I also said, look, the biggest reason they're doing this
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  is because they want people to leave, but not having
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  to do layoffs and I don't have to pay a severance,
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  don't have to do any I think that message is
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  confirmed here.
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  Speaker 3: Yeah.
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  Speaker 2: The other thing that I was thinking about though, and
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  what trigger did for me, was reading about that second
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  headquarters in Arlington, Virginia. The reason why Amazon put part
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  of it there, Remember they put part of it.
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  Speaker 3: In New York.
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  Speaker 2: Also, the reason that they did that was because they
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  got a bunch of tax breaks. Those tax breaks are
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  most likely yea on having a certain number of employees
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  in the area.
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  Speaker 3: Yeah, you're probably need to get your.
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  Speaker 2: Employees back in the office in order to get the
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  full extent of the tax breaks. I bet they had
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  waivers for the last few years because of the pandemic
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  in this and that, and now you've got cities that
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  are looking at their commercial real estate value saying, gee,
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  our cre values are plummeting. We can't get the tax
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  revenue from there. Yeah, you got to get your people
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  back in the office if you want these tax breaks.
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  Speaker 3: Yeah. I bet that's part of it too, Probably, I do.
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  Just I find the attitude towards the whole thing just
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  humorous and again not problematic. Just hey, look, if you
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  don't like that type of environment, it's okay, you just
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  can't work here. I kind of respect the message. It's fine.
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  Speaker 2: There's plenty of other tech companies to work at. Plenty
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  of other tech companies in DC to work.
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  Speaker 3: At, but a shrinking number of whom will let you
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  work full time remote. Yes, but it's left it's full
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  time remote. Yeah. I don't know, Yahoo, I don't have
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  any employees.
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  Speaker 2: If you don't have any employees, then technically you're not
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  in person's true. Yeah, they're all remote. You know, there's
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  no people. You're not an in person company.
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  Speaker 4: Got a couple of texts, by the way, oh Mike's
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  question that he put, what can't you buy an Amazon firearms?
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  Speaker 3: True?
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  Speaker 4: And three other people said cars automobiles.
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  Speaker 3: Ah, yes, you can.
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  Speaker 4: Vehicles.
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  Speaker 3: Hyundai has a next exclusive deal to sell cars through Amazon,
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  I believe.
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  Speaker 4: Oh yeah, I remember seeing that Hyundai Kia is one
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  Honday Evolve showroom on Amazon.
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  Speaker 3: Yep, So you can buy cars through Amazon. Okay, if anyone.
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  Speaker 2: Else wants to try to challenge mister Bezos, then you're
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  more than welcome to.
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  Speaker 3: You can't buy illegal drugs. I guess yeah, you said that, well,
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  but you can't buy those anywhere legal, agreed. I'm just saying, like,
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  so guns, illegal drugs. What store do you go to
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  get your illegal drugs? That's why they're illegal? Like that
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  was the only thing we can come up with this firearms.
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  There's got to be one other category that's everything must
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  be boats. I'll bet you can buy a boat on Amazon.
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  It might not be like what do you what do
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  you put into the search bar?
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  Speaker 4: Is?
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  Speaker 2: When I put in a boat boat, it's I mean
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  you get like inflatable dinghies and stuff.
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  Speaker 3: That's a remote counts that doesn't count counts or boat
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  power boat.
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  Speaker 4: So any vehicles besides Hundai, you can't.
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  Speaker 3: Know these are all toys? Can I list the price
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  from high to low?
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  Speaker 4: So you can't buy boats.
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  Speaker 3: No, it doesn't look like they have boats.
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  Speaker 4: Try planes, and then trains.
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  Speaker 3: And then automobiles. Yeah, let's face it, it is a
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  very limited set of items that Amazon does not sell
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  these days in one form or another.
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  Speaker 4: Oh, fireworks, somebody said fireworks can't do that.
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  Speaker 3: Yeah, probably not anything that can't cross state lines. What
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  are solar fireworks? You don't think there's a You don't
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  think there's a Whole Foods in like Kentucky that sells fireworks.
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  Speaker 4: I do not know organic fireworks, fireworks, bubble machine, Yeah,
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  doesn't count, doesn't doesn't quite get you there.
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  Speaker 3: I don't think. Okay, thank you listeners for helping us
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  nail down a couple of these items. I knew there
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  had to be something that they didn't sell.
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  Speaker 2: I gotta say, if you'd whine, if you do want
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  to start, yeah, you know, if you're counting Whole Foods,
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  if you're camping, you got to count Weber like you
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  have to the Holy own subsidiary. If you do want
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  to start your own club, Amazon has everything you need.
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  They've got those like little air cannons that they shoot
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  off and stuff. They got the sparklers. Animals, animals, pets.
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  Speaker 4: You can't do that.
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  Speaker 3: Yeah, yeah, they probably can't, right, Yeah, Okay, that's good. Okay,
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  we got a few things. Yeah, it's great again, listeners
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  Speaker 3: Hey Chuck, Yeah, what are you doing next Thursday? What
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  am I doing next Thursday?
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  Speaker 4: Oh?
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  Speaker 3: I'm going down the cape. You are. We're doing a
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  live broad cast of the Financial Exchange on Thursday, October
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  with the folks at Armstrong Advisory Group. Ask your questions,
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  We'll do our best to attempt to answer them. A
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  lot of discussion about the upcoming election, where market stand
• 10:39
  right now, outlook for twenty twenty five, what tax policies
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  could look like depending on the results of the election
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  in just a few weeks now. But like I said,
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  we're doing this next Thursday, which is October twenty fourth.
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  The numbers eight hundred three nine three four zero zero one.
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  But again six days from now, Double Tree Resort in
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  Speaker 3: Mike, do you ever have invincibility syndrome. Not since I
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  was a teenager, but I think most of us suffered
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  from invincibility syndrome at some point in our lives.
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  Speaker 2: The so co chief investment officer at Calamos Investments, they've
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  got you know, thirty three billion dollars in change in
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  assets under management.
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  Speaker 3: And again they're not dummies.
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  Speaker 2: It's really just this invincibility syndrome piece that is, you know,
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  kind of bothering me more than anything else. But basically
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  they're co chief investment officer says, look, this is a
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  market that doesn't think anything can go wrong, and that's
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  typically when things go wrong in markets, and investors have
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  to be wary of that fact. I don't think that
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  message is inherently wrong. The problem, I think comes from
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  the framing of this piece for MarketWatch, which is, Hey,
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  this is something you need to worry about right now.
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  It's literally they have the word worry in the title. Ye,
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  and look, the only thing that I'll say on valuation is, hey,
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  valuations can remain.
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  Speaker 3: High for a long period of time.
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  Speaker 2: It wasn't called the tech bubble because as soon as
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  valuations got high, it went down. It was no the
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  bubble kept floating and floating and kept going up. And
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  I mean you had case where like the Nasdaq was
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  doubling in back to back years, like it doubled and
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  then it doubled again in.
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  Speaker 3: Back to back years. Yeah good, So I think that
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  sure you can.
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  Speaker 2: You can look at this and say, Okay, this is
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  something that I need to be worried about. But what
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  do you do with that from an actionable perspective is
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  the problem. And ultimately it comes back to the fact
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  that no one out there knows exactly how the market
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  is going to move. There's there's no one like. Talk
• 13:18
  to any investment manager and they've gotten a whole bunch
• 13:22
  of trades wrong. It's not that you know, you get
• 13:25
  every single one right. The key is minimizing your potential
• 13:28
  downside for when you're wrong. And so if you're looking
• 13:33
  at this market saying that you're you know, it's overvalued
• 13:35
  right now, well, how do you end up approaching that?
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  Speaker 3: What do you do with that?
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  Speaker 2: What happens if you say, you know what, I'm taking
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  all my money and I'm going to cash and what
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  if the S and P five hundred rallies another ten percent?
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  Speaker 3: Well, I mean that's the problem. With this type of
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  thing is you could have written almost this exact same
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  piece a year ago. You could have written this exact
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  same piece of year ago, like the value questions that
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  we were seeing at the end of twenty twenty three,
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  and most of a large portion of twenty twenty three
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  and twenty twenty one were through the roof, the likes
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  of which we had not seen since twenty twenty one,
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  and before that the dot com bubble, And had you
• 14:14
  taken action based on that this time last year, what
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  happened to you? You missed out on solid double digit
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  returns on the S and P five hundred. So, as
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  we've talked about this before, legitimate concerns. I share concerns.
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  I don't see a great reason why Netflix stock should
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  be up ten percent today, but it's ten percent today,
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  tells you nothing about timing whatsoever.
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  Speaker 2: The other thing on this is, look, when you talk about,
• 14:46
  you know, trying to figure out like, oh, here's what
• 14:48
  I think is going to happen. Let's say that you're
• 14:51
  completely right about what you think is going to happen. Economically,
• 14:55
  you have, you know, a view that X, Y or
• 14:57
  Z is going to happen, even if you're completely right
• 15:02
  about it. The market can still move in a different
• 15:05
  way than what you expect the market reaction is going
• 15:08
  to be. As an example, oil inventories have tightened worldwide
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  the entire year this year, the entire year, oil inventories
• 15:18
  have been tightening. And yet if you go and take
• 15:21
  a look at west Text Intermediate right now and pull
• 15:23
  up the one year chart on it and say, okay,
• 15:25
  oil inventories have been tightening, that must mean that oil
• 15:28
  prices are higher than they were a year ago. Well,
• 15:31
  year ago, West Text Intermediate was trading at it closed
• 15:35
  the day on October eighteenth of last year at eighty
• 15:39
  eight dollars a barrel. It's sixty eight today. I mean, like,
• 15:45
  what are we really doing here? Is kind of what
• 15:47
  I'm getting at.
• 15:48
  Speaker 3: Well, And you know, look, Michael Barry wasn't the only
• 15:52
  person who saw something funky going in the subprime mortgage market.
• 15:57
  There are probably of other people who saw the same thing.
• 16:00
  And being able to hold onto that strategy while being
• 16:02
  proved wrong for like four years from two thousand and
• 16:05
  four to two thousand and eight, right, pretty challenging.
• 16:08
  Speaker 2: Can you be wrong in the face of like all
• 16:12
  like your dollars telling you you're wrong.
• 16:14
  Speaker 3: Yeah, I remember the story and I wish I could
• 16:18
  find it. But there was a fund manager somewhere. I
• 16:21
  thought it was Fidelity. I could be wrong, who was
• 16:23
  making a very similar bet to Twobury ahead of the
• 16:26
  subprime mortgage crisis. Lost his job because the fund lost
• 16:30
  so much money leading up to it, and then you know,
• 16:34
  it was eventually proven right, but it didn't really matter
• 16:36
  because he didn't have a job managing that fund anymore.
• 16:40
  Kind of a problem when that happens. Yeah. Yeah.
• 16:42
  Speaker 2: Let's take a look at where markets are as we
• 16:45
  head towards the bottom of the hour, with the Dow
• 16:47
  was still down eighty seven points, so still a negative territory.
• 16:50
  Spece up seventeen, about a third of a percent, in
• 16:52
  Nasdaq up one sixteen, about two thirds of a percent.
• 16:56
  So not a ton of movements so far. I mean,
• 16:58
  this has been kind of a quiet week overall, just
• 17:01
  not really a whole lot of anything as far as
• 17:04
  movement in UH equity markets. I mean, you've had a
• 17:07
  little bit here and there, but overall it's been fairly quiet,
• 17:13
  aside from the open on Monday, which you know, we
• 17:15
  gapped up and basically have just been treading water since then.
• 17:18
  So even with you know, some economic data that we've gotten,
• 17:22
  not much going on. But next week again, next week
• 17:24
  for earnings. I gotta tell you, I'm I'm excited, Mike, Microsoft, Alphabet, Visa, Meta, Tesla, Amazon, Apple,
• 17:35
  We got them all lined up next week.
• 17:44
  Speaker 1: Bringing the latest financial news straight to your radio every day.
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• 17:59
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• 18:01
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• 18:06
  Speaker 2: Mich Let's talk a little bit about this piece here
• 18:09
  from the Financial Times. It's titled the tech sector should
• 18:12
  brace for further turbulence.
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  Speaker 3: Why well, I see no evidence what turbulences the tech
• 18:21
  sector had so far, like a day of it back
• 18:24
  in July and August.
• 18:25
  Speaker 2: I mean, look, I'm all for the idea that, hey,
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  some trends won't continue forever. But first of all, tech
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  sector as a whole has been the best performing sector
• 18:37
  in the last I believe two and a half years
• 18:39
  now for the call it two years for the US economy.
• 18:45
  If you're going to call the tech sector turbulence, what
• 18:47
  do you call the rest of the market. Now, this
• 18:51
  is making the case that, hey, the chip making part
• 18:57
  of the tech sector has had a bumpy week. Yeah,
• 19:00
  you know, ASML report earnings earlier this week that were bad,
• 19:03
  sending it down over fifteen percent. Taiwan Semiconductors comes out
• 19:07
  and has good earnings, but the tech sector as a
• 19:10
  whole has not been particularly volatile.
• 19:13
  Speaker 3: Here's I think a reasonable rephrasing of this. The tech
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  sector is priced for perfection. If it doesn't achieve perfection,
• 19:20
  prepare for volatility.
• 19:22
  Speaker 2: But also, hey, basically, every time that the leaders of
• 19:28
  that sector have come up against needing to hit really
• 19:31
  high hurdles on their earnings, they've done it. And I'm
• 19:35
  someone I've talked about invidious valuation stuff like that, but
• 19:40
  I'm also I'm also realistic when you look at this
• 19:44
  where look, if they're just continuing to knock the cover
• 19:46
  off the ball, you can't just sit here and say,
• 19:49
  well but one day, well but one day is not
• 19:51
  an investment strategy. Again, tell me what is actionable, Because
• 19:58
  if all you're doing is saying, well this this is
• 20:00
  something to be nervous about, well, I got a million
• 20:04
  things to be nervous about. I don't have to write
• 20:06
  all of them down, you know, Like, what.
• 20:09
  Speaker 3: Are we really doing here?
• 20:10
  Speaker 2: I guess it's just it's kind of bothersome. The other
• 20:14
  piece New York Times, Microsoft and open AI's close partnership
• 20:17
  shows signs of praying boys. Should we be nervous?
• 20:22
  Speaker 3: No, but i'd Tina's going a break up. I don't
• 20:24
  think so. But this one was at least a little
• 20:26
  bit more interesting. It wasn't telling you anything about what
• 20:30
  you should be doing in the future. But there's been, yeah,
• 20:34
  a seeming fraying of this relationship. This very close relationship
• 20:39
  between open ai and Microsoft seemingly started after the well
• 20:45
  very surprise ousting of Sam Altman at open Ai. The
• 20:49
  ousting and then bringing back you begah. When was that
• 20:51
  this spring? No, there was a year ago. It's like
• 20:53
  November of last year. Okay, Yeah, So at the same
• 20:56
  time open ai had been asking Microsoft for further investment,
• 20:59
  reading goiation of some of their deals, and then you
• 21:02
  had this, I guess, surprise volatility, And I think that's
• 21:06
  I think that's mainly what's been framed the relationship is
• 21:08
  Microsoft having a realization that Wow, this is a pretty
• 21:12
  immature company that is not I don't know, maybe just
• 21:17
  doesn't have the same institutional safeguards that Microsoft probably does
• 21:20
  have in place here, and for those reasons has seemingly
• 21:26
  pulled back on investment, maybe pulled back a little bit
• 21:29
  on what they're saying publicly, and made some contingency plans.
• 21:33
  In March, they paid at least six hundred and fifty
• 21:36
  million dollars to hire most of the staff from an
• 21:39
  open ai competitor to start building out a you know,
• 21:42
  more Microsoft themed product when it comes to artificial intelligence.
• 21:46
  Because I don't know, when you have the crazy stuff
• 21:48
  that's been going on at open ai over the last year, you,
• 21:51
  if you're Microsoft, you do take a step back and say,
• 21:54
  let's build out a contingency plan.
• 21:56
  Speaker 2: Yeah, And I don't think it's crazy to also say, hey,
• 22:01
  maybe we want to actually own this and not be
• 22:04
  relying on someone else who we might have to pay
• 22:07
  either in dollars or.
• 22:08
  Speaker 3: In free compute capacity.
• 22:10
  Speaker 2: Right, you know, we want to be able to say, yeah,
• 22:14
  this is ours and we can sell the IP from
• 22:17
  it how we choose to, rather than being subject to
• 22:21
  the whims of what is now going to be another
• 22:24
  for profit entity, who can you know important?
• 22:29
  Speaker 3: Yeah, that wasn't the case when Microsoft built this partnership.
• 22:32
  Maybe they saw it coming, but you know, open Ai
• 22:35
  at the time of the partnership was a non for
• 22:37
  profit entity that Microsoft was investing billions of dollars in.
• 22:41
  Now looking to become for profit. What does that mean
• 22:44
  for microsoft stake in the company. How does that all?
• 22:47
  It's going to be tricky, but let's also face the facts.
• 22:53
  There is no other company that I think is as
• 22:55
  compelling in the artificial intelligence space from a user product
• 22:59
  perspective than a A I don't really know. I haven't
• 23:03
  tried around enough to see what's out there, quite honestly.
• 23:06
  I'm sure there are some niche products for certain industries,
• 23:09
  Like if you're a coder, maybe there's a you know,
• 23:11
  a different product that's more front and center for you.
• 23:13
  If you do graphic design, might be something different. But
• 23:18
  for general use among the public in terms of you know,
• 23:21
  what I would imagine gets taught in every college level
• 23:25
  course on artificial intelligence probably starts with open Ai. To
• 23:28
  take a quick break here.
• 23:29
  Speaker 2: When we come back, we're gonna be joined by Paul
• 23:32
  Lamonica from Barons.
• 23:34
  Speaker 3: Right after this.
• 23:36
  Speaker 1: This is your home for the most comprehensive coverage of
• 23:39
  the economy and the trends on Wall Street. This is
• 23:42
  the Financial Exchange Radio Network. Find daily interviews and full
• 23:47
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• 23:49
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• 23:52
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• 23:59
  the weekend.
• 24:01
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  in part by the US Virgin Islands Department of Tourism.
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  The US Virgin Islands are Saint Croix, Saint Thomas St.
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• 24:36
  Speaker 2: We're now joined by Paul Amonica from Barons. We're talking
• 24:40
  a little bit about crypto stocks, specifically micro Strategy.
• 24:45
  Speaker 3: Paul, how are you today, I'm good, Thanks, How are
• 24:48
  you doing well?
• 24:49
  Speaker 2: What have we been seeing recently with crypto related stocks
• 24:54
  out there?
• 24:55
  Speaker 5: Yeah, the crypto related stocks have you had some pretty
• 24:59
  dramatic game because of crypto rallying. Look today, bitcoins up
• 25:03
  about two percent, you know, just under sixty nine thousand dollars,
• 25:08
  and as a result, micro Strategy is up nearly ten percent.
• 25:12
  It's been an incredibly volatile run for micro Strategy, as
• 25:18
  well as companies like Coinbase, uh, you know, big digital
• 25:22
  brokerage firm, and also some of the mining companies like
• 25:25
  Mara and Riot platforms. But I think that uh, you know,
• 25:29
  micro Strategy in particular has really been benefiting from the
• 25:35
  surge in crypto because if you look at micro Strategies
• 25:39
  balance sheet, company owns more than two hundred and fifty
• 25:43
  thousand bitcoins, so that's worth you know, nearly seventeen billion.
• 25:49
  You know, that's that's about a third or more than
• 25:51
  a third of the company's total market cap.
• 25:53
  Speaker 2: When you look at what's going on here, what's the
• 25:56
  what's been the catalyst for this?
• 25:58
  Speaker 3: Like what why? Now?
• 26:01
  Speaker 5: Why now? With regards to micro strategy or why now
• 26:03
  with regards.
• 26:04
  Speaker 2: Why now with like what's what's all the excitement about,
• 26:07
  like anything crypto related right now?
• 26:09
  Speaker 3: Like haven't we been through this before?
• 26:12
  Speaker 5: Yeah, we have been through this before, and it kind
• 26:14
  of you know, goes in stages. I'm working on a
• 26:17
  piece right now about how bitcoin and gold are both
• 26:21
  rallying and there's actually a couple of funds that are
• 26:24
  now out that let you invest both in gold and
• 26:27
  crypto as kind of a bet on further dollar devaluation
• 26:32
  and you know, inflation of you know, pressures maybe receding
• 26:36
  and what that means for for global interest rates. So
• 26:39
  you know, that I think is the predominant trade right now.
• 26:43
  What I find fascinating though, is that stocks are also,
• 26:46
  you know, at record highs along with gold, and bitcoin
• 26:50
  is creeping back towards the records of you know, nearly
• 26:53
  seventy four thousand from earlier this year. So it's clearly
• 26:57
  a risk on environment right now.
• 27:00
  Speaker 2: When you look at these stocks that are related to crypto,
• 27:03
  what are we seeing as far as you know, how
• 27:05
  steeply valued they are right now and you know the
• 27:08
  potential risks that that presents.
• 27:10
  Speaker 5: Yeah, those are the enormous risks with these companies. Mean,
• 27:15
  Coinbase and some of the miners are off of their
• 27:20
  year to date highs and fifty two week highs. But
• 27:23
  even if you factor that into the equation, Coinbase has
• 27:27
  got a pee multiple of about forty or so twenty
• 27:31
  twenty five earnings estimates, So that's rich, to put it mildly,
• 27:34
  Riot and Mara, the miners, they're not really even making money,
• 27:38
  so you have to value them on revenue, I guess,
• 27:41
  and you know their price to sales ratios are a
• 27:44
  big premium to the overall market. And then you have
• 27:47
  micro Strategy, also not expected to make a profit on
• 27:51
  traditional gap measures. It's price to sales ratio is enormous,
• 27:58
  so you're really only, i think, looking at micro Strategies
• 28:02
  valuation as a proxy for all the bitcoin it owns.
• 28:07
  I'm not so sure whether or not the core software
• 28:10
  business is, you know, vibrant enough to justify where MicroStrategy
• 28:17
  stock currently is, even when you factor in that it
• 28:20
  has all those tens of billions of you know, bitcoins
• 28:23
  on its balance sheet. I mean, you're looking at micro
• 28:25
  Strategy right now as a company with a marketcap above
• 28:29
  forty billion.
• 28:30
  Speaker 2: Paul, what what does micro Strategies business consist of aside
• 28:34
  from owning a bunch of bitcoin. I've never actually looked
• 28:38
  into it.
• 28:39
  Speaker 5: Yeah, it's analytics software firm, you know, so obviously they
• 28:45
  are benefiting from the migration to the cloud. Like many
• 28:51
  other software companies. There's a bit of a threat monitoring
• 28:56
  cybersecurity type play as well. So this is is a legitimately,
• 29:02
  you know, a legitimate corporate software company that has you know,
• 29:08
  a decent amount of revenue. They're expected to you know,
• 29:13
  generate you know, just under five hundred million in sales
• 29:16
  this year and next year. You know, that doesn't make
• 29:20
  them buy any stretch of the Imagination and Oracle or SAP,
• 29:23
  but they're not an insignificant player in enterprise software, so
• 29:29
  there is some value there. I just don't know if
• 29:32
  it's you know, a forty billion dollar company, and it
• 29:35
  probably wouldn't be if not for the fact that it's
• 29:38
  got you know, more than sixteen billion dollars worth of bitcoin.
• 29:41
  So you got to give Michael Saylor, the CEO or
• 29:44
  former CEO founder some credit there for making that pivot
• 29:49
  into bitcoin. He has been a bitcoin evangelist for some time.
• 29:53
  You see that clearly on his you know, Twitter x feed.
• 29:58
  You know he's very vocal about how bollishit is on bitcoin.
• 30:02
  Speaker 3: Very good, Paul.
• 30:03
  Speaker 2: We appreciate you joining us. Thank you so much for
• 30:06
  the time today.
• 30:07
  Speaker 5: Thanks a lot.
• 30:08
  Speaker 3: I have a good weekend. Guess you too.
• 30:09
  Speaker 2: That is Paul Amonica from Baron's talking about micro Strategy
• 30:13
  and other crypto adjacent stocks.
• 30:17
  Speaker 3: Mike, what do you have for me for stack Roulette?
• 30:19
  I want to talk a little bit about artificial intelligence
• 30:23
  in classrooms. Oh sure, and I'll start by stopping and
• 30:27
  try to do in five minutes. I'll start by saying
• 30:29
  that it appears that a lot of schools and even
• 30:33
  college level university level institutions are probably behind the eight
• 30:37
  ball in developing their policies and guidelines for students about
• 30:42
  how to use and how not to use this and
• 30:44
  what they consider cheating. And I will admit to that. However,
• 30:48
  if you haven't seen the story of the parents of
• 30:50
  a Hingham High School senior who are now suing school
• 30:54
  officials alleging that their son's civil rights were violated after
• 30:59
  he was vote unfairly punished for using AI to research
• 31:02
  and outline a social studies project, I just can't say
• 31:09
  enough that's negative about this lawsuit, which is just such
• 31:13
  a frivolous use of taxpayers money, who now have to
• 31:16
  go and defend the school's actions on not even suspending
• 31:21
  or expelling the student, but rather giving him a bad
• 31:24
  grade and rejecting him from the school's national honor society.
• 31:29
  The I don't I don't know what the student did.
• 31:31
  It's not abundantly clear. We have no idea. It seems
• 31:34
  like he maybe used AI in a way to generate
• 31:37
  an outline for a story. The parents are saying, look,
• 31:40
  you know this is this is not a violation of the
• 31:43
  schools private policies. And you know we've got a four
• 31:45
  point zero GPA. You know, great student here who you
• 31:50
  are unfairly punishing. And some of that stuff may all
• 31:53
  be true, Like I don't debate all that. The fact
• 31:56
  that it's ending up in court. I just the lawsuits
• 32:00
  in this country and the frivolous waves we use the
• 32:03
  court system when things don't go our way and we
• 32:06
  want to whine about them is absolutely preposterous. It's absolutely
• 32:11
  crazy that this is going to the court system rather
• 32:13
  than being dealt with within the confines of the school
• 32:17
  and it's a teacher, by the way, is one of
• 32:19
  the parents who is suing the Hingham School system for
• 32:22
  all of this. Like I said, I think that there
• 32:25
  is a lot more to be done on the part
• 32:27
  of schools of defining what their procedures are. But suing
• 32:31
  the school and using up taxpayer money for this, I
• 32:34
  just I think sends a terrible message to not only
• 32:38
  the general public, but to your child as well. Things
• 32:41
  don't go my way, So I just sue people. Yeah,
• 32:44
  the problem of parents becoming.
• 32:57
  Speaker 2: Overinvolved in their kids education and sports and every other
• 33:03
  aspect of their lives.
• 33:06
  Speaker 3: Is kind of a bad one.
• 33:08
  Speaker 2: Because here's the thing as a parent, and this is
• 33:10
  something I try to actually think about every day because
• 33:13
  I actually think it's healthy to do this, And somebody
• 33:15
  might think this is insane, Like one day you're gonna
• 33:17
  die and your kids are gonna have to figure out
• 33:21
  what to do without you. And when you're dead and
• 33:25
  looking up at them from six feet under the ground
• 33:29
  and you see that you know, Hey, their presentation at
• 33:33
  work didn't go well and they decided to sue their
• 33:36
  company because they didn't get the deal that the guys.
• 33:41
  You're gonna have times where you just don't bring it
• 33:43
  or you do something that you're not supposed to do,
• 33:46
  learn from it, adapt and move on.
• 33:48
  Speaker 3: And you know what, there's also gonna be times when
• 33:50
  you do everything right, you follow all the rules and
• 33:54
  still and deliver something perfect, and you still get screwed
• 33:57
  because the system's unfair. Correct, And that's an important in
• 34:00
  life lesson too.
• 34:01
  Speaker 2: Like we gotta learn how to grow up here a
• 34:04
  little bit ugh, because like this is presented as like
• 34:08
  an AI story, but this is not.
• 34:09
  Speaker 3: This is an overactive parents story quite honestly.
• 34:13
  Speaker 2: And as someone who you know is married to someone
• 34:16
  who worked in schools for quite a while.
• 34:19
  Speaker 3: This is why you don't want to be a teacher.
• 34:20
  By the way, too, it sucks, like who wants to
• 34:24
  deal with this? Oh?
• 34:25
  Speaker 2: I gave Jimmy a D and now I'm getting sued.
• 34:27
  Give me a break, Like you gotta be kidding me,
• 34:33
  Like all of us have gotten bad grades on like
• 34:35
  you figure it out and you move on. The world
• 34:36
  isn't fair, And honestly, it's one stupid grade. When you're
• 34:41
  thirty five years old, whether or not you made National
• 34:43
  Honor Society isn't gonna matter. I did, by the way,
• 34:49
  and nobody cares, and nobody cares exactly like this is
• 34:52
  literally the first time I've thought about it in twenty
• 34:55
  five years, Like, what are we really doing here? The
• 35:00
  Dow Jones isn't doing much of anything. It's down forty
• 35:02
  seven points, about a tenth of a percent, The S
• 35:04
  and p is up seventeen, the Nasdaq up one oh six,
• 35:07
  and so markets are mixed heading into Friday afternoon.
• 35:11
  Speaker 3: We're done for the day, done for the week.
• 35:13
  Speaker 2: Hope y'all have a great weekend and we'll see you
• 35:18
  back here on Monday as we get into a pretty
• 35:21
  heavy earnings week next week.
• 35:24
  Speaker 3: See you then,