Trading the DOGE dividend
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Love them or hate them, Donald Trump is making good on his campaign promise to cut wasteful government spending and bureaucracy, putting Elon Musk in charge of the newly formed Doge, Department of Government Efficiency. Elon and crew have been hard at work. Their website claims to have already saved taxpayers $55 billion.

Of course, some of that controversially because nobody wants their projects defunded or shut down. The Democrats are trying to block Doge with lawsuits and new laws and public criticism. But in typical Elon Musk style 4D chess, he took an idea that somebody posted on X to the president, that idea giving some of the Doge money back to the people. And Trump agreed, saying that they're considering using 20% of the savings to pay down the national debt.

and giving another 20% of it directly to Americans in what is being called a Doge dividend. And it's kind of brilliant. Quiet the haters while you're also increasing the approval rating for Doge and watching that skyrocket and at the same time making it not a good look for Democrats to keep fighting Doge, which wants to give the money back. And in doing that, you're going to stimulate the economy. So will there be another stimulus rally in the stock market? And which stocks are...

at risk of being defunded by Doge. Today on Dumb Money, the winners and losers. We're going to reveal our Doge dividend stock trades.

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This is Dumb Money Live.

And the algorithm of whatever platform you're on right now, Chris Jordan, we've already seen some big moves on stocks related to government spending. When the White House announced the Pentagon needs to plan to cut the defense budget by 8% annually for the next five years, we saw Palantir stock immediately drop 20%. It has been coming back, and we can talk more about that stock specifically in a minute. But big picture here, what does a Doge dividend look like? Does it trigger another stimulus rally?

Well, I'll tell you what a Doge dividend looks like. So if we actually trust the $55 billion claim in savings, which I think is dubious at best, that if you divide the 20% promised dividend among 120 million taxpayers, you're talking like $90. I'm glad someone did the math on that. So the math ain't math. If you want to get into the four figures,

and the low four figures, you've got to get to a trillion dollars in cuts. And I don't see that happening anytime soon. Well, wasn't Elon's whole plan $2 trillion in cuts, though? So if we get halfway to Elon's...

which would be significant, but that's a pretty big ask, especially with the tax plan that they're looking to pass. I thought it gets up to $5,000 at $2 trillion. No. It's $5,000. About $2,000, $2,500, depending on the... That's just an estimation on the number of taxpayers. So if there's 120 million taxpayers, then no, it's like $2,500.

And I was trying to find where that $5,000 number came from. It didn't come from Elon, I don't believe. It didn't come from Trump. Trump said 20%. But I think people did the rough math. And who knows? Number of Americans or number of taxpayers or number of tax filers because a joint return would be a single tax return. There's a lot of numbers to be divided by. It's complicated. So it's just rough math. But let's say it's $60 million. At that point, it'd take $2 trillion to get to $5,000.

Yeah, and it could be it could have been household. I think maybe 5000 was. But that would take I mean, that would literally take two trillion cuts and the 55 billion seems inflated anyway. So I don't know. Maybe they get through. Well, so you could look at this a couple of different ways. One, who would benefit under a Doge dividend, which is kind of seems like it's likely to happen, but it might be much smaller than people anticipate.

You have to go back to the last time we had, right, government money. And just, you can't overthink it, right? So like, all right, let's just say this. We can debate how people would spend their money differently this time. But as investors, what actually matters is how the market thinks they're going to spend their money. And you know the market is going to go back to last time and front run,

the same exact stocks and sectors that benefited from the last government handout so initially it doesn't matter what you think it matters what everyone else thinks so you have to go back and you have to trade the same exact stocks as last time so what benefited the last time

crypto agree yeah yeah bitcoin would be the would be the biggest winner i think agreed bitcoin was the biggest winner and with with but not just bitcoin this time around you're gonna have bitcoin plus meme stuff and other crypto junk right and who benefits the most from that

Robinhood, right? So like Robinhood would absolutely be. In fact, the one thing you guys remember, the one thing we learned with the stimmy checks from 2020 or 21 was that the majority of stimmy money actually went to pay off people's savings and to invest. Right. So it went into people's investment accounts. The obvious beneficiary here has to be Robinhood and crypto. Right.

And beyond that, probably just wherever the loose money goes, right? Is it travel and clothing and just stuff, right? Just everything's going to pump, so don't overthink it. You just get a short window of pump out of this if it happens. But I don't even think it matters if it happens. If you start getting conversation around the fact that it's likely to happen, the

the market will trade up those sectors and stocks. So you just have to be prepared mentally, right?

Uh, but that's a, that's the STEMI that might or might not happen. What we know is going to happen is continued talk. Oh, we agree that we probably have two to three more months of heavy Doge conversation. Does that sound about right? Didn't Elon say he was going to spend four months on this project, right? I think, yeah, there's a definite end date and it is just, it's a, it's a few months. It's not, it's not like a year long project.

Okay, so we know that there's a few months left of this whole doge, let's slash budget from every area of government. Where do we think the juice is left? Like, people have already traded down...

what defense stocks right you know specifically i don't think i don't think defense stocks are that yeah the the the other defense stocks i look at weren't really affected you know some of them had already been in a downswing you know but i didn't see anything except which doesn't make any sense to me yeah if you look at the ita which is the aerospace and defense etf i mean it's oftentimes but it's not i mean i wouldn't call it down

And did you see a big drop on the day that that 8% cut was announced? But who gets punished the worst? Or planned for an 8% cut was announced. Who gets punished the worst here? Who generates the most amount of BS money from government overspending?

are the consultants. We know that, right? Those are the people that have really crushed it the last two decades from government overspend waste, the consultants. Booz Allen. Booz Allen is at the top of that list. How much money has Booz Allen made from government waste the last two decades? And then take a look at their stock right now. People are onto this, right? Booz Allen has got to be...

one of the the war the most negatively impacted uh i don't have a good way to show charts here today but look at that look at that b-a-h past week b-a-h they topped out at like 186 in october they're trading at 109 right now down like 40 percent well yeah this is a two-year chart on the non uh

yeah I I have a feeling those guys are generating a lot of revenue and they're going to get they will be first to get cut but there's a there's another trade that I find super interesting have you seen the conversation around taxes now we have to discuss whether or not this is actually going to happen or if they could theoretically happen but this concept around

kind of dramatically changing the tax code. It's starting to get a lot more traction here in the last few weeks. Do you think there's any sort of real possibility

Yeah.

an online thing already for income tax codes that they're they're working on so i don't know why they would be working on irs tax codes if they're planning on getting rid of income tax or switching to a flat tax i don't know if that's possible

I don't know. But I mean, the talk about doing, I mean, just theoretically, right? The talk about using tariffs would just be like a consumption tax, right? So tariffs, by going directly to tariffs and not using income tax would be a consumption tax, which would disincentivize consumption, which I don't know is a good idea. I love it. I'm just at a loss on this one. I do think it could benefit Intuit because aren't they getting rid of some of these free tax, online tax return companies?

That's what I was going to say. And by the way, I don't love necessarily the tariff concept, but the concept of moving to more of a some type of consumption audience. By the way,

Jordan, that would take like a decade. You can't just do something like that. No, I mean, it would be, yeah, I mean, it would be a disaster. Yeah, it's not, it's being trialed in multiple countries around the world right now, but it has to be phased in over time. I've been a believer in that system for a long time and have always wished that we would trial it here. It doesn't matter if it happens immediately. If there is serious talk around it, just the conversation and the threat of it

could be disastrous for companies like what, Intuit? - Intuit. - With TurboTax, right? - With TurboTax people, yeah. - How about HR Block, right? Let's see how they're doing. I'm not saying to make these trades now, but you absolutely have to be prepared to make them if the conversation starts to escalate. These could be absolutely killer trades.

going into any type of flat tax or any type of consumption tax scenario that would dramatically reduce the degree of flexibility in the tax code would destroy these companies. Yeah. So

I don't know. And by the way, it's the perception of how damaging that would be. Yeah. What I see right now is that I don't think taxes are getting more simple. I think they're getting less simple. So you need something to help you. And the biggest push was to get rid of these free e filers, which I think would be huge for Intuit because then they get their 30 bucks a pop on

more taxpayers. Well, even Intuit, though, has a free product. Well, right now, right? But that's a government subsidized product, right? And that's what they're pushing back on. So they're pushing back on these government subsidized free filing services. And that's one of, Intuit has that, right? And so now if they could charge 10 bucks for that service, like, oh, it's no longer free, but now it's 10 bucks and it's more revenue. Chris, I think your mic's off again.

You froze a little bit and now I don't think you're working. Chris is gone. Maybe he could write, uh, he should get a tablet and just write what he wants to say. Yeah. Do what I have to do. And I'm showing stock clothes. Just, just show your phone. I guess, I don't know. Maybe you need to reboot again. Plug in the internet. There he goes. All right. Now it's a Dave and Jordan show. Yeah. Um,

So yeah, Intuit was not on my radar for this. And I hadn't really, other than the IRS preparing to fire more people, I hadn't really been following the simplification of the tax code rumors. So that wasn't really on my radar. But for me, it comes down to the stocks that you're expecting. Oh, there is Chris on his phone.

It works. We've got a phone. Low tech. Now we can see the studio there behind the scenes. I really had not been following the rumored simplification of the tax code, so that was not at all on my radar. But I was more focused on

individuals putting money in the brokerage account and Robinhood was the top of my list and Bitcoin is the top of my list. And I think it's funny how we never talk about what we're going to do other than the title of the show. We never talk about our stock picks, but it's funny that we came prepared with the same two things. I was with, by the way, a lot of crypto guys and girls in Austin this week.

for robot meetings and there were just a lot of crypto investors down there. Probably some of the most prominent that I've ever been around. And I was shocked to hear that they were really negative on the crypto sector right now. I didn't realize how. But then again, you know, sentiment sometimes means the opposite of what you think it means, right? So the fact that industry is so negative on itself

Perhaps that maybe is a longer term positive for the sector. I don't know. I don't know. But I do feel, and by the way, when we look at stocks, I've kind of gotten ahead of themselves here. Palantir comes to mind, right? Yeah.

I think we discussed Palantir because Palantir was what probably, would you agree? Maybe one of our largest topics of 2024, late 2024, one of the most contra, I would say Palantir was one of the most controversial high conviction, uh, trade picks that we've done in years on our show, because everybody told us that we were crazy and way too late at 30 bucks a share to be talking about Palantir. And, uh,

Quite honestly, guys, I did not expect Palantir to do what it did as quickly as it did. I was happy to have had it. Yeah. No, I felt like we were a little bit late only because Palantir was just hard to wrap my head around what they even did. And once I really understood that, it was a no-brainer to buy the stock. And I'm glad I did when I did. Yeah.

And it's off, but I don't really understand the... The Pentagon spending cut doesn't really seem like the reaction... I feel like that reaction was way overdone because... It seemed concentrated in the Palantir, which was odd. Isn't Palantir basically the thing that's going to...

be optimizing for the Pentagon, help them figure out better cost savings, ways to cut across the board. I feel like the software is the one thing you need to keep paying for. Guys, okay, let's just talk about Palantir for a second. No one has been more bullish on Palantir than me the last year. The stock

who everyone told me the stock was already overpriced at 30 bucks when I went all in on it, has 4x since then over the course of a few months. So there's no such thing as an overreaction to the downside when you have a stock that the whole world thought was already over, way over, but then 4xs. It makes absolute sense that a stock like that would overcorrect on the downside.

I don't monitor price. You know that. I could care less about price. I don't track price. But I did sell one half of my Palantir at close to the top. Why did I sell half at close to the top? Not because the price had 4X'd, but because my entire...

uh thesis around Palantir is that it was misunderstood and underappreciated in terms of where they were in their cycle and that is just no longer the case right now right it's much more appreciated than it was when we were talking about it last year so as a social arb investor

When the rest of the world kind of catches up to my thesis, I start to exit. And I exit half of my Palantir. I feel good about that. Now, I also believe, as you know, that Palantir is a company that could theoretically continue to surprise us for years, if not the next decade. And I don't want to be completely out of it because it's also a longer-term social arbitrage. So

I still own half, but I sold half because certainly people are more aware of that thesis today than they were last year. And they appreciate Palantir and their positioning in the marketplace of this new AI world meaningfully more than they did a year ago when we were talking about it and investing aggressively in it. So I sold all my options a while ago, but I sold half of my equity stake as well here.

That said, I still have the other half and I'll probably, quite honestly, I'll probably keep it for a very long time. So that's my Palantir trade. I don't necessarily want to trade Palantir based on Doge though. I don't know that I necessarily want to do that. So when we talk Doge, we have to factor in Tesla, right?

What does Elon's involvement in Doge do to Tesla stock? We've seen a huge run-up between the election and the inauguration, and then since the inauguration, we've seen Tesla being punished, possibly. Several of the analysts are saying that Elon's lost focus at Tesla is the reason. What do you think?

Well, we've seen some of the European numbers for EV sales drop, specifically Tesla sales. So I'm sure that plays into it somehow. It also had a big run up.

okay jordan on you know i could care less about automotive sales for tesla but to be fair a lot of that drop in europe due to tesla uh on tesla cars was a kind of a timing issue right with the release window of their new vehicles and tesla i heard that that is that that's beginning to turn around

So I think it was a timing. It was a timing issue on the release of what the why I believe. Yeah. So it's kind of unfair. Also, you know, I was with some Tesla guys in Austin this week. Similar timing issue in China, right?

uh that due to the chinese calendar this year being off uh there was you know there's like there's a few weeks when no one purchases you know anything over there and that disrupted the calendar and the buying window i heard that in the last one to two weeks

that the Tesla numbers appear to be up meaningfully in China as well. So perhaps there's a bit of a tailwind now, both in China and in Europe for the automotive division, which nobody should really care about. Nobody cares. But they do. No, they do care. Optimist division. No, no, they do care. They do care. That's the problem. They do. That's the issue is that Tesla is still majority automotive driven. I don't know why, but it is.

So that stuff actually matters right now. And then you also have the tailwind on Tesla of FSD this summer with the launch in Austin. Do we think the launch in Austin is actually going to be meaningful?

I think it depends on whether it's fully autonomous or if there's someone in the vehicle, right? If there's someone in the vehicle, which I think there probably will be, right? It's probably not as interesting as everyone's hyping it up to be, if that's the case in Austin. Is it, yeah, is it a robo-taxi trial or is it FSD in your own car without being monitored to make sure you're paying attention?

No, no, no. From what I understand, I thought it was RoboTaxi, but is there going to be a system? I thought it was FSD in your own car being untethered from the nagging screen that makes you pay attention. We'll see. We have that, and then we also have the introduction of the new cheaper model. To what extent will that model be a new form factor?

or to what extent will that model just be an iteration?

you know, I guess the three, right? And that will kind of dictate the level of excitement around this new cheaper Tesla. Again, a lot of the movement in the stock is still focused around autos. I don't believe that it should be, but it is. So as a Tesla, even if you're trying to time your entry point, you have to pay attention to autos because it's still what's driving the stock right now. Yeah.

i i i've been saying for a while i think at some point in the next i don't know next nine to 12 months that will change and i think it will change but it's not today so i i have a tesla position that i tend to uh lever up and lever down on a weekly basis so and you're you're still primarily in tesla options right

Yeah, I'm just doing stupid stuff. I'm levering up, levering down all the time. Sometimes I make the right decision. Sometimes I make the wrong decision. I do not. I'm not the know it all when it comes to Tesla timing. So people always ask me, I'm like, don't ask me. I'm in the same boat as you. I have a I have this really strong thesis related to Optimus that is not that relevant today.

And I think it becomes relevant at some point in the near to midterm future, but it's not today. So these are in the money calls that you keep repurchasing, just pushing out the date and changing the strike. So that, that, those are, that's like insurance because I know I want to be aggressively in Tesla at some point in the future. And if some other driver of Tesla stock significantly moves the price, then,

in the interim, that would upset me, right? So I kind of want to make sure that I have at least some percent of the position I ultimately want to have locked in. That's what I'm doing today. So it doesn't make sense to a lot of people, but I'm trying to protect the position I eventually want in Tesla, right? So I'm just trying to do that through options right now.

Yeah. Just in case they dropped a video, uh, of Optimus the way it's not, no, it's not, that's, it's not for a video of Optimus. It's because just because I'll be, I would rather wait till the video drops to get in for Optimus. It's about people trading up FSD or trading up the new vehicles or trading up the other stuff that I don't care about. Uh,

I just want to have some level of exposure in Tesla just in case. But my big trade will come on when I think the market more appreciates Optimus. And what do you think about the new figure video that dropped with two robots working together to unload groceries and put things away based on seeing an object, figuring out where they thought it belonged without any prompting?

I thought it was impressive, but I thought it was also a reminder that people are getting overhyped on expectations for what humanoids are actually going to be doing in the next 12 to 18 months. I keep reminding everyone that we're not even at 1.0 right now. Like, we don't even have our 1.0 humanoids right now. You think they have them at Tesla and figure, but

They don't. This is not the 1.0 yet. So he's got, you know, Brett has reasons for releasing videos like that. And the biggest reason is that he's about to raise a round. They're raising huge, they're raising rounds. And listen, Elon Musk...

They're doing a great job, but they're displaying, they're kind of playing to the strengths of what they've built so far. And I think that's fine. But he's got to sell the round. We are at pilot stage in the humanoid sector, period.

uh and stop like we're at pilot stage guys we are not at commercial stage humanoids there are a lot of people out there that think that we're about to start commercializing humanoids because they hear elon talking about these production numbers you know quite honestly figure ai is talking about production numbers that's fine i'm not sold on that yet and i love both of those companies i love optimus i love figure i obviously love aptronic um

But we are not at commercial stage humanoids yet. I'm sorry. We're just not there. I don't care what any of these CEOs say. And it doesn't bother me one bit. We're going to have 12 to 18 months of intensive work.

pilot stage work at real companies around the world where the rubber is going to meet the road and we are going to identify problems with these humanoid platforms uh whether it's like I said many times it could be joints overheating it could be wires fraying it could be connectors uh that they have those things out but you also have to prove value right and so if they can do those things and figure out how to prove the value then that's

Those are the steps. Jordan, that's right. We also have to ramp up speed. We have to prove durability. We have to prove that these machines can actually operate 20, 22 hours a day, seven days a week for months on end. That has not been proven yet.

And we might have to tweak the actual form factor of these humanoids and various components and architectures and software in the tech stack in order to get there. Also, just like the implementation plans of these things and trying to figure out, okay, do we have to have...

you know a figure AI employee on site at all times or do we have to have this or that I mean I hate to say that but you've got to figure all of these things out on how to make these things operational listen none of this stuff is negative to me none of it's a negative it's all expected yeah I just don't be an exciting 12 to 18 to 24 months I think that we're going to see a lot of

progress. We're not going to see them walking in our house, but we're going to see a lot of progress. If people have reasonable expectations, this will be the most exciting time in humanoids the next two years. I just think that there are some people on the market and on X that are getting overexcited and their expectations are starting to become unreasonable for the sector. And believe me, this is

As you know, I'm engaged with these humanoids on a regular basis and the engineers that are working on them. The progress is phenomenal. The future is super bright, but you just can't go from zero to 100 in an industry sector like this where you're having to put bots on manufacturing lines for the very first time. There's so much variability in how these humanoids work.

you know, this is not traditional automated machinery, right? There's way too much variability, which by the way is why people love these things, right? Because they have the old, they could, they could eventually work in really unstructured environments and do anything by the way, like,

when you think about the timeline for humanoids just think structured to unstructured right the first jobs they're going to be doing are going to be in highly structured environments where there'll be minimal movement and then we're going to over time transition to more unstructured environments still in commercial and industrial settings when people are talking about home humanoids

Forget about home humanoids. We're not going to see viable home humanoids for years because that environment is just way too unstructured. We're not there yet. And it doesn't matter. It doesn't matter. It's just such a better, I mean, in my mind, the better use case is in industry, right? You can deploy far more with humans.

fewer touch points if you deploy them into industry. If you're deploying them into homes, it's wildly, it's just a big, it's a mess. Although I will say, I'll spend a million to get one, but

Jordan, I think the best use case actually is at home eventually when we can get there for numerous reasons, but especially for healthcare and for home aides. I think that becomes a multi-trillion dollar industry just with home aides. Problem is they creep me out, so I can't have a creep me out robot in my house. They won't creep you out. You're looking at today's robots. It'll become as normal as having a phone with you at all times.

Jordan, they won't creep you out. I think the form factor that ends up... I've got my dog here right now. Your dog will love these humanoids. I think the form factor that ends up landing in the home will be...

a very kind of positive, non-creepy form factor. I've seen what some of these companies are doing and what they're thinking about years out for the home. And I think you will love it. I think your dog will love it. And by the way, it will be the most game-changing moment, period, that we've had in consumer tech.

far more game changing than the smartphone that's coming. It's not coming this year or next year, five years from now, eight years from now, we'll start to see kind of the first home bots that, that are, that are meaningfully, uh, productive, uh,

In some homes, you just have to be patient. Right now, it's all about commercial and industrial. And even there, pilots, guys, the next 18 months is pilots. I'm sorry. We're not going to see any type of scalable commercial humanoids over the next so many months. And that should not be a negative for anyone in this sector.

Okay. So I'm off that soapbox because I think X has been getting overexcited on this stuff, and I want to slow people down. But yeah, for Optimus, I think we see it by the end of the year. I think by the end of this year, we see enough with Optimus that starts to get the story and the narrative for Tesla starts to transition away from cars towards FSD and Optimus at some point later this year. All right. Anything else?

No, I will say this. I've been almost exclusively focused the last week on a few different retail stocks. And I found a couple that I am super excited about. By the way, Corsair, that trade still continues to move. But I have a couple of retail stocks. I'll just give a little hint. One of them has been punished recently unfairly.

and they seem to be having a great quarter. There are a bunch of retail stocks that are coming out with earnings in early March, and that really has been my focus this last week. I'm almost done with my research, and I want to share it with you guys, and I want to share it with the community, which I will do in our Discord, dummany.tv. So head to dummany.tv slash Discord. It's absolutely free. Get an invite there and join us there. Boom.

But on our show next week, Dave, can we do it next week? Because I think there are some really good opportunities right now. And I know everyone's so focused on tech and everyone's hyped on Palantir and all these other tech stuff. Like,

People are not paying attention to some of the other sectors because they're so focused on the noise of government right now and Wall Street and AI and tech. And I think there's never been a time when people are so overlooking some of the I don't want to call them boring sectors.

But I don't know, less trendy sectors that are outside of this disruptive AI. And I think that means there's more opportunity for traders. I made a couple of trades this last week. One was on Garmin, killed it on Garmin. And I had another trade that was short on Fiverr.

That crushed it this last week. Obviously, the Corsair trade was one of the biggest trades I've made in a while. And no one's talking about this stuff right now. No one's looking at it because they're all focused on HIMS and Palantir and just a handful of stocks that everyone's talking about. In the meantime, you can double your money on a boring stock like Corsair. That was a great investment.

I thank you, dumb money community, for tipping us off to that trade that we ended up running with and studying. Hopefully a lot of the community members did their own homework and came to the same conclusion that we did.

Okay, guys. So next week, retail. I'm just finishing my research, and I think I got a couple big ones to discuss. We'll do a show early next week and maybe Tuesday, our normal date and time. So we'll see you there. And until then, we're done money. Have a good week.