I Know a Bull Market When I See One! + The Big Short 2025
54:43 Share

On the Tape.

iConnections is the world's largest capital introduction platform in the alternative investment industry. They bring the asset management community together through a membership platform that lets allocators and managers meet and connect both physically and virtually. Over 3,000 allocators and 600 managers are part of the iConnections community, overseeing nearly $48 trillion and $16 trillion in assets, respectively.

They are also the people behind the alternative investment industry's largest and most exciting in-person events. To find out more about iConnections events and members-only platform, visit iConnections.io. Welcome to the On The Tape podcast. Guy Adami, always joined.

by Dan Nathan and Danny Moses. This week, we're at the iConnections conference in Florida. And one of the highlights for the last couple of years has been the big short panel of Steve Eisman, Vinnie Daniel, Danny Moses, and Porter Collins, moderated by CNBC's Melissa Lee. You will be hearing that in its entirety today.

But first, a couple of things. We're going to talk about the big earnings this week. We're going to talk about the Fed. But Dan, we have a fun announcement to make as well. Yeah, really excited about this. After four years of the On The Tape podcast, we're going to be renaming that podcast. We're going to be renaming OK Computer our tech

podcast the risk reversal pod that is going to drop every monday through friday in the podcast store risk reversal pod you don't have to do anything you're already subscribed we're going to change over the description the artwork all that sort of stuff

And we're really excited to announce that Danny Moses is going to be keeping the On The Tape podcast name. We're going to have a new feed for that. We're going to keep you guys all updated when that's going to drop, how to subscribe to that feed. And Danny's going to be having conversations that we're really excited to hear with a whole cohort of speakers, of strategists that I think you've come to know pretty well. Danny, give us the 411 on the relaunch of the On The Tape podcast.

Yeah, guys, I couldn't be more excited. It's been an incredible four years building this with you guys, the knowledge that you've instilled upon me, the people that we brought on to the podcast together, getting an opportunity now to kind of draw it out in a little bit longer form while you guys do your five days a week and bring people market information like they need it. I'm obviously going to get a little bit wonky here and there, but not too much. I want to entertain. Porter and Vinny are going to be joining me a lot. We'll do the what are we doing segment that we love so much.

I'm gonna be doing stuff on policy stuff going on in DC, calling that from K Street to Wall Street, how it impacts you as an investor and as a consumer. Friday Night Dirties, I love those every once in a while. So stay tuned for some of those segments as they come along, but I couldn't be more excited. I hope you guys will come on as guests.

as I will sometimes to your podcast. And yes, we're still a team who's doing what we're doing, but I couldn't be more excited and excited to launch this in a few weeks. Yeah, we are excited as well. And I think this gives you a lot of oxygen. All the guests we've come to know and love without question. You mentioned Vinny and Porter. Steve might jump on, Meredith Whitney. They're just a host of people that you can drill down and talk about, you know, not necessarily the second to second market moving things, but things that people should really be thinking about over the course of weeks, if not months. So

We love that format, and we love the fact that you're still obviously a family member, so we're really excited about it. But let's talk about what we saw this week, Danny, because it was a great weekend. As I mentioned, your panel, that big short panel, is always a highlight of the conference. But what I found fascinating was, again, your concern about some of the things that we've been concerned about. Steve Eisman obviously not sharing the same concerns, but once again, the Federal Reserve seems to be front and center.

Yeah, we did that, obviously, right before the Fed was going to be meeting. And I think my one takeaway from Powell on the questions that he got about inflation was that it's one of those things we'll know when we see it, was his answer to his question. And so, listen, he's done a decent job. I would flip that on him that he will know when we see it that inflation wasn't transitory a few years ago. But that being said, after the press conference, obviously, we saw Fed Fund futures actually move out

to later in the year cuts and actually a higher chance of more cuts in the future. So the market is actually telling that he might be making a mistake by waiting too long and or people believe the economy might slow down more in the back half of the year foreseeing. So really kind of a nothing burger as far as as the meeting was concerned.

Obviously, Trump came out right after that and said, you know, he wants lower rates. He said it again. That's going to be an ongoing thing that we're going to see. So, you know, I feel for Powell that he has to deal with the fiscal stuff as much as the monetary stuff and also the noise out of Washington. I think he's done a very good job and I think the market took it in stride. Yeah, well, it's interesting. He's sort of the Potter Stewart moment. I don't know what.

pornography is, but I know it when I see it. A Supreme Court justice, Dan, from way back in the day. But, you know, I know when I see a bull market when I see it. And clearly that's what we've been in, despite the fact that I've tried to sort of rail against it for a while. As we're sitting here, the S&P 500 is effectively at all time highs.

Dow Jones back above sort of this 45,000-ish level, NASDAQ right around 20,000. We've heard from a bunch of really important companies this week, some good price action, some bad. Let's start with the good, and the good came in the form of Apple that we heard from on Thursday night. When I first saw the earnings release, Dan, I was not all that moved by it. You know, 4% or so EPS growth.

you know, single digit revenue growth margins that were improving slightly. But the market got excited when they gave guidance. And that's when the stock sort of took off. Yeah. You know, here we are. It's about an hour and a half after the open Friday morning. Like you said, Apple was after the close. I think at one point it was up 5% either in the aftermarket. It was probably up about 4%.

on the day at the opening here. And here we are, we're only up about one and a half percent. I think you and I both thought there's a really good chance based on the earnings and the guidance that they gave that the stock is going to be down in the day, especially after the big rally it had early in the week while much of the NASDAQ or at least the generative AI trade led by Nvidia took

a huge swoon lower on Monday. So when you think about how this week has been bookended, you wake up Monday morning, the futures are down a lot. I think the NASDAQ futures were down 2%. Chinese company called DeepSeek. The data was out a week ago, but the market really came around to it

Sunday night or so. And you had a situation where this large language model, supposedly by a company that was formed a year and a half ago in China, trained this model on a much less infrastructure spend than any of the ones that we have over here. Really shook

I think the fabric of this trade, NVIDIA closed down 17% on Monday. But here we are, the QQQ, the NASDAQ 100, as we are basically shutting the week out, is unchanged on the week from Friday's close. Now, NVIDIA really hasn't rallied much. Microsoft, I think, Guy, you will also agree, that had a really tough week. Again, this is one of the ones that if they are that closely tied to OpenAI and this DeepSeek R1 reasoning model is a direct

threat outside of the US to open AI, then it makes sense that investors are looking for an opportunity to kind of broaden this trade out away from a lot of the names that have accrued most of the value in the private and the public markets over the last two years. So again, I think you've been railing against this.

I've been railing against a little bit, not that we've been shorting it, but we've tried to identify the reasons why this emerging bubble over the last two years could burst. And I think this might be an inflection point. Yeah, I think so, too. I will. I believe we'll come back six months from now in the middle of summer and say, you know, remember when we heard from deep seek on that Monday in January and the market sort of

took a pause. My sense is that's just the first salvo of many. You know, Danny, something else this week, and, you know, it's funny, you sort of get labeled with a certain stock. It happens to me. It happens to all of us. You know, Tesla's sort of been, I don't know, your Waterloo if you want to go down that road, and you've done well with it. You've done poorly with it. I only mention that in the context

of what we heard this week. And again, I turned to Melissa Lee when earnings came out and said, if you had told me these numbers prior to earnings and asked me where the stock would be trading, I'd said it's at least $50 lower given the huge run it's had since the election.

Margins for the auto margins were the worst we've seen, I think, in seven years. A deceleration. They told us that we were going to see trough margins, I think, a year or so ago. That clearly wasn't the case. Free cash flow came in better, but it came in better because they basically took a gain vis-a-vis Bitcoin. EPS, I don't think, was all that inspiring.

I don't think revenue was all that inspiring. We know about deliveries, yet the stock rallied on the back of it on the hope and some of the promises that Elon Musk gave. And you say it all the time, Danny. It's not a fundamental story. Dan talks about it as well. So here we are with Tesla. But I just think that speaks to some of the excitement or some of the optimism that market participants clearly still have.

Yeah, I point out a few things. Again, I have not been involved. I had a small position going into the election, immediately covered on the Wednesday after the election, knowing that it's certainly not only is it not a fundamental story that all of the government regulatory stuff could go away instead of a headwind become a tailwind for the company. So I'm smart enough to do that. That being said, again, I actually listened to the conference call.

all in a much more relaxed state knowing that I wasn't involved. And let me just give you a couple takeaways. And you're right, it was a terrible quarter in terms of their core business guy and everything's still on the come and everything they talked about. I mean, for Musk to say on the call that he believes Tesla's worth more than the top five companies in the market put together, which by the way is over $15 trillion, to think that, here's my takeaway. It's a $1.3 trillion company.

Certainly it has a future in autonomy with robots and cars and all this stuff. But there's so many other ways to play that theme in some of these companies that you guys just talked about. Whether you think Microsoft's at the right valuation, whether you think Apple's at the right valuation, whether you can bottom tick NVIDIA to a certain degree if you want to look at it on earnings rather than

Revenues obviously from video to me, there's other ways to play this macro theme because it appears that auto is going to be a drag. Not only do they take a Bitcoin charge, the amount of money they still make from these zero emission credits and so forth and all these tax credits and stuff. This is just certainly really interesting. And the last thing I'll say on it is this. I think the underwriting factor is one of the things that's not talked about is the belief that he will now get away with outlandish statements, not be called to the mat on it, which is probably true. So I think people say to themselves, all right,

He's obviously overpromised and underdelivered over time with fear of the SEC. Now he can say whatever he wants and not worry that the DOJs could come after. So I think that's kind of the backdrop of all that. It is what it is. I'm not going to buy it. I'm not going to short it. But it is fascinating to watch. And I just hope people, and Porter and Vinny called it out on our panel, what you hear, they called it a cult stock. And I think to a degree, you've got to wake up and really take a step back and look at it from an opportunity cost perspective on other companies that are out there that might be a cheaper way to play the theme, Dan.

On the Tesla front, I mean, Guy, I can't reiterate more of what you just said. You know, we were sitting on the desk of Fast Money. We're looking at the key metrics and it just didn't matter. I mean, the stock went higher. You know, I listened to that conference call. I listened to, you know, Elon and what he had to say. They didn't really have much to say.

about the EV market, which is just fascinating because they were talking about optimist robots. They were talking about a robo taxi. He was giving some sort of deadlines in which they were gonna be making thousands of optimists and having robo taxi on the streets in Austin.

this year and that's i guess what investors want to hear they want to hear how he's going to drive value for this entity they talked a lot about ai they talked about his positioning how they're using cameras powered by ai versus their competitors using lidar i mean this is going to be you just used the term waterloo this is going to be his waterloo and how do you bet against at this point so we came into this year we said we're going to talk about uh tesla a whole heck of a lot less

I think that's going to be the case. I think when we have the opportunity to kind of point out some of the very good advancements that they're making in technology, if he is right about their self-driving and robo taxi capabilities versus the other, we're going to call it out and we're going to you know what I mean? We're going to say when they're doing the sort of things that he has promised

to set out to do, but the stock to me is uninvestable. It's not particularly a great trader anymore, but I listened to the call. He was really focused on a lot of those things that the stock has not

really been represented for in the last few years. It's been about EV delivery. It's been about a price war. It's been about those margins. It's been about EV tax credits. And now it's about his proximity to the president of the United States. And I don't know how you can bet against that. It's a fascinating story. And we obviously, it's a stock that a lot of people love to talk about. There's something else interesting today. I mean, in the energy patch, Chevron and

You know, this is a stock, and we talked about it at the time. I remember being on a set of Fast Money. I think it was January of 2023. They announced a $75 billion, with the B, stock buyback, which was an astronomical number given the market cap of the company. And I think it took a lot of people by surprise. It also coincided, Dan, with effectively the all-time high in the stock. And ever since then,

You've had a stock that's basically going sideways to slightly lower. Recently traded down to 140, traded up to 160 in a short period of time. Here we are at 150 on the back of earnings, which I didn't think were a disaster, to be honest with you. I thought they were sort of okay. Profit was up, or revenue was up, I think, 10% year over year, much better than the street was looking for. They recorded a record profit of $3.24 billion, or $1.84 share. But I think it was slightly below $1.

the street expectations. It's amazing to me still, and Danny can opine quickly on this, how just sort of poorly these big cap integrated names have been trading. Exxon, you can throw in the mix as well, despite valuations that are still pretty reasonable, Dimo.

Yeah, I think the tariffs are certainly a little bit of overhang what that's going to mean with Canada and Mexico, obviously. Again, they're not sexy, but I think they're stable cash flow companies. And the numbers were fine for both companies. I stay long in these things. You're going to get dividends. You're going to get buybacks. And again, you still get the realization of the M&A that has occurred. And oil is traded back down here a little bit as well. We've gone down, you know, four or five dollars on West Texas of last year.

a few weeks apart of it as well. It's just not sexy. It's also the last day of the month. I would just point out, sometimes you get some markups and marks downs that occur. So I'm staying long and strong in those names, Guy. Yeah, what's interesting to me about this, and I think both of you guys know, you guys have probably forgotten more about the oil trade than I will ever know. The volatility in this name around the election, the stock rallied 10% after the election. Then it gave not only all of that gap back,

but then continue to go lower, down 15% from the highs post-election, had a big rally as crude oil got back above 80. Now these results, it's refining margins, it's a whole host of other things. Obviously the uncertainty about policy is weighing on one of these huge American sectors, which I think is something that we better get used to over the next few months or so until a lot of this policy gets kind of better defined.

The last thing I'll say is that Chevron, which has, you tell me how many rigs in the Gulf of Mexico, they are starting to refer to the Gulf of Mexico as the Gulf of America. And it just shows you how the will of CEOs are being bent to this new administration as they look to kind of

create, I don't know, policy that works towards them. We will see. I just thought that was a really interesting tidbit. And for a company the size of Chevron to be down four and a quarter post results, I just think it's something you got to pay attention to. Yeah, absolutely agree. And again, I mean, just sort of stock that's been mired in no man's land for the last year and a half or two years. But, you know, I'll continue to watch big cap integrated. Other stocks that have not been mired at all, Danny, have been master-

card and Visa. And if you look at those stocks over the last decade or so, lower left upper right, meaning the stocks have done extraordinarily well, you know, valuation continues to always be a concern around the space, but you know, they process transactions, they take no credit risk. One of the things that I've been saying for a while is the US consumer specifically has been fighting inflation with credit vis-a-vis transactions, and it's manifesting itself in these earnings releases.

Yeah, listen, the kind of secular shift to using credit cards, obviously they're still benefiting from spending on travel and leisure still benefiting from. There's something I want to highlight just to make, these are tech companies, not financial companies. I think we know that. And we talk about the XLF all the time. I just want to point out that they're number three and four respectively in the XLF. So when you think about you're getting a pure play on banks, that's not your pure play on banks. I also want to point out one other thing that Berkshire Hathaway obviously is the number one investor

name in the XLF. And I don't, you know, obviously it doesn't look like a bank as well. It's an insurance company with a lot of cash and has some energy exposure. And I bring that up for a reason that I went back and look through kind of the top 10 names in the S&P by, you know, market weight and then the top 10 by earnings. It's interesting that Berkshire is the number one in terms of earnings, right? Obviously they're not number one, I think they're number eight in terms of rank.

and Tesla and Broadcom aren't even they're in the top 60 in terms of earnings but they're obviously you know in the in the top 10 in rank so it's something when you see the market shift and it becomes a little bit more defensive in nature just keep in mind that Apple and Microsoft and Nvidia are number two four and five in earnings and you got us put Berkshire and JP Morgan in there as well so something to think about just in the makeup overall when you think about the construct of ETFs and passive so again

Not going into all the earnings on all these companies per se, just understand the market dynamic there a little bit, Guy. One thing that also has been working and you've been understanding for a long time has been the gold market. And gold continues just to make all-time highs, despite the fact that until recently, yields have been going higher. The dollar's been strong. Both of those have abated. So that headwind has been somewhat become a tailwind. And here we are. More people are talking about it, but gold continues to do the thing.

Yeah, it had a little knee-jerk reaction up on the dollar move down. But the dollar really, if you look at over several, you know, a couple weeks or even a month, it really hasn't moved that much. So that wasn't the case. Then they said it went up because of the tariff announcement yesterday. Well, that's been on and off for a while. So to your point, I think gold is now looking for it to go higher rather than it used to go lower. And you're starting to hear a little bit more rumblings kind of in the investment world about it. So I think we're still in the early innings of people actually owning it. But it looks great on the chart, Guy. And I think...

our theme about geopolitical risk and hedging out policy mistakes will continue to be that way through 2025. So continue to buy the dip. I want to give Dan credit on this. You know, I said it several weeks ago. He pointed out towards the end of last year that if gold holds 2,600, he'd wait for 2,600. That was probably a re-entry point. It literally ticked.

at 2,600 and has not looked back since. And so Dan, you're a gold bug, you're in, you're part of this now. - By the way, I get to listen to you and Guy talk about it each day. So for me, I'm kicking up the levels. And the last thing I'll just say is that gold is one of those commodities that trades very technical. I get some of the things that makes it move, the dollar and some of the trade differentials and how folks are looking for inflation hedges and the like. But if you just played the technicals the way Guy

And you have for the last year and a half, you kind of got it right because it's been lower left, upper right. And some of those uptrends have just held like a boss. It's held certain moving averages and the like. So again, I've learned a lot from you guys about it, but the technicals also play an important part of it.

Well, a lot going on. We're excited about this new launch, Danny Moses, the On The Tape podcast with a lot of amazing guests. But when we come back, the entirety of the conversation Melissa Lee had with Vinny, Porter, Steve and Danny. So stick around.

Introducing Event Contracts from CME Group for individual investors who want a new, less complex way to trade some of the world's most recognized futures markets. They're smaller, lower cost, with predefined risk. Event Contracts let you trade your views on daily up or down price moves in equities, gold, oil, and more. The markets you know and use every day. Take a position by choosing a side with Event Contracts from CME Group.

Learn more at cmegroup.com slash eventcontracts. iConnections is the world's largest capital introduction platform in the alternative investment industry. They bring the asset management community together through a membership platform that lets allocators and managers meet and connect both physically and virtually. Over 3,000 allocators and 600 managers are part of the iConnections community, overseeing nearly $48 trillion and $16 trillion in assets, respectively.

They are also the people behind the alternative investment industry's largest and most exciting in-person events. To find out more about iConnections events and members-only platform, visit iConnections.io. With Robinhood Gold, you don't need a silver spoon to eat up the financial favors of the 1%. Robinhood Gold allows others to get the rates and perks usually reserved for the high society. Now the resourceful individual with Robinhood Gold

can earn the very liberal rate of 4% APY on uninvested cash and be rewarded with a handsome 3% retirement boost on qualifying IRA contributions. Robinhood Gold provides the privileges of a high net worth for

any net worth. These generous benefits are now available for only $5 per month. The new gold standard is here with Robinhood Gold. Sign up at Robinhood.com slash gold. Terms apply. For product-specific disclosures, visit Robinhood.com slash gold. Investing involves risk. Rate may change. Limitations apply to the retirement boost.

Hey Vinny, do we own the Mets?

When they were showing the Met thing, I was getting all excited. They're going to want to talk about analysis and what Steve Cohen's doing. It's better than the Big Short. If you're here for that, you're at the wrong panel. This is the Big Short panel. If you attended last year, this is one of the highlights of the conference. Because everybody else is so boring. Nobody is as honest as you guys. Let's start off with what happened in yesterday's market. For people who are worried about the valuation of the stock market, which I think

many of you here have been, was yesterday the reckoning with the AI trade sort of in question at that point? That's them. Yeah, that's them, not you. You're long. You're another story. We'll get to you in a minute. I mean, we worry about everything, usually. So, I mean, I think it probably changed in the fact that, you know, it broke conventional narrative that American exceptionalism, American AI stocks were the only place to invest, you know, the

top 10 stocks or 31% and everything's piled in and everyone's been pointing this out for a long time and the question is what breaks it how does it break and none of us know you know the question is what can go wrong from that you know the valuations didn't have a lot of support especially in Davidia what was it 52 times sales I mean these things historically traded but one-time sales

So, you know, I think what all of us have done during our career is try to be contrarians, look around the world, where are cheap assets, what can go right, and how do we make money off that? And obviously, conversely,

what's priced to perfection and what can go wrong. So that's how I think about the world. - Yeah, I think when you get days like that, you really have to re-underwrite your positions. You realize, hold on, let me take a deep breath. What do I own? Is it a buying opportunity? It appears now it might have been a buy the dip, but certainly a time to reallocate. - Like a two bullish. - It's really amazing to me that when stocks go up, you don't hear gain 200 billion market cap, gain 150, lose 600 was a big deal, don't get me wrong, on Nvidia. But it certainly is, I think,

you really got to start to look at what you own. And I think now, I would call it maybe like a flesh wound, that now it's going to be under a little more scrutiny in the longer term, what's going to happen with valuation. Probably out of my league speaking about deep seek and AI, but I did stay at a holiday inn, so I'm going to go and do it. The way I'm thinking about it is...

AI is not dead after yesterday. In fact, if anything, it'll probably be more ubiquitous and more open. And so I'm looking more at what are the 485 companies that are going to benefit from the fact that this cost is going to be significantly cheaper, theoretically, relative to what it would have been five days ago or what we thought it was going to be five days ago.

So that's where we're seeing the... Because to me, AI is all a function of, and it's sad, but a function of how many people can I lay off and what percentage of my cost in my workforce can I get rid of through productivity enhancements? And I don't see that changing. I just, if anything, it might have accelerated. Right. It's been pulled forward in terms of the efficiency expectations of it. Way to be bullish on you. That's kind of as bullish as I can get. It's pretty constructive.

For you, you've been long MAG7. It's funny because you were talking before about consensus and for your careers or how you became famous as the big short traders was going against consensus. And MAG7 is probably one of the greatest consensus trades we've seen. And you are in the consensus stage. Absolutely. I mean, I'll be the first to admit I was a little upset yesterday. Okay.

Yesterday, at the end of the day, I was watching your network and Tom Lee was on and he said he's still bullish and he thought that the correction yesterday was healthy for the market. And I thought to myself, I could use with less health, in all honesty. But so, look, I don't know what the ramifications of this is. I don't think anybody does.

But I do think the U.S. economy is in great shape. So, you know, does that mean eventually you have to reallocate some? Maybe, but I think it's a mistake to make a decision just because the market went down a lot in one day.

- Just to say, you just asked, there's really not a comparison, but when you think back in the mid 2000s, home prices never go down, right? They never go down. Everyone was buying homes as investment opportunities, right? That was the trade. They're buying the builders, they're buying, again, at some point there's a cycle. And this is still a secular trade, in my opinion. It's not something I would ever short, or these names necessarily, because there's no way to know where the long-term valuations are gonna be, at least I don't believe so, 'cause you're still in the secular growth story. So when a secular growth trend ends,

You're going to miss the first 30, 40% potentially on a stock trade, but that's probably you get to have another 40 to 50% chance on it. So how do you go against the consensus without shorting this trade? If you are by nature a contrarian investor, you don't necessarily want to go against the trade itself. You might get your head ripped off. So what do you do? So we were sort of year end, December end.

after the election, sitting around saying, okay, where's the opportunity? And we did a lot of screening and you do any sort of valuation screening and we're, we laugh, we're one of four people that still care about valuation. And when you do that, all these Asian stocks pop up and all these emerging market stocks pop up. And so the question is for us is like, okay, the conditions are there because these stocks are extremely cheap. You know, Baba trades at

you know, four or five times earnings, 40% of the market cap in cash, and everyone hates it, right? And the question there is, well, what can go right? What happens if Trump comes out and says, we have a trade deal with China, and everything is all set? What happens if it comes out that China's now the AI leader, right, which they might be? And so, you know, and the other place is, we talk about political change and post the election,

Trump was part of the moving right. Argentina moved right. I think that over the weekend, Colombia showed that's gonna move pretty hard right. Does Brazil move hard right? Obviously, Canada is gonna move pretty hard right. And that has a huge amount of implications. Vinny can go into the dollar and what it means and stuff like that. - So my thoughts on, as we were thinking about

What needs to happen in order for Trump to be successful, right? And we were kind of solving for what needs to happen Well, there's this thing called American exceptionalism, which most people think strong dollar But if the dollar stays strong or strengthens I could tell you there's a very likelihood that the markets are not going to work in fact If we're gonna onshore all these jobs and factories We're gonna need a weaker dollar to sell our goods overseas at a cheaper price so we have talked ourselves into and the fact that

Everyone and their mother is long the dollar we talked ourselves into well It's probably a decent or a higher probability than most people think for the dollar to weaken and if the dollar weakens What would you buy right and this in line with our screenings that we were doing in valuation just suggested to us strongly It's like, you know, maybe we start leaning in heavily Into emerging market stocks as the ones Porter mentioned. I

Danny, how about you in terms of your contrarian trades these days? Yes. So Vinny and Portia will tell you they're going to be modest, but they were up 67% last year, and that's with a contrarian mind. So the point is that you can find great ideas, a lot of them on the long side and the short side. So obviously what Vinny's talking about, for the market to work, you would need to debase the dollar over time.

As you know, I've been a gold bug for some time and it's not, you know, no, it's not digital gold and it's as sexy as crypto, but to me, it's basically effectively going short things that, you know, things that could go wrong. So obviously long gold, and I agree with them thinking outside the box, owning energy stocks when no one wants to own them, you're gonna get a rotation over time, but from a risk reward perspective, you know, thinking, you know, away from what everyone is doing,

You want to own, I believe, value names potentially that could give the benefit of a secular shift that might occur. And at some point, we have these mini rotations. I mean, the Russell was up for most of the day yesterday, right, while the S&P 500 was obviously down. So you see it happening. That was actually a healthy rotation.

sell-off to a degree. The money pretty much was staying in the market. So I'm looking at a wide variety of things opportunistically take shots when the market presents itself. Let's talk about the gold aspect and some of our other guys who were in the subprime mortgage trade, Chad Cascarillo, they're big Bitcoin people. I think that a lot of that resonates with us in terms of hard money. If you look at, everyone talks about the 60-40 portfolio and the stock aspect, but

If you just take a look at gold versus bonds, over any time period, gold's destroyed bonds. And I think that we look at the debasement, the inflation costs are much higher than what they're reporting. And so for us, gold really should be in everyone's portfolio. Or if you want to choose Bitcoin, too.

whatever, but I think gold over bonds is a much better choice. I have a new contrarian tray that I've sort of developed, which is... Like just now? Yes, right. About five seconds ago. I think the group that's actually very interesting and I find it interesting for the first time in a long time is homebuilders.

Unlike my friends here, I don't lose sleep about the deficit. I actually think that-- - We're gonna talk about that. - We can talk about that. But I think rates might actually go lower. And given what's happened in California, I think there's a growing recognition that we have a housing problem in this country.

This administration may do some stuff to make it easier to build homes. So building on federal land? Yes. And so home builders, which have had a tough time of late because of higher rates, I think have gotten interesting for the first time in a while.

Do you agree with that? I mean, he's just unveiling this trade right now because he came up with it in the past five minutes or so. So how do you digest that? Do you think rates are headed lower? We are in a week where there is a Fed meeting and there is pressure from the administration to bring rates down somehow. The one thing I feel very strongly about is that the straw that stirs the drink in markets right now is not the Fed, it's President Trump. And I feel extremely strongly about that, living through

First administration one you could wake up one day and your stocks could be up eight to ten percent happened today down temperate eight percent Just because he made a simple comment during the statement. So he's the straw that stirs the drink like his first Administration he wanted breaks down. I don't and he's been strongly hinting at it as well So by hook or crook, I think he's gonna try and get rates down. So in that regards the builders will work and

Hook or crook. I mean, what does that mean, though? It's going to happen. That's what it means. I mean, we are short housing structurally, right, in terms of short housing stock in this country. And, you know, when you look at California, it could have a massive stimulus between the insurance funds that come in and all the rebuilding funds that come in. You know, after any one of these calamities, after Katrina, after, you know, the KRW in 2004,

I think it was. There's huge stimulus that comes behind that. And so there's obviously going to be a lot of home building in California. Inflation is going to be a problem because they're all trying to build a house at the same time.

but we're structurally short housing stock in this country. And that's all sort of direct reflection of what happened at the GFC, right? Housing, you know, the housing standards or lending standards cut off very, very quickly. And so I want to go back to the rate question because I think that the long run of the yield curve is really the only kind of report card or self-check mechanism right now. I think everyone in this room agrees that when we see rates on the 10-year yield drift towards 5%,

We see equity sell off. It's a big number. And it's not just because it's symbolic or it's technical. Things do slow down at those levels. And so when you think about, you can control the short end of the curve. Obviously, the Fed can do that. And yes, they can control the long end of the curve with 50%,

15 years of QE1. We could have five, six, and seven by the time we're all done with this. But I do think that if you start to see a policy where the demand is short-term rates go lower, and we're going to get a glimpse of this tomorrow, I believe, and it just so happens that it's Tesla call. I don't want to talk about Tesla, but Elon Musk conference calls. He does want to talk about it. Elon Musk's call tomorrow is at 5.30. The Fed's at 2.30.

conference call or press conference so that's going to end i would expect that musk like he did two years ago went against the fed for higher rates because it was hurting his car sales if it just mentions it on the call tomorrow the federal private neutral tomorrow it could these are the type of things where to vinnie's point you have to deal in the news cycle with these type things so i believe the the effect of that could be if it were to happen or even if there's any rhetoric

short-term rates go lower i think the exact the exact effect will be long-term rates move higher because the thought would be if you artificially suppress short-term rates it will potentially bring back inflation so those are the things that you know steve loves that keeps me up at night but look no yeah i sleep well yeah i just want you to know i mean that's an extraordinary prediction though to say that elon musk

by talking on a conference call is going to impact yields. I don't agree with that. What do you mean? I think he's living in lullabies. No, but it's not just Musk. I'm not just saying that. He's one of the most powerful guys. Trump has said it. He's listening to everything he has to say. You think that app was shut down yesterday? Who shut the app down yesterday? I'm just saying. So I'm not trying to make a bold prediction. I don't think it's a bold prediction. What I'm saying is if you start to hear rhetoric, no matter who says it,

that you want to control short-term rates, I think the impact will be long-term rates moving higher. That thing will have the opposite impact of what you think it would. I mean, I think at the crux of all of this is the notion that we live in a world, an investing world, that will be dominated by Donald J. Trump for the foreseeable future. For you guys, and Danny had mentioned this in passing, but in case you missed it, Seawolf had a 67% return last year on the Trump trade. So how much of that trade is still on?

What do we do now that he's in office? How has it changed? The anticipation of Trump, the election of Donald Trump, and the hopefulness between the election and the inauguration and now? First of all, we're not MAGA people. I have no political opinion whatsoever. That's a lie. No, it's true. It's true. I think it was pretty self-evident that, to me at least, it was that he was going to win the election. And there's

there were a lot of asymmetric trades setting up, whether we went on CNBC, talked about Fannie and Freddie preferreds. Obviously, immigration's a big issue, so a lot of the prison stocks were a big winner for us. And a lot of that's still out there. But I think that we try to think a little bit differently about the next phase, right? Try to think about, okay, everyone's looking at NVIDIA and trying to figure out DeepSeek.

I don't want any part of that, honestly. I want to try to figure out where are really cheap assets that can double and triple. And going to that, I go back to China, and everyone's talking about higher yields, but the best performing bond market in the world last year was China. And rates are lower there. Imagine in this country, if rates overnight go to 2%, everyone in this room would be massively bullish.

And in China, they're directing their state pension funds to buy stocks. So you have this totally reverse condition where everyone hates it, and they have all these conditions to possibly be pretty bullish. And so that's the kind of, you know, I'm not betting my entire portfolio that way, but I mean, those are the type of things, if I'm wrong, I'm not going to lose a lot of money. If I'm right, BABA can trade at 15 times earnings. It's a triple from here.

Right? And we still have some of the Trump traits on. We sold the Fannie Common because I don't necessarily believe in it, but we still own the preferreds. We still own... That's going to be still... That's a tougher trait. It's a tougher trait, but a lot of these are tougher traits. Probably the easiest one right now, the one I feel most strongly about, what Trump feels most strongly about, is immigration. I feel like that was his...

he's going to do something. So my belief is through executive orders and appropriations, we are going to see a change in our immigration policies.

Sadly or not sadly, the prison marines will benefit from that because you need to detain and put monitoring services while they... The bigger thing is monitoring. They only monitor 175,000 people and Trump's talking about monitoring a couple million. And the other thing, not to be controversial, but we've adopted grift as a service politically. It's bipartisan. The Dems...

Employee grift the Republicans employee grift, but we feel like there's a certain special thing associated with Trump administration and grift right like and if it can Trump coin I mean, I have three days before he gets inaugurated I mean he endorsed a Ponzi scheme right like for lack of a better term So that's right. If that's gonna happen you have to open your mind and say what other things of grift? So we are just kind of following

the money where, who got him into his administration and acting accordingly. So not to bring back Tesla, but that seems to be where we go anyway. You would not short, I mean you wouldn't short, and this may have existed before the grift trade was in place, but you wouldn't short Tesla or go against Elon Musk. You would see that BGC, for instance, could be some sort of a beneficiary. That's sort of like...

the tenets of the grift trade. - An interesting trade on the short side is to be short, and I'm not gonna mention it, short anything that Musk is against.

Right? Because you actually lose a big... That would be England. What? These days, that would be England. But you lose a big investor audience. You lose the cult that would invest. I mean, for example, we've been short lucid, right, for a long time. And the beauty about being short lucid is a function of the fact that nobody who invests in Tesla is going to be long lucid. So you've lost an entire audience of people. You don't question him when he says Musk has power over the markets? No.

I just want to be clear. It sounds better coming from-- - You're talking about one of the biggest, deepest markets in the world. - I mean, Tesla's the biggest cold stock the world's ever seen, right? So trying to short the biggest cold stock the world's ever seen is not healthy for anybody, right? - Hasn't been healthy for us from time to time. - No. - So that's interesting, just sort of the,

There's got to be an ATM. I mean, there's a finite pool invested in the EV trade. Correct. And it's all going to Tesla, and it's going to go away from a Lucid or whatnot. How do you interpret the land of Trump and the investing world that we live in now? What's changed? I mean, the thing that I think about in terms of... They talked about some of the regulations that might happen. I think the interesting thing that may happen is...

and the whole regulatory banking apparatus has to flip, so we're at least a year away. But I think it's possible we're on the cusp of M&A amongst banks for the first time in a long time, and it's actually something, I've actually changed my mind about this. I think it's actually something that we need in this country for the banking system to maintain its health. And the reason is that

the cost of playing in banks is just so much higher than it used to be because of the cost of technology. So I think JP Morgan spends something like $10 billion to $15 billion a year on tech.

the mid cap banks can't compete with that. So I think we need a massive merger wave amongst mid cap banks. - Still 5,000 banks in this country. - Right. So now some of these banks are not exactly the best well run banks in the world. So that's a problem trying to pick which ones you want to own.

that there's a potential. We haven't had a merger wave in banks in this country since the 90s. So I think it's possible we're going to get one. Is that something you're investing in? Not yet. Not yet. And also to that, I think that there's a lot of bank CEOs out there that look and say, well, look back at 2016. I missed my window. I should have sold then. Right. And then the Dems come in and they pile in all these regulations. If

you miss this window i mean a lot of very very old bank ceos that they're not they're going to miss that window right and they're going to retire and not sell out for a huge amount of money so i want to go back to the regulation you mentioned certainly there was things that were over regulated and yay you know we'll

pull some of that stuff out in the banks and so forth. But everyone in this room has to sign documents, abide by the law, you put your money where you say you're going to put it, all those things. I think one of the problems we have, what's going to happen right now is the interpretation of the SEC and all the other regulatory stuff that's in our world. And I think it's up to us to monitor these companies, publicly traded companies, I'm saying, but you have to start to think

if you're especially if you're a short seller that are you going to be able to is the sec or the doj going to care or do anything to enforce when you you know it's one thing to have these meme coins and coins everywhere that are just kind of just people just letting those things go and not saying anything about them but you have to start to think about that when you're analyzing a company even me even from the long side but i'm saying all right

you know, the counting and everything like that. So if that's your thesis on an accounting irregularity, you have to start thinking that it may not be identified or flagged. I mean, they haven't looked at this stuff in years. No, I know, but now even more so. I'm just saying it's something you have to start to think about. So basically you think that the regulatory pendulum had been so far to one side, over-regulation, very tight, and now it's swung all the way back to the point where...

malfeasance can happen. I just think you need to be aware of it. It'll be a richer field for folks like you, in theory. In theory. It's early. It's early, yeah. But it feels highly probable. I mean, I agree with what Steve was saying. I'd be shocked if M&A didn't pick up in a pretty sizable way in the regional bank plan. The larger banks, I doubt it. They're just too big. And I do think we need some healthy consolidation in regional banks because they're...

They need to be more effectively compete, not just with the big banks, but also with private equity as well. - But we're only seven days into this Trump administration and I think one,

Interesting example was what happened with California and Newsom and the environmental agencies. Newsom flip-flopped 180 degrees and wants to take down the Coastal Commission. All those big homes in Malibu, you couldn't have rebuilt any of these things if the Coastal Commission was in there. He's sitting there and said, okay, tear it down. Get these houses rebuilt. That's a big change in seven days.

Let's talk about bubbles because you guys made your name in one of the biggest bubbles in our history. Are there any out there? Do you see bubbles in the market? Yes. The biggest bubble of them all is the fiat debt bubble. Is the what? The fiat debt bubble. Oh, there he goes. We were waiting for it. It only took 25 minutes. No, I mean, look.

The reality is the math is horrible. You can't keep spending trillions upon trillions of dollars. It doesn't work. But it does work in the market. Can I respond to that? But that's the Bitcoin thesis. That's the Bitcoin and gold thesis. And they have been right. First of all, I just want to say that...

the statement that there's too much debt and stuff is to me like the great unifier of Wall Street. Everybody ever goes on TV, I mean you got Vincent Daniel, Porter Collins, Danny Moses, as different ethnic backgrounds as possible, and you say, "Danny, what do you think about the deficit?" And Danny would say, "Oy, the deficit." And, "Porter, what do you think about the deficit?" "Oy, the deficit." And, "Vincent, what do you think about the deficit?"

Oh, yeah, the deficit. Like, everybody is just always upset about the deficit, and they're upset about it for 40 years. I would say, "Bafangul," the deficit, but that's very different. And my only point is, I actually find it a more interesting question to ask is, we've been talking about it for 40 years, but why hasn't it mattered? Now, maybe they're right and it'll finally matter, but I think the reason why it hasn't mattered is a more interesting question to think about. And I think the reason for that is,

A, we're the reserve currency of the world. But even more importantly, our treasuries are the lifeblood of the entire global financial system. Repos, etc. That's all done with treasuries.

For the deficit to matter, you have to break that system. And to break the system, you need an alternative. And at this point, there is no alternative. China bonds are not an alternative. We will get no argument. You'll get no argument from us on that, Steve. The way we play it...

I agree with you. I think the great question is why has it not mattered? What are they doing behind the scenes to make you feel comfortable every day despite the math being bad? And they're doing a lot. It's not that shit works. Shit doesn't work and they stuff QE, YCC, all that other stuff. And that's the reason why we buy gold. Well, you know, rates have moved up on the 10-year yield, the longer end. People say, oh, is it

is a risk coming in that the government won't be able to pay its bills or finance itself. And just like you had the deep seek moment yesterday where you kind of a wake up call, you have a 20, 30 basis point move on a failed auction on the 10 year. Then people will start to examine what's happening here. I'm not saying, but it will happen. It has to, it's math. It has to happen. You're not outgrowing this. It doesn't have to happen. It's going to happen. I don't know when it's going to happen. It's

It's going to happen. It's going to happen. It's been for a long time. It's of national security importance, like the big highest importance that we don't have a debt problem, right? Because then we can't fund the military. Then we can't fund any of this stuff. And so they manage it. They switch from coupons to bills. They do the yield curve control. You know, the bailouts have been quicker and quicker and quicker.

And so that's debasement, right? There was a problem with it. - But the difference is that we act, because we are the financial system of the world, we actually still have the luxury of time to fix this. - Agreed. - Whether we fix it or not is another story. - But let's never go on. - This is great, let's do a show of hands. Other than OPM, right? We could do it in the audience as well. Who is buying unlevered long duration 10 year debt right now? Have you bought it? - Me? - Yeah. - I'm a stock jock, I just do stocks. - My point is, whenever I ask that question,

No hands go up. Yet it's the most important asset in the world that everybody has to buy. No one's buying the 10-year here. Nobody. Nobody. Yet we just naturally assume someone's going to buy it. I think they will buy it because they're buying on an 11 basis, 50 to 1, and it's OPM and the like, and we're going to try and get sovereigns to buy them again. And that makes me even more comfortable with our gold trade. By the way, zero hands went up. Zero hands. Zero hands.

Private credit is obviously a huge sector. It's growing and I wouldn't call it bubble per se, but right, it just,

People are just closing their eyes and putting that money to work and they're gathering assets. At some point, you underwrite. At some point, these modifications. There's something to keep an eye on. Nothing that's going to, I think, roll the markets right now. But as rates move higher, that has an impact on everybody that's borrowing. That's why they need rates to go lower, Dan. Well, Vinny made a comment to me, and he's right. And I said to Vinny, I go, do we care about the multi-trillion dollar? He goes, why? I go, well, what if it goes bad? He goes, they'll bail them out.

The government will bail it out. Of course they will. And he's right. They'll bail it out. So if that's the mentality and that's the moral hazard that we've created, you've got to navigate through that. It's going to get a lot harder.

We are just about out of time, but I do want to get a prediction or two from you guys. In June, you guys were on Fast Money, and Porter and Vinny were saying make volatility great again was going to be the trade, and that really was the theme. So what's your anticipation for the next six months to a year? We're back on the stage in a year. Mr. T, you're going to get a Mr. T prediction. Pain? Pain. Pain. You want to go first? Go for it.

I always felt like the first hundred days were going to be low-hanging fruit for him. There was a variety of great things that he can do that were just easy to do. I think after that, if the economy starts to percolate and grow again, we'll see. We'll probably start talking about the Fed again in six months and what they should do. Like possibly raise? Possibly. Possible raise. Right. If things go right. Mm-hmm.

I think Trump wants to win the Nobel Peace Prize. I think he's going to do everything he can to say, "Hey, I fixed everything. Why did Obama win it? I should have won it." I think he's going to try to usher in a real strong foreign policy and at least a period of peace.

I think we're in a stock market that's dominated by a handful of names, and I think we're in an economy that's dominated by a handful of people. And I think that the wealth effect, which I'll always underestimate on the markets, certainly can be positive. And if you unwind the market at all, it actually could be the thing that slows the economy down. So everyone's looking for recession indicators, this, that, and the other. It actually could be the stock market that actually causes spending to slow that has an impact. Steve?

I think the economy is fine. I think the market goes higher. Until I see signs of recession, I'm not deviating from that position. On that happy note, thank you. It's always a great conversation. Thank you.