Willow: End of Bitcoin? Generational investment?
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This week, Google announced Willow, a new chip that in five minutes was able to compute something that our current fastest supercomputer would have taken more time to do than the universe has existed. So immediately, of course, everyone thought, oh no, my Bitcoin. Fortunately, though, this new quantum chip is not any good at guessing your wallet seed phrase, and it would apparently take a whole bunch of them specifically programmed to mine Bitcoin or really to do anything practical. And so,

So far, anyway. But at some point, theoretically...

they're going to be able to steal your Bitcoin, right? Or probably before that happens, quantum hackers are going to crack the legacy banking system. But not to alarm you, China has already created a computer with five times as many qubits as this new one announced by Google. But there's something bigger here. The future practical application really could be anything. It could be everything. Just think what the entire universe of time worth of quantum computer power could do to speed up development of medicine or AI or robotics, right?

And we're at the very beginning. Right now, the market cap for the entire quantum sector in the U.S. is less than that of Dogecoin. Today on Dumb Money, how breakthroughs in quantum computing could be a generational investment opportunity.

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this is dumb money live hey there dave here along with chris and jordan we are dumb money welcome to dumb money live quick reminder to smash the like button it is the absolute best way to make markets green again keep the markets green chris jordan before we get into quantum computing as an investment and that what if scenario if quantum is trained to mine bitcoin or whatever first

Did you see in the Google announcement where they casually mentioned that the test of Willow shows that, and I quote, quantum computation occurs in many parallel universes and that we're probably living in a multiverse. That, by the way, headline news for my time travel research institute, probably have a breakthrough coming sooner than expected there. But.

what like what is how does that even exist what the uh multiple universes universes and we figured out how to do math in some other dimension so what's interesting about quantum computers is that we don't we can't actually watch them work right because any time this is like this is just basic physics but every time you look at like a you know quantum bit or something like that it

it collapses into one value, right? And so what it's actually doing underneath the hood is a bunch of really complex linear algebra, but you don't, you just get the output of the results. So you can't really see how it works. And that's where, you know, some of these thoughts about that it's happening in other universes come from. I think there's a small amount of physicists that think that. I think that that's an overstatement to make that claim.

I just ignore every news story that talks about parallel universes. I just love the headlines and I just scanned right over it and didn't read it. I just, I don't, I can't, I can't not to say that it's not possible. That seemed like a regular exercise in technological marketing, right? Something seemingly powerful tech that creates fear, AI, quantum, uh,

Fear creates engagement, do a PR campaign, then try to enhance your brand by showing that you are achieving something that nobody else has. - Yeah. Well, I also think that's where, you know, this what 25 trillion or quadrillion or it doesn't even really matter how many years that they say that this quantum computer can do in five minutes what it takes a traditional computer to do in so many years. These are very arbitrary,

kind of esoteric problems that they're solving that don't really have any practical application. And they're really designed to showcase what a quantum computer can do, but nobody's actually trying to perform these calculations in real life. So, you know, there's not really any practical application for that algorithm. - For random circuit sampling. - Correct. - From what I understand.

I researched quantum computing this week, so I really tried. I had to figure it out. Like, I can't. I have to understand. I had to understand it. And I will say that I understand it now, I think, really well, but not well enough to talk about it. So in my head, I know exactly what's going on when someone says quantum computing. That's how I feel about every topic. I understand it perfectly. I'm just not going to tell you what I think.

Well, let's just break it down. None of us are PhDs in quantum physics. So if you're coming here to learn how...

one of these computers works, you're in the wrong place. No, I don't know about that because I think if you want to listen to someone who actually, like a quantum physicist trying to explain it just sounds ridiculous and makes no sense, but listening to an idiot try to explain it that's spent a lot of time listening to quantum theorists, I think is probably a better way

to learn about it because we can like convert the language into something that makes more sense for people. So basically, I mean, the whole- Is this going to be, when do we see the chat GPT moment where everyone, normal people like us catch on to how this could change all sorts of industries? Yeah, if I were to like- Can we just try, Jordan, can we try-

Can we try to explain it for people? Hold on. Before we talk about the implications on investments and Bitcoin and all the other stuff, which is what we want to do today, because the whole point of this show is we take things that are happening in real life and we connect the dots to investable opportunities because that's literally everything that we do. The entire purpose of Dumb Money and our social art methodology is to focus on real life

identify change quicker than others and connect the dots to investable opportunities. That's literally if you're, that's why you're here today. Right guys. But, but can we, we know that this change, we don't know how long it's going to take, but we know that this is a change and we, we see that this could affect numerous industries. So how is the best way to position ourselves? Is it just by Google or is it to buy some of these quantum startups? That's what we need to figure out.

Yeah, but before we do that, we have to try to explain quantum computing in the simplest way. Okay, so you have zeros and ones for all of our history. Math and computing is all, and coding is all zeros and ones. Quantum computing basically takes the zero and ones

and like spins them and to where you don't actually, instead of doing zero or one, it can do an infinite number of combinations of zeros and ones in a spinning, like multi-dimensional way to where you could do an infinite number of combinations of that. I told you I can't explain it. Yeah, so quantum computers don't work on binary functions.

on the binary system, right? So they have qubits which have both zero and one properties each and they have some vector of zero and some vector of one all at the same time until they're observed, in which case that state collapses. And so that's kind of the underpinning to where instead of

operating these things with binary algebra, you're running linear algebra across the system. So it's just a different system. So they don't have comparable algorithms. They don't have comparable results sets. It's just a totally different way of thinking about computing. - So did I do a better job than Jordan or did Jordan do a better job than me explaining quantum computing? - Let us know in the comments. - Pretty sure Jordan won.

Oh my God. So let's talk about what this means. So McKinsey, that, that global firm that, uh, predicted 30% of all work is going to be done by AI by 2030. They're now saying that quantum computing is going to add trillions of dollars to the economy within the next decade, that entire industries are going to be rewritten, that it's already solving problems in medicine and defense and finance and, uh,

Platforms like AWS and Google are letting you rent out quantum power right now. We have a hundred qubits, 500 in China. These startups are saying they're going to have thousands of qubits within five years. Like,

I just want, I'm more curious about the investment opportunity than how it works. I know that I'm never going to understand how it works. And even if I did, by the time my brain figured it out, it would collapse just like a qubit. I'll tell you what, I took linear algebra in college and it sounds like, you know, linear algebra, that sounds easy.

No, no, it's not easy. It's hard to, it's just really hard to wrap your, it's things that you're not really, they're not intuitive results that you get from linear. So can we just say it's going to be infinitely faster than what our slow ass computers know how to do today? That's, I don't think that that's the right way of looking at it. I think that there, I mean, maybe, right. And maybe for certain problems,

but here's kind of what I've been learning and really trying to learn over the last few days. And so I'm not an expert in this at all, but what I've learned is that the one advantage that we have with digital computers, with traditional computers, is that we've got about 80 to 100 years of algorithm development under our belts that operate on top of the binary system and on top of

the binary logic gates that we've developed. And so we really understand what we're doing and we're kind of sitting on all of this research that's been done over the past 80 to 100 years. In the quantum computer space, the algorithms aren't quite as developed and the chips aren't nearly as reliable.

And so with those two things, it makes it really tough today to actually perform real work on a quantum computer.

now couldn't you explain well could you explain the part that we talked about the other day where it's all about the identification of mistakes or errors i guess or that is the big part of what google has been working on and that that one feature really everybody's working on this and the problem with and there's a ton of different ways people are trying to solve this um but basically you've got a qubit which is

who knows depending on who the architecture or what what the architecture is it could be an atom it could be a photon it could be an ion we just by saying quantum computer you don't really know but um the ways that people try to correct for errors in these things well so the problem is that you've got these like atomic particles and they can just

basically stop representing what you think they're representing at any given point in time. So they might only be useful for like,

milliseconds or microseconds. And so you don't really know when they go in or out of their productive state. And so that's what these errors, that's, that's the problem is that you get errors that build up in these chips. And as you're running some set of algorithm across some data, you could have errors build up that invalidate the results. And

What Google's doing, what everybody's trying to do, either through the hardware or through algorithms that sit on top of the hardware, is correct for some of these errors and try to get that error rate down within the chip. On that note, Jordan, we also discussed commercialization of this new technology.

Is the consensus right now that commercialization is still high single digit years away, double digit years away in terms of- Well, I mean, it's already commercialized, right? So there are companies that have commercial systems available. I've never done this, but apparently some of these companies offer their computing systems on AWS, as I'm reading.

I haven't independently verified this, but you could actually run your code on a... But are they solving academic problems or commercial problems? Because there's a big difference. Yeah, yeah. So what I mean by commercially available is that commercially you can spend money and

figure out how to run your problem on a quantum computer. But in terms of how it actually impacts our economy and our world in terms of solving commercial problems, do we think that's 5, 10, 15 years away before we can take it? Yeah, I think that's as good of a guess as anybody could make is 5, 10, 15 years.

oh okay so you know with so two things one the the you know just the size of these things they're really small you know uh google's 105 cubits um you know when you're talking about what's useful well one of the things that's useful is prime factorization in which case you could potentially break encryption maybe that's destructive but it's useful but they the estimates are that you need like a million qubits um to

to be able to break prime factorization or to do these prime factorizations. And that's four orders of magnitude away from where we currently sit with any known quantum computer. So that's years and years away. Now, what could be useful is that people are using these things to develop algorithms and to figure out how to use them.

And so it's not like there's no progress being made just because the actual use case is five to 10 to 15 years away. My, my, let's talk about Bitcoin and because this is important, the knee jerk reaction on this news, the knee jerk reaction was this could potentially compromise Bitcoin, but that was only the knee jerk reaction. Once people actually started assessing the reality of the risk, it,

It feels like we are meaningfully far away from this having any type of real risk to crypto and Bitcoin. We're talking not single digits, we're talking double digits. Yeah, and I've heard the people talk about this. And yes, so we know what's coming, right? So we know that these things could potentially break encryption.

and so what you need to do is come up with new encryption methods that are quantum proof and that's known like people actually know how to do that already i've heard and so um you know over the next 5 10 15 years encryption standards might need to change in the in the event that you do have these quantum computers come online that can perform these prime factorizations

I actually think, you know, we talked about this, the two largest risks to crypto and Bitcoin specifically are one regulatory, which seems to be a non-issue for at least the next few years now. And that was a really big deal. And I think a big part of the reason why Bitcoin has gone on the run that it's gone on over the past month or so. The second risk that we've been talking about for years is the...

safety of Bitcoin, you know, the security of Bitcoin, right? And again, I feel like this conversation we've been having over the past week has ironically played in Bitcoin's favor because it seems like we're collectively learning now that one, the risk is not coming anytime soon. And two, we are very likely to pass a solution. Well, I mean, soon is relative, right?

Yeah, but more importantly, what you just said, I think, is part of the conversation this week, which is we are very likely to have better encryption methods before the safety gets compromised.

So I think it's actually oddly worked in Bitcoin's favor this week as people have kind of flushed out the different scenarios. And there seems to be, listen, this is a big risk factor. And having something like this happen, a shock to the system and seeing the Bitcoin community and the and kind of the institutional community shake it off once they learn the facts of

I think we're going to be fine. Encryption should be able to handle this over time. That's a positive thing because the unknown...

was scary now that it becomes more known and we're addressing the problem and people don't seem to be overly concerned that this sure i think as long as you know people see that this is like a freight train coming and it's you know we've got some problems that are avoidable and as long as people work to you know upgrade systems that you know potentially this could be a non-issue for

technologies like crypto. - Yeah. - Yeah. - And, you know, Bitcoin can be upgraded, it can be forked. And we also know that if someone were to put all of their qubits to work and try to figure out mining Bitcoin, Bitcoin just gets harder to mine as time goes on. So it's almost like built into Bitcoin is the challenge of it becomes, you know, less valuable to mine as it gets harder.

Clip by Cran says, Wales will start offloading far before you can hack BTC. I do agree with that, but the moment that it becomes even remotely clear that that's a very real near-term possibility or even mid-term possibility, I think this is a big enough topic

uh that it's not going to be alpha that only some you know cryptologists have access to there are enough data scientists in the world and cryptologists that are openly sharing their thoughts and this is such a meaningful topic for the investment community that i don't i think we will all have access to that information kind of as it's revealed and i would imagine that

Everyone will have the opportunity to assess that situation and determine whether or not they want to be, you know, continue to have a large part of their wealth in crypto or Bitcoin specifically. So I'm not going to personally me. We're not investment advisors, guys. Remember that.

But personally, me, I am not concerned at this moment in time and do not foresee anything that's going to happen in the very near term future that will create a shock and concern to the crypto or Bitcoin community. And I think this is a good little test this week. I actually think this is a net.

positive, not a net negative for Bitcoin in the short term, at least as it relates to the safety of the asset class. Yeah, I don't think that the hardware algorithms are to the point where we have concern yet. Yeah, agreed. So now that we've gotten the negative, the potential negative out of the way, let's talk about the positive, guys. I mean, this is really big. And I think it's big not because of...

not just because of willow or or google or this type of new computing and what it will do to the world anytime soon but i think it's like don't you feel that it's every few days to every week or two that we're getting some unreal piece of technology news

that reminds us that we are in the middle of a really special moment in history right now that we're all living through. And as investors, we've always said the same thing here on Dumb Money.

The biggest opportunities come when we're experiencing the biggest changes in the world. And the faster those changes, the bigger those changes, the bigger the opportunity we have as investors to connect the dots to investable opportunities, right? Again, I have in my lifetime, I've never experienced a moment in time where we've experienced this type of monumental general change.

change happening this big and this quickly the Willow news this week just the newest piece of news that is going to surface in the next few weeks I don't know what it is but it's going to be something right like this is wild this is a wild time to be living through as investors like I'm holy crap

and I'm not going to get on my whole robot tangent again, or I'll try not to in this episode, but the amount of robot news we're seeing every four to five days that that's popping up, whether it's Elon now, or, you know, bread at figure or what, you know, what I believe will be coming in the next year from that chronic as well. It's, it's,

Dude, this is crazy, guys. Like the Willow News, isn't this just one more thing to realize that, holy crap, the world is about to just get turned upside down, completely turned upside down? Yeah. Yeah. So Google is unchanged slightly down today.

but have you seen some of these pure play quantum companies yeah i was these are companies i don't even know but ion q is up 11 today yep rgti is up 17 and a half percent uh cubits is up 16. yeah i mean

I rode the wave on a couple of these things. Did you buy some of these? I had no idea how to... I don't even know anymore. I mean, it was just purely momentum. My opinion is about the same in that I think they've all had PhDs run through these companies. They're developing real technology. It seems like they're legitimate.

they're not profitable, like, or anywhere close to profitable. Like they, they, from what I've seen most of them, you know, no, they're like, negative, negative 36 p ratio, like ion, like ion q. I think made, I listened to their last earnings call, they had like $12 million in revenue for the quarter. And I think they spent

like $52 million. And so it's an expensive ordeal. They're looking to try to, obviously, I mean, they're trying to increase their revenue by,

working with governments and working with private companies that, you know, want to start exploring use of quantum computers. But I mean, these things don't make money yet. And that's one of the bigger ones. And it is only a $1.3 billion market cap. IonQ. The other ones are IonQ. Am I right? Yes. So with companies like IonQ. That one's $7.2 billion market cap. That's one of the bigger ones.

Some of these others are $800 million. They and RGTI are probably the two most legitimate ones that I've seen, but I'm not exhaustive on this at all. When I look at these investments, obviously, we always kind of look at asymmetric risk. We love asymmetric risk reward as investors. Where the...

the reward appears to be meaningfully better than the risk that we're taking on. I see huge potential reward with some of these companies, but also an equal amount of risk, which... Well, I think you've got time risk on these. And I think that's the biggest issue is that time is not their friend. When you look at, you know,

spending a burn of $40 million a quarter with somewhere around 350 to $400 million of cash on their balance sheet means they can last about a couple of years unless they start pumping up the revenue number or unless they do a raise. And so if you think it's five to 10 years before these things are commercially viable,

They're going to have to do a raise. And you really, you know, time is not your friend on this stuff. What was most interesting to me this last week as a social arb investor, we always discussed the information dissemination window, which is,

the strategy of initiating an investment at the point of information imbalance, meaning you come across some meaningful piece of information that for any number of reasons, the rest of the investment world hasn't fully

fully heard yet or seen yet or appreciated. And you exit that investment at the point of information parity when the rest of the investment world has now seen or heard that information, has had ample time to react to it. So when that Google news came out on Willow, it was a pretty big news event. And I was a bit stunned that Google stopped.

didn't move at all. I think it was like the after hours that day when the information came out. I was like, why? Why is Google? I would have thought that Google would not move. And I was trying to I was really distracted this week, as you guys as you guys know, working on robot stuff. And I didn't really understand why Google wasn't moving at all. And I was like, but then the news started to

to populate social media and go viral and content creators everywhere were doing clips and takes. And then the news media started coming out with articles about the Willow chip. And before you knew it, it was like a 24 hour

to 48 hour period of time when this news just went hyper viral and then Google stock started to move. I think as investors, this is a really important observation. I talk about this all the time. A lot of times it's like your gut instinct of understanding how other investors will react to certain types of news. So let's learn from this.

Let's learn that when this type of news comes out, one might think, oh, it's an efficient market. The news was released 15 minutes ago. So if Google was going to move, it would have moved because everyone had the news release. Everyone can read it. There's already been some articles. So Google's not moving. So obviously the market doesn't care. But that's not the case. In this case, maybe because the concept of this type –

of technology is so advanced and so difficult for your conventional investor to understand that it took 24, 48, 72 hours for all the different

media sources and YouTubers and TikTokers and technologists who are writers to basically write about the implications for people to absorb it and then say, you know what? This is really impressive for Google. Whether or not this technology is commercialized anytime soon, the fact that Google was able to achieve this, maybe we should start

appreciating what Google's capable of. You know, like maybe they're not, maybe they are actually cooking up some interesting stuff at Google. Maybe that was a thought process. But I found it amazing, guys. In the future, when this news comes out, I will not be hesitant if the stock, the obvious stock doesn't move right away to go ahead and place a trade, even if I'm a little bit late because it seems to take some time, right? Yeah. For the market to absorb this.

It's hard to really understand what it means. The initial headlines were all fear. It was all like, is your wallet going to be hacked? That was exactly what everyone was worried about on day one. And then within 24 hours, less than 24 hours, within 12 hours, we had people who knew what they were talking about on X saying why that isn't a concern. Right.

And then you get us several days later. What do you think? Yeah, I mean, but this is, listen, we're kind of like, our show is kind of like the Apple of investment news. We let everybody else do their hot takes and we actually spend some time really thinking about it. And we try to put the pieces together. Obviously, if there was a trade, we would have traded already. I didn't trade this, guys. Like there was no trade here. There was a trade. I missed it, obviously. Yeah.

But going forward, what do we learn from this? I have this thesis that

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My dad works in B2B marketing. He came by my school for career day and said he was a big ROAS man. Then he told everyone how much he loved calculating his return on ad spend.

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I know. No, I know. I'm on Wi-Fi instead of on. Is it too late for me to switch over? Can I switch? Can I hit the. You can try. If you lose, you just dial back in. Okay. Because, because I was. He gave us talk in the, in the multiverse. I think. And then, and then he collapsed. And then his signal collapsed. If his signal completely goes out, it automatically will like close in on him. Yeah.

No, he's still there. Okay. I think he's back. It worked. It worked. I'm back. You're out of sync with your- Now I'm hardwired. Wait, now you're off, Dave. Oh my gosh. Whoa. Did I mess this up? No, everything's fine. Everything's fine. We're just living in an alternate universe now. It's passed. We clicked over. Terrible universe.

I do think that these big tech, especially the Googles of the world, like they're all working. They're all focused. They're laser focused on one thing. Let's let's just talk about it. They're focused on AGI. Right. And they've been talking about this Microsoft, OpenAI, Google, Meta, Tesla. So whoever achieves the concept is you achieve AGI.

and you can solve all the world's problems. And what is, how should you be valued at that point? Right? How should you be valued? You could make a case that one or more of these tech giants is on a roadmap to being, to potentially being valued as,

we've lost him again one of these tech companies max headroom is that who he reminds me of when he's uh in and out like that he must be sorry it only only goes out when you're on a roll did you try turning it off and turning it back on again i i did i'm i mean i'm i'm on i'm on cord no i'm on like hardwired so it shouldn't be an issue anymore

Anyway, I think this is fascinating. I'm not a boomer. Gen X. Gen X. I think this is fascinating for big tech. That's all I'm saying. I think this is a big tech moment. This is one of those moments where we start to realize, you know, we make fun of big tech for spending tens, hundreds of billions of dollars on all these chipsets and doing all the crazy stuff they're doing that is really not resulting in anything real for anybody.

And we're like, these guys are losing their mind. Zuck is losing his mind. Like, why are they spending all this money? So we have a slightly better chat GPT. Like, it doesn't make sense. That's not what they're going for. They're going for this. This is what they're going for. They're, they're going to, they're, they're trying to achieve something that will solve all of the world's problems that, that you, so right now,

We look at pharma, right? And we're like, look at how much pharma companies are valued at. What if the next gen pharma is Meta or Google, right? Because at the end of the day, if they can solve cancer

by having access to this type of technology, how valuable is Google, right? I've been making fun of Google for the last two years because I think their search business is meaningfully at risk. And I still do think it's meaningfully at risk, which is like 85%, 90% of their revenue. Yeah. It's kind of a scary time to be a Google investor because everything that we know about Google is at risk.

But what if search and advertise? What if in 15 years, what if in 20, 15 years, we look back

And we're like, we can't believe we were so worried about Google losing half or two thirds of its ad business, which is like the whole damn company. Okay. Because the reality is this new business that they're in, which is, I don't know, solving cancer and solving, I know, generalized like, you know, like archetypes.

artificial intelligence and AGI and every problem on earth. What if that is 30 times the advertising, you know, business in 2024, if we move forward to 2038, right? And we look back and think how dumb were we that we were so consumed with Google losing its ad business when in the reality they're now working on a business. My paid search going away when, when, yeah.

I'm going to feel like an idiot. I'm going to feel like an idiot. The fact that I was so consumed by, I'm not touching Google when they're going to lose all this business. If they're working on something that's 20, 30 times bigger in terms of a total addressable market that we almost can't even define today because we can't wrap our stupid human brains around the opportunity. Yeah. I mean,

I mean, I think, listen, I know we're not like giving out stock picks right now. And that's what a lot of people want to hear from us. But I feel this is something that's really important for us as investors to at least think about. By the way, I do have to keep our eye on this space. And for me, that means that I'm following podcasts that talk about quantum computers now. And I'm following people that are experts in this field so that I can keep my finger on the pulse of the state of the art of quantum computing.

what's going on in the space and I feel like I have to now, right? It's something that I can't afford to not know about because of the potential implications that are down the road. I do think they're down the road, but I, you know, who knows what impact could be to pharmaceuticals, material science. I think there's a lot of use cases that could pop up.

I'm glad you're doing it, Jordan, because I'm just, I don't have time for that. But I'll talk to you every couple weeks about it. I enjoy it, though. I mean, I listen to these people. I'm like, it kind of blows my mind. So it's fun to... Yeah. I don't mind listening. Like, I did a bunch of deep dive this week on it, but I would prefer, like,

The 60 second tick tock click summarizations of what the hell is going on in this space. Yeah. So what happens when when quantum computing meets? What was the hype thing from from like last year, the superconductor, the LK 99? What happens when those two things come together?

Well, so that's one of the things right is that these super these quantum computers, they have to basically do their math at absolute zero temperature. That's one way to make them so there's trapped ion, which I don't think requires as cold of an environment. And that's what IonQ uses. But some of the ones like the Google use are cooled with liquid helium. And so those

require superconductors to work at really cold temperatures. So yeah, I mean, it's, but one of the, you know, one of the use cases might be that these things can do things in material science that we don't understand yet, and they can find a room temperature ambient pressure superconductor, right? So that's a possibility that, you know, maybe somebody's going to try to fine tune an algorithm for. And so there's tons of discoveries to make.

by using these things that I think they can be fine-tuned towards, which are the natural world, which is what physicists tend to think about anyways. And so if you've got a computer that solves problems for physicists, what problems do they want to solve? Yeah.

That whole time you were talking about quantum computing, I'm trading Crocs right now, Jordan. Thanks. Sorry. I was. I was. I'll tell you what I'm doing. All right. That's probably rude. I just...

I do want to talk about this for a quick minute. This is the weirdest transition. But you know when we did that episode last week and we looked at all of those consumer stocks and we were just pulling data? Yeah. I forgot to share the one piece of data I really wanted to share on that episode. I think I forgot it, which is Crocs data. Yeah, we didn't talk about Crocs. It's not in my list here. Dude.

it is so bad it is so bad the crocs data this holiday season is so bad i mean all of it i'm talking about uh the web traffic on their landing page uh not their landing page the web traffic on the crocs checkout page it looks horrible um the search traffic

doesn't look good. The credit card swipe data doesn't look good. The search traffic of people looking for Crocs on Amazon doesn't look good. And to make things even worse, the Hey Dudes division looks terrible. All those same data points on Hey Dudes looks terrible. The only thing I'm looking at on Crocs that has potential to be a positive is

is their international business coming out of China. So I have to assess to what degree is China going to save Crocs and maybe even Hey Dudes this holiday season. I don't know, but I'm shorting Crocs right now, guys. I'm shorting freaking Crocs. It looks so bad. I have to. By the way, I'm reminding everyone, we're not financial advisors. These are ridiculously speculative positions that I'm taking on as a

very high risk investor. You guys should do your own homework on Crocs though. I would love for the community to discuss it in the trade research channel of the dumbmoney.tv forward slash discord, which is completely free and get their take on this because, you know, the reason why Crocs trades at such a low PE like Jordan, you remember, we always joke like it trades at like a seven, eight, nine PE is because the market,

has been waiting for the shoe to drop. And they always just assume the shoe is going to drop on Crocs. The shoe. The shoe. I didn't even realize I was saying that. But they're always waiting for this company to fall apart. And I've always been a long... I've been long Crocs on and off. You guys have too for how many years? It seems like half our lives we've been long Crocs. But there have been moments in history when the Crocs trend, after being hot, hot, hot...

for years completely falls apart. And

This is not a diversified company. This is not. And we haven't heard of any cool collabs lately. The thing that we normally look for though, is like something hot coming out of Crocs because they have a Lizzie McGuire collab and it looks pretty cool. But the problem is that this brand has been so red hot for so long now that at some point, as we all know,

It's very hard to have a durable brand that is just on perma trend. Okay. Like always on trend. It happens, especially with comfort, comfort apparel. Okay. And Crocs, you can make a very good case that Crocs are so comfortable that it kind of always is on trend, but maybe not

to the degree that has been the last few years. So if we see a fall off in Crocs happening at the same exact time that the company levered itself to buy Hey Dudes and had a bump in the road with expanding the Hey Dudes line, which I know they have this...

maybe the best marketer on earth running Hey Dudes now. We've talked about, we've done episodes about this. And the thought is he will do the same thing to Hey Dudes that he did with Stanley Cup. And the same thing that he did to Crocs many years ago. All right. Maybe he will, but it seems like that Hey Dudes strategy is not unfolding as quickly as people would like. Yeah. And, but they had the Crocs business where,

to kind of anchor them. If this Crocs business falls apart here this holiday season, Wall Street is not going to be kind to Crocs.

okay and even though it already trades at a low p e wow i think this thing could get wrecked if it and again i'm just looking at certain data points i haven't done any deep due diligence on crocs yet in terms of like truly i haven't done my normal like social arb common analysis i haven't done that yet but the data doesn't look good i had to take i had to take an opening short position

through the holidays. And by the way, it's easy for me to do that because so much of my portfolio is so long. It's so long, right? So like for me taking a short position in Crocs, all it's doing is a little, it's like hedging my ridiculously levered long portfolio with a company that I think if this thing's going to fall apart, like this thing might fall apart even if the rest of the market does well. Oh, and by the way, we have the tariffs.

Is there a company that's potentially more at risk to the China tariffs than Crocs? What other company? You were also short something else from last week. Yes. Let me pull up my book. It was...

Nike. You're short Nike, but you're also short. Oh, VFC. VFC. Yeah, VF Corp. VF Corp. I am short all three. So now I'm short Nike, VF Corp, and Crocs, which again is easy for me to do because I'm so long everything else, including some retail stocks like Ralph Lauren, Nike.

like Elf, as you guys know, and Burke, Birkenstocks, right? So I'm basically long- This is short the American consumer right now. Well, no, no, but I'm long three-

retail companies and I'm short three retail companies. I can't wait to see how this plays out. Am I, what are the chances that we have a show in January and the three retail companies that I'm long crush it. And the three retail companies that I'm short get destroyed. What that would be awesome. What do you think are the odds?

20%, 25%. - No, I think it's higher than that because it's a very logical selection of which ones to be short and which ones to be long. And it's based on checkout cart data and the stuff that we have access to.

But it's not always correct because I want to remind everyone watching the show right now, there are some other factors with these companies. Specifically China. Forget about the tariffs. The tariffs are bad for everybody, right? But on the China consumer side,

in some instances, has the ability to be more important than any of the trends that we can read into here in North America and Europe and in other regions. So as an investor, I am fully aware that China could mess up my trade. And I'm prepared to lose a lot of money if China messes up this trade.

But it's a risk factor. Like, I hate it. Like, as investors, we have to understand where the risk is. And for me, I believe that's the biggest risk with some of these short positions, at least. But, man, I love this retail. I love holiday season trading. I love it. Because you know why, guys? It's just so...

I don't want to call it simple. It's so tangible. We're talking about how many shoes are they flipping, right? Like how many Crocs, how many, Oh, Ugg's another one. Ugg's another one. I was researching deck this week and I'm a little conflicted because I

UGG data does not look good either, guys. It doesn't look as bad as Crocs. It doesn't look as bad as Vans or the North Face for Vietcorp. But it doesn't look good. But HOKA data does still look pretty strong. So I'm not really...

like aggressively wanting to trade deck when I have one of their divisions not looking great and the other division looking pretty decent and then we have China you know on top of that so like I'm not trading deck right now yeah I tell you the UGG sales look pretty good under archery wait under what under archery what's archery or Christmas tree

Oh, under your Christmas. Or Christmas. It's a new data point. Publicly? It's not Christmas yet. Are you out of your mind? The girls don't watch this show.

Dude, they're friends. Dude, you're going to find out the hard way, Jordan. So I don't allow my kids to, I've never allowed my kids to watch our show. They are not permitted because I talk about money. I talk about, I don't want them knowing my personal business when it comes to money, right? Just the rest of the internet can know that. Yeah. The problem is, no, the problem is a few years ago, they would come home and they'd be like, dad,

did you make this much money I'm like what

talking about? I had a friend in class that watched you on dumb money that told me that you made this or you just made a million dollars in four days. No, or they were like, do you remember when we used to, when we had those huge crushing losses? I had some days my kids would come home and they'd be like, are we going to be okay? Are we going to be okay? I had a friend tell me that you lost all this money this week. And so Jordan, just be aware. Well, especially as they get older. Yeah. Dude,

Dude, no, there are kids that are like eight years old that were watching dumb money. It was freaking insane. They were. Anyway, just be careful. That's all I'm saying. Be careful. Oh, shoot. I got a meeting starting in a few. So we got to put a wrap on this. We need to wrap this anyway. We've already gotten off track. Now we're talking about retail Christmas trades again. Yeah, yeah. I know. I love it, though.

I love it. Oh, by the way, one more thing. What? Two more things. Two more things. The, you know, we talked about the, one of the long trades I put on in the last week's episode. And I think all you guys are pretty much in on it, which is Elf.

Elf data is still looking pretty strong. So I'm feeling pretty good about it. I've already cashed out. Oh my gosh, I don't own enough elf calls. So I already, I cashed out of my elf like twice already and I bought new options at a higher strike price. And then I need to buy some more because the elf data really does look pretty good. I just picked up a few others. The elf data looks good, but you know what else I feel like I've,

I'm loving right now. I just love hood. Did you see the Robinhood data that came out this last week? Those charts of assets under management. It's not management. What do they call that? Custody. Did you see the number of gold accounts they have? Guys, the Robinhood data is insane. What this company has done in the last 12 months is

It's freaking wild. It's wild. I upped my Robin Hood position this week. I had to. I had to. It's just unreal. And I don't think the rest of the world really appreciates what the hell is going on at Robin Hood right now. These guys behind the scenes are just massively...

Just increasing their base of customers and the amount of money that they have under management. While at the same exact time, they are increasing the number of products that they could monetize across their portfolio. And I heard someone say something this week. I don't know who it was.

They were talking about how, you know, this next generation, like every single one of them, especially males, every single one of them, what they do at a certain age, they just they download Robin Hood or and or Coinbase or both.

And they immediately just start trading crypto or whatever. But like, okay, we talked about it so many times. It's almost becoming the default for people who want to trade stocks who are just getting into it and not

Robin Hood has found a way to attract the people who have been long time. Like I switched, I switched from Schwab to Robin Hood, which I never thought I would do when, when I first got the app, I put some fun money in there because it's easy and fun, but I never thought that that would be my primary brokerage. But then they offered a what 3% cash match to move my money over. How long do you have to stay? I think two years. Yeah. It made it worth it.

And they just had their gold Monday where they were giving away a million dollars divided evenly among all new gold signups within a certain window. They have these little like game. They've gamified investing early on. And when you buy a stock, you get confetti. Like it was it was the first time that stock trading was was fun on an app.

instead of just painful like the Schwab app or even the TV app used to be. You guys suck who are watching this right now. Our audience just front ran me on my trade. Am I the worst trader YouTuber ever that I literally announce my trades and then I go on my phone during our episode to do that? Wait, you're Crocs Short? No, I already got that one, but I just started trying to buy my elf and now I'm chasing and I'm done. It went through.

I am like the opposite of every other person that talks about it. I actually talk about it and then I go watch the trade. I can't imagine that you moved the market. I did. There is a little spike here. I did. Both in volume and...

I just caused myself to pay so much more for the little option I wanted to buy, but it's done. I bought it now. It's done. So by the way, we are not, do not do it. That is the Chris Camillo, uh, the gold bar, green bar.

Oh my gosh. Uh, dude, you guys do your own freaking homework. Speak to your financial advisor. Do not we're we're we're my risk tolerance is insane. If you guys are doing things as I'm doing them, you're out of your mind. You might as well be in a casino. Okay. Because like, don't do not

mirror my when I do crap like that do not mirror now if you want to take something that I say and go do your ton of your own research and then you end up finding out that you think it's a good trade on your own go do it but like come on anyway but before we leave last thing did you cover the last two things that you were going to cover yeah I just wanted to say one thing just I wanted to say it Tesla that's what I want to say it it made me dude Tesla dude

Dude, it was insane. So I share sometimes, do not talk about this guys, but I will send some of my closest friends, Dave and Jordan. Is that annoying when I tell you how much my account is up in a day? No, I love it. I love it. All right. I will send you the same screenshot if my account is down that much, which is very likely to happen here at some point.

But I'll send screenshots of how much my account is up in a day. And it astonished me. And it was because of Tesla. Almost, it was like 80, 90% of that was Tesla. You had call, like one week out calls, like crazy, like big numbers. And yeah, I was very proud of you. I had an irresponsible response.

unethical number of Tesla calls the last two weeks, two and a half weeks that weren't expiring. They were just like short-term, that they weren't out of the money. That's the thing. But I made up for them not being out of the money by spending

an obscene amount of money at risk. All my calls were like late in January and they did great, but you know, Oh man, that was the stupidest thing that just happened. It worked though. Uh, question though, did you had, do you still have these Tesla calls or have you rolled them into different strikes or are you just out? I,

I'm rolling them. I'm taking risk off the table, taking risk off the table. I do have more Tesla. Yes, I do have some. I do have a lever position Tesla right now, but it is definitely less risky than it was a week ago or two weeks ago. I got it, guys. I got a call starting right now. I literally, I need to go. I need to go. Okay. All right. We're Dumb Money. Thanks for watching.

Chris is joining a call. If you're on his call, you should probably join too. All right. We're done money. See you next week. Have a great.