CrackBerry to RoboTaxi: How Dan Niles Thrives In Tech Investing Hype Cycles
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Welcome to the Risk Reversal Podcast. I'm Dan Nathan, joined by Dan Niles, Portfolio Manager at Niles Investment Management. Dan, welcome back to the pod. My pleasure, Dan. All right. I appreciate this. You were last on with us on January 15th. You've been on Fast Money with me, I think, a couple times since then. You are a prolific investor.

You are very transparent in that regard. You are at Daniel T. Niles, by the way, if you're not following Dan on the Twitter, you have to. And when I talk about that transparency, Dan, back in January 15th, you said, I got two focuses coming into the year. One was cash is your best idea. And the second one was that not only were you underweight, which most folks were not the max seven, you had none of the

of those names in your portfolio. I'd love to take a quick look back at those barbell sort of approach there because I think the cash had a lot to do with maybe some of the macro and the uncertainty in 2025, but also something that you had been talking about on our podcast at least for a year about this oncoming digestion

of the generative AI trade. Let's start with the macro. One of the reasons why you saying the word cash is maybe not something in the last couple of years a lot of folks who listen to you, follow you, had given much thought to. I mean, coming into the year...

I had three main issues. One was policy uncertainty. And ever since President Trump got elected, people looked at all the positives of tariffs and all the positives of what he was going to try to do in terms of cutting government waste.

And as I said, there's some negatives to that too, which is potentially inflation from tariffs. And you have less government spending that can drive up markets. And so there's some negatives here that I don't think people are taking into account. And then when you put valuations into the picture, you say, well, trailing S&P 500 PE ratio. When I use trailing because of the forward numbers, they're just made up, right? And they can change.

The trailing numbers, those are facts. And you can go back in time and see what that EPS number is. And it was trading at 25 times. And we've got inflation running between 2.5% to 3%. The normal...

average trailing PE 19 times. So you already had sort of 20% downside risk to kind of get you back to average. And then the final piece, which I've been focused on really since the middle of last year, when you had Microsoft, Amazon, and Google all having their revenues go down for the September quarter after they reported the June quarter, was this idea that, look, you're going to run into this digestion phase

for all this AI spending and people just aren't focused on that because at a certain point you need to get ROI for whatever you're spending. And so that's why coming into this year, I had cash as my top pick for the first time since 2022.

And by the way, in 2022, the S&P finished the year down 19%. I had no Mag7s in my top picks, whereas last year I had both Amazon and Meta in there. It's the first time in years that I hadn't had any of them because my view was that numbers had to go down. And that was a problem with valuations where they were. And if you look at the December quarters that all these companies reported or Q4s, I should say, calendar Q4s,

Six of the seven have the revenue estimates for calendar Q1 go down after they reported their calendar Q4s. And by the way,

that had been happening for four out of the seven since the middle of last year, but nobody really pays attention to fundamentals when stocks are going up and the Fed's cutting rates. And, you know, you want to look at all the bullish things potentially, and you kind of say, well, you know, that bearish stuff, I'm just going to ignore because it doesn't fit with what I want for owning these stocks and going to ignore valuations. But when you get into a rougher period like now, then people start to focus on these things. So I find that interesting. Why do

think and you were on the pod I think the end of Q2 or maybe early Q3 of last year and you were talking about that you were talking about that the estimates for three of the most important companies in the entire world and and some of the biggest contributors to S&P 500 earnings and participation you know what I mean as far as the performance

Because you made this point and it got me really thinking about this because a lot of folks were using rose colored glasses about the back half of the year. But if you look at a lot of those names that you focus on, NVIDIA, Exhibit A, they were going sideways. Microsoft was going sideways.

right? Amazon and Google, yeah, they rallied into these all-time highs that they saw right before their earnings, the Q4 earnings. But to your point, that all happened the way you kind of laid it out because you saw that revenue deceleration and then you saw spending go higher and investors were having none of it. I don't blame them because really since the global financial crisis, the market's been a one-way trade because you've always had either the government or the Fed step in

to stimulate the market and keep stocks going up. And that's why you have PE ratios as high as they are. And so if you kind of think back to, I'll pick 2021, right? 2021, you had inflation start the year CPI at 1%. It ended the year, I think at 7.4%. And if you said, wow, inflation is going to go up 6%, you'd be like, oh my God, the market's going to get killed.

The S&P was up 27%. Well, why was that? Because the Fed said it was transitory. Now, you go to the next year, 2022, and the Fed's going, uh-oh, made a mistake, not transitory, starts to raise rates. It started 2021 at 1.4%, ended 2021 at 7%. By the end of 2022, that had actually dropped into the mid-6s. But because the Fed was raising, the market went down 18%.

And so it really comes down to, I think investors, you know, whether you want to call it FOMO or buy the dip and sort of train that, well, every dips a buying opportunity, the market can't go down for more than a month at a time. And so I just keep buying. And quite honestly, the people you kind of have commentating all the time, they can care less about valuation. It's well, a decade from now, it's going to, this thing's going to be huge. And

And you probably remember all the innovation funds in 2021 and how they went vertical. And now they're like flat on their backs. And the numbers are all just destroyed in terms of performance. And it's because like in the market where it's being flooded with money. And last year, it was still being flooded with money because the Fed was cutting.

People just don't care about fundamentals until they ultimately care. And that's what makes it tricky to be an investor, which is you've got the fundamentals as a background, which ultimately stocks will go back to. But in the near term, as John Maynard Keynes said, the market can stay irrational longer than you can remain solvent.

which is why I put out those pieces from time to time saying, yeah, the stocks are going up, but this is actually what's going on with Microsoft lowering September when they reported June, lowering December when they reported September, lowering the March quarter when they reported the December. They've been having numbers go down for nine months. Four out of the seven MAG7 have been having numbers go down since the middle of last year. The S&P 500 estimates as a whole

have actually been edging down since the middle of last year, driven by these big companies. It's just, you don't want to hear that when the Fed's cutting because it's just easy money falling into the system. Yeah. And I want to hit to the policy uncertainty because that was one of the pillars of your thesis coming in. But I just wanted to touch on something really quickly. You talked about the innovation funds. I mean, and I'll just say this, we're recording this Wednesday. It's 1 p.m. or so. Last night on Fast Money, we're going through the Tesla numbers as they were coming out. And we had a

A futurist, a futurist from one of these innovation funds. He's not an analyst. He's not a portfolio manager. He's a big thinker futurist. And I literally I couldn't believe what I was hearing. He said after listening to our panel, he's like, well, I love hearing all the cynicism from the panel about Tesla right here.

But I'm focused on, and you know what they're focused on, RoboTaxi and Optimist and all this other crap. And it really, and I said, well, that's great because I love hearing all your optimism. It almost reinforces, you know what I mean, what I think about this company because I have never seen the fundamentals of a company that is in the upper decile of the S&P 500 as far as market cap, you know what I mean, this bad.

Dan, I can't go back and think of it because their core business is so bad right now. 2.5% operating margins and probably sub-10% auto gross margins here. And I think Elon is literally ceding, for all intents and purposes, all the competitive advantages that they've had over the last 10 years in the EV market. Yeah, I mean, it's amusing to me because I'm doing this presentation for CNBC and

middle of June and one of the slides is that

Knowing the ultimate winners in any market is unknowable. And so I have a slide there of, you know, if you look at the smartphone market, right? Nokia had 40% market share. They were dominant. Then you had the flip phones. And my first phone was a Motorola StarTAC. And then Motorola was dominant. Then you had RIM with the, you know, the keyboards, right? They were called the Crackberries at one point. And that was dominant. And then Steve Jobs introduced the iPhone. You go back to the computing era.

IBM was the dominant company with mainframes. And then you had, I worked at Digital Equipment Corporation. And so then that became the new one with the VEX and, you know, a smaller version. And then it was, well, maybe computing should go on the desktop. And so an Apple computer shows up, but then they get displaced by ComFan on the x86 architecture. And then a company comes along and says, hey, maybe we can sell these things over the internet called Dell.

And, you know, you can take it all the way to something closer to home, which is you can look at, you know, web search or browsers and you go, well, you had AOL, that went public. You had Netscape, that went public. You had Lightcoast, that went public. You have Ask Jeeves, that went public. And guess what? Google didn't.

pretty much crush them all. Or even with social media, where you've got, you know, MySpace and Facebook, and there's a bunch of other companies in between there. And Friendster, that's why when you have these futurists kind of saying, oh, you know, focus on this particular company. I've been doing this job long enough where when I was 30, I thought I was a genius. You

Now that I'm pushing 60, I go, I realize how stupid I actually am because you realize how fast things can change. And Intel today is another great example of that where a decade ago, who would have ever thought they were going to get absolutely destroyed by AMD and NVIDIA?

And that, you know, you'd be worried about their viability over the long term. On a bigger picture basis, does it make sense to say, yeah, I think Internet's going to be a big thing or AI is going to be a big thing or self-driving cars are going to be a big thing?

That's easy to say, and I 100% believe that. But you look at Tesla last year. So ignore this year, because all the bulls on Tesla want to say, well, you know, this is all caused by Elon's involvement in Duke, which is completely ridiculous. Because if you look at last year, Tesla's deliveries were down about a percent. The EV market, and I wrote this up yesterday morning before they reported, the EV market was up 25%.

BYD, which is a Chinese EV manufacturer, its revenues were up 30%. The Chinese absolutely were killing Tesla in their second most important market. That's the issue. This Doge stuff is just convenient excuse for if you're a bull of why the stock isn't doing well. Because right now, it's very challenging with the Chinese auto manufacturers taking shares.

You know, Tesla trades on sentiment. I'm very bullish on autonomous robots and full self-driving. I have a Tesla. I love it. I love the way it can drive me everywhere. And so that's well and good. And I can see the stock actually rallying. I thought it would actually today. And it did, even despite horrific numbers. It was up slightly in the aftermarket before all of this Trump tweeting about not wanting to fire Powell came out.

And so that didn't surprise me, which is why I thought the market partly would trade up to early May on earnings. But yeah, I mean, the futurist stuff, I don't know. I don't know if he was 30 or not, but I thought it was a lot smarter when I was younger than I do now.

You can be either the futurist at a mutual fund complex that owns a bunch of stocks that are basically the island of misfit tech toys going back for the last five years. Right. Or you can think the way you do and have a very optimistic view about autonomy and autonomous robo fleets and markets.

you know, humanoid robots that are gonna first power factories, but then everyone's gonna have one in their home, you know, doing this, that, or whatever. But I'll take the over on that. I suspect you'll take the over on that. And if a company like Tesla is already discounting a whole heck of a lot of that with an $800 billion market cap, it just doesn't seem it's particularly investable here. And I just wanna make one point. While a lot of people are focused, even with it up 8% today, that it's basically been cut in half from its all-time highs that it hit in December,

it's trading at the exact same level as it was on November 5th. Okay. So really it's done nothing since election day. And think about what is incorporated in that was Elon's proximity to the white house, the whole idea that they would basically get some of this deregulation, um,

that would help them get closer to full self-driving. Right now it's called Supervised, which would open the door to being able to sell subscriptions to that, which gives it a higher multiple, which it gets it closer to doing the same thing in China, which would help them better compete. You know, the list goes on and on, and then full self-driving takes you to RoboTaxi, you know, autonomy in RoboTaxi.

But man, I mean, the stock's done nothing since the election. So give me the hot take on Tesla. Well, I mean, last year he was focused on Tesla and deliveries were down for the year and industry EV shipments were up 25%.

And BYD took over as the number one EV shipper and their revenues was up over 30%. It's not to say, I honestly think Tesla will rally between now and kind of mid-year when you get the robo taxis out, just because the stock is driven by sound. It's just not driven by fundamentals over a short period of time.

But I'm a GARP investor, so growth at a reasonable price. At over 100 PE, from a longer-term perspective, it's hard to imagine, even if a lot of this stuff comes true, that this is going to go well. And let me give you an example of this.

If you go back to the 1990s, Cisco was the NVIDIA of its day. It became the most valuable company in the world. The stock went up 4,000% from the end of 1994 when the first mass internet web browser, Netscape Navigator, came out over the course of six years. The stock is still damp from where it was at its peak in 2000, even though the internet has turned out to be all that and a bag of chips since then.

You can look at Sienna. Is there a lot of video on this new thing called the internet being done today? Is there a lot of need for optical capacity? Absolutely. Sienna stock is nowhere near where it was during its peak. Content delivery networks.

Are you going to be serving videos on this thing called the internet? Actually, it turns out you do. There's a lot of stuff like that. There's this thing called streaming, and it's huge. You look at Akamai stock, though, it is absolutely nowhere near where it was in 2000. And by the way, all these companies have had their revenues go up considerably since their peak levels in 2000.

And so at a certain point, valuation in the short term, it means absolutely nothing. It's all driven by sun. But over a longer period of time, that gives you upside or downside

to your investment thesis. And so I'm really bullish on autonomous robots and full self-driving, et cetera. But I'm looking at other players going, there's other names that might benefit more or guys that provide the chips to make it possible for other car companies.

that might be the better risk-reward way to play it because much like Cisco or Ciena or Akamai, and the internet is clearly bigger today, 25 years later, and it's peaking 2000. But if you're paying an egregious valuation for it,

over a long period of time, you might have a problem getting a return from them. By the way, obviously, a lot of other companies that were built on the internet have done relatively well, right? Meta, Google, Amazon, to name a few. And so you have to think about the valuation. And I love Elon Musk, and I think he's a genius in terms of being a businessman and an inventor.

But from a stock perspective, I love my Model X. I love the self-driving features that it has. But from a stock perspective, it's a tough stock over a multi-year period of time, given some of what we talked about. And the cash flow from the EV business funds a lot of this other stuff, like autonomous robots and robo-taxis, et cetera, which is why it gets kind of, you know, if your core business funding everything else has got an issue,

That makes it somewhat problematic for me from a longer term perspective versus can it trade up into the robo taxi launch in the middle of the year? Which, yeah, it wouldn't surprise me if it did. Yeah, it wouldn't surprise me if they push that event out. I hope next time we pod together, you'll come back with some of those names that you think might be better positioned longer term. By the way, you know, like I talked about your transparency other than at the

Daniel T. Niles on the Twitter. You can also go to NilesInvestmentManagement.com. I think there's a whole heck of a lot there more to talk about.

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Dan, you just mentioned a few names that are going to be reporting over the next couple of weeks. Do you want to quickly hit Google that is out Thursday after the close? A whole host of things going on there. Obviously, regulatory overhang, what the remedies might be for this DOJ suit. You think about competitive positioning as it relates to Gemini versus OpenAI, ChatGPT, and the like. There's just

A lot going on here. The stock is obviously one that people point to on valuation trading below market multiple, much less than a lot of its peers. But there seems to be a lot more trepidation about their ability to compete and not, I guess, cannibalize that core search business and that core search advertising business.

How do you, how are you thinking about this stock right here? That's down, you know, 16, 17% of the year, but it's down a lot more from its highs. Does the highs matter from you? Because this is also one of those names that you talked about six months ago where forward estimates are, we're going to be coming down. I don't really focus on where stocks been. I try to look at where is it today and what are the, what does the business look at? And from a bigger picture basis, I just want to clear. I think for all of these stocks in the mag seven, my guess is that on average, they're going to trade up.

Why? Because expectations are so low and people want to believe. And in the short term, that's a very powerful thing. And it's going to take a while to break people of this desire to believe that it's all going to be fine just because I know what a Google is and I have an iPhone in my pocket. Let me start with that. And with, you know, President Trump rolling back some of his

Talks about firing Jerome Powell and other things like that and talking more friendly around China. He's going to play nice. That's going to make people want to chase these things higher. Now, with that as a backdrop, everything you said about Google is absolutely 100% correct, which is you're having a lot of people use other platforms.

things to get their answers. I use Brock actually quite a lot now because I like having those links to be able to click through to find where it's getting the answers from other people. Obviously, ChatGP, I think, has talked about getting to a billion users, I think. OpenAI has, excuse me. And so...

There's a lot of things that people used to use search for, but they're going to other things. And if you get into a world of agentic AIs, that's even more problematic. Google also, I think there's zero, there's a very small chance they get to maintain their position as the default search engine for Apple and paying for it. I think that's going to be gone. Um,

So between all of that, it makes it very difficult. But in a slower economic climate, and by the way, I think Q3 GDP is going to go negative because you pulled forward so much demand in the first half of the year. Every company that I know of is trying to get in front of tariffs by pulling as much goods in as they can before any of that kicks in.

And so I think the back half of the year is going to be really ugly from that regard. You've got no election for ad spend. You've got no Olympics for ad spend. And advertising is very discretionary. So I think Google's in a really tough spot from a longer perspective.

position for all those reasons that you rightly brought up. But it doesn't mean that the stock can't go up in the short term as people are readjusting their positions and going, oh, it looks cheap. And, you know, I just feel like I know Google wouldn't want to own it much the same way as we haven't talked about Apple. But, you know, kind of the

the love affair people have with that, always thinking there's an upgrade cycle at something. Yeah. The one thing about if one of the remedies is that they have to sell, you know, Chrome, I think it could be a huge problem for them because I think, you know, folks like us who are using these chatbots a lot for search, the only time I'm usually using Google for search

Is if I do it through Chrome. And so I just think that that's like a huge potential headwind. You know, another name on the advertising front, I know we got to be quick and get out of here, is Meta's one. It's been getting a lot of attention over the last couple of weeks because of, you know, this de minimis rule going away. So Xian, Timu, you know, all the crap that they're sending here to the U.S. Supposedly they spent maybe $7 billion last year on Facebook. China, despite not having any properties, Facebook,

in China. This is the second largest revenue region for them outside of the U.S. Is this something you're paying close attention to? Because Meta is also one of those names that folks know it, they can touch it, they can feel it, and then they're feeling okay about it from a valuation standpoint. Yeah, and all that you said is true. The thing that actually came up recently that I'm actually more focused on, because I think it's relevant, is if you think back to a few years ago, if you remember when they changed their name to Meta, I said they would spend

a zillion dollars on the metaverse. And the stock got absolutely murdered back in 2022 off of that. And I think it went down like 75% from its peak to its trough. That spending relative to their business was an issue. One of the things that's come up over the last week is that they were supposedly trying to get Microsoft and Amazon to pay for their investment in long, which

They've actually been one of the few companies that's invested a ton in AI that's actually seen a return in that they've seen their, you know, what they recommend to a Dan Nathan. Hey, Dan likes to watch these things on classic cars or whatever. And, you know,

oh, he'll actually watch these ads on vacations in Hawaii or et cetera. And so they used AI the best to drive both their revenues and their margins. They're actually now sitting there worried that they might be overspending. It makes me wonder what's going on underneath the covers and much like with the Microsoft where it's been obviously out there that they're cutting back on a lot of their spending. Amazon, which is also overspending,

I forget how they put it. They're adjusting their spending in different areas. I go, if Meta is actually having to worry about that, because I look at what companies do and not what they say, right? And if what they're doing is trying to get somebody else to pay for this AI CapEx, it makes me wonder what else is going on underneath it. Because everything brought up is accurate. We know it, etc.,

This was actually one of the names I kind of felt the best about once you reset all the numbers because of the advertising slowdown that we all know is kind of coming. This makes me wonder if there's another problem underneath there that I'm not aware that's going to pop up. Because remember, their CapEx, based on the numbers floating around there, it's like one third of their revenues. It's an enormous number.

And so it's something I'm thinking about as, okay, maybe I shouldn't be as looking to pick it up.

on this most recent drop as I originally thought. So it's something I'm thinking. Yeah. And by the way, to your point about 2022, I think investors have very short memories of the fact that that stock was down 70 some percent because investors were worried about that spend on the metaverse. Now they repositioned a lot of it and it was helpful to their businesses to the point that you just made about serving ads and the like, but you take out seven

billion in spend there and you still have, that's Timu and Xi'an and some of the other Chinese ones, and you still keep your CapEx at that spend and you're not getting the return on investment and your large language model Lama, which is open source, is not something that people are using or on their own platforms or externally, then you got a problem. Well, and actually just finishing that thought out, what people also forget is in the

beginning of that year in 2021, it was kind of like this China issue in reverse where TikTok showed up on the

on the scene and it caused all kinds of problems with their advertising business. To some degree, this is almost the same thing in reverse, which is now these companies can't advertise or that there's no reason for them to because they can't ship anything to the US. And so if you remember, I think it was like when they reported that first quarter of 2021, the stock got absolutely murdered. I remember this because I was long into it. Got out of it, was bullish on it near $1.

that late 22 time period and it turned out to be correct. This is another one of those situations where I don't think people are thinking there's some existential problem where if you do, you don't realize it's as big as it is, much like with TikTok at the beginning of that year. And

it's just something to keep in the back of your brain. Yeah. And the last thing I would just say on the meta is that it wasn't until they started cutting jobs and talk about rationalizing costs in October of 2022 that the stock bottomed. So I think that's something that you really want to focus on as we talk about CapEx and the like. And that's the last point I just want to make on that is that I think investors got so off sides. They thought the ratcheting up

of these CapEx numbers over the last year was a really bullish thing. They wanted to ask for forgiveness rather than permission, and the market was rewarding them. And I think what's happened over the last few months or so, it's gone the exact opposite. To your point, when you were one of the very few people nine months ago suggesting that if revenue estimates are going to be coming down over the next few quarters, that's just not going to work. It's just because the valuations were kind of thick.

I lived through 2000. I started on Wall Street in 1990. So I was there for that whole decade run up and this new thing called the internet in 1994. The way people talk about AI today, it's not very different. And so I can see the writing on the wall. If you go all the way back to the late 90s, it was a similar situation where you had these optical companies, global processing, right?

spending billions, and they're not making any money. And then the financing shuts up. And then you find out that, yeah, internet traffic is doubling every year, not every three months, like they thought when they built all that capacity. You fast forward to today and you go, do you see cut the cost to produce data

a token by over 90%, nine zero. And Facebook and their new Lama models, all of those innovations are put into that. You throw on top of it, the fact that, okay, now your cost to produce results have dropped by over 90%. You spent all this money, but you're not generating the revenues because there's no killer end.

It's not like you've got Siri with AI on your iPhone, where you can tell it, "Hey, go book me a flight and a hotel and a car and take care of that," and you can go do that. It's not there yet. There's no killer app to drive the demand that these companies need to keep funding this kind of spending. To me, it's the Mark Twain quote of history, it doesn't repeat itself, but it often rhymes.

This is rhyming an awful lot with what happened in 2000. I'm hoping that inference comes in and you have another wave of spending sometime late next year. But there's a part of me that's going, well, maybe this is 2000 and not 1997 or 98 when you had some digestion periods. And so that's one of the things I'm thinking about, especially when you throw into the mix that,

Countries that aren't friendly with the U.S. are now looking at the fact that you can use DeepSeek and say, okay, I can fix my AI problem on the software side with a much more efficient type model. And I can get a chip from Huawei, which might not be as good as what NVIDIA has, but it's pretty darn good for what I need. And so I'm going to use that instead because I don't want to be at the mercy of the U.S. government.

And so you kind of look at that and you go, you combine that with people having pulled in a ton of demand to try to get in front of both tariffs on the one hand and export restrictions on the other. And you wonder what is this going to look like on the other side of this in another three to six months? A couple of things right there. I'm going to rattle them off. I think Nvidia is screwed for those very reasons over the next couple of quarters. I think agentic AI take the over on when that is the killer app.

I think CoreWeave is going to be the global crossing of this time period. So I just wanted to rattle a few of those things off really quickly. We talked about thick valuations, Apple trading at 28 times higher on a trailing basis. We thought that they had an exemption from this trade war and then they didn't. iPhones, there's no killer app to up

The only reason I think is because the aging sort of, you know, amount, hundreds of millions of maybe, you know, Apple intelligence pushed it. That's not it. The reason to upgrade your iPhone right now is worried about what the price is going to become Christmas because of the tariffs. So I know several people that have upgraded their iPhones for that very reason. So I think Apple is going to have a really good quarter.

I think the June guidance is going to be good, too. And the thing is, people are going to want to believe. I've seen so many companies put up, you know, it's obviously early in the reporting season, but that put up good numbers and have said, oh, yeah, but this is not free buying in front of tariffs. This is not demand pulling. And I go, how on earth do you actually know? Right. It's not like the customer is telling you I'm buying this in advance for that reason. They never tell you that.

That's why semiconductor companies get screwed so often by their customers because they're double and triple ordering and not telling them. So yeah, it's going to be very interesting to see how thoughtful investors are in terms of going, wow, Apple beat and raised, which wouldn't surprise me. Do they then go, well, this is demand that got pulled in because the AI features I was thinking I was going to get this year, I'm not going to get this year. I'm going to get it next year. So this is going to get very fascinating between psychology and technology.

stock prices and what happens there. Yeah, and one thing I'll just say last so we can finish on this because I know they don't report until late next week, but to your point, I think you're one of the very few folks who've kind of seen these cycles in a way and you're not going to know why the number was good or you're not going to know why. I just can't imagine they're going to be particularly aggressive on their guidance going forward because of all the uncertainty.

in and around trade. I think you almost have a bit of a mulligan, especially if you're Tim Cook and folks say, well, you know what? He navigated this pretty well in 2018 and 19. And, you know, he's been a supporter of the Trump agenda and he's going to try to figure this thing out. But I just don't know how. Maybe you can buy it as a trade into that because the sentiment is so bad. But

At the end of the day, I think the bigger issue is the push out of Apple intelligence and just how clearly behind they are in so many of their other tech peers. Does that make some sense? 100%. And I want to leave...

You know, your viewers with this one thought, if you go back to the tech bubble, now you got to remember over the last over 100 years, the S&P compounds at about nine and a half percent per year. The tech bubble took two and a half years for it to ultimately go down by 49%.

But during that time, so this is over two and a half years, you had seven rallies in the S&P 500, averaged 14% each. Now remember, a good return for a year is 9.5%. That's on your way to lose 49% of your money. That's why I can go back to the global financial crisis. You had 11 rallies of 10% each over a year and a half on your way to losing 57% of your money. So I

I think this is why I wrote something yesterday morning saying, hey, I think the market's going to rally through early May based on a bunch of reasons which you can read. You don't want to get too negative when you're in one of these fake rally situations, which I think you're going to be in because there's so much demand getting pulled for that numbers, I think, are actually going to look pretty good relative to how bad people thought they were going to be. So

Take Tesla as an example, right? That was a horrific quarter. And the stock was still up slightly in the aftermarket before Trump said anything about power. And valuation, there's zero support for it. So if that's the way they treat Tesla, companies that actually have good cash flows, relatively reasonable valuations by comparison, that are also down a lot that people want to believe, you know, there's a good shot that they all trade up because people go, oh my God, numbers weren't so bad.

And they don't want to think that you have a negative Q3 GDP number probably in the pipeline coming, more inflation and all this other stuff. So that's why I just don't think the market has hit its bottom, though I'm playing for a bounce in the near term. All right.

Well, we can leave it at that. We're going to put that Twitter thread in the show notes. Be sure to follow Dan on Twitter at Daniel T. Niles. You can also get more information about just his process and the like here at NilesInvestmentManagement.com. Dan, I really appreciate you taking the time. I know our listeners do, and they really, really appreciate your transparency. So thanks so much for being here. It's always my pleasure to be on, Dan. Thank you for having me.