A Bear Market Inside a Bull Market — Transcript

Full transcript

1. 0:00All right, we are gonna get going. Um,
2. 0:03time mismatch
3. 0:05presentation. So, I'm going to take you
4. 0:07through
5. 0:09during the course of this presentation
6. 0:11uh the theme that I had for uh my time
7. 0:15in DC this week uh presenting to Freedom
8. 0:19Tech. I enjoyed it. Uh made a lot of
9. 0:22friends there and I'm happy I went down.
10. 0:25Uh I'll talk about that. Of course, I've
11. 0:27got to talk about scary rates. Uh, I can
12. 0:29always tell when [laughter]
13. 0:32by by people reaching out and by reading
14. 0:36X what everyone's most scared of. It's
15. 0:38just amazing that uh it goes from oil to
16. 0:41rates to breath to everyone is just
17. 0:44every week there's a new thing. It's
18. 0:46just impossible to stay up with people's
19. 0:47anxiety. Don't know if that's a
20. 0:50reflection of not being able to make
21. 0:51money. Don't know if it's a reflection
22. 0:53of pressure. No idea. But we'll go
23. 0:55through that. Uh I will give you the
24. 0:58facts. So, for every person who tells
25. 1:00you every single time rates go higher,
26. 1:02there's a disaster. First of all, that's
27. 1:04a story that's not true. Um, second of
28. 1:07all, I'm going to take you through the
29. 1:09facts of the history of markets in terms
30. 1:11of myself building models of where the
31. 1:13contagion starts. I had to do this
32. 1:15because I grew up in Brazil and emerging
33. 1:16markets where if you didn't get out
34. 1:18before the things blew up, uh, you died.
35. 1:22And I watched many of traders and people
36. 1:24during the time of the 90s that were not
37. 1:26there. I did all of my theory on Jeffrey
38. 1:29Moore and economic leading indicators,
39. 1:31but then I'm also going to go into a
40. 1:33whole new mind. I've talked about this
41. 1:34book before. I think it's really
42. 1:35important for people to start thinking
43. 1:37about this. It's Muse time. Consumer
44. 1:40agents, the next AI moment. This is a
45. 1:43big one, guys. This is driving the
46. 1:44market today and I believe will be the
47. 1:46driver of the next 12 months. The
48. 1:48investments you make the next 12 months,
49. 1:50in my opinion, to be successful of
50. 1:52creating alpha will be about consumer
51. 1:53agents. Uh there's a bare market going
52. 1:56on within a bull market and I'm going to
53. 1:58go through that because I think this is
54. 2:01going to continue. Uh IWM over QQQ makes
55. 2:05new lows since the iPhone. Talk about
56. 2:08that and all the other good things
57. 2:10related to crypto. Oh, my disclosure.
58. 2:14Remember guys, I'm wrong.
59. 2:18Sometimes I'm wrong, sometimes I'm
60. 2:19right.
61. 2:21All right. So, yeah, I went down to DC.
62. 2:23I I really want to bring this up because
63. 2:25this presentation was about how there's
64. 2:28two different worlds that are going on
65. 2:30and you [clears throat] have a choice
66. 2:31and as you can see in my V up here you
67. 2:33can either be a linear thinker think
68. 2:36every time rates over the past whatever
69. 2:38amount of years have done XYZ this is
70. 2:40what's happened
71. 2:43or you can come over here and be in the
72. 2:46exponential and that's the problem. We
73. 2:48haven't had a rate rise while this has
74. 2:50been going on. We had a rate rise when
75. 2:52this was going on. Remember that as you
76. 2:54talk to people and I'll give you some
77. 2:56insights on how to avoid it. For the
78. 2:58people that were down in DC, the
79. 2:59community of people around Bitcoin, it
80. 3:03was a great event. I made some new
81. 3:06friends that I'll have for a long time.
82. 3:08You guys know who you are. And uh I
83. 3:10enjoyed the presentation. Hopefully I'll
84. 3:12be able to show it at some point. Uh but
85. 3:14this is really what the theme is about
86. 3:16on here. I wanted to show you guys the
87. 3:18notes that I put together just so that
88. 3:21when I was sitting down in the minutes
89. 3:22before I got up there and go on. So
90. 3:25there's human time. This is the system
91. 3:26that we're involved in. Um there's a
92. 3:28reason why housing and autos and retail
93. 3:31and restaurants and things are trading
94. 3:34where they should be at a bare market
95. 3:35level because rates are going higher. Uh
96. 3:39the ghost rails.
97. 3:41This is the other side of the equation.
98. 3:44So, you've got the human time where
99. 3:45everyone that's doing back tests based
100. 3:46on the linear world that no longer
101. 3:48exists. And most of them are above the
102. 3:50age of 50, which I will take you
103. 3:51through. Uh, the ghost rails is the most
104. 3:54important story. It connects back to the
105. 3:55agents. I'll talk about that, why it
106. 3:57matters. But here's the deal. The speed
107. 3:59of intelligence is changing. The speed
108. 4:01of money has to catch up. So, everyone
109. 4:03you're listening to
110. 4:05on the bank side, you got to start with
111. 4:08their age. I hate I hate to say that,
112. 4:10um, but it's just a fact. Uh there's a
113. 4:12big difference between someone who's in
114. 4:14their 50s and has already made money
115. 4:16telling you how the world's going to end
116. 4:18and someone in their 20s or 30s who's
117. 4:20working really hard at AI and
118. 4:22understands crypto. It's like two
119. 4:24different worlds and that's why there's
120. 4:25a time mismatch and people have not
121. 4:27adapted because they don't use AI. Um
122. 4:30Alvin Tooffler I referenced this book
123. 4:32but this is really what this is and if
124. 4:34you haven't heard of future shock you
125. 4:36should. We're at that point where
126. 4:40you will frighten and get everyone to
127. 4:42feel overwhelmed. And I think right now
128. 4:44anyone who's bearish honestly with
129. 4:46what's happening in AI,
130. 4:49they don't want to jump on board at this
131. 4:51point. Uh they can't. And I think
132. 4:53mentally they're angry at it. They think
133. 4:55it's a bubble. They think all these
134. 4:57things that fit in with anger. Um and I
135. 5:01think this makes sense because that's
136. 5:02what future shock is. If things are
137. 5:04changing too rapidly, then people don't
138. 5:07want the games to change. They don't
139. 5:09like managers making decisions based on
140. 5:12quantitative data. It's the old man in
141. 5:15the front yard routine. And I think
142. 5:17that's why I keep showing this, which is
143. 5:19I didn't want to be over here. I made
144. 5:20the journey over here in 2013, uh, my
145. 5:24trip to Silicon Valley and Singularity
146. 5:25University to make sure I didn't focus
147. 5:27on this anymore, believing that this was
148. 5:29no longer relevant. And that's what's
149. 5:31worked. And it's worked honestly since
150. 5:332007. That's why IWM versus QQQ has gone
151. 5:36down every single year and it just
152. 5:38continues to make new lows. Even though
153. 5:39we had a rally and a broadening out in
154. 5:41the early part of the year, we're back
155. 5:42to the Mag 7 making new all-time highs
156. 5:44and the Mag 7 are gigantic and the
157. 5:46Russell 2000 2000 names are in trouble
158. 5:51because of AI. Uh not all of them. Some
159. 5:54of them make the infrastructure side as
160. 5:56we saw early. But when rates went higher
161. 5:58and oil went higher, these companies
162. 6:01don't have a way to survive. So this is
163. 6:04the world that we're in. And over here,
164. 6:06we're going to wean out a lot of people.
165. 6:08That's why I'm saying there's a bare
166. 6:09market with inside a bull market. So too
167. 6:12much of our life right now is polarized
168. 6:14into binary situations. It's a bubble.
169. 6:16It's not a bubble.
170. 6:19There's a time mismatch.
171. 6:21So, it's very hard for me to imagine
172. 6:23having been involved in markets for a
173. 6:25long time that Blockbuster earnings
174. 6:28bolster stocks record run.
175. 6:31And yet, while this is happening and
176. 6:34stocks are near their all-time highs, uh
177. 6:37I'm doing Julia's show uh soon. Um these
178. 6:41are just the three ones that picked up
179. 6:44on here. depression ahead. Michael
180. 6:47Pinto,
181. 6:4955 or higher. Uh Daniel D. Martino, I
182. 6:53don't want to disclose her age. I looked
183. 6:54up and go through it, but she's in the
184. 6:56bracket of me and the rest of Michael
185. 6:57Pinto and George Noble who's older than
186. 7:00us. All of us
187. 7:03above the age of 55 or above the age of
188. 7:0650. Let's just leave everyone else out
189. 7:08of this. Here's the main thing. You see
190. 7:11this chart? Does it look like it's going
191. 7:14higher? absolutely does to me. I mean,
192. 7:16this is a beautiful five waves up
193. 7:18consolidation, little triangle. It's
194. 7:20going higher. Do I think it's going
195. 7:22higher? I do. Would I bet on it's going
196. 7:25higher? No. I don't think it's worth the
197. 7:27time and the energy when I've got other
198. 7:29things to be involved in. Do I think
199. 7:31that this period here to compare to this
200. 7:35period is very different? Yeah, I do.
201. 7:37But again, everyone wants to just take
202. 7:39the story and get you scared because
203. 7:41this is going to go up to 10, 12, 14,
204. 7:4315. The government's got tons of debt.
205. 7:45All this stuff. It's a story. Here's
206. 7:47another story. I am 59 years old, soon
207. 7:50to be 60. This is what I did this week.
208. 7:53Crypto. Why now? All of the different
209. 7:56components. AI agents are the inflection
210. 7:58point. I'm showing you this because I'm
211. 8:01spending my time on where the world is
212. 8:03going, not where the world was.
213. 8:05Tokenization is happening. It's
214. 8:08happening now. I'm talking about how
215. 8:10tokenization will dramatically change
216. 8:13M2, will dramatically change monetary
217. 8:16economics today. This is the most
218. 8:18important thing happening in the world
219. 8:20today. And it's directly related to
220. 8:22crypto and it's directly related to AI
221. 8:24agents.
222. 8:25Bond yields, believe it or not, I did a
223. 8:27back test. There was no tokenization
224. 8:29during the 70s, 80s, 90s, and 2000s.
225. 8:32There was no AI in everyone's hands
226. 8:35accelerating at the pace, solving math
227. 8:36problems, stuff. None of that was there.
228. 8:38So, is it different? It's absolutely
229. 8:40different. I don't even know how people
230. 8:42don't see it. So, a whole new mind. Why
231. 8:45rightrainers will rule the world is
232. 8:47something I included in there. I'm going
233. 8:48to go back to it. This has been going on
234. 8:50for some time. I didn't just make this
235. 8:52up here. Remember when we were everyone
236. 8:55was telling us in 2022 when rates were
237. 8:57going higher and the Fed raised rates
238. 8:58how we were absolutely going to have a
239. 9:00problem?
240. 9:02We did have Silicon Valley Bank go
241. 9:03under, but it didn't even make a hiccup
242. 9:05on the market. We had a an inverted
243. 9:08yield curve, 100% probability of getting
244. 9:10a recession. We had this the lei
245. 9:12year-over-year, something I studied for
246. 9:14years, and yet I didn't fall for the
247. 9:16trap of it because I knew that this was
248. 9:18created during a time that didn't matter
249. 9:20anymore. Same thing with rates. Yes,
250. 9:23rates mattered in the past when
251. 9:24companies took debt out that didn't have
252. 9:26good balance sheets and they were
253. 9:28betting on the future. When people
254. 9:29bought houses, nobody buys a house now.
255. 9:32Housing is trading near all-time lows in
256. 9:34terms of sales. Everyone has positive
257. 9:37owner's equity in their home. It's a
258. 9:39completely different world. The
259. 9:40government is the one saddled with the
260. 9:42debt. So, if you want to bet that the
261. 9:43United States government's going to
262. 9:45default, as I wrote in that paper, blah
263. 9:47blah blah. I've heard this too many
264. 9:48times over the course of my life in this
265. 9:50business about how governments aren't
266. 9:52going to be able to get through having
267. 9:54debt. The LEI just went positive. We
268. 9:57never got a recession. But guess what?
269. 9:58Every other time that it was down there,
270. 10:00every other time we got a recession. So
271. 10:02that's why I'm saying there's plenty of
272. 10:04instances where this time is different,
273. 10:06but I want to give you stuff as facts
274. 10:08that if this I'll change my mind. If
275. 10:10year-over-year S&P goes negative, I'll
276. 10:13change my mind. And like I've said, I
277. 10:15got a recession signal here in the end
278. 10:17of 2007 near the peak. It was before the
279. 10:20peak of the market. It was right at the
280. 10:21peak of the market. When you have an
281. 10:23economy that matters, stock prices
282. 10:26reflect profits. They reflect hiring.
283. 10:28They reflect profit margins. All of that
284. 10:31stuff matters to whether rates are
285. 10:33having an impact. If rates are having an
286. 10:35impact and you're saying, "Well, there's
287. 10:37a bubble because stocks aren't going
288. 10:38down." Okay, but what about earnings
289. 10:40going higher? What about profit margins
290. 10:41going higher? I'll go through other
291. 10:43things as well. In 2000, before we got
292. 10:45into the recession, you got a sell
293. 10:47signal. The second derivative matters.
294. 10:50The second derivative tells you if
295. 10:51there's issues happening in the economy.
296. 10:53We are up 17% year-over-year, guys. Here
297. 10:57is credit spreads. This is taking the
298. 10:59Moody's BA yield relative to 10-year
299. 11:03yields.
300. 11:05I I'm sorry. When we have problems like
301. 11:07in 2000, spreads are widening. Spreads
302. 11:10are widening. They're always So, if
303. 11:12rates are going to have an impact,
304. 11:13you're going to see it in credit
305. 11:13spreads. It's not there. Jobless claims
306. 11:17for everything with the jobs market.
307. 11:20If companies are in trouble, if we're
308. 11:22going to have a problem in the market,
309. 11:23if rates are mattering, you're going to
310. 11:26fire people and they won't be able to
311. 11:28get rehired. They will go for
312. 11:30unemployment insurance. That's why this
313. 11:33thing matters so much before every
314. 11:35crisis.
315. 11:37Jobless claims are going higher. They're
316. 11:39not budging. So, when those things
317. 11:41change, I'll worry about it. Profit
318. 11:43margins, like I said, they're mean
319. 11:44reverting. They tend to go down before.
320. 11:46Look, they peaked in ' 07. They were
321. 11:48already declining. They haven't even
322. 11:50stopped going higher in a parabolic
323. 11:52fashion yet. And oh, by the way, this is
324. 11:55another fact. So everything I'm showing
325. 11:56you are facts. These are not a story I'm
326. 11:59putting together as a story. But people
327. 12:02using rates as the story, there's no
328. 12:05facts to it. It's just a story. Here is
329. 12:08the story or the facts.
330. 12:11Money supply or money market funds again
331. 12:14on a three-month base, they went higher.
332. 12:15Now, I don't care if this is
333. 12:17cherrypicking three months. What I'm
334. 12:19saying is that historically this is
335. 12:21happening in times not while the stock
336. 12:22market is sitting their all-time highs.
337. 12:24It's it's happening during panics.
338. 12:26There's flush with cash out there.
339. 12:29It's moving in because rates are higher
340. 12:31and people are collecting 5% 4% whatever
341. 12:35they want. So I've referenced this book
342. 12:37twice already in this in this uh video.
343. 12:40This was a very important book of my
344. 12:41life. I think I read it just before the
345. 12:43great financial crisis. This really got
346. 12:46why right ber why right brainers will
347. 12:49rule the world. This was written by
348. 12:50Daniel Pink who predicted that because
349. 12:53of technology and exponential
350. 12:55technology. This is just after the.com
351. 12:57bubble but knowing what was coming.
352. 13:00The world was no longer going to be
353. 13:02about mathematicians. It wasn't going to
354. 13:05be. This is what I always say about
355. 13:06Michael Bur. Everyone who made money on
356. 13:09the housing market. Look how long it
357. 13:11took before that had an impact to go
358. 13:13through. But regardless, you can't bet
359. 13:16on the technology side to go through it.
360. 13:20This is a different world. We're in a
361. 13:22completely different world. So to say
362. 13:24this time isn't different isn't that is
363. 13:26an old man on the front yard story. It
364. 13:28is different.
365. 13:30The demographics, this is a fact,
366. 13:33Claude, who uses it?
367. 13:37Those people I mentioned, meaning myself
368. 13:39and anyone above the age of 55, who are
369. 13:41the people normally interviewed on
370. 13:43podcasts as macroexperts,
371. 13:45we're interviewed. Our bracket of age is
372. 13:4855 to 64. 2.2% of us use AI. How can you
373. 13:54have a view on today's economy and on
374. 13:57today's market if you don't use AI? I
375. 14:00don't think it's possible because here's
376. 14:01where we are. It's about to get worse.
377. 14:05So, in 2022 is when Chat GBT came out.
378. 14:08Here we are now in 2026. So, unless
379. 14:10people are using it on a regular basis,
380. 14:12of which, if you're impressed with the
381. 14:14images, and everything I put together in
382. 14:16this video, it's all done via AI. I
383. 14:19learn everything through AI. I have Muse
384. 14:22doing all of my checks, my bank fraud
385. 14:24alerts, everything like that is done
386. 14:26with AI. Anything that comes out new,
387. 14:29I'm working on Jev now, and I'll show
388. 14:30you that in a little bit. Anything
389. 14:32that's new I'm trying to give you guys,
390. 14:35but I'm also trying to use it myself for
391. 14:37what's going on. This is what's coming.
392. 14:39Robots, science and technology,
393. 14:42flying cars, Mars. Is this time
394. 14:45different? Of course it is. Now, here's
395. 14:48where we are. The personal agent. It's
396. 14:51finally arrived. This is a big deal.
397. 14:52This is a major thing. This was the
398. 14:54number one thing of the market this
399. 14:56week. New York Times, not the most
400. 14:58positive uh paper on technology. I gave
401. 15:02my life over to Meta's AI agent and I
402. 15:03was blown away. So was I.
403. 15:06Here's mine. Yubie. For all you Nick
404. 15:09fans, Yubie Brown was my favorite coach.
405. 15:12That's in honor of Hubie. So, I named my
406. 15:14He looks like a Yubie. Uh, this is just
407. 15:16my fraud alert. See, someone tested
408. 15:18something. AI is all over the place. I
409. 15:20asked it to go back and see if it saw
410. 15:22any charges the prior week. Uh, the
411. 15:25downloads are surging. This is what came
412. 15:27up the other day for someone who tried
413. 15:29to get who showed me. Here's the
414. 15:31partnership with PayPal, Expedia,
415. 15:34Shopify, Instacart,
416. 15:37Meta Stock was up 14% on Monday.
417. 15:43It drove Intel, AMD, but also the other
418. 15:47Mag 7 because guess what they have too?
419. 15:48They're going to benefit from this,
420. 15:49especially when I take you through why
421. 15:51it happened. So remember back in July
422. 15:54July 2nd meta Mark Zuckerberg I covered
423. 15:57this just said at an internal town hall
424. 15:58meeting that AI development over the
425. 16:00last four months hasn't accelerated in
426. 16:01the way we expected. Think about that
427. 16:03and now look here. So I went in to AI
428. 16:07and I basically said I want you to go in
429. 16:08and find out what changed from that time
430. 16:11because it seems to be able to get from
431. 16:12there and all of a sudden be able to
432. 16:14launch this product. What happened? and
433. 16:18I asked it to go into Reddit into X into
434. 16:21all employees of Meta and get whatever
435. 16:23information you can get other than
436. 16:25what's been out there as well and then
437. 16:27put it together. So basically you can
438. 16:30see on the chain of events they release
439. 16:321.1 then 3 weeks later was 1.2 then 3
440. 16:36weeks later was 1.3 and all of a sudden
441. 16:38you have the Muse consumer launch.
442. 16:41Clearly as you go through this things
443. 16:42were changing and the benchmark move was
444. 16:45happening. And the reason this is
445. 16:46important is when you go through it and
446. 16:48you read what they said changed, we're
447. 16:51at the point of effectively recursive
448. 16:54self-improvement or at least the models
449. 16:56are so smart that their ability to
450. 16:58contribute to them getting better is
451. 17:01increasing dramatically. And this is
452. 17:02where when you go through it and you
453. 17:04have to think about this because this
454. 17:06means the competition for consumer
455. 17:08agents is coming quickly and the models
456. 17:10are just going to get better and better.
457. 17:12And that's what this was about. So again
458. 17:14this is from Leopold Ashen Brener's page
459. 17:1871 of situational awareness and when we
460. 17:20hit this point which as I've mentioned
461. 17:22his expectation with this would be 2027
462. 17:25and based on what Zuckerberg said in
463. 17:28June or in July two months later
464. 17:31everything changes. Go back to Andre
465. 17:33Karpathy who on Dwarash in October of
466. 17:36last year said agents would be a decade
467. 17:38away. constantly everyone with inside
468. 17:41the space is underestimating how fast
469. 17:44this is moving.
470. 17:46Remember it wasn't too long we were
471. 17:48talking about the pause. No pause. So
472. 17:51this week Opus 5.5 released. You
473. 17:54probably even see lower prices fable
474. 17:56level performance. Then GPT6 Soul and
475. 17:59Luna came out. Lower cost, fewer
476. 18:01mistakes. Wasn't just those. Google
477. 18:04released one. A uh ch China released a
478. 18:07bunch. Forget it. We are this week. The
479. 18:10model fire hose is wide open. Recursive
480. 18:12self-improvement.
481. 18:14And so what's coming?
482. 18:17A new kind of AI model from chatbt
483. 18:19inventors. Thrilling developers.
484. 18:22So Jev came out. I'm I'm not going to
485. 18:25spend a lot of time on Jev at this
486. 18:27point, but I am going to let you know.
487. 18:29You have to go read what this is doing
488. 18:31because this is very different than an
489. 18:32LLM. So this is not another one
490. 18:34competing with ChateBT. And this this is
491. 18:37actually one that you would use with it.
492. 18:39And that's what I'm working on because
493. 18:41with the treasure hunt and again for
494. 18:43those of you who had your children do
495. 18:46this on my uh the on on my video and and
496. 18:49the subscribers, Jev is now the next
497. 18:52thing for them to play around with. Jev
498. 18:55analyzes everything. So it's not just
499. 18:58something that's going to go back as an
500. 19:00LLM and do a back test. This one is
501. 19:03making decisions based on everything. it
502. 19:06is completely different. So the it
503. 19:08becomes a decision engine. So I'm
504. 19:10working on this to kind of go through it
505. 19:12and bring the agentic trading and show
506. 19:14you guys what I'm doing in it. But
507. 19:15again, all of this just says that we're
508. 19:17right here. So now that the agent has
509. 19:20arrived
510. 19:22Muse,
511. 19:24what happens Microsoft? So now all of a
512. 19:26sudden the Mag 7 and I want to since
513. 19:29people reach out and go, does this mean
514. 19:30you're not negative the the
515. 19:32hyperscalers? Does this mean you're not
516. 19:34negative SAS completely?
517. 19:38I don't know how many times to like go
518. 19:40through this. My viewpoint on everything
519. 19:43is that the infrastructure compute names
520. 19:46will outperform. So my thematic
521. 19:48portfolio on the Agentic infrastructure
522. 19:50is up 46% through Friday. The Mag 7 are
523. 19:53up 10%. Salesforce.com despite this
524. 19:57major rally is down 10% year-to date.
525. 20:00There will be periods where all of them
526. 20:02will outperform, but in the end, I think
527. 20:04they'll all run into trouble. And what
528. 20:06these guys will run into, they're going
529. 20:07to get benefits, but they're going to
530. 20:08have competition from each other and
531. 20:10competition from OpenAI and competition
532. 20:13from Anthropic. They are going to drive
533. 20:15prices lower. And so, there will be
534. 20:17periods where the enthusiasm and the
535. 20:19hope will get there, but in the end, I
536. 20:22believe all of them will go through
537. 20:24multiple compression. And remember, the
538. 20:26Micron has already gone through multiple
539. 20:28compression to very low levels. I know
540. 20:29the mag seven have it. I know software
541. 20:31has as well. They're all going to go
542. 20:32through it. That is the bare market with
543. 20:35inside a bull market. And that, my
544. 20:37friends, is what happens normally when
545. 20:39rates go higher is we get multiple
546. 20:41compression. Where was the S&P 500 PE
547. 20:45back in 1980? Go back and look at your
548. 20:48books. It wasn't 20, it was below 10. I
549. 20:52believe and we'll say it publicly that
550. 20:54based on my viewpoint of the competition
551. 20:56from tokenization, the competition from
552. 20:59AI and the fact that I don't see rates
553. 21:02for the near-term coming down
554. 21:04dramatically. I think the pressure on
555. 21:06all of these companies is actually going
556. 21:08to come from the deflationary side. And
557. 21:10that deflationary side is going to come
558. 21:12from tokenization, expanding the amount
559. 21:14of things to invest in at the same time
560. 21:16as AI making things cheaper and cheaper
561. 21:19and just driving competition to hyper
562. 21:22competition. Apple, Siri getting closer.
563. 21:26I'm sure now because of how good the
564. 21:27models are, we're finally going to get
565. 21:29that. Amazon. Why do you think Amazon
566. 21:32has a standoff over Muse? I think again
567. 21:35we're at the point of competition
568. 21:45for me. Check it out.
569. 21:47>> Well, you guys got to hear my uh my iPad
570. 21:50jumping into the equation as I said her
571. 21:52name. Uh met a standoff with Amazon.
572. 21:55Could be a sign of things to come. It's
573. 21:57always good when you're one man. John,
574. 21:58I'm not editing this out, so I hope you
575. 22:00enjoyed that. Um had the opposite effect
576. 22:02on some financial services. online
577. 22:03travels. We're in another stage where I
578. 22:05think people are trying to figure out
579. 22:06who loses and who wins from the agents.
580. 22:09I think this is going to be a big deal.
581. 22:10And remember, OpenAI is going to release
582. 22:13their agent. So, you're starting to get
583. 22:16more
584. 22:17response uh to Meta's Muse. There's
585. 22:20going to be a lot of them. So, let's go
586. 22:21back to something I've shown you guys
587. 22:23relentlessly this year in terms of the
588. 22:25infrastructure and compute needs.
589. 22:27They're insatiable.
590. 22:30We had enterprise agents. we didn't have
591. 22:33consumer agents. So, we already had the
592. 22:35enterprise. This was in the first half
593. 22:36of 26. So, let's assume now we're here.
594. 22:40Consumer agents are just starting and I
595. 22:43would expect that they're going to
596. 22:45explode in terms of usage just based on
597. 22:47the downloads. So, here's one of the
598. 22:49slides and the most important thing for
599. 22:51you guys to think about. You can choose
600. 22:53what side you're on. This is the way the
601. 22:55economy is right now. So, think of this
602. 22:57as the mag 7 in technology. Over 50% of
603. 23:00the S&P 500 is over here. Over here are
604. 23:03homebuilders and auto companies like
605. 23:05Ford and all this stuff
606. 23:08that the young kids don't care about and
607. 23:11that the people above the age of 50
608. 23:13think is what drives the economy. This
609. 23:15is what drives the economy. It's in the
610. 23:17market cap. We know that the Russell
611. 23:192000, these companies that still need
612. 23:21debt, that care about rates, they're not
613. 23:23going to make it through this. This is
614. 23:24the bare market within the bull market.
615. 23:26So you can either focus on the bare
616. 23:28market signals or you can focus on the
617. 23:30bull market signals. This is the two
618. 23:32worlds that are going on and this is the
619. 23:34time mismatch. When I was in DC, I
620. 23:36talked about the friction. Anything that
621. 23:38has friction which will eventually get
622. 23:40the big mega companies as well on tech
623. 23:43uh eventually. What is going to happen
624. 23:45is that more and more young people are
625. 23:47coming over here. The AI native
626. 23:49companies are rising over here. All of
627. 23:51this stuff is going to disappear
628. 23:54slowly.
629. 23:57But it's going to happen. So again, the
630. 23:59future began begins belongs to a
631. 24:02different kind of person.
632. 24:04So here you go. Here's the scary chart.
633. 24:07Here's the oil chart. Oil is the same
634. 24:09price as it was in 2007 despite the fact
635. 24:11that disposable income and everything is
636. 24:12through the roof. This is what's scaring
637. 24:14you. Those two things. I showed you
638. 24:17facts about the economy and I showed you
639. 24:19facts about agents and the acceleration
640. 24:21of AI. Those are facts. Those are not
641. 24:22guesses. So there's a bare market within
642. 24:25a bull market. Lowers the barriers to
643. 24:28entry. AI reduces the cost to start and
644. 24:31compute. Faster innovation cycles. Most
645. 24:33erode more quickly. Margin pressure.
646. 24:36Shorter duration. Multiple compress. So
647. 24:38multiples compress is the bare market.
648. 24:41We have the most important technology
649. 24:43ever. People compare this to the dot
650. 24:45bubble when Cisco was trading at 100 PE
651. 24:48and Nvidia is trading at 15 next year's
652. 24:50earnings. This is not a bubble. This is
653. 24:53the opposite. This is a bare market
654. 24:55where we are pricing in that AI's
655. 24:58competition will destroy the value of
656. 25:00anything outside of five years. And that
657. 25:02is going to get shorter and shorter. So
658. 25:05as they're making money, they're
659. 25:07starting to say what actually happens.
660. 25:10So before AI, 10 bucks a share. After
661. 25:14AI, think salesforce.com. But now the
662. 25:16multiple goes from 30 to 10. The stock
663. 25:19price goes down. Again, this is what's
664. 25:21happening in the market. And what you
665. 25:23need to be focused on in terms of
666. 25:24investing is smaller businesses, AI
667. 25:27native companies, the infrastructure
668. 25:29side, the intellectual property. We're
669. 25:31going to have a change because more
670. 25:33asset classes are coming and they're
671. 25:35coming through tokenization. So, public
672. 25:38equities dominated. It's going to get
673. 25:40brought up, broken up into a bunch of
674. 25:42things. And if you don't believe this,
675. 25:44that's what my job is with the crypto
676. 25:46side. And so for those of you who have
677. 25:48ignored crypto, you know, tokenization
678. 25:50is coming. You don't, you're reaching
679. 25:52out more and more. I got more people
680. 25:54coming to me on this. This is really
681. 25:56important because tokenization plus AI
682. 25:58is a gamecher for the economy. And
683. 26:01that's why we have a bull a bare market
684. 26:03within a bull market.
685. 26:05The groups that are not part of this are
686. 26:07going to suffer. And what rates are
687. 26:09meant to do is to go high to drive them
688. 26:11out of business because AI is driving
689. 26:13rates higher because nominal GDP is
690. 26:15driven by AI. So the winners are moving
691. 26:18rates higher. They are forcing out the
692. 26:21people that can't survive. The companies
693. 26:22that can't survive with rates at higher
694. 26:24levels. So the businesses that will have
695. 26:27to replace them will be the ones that
696. 26:28can survive on that. The only way you
697. 26:30can do that is not have debt today.
698. 26:32Start your business now. Use humanoids.
699. 26:35Use AI. That's what's coming for
700. 26:37housing. All of it. House prices will
701. 26:39come down eventually. They'll come down
702. 26:41when the cost of building them goes
703. 26:42down. That'll be in five years
704. 26:43beginning. You have to start thinking
705. 26:45this way because that's the way this
706. 26:47goes. Rates are a way to get rid of the
707. 26:49weak and that's what's going to happen.
708. 26:53Breath. I like Jason's work. He's been I
709. 26:57think reluctant because I I think in the
710. 26:59back of his mind he's like I I don't
711. 27:01even know. We've never seen breath this
712. 27:04bearish in the last hundred years. Okay,
713. 27:10this is the reason why
714. 27:13um IWM [clears throat]
715. 27:15relative
716. 27:17to QQQs is the white line. The orange
717. 27:20line is the breath
718. 27:23they're tracking. It makes sense that if
719. 27:26you have companies worth 30 trillion
720. 27:29and a bunch of stocks that combined are
721. 27:32worth 4 trillion.
722. 27:35H
723. 27:37it's a different world, guys. It's a
724. 27:40different world.
725. 27:42This has been the widowmaker trade
726. 27:44making new lows. See that September
727. 27:4724th, new lows. IWM verse Q. This is not
728. 27:51a new thing. You know when breath was
729. 27:53really bad? when Amazon was beating
730. 27:55every retailer, that's when Breath was
731. 27:57bad, too. Breath is always bad during
732. 27:59these times when the Mag 7 do well. So,
733. 28:03here's that bridge to cross over to the
734. 28:05new side. This is where we start to get
735. 28:07in the interesting stuff. If you guys
736. 28:09haven't seen the Muse character, here it
737. 28:12is. So, what Yubie is doing, my Ubie, is
738. 28:15he's guiding people that want to go
739. 28:17learn new stuff. He's trying to help
740. 28:19them cross the bridge. He's the agent.
741. 28:22AI agents are really the thing that are
742. 28:24going to fix because I've learned that
743. 28:26humans don't adopt technology anytime in
744. 28:29history fast. That is the reason why we
745. 28:31have things like the.com bubble. They
746. 28:33get excited about it. They overbuild it
747. 28:36before it's ready. The AI agents are the
748. 28:38app store. The AI agents are the iPhone.
749. 28:42That's what it is for me. This is the
750. 28:43change. This is where tokenization,
751. 28:46crypto, and AI connect. That is the
752. 28:48bridge here. So that bridge is really
753. 28:51the thing that I'm measuring both in my
754. 28:52AI infrastructure basket for those of
755. 28:54you who saw my crypto video this week
756. 28:56and our subscribers. You're going to get
757. 28:59an education for all the mutual funds,
758. 29:00the macro people, the hedge funds that
759. 29:02are out there, even if you don't have
760. 29:04the ability to invest in crypto. You
761. 29:07need to understand the entire ecosystem
762. 29:09because it matters for public companies
763. 29:11because they will be disrupted. So this
764. 29:14is going to be a weird one. Everyone
765. 29:15focused on Amazon. They focused on
766. 29:17Ozmpic. When Ozmpic came all the re you
767. 29:20need to get the disruption names because
768. 29:22when the disruption comes the alpha's on
769. 29:24the short side. That's what this new
770. 29:26world is. The new world destroys old
771. 29:29businesses. This is more about the
772. 29:31companies to be short. If you go through
773. 29:33and look at how what percentage of
774. 29:35companies have outperformed the S&P 500
775. 29:37over the last one years, three years, 5
776. 29:39years, 10 years, it is a destruction.
777. 29:43There's just nobody outperforming. Part
778. 29:45of that is because of the market cap,
779. 29:47but part of that is because these small
780. 29:49companies are so tiny that you need some
781. 29:52kind of a cyclical recovery. We had it.
782. 29:53The PMIs went higher and now we're
783. 29:55making new lows in cues. That is not
784. 29:58supposed to happen. That's because rates
785. 30:00are going higher and they're suffering,
786. 30:02the majority of them. Here's
787. 30:04Salesforce.com.
788. 30:06The amount of people said, "Yeah, but
789. 30:07it's rallying. It's rallying. It's down
790. 30:0910% year to date. Now it's in a
791. 30:11downtrend again. the last five years
792. 30:14it's unchanged. Actually, it's down 15%.
793. 30:17Like, don't give me this garbage with
794. 30:19Salesforce.com.
795. 30:21Here's Visa.
796. 30:23Here's the name that gets brought up to
797. 30:25me the most. Visa and Mastercard. Unless
798. 30:28I'm missing something on the sentiment
799. 30:29side, guys. This is just going to be a a
800. 30:31knife fight for the P with as the PE
801. 30:34comes down because no one wants to give
802. 30:35into this. They just don't see how
803. 30:38crypto is going to do it. This was name
804. 30:40was brought up to me about eight times
805. 30:41this week. So again, I believe that
806. 30:46there will be no consumers. The
807. 30:47consumers will be Muse. If you haven't
808. 30:49got Muse, you can't even have a say in
809. 30:51it because you haven't used it. Muse
810. 30:53will change everything. And yes, I've
811. 30:54given it all my credit cards. I've given
812. 30:56it all my bank accounts, everything
813. 30:58about it. It already did information for
814. 31:01me. It did DMV work for me. It canceled
815. 31:03the Verizon FiOS thing because I saw it
816. 31:05on X and I went, "Oh, this is great. I
817. 31:07need to cancel something on there or two
818. 31:08and renegotiate." All of those things
819. 31:10you're going to be able to do. All
820. 31:11right. Now stocks really bearish chart.
821. 31:14S&P is about to make new all-time highs
822. 31:16and it's been consolidating after pole
823. 31:18consolidation. Pole consolidation
824. 31:22pole consolidation. This is cues.
825. 31:26IWM downtrend still above the 200 day
826. 31:29still pointed upwards. All that needs to
827. 31:31happen for this to go higher is what?
828. 31:33Oil just needs to come down. If oil
829. 31:35doesn't come down, it'll probably just
830. 31:37hang in here and be dragged around. But
831. 31:39this is not like some collapse or some
832. 31:41bad thing. It's just they suck with
833. 31:44rates. It's just a fact. Uh if you want
834. 31:48the one place that the bears can kind of
835. 31:50look and be like, "All right, let's see
836. 31:51if there's contagion." Now again, this
837. 31:52is one thing that hasn't meant anything
838. 31:55in terms of the last three years. But
839. 31:58let's just look bond went up. So the
840. 32:02long end has got to the point where for
841. 32:04some reason people are reaching for
842. 32:05volatility and fixed income which
843. 32:07usually means someone's getting hurt. So
844. 32:10I overlaid it with the OA OAS
845. 32:13for high yield.
846. 32:15It's barely budged but at least it's
847. 32:17moving. So for people want to be bearish
848. 32:19this is where I'd focus my attention.
849. 32:21You have the dollar rallying too. You
850. 32:23know you're getting a little bit of
851. 32:24deleveraging stuff. Everyone's freaked
852. 32:26out in gold and silver and things like
853. 32:28that. But the reality is credit needs to
854. 32:30widen out. This is the long-term chart
855. 32:32of OAS. Um,
856. 32:35okay. Just a reminder because I got
857. 32:37called or emails on the weekend. Are you
858. 32:39worried about and I can't believe this
859. 32:42guy even gets anything as like something
860. 32:44to follow? But AI stocks will drop 10%
861. 32:47on Monday morning. Brace for impacts.
862. 32:49All because of the pause trade. So, we
863. 32:51all know that that was a bad time to
864. 32:52sell stocks because they all gapped
865. 32:54lower because everyone was scared and
866. 32:57the knee-jerk happened and then that was
867. 33:00the low. So, I don't know how many times
868. 33:03everyone's going to fall for AI bear
869. 33:05stuff, bubble stuff. What does this
870. 33:07mean? It happens the entire time. And
871. 33:09remember, this was the end of
872. 33:10situational awareness. This is the area
873. 33:13where I was doing my midcycle slowdown.
874. 33:15And I'm I this chart is great. And more
875. 33:19importantly, the structure of what's
876. 33:21going on is really good. And the fact
877. 33:23that it's starting to handle bad news
878. 33:24really well when people are panicking.
879. 33:26Uh and oh, by the way, it was the best
880. 33:28week since the week after it. So, I
881. 33:30think the infrastructure trade has a
882. 33:32catalyst. I think that is the
883. 33:34recognition that the consumer agent
884. 33:36stuff is going to drive not only numbers
885. 33:38now, but people are going to start
886. 33:40talking in their numbers about how big
887. 33:42of an impact the consumer agents are
888. 33:44because the token numbers are going to
889. 33:45go up significantly. And that's the
890. 33:48reason why you've seen Intel, AMD,
891. 33:51you've seen names get hit on the other
892. 33:53side related to the disconnect. Now,
893. 33:57I haven't shown this in a while. We're
894. 33:59getting some good Brett. We got the
895. 34:01highest number of names above the 20-day
896. 34:03since back here. But most importantly,
897. 34:06when we were doing this here, as I said,
898. 34:08the ATR was very, very high. And now the
899. 34:11ATR is very, very good. I think we're at
900. 34:14the beginning, and I think these things
901. 34:15are going to get back to the highs.
902. 34:17meaning my agentic portfolio. Go pick
903. 34:19your names in it. Uh whatever the case,
904. 34:22I've told you the ones that I still have
905. 34:24decent sized positions on. Uh I've been
906. 34:27moving out of some of the tinier ones
907. 34:29and moving all of that in the crypto
908. 34:30because I believe crypto is the major
909. 34:32story on the back of the agent trade. Uh
910. 34:35a good video to watch uh is just
911. 34:39Blackston's John Gray. He I watched this
912. 34:41this week. It's really I I like read I
913. 34:45like watching uh people like John Gray
914. 34:47talk about what he's seeing in his
915. 34:49companies. He's got a bunch of private
916. 34:50companies. He gives a lot of numbers in
917. 34:53here related to how much they're using
918. 34:55AI. I'm not going to go through the
919. 34:57whole thing, but he does a really good
920. 34:58job. First of all, it's interesting. He
921. 35:01shows the explosive spending that has
922. 35:04happened uh from September of last year
923. 35:06to September of this year. 21% increase
924. 35:09on his companies in terms of their
925. 35:11spending. uh the payoff is already
926. 35:13showing up. He goes through the ROIC and
927. 35:16more importantly he cites all of the
928. 35:18places that it's happening. Lease
929. 35:20processing, code repair, like everyone's
930. 35:23worried about the revenues. They're
931. 35:24already happening. Absolutely. But
932. 35:26there's no way to measure where they're
933. 35:28happening. You know how you measure it
934. 35:29in profit margins. That's what this is.
935. 35:32They're show he breaks it down for you.
936. 35:34So it's showing up in productivity,
937. 35:35showing up in margins, earnings, jobs,
938. 35:37science. The limiting factor is now the
939. 35:40physical world. It's what we talk about.
940. 35:41That's why you invest in the physical
941. 35:43world. The biggest investment risk is
942. 35:45underestimating disruption, but
943. 35:47overpaying is also dangerous. So, as
944. 35:50he's going through this, he's just
945. 35:52talking about the things people have to
946. 35:53worry about, which again, cyber risk,
947. 35:55regulation, geopolitical tension. He
948. 35:57gives you both sides. So, I just think
949. 35:59it's important because he does a really
950. 36:01good job of basically going through
951. 36:04everything. I think the underestimating
952. 36:08disruption is why these companies are
953. 36:10going to have a hard time with their
954. 36:12multiples. I [clears throat] think all
955. 36:14companies that are big are targets and
956. 36:16that's basically what it comes down to.
957. 36:18I think friction is in companies. I
958. 36:20think AI native businesses that are
959. 36:22small are just not targets for the stuff
960. 36:24that's going to go on. So I think you
961. 36:26have to be on top and again companies
962. 36:28that don't have AI don't have the
963. 36:29protection, they're going to be an
964. 36:30issue, but people that do will be fine.
965. 36:33So the real returns he goes through it
966. 36:35like I said I think for people that
967. 36:36doubt what's happening he gives specific
968. 36:39examples of companies he goes through
969. 36:41this it is absolutely worth watching
970. 36:43again we're here so you need to stay on
971. 36:45top of this stuff
972. 36:48this was a great interview for anyone
973. 36:50who's seriously worried about hugging
974. 36:52face in the agent swarms brown who's a
975. 36:55lead openai researcher and Darkashh and
976. 36:58Dwar is a super smart guy who
977. 37:01understands this stuff inside and out
978. 37:03and most importantly as an interviewer
979. 37:05he attacks. I mean he he forces people
980. 37:07into a corner to go through it. This is
981. 37:10where you want open AI. They were the
982. 37:12ones that had the hugging face incident.
983. 37:13They were the ones that everyone read
984. 37:15about. Dwaresh is a good interviewer and
985. 37:18so this isn't on 60 minutes and this is
986. 37:20fairly complex but there's a bunch of
987. 37:23important points for people who are
988. 37:24worried about the swarms without
989. 37:27thinking about the positives that are
990. 37:29coming out of this. So again, he
991. 37:32explains multi- aent systems. I think
992. 37:34this is important. I think it's
993. 37:36important to understand what's been
994. 37:37happening with Navier Stokes, why that's
995. 37:39going on, what's been happening with
996. 37:41Muse, why that's happening. You have to
997. 37:43listen to what agents are able to do.
998. 37:46Most importantly, he does go through the
999. 37:48hugging face incident.
1000. 37:50He goes through all of it. I don't see
1001. 37:52how you can't leave that. And if you do
1002. 37:54leave it being completely worried, then
1003. 37:57you're not paying attention to this
1004. 37:59part.
1005. 38:00One of the major takeaways from the
1006. 38:02incident, this is a quote from him, is
1007. 38:04that people underestimated the AI. And
1008. 38:06we never want to be in a situation again
1009. 38:08where we underestimate the AI. It's a
1010. 38:11weird world that because AI progress is
1011. 38:13so fast, people are consistently
1012. 38:15underestimating AI. The critical thing
1013. 38:18here is that the reason this happened is
1014. 38:21because people, humans, underestimated
1015. 38:23it. So for everyone who's worried that
1016. 38:25these things are just going to go out
1017. 38:26there and go do what they need to do, is
1018. 38:29it possible? Of course. But they're
1019. 38:32talking about why we had this situation.
1020. 38:34Just like when Mark Zuckerberg
1021. 38:36underestimated AI, this is a really
1022. 38:38critical point because that's why the
1023. 38:40pause was so important. We are going to
1024. 38:42be spending time on the best models,
1025. 38:45either not releasing them or making sure
1026. 38:47that the guardrails are different. He
1027. 38:49goes into that in there. You should be
1028. 38:51more happy with this kind of stuff.
1029. 38:55Claude has discovered a previously
1030. 38:57unknown enzyme system hidden in DNA of
1031. 38:59of what will effectively be a structure
1032. 39:02that looks similar to crisper. Now, I'm
1033. 39:05sure you guys know gene editing and
1034. 39:06crisper like stuff. So, if you go read
1035. 39:09on X and or if you go read somewhere,
1036. 39:13you will find people that say this is
1037. 39:15nothing. You will find people that say
1038. 39:17it's something. I want you again to just
1039. 39:19focus on the fact that gene editing and
1040. 39:22the advancements we're making on this
1041. 39:23kind of science are unbelievable because
1042. 39:26this is not an old technology. I
1043. 39:28actually read this book or I I did books
1044. 39:30on tape for it uh at high speed because
1045. 39:33I was interested in what went on with
1046. 39:35this with Jennifer I think her name is
1047. 39:38Dana and I like Walter Isacson. I love
1048. 39:41Da Vinci and I love Steve Jobs. The
1049. 39:44reason I bring this up is Fangg Zang,
1050. 39:46for those of you who read it, was in the
1051. 39:48book as the major competitor to Jen
1052. 39:52Jennifer. Um, he came out and he's the
1053. 39:55only one I care about. I don't care
1054. 39:56about a random biologist saying it's
1055. 39:59good or bad. What I care about is
1056. 40:01someone who is known and renowned for
1057. 40:04his work and basically talking about how
1058. 40:07science is changing in front of our
1059. 40:09eyes.
1060. 40:10And that is where we are is that when
1061. 40:14did they set this up? They didn't even
1062. 40:15set their biology research group up
1063. 40:17until 20 until spring June 30 they
1064. 40:20launched this. Again, this just
1065. 40:21highlights that we're where we are in
1066. 40:23the Leopold map. We are going to have
1067. 40:25breakthroughs that are going to solve
1068. 40:27things and that's why Fang Zang's part
1069. 40:31of this is really important as going
1070. 40:32through it. McKenzie new research out
1071. 40:35emerging trends in AI enabled drug
1072. 40:38discovery suggest accelerated discovery
1073. 40:40cycle time. So again we're getting this
1074. 40:42whole thing and silicico medicine is on
1075. 40:44here twice. I've talked about their
1076. 40:46relationship with Eli Liy. You guys can
1077. 40:49go through all this stuff on your own.
1078. 40:50The only reason I'm going through this
1079. 40:52is because I believe that healthc care
1080. 40:55and uh and drug pharmaceuticals will be
1081. 40:58a major part of the agentic side. So AI
1082. 41:01consumer agents are going to get people
1083. 41:03excited for the next three months
1084. 41:05because they're going to extrapolate
1085. 41:06numbers into all of these. I don't think
1086. 41:08those companies are ever going to get
1087. 41:10them that way. I think there'll be some
1088. 41:11nice stuff that comes. Maybe I'm wrong
1089. 41:13on it, but I think this is going to be
1090. 41:15the next hype cycle in terms of what
1091. 41:16consumer agents are going to do. And I
1092. 41:18think people are going to miss the fact
1093. 41:19that this is more this is going to be a
1094. 41:21better thing for the biology side than
1095. 41:23the other side because I think this is a
1096. 41:25research and science thing and not a
1097. 41:27consumers are going to pay me more money
1098. 41:29thing. I think in the end crypto is
1099. 41:30going to benefit, but we'll get to that.
1100. 41:32Research acceleration. Again, OpenAI
1101. 41:34released this blog talking about how
1102. 41:36fast it's going. Just look at the
1103. 41:38internal use of coding agents and how
1104. 41:41much that's changed lately. These are
1105. 41:43parabolic moves in terms of what's
1106. 41:45happening, how much they're using them.
1107. 41:48It's just insane when you read the
1108. 41:51numbers. And this is driving the price
1109. 41:53of intelligence down faster than any
1110. 41:57technology in history. So again, if
1111. 42:01you're looking for productivity gains
1112. 42:02and you go back to the Leopold, when you
1113. 42:04reach the point of agents where now
1114. 42:0710,000 agents can work together as
1115. 42:09opposed to one human
1116. 42:11using coding agents, now we're going to
1117. 42:13have multi- agents working. That's why
1118. 42:15you have to listen to the nome brown
1119. 42:16thing and just start to get the numbers
1120. 42:18because that's when you start to get
1121. 42:19into the point that productivity
1122. 42:20explodes. And this is why at this point
1123. 42:23you want to be long speed and short
1124. 42:25friction because everything that's
1125. 42:27moving at human time and thinking at
1126. 42:28human time think people worried about
1127. 42:30rates is going to have a problem. You
1128. 42:34cannot sit there and wait. You have to
1129. 42:36be on top of what's happening. So if
1130. 42:38you're someone managing money and you
1131. 42:40are not fully in the know of compute of
1132. 42:44agents and swarms of the crypto
1133. 42:46guardrails and why they matter from the
1134. 42:48financial side, I don't think you can
1135. 42:50compete. I really don't. You're going to
1136. 42:52be competing first of all with
1137. 42:53computers, but if you're going to try to
1138. 42:55find ideas, which I think is going to be
1139. 42:57impossible to do because of what I've
1140. 42:59seen on the agentic side for retail and
1141. 43:01how much they're using it, I think you
1142. 43:03have to be short friction and I think
1143. 43:05you have to start to identify where you
1144. 43:07make money. So, putting a trade on for
1145. 43:10short friction right now, I think
1146. 43:13there's a bare market. Like I said,
1147. 43:14there's a bare market with inside a bull
1148. 43:16market. Go short. If you're if you think
1149. 43:17rates are going to blow something up, go
1150. 43:19short housing. Go short the private
1151. 43:21credit names. Go short the private
1152. 43:23equity names that are still trading
1153. 43:24down. Blue Al was down again this week
1154. 43:26approaching low. Like find the things
1155. 43:28that are clearly weak and go short
1156. 43:30those. I just think you're making a big
1157. 43:32mistake. This isn't the great financial
1158. 43:34crisis. This isn't the time before where
1159. 43:37everything was very sensitive to rates
1160. 43:39because we hadn't had the iPhone yet.
1161. 43:41The iPhone changed everything in 2007.
1162. 43:44That is when the debt markets changed
1163. 43:46forever and the market cap for the
1164. 43:48equity market changed. Those are not
1165. 43:51rate sensitive names. So again, AI plus
1166. 43:55tokenization.
1167. 43:56It's going to increase the speed
1168. 43:58significantly because the agents will
1169. 44:00now be doing the transactions. The
1170. 44:02velocity of money is going to explode.
1171. 44:04And like I said, M2, which right now
1172. 44:09you're going to have a dramatic change
1173. 44:11when wealth becomes part of M2 because
1174. 44:13of speed.
1175. 44:16I I just had to put this in there
1176. 44:18because it was a deadcat bounce on
1177. 44:20August 21st and my thematic my index is
1178. 44:23up 42% since he sent that out. So, he's
1179. 44:26he's really got a good track record uh
1180. 44:28lately. Um if you're looking to catch up
1181. 44:30on tokenization, I would start with Vlad
1182. 44:33Tennv's Rob from Robin Hood. Uh he was
1183. 44:36on moonshots this week. It's important
1184. 44:39to listen to someone and think, can
1185. 44:41someone at Morgan, Stanley, Goldman
1186. 44:44Sachs, Bank of America, JP Morgan, go
1187. 44:46through the list, can they compete with
1188. 44:48a guy who understands AI so well? Could
1189. 44:51anybody be on here on this show and talk
1190. 44:53about the things that he talks about on
1191. 44:54there? You have to listen to it and just
1192. 44:56understand the advantage of being a
1193. 44:58younger person in a world of AI with
1194. 45:01agents. It's really a big deal to
1195. 45:04understand that. And so to understand
1196. 45:06the tokenization side to understand uh
1197. 45:09Robin Hood chain these are all things
1198. 45:12that it talks about self- custody is a
1199. 45:14big deal he goes through that I think
1200. 45:16all of these things are super important
1201. 45:17as a thematic basis you don't have to
1202. 45:19listen to the whole thing but I
1203. 45:21definitely think when he says
1204. 45:22tokenization will take over the entire
1205. 45:23financial system and you're seeing that
1206. 45:25happening where it's moving that
1207. 45:26direction it should be there I highly
1208. 45:28recommend that you read this I publishes
1209. 45:31it as a substack for the exact reason
1210. 45:34that even though This is going out to
1211. 45:35subscribers
1212. 45:37and all of my crypto stuff. Well, and
1213. 45:39all of my stuff is basically going to be
1214. 45:41behind the payw wall now. Um, not the
1215. 45:44Substack and not the YouTube, but I want
1216. 45:46to make sure that people understand that
1217. 45:48I fully believe that this is the major
1218. 45:51story and that you have to go through
1219. 45:52it. And yes, I do take shots at people
1220. 45:56in rates because we've fallen for this.
1221. 45:59When you go through the things that we
1222. 46:00fell for, I highlight them here. One
1223. 46:02thing I want to remember is it was last
1224. 46:03year we heard about Smoot Holly a
1225. 46:05billion times and the Great Depression.
1226. 46:08These fears continue relentlessly while
1227. 46:11there's something bigger going on. Black
1228. 46:13Rockck released the machine native
1229. 46:14economy. How digital assets connect
1230. 46:17intelligence, commerce, and compute.
1231. 46:19They're going through a theme that I've
1232. 46:20written about and talked about on this
1233. 46:23for a long time. Pomp and I talked about
1234. 46:26it this week that I've talked about this
1235. 46:28for months, but they're finally starting
1236. 46:31to focus the attention on machine native
1237. 46:33transactions require purpose-built
1238. 46:35agentic payment protocols. And that's
1239. 46:37where we are. And that's why I've
1240. 46:38highlighted to you guys Stripe. That's
1241. 46:40why on the crypto video, I spent a lot
1242. 46:42of time on Stripe. If you guys don't get
1243. 46:45that and you're interested in it, it's
1244. 46:47part of the overall AI package. So,
1245. 46:49you're getting both of them together
1246. 46:51because that was always the game plan is
1247. 46:52that they both be on the payw wall. Um,
1248. 46:55Black Rockck following that paper
1249. 46:58middle of the week, it's taking model
1250. 47:01portfolios on chain. So again, they will
1251. 47:05tokenize through Ando Finance, part of
1252. 47:07my 46 name basket, giving non- US non-
1253. 47:12US 247 access via crypto wallets for
1254. 47:15their portfolios.
1255. 47:17Um, I'm telling you, for your children,
1256. 47:21this is my focus. It's been an
1257. 47:24entrepreneurs paradise and this is for
1258. 47:27people of any age. The entrepreneurship
1259. 47:29is blowing up because of AI. So there
1260. 47:33are business creations happening at an
1261. 47:35incredibly fast pace. And guess what?
1262. 47:37Rates don't hurt them. Let me say that
1263. 47:40again. Rates don't hurt them. These
1264. 47:42companies don't need capital because
1265. 47:43they're using AI. Remember that.
1266. 47:47That's why this whole thing is in there
1267. 47:49in terms of how the economics are going
1268. 47:50to change on the back of
1269. 47:51entrepreneurship. if you didn't get the
1270. 47:53ghost rails piece. Again, we built the
1271. 47:56crypto rails waiting for the app store
1272. 47:59or for the people to move in. But the
1273. 48:02mistake was that humans would never use
1274. 48:04crypto. And that's a mistake that I
1275. 48:06think everyone that believes in crypto
1276. 48:09didn't recognize that in the end, you're
1277. 48:12never going to change the people that
1278. 48:13own the $900 trillion view on crypto.
1279. 48:16I've seen it myself personally. They
1280. 48:18don't want to take the time to learn
1281. 48:20because they don't understand it and
1282. 48:22they have no need to. They've already
1283. 48:23made their money. If they would put some
1284. 48:26money in, they might have some skin in
1285. 48:28the game. Agents change that. They will
1286. 48:31be the thing that changes it. Agents
1287. 48:33will change it. And that's why AI agents
1288. 48:36building the bridge is there. Here's the
1289. 48:39video that I did. If you guys didn't see
1290. 48:40it, it's an hour long. I promise you,
1291. 48:42you will understand why now is time in
1292. 48:45crypto. This is not happening for no
1293. 48:47reason. So the same reason that I said
1294. 48:50the MAG7 and all of the consumer agent
1295. 48:53trade will be the trade and you're going
1296. 48:55to get the stocks with the hype. Crypto
1297. 48:57to me is at the beginning of a Peter
1298. 49:00Lynch style bull market. For those of
1299. 49:01you who have ever looked at Peter
1300. 49:04Lynch's uh famous book back in the early
1301. 49:0880s, his whole premise was that you
1302. 49:11wanted to find something that the street
1303. 49:13didn't cover that was in the early stage
1304. 49:16and you had done the homework on it
1305. 49:18before the masses did. That is the exact
1306. 49:21definition of why now in crypto. It's
1307. 49:24necessary because of AI agents. This is
1308. 49:26the app store moment for crypto.
1309. 49:28Whatever your views are of crypto,
1310. 49:30remember stable coins, tokenization,
1311. 49:32Bitcoin, Ethereum,
1312. 49:35this all had to be built. And it took 15
1313. 49:37years, 16 years. And guess what? The
1314. 49:40internet to get to the app store took
1315. 49:43about the exact same amount of time. And
1316. 49:45that's when it took off. The.com bubble
1317. 49:47was a representation of the ghost rails,
1318. 49:49except for one thing. They used debt.
1319. 49:51The crypto side went through its dot
1320. 49:53bubble from VC money. Now we're in a
1321. 49:57different stage. AI agents are coming.
1322. 49:59The demand is picking up. And just like
1323. 50:00token usage a year ago, the numbers will
1324. 50:03explode in terms of agents consuming.
1325. 50:06Are they going to start small? Sure.
1326. 50:09But that's what Peter Lynch was looking
1327. 50:11for. You by the time it's big, the trade
1328. 50:14is up dramatically. Didn't you learn
1329. 50:15your lesson with Micron?
1330. 50:18So this was the first slide again. You
1331. 50:21guys can go see it. And while breath is
1332. 50:24bad in the stock market and you saw
1333. 50:27where my names are on my Agentic
1334. 50:29portfolio where there's now 60 some odd
1335. 50:31above the
1336. 50:33uh 50-day moving average
1337. 50:36in my crypto 46 name tokenized index
1338. 50:38which for you subscribers that didn't
1339. 50:41see the video I did upload the index so
1340. 50:43you can go see the names. It was up
1341. 50:45another 3% today on Friday for the month
1342. 50:48it's up 31%. Bitcoin's up 6 and a half.
1343. 50:51Bitcoin is not what you watch right now.
1344. 50:53You want to watch the index of which
1345. 50:54Bitcoin is a member in it. 44 of 46
1346. 50:58names are above the 50-day, 96%. The 200
1347. 51:01day, 87%.
1348. 51:0496% of the 50-day moving averages are
1349. 51:06pointed upward and we are now to 72%.
1350. 51:09This, my friends, is a bull market.
1351. 51:11That's what the chart looks like. You
1352. 51:13don't want to be part of this. And
1353. 51:15remember, what did rates do?
1354. 51:18Rates went higher. Well, isn't crypto
1355. 51:20supposed to be very liquidity sensitive,
1356. 51:22rate sensitive? H, maybe it's a bull
1357. 51:25market. For more, for those of you who
1358. 51:28haven't subscribed, who haven't reached
1359. 51:30out, go have a conversation with Mark
1360. 51:32Whailing. Mark's a good dude. You'll
1361. 51:33have a fun time no matter what. Uh, but
1362. 51:36you can go find him there. The Thai
1363. 51:39terminal. For those of you who are
1364. 51:41looking to start using something for
1365. 51:44what you can go through like Bloomberg,
1366. 51:46this would be my suggestion. Here are my
1367. 51:49names. Look at this. Free six names for
1368. 51:52you guys that are in there. Uh, and look
1369. 51:55at the returns for the last seven days.
1370. 51:57These are all part I uploaded these in
1371. 52:00there. I'm just saying this is like
1372. 52:01Bloomberg. You have charting functions,
1373. 52:03you have news, you have all kinds of
1374. 52:05fundamentals. These guys have done a
1375. 52:07great job. Uh, I'll be speaking at their
1376. 52:10event on October 27th. I would go sign
1377. 52:13up if for no other reason. It's
1378. 52:15institutions. It's they have a lot of
1379. 52:17customers that are hedge funds, a lot of
1380. 52:19customers that are mutual funds. It's
1381. 52:21everything. This is not just crypto. I
1382. 52:23think at some point, and again, there's
1383. 52:25probably reason why they have it called
1384. 52:26the bridge. And I'm showing you guys a
1385. 52:28bridge on this. I think they're all
1386. 52:30related. Uh again, Muse,
1387. 52:34Coinbase, want to trade with Coinbase on
1388. 52:36Muse? You can trade Coinbase on Muse.
1389. 52:38Again, Muse just came out. You can do
1390. 52:40all this stuff. That just shows the
1391. 52:41rails are already set up. says crypto
1392. 52:43and stable coins will be the go-to
1393. 52:45payment method for agents. New York
1394. 52:47Stock Exchange teams up with
1395. 52:48blockchain.com to for tokeniz. This is
1396. 52:50all this week, guys. Uh Robin Hood said
1397. 52:54something big is coming in stock tokens
1398. 52:56soon. And remember, they kind of are
1399. 52:58involved with the government on this
1400. 53:00stuff. The tokenization's happening.
1401. 53:02Okay, so this is the part where I give
1402. 53:04you a little bit of what I showed to the
1403. 53:06subscribers.
1404. 53:09I would go watch this immediately. And
1405. 53:11again, I will have all of the um
1406. 53:14podcasts for the subscribers that you
1407. 53:17can go watch. I'll I gave you all the
1408. 53:18info that'll come out an email at 9:00
1409. 53:20on Sunday. Um Ali Yaya is a must listen
1410. 53:25to. I don't he's not out there that
1411. 53:26much. He's been a general partner at
1412. 53:29Andre and Horowitz. This particular
1413. 53:31episode on Unchanged on their five fund.
1414. 53:34I just want to give you the highlights
1415. 53:35of him and why it's important. So he's
1416. 53:38been at A16Z since the beginning. He's a
1417. 53:40former Google brain engineer, former
1418. 53:43Google X researcher. He left while he
1419. 53:46was with Google X because they would not
1420. 53:48listen to him for an investment in
1421. 53:50crypto. That was a long time ago.
1422. 53:54But I want you to think about it. Here's
1423. 53:56someone who is basically got a, you
1424. 54:00know, his he specialized in computer uh
1425. 54:02security, distributed systems,
1426. 54:04networking, cryptography. He believed
1427. 54:06this was going to be so big a long time
1428. 54:08ago when they set up A16Z that he went
1429. 54:10there. So when you listen to him speak,
1430. 54:12he is someone that understands the
1431. 54:14connection between AI and crypto. That's
1432. 54:16why I'm directing you towards him. He is
1433. 54:18very very good at kind of going through
1434. 54:20it and he talks about how AI is
1435. 54:23fundamentally different from where it's
1436. 54:24headed. It's primarily a tool that
1437. 54:26humans use. The next stage is what he
1438. 54:28calls AI agents becoming autonomous
1439. 54:30economic actors. So, if you want to go
1440. 54:33through and understand why this is and
1441. 54:35why it's so important, trust me, you
1442. 54:38want to know what he's saying and you
1443. 54:40want to go back to Mark Andre's paper of
1444. 54:42why Bitcoin matters and just understand
1445. 54:44that 12 years later, the story that he's
1446. 54:48saying, Aliya, is what Mark said. Mark
1447. 54:50didn't know stable coins would be part
1448. 54:52of it. He didn't know tokenization would
1449. 54:54be part of it. He didn't know Ethereum
1450. 54:56would be so important. He was talking
1451. 54:57about why Bitcoin matters. The ecosystem
1452. 54:59has changed.
1453. 55:01and it has gone into this. He didn't
1454. 55:03know that AI agents would be here.
1455. 55:05Nobody talked about autonomous agents in
1456. 55:08this side. This is why it's such a big
1457. 55:10deal
1458. 55:12another video and actually the number
1459. 55:14one one to listen to because this has
1460. 55:16Chris Dixs and it has a bunch of
1461. 55:18partners at A16Z along with Ali Yayya.
1462. 55:21If you guys want to get up to speed on
1463. 55:22this and you want to start to learn, I'm
1464. 55:24not going to take you through all of
1465. 55:26this, but they say AI dramatically
1466. 55:28lowers the barrier to using programmable
1467. 55:30money. That is critical. Again, humans
1468. 55:33were never going to be able to do this.
1469. 55:35AI agents are the major new catalyst for
1470. 55:37crypto. They go through this whole
1471. 55:38thing. This is from May. So, I want you
1472. 55:42to go listen to this and realize that
1473. 55:44they were right. I want you to go listen
1474. 55:47and understand what's going to happen.
1475. 55:51Agents could aggressively
1476. 55:52disintermediate existing payment and
1477. 55:54subscription models. Unlike humans,
1478. 55:56agents have no attachment to Visa,
1479. 55:59credit cards, brands, subscriptions, or
1480. 56:01familiar interfaces.
1481. 56:04Think about what the consumer side is.
1482. 56:06Agents don't care about preferences.
1483. 56:09They have no attachment.
1484. 56:11You have to change your mind. For those
1485. 56:13of you arguing with me on this, at least
1486. 56:15look at it and go through. I don't care
1487. 56:18about the other side of this. The other
1488. 56:20side is everyone already uses Visa and
1489. 56:22Mastercard. If agents are going to
1490. 56:25disrupt,
1491. 56:27this is very, very important. And I
1492. 56:29listen to a lot of people tell me,
1493. 56:31"Consumers want to walk into the mall.
1494. 56:33They're never going to buy Amazon." And
1495. 56:35don't tell me that that wasn't a story
1496. 56:36that you didn't hear repeatedly, which
1497. 56:39is the reason I went to Silicon Valley
1498. 56:41in 2013, which was the how can Amazon
1499. 56:44trade here? I don't get it. More
1500. 56:47disclosures. Again, guys, it's been a
1501. 56:50pleasure. Uh again, thanks to all the
1502. 56:52people down in DC. I will be at uh the
1503. 56:55Bitcoin Treasury Conference on Monday.
1504. 56:57So, those of you that are there, come
1505. 56:59by, see me. Uh I will be at Pomp's event
1506. 57:02in uh two weeks and like I said, I'll be
1507. 57:05at the bridge event and it seems like
1508. 57:07I'm getting invited to a lot more. Uh
1509. 57:09I'll see you guys next week. Thanks.