And let's see where investors are

putting their focus in as Wall Street

wraps up a busy trading week. Joining me

now is Michael Monahan. He's a founder

ETS partner and portfolio manager.

Thanks for being here on a Friday

afternoon and a historic one. Let's just

start with SpaceX and get your your

first initial thoughts here on the first

day of trading.

>> It's great to be here and we really

appreciate the way traded sort of the

piece de resistance of the legendary

Goldman Sachs franchise IPO franchise.

They went ahead and put in a perfect 20%

pop as you talked about. But what we

really liked as real buyers, right?

We're real buyers on the open. I think

that match off they did was masterful.

So rather than giving the big pop to the

flippers, they managed that process

where they got all that flip stop stock

out, sold it to real buyers like us at a

decent price and allowed us to

participate in part of the pop. So

Goldman Sachs, the legendary IPO

franchise, I think they earned their

money today.

>> All right. Well, let's talk about the

market in general because we we saw this

week, we've seen semiconductors the

heart of this AI trade take a few

stumbles here and just getting some of

the research notes out from companies

like VandaTrack. At least on the retail

side, investors were selling some chip

stocks to make room for SpaceX. Do you

have any concern that SpaceX and these

other IPOs are going to just suck too

much money out of the system? Any any

broader market concerns there?

>> So we invest for such a long term that

we don't look at a lot of these

day-to-day moves. We know other market

participants do. So

I think people are going to go home over

the weekend and remember that Elon just

raised 80 billion, that Google raised 80

billion, that Larry's about to raise 40

billion for Oracle, and that there's

going to be a whole lot of capex going

into these names. I think the sell-off

last week of those names was really more

of a

risk management at the big pod shops and

multi strats where we saw that hot jobs

number a Friday ago. We saw a little

tilt in the market and those guys all

lean the same way. So as soon as it

started to undo they had to all undo

together.

Talking to our trading counterparties,

that seemed like what it was really more

than heavy selling. It was really just a

bit of certain guys leaning in together

had to lighten up to manage their net

net books combined with the fact there

weren't a lot of bids as everybody,

myself included, was so focused on how

we wanted to get involved with SpaceX

that I think everybody had their pencils

up this week. I think this weekend we

put our pencils back down and figure out

what we want to buy this week. We

actually bought a couple of the names

today that we were excited about based

on what we had done.

>> Yeah, let's talk about those. What else

do you like there?

>> So so so we bought for example we bought

the two Nvidias.

We bought you know the

the Neo Clouds. We bought Arrian

and so we're we're buying more names in

the the AI space. We also bought a

little Rocket Labs today as well.

>> All right. Well, let's let's go back to

last Friday because that was when we saw

the stumble and arguably the trigger

there was that hotter than expected

payrolls report and it just speaks to

the fact that we have an economy that's

a bit hotter than people expected. You

know, probably good problem to have

probably a good problem to have. But now

there are concerns that the Fed is going

to be raising rates instead of cutting

them and we're seeing one rate hike

already penciled in for the end of the

year. ECB just raised rates. How much do

interest rates factor into your your

models or is that just even too short

for term for you?

>> That's too short term for us. Um so

we're not particularly rate sensitive in

how we think about the world. Although

some of our names because they're high

growth and you have the implied interest

rates in their terminal multiples are in

there.

Um

I would make two points on jobs. Number

one, one of our concerns

earlier in the year is are we going to

destroy consumer jobs faster than we can

replace them. We're not seeing that. In

fact, we're seeing the consumer get

stronger. Those jobs were led by

restaurants where which are a leading

indicator of consumer confidence. That's

number one.

And two, I think that we'll get what I

call as a phantom rate cut, meaning the

data is showing that we probably should

raise. I think the compromise under the

new warsh regime will be we won't raise.

And in this economy with the data we're

saying it probably should be a rate

hike, but I think we won't get them and

it's what we're referring to internally

as a phantom rate, you know, phantom

rate cut.

>> I like that and I might use that. Um

let's talk about the space economy writ

large. What are some of the How do you

see this playing out in the investing

landscape because we've seen uh

initially there was the picks and

shovels trade, we've seen mega cap and

we had the hyper scalar trade. Um but

where is the next leg coming from?

>> So, I think it's a continuation of where

we're at where it's uh you know, kind of

as Jensen says it's a race to see who

can build out the lowest uh token costs

um and the folks investing in that cycle

are are going to have it. You know,

look, we're we're sold out. Uh hence why

we bought the CoreWeave and the Nebius.

Um

you know, there's just not enough

compute power right now and you know,

Elon is going to uh be putting his his

satellites up. It's going to take a year

or two. It's going to take uh

Starship getting perfected, but I think

we're just going to see a continuation

of the ongoing CapEx trade.

>> So, you you hinted at uh the downside

effects of AI which um to a large People

have gotten fired for reasons official

reasons of AI, but we've also seen uh

job creation here. But we also saw the

AI scare trade earlier this year

manifest itself. Software stocks

overall, they peaked in October of last

year and the concern is that AI was just

going to eat all these software

companies' lunch. And I think it was

definitely overblown at the time. But

when you're looking at companies to

invest in in the software space, maybe

what do you what are you looking for

there?

>> So, we're looking at we own a lot of

software and we think some of it's

durable and we think the SAS apocalypse

is overdone. But you really it needs to

be an enduring franchise. You know, we

like Salesforce.

We like Palantir.

We're of the theory that

um

enterprise software rather than being

disintermediated will be the trusted

endpoint into the enterprise. And as

long as you're in that trusted endpoint,

we think

enterprise software still has room to go

here. We think the SAS apocalypse is

well overdone.

>> Any misconceptions out there that you'd

like to clear up? It could be in the

retail space, it could be in the

institutional space.

Like any opportunities there to lean

against what the herd is saying?

>> You know, the the one thing that that we

really look at and and want to

understand and I don't know that I have

a great answer other than just reminding

people that

memory stocks and some of these

semiconductors are really cyclical

stocks. We're we have a cyclical secular

bull

and a big capex cycle, but at some

point,

you know, we we need to all keep in mind

that that semiconductors, especially

memory,

obviously outside of the high IP, right?

I'm not putting a

an Nvidia, I'm not putting into this,

but the the more commodity semi names,

those are cyclicals and as people are

trading them, they need to keep that in

mind.