When I was in Zimbabwe, the thing that

shocked me was the guys who were long

stocks, the guys who were long real

estate, the guys who were long

businesses were absolutely seeing huge

nominal gains and the terrible thing,

the crash was upwards and the people

that got hurt were actually the people

who were not long. I'm joined once again

by veteran fund manager, investor Eric

from YWR, your weekend research. Eric,

great to see you. The last time you were

on monetary matters in the middle of

November, you said that by the end of

2017, you were looking at the S&P

10,000. Very lofty. We're a little bit

further towards your goal. The market is

up 10% since there a lot has happened.

Remind us your bull thesis and what's

your thesis right now?

>> It's still the idea that we're in an

incredible bull market that's going to

exceed all of our expectations. And um

this was an idea I started last year in

July. Um and I really wanted to put it

out there as a counterpoint to I think

this was the the origin was it was post

liberation day when we had that big

selloff in April with the tariffs and

the market had made it back kind of up

to where it was before and everyone was

like, "Oh, can we hold the gains? Is it

going to roll over when the tariffs

finally?" It was all this and I mean I'm

in a lot of chats like you, right? And

so I could just feel this everywhere I

looked it was this bearish view on the

market and it really triggered my um

imagination about something totally

different and it also went back to a

theme. I apologize for explaining all

this but I it is a kind of important

background that and a change I had to go

through was I spent some time uh in

Zimbabwe

uh as part of an Africa fund and I the

country was I saw such a weird situation

to me where the country was totally

unraveling everything was going wrong

and yet the market started to go up uh

incredibly so and at first I thought the

investors were getting it wrong they

were being delusional too hopeful and

Then what I saw in hindsight, what

started to kick in was inflation and and

the investors had seen it before and so

they were kind of anticipating what

would happen and what I saw was that it

was a country that was struggling.

Everything was there was no rise in

employment. There were no uh the

government was disappointing and the

nominal inflation was carrying stocks up

to unimaginable levels. And this has

been something I call project Zimbabwe

that I'm like we're in a higher

inflationary era and you're going to be

surprised how high the market goes. Um

even when you might not think things are

very good. So that was something I

started a while ago. But then I kind of

last year with the S&P 10,000 I kind of

layered in a lot of and one comment that

was going around a lot was we're almost

at 1999 levels and like that was I kept

hearing that like you know the S&P is at

over 20 times earnings and like it's

almost like 1999 and I was thinking okay

first of all who says like I was around

in 1999 and traded I remember I was in

San Francisco in fact and lived the

whole And I was like, "Okay, but who's

to say in the history of stock markets,

we can't have an even bigger bubble than

1999?" Just to say, you know, who says

that's going to be the biggest bubble

ever? We had the internet was kind of

interesting, right? Connecting computers

at the time, right? But maybe we have

kind of a revolutionary technology now,

like maybe this is even bigger than the

internet. And the other thing was I'm

like, where is this thing around 20

times? like what why is that a limit for

a PE? Why is that the right PE? And

really it's a rule of it's kind of a

shortcut rule of thumb that people use.

And I was one of the things that I

talked about in my note, Jack, is that

um earnings are actually accelerating.

The earnings growth of the S&P

going back from 2000, the last 25 years

has averaged 8% a year. Nominal. We're

doing like 12 to 15 now. So, I'm like,

if there was ever a time to rerate to a

higher multiple of maybe 25 or 30 times,

um, you could kind of justify that now.

And, and I think another thing to bring

in here that's part of that is that I'm

really amazed at the bonds and that we

have, you know, almost 3% GDP growth. We

have very low unemployment. We have the

stock market on a meltup. We have 4%

inflation and the 10-year bonds at 4 and

a.5%. That's like almost no real yield.

And and I'm like, look, if you're going

to if those are my two choices, the S&P

growing at, you know, 15% a year and or

a 4 and a.5% tenure with inflation at

four, that is a massively positive thing

for the S&P. And you know, just going

back to your like Wharton MBA stuff, you

know, the um you know, what's the fair

multiple for in a in a DCF or or Gordon

growth model and what you put on the

top? I'll debate people want to use free

cash flow or the EPS or whatever. I'm

just going to use the EPS.

You know, the the denominator is always

R minus G, which is your cost of capital

minus your growth rate. And most people

put like eight or nine as my cost of

capital, what I want to earn, and the

growth rate is three. And I'm like,

well, okay, what if the growth rates

15 or or eight or nine? It's you. Um, so

what you get is very funny numbers. you

you when you have a low low interest

rates like four and a half% tenyear but

very high nominal growth on an index you

can justify and I know like that's where

I leave the kind of Wharton MBA to like

just us being practical investors but

mathematically and this is something

people really struggle with and is

compound growth over long periods of

time and

it at the very least

you know, could could justify um 25

times on the S&P. And I know people will

go, "Oh, but how do you know that E is

going to not crash next year and so blah

blah, you know, this and that?"

And you don't, but um but I just say on

the side part of that, the economy is

very strong. I have a I have an extra

view I think people don't appreciate on

that but um just generally you have

economy firing pretty much on all

cylinders companies spending money

government spending money interest rates

extremely well behaved surprisingly

um earnings growing at an accelerating

rate um and I just think we haven't seen

I haven't seen like a lot of euphoria

you know I I see kind of investors kind

of positive and and kind of naturally in

involved. I I most fund managers I speak

to are relatively skeptical and careful

about malinvestment in AI and whether

this is going to continue and they're

bearish on the consumer because he's

going to lose every kind of if you think

about it Jack I I don't know many

sectors that invest they're a little bit

kind of positive on maybe like some of

the data center supply chain like uh you

know GE Venova optical connectors or

kind of parts of it and chips They're

kind of I mean but memory like they're

bullish on right but then it's like the

PE is 10 times because they're not sure

how long the memory cycle is going to

last because then it could we don't they

don't generally like memory stocks.

They're not going to put a high multiple

on memory stocks. They're not sure about

the hyperscalers because are they ever

going to get paid back on this uh capex

that they've put in. Software is going

to get disrupted. The consumer is going

to lose his job to AI. The housing

market isn't going to work. the no one

wants to own car. I mean, energy is not

even going to work even if you know the

straight of Hermoose is closed. And so,

it's I don't want to say it's bearish

because the S&P is still at 22 times,

but I don't see a lot of um

carried away euphoria or bullishness or

positive despite kind of amazing

earnings growth um and a very good setup

here for the market. So, um, I'm kind of

like I I'm trying to give a counterpoint

to what I often feel is a quite bearish

community out there. And I'm like, I

know I'm at the at the risk of be

looking like an idiot. I'm like, let's

use our imagination of like how this

could go much higher than we expected.

And last year when it when we when it

came out with it was like, you know, I

was like 10,000. It's 50% above where we

are. How about that? you know,

>> and yeah, I think you opened me up to an

argument last time we talked where you

said if AI is bigger than the dot and

the the internet, then the bubble should

be bigger and the you know the the PE

for Microsoft was like 70 and so then

for therefore the PE for Nvidia should

be 100 at the peak of course and you

know if Nvidia is going to make two

or$300 billion that would be a market

cap of like 20 or 30 trillion on Nvidia.

Now, I'm not saying that's going to

happen, but I think that people both

should think of that right tail risk as

well as the the left tail risk of this

evaporates to nothing and we have a you

know an 80% crash that's very violent.

>> Yeah. um just to the parts companies

like the you know the micron or memory

you remember Cisco was 50 times I think

JDS unifase was a hundred times um that

that earning screen most of those things

are a lot of those like kios a lot of

this memory stuff is like six times or

eight times and I'm like may I'm like I

don't know maybe it's an earnings bubble

but it's definitely not a valuation

bubble um

>> definitely not a valuation bubble I feel

like for for memory it's gotten so

extreme

that many people view it as

unsustainable where you if Apple has to

raise the prices by several hundred

because memory prices are so high, you

know, memory prices should should go

down. I don't know if they will anytime

soon. I think I think they're going to

keep on going up for for this year. Um,

>> one one other point I would make for

everyone is

and I'm careful with this but just I

want to provide an alternative

perspective. If you say look we're in an

inflationary environment and I've

studied inflation over the histories and

I know what happens during these periods

one of the things that happen are people

speculate

because the money is losing value

quickly and so there's a na this is what

happens so in that if you kind of look

at it and you go wow we're in a period

of we're not even high we're at 4%

inflation right it's not it's not even

that high like maybe we're going to

eight or something right but Like if

you're almost like give this checkbook

of like, okay, what would I expect to

happen if this is all playing out like

Eric says or whatever, I would expect

the S&P to go up a lot. I would expect

nominal earnings to be going up. I would

expect people I would expect to see

rampant speculation across the land. I

would expected to see, you know, uh

brokerages like Hood doing well. I would

expect to see people trading like all

these instead of like seeing them as

warning signs and like reasons to not

participate. You could almost see them

as checklists that were like this whole

scene is unfolding. So I kind of I'm I'm

careful about it. Like I do see Koreans,

you know, on margin and Taiwan and and

um I I go okay yeah that's care I'm

careful about it but on the other hand

is it just kind of naturally what is

going to happen? And I'm like, even if

they're on wire, they're speculating

their brains out and Samsung's still at

seven times earnings. I'm like, I don't

know. Maybe they're just that's actually

smart, you know? I mean, if maybe if

your biggest company is the leading one

of the leading memory providers, leading

technology companies in the world, it's

on seven times earnings, you should

borrow your brains out to buy it. I

don't know. Um maybe that's

>> and maybe and maybe people say, "Oh my

god, the concentration risk in Korea is

so huge as a negative." The positive

framing is you want your index to be to

be extremely concentrated in the

industries that are that are doing well.

>> The index is exposed to the like one of

the most important trends in the world

and it just went up 100%. I can and it's

still um and the earnings are going up

faster than the index. Um, so I'm just I

just put that piece on, you know, when

you see people trading to just maybe

rather than seeing it as a warning sign,

it's actually a symptom of a diff of a

bigger thing. Um, and so

I I think that the 1999 was more of a

cyclical thing. It kind of went up

quickly and ended quickly. I think this

may be like a bigger a bigger trend and

that may be why it's not rerating. You

know, the S&P kind of just ripped up to

50 times and then crashed right down.

This might be a slower burn because

we're all being careful about it.

Another thing with the IPOs, like I I

go, you know, people go, "Oh, SpaceX,

like that's so concerning." And I go,

"Yeah, but you should have some hot IPOs

in a bull market." But then the thing

that's different,

the the PE and the VC firms are holding

on to these things way longer, right? So

we're getting trillion dollar IPOs and

I'm like, so they don't really pop like

the ones did back in 99. So I just I

just go maybe this isn't going to have

the ferocity and the euphoria and the

juice of 1999,

but maybe the positive is it plays out

longer because, you know, it just keeps

going. And and I look at my numbers on

the S&P 10,000. That could be quite

conservative actually. You know, I'm now

I'm like lowering the PE to get there.

I'm like the earnings have come in way

better than I expected when I made that

call last year. I thought I was going to

have to put a 30 times multiple on it to

get there. Now it's like 25 because this

then earnings are, you know, another 50

bucks higher than I expected. So,

>> are you willing to raise your call to to

11 or 12,000?

>> Yeah. I mean, that's what I was kind of

I did the did the math in the note and

I'm like, you know, I could could make

it a little higher, but let's get to

10,000 and and, you know, just stick

with that for now.

>> Yeah. A key point you're making is just

that the earnings boom in the S&P 500 is

massive. So expected earnings for

calendar year 2026 are probably going to

be around like $340 a share for the S&P

and that would be around a 25 or 26%

growth rate from the preceding year. And

then there's like another 20% of growth

that is forecasted for 2026 from 2027.

Eric, some a small percentage of that

profit but a meaningful small but

meaningful is the hyperscalers booking

profits from VC g investments they made.

So they invested in OpenAI and Anthropic

and they recognized gains now that the

valuation has gone up so much. And I'm

not saying that that's a fake earnings

or or anything like that. But it does

make sense to not count that as a

multiple. Like you can't expect, you

know, oh anthropics is going to go to 20

trillion valuation and therefore you

can, you know, rely on this as recurring

revenue. Like I don't I don't think, you

know, we should be doing that. How do

you feel about the quality of the

earnings in the S&P 500 given that some

of it is these markups from VC gains?

Some of it is hyperscalers, you know,

make realizing the gains from their

investments or the revenues growing but

not seeing the depreciation yet. And

that, you know, there's going to be a

depreciation bomb over the next five

years. Like that's just a fact. And then

also the fact that a large percentage of

the earnings growth has been in one

industry, semiconductors, an industry

that I love to be clear, but it is, you

know, increasingly somewhat of a of a

one-way bet on AI and semis in the S&P

500.

>> Do you think I don't think that booking

gains on Open AI would be a big part of

or in the 2027 forecasted earnings

before the IPO?

>> Not 2027, but 2026. Yes.

>> Okay. Um,

>> they did book very large gains in the

past quarter.

>> Okay.

>> I don't I I'm going to have to do the

numbers. I'd be surprised if that's like

a meaningful part of the of the S&P 500

earnings, but it could be.

>> I was going to say less than 10% of the

S&P stated uh earnings growth was from

this the gains booked from private

companies. According to Gemini, it's

9.5% 9.49%.

>> 9.5% are from that. Okay.

earnings growth of the earnings growth

for calendar year.

>> Okay.

>> Yes. So, I'm not saying it's some some

lion's number, but if you're saying, oh,

earnings went from 12% to 25%, you know,

I some percentage of that is is a a

little bit of a gain, but I am I am

nitpicking a little bit. Like, I don't

deny that the the operating earnings and

the operating income growth from the

cloud providers has been has been

dominant.

>> So, there's a there's maybe a trade-off

or a or a concern is semiconductor

earnings have been phenomenal. What

happens if that tails off? Um, does that

kind of like does the S&P start earnings

start to even decline? Maybe if you know

if because that's kind of capex, right?

That's not to some degree that's like

oneoff spend in a data center and it

should it could actually decline quite

meaningful if the spending stopped. Um,

one thing I'm seeing on the other side

though is cloud revenues are ramping

quite a lot and I know we're kind of

dinging the hyperscalers right now

because they're spending almost all of

their cash flow on on data centers which

are yet to be completed. But when you

just look at the earnings of these

companies like the the cloud revenues

are stepping up quite meaningfully. I

mean like as they would ex as you would

expect. They're like, "Oh, there's this

thing called AI. Our customers are all

using it. They're using a lot more every

month and we're building these data

centers because we don't have enough

capacity for it." And so every quarter

they're coming out with cloud growth.

Cloud cloud earnings were cloud revenues

were growing in the 15% range. They're

now in the over 25% uh keer. I think one

thing we're underestimating is that the

hyperscaler revenues are going to be

growing as all this cloud business comes

online um that they spending hundreds of

billions of dollars to earn right now.

So that's part of it. One thing

interesting for 2027 is earnings for

energy the energy sector expected to be

negative

>> earnings growth. Yeah.

>> Yeah. like 2026 was great, but 2027 will

be a ne will be negative year-over-year

because the oil price will be lower and

they benefited from the first half of

2026 being high. So, depending on where

you think with the oil price goes, I

think it could go higher still. Um, that

that's a little bit of a cushion or a

something in your back pocket that

energy could surprise positively. I

think I figured out I think I was trying

to calculate that X technology the

implied growth for the S&P was 7%. That

you had 40% of the market that they

thought was going to grow 30% and that

so it implied that the rest of it was

seven to come up with a I think a 15%

estimated growth for next year. So um

the big piece is technology. If that um

maybe that disappoints but on the other

hand the other part of it seemed you

know real estate, financial services,

energy all seemed very quite

conservative the um the outlook for

those sectors. I got two more points.

One on the data centers

um just kind of interesting like I'm not

saying this is good but just to get us

to where we need to want to get to which

is 10,000 and keep it going. Um I was I

like to track Blue Owl, right? The um

the private credit firm and they had

record, you know, despite all the news

about Blue Owl, their stock price

crashing and redemptions, they had a

record first quarter for inflows,

institutional inflows into private

credit. And I I imagine that to an

instit I mean if you're saying you're

going to build a data center and lease

it out to Meta or Microsoft or Amazon

and I don't know if they're getting 9%

for that or whatever I can imagine that

being attractive to an institution and

and so whatever whatever the reason is

what I just like to see is that private

credit industry is getting a lot of

inflows

and fueling the boom so to speak.

Another thing I'd kind of noticed is I I

like to cover banks globally. I was

looking at the Mitsubishi Bank in Japan

and they were touting their um

partnership with Morgan Stanley and how

Morgan Stanley was originating um I

think it was Coreweave debt and that

they had then syndicated it out to their

customers in Japan. It was an example of

this great relationship and I was like

you know think Jack thinking back to all

the great bubbles that Japanese banks

have been involved in and I'm like

there's more like great you know

Japanese banks can absorb so much debt

they haven't lent for 10 years and so

anyways there are um this gets to

another point that I just um I think is

underestimated about the economy

um and kind of why I feel more positive

than on the economy than I think my a

lot of my peers do is banks post GFC

were really in the doghouse especially

the European banks. Um it was like you

know you remember don't ever do that

again.

>> Sorry to interrupt you. So Eric, you've

had a monster call on European banks and

Japanese banks and your point that they

are underlevered and overly conservative

and as a result there was tons of

earnings per share to return to

shareholders. You you nailed it. But I

just want to stick in so you you

basically agree with me that it is a you

know the S&P has a very concentrated bet

in it on AI.

>> Yes.

>> To be a bull on the long this trade of

AI long term. Do you need to believe

that artificial general intelligence is

going to be reached and have these

massive productivity booms? Like can you

still be bullish if that doesn't happen?

>> If it doesn't have a product

productivity boom. Um

>> yeah. Like if if you know the companies

that are employing and spending so much

on anthropic right now in six months

they say hey we're getting some return

on investment but it's nowhere near what

we're spending so we're going to scale

back.

>> Yeah

I read some of those things too. Um,

I think there's gonna

It's too good. I mean, Jack, you're

probably using it like I am. I I'm

amazed at how good it is.

>> I was just using it five minutes ago to

look something up while you were

talking. I was listening, but yeah.

>> Yeah, I'm I'm using it more and more.

Um, I can understand companies being

careful about their budgets and

questioning them and whether what

they're getting out of it. But broad

strokes I think it's I'm increasingly

amazed about it using it more. Um I even

you know have clients and people I work

with and and you know just that I I I

know quite a lot of people in the large

asset management industry and it's

barely being used other than them on

their laptop but it's not broadly you

know infused into the entire

organization. I think we're very they're

very careful mostly organizations are

quite careful about uh cyber security.

So there's been this kind of blocking

about how much data can we give the AI

and financial services and I just think

there's there's a long way to go for um

use of AI. I I'm gonna use another crazy

uh thought, Jack, and um I kind of

because and I I look at uh all the semi

the semiconductor supply chain stocks in

Taiwan and South Korea going through the

roof and the earnings are incredible,

but the multiples are quite low because

everyone no one knows like how far are

we going with this, right?

>> And two two analogies.

I remember in 2004 I was on a at a hedge

fund and we were my guy next to me was

the mining analyst and we were long iron

or stocks and in two and China had had

like two positive year two 8% growth

years. China was starting to grow at 8%

which it hadn't before and every year we

thought China was a bubble and I was

like and and we weren't sure if iron ore

would have another good year and I'm

like imagine if you could come back like

in your time machine from 2025 or 26 and

go back to 2004 and tell someone this is

not a bubble this is a whole new trend

China is going to grow at 8% for the

next 20 years so like stop worrying

about it every six months and I kind

>> it eventually was a bubble You want you

wanted to sell in five maybe 10 years

when the price of iron collapsed and

China turned out to be a real estate but

for many years yes you wanted to remain

very long for sure

>> and I go I kind of want to go back like

>> should we be sort of someone from 2035

be coming back to us now and going guys

this is like the biggest trend and you

are so it's funny how you're like fading

it and and it's like two or three years

in and you're already worried it's going

to fall over. You know the Transformers

movie, right?

>> Well, you remember how Cybertron looks

like with all the electronics and and

the robot? I mean, we have AI, we have

AI, we have data centers coming right on

really soon is going to be robots. You

know, you go to China and they've

already the robotic piece is going to be

coming in layered on top of this pretty

soon. And I'm like, what if we're

effectively building Cybertron? We're

building AI. We're building data

centers. We're building robots. And

you're like, if you think of that, all

those computer peripheral stocks, all

the chips, laminate boards, you know,

electric server motors, um, batteries,

EV battery, all that stuff that's

booming in Taiwan, South Korea, China,

if you had this kind of bigger

perspective of a society that was much

more robotic, had infused with AI

everywhere, kind of like Cybertron, just

to imagine it. I'm like that if you're

if someone from the future said look you

are building out an AI economy a robotic

economy all this hardware stuff that is

booming is going to continue it's the

most important trend of the next 20

years and it's going to continue to boom

um and I just I only say that because I

try in my head to go what is the counter

to the fact that a lot of this memory

stuff a lot of these component stocks

are at quite low multiples because we

just don't trust how far this is going.

We're just kind of waiting for the whole

capex to kind of flop over that, oh, the

hyperscalers overdid it. They spent $800

billion. It turned out to be like, you

know, a malinvestment. They never got

their money back. The whole thing

crashed and the S&P went down 40%.

That's what we're all flinching and

waiting for. And I'm just trying to

like, how could that be like China in

200? Like, is is this actually like a

20-year trend or something? Um, and is

it like a whole different economy we're

going towards that's going to look very

different? Um, and I apologize, but but

you don't have to put a much imagination

on it because the multiples are so low.

Um, so anyways, yeah, it's um that's

where my that's where

and that's the difficulty with what we

have right now. We have like eight, you

know, is it eight six or eight $600

billion a year in capex on data centers

and does it go to 800 or

>> I think it's headed to a trillion. I

think I I think it's head to trillion in

few years or maybe you know one to two

years.

>> What are the risks that it stops like if

in two years Eric you know I have by the

way I I don't want to have you on just

when the market's up. I want to have you

know when the market's down as well and

I can say Eric what you what happened

why was the bull thesis wrong and the

capex stopped. What

>> is happened that made that happen in

that in that scenario and how do you

assess the odds of that? I mean, you

could say something like, um, look, they

built amazingly large data centers, you

know, five gigawatt data centers, and

they

maybe got a few years, they, you know,

were planning for some real growth, and

it came in, it grew, but it just they

got a little ahead of it themselves, and

they could be sitting there in 2027

going, you know what, we're pretty good.

We don't need to have another 5 gawatt.

We're kind of good for a few years. And

if you had the second derivative of data

center capex go you know 400 billion 600

billion 800 billion a trillion back to

750

and some questioning where you know

whole whole hardware space would um you

know you wouldn't be trading 40 times on

connector a lot of that stuff I find it

concerning you're putting very high

multiples on certain subsectors very

high multiples on what is a highly

cyclical

capex good that's kind of like a one

time you're invest you're putting a very

high multiple on what is basically the

front end of the investment um and so if

you kind of have a second derivative and

the guy who's your customer saying well

thanks I built my data centers I

anticipated a huge ramp up in supply or

in demand and I'm prepared for it and I

accurately predicted it and I'm good and

I don't need to build another one and

I'm now going to milk the profits

because they're coming in and all the,

you know, cloud subscriptions are coming

in and that's very nice. I don't need

another I had it was a it was like a a

ramp a big catch-up boom. I mean it's

what is catching the market out is how

quickly these guys ramped up capex. I

mean they went from 200 billion to like

600 800 like that and it was and that I

think and look look at the

semiconductors this year. That was what

shocked everyone. And it shocked me at

least is the fullear numbers came out

from Amazon and Google and everyone

thought they would the number would be

the net capex for 2026 would be down or

flat or something after the instead they

went higher. Everyone went, "Oh my god,

you're,

>> you know, it's even double or so." And

and that's when the semiconductor trade

went mental because they were like, "Oh

wow, these hyperscalers are not backing

off. They're actually accelerating the

bet." And

I don't know to their credit or not,

right? But like the Larry Ellisons of

the world and Mark Zuckerbergs,

they have

seen big trends like mobile play out. Uh

Larry Ellison with this the internet and

data. I think to there you can fade them

or not but I think they have a feel when

something is very big and catching on

and that they have seen trends play out

in their industries that in their

companies that they went bigger than

they ever expected

and I think they're very don't want they

they can see that over time you do not

want to get left behind on these things

and and that is their own business

experience of having lived through these

things and been on the right side of

them and said, "Wow, I never could have

expected what Instagram would would

happen to Instagram or Facebook or

Microsoft, any of these things, they're

like, "Wow, this is as big as those

things in my past." And I never regret

the $26 billion I spent on Instagram,

right? And

>> yeah,

>> I think they're So, but we look at it

and we go, "Oh my god, these guys, you

don't have the numbers to back this up.

Where's the spreadsheet that tells, you

know, how do you know?" And and I think

that's what the market's critical of

them. They're like they can't they're

putting a huge bet down very early in

the game very quickly and it looks you

know that's why you get all these

questions around malinvestment and um I

I agree there's not a lot of data yet to

there's a lot of revenues that got to

come through. I just do sometimes give

them credit and go look these guys are a

lot richer than us. I have naysayed them

on many things and been totally wrong

which is why you know I don't I'm not

his Silicon Valley you know

multi-billionaire so I do give them some

credit that they've lived through

they've seen how these things play out

and they have a sense of it and they're

they are all getting the tingle wow this

is big I need to be on it the revenue

model the business model for m Microsoft

and Google and Amazon is actually pretty

simple it's we're going to spend a bunch

on data centers and then our revenue is

going to come from selling and leasing

that compute out to the AI companies who

are going to buy it from us. A comp even

for Oracle that's true but for a company

like Meta I really don't understand

their AI strategy and I think that if

these glasses these Meta glasses are a

flop I have some severe concerns about

about Meta like what how are they how

are they going to make money? I think

they're partly considering that um this

is the new iPhone, right? That this is

the new interface will be the glasses

that the phone that the glasses can be

like the smart AI involved in your life

and it will could even supersede the

phone. And um

yeah, the other thing with Meta um I

don't it's not you or I but a lot of

people use Meta for their businesses in

in the you know kind of smaller

businesses and I'm kind of interested

that if you could get your AI if you

could get the AI kind of inserted into

people's business and it was kind of

like their business consultant and I

don't know I was just I was kind of like

trying to think how

maybe that could be a quite a valuable

um relationship and and I have you know

I I remember when we never figured out I

remember when Facebook IPOed

um did it even have revenues or very

little right

>> yeah they had they had uh five five

billion in revenue or I guess three yeah

3.7 in revenue when they they IPOed the

point that you're making which is that

there's been tons of bare cases and from

the naysayers and they've all been

wrong. I I do accept that point.

>> Yeah. So I mean we don't have to imagine

much. I mean just the kind of

the my base case or kind of where I'm

started with this is like look when you

have higher inflation what when when I

was in Zimbabwe going back to that the

thing that shocked me was I was like wow

things are not going very well here lots

of people don't have jobs. The guy that

is getting left behind is the person

who's only earning their income. That we

had like 25 30% inflation and they'd be

fighting for a 15% wage increase and the

guy their boss would argue with them

maybe they'd get 10 or 11. Meanwhile,

the guys who are long stocks, the guys

who are long real estate, the guys who

are long businesses were absolutely

seeing huge nominal gains. And the

terrible thing, the the crash was

upwards and the people that got hurt

were actually the people who were not

long. And so, yes, we're always worried

about whether the market's going to go

down 20% and this and that. And I'm

super respectful of this and I'm say all

this very carefully, but there is a

longer term crash quite con consistently

that nominal assets go higher. And what

hurts? It's a it's a slower problem, but

it's a the other crash is when you're

not exposed to the asset prices going up

and your um the cost of living around

you is going higher and you're not

keeping pace. And so that is the that is

the crash I feel is not articulated that

well in our community. I mean just as a

weird thing Jack we always talk about um

the big short right and we love the

movie and we idolize all the guys who

called the big short right Burbank uh

Michael Bur whatever right?

How many of those guys and we laugh at

all the people that didn't see it coming

right? How many of the people that

called the big short are still managing

money today? I don't think John Paul

said right. I don't think any of them

are. That all the idiots who just rode

the car off the cliff, they're probably

running three times as much now as they

were in 2007. And I look at it and I go,

is the longer the short story is, oh my

god, they missed it. They were too

bullish. The market went down and blah

blah blah. But is the 20-year story of

the movie? Wow. Actually, if you'd done

nothing and you just rode it through and

it was unpleasant 18 months or two

years, you're now back above and make

managing more money than ever. And the

S&P is on its way to 10,000. You know,

that it could be that's the story that

no one tells, right? I'm like

>> and I and that's just my you know it's a

very exciting short case

>> but I just longer term

>> is the lesson longer term yes you can

have these very unpleasant unwindings

and they're very scary but generally

these are nominal and this is a these

are nominal assets that generally repric

upwards I don't think you can find a

stock market in the world take your

Bloomberg show me a nominal stock market

in local currency

where the chart doesn't go up and to the

right. Turkey, Argentina, Venezuela,

Brazil, Japan, whatever country in the

world, if that's a stock market and it's

priced in some paper currency, go back.

There could be a 10-year period where it

goes flat or does something. But just

every single chart will go up and to the

right. And that is just not like people

being bullish. That's just nominal

inflation. That's just the

>> China China has some issues with this

chart going up and

>> yes it's gone sideways but it will go

that one will go higher too over time

>> probably. So, so if you are a believer

in AI and the semiconductor trade that

is attached to AI, why not just just do

that trade? You know, you've got some

great articles and and bull thesis on

many different businesses, the exchanges

like CME and ICE or the European banks,

a trade that works has worked out

phenomenally well for you. The Japanese

banks, many other companies, but why not

just be 100% in in semiconductors?

>> Yeah. Um,

I guess I'm a bit more diversified. But

I'm kind of long everything. I do have a

good chunk of my um personal portfolio

in the NASDAQ and I've been over time

doing less S&P and more NASDAQ because I

just I looked at it over decades and I'm

like the NASDAQ consistently outperforms

the S&P by like two or 3% on average.

I'm like I've I know I'm like an idiot

and I could be the guy, you know, I

started doing this a few years ago, but

I'm like, yeah, you always feel like

you're the guy who bought the top, but I

have Yes, I have switching more to

NASDAQ. But for the rest of my

portfolio, I like to be diversified. I'd

like to be like an 18-wheeler, you know,

like a semi that a couple tires pop out

and

>> there's a little bit of a rumble on the

truck, but it's still going on. And um I

also like dividends. I like dividends

coming in and reinvesting them. Um, so

I'm also a financials guy. I know that

space well. So I'm not I don't know. I'm

not all in on semiconductors. It's not

my it's not my strength. I guess

>> it seems like a lot of stocks have been

selling off and as semiconductors have

been rallying. I mean most recently even

the hyperscalers have been selling off

but like stocks like ICE or CME or S&P

Global or Moody's or Mastercard or Visa

have been selling off. So, kind of your

world, your sweet spot that that's been

they've been selling off. Do you see

opportunities there?

>> Yeah, I think the CME and ICE look

really good here and um I wrote about

that, but they had a great quarter.

They've been having very consistent

earnings growth. um in the CME across

all the comp like the interest rate

complex is doing really well, energy

complex doing well, metals complex doing

well, um equity S&P contract,

ICE did really well with the um energy

complex, the the European interest

rates, I mean they're and they were kind

of I I I get it. I mean another part so

just two things there. One is in the Zim

project Zimbabwe trade you get

speculation. This is something that you

go anytime you get high inflation and I

was there's that wonderful story about

hyperinflation in France and they I was

like the aenat it's like 1830 or

something they were talking about the

gambling halls of Paris and and this is

what you see when people when money is

losing value people trade a lot right

because it's way easier to make money

flipping a stock on Robin Hood than like

going down to McDonald's and earning 13

bucks or whatever you know so you it's

you you see speculation. These are great

trades on um rising speculation

um rising interest rate uncertainty and

a an unpredictable world. Think of all

the one

>> why have they sold off so much?

>> I think um the the headline is that it's

couch it's the uh cow sheet coming in

with uh uh perpetual futures contracts.

And then I I wonder also if people think

the the very high earnings in the first

quarter from uh the energy complex was a

oneoff like oh they made a lot of money

on the Iran war and all that but that

kind of is falling over but otherwise

maybe I'm missing something because

you know there's a lot of drivers in the

in the complex in in the

>> Yeah, I mean you've written about it.

It's it's prediction markets and

perpetual futures. So an investor rather

than buying or selling contracts of WTI

crude oil at $80 in April will say just

buy a contract of what are the odds that

April that the price of crude oil is

above $80 and they'll buy or sell that

contract and also perpetual futures that

they there's going to be listed on like

Robin Hood and probably Coinbase. People

can trade there the same things they did

on CME. So CME's monopoly is dead. What

what's your reaction to that?

>> Not monopoly, duopoly or

um

>> I would go with the CME's kind of

response to this and I thought it made

sense. It's like well two things. One

they were saying like 90% of our volumes

are institutions like asset managers, uh

commercial hedggers, actual buyers, you

know, users of oil contracts or interest

rates. Um and so they want something

that actually can convert to the

underlying um which the perpetuals don't

have. They have a kind of way of trying

to

stay anchored to the underlying but I

think it's actually valuable to real

players that it con it converts to the

actual oil contract or the actual S&P.

Um, so you know there's a thing also in

trading in futures trading where and I

this came up because I was following ICE

and they were make Jeffree Spreer was

making a point about this early on.

The real core value volumes in a

contract are the guys that actually use

it. the guys who actually take delivery

of the oil or the jet fuel or the

agricultural commodity and the and

they're hedging actual needs and then

you kind of get the the high frequency

traders come on top. But those guys look

around for like real they don't want

they want some kind of real demand

players, not everyone just gaming each

other, you know, they so that's what the

CME has. It has the real the real use

case uh traders and that's because it

has the contracts convert to the actual

underlying with deliverability and so

that's

>> okay Eric sorry what does that mean so

for for oil energy and agriculture you

know wheat crude oil natural gas

receiving the commodity is a real thing

what does physical delivery and physical

settling mean for something that doesn't

exist such as the S&P 500 or interest

rates they don't exist in the physical

world I mean what is CM delivery of the

delivery of the 10-year actual bonds.

And that's a

>> apparently an important thing because

CME is investing in their own um

settlement clearing system to actually

deliver uh the bonds electronically. So

that is a that is I mean the S&P you

could say is a bit less you know who

actually does take delivery of the S&P

and owns the 500 shares, right? Um so I

I so there's one part is to say like

look how important is the convertability

to the actual underlying the second part

is okay if this is a big thing you know

if this is a and if this is a hot

contract and this is like the way the

world's going then why can't the CME do

this better than Koshi or why they have

just as easy way to play this as you

know I think their their view is like

look this is a hyper leveraged product

it is quite quite dangerous and we're I

mean they're trying they don't want to

have the boat rocked. They do not want

to have customers losing tons of money

and going and having Senate hearings and

having themselves dragged in front of

financial services communities. They

want the boat to just function without

huge newspaper headlines. And so they

don't want contracts that people blow

themselves up on. And so that's why

they're nervous about it. I mean, but

they're like, "Look, we don't have any

problem doing these contracts if they if

this is the way the world goes, but we

don't think it's a it's not a futures

contract because it doesn't convert.

It's hyper leverage. It's hyper risky."

And so, but I think they're like, and

they haven't committed to doing to

saying they would do these contracts,

but they could just as easily offer them

themselves. So, I'm like, like, look,

they have futures. They have options on

futures. Like, I'm sure they could come

up with perpetual futures if they wanted

to. Um maybe Kowi has good retail

distribution, but all the guys like

Charles Schwab or Fidelity I think would

trade if perpetual futures were a big

thing and the CME offered them the same

way the CME offers Bitcoin futures. I

think people would trade on the CME or

ICE just as you know I think they have a

a re a defense against that.

But maybe that's not entirely what's

going on, right? like

I'm sensing there is a bit of a um is

there a kind of like semiconductors are

crowding out every other sector like

it's almost like people are questioning

everything about like I'm surprised that

I'm like I'm surprised this perpetual

futures is like that big a thing but

like every software stock is getting

crushed like and I'm like is there some

kind of broader

like inverse thing that for semis to go

up these other sectors have to get

derated a bit and we're kind of trying

to come up with the reasons why and

because I I don't know I'm just you know

I feel like a lot of sectors

we're having to defend the multiple of

why they're so low. Um and it's usually

oh AI is going to disrupt it or

something's going to disrupt it and it

feels it feels like the derating is

higher than the actual risk is warranted

maybe.

>> Yeah. Of people just wanting to sell

stocks that are not semiconductors to

buy semiconductor stocks. For sure.

Also, I'll say on CME's defense, it's a

very high quality business, very

extremely high margins, and they also

are entitled to something like 27% of

S&P Global's index business. So, they

are an index business. Basically,

they're 27% of an index business. So,

yeah, I would uh I would not be I I

would not be buying puts, longdated puts

on on CME, although of course I could be

wrong. Do you have any views on the not

other financial stocks like Visa,

Mastercard, S&P Global, or Moody's? No.

Yeah. No, I'm on the European banks as

you know still. So, still in that trade.

>> Got it. What about software?

>> The one thing that's interesting about

software is the earnings estimates are

going up on them, right? So, for all

this sphere, they make numbers, analysts

look at the numbers and they touch their

future forecast up. So

that kind of semi-refutes or that is a

questions this software um disruption.

where I'm shaking out on this is I think

the market sees

there is probably a longer term problem

or or that many of these and the problem

also is these software stocks they're

all very different right but one is

estimates are almost all fine to going

up second is but I think the most

investors are sensing the business model

may need to change in two ways at least

one they may go like this all this

seatbased pricing feels like that's

going to have to change maybe these

software services are going to be kind

of a backend that an AI connects to you

know if it needs a customer service

piece of software it doesn't you don't

go into the front end you that your AI

connects in through an API so you kind

of becomes this backend thing how does

that work and it may go to some kind of

usagebased model and So I think I almost

kind of in my head I'm like is this like

the new real estate sector like that

there's it's kind of okay and but

there's kind of a structural change

underway

and we don't know how long the other

problem is people go um how long are

they going to stay derated like some

people will say look time will prove me

right that the mo that the software

company is fine and the business model

is going to be fine But one uncertainty

is no one knows how long that is going

to take and the feeling is every year

the AI is going to get smarter and so

the bare case might actually be

improving with time and so um you kind

of get this feeling that the same way

people don't really want to ear own

office buildings right they're like yeah

there may be an office building down the

street and it may be kind of leased and

doing okay but I don't feel highly

comfortable about it I'm not wild about

it and I don't want to pay a high

multiple for it. And so I feel it's a

little bit where software has gotten

that it's like, okay, they're doing

okay, but I'm worried that with time

these problems will manifest themselves.

And so I'm kind of I I was more bullish

on them and I'm kind of going into the

the camp of these might be

semi semi-dead money.

>> Yeah. It's amazing to me how much they

can go down without being cheap. So I

think Adobe is officially cheap at like

eight times forward free cash flow,

maybe less, but so many of their

valuations were so high on a free cash

flow basis, but particularly on a net

income basis because depreciation and

stockbased comp was so high. So like

something like Tyler Technologies which

they sell software to the government.

It's you know unlikely that in the next

five years the government is going to be

vibe coding its own software in my view.

>> Um or they certainly would be the last

one to do it after literally everyone

else. And the company is you down a ton

and on a PE basis it's still like 35 or

or 40 times earnings. Okay. So that's

software. What else are you looking at

that's interesting other than

>> the we talked about ICME and then

software. What else?

>> Payments companies

um you know the PayPal's global payments

aden I'm trying to think every fiserve

everything in that payment space that

all those fintexs that in 2021 we were

all bullish about they've completely

gotten smashed and so um again I'm not

wild about them and I was it was more of

an exploratory call we did just because

they've gone down so much Um

the good thing that the payments

companies are doing and this is like if

you're in a company in these sectors

where everyone says you're going to get

disrupted and there's a big bear case

but you don't believe in it. Your only

real defense as a company is to buy back

shares. You're like look I'm making this

cash and if you want to trade me at five

times earnings or seven times it I'm

just going to buy shares back all day

because you're wrong and you're going to

find out you're wrong and meanwhile I'm

taking advantage of it. I don't know if

the software companies are really doing

that yet. the payment companies are um

and so the story there is just like

really high free cash flow yields and um

you know also I'm not I'm questionable

about them but it was just something we

explored because I was at an ideas

dinner here in London and we were all

talking about them because they're down

so much. Um, the other slight surprise

kicker could be they're all they all

earn percentage of the n the nominal

transaction value, right? So, I'm like,

are these hidden inflation plays? I

mean, they would have to inflation would

have to maybe get a lot higher, but I'm

like,

>> they're inflation hedges. They just are.

They're not thought of that, but they

totally are.

>> Yeah.

>> Yeah.

>> And pay Yeah. I I PayPal was probably

one of my worst trades. I owned call

options on PayPal that uh I sold at at a

very large percentage loss and it's just

amazing just how the earnings were fine

but they stopped growing and it just

derated massively and the share buybacks

happened but the the growth has

decelerated to such a level that you

know extremely low singledigit growth

the the CEO who came in was not a good

fit their strategy wouldn't wouldn't

work and at end of the day they are just

really

>> what what is growing for them is it is a

very low margin business of unbranded

checkout and for branded total payment

volume which is where they make a lot of

their margins that is under severe

pressure just from Apple Pay and other

competitors and I think it's really

tough to have Apple as your competitor

they have such a huge advantage

>> of you know does people really want to

open the PayPal app and I I think a

hidden gen for them is is Venmo So, if

Venmo was a standalone company, I'd be

interested in that, but it's tough.

What? So, wait, what about you think

about Visa and Mastercard? They're

they're the ultimate payment kings

basically.

>> Yeah, they've always been really

expensive and I've kind of So, I've kind

of and to be on and then they've

performed beautifully even so. So, I'm

I'm um I don't know what the valuations

are right now. I haven't looked at it in

a while, but um

>> not that high.

>> Not that high.

>> Less than 30 times. Yeah.

>> Okay. I think Jack, just to keep it

simple, I think if I would look at ICE

and CME, those are two of the amazing

businesses and they're they rarely trade

below 20 times earnings. I think ICE is

like 15 times and CME is 18 times. I

would 100% focus on those two things and

go through the conference calls, see if

there's something I'm missing. Think

about it. But like that rarely do those

two businesses there. They've done been

extremely consistent growers, extremely

high generators of cash flow, very

quality businesses, and if they come

down to these levels, you should really

check them out and make sure it's, you

know, because it could be a gift. So,

that's where I would focus 100%.

>> Tell us the sectors that are seeing very

high earnings growth, your global factor

model.

>> Oh, yes. It's estimate revisions. It's

it's it's where are earnings moving the

most and it is everything in computer

hardware semiconductors

memory a lot of companies in Taiw Taiwan

that do the um the Nvidia supply chain

basically. So that's that's one very

obvious sector that's doing well. I mean

it's actually three or four subsectors.

But then the other space um which is

showing a lot of earnings revision is uh

oil and gas

chemicals

refining um and tankers and and and

shipping. And this is a very interesting

you know setup to me. Um,

when I go back, I was looking at the

memory stuff in like 2024 and this

showed all, you know, memories was

starting to beat earnings massively in

2024 and it was showing up on the on my

screens, you know, oh, what memor

I had to look at what SKH Highix was,

right? Which was interesting was the

companies were beating numbers, but the

earnings estimates for the next year and

the year after were lower, right?

They're like, "Oh, it's a one-off, great

year, but I don't think it's

sustainable." And so the analysts had

predicted it would fall over

those

those I'm trying to think the 2027

numbers.

I think they were predicting 20,000

Korean Juan in earnings in per share in

2027. And I think that number is now

like 300,000 Juan. I mean, it's like

>> over 10 times.

>> Over 10 times. How wrong in like two

years they that that estimate has gone

up 10x. But what I why I bring this up.

What's a setup like that now? Something

where companies are making extraordinary

amounts of money but the an the whole

market is fading it. Fading it with the

estimates, fading it with the

valuations.

Shipping is one stuff like front line,

you know, everything basically to do

with the Iran war. everything to do

everything. This is one of the biggest

trends potentially in the world, Jack. I

mean, beyond semiconductors, I

the what if, you know, I'm like, what if

we have to rearchitect the energy supply

of the world? Like if 20% of the energy

comes out of the Persian Gulf, but all

of a sudden we have a very

well-fortified country with missiles

that's not is an intractable problem. it

is not really or it's going to take

years to fix the same way the Dombas the

Ukrainians and the Russians are still

fighting you know I don't know four or

five years later what if this is I mean

know what if this is a four or five year

problem or more how does it affect

shipping how does it affect LG how does

it affect energy supply how does it

affect refining because all these

sectors US refiners are booming because

they are you know they have cheap access

to energy and jet fuel prices are

through the roof shipping Shipping is

booming. Chemical companies are booming

because all the chemical plants that

Saudi and Kuwait and Qatar and the UAE

built all these waste everything to do

with their product, right? They're like,

"Let's benefit, you know, value ad.

Let's build refineries. Let's build

ammonia plants, ura plants, fertilizer

plants, whatever. Everything can't is

stuck in the Persian Gulf." And all the

guys that are running chemical plants

around the world, especially in the US,

are really benefiting. And I just go,

these estimates are through the roof.

They have some of the highest earnings

momentum in the world, but the market

isn't sure what to do with it, but like

because that kind of is a unimaginable

scenario that this could go on for

years. And like what if this is the

first chapter of the oil boom? Like

everyone's spiking the ball. Oh wow, oil

bulls are such morons. Look, we're at

$70 oil, right? And I'm like, what if

that was like the first chap? What if

you know how what if we're on our road

to 150 oil and you know it's just this

going to take time to realize this is

like unsolvable

you know it's it's a bit of this

checkmate the the US doesn't want to put

troops into Iran but so um just to say d

on the data the data is screaming all

these energy related all the sectors

that are affected and benefiting from

the lack of supply coming out of the

straight of hormuz

um are screaming screening very well for

earnings revisions and very low

valuations. So if you wanted to take a

view that this problem will persist

those sectors are you know look quite

attractive.

>> What about banks?

>> This is another um like what we touched

on slightly on earlier. I think the big

mega trend is that banks are tipping to

risk on again. I think they've been in

the doghouse for 10 years. They are

what? Highly capitalized, highly

profitable. Loan losses are very low.

And I think we're now finally getting

kind of a top-down regulatory change,

government change. It's okay to lend.

It's okay to take risk. We want the

economy to grow. People need to have

jobs. Banks need to be involved. This

view is happening in Europe. It's

happening in Japan. And it's happening

in the US. And this is another reason

I'm bullish on growth is because like we

have been growing. The banks are now

coming to the party and I'm seeing loan

growth. Mitsubishi bank grew their

earnings 10 through their loan book 10%

last year. First time it happened in

forever. European banks are still

growing at 5%. Not but so I'm bullish on

the banks. It's been a great trade. It's

not as fresh as it was years ago, but

still like stuff like Barclays that you

can get most European banks at eight

times earnings. And I'm like, okay, was

better. It was more fun when they were

five or six, but 8 to nine,

you know, and the earnings grow. Maybe

they grow to 12 times and the market

gets bullish. So, I still like the

European banks.

>> Tell me about Chinese AI and Chinese

tech stocks. Oh,

Jack, why did you have to bring that up?

My worst my worst trade has been um

Hong Kong. And um

I uh my thesis I mean this is this is

screens as one of the cheapest markets

in the world. I think the hang index is

less than 10 times next year's earnings.

And I have had this view that uh Chinese

savings are going to come out of the

real estate market out of uh fixed

income into equities. You know, you talk

about the S&P with, you know, interest

rates in China one and a half%.

And they had a very difficult property

crash. And this reminds me of it's a bit

bit more prolonged than the US, but I'm

it's reminding me of us coming out of

the GFC, right? We're like property

crashed, everyone was bearish, interest

rates were super low, and the and the

experts were saying, you know, "Wow, if

interest rates are so low, you should be

buying equities, right?" They would and

I was the strategist was saying, I'm

like, "Wow, I don't know, man. That's

super I'm nervous the economy is going

to crash. The market's risky. I don't

care. I want that two. I feel safe with

2%." In hindsight, they were totally

right. the market roofed it, right? You

had very low interest rates and the and

the economy recovered. And so I look at

China and I go, "Wow, this looks reminds

me of post GFC interest rates at one and

a half% everybody in fixed income and

the equities are starting to grow again

and and very cheap at 10 times their and

by the way uh a culture which has had

massive investing booms in the past like

these guy, you know, it's not like

talking about expecting Germans to have

a bull market, right? Or, you know,

they're they're they have a proclivity

that if this market got some momentum, I

think the the Hong Kong Chinese market

could be a massive bull market. And so,

I'm um I've been holding on there.

What's not been working? Uh real

estate's been slow to turn around.

consumers been still quite sluggish but

more uh the bigger problem has been the

Hong Kong index is dominated by Alibaba

JD.com

um bu and the earning they've all been

kind of like uh online retail takeout

it's a space that's gone smashed there's

been so much competition in online

retail in the food delivery business uh

a paid search in China the those stocks

have been really have the earnings have

been terrible and so the tech space that

Hong Kong tech space has actually been a

big uh disappointment. Um and the actual

like all the semi-h hardware stuff is

mostly in Shenzhen and the ashares. So I

almost kind of say like that's not what

I'm it's not a realization I'm happy to

find out but I feel like Hong Kong is

software and mainland China is the is

the hardware play and so that's actually

been performing much better than Hong

Kong. So, but I'm still sticking with

it. So, I still think it'll work.

>> Eric, can you summarize your bull view

and maybe you can cite or look at the

piece uh where you said 10 reasons we go

higher? What are the 10 reasons you

think we go higher in in the S&P?

>> Yeah.

>> Yeah. You have very strong economy. Uh

you have good you have strong

employment. You have earnings

accelerating and you have interest rates

that are too low. you have investors

that are not very bullish and you also

have rising inflation which is great for

nominal assets and so I um and and

another thing like just on the

bullishness in 1999

we didn't we were no one was standing

around saying it was a a bubble we were

all trading our brains out that's when

people say oh it's a bubble like it's

like 1999 it's like in 1999

we were all involved like no one's doing

that like very no one's like getting

carried away and maybe we never will but

the broader takeaway for people is when

you're in an inflationary environment

which we are

generally assets go up and

the more important thing over a fiveyear

view over one year who knows maybe the

S&P goes 20 down 20% on a 5-year view

quite consistently assets go up and that

is also a risk that you're not

participating in a in a bullish market

when all the prices around you go up.

Um, and so, you know, that's, you know,

you're always worried about the risks.

Like, we always kind of do regret

minimization. One risk is that the

market goes down and you lose 20%. I

probably say that's a temporary thing.

But another risk is that the market goes

up and you didn't participate. Your

neighbor did, you know. Um, and he goes,

I mean, and it kind of has that circular

effect where it brings the prices up of

everything. you go to the, you know, the

pub and the hamburger is 20 bucks and

you're like, you know, you need to be

making be involved and making money,

too. Um, so anyways, thank you, Jack.

Thanks for having me on. Pleasure, Eric.

People can check out your Substack, Eric

YWR.

I very much enjoy it, find a lot of

value there, and it's always good. It's

You got to You got to hear from the

Bulls.

>> Thanks for doing the update, Jack. and

and uh cuz you know we made a punchy

call last year and I thought it was good

to you know check in on it.

>> Thank you. Just close the door.