Gold at 5,000, silver over $100. We're

going to be talking about the precious

metals bull market. But first, a shout

out to our sponsor, Fiscal AI. It's

where Max and I get all of our

fundamental equity data, where we do our

equity research. You can get 15% off any

paid tier with fiscal.aiMM.

Let's get into it, Max. Great to see

you. Good to be speaking with you again

here.

>> Great to talk to you again, Jack, and to

be talking about precious metals. We

talk about it a lot. We we dedicated

some time I think back in October

specifically to silver. I know you

brought out um I forget exactly which

industry organization it was but um a

great report on the physical shortage in

silver at least if you've been tracking

the price that seems to be playing out.

It was uh quite the call from back in

October. Are you still in the silver

trade with us now over $100?

>> So the short answer is yes. I don't own

uh any silver. I prefer to express this

trade in in a way that we will get into.

Uh my participation in the precious meta

beta play, let's call it that way. Um is

a little over a year old. So I'm

actually I'm not that early at all. Um

and I certainly was not early in time,

Max, when we talked about that in

October. But just look at the price of

silver. Uh you know, the price of silver

in October, even though we weren't early

at all, was $50 and now it's double

that. I remember thinking at $50 this is

getting a little too crazy. I mean the

price of silver has doubled from here.

Um and yet it it has doubled from there.

Now Max I I first want to share a few

observations which is number one

commodities tend to mean revert whereas

stocks tend to go up over time. So uh

you know the the price of a lot of

commodities if they surge often the the

correct move is to fade that surge and

they will go back to uh their fair value

you know and trade roughly in with

inflation of two to 3% you know increase

every year where stocks do something

like uh 9% every year and if a stock

goes up oftent times you know you can

ride that trend for a long time and I

also will echo something Warren Buffett

has said which is you know over a 50 to

100 year time horizon, you know, very

confident that equities will outperform

commodities.

Now, that being said, Max, you know, my

first instinct is, oh my god, silver's

gone from $21,

a little over $20 to $100. It must be a

bubble. It must be a speculative bubble.

And I feel like that argue that argument

makes sense. And I feel like oftentimes

most of that is is the truth. However,

Max, just looking into who I think is

buying and what the supply demand

situation is, I I don't think um that

it's it's that simple. And I I really

think that, you know, this might not be

a large speculative uh bubble that is

that is about to to pop. Um certainly, I

would expect corrections. You know, I've

I think many times on this program been

like, "Oh, I think gold and silver are

going to have a correction just because

it has to because it's going up, you

been going up every day." I was wrong

about that. Other than I think maybe uh

Deiwali in uh October an Indian holiday

silver had a very large sharp

correction. Other than that I think

there's actually been very few violent

down moves and even the up moves um you

know they've just been quite somewhat

steady. So the I say the volatility

has been lower than I would have thought

given how much it is up.

>> Yeah. It feels like when it opens up

every day I check I'm like oh is is s

today going to be the big red candle in

silver and precious metals it's like

nope gold's up a little less than 1%

silver's up somewhere between two and a

half and five it's feels like clockwork

yes and actually you know the great

Milton Berg who I I hope we will be

getting back on monetary matters he

often had a great observation about

stocks he says I get worried about

stocks when the stocks begin to trade

like commodities my observation of

silver and gold particularly silver is

that it's almost trading like a stock in

that it's like a stock in a classic bull

market, you know, it's it's a trading

like Nvidia was um last year. So,

basically, Max, the let's get to the the

fundamentals. So, there was a shortage

of 95 million ounces last year. The

amount of supply was roughly a billion

and it was one uh

uh demand is 1.1 billion. and that that

is the fifth year in a row that there's

been a supply demand imbalance. Now, as

I pointed out in our October interview,

a lot of these silver reports who have a

generally pro-silver, pro gold bias, you

know, they do count people buying coins

and bars as including in that demand,

which which makes sense. So it's um it's

not all central banks buying it or uh

it's being used for industrial case but

but silver is is used for industrial use

cases particularly in the electrical

industries particularly in solar and

increasingly in AI chips and this is

something I've only discovered like over

the past two months. Um so a single

digit percentage of silver is used in

the creation of of AI AI chips in

particular something called silverinter

paste. So I think there is a bid for

silver that is industrial that is not

speculative that makes me pushes back on

my initial reaction which is this is a

bubble and it's always going to pop that

that's always my initial thing anytime

something goes up is this is a bubble

and it's instant you know it's going to

pop tomorrow I think on equities it's

easier to fade that because there are uh

you know certain secular trends and the

earnings and are growing so rapidly on a

commodity I think My instinct is to say,

"Oh my god, this is going to mean

revert." Because commodities almost

always do mean revert. But so, so the

demand is growing. Uh the supply has

been shrinking. The supply now is mildly

below where it was 10 years ago. And the

demand demand hasn't been growing that

much, but the portion of demand that has

been growing is going to continue to

grow. solar, AI, electrical use cases,

and in particular, again, I'm not an

expert in this, but I know that there's

a type of

this type of solar technology is more

silver intensive now than it was 5 years

ago. And the industrial companies are

just racing to buy as much silver as

they possibly can to to meet this

demand. And a lot um you know, there's a

great guy, Alex Campbell, who's super

early on silver, you know, former did

commodities at Bridgewwater. I actually

haven't interviewed him. I I would love

to interview him. I haven't. Uh but he

in a in a piece wrote how actually

a lot of some parts of silver can be

replaced with copper, some parts can't

be in in his electrical processes. And

that I think in a solar thing he said

demand destruction didn't begin until

$125. So I I'd say he's uh much more of

an extreme bull than I am. And I'm uh I

wouldn't even say I'm bullish at 100.

I'm just kind of resistant due to

caution and I'm looking at ways to make

money if silver stays between, you know,

70 to $110,

which I think there are are several

ways. Um, I can pause there, Max. I have

some observations about the way that

it's trading, particularly the margin

moves. You know, I I would not say I'm

an expert trader by any means, but just

by studying history, I know that the the

previous two silver bubbles, which, you

know, were uh 1981 and uh 2012 or 2013

were popped when I mean 1981 was crazy.

Uh they're basically where these

extremely um you know, Nepo babies, you

know, rich these rich sons of a really

rich family.

>> Hunt brothers.

>> Hunt brothers. Yeah. who just bought as

much silver as possible and tried

attempted to corner the market and then,

you know, did did so on the Chicago

Mercantile Exchange. Um,

>> for the football fans out there, the AFC

Championship Trophy is named after the

Hunt brothers.

>> There we go. And the CME raised the

margins and it crashed. And actually, I

think the the peak in prices was about

$50. So inflation adjusted, it was about

150. I'm I'm that is roughly accurate.

It's not precise, but it's roughly

accurate. Um so in terms of inflation

adjusted prices we are only you know

twothirds of the way there to an extreme

bubble of 1981. So it's getting it's

getting a little a little hot. However

max and and also the same is true in

2012 CME raised margins and the the

price collapsed. However, Max, okay, the

CME and the Shanghai exchange. Um, so

there are three three places where

physicals is traded. You know, the

London uh exchange, the CME exchange,

the Shanghai exchange. The CME is

actually getting bigger uh in commanding

bigger market share. I actually

interviewed the the chief economist of

the CME in early December. So, Eric

Norland, people can check that out. But

the CME raised margins on January 13th,

so you know around, you know, 10 12 days

ago. And the I guess the price you know

corrected a little bit but that you know

the price was like $85 or $90 then so

the price has gone up and the Shanghai

exchange also raised margins to 20%. Uh

and the CME changed margins from a fixed

level to a percentage margin. So now the

margins are at 9%. So you know you can

still get a decent amount of leverage

like 10 times 10 11 times leverage but

uh the actual amount of le you know

amount of margin you have to post I

think went from 25,000 to 45,000. So it

went from a fixed level to a uh um to a

to a percentage model. So basically like

the things that popped these bubbles uh

in 1981 and 2012 already happened 10

days ago, you know, close let's say, you

know, close to two weeks ago. So I think

that indicates that maybe this is not a

giant speculative bubble pushed by

Western speculators who are using a ton

of of margin. I do think that there's a

ton of eastern investors, retail

investors who are buying it, but they

are buying it in coin and bar form. And

the point about coin and bar form is

people who buy coin and bars tend to

hold on to it for a really long time.

And if anything, coin and bar demand is

proyclical, which means the more it goes

up, the more they want it. Uh, and so I

think eastern investors, particularly

Indian investors are huge, huge

participants in this market. And

actually there's a report from November

that uh we could you know flash on

screen that shows how just this demand

for

silver among Indian investors has been

very proyclical and even I think because

of the weakness in the rupee I think

that basically the a lot of Indian

investors didn't even experience a bare

market in silver because I think the re

the rupee went down so much and that

that that's what the chart suggests I

don't I don't know

>> and we discussed we discussed last week

how poorly the Indian stock market has

performed especially relative to their

other emerging market peers and the

United States. So if you're an Indian

investor and you have been investing in

stocks and you've been watching gold,

silver, precious metals like pretty

traditional investments uh in India go

up uh maybe you're continuing to sell

your Indian stocks and move into

precious metals again um when you're

just looking at the options that they

have. completely Max and the final

observation that I will share before I I

get into some con potential conclusions

uh is that my read of the data of

does not indicate that western investors

you know Wall Street investors who are

trading ETFs are large participants in

this market as all at at all. I think

the inflows into American products and

you know, United States of America

products are not large at all. Like if

you look at SLV, the um the inflows are

are positive, but they're just not

there. And they look nothing like, you

know, the precious metal bubble of, you

know, from 2000 to 2013, you know, bull

bull market. And uh there's some other

charts that indicate in in Europe and

North America, which includes Canada,

that it's slightly higher. But I mean I

it doesn't look like uh these investors

are pushing the pushing the price of

silver around. So I think it's ma it's

mainly industrial producers h and the

fact that there's just not enough and

then some uh some Asian investors which

are primarily retail investors primarily

buying coin and bars. I think that's

also true about gold and go I think

gold's a little gold is less complex but

I think it's because it's more monetary

and almost all monetary it's it's harder

to understand whereas industrial like

data is is completely reported um you

know I think it's silver

uh the like

in in India I read this that there it

can be used as collateral for loans so

it can a very minor monetization of of

silver as as well as the central bank of

Russia started buying silver. So that's

something that's very speculative. I

wouldn't say that that's like this is

driving the price, but that's just that

that's just in in the background.

>> So Jack, I I I think the nearly

impossible thing to determine in this is

what is the peak price of silver going

to be? The big question, especially for

the way that I know that you like to

play this trade and many people who are

not trading futures, obviously you have

the the S um SLV ETF, which tracks the

spot price of silver. you've got some

silver minor ETFs are not as big and

liquid as the gold ETFs uh or the gold

miner ETFs. Um and the problem with

silver is it it comes as a byproduct of

a lot of other mining. So it's it's

pretty difficult to find pure play minor

exposure in the same way you can with

gold. So you have chosen mostly to play

it through royalty companies. Now again,

even the royalty companies, they're

usually somewhat diversified in terms of

their exposure too. Um, and so for them,

the question is not really what is the

peak price from this this price spike.

The question is what is the is there a

new floor? Is this industrial demand

going to set a new floor for silver? And

is how much higher is it going to be

than the sort of high teens 20 $20 range

that we saw before? um which people, you

know, talked about as like being a big

breakout range. I mean, I remember $18

silver like doesn't feel so long ago,

right? So, are we in in a world where uh

silver starts to to be produced more,

which is the way it it goes with

commodities, right? What is that new

floor going to be? And what does that

mean for the silver producers and for

the royalty companies that get, you

know, exposure to to those revenues of

the producers? So, I'm sure you have

looked at that, especially as you

consider how high can the the royalty

companies that you're invested in go.

The one that you talked about

specifically in our last talk was Weed

and Precious Metals. I know there's a

smaller, more speculative one that you

like that we're kind of cautious about

just because it is pretty small, pretty

speculative, but specifically with

Wheaten, what have you been looking at

in terms of how much money they can be

making at current prices and even if we

settle down into into lower prices um

below where we are now at $100?

>> Yeah. So that smaller one I personally

myself in my you know personal investing

got got involved with it two weeks ago

and it has since returned over 150%. So

I will and I will such a small market

cap I will not be talking about any of

those stocks and that's just um a way

that's just that's just a kind of the

way that we play ball right now. Um so

however wheat and precious metals I do

feel very comfortable comfortable

talking about that's a you know many

many many uh multi-billion dollar

company max three place three ways to

play gold three ways to play silver you

can trade the underlying commodity you

can buy mining companies or you can buy

these thing called streaming companies

mining companies have a lot of operating

leverage to the underlying commodity

they are for lack of a better word much

more risky businesses than precious

metal

than streaming companies. They if the

price goes down, they could lose a lot

of money. Also, if the cost of mining

goes up, their profit margins are going

to get crushed. Their profit margins

already are, you know, if with at $1,500

gold, their profit margins already quite

narrow. You know, a lot of these invest

gold mining investor DEXMax, I have to

say, you know, not to be uh too too

negative, but they include things like

Ebata margins and uh free free cash flow

margins and and and other types of

things which can be completely uh you

know legitimate measures. But I think

with these with these businesses,

commodity businesses, includes oil as

well, EBIT margins is so misleading

because there's so much depreciation and

every single day that goes by you you

the investments that you've put into the

ground are are losing value uh because

you're mining them. And that's just the

accounting sense. And so a a precious

metal mining company, you know, trading

at seven times earnings is not

necessarily cheap at all. And if it's

trading at three times IBITA, it's not

necessarily cheap at all. Likewise, I

would say a precious metal streaming

company trading at 30 times net income

third times earnings I would say uh is

cheap. And this is a type of thing, you

know, I grew grew up value investor of

course like like many people watching.

Uh but it's just some companies with 30

or 40 times earnings are cheap and some

companies with three or four times

companies are are not cheap. That that's

just the reality. Precious metal uh

streaming companies, they have a

completely different business model.

They they're basically think they

they're not banks to uh to miners, but

they invest in the project and they

don't get equity. They don't get debt. I

mean, sometimes they make loans, but

they get they get a royalty. So, every

uh you know, a thousand ounces that come

out of the ground of a mine, we get 20

ounces or every 100 ounces we get we get

2%. So, it's a 2% net smelter royalty

and we're going to pay 20% of spot price

of gold. So, like guaranteed 80% profit

margin. So these companies I mean you

know if the price of silver were to go

down 70% uh wheat and precious metals

you know his cash flow would still be

extremely positive. Um you know it might

record some little losses and so the net

income might might be negative but these

businesses I would say are safer than

just a on a business standpoint on a

cash flow basis than a lot of businesses

that many investors invest in and

consider high quality. I mean, I might

even consider like Coca-Cola. Uh, I

mean,

>> Jack, I do want to I do want to stop you

for one second because you were like,

"Oh, these investor decks where they're

talking about IBIDA at uh $1,500 gold."

Well, we're about to hit $5,000 gold if

we open if we open up green on on Sunday

night in the futures market, gold is

going to touch 5,000 most likely. So,

you know, these decks that you're

talking about, you know, I remember

seeing them when gold was at 1500. And

these a lot of times are the ex the more

exploratory, not the more mature mining

companies where um where gold is not

being produced. So, that's the other

thing too within the gold mining

complex. You have people who are

exploring for gold. Like they have a

piece of land that they think has gold

on it. You have the ones where it's a

proven resource, but it hasn't been

developed and they're likely going to be

um if it is going to be monetized in

some way, it's going to be being bought

out by a major who is then going to put

in the work. Very rarely does a non-

major gold uh gold mining company

actually take it fully to production and

then start to trade at those multiples.

It's much more likely that it's going to

get bought out. And then you have the

larger gold producing companies which

are actively uh mining gold and you know

have profits you know profits and

revenue. So there's a lot of variation

even within those and largely in periods

like this where you have gold going up

as much as it has the most speculative

stuff where you don't even really know

how much gold is under the ground is

what does the best. Um, and so, you

know, when when we're talking about

these decks, it's important to to

remember what is the price right now and

is this company producing anything? Max,

for our viewer, for our listeners who

are can't see me, I'm nodding my head so

violently. I, you know, it risks injury

to to my neck. You know, Max, few times

in my life have I heard things that are

as true as what you said. And basically

I'll interpret a short short term of

short a short explanation of of what I

said earlier is precious metal streaming

companies are much more high quality.

They have the quality factor than the

precious metal mining companies which

can in some instances be very junky. Uh

in the same way like Visa and Mastercard

are way more highquality businesses than

banks. But that's like saying like from

April 2020 when you you know we we just

had a giant depression for one month and

then we're about to have the biggest

nominal boom in GDP and consumer

spending ever like being long precious

metals over the past year has been like

being long Visa and Mastercard in April

2020 of you're just long these oh I'll

just have my little high quality stocks

like really the thing you wanted to own

was just the trashiest CLO equity

companies and these subprime lenders and

the companies that were about to go

bankrupt like you in a in a bull market,

the things that are often not the best

companies do the best. And that is true

uh in many instances, but in gold and

silver, it it particularly can be true

just looking at the operating leverage

because like let's say there's a company

that was they're all in sustaining cost

of of for gold was uh 1,600 and the

price of gold was at 1,500. Gold going

to 1500 to 5,000 is so so good for them.

Like they went from losing money to just

making a lot of money. If Franco Nevada,

you know, precious metal streaming or

wheat and precious metals, for every

price of gold, they were buying it at

$200 an ounce, they already were

printing so much money at $1,600, it's

so safe. They just, you know, they they

their profit margins went up, but they

went from, you know, 50% to 80%. These

other more speculative companies went

from profit margins of, you know,

negative 10% to 30%. And and the volume

is really high. So I would have made way

more money max in this in this precious

metal bull market if I had been long the

the miners rather than the streamers.

However, given my confidence in the

business model of the streamers, I was

able to have conviction and size it

quite uh largely. So I actually might

view like a three times wheat and

precious metals position uh as less

risky than a one times silver miner

position. Uh but how even might and I

might even say that's true if you have

to use leverage for the wheat and

precious metals but I understand that

many people would disagree with me and I

I I would respect that disagreement.

>> Yeah, it's funny. I mean you're seeing a

lot of people turn towards precious

metals that you would never have

expected like me you but also like

somebody who I know you are in the

process of booking the date isn't

exactly set but Carson Block of Muddy

Waters known for shortselling at SWN

they actually announced that they are

long and are long uh Snowline Gold which

is a a large um gold mining company

based in Canada and they have

approximately 8 million ounces of gold.

So, they're kind of in that middle

range, right, where they're not

producing gold, but they have a a proven

resource and they believe it's going to

be bought out and, you know, they

believe at the time that they were

talking about it back in November, I

think it was trading at like around two

billion CAD and they think that the that

the resource was worth approximately,

I don't know, um, 4 billion to six

billion CAD. Well, you know, gold prices

have gone up a lot and if they continue

to go up a lot and these majors, these

gold majors are being pressured, hey,

how are you going to continue to expand

production? Because that's the thing

with the majors is they do have this

terminal value risk, right? Like what is

the terminal value?

>> Well, you have to keep acquiring

properties. Like you do, it's the same

thing as an oil company where it's like,

okay, great. like you have this super

profitable moment right now in terms of

oil production or gold production but

the whole idea is that this is going to

continue you know indefinitely. Uh

that's that's where you get high

multiples right is that there is going

to be indefinite um cash flow coming out

of it. And so if you are a gold major,

you you know it's it's funny like you

get when they should be acquiring

properties like when gold is is down low

transactions are extremely low, right?

They actually are kind of um

you could argue that they're bad buyers.

Uh a lot of these gold majors where they

are buying close to the top of the

market. So when we're asking ourselves

like how close are we to the top in this

precious metals market, one of the

things you can look at are these sort of

flashy acquisitions where you know

that's when and we talk about all the

time like we are having we led off the

episode today talking about gold and

silver when the price of gold is close

to 5,000 when the price of silver is

100. when you start to see people like

us talking about an asset class that

that can mean now look back in October

we didn't signal the top but as it

continues to happen it continues to take

mind share uh in the media that's

generally a sign and then you know one

of the the bigger signs is the the board

and the executives start to get pressure

from shareholders to be making

acquisitions because the market says

look at the price of gold how come we

don't have more resources to produce and

that can that can often start to to mark

the top of the cycle. Um, so that's just

one example of a of an interesting gold

mine that I wanted to throw out there

that's sort of in that middle range. Um,

and it's interesting short sellers

because gold mines have typically been

talked about as the type of um the type

of asset where it's like a there's a

it's a hole in the ground with a liar on

top. Well, these guys special in trying

to figure out what are the companies

that are essentially a hole in the

ground with a liar on top being activist

short sellers and hunting for frauds and

fakes. And so their move into precious

metals specifically is is interesting in

that regard. Um, and I not that people

can't be wrong, but um, I I doubt that

they're just punting on a on a precious

metal stock as one tends to find if

you're, you know, trolling around

Twitter looking for exciting gold mine

companies.

>> Yes. I mean, Carson and that that

research team is great. So, I imagine

that The Rock is very good. Uh, so very

very low cost there. I mean there are

companies

>> one more quick shout out they're they're

hiring uh on that on their natural

resources team to go work with their so

if anybody here is a natural resources

analyst and wants to go do deep

fundamental research uh you should check

out their Twitter they have a job

posting right now

>> that is uh very interesting people

should definitely look at that I think

if if anyone applies and gets the job

that they would be very lucky and and

hopefully the uh the team would be as

well uh just an example Max you I

actually have owned this in the past but

you don't own it now I I think I lost

money on it but um Jaguar mining like a

a company in Latin America and they just

had all these problems like the the the

rain got in the mine the the the gold

was in the water it got screwed up like

they huge operational thing this some

senior official had to leave not senior

official but you know a sea sweetite guy

had to leave boom boom boom like that's

one of the best performing gold stocks

because it was priced for disaster

because it was a disaster but a lot of

disaster can be washed away with the

beautiful uh you know Windex of $5,000

gold So yeah, I I think

>> that was a that was a Grants interest

rate observer stock, wasn't it?

>> Was it really? I don't I don't know.

>> I think so. I think Jaguar was was in

Grants for a while.

>> I I I like I said, I don't know. Um I

Yeah, I mean, Max, one thing I'd say

roughly my personal portfolio year to

date, as we record on January 23rd, I'm

up about 21% this year. And I think a

lot of that is due to precious metal

streaming beta, but I'm much more so

semiconductor beta. We can get into

semiconductors. Um, so yeah, I've made

two big bets and they they both worked

out. I've also made bets in software uh

to a much smaller size and um you know,

I think Max to one thing that I think

works is just like betting on your

winners and doubling down on your

winners and not doubling down on your

losers or maybe even cutting your your

losers. Um like you know, one stock that

I own that's not working at all is

Service Now. Everyone thinks it's a

disaster. Um, I think it's probably

fine, but I am much more reticent about

being short the momentum factor than I

was three years ago. Three years ago, I

probably didn't even know what the

momentum factor was, but uh it's just,

you know, Service Now will will I think

make it uh as will Constellation

Software, which I'm not involved with,

but but I think um you know, I I could I

could see that that that going down for

for a while. So Max just regards to

precious metals and particularly silver

silver beta uh the you know I'd say I

actually have taken a modest short

position in the underlying metal silver

uh but that is against my precious

metals my other streamers which have a

modest silver exposure and another

silver play that I I won't mention. So

you know I'm I'm uh you know if the

price of silver goes $150 I will be down

on my silver short but uh I would be

shocked if I not not much much more more

up. Um, but it's just it's just a little

bit of a mod modest hedge. So like you

know I've already got positions on but

like one like one trade that I've have I

basically kind of already have on but uh

is like being long wheat and precious

metals and shorting silver in

particular. I kind of like what what I'm

short actually is um AGQ which is the

double levered silver position. So

obviously you just size it one size less

and the benefit is that you get to

harvest the variance drag uh over time

which obviously like a lot of

quantitative investors they all know

about this thing but um I don't know if

they've

>> and depending upon the borrow rate if

their borrow rate is higher than your

margin rate then you get that too.

>> Yes. Yes. I it's it's possible that I've

spotted these opportunities that only

exist because I'm a small account and

I've give you a half a billion dollar

hedge fund. That's it. But uh that that

probably is the case honestly. But I I

don't think that in the instit instit

institutional community that these are

um I I haven't really encountered that.

Um so yeah, so bas basically being you

long five or six times uh as much wheat

and precious metals as as you are short

AGQ. So you know wheat and precious

metals historically the beta to silver

is 08. It's varied a lot. um it's

actually gone down over time because it

used to be a close to 100% silver

exposure whereas now they diversified

into gold. Um their actual silver uh

ounces produced or silver ounces

delivered is actually modestly down over

time. But I just think that speaks to

the like the shortage of silver

properties. There really are very few

silver properties, silver only

properties that can you know if you're a

big company like wheat and precious

metals you can do big deals with. Um and

so wheaten is relatively diversified in

its silver products. Interestingly one

one risk of so wheaten is roughly like

you know uh you know it's it's a

slightly higher percentage of gold than

silver and then the rest is 1%. So it's

you know 99% precious metals but uh one

risk of of wheat and precious metals is

it's very concentrated in gold of it of

its gold positions. It's very

concentrated in this one mine called

Salobo which has been just a phenomenal

deal for them. But you know if if that

country decides to just take away the

mine like they did to Franco Nevada in

Panama which was a serious risk which

I've also been invested in. Um that

would be that would be a big problem.

But um yeah wheat and precious metals is

it also has exposure to to gold and yeah

I guess I've uh you know sometimes the

silver the precious metal streaming

companies have been referred to

negatively as the coward's way out. uh

uh basically they're a you know a pansy

way to bet on on silver and gold and I

I'll take that criticism. I I think this

the miners have done a lot a lot better.

Um but uh I think um yeah I think that

these companies are are very high

quality companies and based at 100 times

silver uh you know net income. So after

tax everything, Wheaten's rough roughly

like 23 to 25 times uh net income which

would again if price if the price stayed

at 100 that would be a historically

quite a cheap valuation for a company

that has profit margins you know higher

than Visa and Mastercard. Max we I

referenced semiconductors uh earlier. I

want to talk about the semicmplex. Intel

reported the stocks down massively.

You've been doing some work on this.

Want to get your take on it. But first,

want to shout out our sponsor, Fiscal AI

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Let's get back into it. Max, tell us

about Intel. What happened there? Yeah,

Intel is very interesting. Uh it was

considered to be an AI loser for a long

time pretty much until it uh captured

the eye of the Trump administration and

then the US government took a I believe

a 10% stake in the company. Since then,

the performance of Intel has been pretty

great, and it has been viewed as a

potential AI winner, but with a Trump

halo effect that has pretty much gone to

just about any stock that the

administration has taken a stake in or

shown an interest in. And up to this

point, it's performed phenomenally well.

Before earnings were released, as of

Thursday night, it was up 44% year-to

date. a lot of dispersion right now in

the semiconductor space and the sort of

AI related name space. Um, so you know,

it's interesting that Broadcom, Nvidia,

some of the big winners of 2025, um, are

actually down on the year, whereas there

there are plenty of the larger names

that are that are up. Um, but it's

really broadened out to much of the

smaller names, but Intel was one of the

names that had just done phenomenally

well year to date, up 44%. and uh

earnings came out and they beat across

the board on the major stuff, but Wall

Street didn't really care because they

kind of gave soft guidance. And in

particular, one of the issues that they

had was um that they just haven't been

able to to meet demand for the chip. So,

they're not able to ramp up production,

which was basically the bet that a lot

of people were making is that Intel is

going to take on this this investment

from the US government. It's going to

become the American powerhouse of

semiconductor production. and they're

just haven't been able to ramp

production. So, if they're going to

become the powerhouse of American

semiconductor production, they need to

be able to do that. And they're not

they're not right now ramping

production. And so, um, if you just look

at the headlines of Intel Beats, you

would be surprised. Um, and you know, I

think it's important because whenever

you have a big uh semi-name report and

uh you're trying to understand the

market's reaction to earnings, you might

think, oh, was there some big um hit to

demand that that might play through to

other semiconductor names? And that's

not really what it is here. It's it's

pretty idiosyncratic to Intel's

inability to meet the demand. Um, so

that is the big thing there. But, you

know, even if they were able to meet

demand, Jack, one of the things that you

pointed out while we were getting ready

for this was their foundry operating

income and just how bad it is that they

just this thing that is supposed to be

the future of Intel, they don't make

money there. They didn't make money last

quarter. They've never really made

money. If you compare it to Taiwan

Semiconductor for the same basic

business line, like it's pretty stark

just how unprofitable this is for Intel.

So, you know, there was hope. It was a

hope story. It was a Trump story. And uh

at least after you know Q4's results, it

appears that that is still just a story.

Um and so with that being said, the

stock is still up after being down I

think like 17% today. It's still up over

20% on the year. So, you know, still

very strong if you've had in your

portfolio, but if you bought it as an

earnings play, you are definitely

hurting. So, I think that that is is

something um that people should be

focused on. And if you were viewing the

sell-off today as as a signal that the

AI trade is done, I think that that's

probably not the way to view it. But it

is a signal that people want to see

results. So that that eventually there

is a breaking point on the narrative

front and that um that that investors at

this point in time if you are spinning a

story of benefiting from the AI capex

trend that eventually people do want to

see it come through and you know that's

the thing with the Nvidas of the world

and some of the other um some of the

other stocks that performed well in 2025

we were seeing it come through in the

earnings they kept raising guidance and

and Intel came out with actually um

guidance that was below expectations.

>> I mean, their revenue was down

year-over-year. Even though that beat

expectations, they're a legacy company

that at a time was was very dominant.

Their chip business right now, they have

a lot of legacy chips. They have a

foundry business to the extent that they

have, you know, true cutting neck

technology. A lot of it is in this thing

called advanced packaging which is not

the chip itself but connecting the chip

within an architecture and basically you

know making it building a beautiful

puzzle of all these chips together and

and how you how they could work together

in the same way like the heart and the

brain um you know and the liver work

together you know uh and I think that

they're making huge investments in their

foundry but their the yields are low so

the that basically means like a lot of

the chips that they make are faulty and

TSMC I don't what the yields are, but

they Taiwan Semi in Taiwan like the

yields are high. Meaning that a lot of

the chips that they make work and so

that because of that they it's very

profitable. But if like if a ton of the

chips that you make you got to throw in

the garbage bin that's very profitable

unprofitable and that's why I think that

the foundry business has been losing so

much money. I know a lot of uh very

sophisticated investors were quite

bullish on Intel because of this

advanced packaging thing and that you

know maybe Intel's technology could be

as good or maybe even as better than

TSMC which is you know unheard of uh in

in this modern day particularly in this

advanced packaging sort of chiplit

thing. Um but I think that the

technology is good but there the

implementation as you said is is uh is

not there is not there yet. Um but I

think Max I mean a key point you said

which I agree with is that demand is is

not an issue. I think across the entire

semiconductor complex demand is just

astronomically high. I think like memory

prices are up 10x. So that's why I mean

literally SKH highinex like one stock as

well as Samsung in is why the the South

Korea stocks are doing South Korean

index is doing so well. I mean there are

other South Korean stocks that are doing

well don't get me wrong but it's just

absolutely crushing it. And the I mean I

I think that we are in a huge industrial

revolution of building out AI uh what

Jensen Wong and the semiconductor you

know AI lovers call uh um AI factories

and that CEOs and politicians leaders

around the world are trying to make this

happen and I think there are a lot of

people who are naysaying it uh because

they don't like it because they think

it's a bubble because they're worried

perhaps rationally that is going to uh

lead to a fall in jobs and a collapse in

uh employment and a surge in

unemployment which I think would be be a

horrible thing. Um but the reality is

that the people who are spending the

money and who have the power they are

you know pretty united on this vision

and it is so extreme that it is causing

huge supply squeezes in and not just in

memory but all sorts of electrical

components. Uh I mean I mentioned

silver. I think that is a relatively

small part of it. But um silver, copper,

natural gas, you you interviewed Michael

Cow who you know AI is going to use all

this electricity and you know I'm I I

always weigh the right tail risk and the

left tail risk and the left tail risk is

it's a giant bubble. The right tail risk

is uh asset prices are are very richly

rewarded. However, there's could be very

negative consequences for unemployment

which I think would be you know very

very negative. But I also think that

like it's it's possible, you know,

profit margins up, uh, unemployment up.

That is a possibility, you know, and I I

I I don't know exactly how I'm assessing

the probability of that versus like a

kind of a vanilla recession or a vanilla

bubble imploding, but um I Yeah, I I I'm

I'm looking at the right tail as well as

the left tail.

>> Yeah, Jack, I I think the memory thing

that you pointed out is also one of the

things that weighed on Intel. so much of

their uh revenue and profit comes from

their traditional chip business that

goes into to PCs and there is concern

that with the the price of memory going

up that that's going to weigh on PC

demand. So if you are you know a

purchasing manager in the IT department

of a big company and you're looking at

wow look at how much it's going to cost

us cost us to upgrade everybody's laptop

this year um you might say ah we'll wait

we'll wait a year to go buy those

laptops and so that's going to hurt

Intel. So there are the winners that

you're talking about in the memory space

and and Intel is at least at this point

in time being perceived as a potential

loser in the memory space.

>> That's good. And I think Max it's a

concept is is like if memory is a cost

to companies how much does it matter?

You know, Max, you and I know some very

sophisticated, very uh uh, you know,

good performing investors who are very

interested in Nintendo and, you know,

they might make the case that, okay,

Nintendo uh, memory is a cost to them,

but like it's it's a tiny fraction. Um,

that argument. Likewise for silver, like

all these why are these uh, silver why

are these solar companies why are they

not mad about silver? It's like it's a

tiny percentage of of their cost. So a a

10x surge in a a 10 basis point product

that's a cost is way hurts you way less

than a 2x surge in something that's 20%

of your cost.

>> Yeah. And and that was something that I

first started to think about during one

of the big price spikes in uranium

because we were talking about uh these

nuclear power plants and it was one of

those things where it's like well isn't

there a point where they're not going to

turn the power plant on and why don't

why aren't these uh fuel buyers why

aren't they rushing to buy more uranium

as the price is going up? And and people

in the industry astutely pointed out

that when it comes to the cost of

operating a nuclear power plant that the

the cost of uranium just is such a small

fraction compared to you know all of the

other stuff that goes into keeping the

power plant running that they the price

can double and they just don't care

because it it doesn't really impact uh

the margins that much.

>> And I'll say case of uranium obviously

huge bull market but that price is down

from its its peak of uh several years

ago. So, commodities do tend to to mean

revert. And, you know, I I'm not saying

$80 silver correction or $30 silver

correction like like what do I know? Uh

I'm just I'm resisting the the the urge

to say this is a bubble and it's going

to um correct while also pointing out as

I've said several times that um you know

commodities are are mean reverting.

Well, there is one commodity that has

put silver to shame this year, and that

is natural gas. So, you know, we talked

about the the interview I did with

Michael Cow and the sort of long-term

bullish demand uh case for natural gas

specifically due to a couple of things.

electrification. Um, but just in

general, electrification outside of AI,

then there's the the AI demand and the

sort of off-grid demand um that could

come from people generating their own

power by burning natural gas, you know,

at the actual data centers themselves.

Um, and then just the the global demand

and the fact that as of right now, we

don't really have a global market for

natural gas. um it's it's very

regionalized and and we just don't we

don't really have that. And so that's

the the long-term thesis. And so a lot

of times people when they hear about

these commodity thesis like silver is

one, uranium, natural gas, it's very

easy to get excited when you start to

hear these narratives and the price

responds and attribute what's happening

in price right now to this longer term

trend. Uh you know, copper is another

example where this kind of got a head

fake before. Um, and so natural gas in

particular is known as like the

widowmaker. Um, it's one of those must

be this tall to ride the ride things

when you're trading especially the

futures. In the past 10 days, natural

gas is up 70%. So it went down to $310,

back up to $5. That's after touching $5

back in December. So this is the type of

volatility you can expect with natural

gas. And so if you are somebody who is

saying I'm really bullish on natural gas

because of a long-term view and you're

seeing this type of price spike, you

really have to be cautious because

what's what's driving it is the storm of

the century which is hitting the east

coast and the the drop in temperatures

that we're seeing across the United

States. And it is really related to the

United States because again it is a uh

what Michael Cow was calling it's a

landlocked commodity and it's even uh

you know we even have different pricing

in different regions of the United

States for natural gas based off of um

what infrastructure there is for

transporting it around. We talk about

the performance of these energy stocks

tied to natural gas. We talked about as

you said the um you know broadening of

the uh AI bull market to some of these

smaller companies that are uh further

down in the supply chain and um that's

really played through into the Russell

2000 more broadly. So talking about

performance of indices year to date you

know we did a a sort of year in review

where we looked at what worked, what

didn't. You know last year the NASDAQ

beat the S&P 500 which beat the Russell

2000. We had strong outperformance from

the rest of the world. Some of those

trends have continued into 2026. Some of

them have have not. And one that uh has

not continued has been the

outperformance of large caps. The the

rally has really broadened out. The bull

market has broadened out into the small

cap space and the Russell took it on the

chin today because of uh sell-offs in in

largely from the bank sector. Um, you

know, there was weakness in in in a lot

of small caps, but really the banks,

which have a a big influence on uh the

Russell 2000, had a pretty bad day

despite being down around 1.8% today,

while the S&P was essentially flat. The

Russell 2000 is up over 7% year to date,

whereas the S&P is hovering between 1

and 2% and the NASDAQ is as well.

Interestingly, emerging markets are

similarly up around 7 and a half%. So

the outperformance XUS has continued but

small caps at least here in the United

States have taken over and that's due to

a broadening out to other sectors and

then moving down um within the

technology sector a broadening out to

smaller cap companies. Um so it it's one

of those things where when you see the

S&P 500 being up a lot it's very easy to

say oh well that's just driven by a

couple of stocks. uh the the Russell

2000 is not nearly as overweight its

largest components. And so um you know

when looking at what's working in the

Russell 2000, it's pretty much

everything. Jack, I know you looked at

some data. What is the breadth like

within the Russell 2000 and what are the

sectors that are driving it higher?

>> It's a lot of natural resources. It's a

lot of banks. It's a lot of materials.

So, Max, interestingly, even though the

financial sector in the US is not doing

very well year-to- date, uh perhaps

because of credit card threats of 10%

cap, perhaps because of the credit card

competition act threat as well from from

the president Trump, which we covered in

our previous interview, um even though

the US financial sector has not done

that well and even though the regional

banking ETF has not done very well,

which is dominated by like large

regional banks like Pinnacle or Fifth

Fifth Third, um even though that is also

not doing well, the financial companies

that are in the Russell 2000 are so

small that they actually are doing

really well. So there are some like

subregional banks like way smaller than

PMC that are actually doing really

really well for reasons that I uh don't

understand to be honest. Um and I think

also Max that the natural resources uh

is done really well. So uh you know no

surprise that the gold miners the copper

miners uh some natural gas companies are

doing quite well and um you know

calculated that roughly 8% of the total

index gains yearto days are from natural

resources 4% from materials um so you

know companies like steel dynamics tetra

technologies uh a lot of onshoring

themes so companies like sterling

infrastructure granite construction so

basically you know this would be cate

categorized as uh industrials um some

defense sectors uh so I I don't know the

defense sector as as well but basically

the uh the

materials so that's you know natural

resources so as as well as uh minerals

is a higher percentage in the Russell

than it is in the S&P. So the S&P is

quite underweight. Um these precious

these these material companies um I know

the great great investor Murray Stall

from Horizon Kinetics. This is like five

years ago. So it's five years out of

date. But there was a time when there

was precisely one company that did uh

gold mining in the S&P 500. And I think

it was Bareric Gold which has since

renamed it uh renamed itself Beric

because it's like oh we don't need to do

gold mining. And then of course gold

goes up so much. Um, so yeah, I think

modestly like if these natural resources

do well that should benefit the Russell

over the S&P. However, it's it's not a

big driver. And as you pointed out, Max,

the there's, you know, 2,000 companies

in this index. So, it's it's quite hard

to look at at any single one. But, um,

it it is interesting that it's

outperformed. You didn't ask my opinion,

Max, but but I'll share it that I a

little bit skeptical uh of this. You

know, you look at some of the companies

that have been kind of dumped into the

market. You know, a lot of a lot of

these companies are are small cap

companies because they used to be midcap

companies or because they were small cap

they've been small cap companies for a

while, you know, and they're almost by

definition they're, you know, 10 year or

20 year performance is a on average, you

know, tends to be quite lower than the

S&P type companies. So, I generally do I

do believe in, you know, I'm kind of

reinventing my philosophy, Max. I

believe in trends. Winners keep on

winning. Losers keep on win losing. And

sure, the Russell could do great. It

could crush the S&P this year. It could

crush it next year. But I uh generally

would stay away from a like sector

overweight, particularly Max, on the on

the view that it's a small cap. Like

actually, if you look at probably my

portfolio, like I have tons tons of

small caps, but I like them for specific

reasons. I don't like them because

they're small caps. So I think that the

a way of a lot of allocators think is

like oh what's my small cap exposure?

What's my midcap exposure? Warren

Buffett has spoken quite negatively

about that outlook and I generally uh

would would agree with him. You know XYZ

type company you know like a path

financial which is actually a banking

company that uh was up you know I spoke

about last week and it was up today on

on quite good earnings. Um that I guess

is a small cap perhaps uh type company

but like I'm not bullish on it because

I'm long the small cap factor. Uh I

don't even know if the small cap factor

is a real thing. It was when all the

nerds did the math in the 1980s and

1990s, but uh small cap premium has been

negative for uh many many years now.

>> The profitability is way down. And

that's one of the things you talked

about the nerds doing the math on on

small caps and why that has changed. And

one of the things that um I think AQR in

particular has looked at with the small

cap factor is well if you adjust for

profitability if you adjust for quality

is there still outperformance from small

caps and that's they found that the

answer to that is yes we kind of agree

I'm saying like yeah bel long the adjust

for prof be long profitable companies be

long uh companies that do well and also

uh founder of of AQR on Bloomberg last

year on in an interview he talked about

this he he how he loves trend investing

and He also loves economic trends. So

basically if the price of Apple keeps on

going up and up and up like that's a

that is a bullish trend thing but also

if the revenue keeps on going up and up

and up that's likely to continue. So

tren trends trends are real and if you

know if if you people who have good days

on Mondays and Tuesdays are more likely

to have good days on Wednesdays than

people who had bad days on on Mondays

and Tuesdays. And often investor

psychology, at least I I think a lot of

beginner investor psychology, definitely

myself, beginner investor psychology, is

to not believe that and think, "Oh my

god, this stock has been down on Monday

and Tuesday, so it must have a great

Wednesday." Um, and often that is just

that is just not the case.

>> I was looking at the natural gas uh

complex. And to do that, I looked at our

our friend Catrini's basket of natural

gas that he put together uh for the

first time, I think back at the end of

2024.

um getting forward to 2025 put together

this natural gas basket if you want to

get exposure to natural gas uh which can

be tough because it is often produced

similar to silver as a byproduct of

fracking and oil. So if you want to get

that direct natural gas exposure, it's

often very tough to do in terms of a

production company. Um, and that's part

of the reason in the interview with

Michael Cow, he talked about natural gas

mineral rights, and that's why he's

playing it via um, more of a private

portfolio because it is just so hard to

get that public exposure. We already

discussed why trading natural gas

futures is so difficult. So, it is

really one of those trends that is super

hard to get exposure to. And if you look

through the companies that that he had

in in his basket, um, which the

composition of does change over time. he

adds and removes things. Um, you know, a

lot of them are services companies.

They're not produ producing. They're

doing something in the supply chain of

natural gas. And obviously, you know,

when the price is high, business is

booming and they're doing well. So, when

I looked at the basket and I just sorted

by year-to- date performance, uh, funny

enough, a lot of the stocks that were

the top performers, the top three were

all inactive in the, um, in the basket.

two of those, the number two and three,

you could argue it looks like they were

probably sold as winners and and uh

Catrini took his profits and moved on.

But the top performing one, which was up

52% year-to date, was the stock New

Fortress Energy NF. And when I pulled it

up on fiscal, it was hilarious because I

was like, "Wow, it has a market cap

below 500 million, but it has a $9

billion enterprise value." So that just

means it's like a super levered indebted

company. So oftent times when you have

big performance from the Russell, big

performance in the commodity sector or

these names are viewed as beta to some

other underlying asset um you can get

really the worst of the worst companies

um sort of outperforming and you know

there are great companies that when the

times are good they don't mean revert

and then there are companies like NF

that I think um at sometime this year

we're probably going to see it lower

than where it is today despite the

strong year-to- date performance. So,

something for everybody who is chasing

these higher prices in commodities

should keep in mind. Um, is this a a

quality company? Is this a company that

um is a winner over time or a loser?

>> You're completely right about that uh

huge huge ballooning debt figure. Uh

apparently like so it's it's recorded as

current debt so due within the the next

12 months which if it was true that

would be a just total disaster and you

know bankruptcy in you know counting and

debt countdown. Um but apparently

because they miss interest payments and

violated covenants accounting rules

require them to classify long-term bonds

as short-term debt. Uh so technically

they actually don't owe that money all

immediately. And apparently they may

have like avoided a liquidity crisis. So

that's probably why the stock has goes

up. If a price if a stock is priced to

go bankrupt and then the market decides

that they're not going to go bankrupt,

that is typically very very good for the

price of that stock. I will say Max.

Yeah, I mean uh a lot of those names uh

are in the the pipelines in the

supplying natural gas to the data

centers and I mean obviously um I don't

know if it's in the index but like the

the best performing stock you know you

you know uh one of the best performing

stocks of last year was like GE Vernova

uh Zemen's all not all these companies

that have natural gas turbines that

basically produce electricity for the

data centers and you know investor

legendary investor Chris Hone who uh had

the most profitable year in dollar terms

uh for a hedge fund ever. I believe last

year he was a big investor in in GE

Vernova and you know I mean so many you

know noob investors like me Max like GE

I mean GE is a piece of crap. Everyone

everyone uh knows that like that you

know that company's been ruined and

there's nothing valuable there. Um but I

was I was wrong and uh Chris Hone was

right. There was a huge huge shortage in

natural gas turbines. But I will say Max

a lot of natural gas names to me are

just I mean literally it is it is a

commodity and also I mean so you got

Michael Cow being bull natural gas you

got being bull natural gas a lot of

smart people being bullish on natural

gas I'm not disagreeing with them I will

say that you know how people say about

silver it's going to take years for

supply to come online that is true about

silver is not true about natural gas

like natural gas is the type of thing

you just like you know basically stick a

stick a large metal rod in the earth and

then the natural gas comes out. Um, so

>> which is why the infrastructure plays

are interesting because the idea is that

if we're going to be burning more

natural gas, which if you look at the

the share of energy production that has

come from natural gas, it is growing and

it's projected to continue to grow

specifically for AI demand. What we need

to do is build out the infrastructure

for all of these places. The hard part

is not getting more natural gas

necessarily. It's um it's it's getting

the natural gas where it needs to go and

and then actually turning that into

energy which is uh what a lot of the

companies in in that you know that give

you exposure to natural gas do. Um but

the other thing is as we said it's a

byproduct. So you say yeah you just

stick a thing in the ground. Well, what

happens if we do unleash Venezuela and

all of the oil from Venezuela starts to

come to us and it and the price goes

down? Like Trump wants gas prices lower,

he wants to be perceived as having

whipped inflation and he wants and

that's oil prices. Well, the interesting

thing is that if if oil prices fall and

shale production becomes unprofitable,

you it gets shut down. Well, that means

that natural gas that you're saying is a

byproduct that just spits out of the

ground, well, it's not coming out. So,

an interesting thing is that the the

negative trend in oil prices could

actually be very bullish for natural gas

prices.

That makes sense to me. I I don't have a

strong view on natural gas prices or

really oil prices. However, here's is my

strong view that a lot of people are

going to create these, you know, fancy

little allocations to natural gas in

order to express this view. Uh but that

me owning Texas Pacific Land Trust, I'm

going to outperform them. That's that's

a high conviction view. Uh I just Texas

Pacific Land Trust, they produce a lot

of oil. They produce a lot of natural

gas. Interestingly, a lot of their their

pricing of the realized price for

natural gas has actually been severely

below the market price because there's a

lack of pipeline infrastructure out in

the Peran Basin in in some regions. And

I think it's called the Waja Hub. I

believe there's a plan to build out this

pipeline infrastructure so that a lot of

the natural gas that Texas Pacific Land

Trust is producing, they're going to be

able to get credit for. And by the way,

Texas Pacific Land Trust, they do not

drill. All they do is own land. They

It's a royalty play. And they also

>> You love your royalties.

>> I mean, so I I love companies that have

70% margins. I mean, what what are you

going to do? And and they have a they've

winners keep on winning. They're up like

a gajillion percent over the past 20

years. Whereas a lot of these natural

gas companies that everyone loves are

trading at the same price or maybe even

below where they were 20 years ago. The

Michael Cow deal sounds interesting. You

know, I don't I don't uh I can't get

involved with it with that deal. So,

I've got Pacific Land Trust and I think

it's going to treat me quite quite well.

Um and to your TPL, Jack, when I did the

sorting of the Satrini Natural Gas

portfolio, it pops up. It's in the top

four in terms of year-to- date

performance of the active names and uh

you know there are some of those more

diversified like less pure exposure

plays because it is just so hard to get

the pure exposure and

>> right and TPL like oftentimes I think a

lot of index inclusion thing is a little

bit overrated and like obviously passive

investing is extremely real and very

relevant but in order to express how

that's impacting prices I would say it's

it's quite difficult. Um, but I TPL was

included in the S&P 500 uh uh and when

it did so it had a huge spike. So I'm

sure a lot of the pod shops who

specialize in index arbitrage uh made a

lot of money there. But it was it TPL

was extremely overvalued and uh since

then the price is down about 50%. So I

think it's uh its valuation is is quite

good and uh certainly the president is

is in favor of of drilling.

>> All right. Okay. Well, let's let's close

it out. Jack, there's one thing that the

president is also in favor of, and that

is cutting interest rates. Uh we have a

Fed day next week. What do we have to

look forward to? As we sit here today,

the news across the tape is that uh

leading fixed income investor at Black

Rockck, Rick Reer, is looking quite

favorable to the administration. I mean,

he certainly knows his stuff. He knows

the duration. He knows the convexity. I

think I, you know, who cares what I

think, but I think he's qualified. He

gets my stamp of approval. uh if anyone

at the White House is is listening and

um that you know I think I think

President Trump he does like very smart

people from Wall Street you know

everyone said the president is so anti-

uh establishment he would never pick

Scott Besson he worked for George Soros

I mean doesn't he know George Soros is

donating to all these leftwing causes

but I mean Scott Besson extremely uh

talented and smart uh financeier who's

now the treasury secretary so I think

the president he likes very smart people

to be in the role and you know I'm

biased because I know him, but I I think

uh the person he chose for the Fed

governor, Stephen Meyer, is very smart

and talented as well. Um so that's that

impacts that that impacts things. I

mean, I think that uh next Wednesday,

the Fed meeting is going to be the last

meeting where Fed Governor Myin is going

to be voting. Um in December, I would

have known that to be true. However, I

was hearing rumblings that maybe his his

term could be extended. A lot is up in

the air. I will say Max that you know I

actually asked veteran macro investor

Andy Constant about this and he actually

said no to this but I might disagree

like I asked Andy to what degree is gold

and to a less degree silver rallying

because the president is getting quite

active with regards to the Federal

Reserve and in his own words the

president's own words he says I think I

should have a say whereas you know for

for three decades we've had this thing

called central bank independence where

the president should not have a say um

at least in in several western countries

there's there's some exceptions uh where

uh they they they don't have central

bank independence but I I wonder if gold

is rallying so much because the

president is is getting involved. Um I I

think also gold is rallying because

geopolitical uncertainty which generally

is a thing to fade like I think that

geopolitical uncertainty uh often

resolves itself. Um, you know, I mean, I

mean, Mark Carney, uh, the head of of

Canada gave a speech where he basically

said that the the Western

is, uh, is is rupturing and that we

should, you know, basically the rest of

the world should coordinate to uh

around the US. So, that that's probably

not great for the dollar. Um, you know,

I think that we Max last year we had

this scare of oh my god and I was part

of the scare. I believe the scare so I'm

guilty you know but um that this scare

of because of tariffs the rest of the

world is going to dump their US assets

and that didn't really happen. We now

have the data we know that didn't

happen. All that happened is they

continued to invest in the US. They just

increased their hedge ratios. Um you

know it was marginally more favorable to

to hedge out of the US dollar and and

they did so. So the US dollar weakened

um and the rest of the world

outperformed but also the the rest of

the world's currency mostly outperformed

as well. you know, if you factor in

carry and as well. Um, I think that

because of that, it might be our

instinct to say to fade that as well and

say, "Oh my god, no one's ever going to

sell the dollar. No one's ever." like

the these the you know the

administration is pushing for some big

changes uh in Venezuela in Greenland and

I'm not saying that it's going to lead

to a meaningful shift in asset

allocation but I'm not putting that off

the table uh at all and I I would say

that I think with regards to precious

metals that you know maybe the pre the

president getting involved with the Fed

uh is leading is leading that I mean Max

we're in a world where you know it's

kind of been normalized that the

president is doing that. Um, you know, I

mean,

>> Jack,

>> I I just checked Fed Watch just to be

certain of this, but it's 97% chance

that we're not going to have a cut.

>> And that means, and I would put that as

we're going to have a 97% chance of a

truth social post about the decision to

not cut. And we're going to get to see

what gold does within, you know, a few

seconds and minutes of that truth social

post going out. So if you want to get an

idea of whether gold prices are moving

based off of what uh President Trump

thinks about the interest rate decisions

of the Federal Reserve, we're going to

get, you know, end of one, but we are

going to get a data point next week. So

that is something that I am closely

going to be watching is how does uh

Trump react to the lack of cuts that I

think are almost certain to happen and

then how do asset prices react then to

that to that post. Yeah, Maxi, it wasn't

until I did the interview with Andy that

he drew attention that there aren't that

many rate cuts priced in. I mean, we

have all this pressure on the president.

He's ch from the president. He's going

to choose the next Fed chair. Boom,

boom, boom. I would have thought that

like the terminal rate would be 2%. But

really, it's only pricing like 30 40

basis points roughly of cuts. So, uh

Andy made a bull call on interest rates

that, you know, the Fed's going to cut

more than is priced in and therefore

it's good to be long short-term interest

rates. I'm I'm inclined to agree with

Andy. I'll just, you know, leave people

with this thing. I think, you know, Max,

you and I, we are macro people. That's

our background doing interviews, but

we're also, we really, really respect

the micro and we respect that, you know,

value creation happens at the company

level to quote my guest Dan Krauss from

from November. And that value creation,

you know, happens at on the individual

decision. and that it's it's it's it's

easy to go uh full macro and you know

never go full macro and totally miss the

giant trade like if for for there's some

reason to be bearish and you you know

you miss the giant move in technology

and semiconductor stocks like don't you

know that that that was a mistake like

don't don't do that I do think macro

investors Mac max are generally too

inclined to be overly bullish about

precious metals and uh overly bearish on

equities particularly US equities um so

I I I just think that uh you know that I

just want to leave that with there and I

don't know I I think uh I think these

semiconductor companies and I mean

Google all these a lot of companies that

with connection to AI I think they could

do pretty well um as we entered into Q1

what do I know just some podcaster uh

but that's what I know and I also think

uh I want to leave people with this that

just like I looked up Visa the stock

right before this and a report from

NASDAQ the question was thinking of

buying Visa before Q1 earnings, you

might want to wait. And like obviously

that was written by an AI or whatever,

but I want to, you know, my shout out my

dad. He um, you know, he talked to me

about how it like in 20 many many many

years ago, like 10 plus years ago, maybe

even in 2010 or even before that, there

was a sellside analyst uh that had a

report about Mastercard, very similar

business to Visa, and the report was

like Mastercard is dead money. And that

pro, you know, a macro analyst would

have written that. Like sellside

analysts are al often also uh, you know,

a little a little too skeptical on

long-term winners. So, uh, if you look

at the price of Mastercard, it

definitely wasn't dead money. And, um, I

uh I I think that there uh I I I still

think there's value to be had uh in in

longs in this market, but maybe I've

just drink the Kool-Aid. Also, Max, I'll

leave I'll I'll leave uh there we we did

some work on some like random random

semiconductors that we've never heard

of. It's like what what type of company

are you and that are up a ton. I will

just leave this. No, I don't I do not

own this, but is a competitor to

Broadcom. MediaTek there's is a

competitor to Broadcom. So, it's in the

custom AS6 helping giant companies that,

you know, produce their own chips rather

than just, you know, buying a Nvidia

chip. Uh Google's been a Google's been a

customer of Broadcom probably is going

to continue, but if there's a little bit

of competition, MediaTek uh might might

might benefit in their business. So

again, no position, but uh just throwing

that there. Thank you everyone for

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