Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the All Thoughts Podcast.
Speaker 2: I'm Tracy Alloway.
Speaker 3: And I'm Jolle Wisenthal.
Speaker 2: Joe, does it feel like we're at a turning point
Speaker 2: of some sort? I feel like that's always a dangerous
Speaker 2: question to ask on a podcast, because the tendency is
Speaker 2: to call turning points or say we're at, you know,
Speaker 2: the beginning of some new structural shift. Yeah, because that's
Speaker 2: kind of what everyone wants to hear, Right, You.
Speaker 3: Don't have been thinking about That's like super meta and
Speaker 3: maybe beyond the scope of anything that we talk about
Speaker 3: on a podcast. But just since we're talking about big moments.
Speaker 3: When I was a kid, probably my parents thought that
Speaker 3: the future would look very different when I'm an adult,
Speaker 3: you know. But now I think that for my kids
Speaker 3: the future will look so radically different that that I
Speaker 3: just can't imagine twenty or thirty years from now anything
Speaker 3: being remotely similar to it is today, due to various
Speaker 3: things that we're seeing with tech and geopolitics and things
Speaker 3: like that.
Speaker 2: Particularly Ai, I don't know, back to the future promised
Speaker 2: we'd have flying cars by now, and I'm still waiting.
Speaker 3: They did get video conference. I guess that's too right,
Speaker 3: So that's one thing, but yes, you're right.
Speaker 2: All right. Well, there's obviously plenty that we could talk
Speaker 2: about when it comes to the future, like what is
Speaker 2: realistic and what is sort of pie in the sky
Speaker 2: thinking like flying cars. I suspect we're not going to
Speaker 2: have those for a while because of various reasons. But
Speaker 2: one person we do like to speak to when it
Speaker 2: comes to thinking big picture and kind of talking about
Speaker 2: these potential paradigm shifts is Steve Eisman. Of course, he's
Speaker 2: been on the show a couple of times. He's the
Speaker 2: managing director at Newburger Berman and Steve, thank you so
Speaker 2: much for coming back on all thoughts.
Speaker 4: Thanks for having me again.
Speaker 2: So big picture thoughts, what are you thinking at the moment?
Speaker 2: The last time we had you on, you were talking
Speaker 2: about a paradigm shift as interest rates got higher, And
Speaker 2: it seems like investors are starting to ratchet down their
Speaker 2: expectations for cuts right now, so we might actually get
Speaker 2: that higher interest rate environment for longer.
Speaker 4: You know, let's just start with the FED so we
Speaker 4: get that out of the way as quickly as possible.
Speaker 4: I have felt for a long time. The FED is
Speaker 4: extremely insensitive to its own impact on markets. You know,
Speaker 4: last was it last week when Powell.
Speaker 3: Spoke, So we're recording this April second, but he spoke
Speaker 3: on for I'm.
Speaker 4: Good, you know, when he said that he thought that
Speaker 4: because rates are higher, financial conditions are tight. That was
Speaker 4: a little weird. I mean, right, credit spreads are extremely narrow.
Speaker 4: I've always felt that, like I said, the Fed's insensitive
Speaker 4: to its own impact on the markets. It's clearly Fed
Speaker 4: wants to cut rates. It once seems to want to
Speaker 4: cut rates very very badly. Why wants to cut rates
Speaker 4: so badly? I don't understand in that they've engineered something
Speaker 4: that's really pretty fantastic. You know. Not only is there
Speaker 4: no soft landing, there doesn't need to be any landing.
Speaker 4: And as far as you know, the data that I
Speaker 4: can see, there seems to be something of a reacceleration
Speaker 4: in the economy right now. So why would you cut rates?
Speaker 4: What's your rush? You know? The actual What I would say,
Speaker 4: even though I think the FED is going to cut rates,
Speaker 4: the fear that I think should be out there is
Speaker 4: that if they do cut rates and be even more
Speaker 4: of resurgence in the economy and there'd be a resurgence
Speaker 4: and inflation. So what's why would you rush to take
Speaker 4: that risk? I don't get it.
Speaker 3: It's funny you start off. You started off talking about
Speaker 3: financial conditions. Actually I wrote about them a little bit
Speaker 3: more a little bit this morning, and the question that
Speaker 3: I have in my mind measures of financial conditions are
Speaker 3: clearly loose, right, so the stock market is basically at
Speaker 3: all time highs and put into financial conditions as you mentioned,
Speaker 3: credit spreads are pretty tough, and then of course crypto,
Speaker 3: which maybe you have thoughts about going to the moon.
Speaker 3: So all kinds of measures of in liquid market loosening.
Speaker 3: On the other hand, the IPO window still hasn't totally reopened.
Speaker 3: It's not obvious that private investment is reaccelerating in some
Speaker 3: dramatic way, hiring intentions. The labor market continues to at
Speaker 3: least normalize. It's not falling apart by any stretch, but
Speaker 3: it's nowhere near where it was. You know a couple
Speaker 3: of years ago. Are those tight credit spreads and high
Speaker 3: stock prices translating into the economic variables employment and inflation
Speaker 3: that the federally cares about.
Speaker 4: Inflation, I can say I think it's too early to
Speaker 4: say what's happening there. I mean, the other thing I
Speaker 4: could say is that from the companies that I speak
Speaker 4: to on the industrial side, things seem to have reaccelerated
Speaker 4: this year. Orders it picked up, Supply chain problems aren't
Speaker 4: as much of an issue. Nobody's really talking about firing anybody,
Speaker 4: you know. Is it perfect? Yeah? What's perfect?
Speaker 3: Sure?
Speaker 4: But things are pretty good. Yeah.
Speaker 2: My framework for understanding this is that the FED basically
Speaker 2: can look through loose financial conditions on the assumption that
Speaker 2: if it does build out investment and a lot of
Speaker 2: the inflationary pressures that we've seen have come about from
Speaker 2: supply constraints, then it maybe is reducing inflation longer term
Speaker 2: rather than leading to additional inflationary pressures. But one thing
Speaker 2: I have to imagine they might not be huge fans
Speaker 2: of is crypto. Crypto's back, right. I think bitcoins down
Speaker 2: as we're recording this, but it surged to a new
Speaker 2: all time high. I don't think anyone was really expecting
Speaker 2: crypto to come back in this way when rates are
Speaker 2: you still at the highest level in DEPA.
Speaker 4: That's because it has nothing to do with rates. Okay,
Speaker 4: so well, let's backtrack first. Sure, here's my big uber picture.
Speaker 4: You look, in bad times, people focus on balance sheets
Speaker 4: and credit quality, and good times they focus on stories.
Speaker 4: And there are three I think great stories of our
Speaker 4: time right now, and those are AI and everything having
Speaker 4: to do with it, infrastructure, and crypto. And I believe
Speaker 4: in the first two and I don't believe in the third,
Speaker 4: the thing about crypto. And here's me getting on my soapbox,
Speaker 4: so everybody can take this with the grainess whole. I
Speaker 4: have no position in crypto, and I never have. But
Speaker 4: you know, there are two issues with respect to crypto.
Speaker 4: Number one, is it a currency? And number two, if
Speaker 4: it's a currency, why should you own it? So let's
Speaker 4: bypass issue number one because that's kind of philosophical and say, okay,
Speaker 4: it's a currency, why should you own it? And the
Speaker 4: people who are advocates of crypto will say exactly the
Speaker 4: same thing, which is that there's a problem with FIA currencies,
Speaker 4: which is government currencies. There's been too much of it,
Speaker 4: there's too much bonduitions, there's too much debt, blah blah blah.
Speaker 4: And so if you want to hedge against FIA currency
Speaker 4: by crypto, in other words, crypto is like digital gold.
Speaker 4: If that's the case and the theory is correct, then
Speaker 4: how should crypto act. Crypto should do well when on
Speaker 4: days like today where people are starting to worry about
Speaker 4: inflation again, interest rates are up and the market is
Speaker 4: down and NASDAK is down, and crypto should do poorly
Speaker 4: when interest rates are lower, nobody cares about inflation, and
Speaker 4: Nvidia is up twenty five percent. And how does crypto
Speaker 4: actually act. It acts exactly opposite to its own thesis,
Speaker 4: which is the correlation between crypto and NASDAK is very,
Speaker 4: very very high. So what does that say to me?
Speaker 4: That crypto is just another way that people like to
Speaker 4: speculate on because they like to speculate. That's all. That's all.
Speaker 4: That's its only use. That and money.
Speaker 3: Laundering, which is a use. Okay, So the three big
Speaker 3: stories of our time that people are into AI, infrastructure,
Speaker 3: and crypto, two of which you believe in. We know
Speaker 3: you don't believe in one of them. Let's go to
Speaker 3: infrastructure for a second, because you mentioned that you talked
Speaker 3: to a lot of industrial companies. Companies that would be theoretically,
Speaker 3: I assume prime to take advantage of a lot of
Speaker 3: the building out that's going on. So what are they
Speaker 3: saying to you specifically right now? I mean you mentioned
Speaker 3: that they're not talking about job cuts, But where are
Speaker 3: we in the broader infrastructure cycle Because we saw all
Speaker 3: of this money, we saw these various bill We're.
Speaker 4: At the beginning. So here's my soapbox again. I think
Speaker 4: that there are several sort of themes that weave its
Speaker 4: way into infrastructure. So one is on shoring. You know,
Speaker 4: the world spent forty years creating global supply chain that
Speaker 4: was incredibly efficient and inexpensive and deflationary and turned out
Speaker 4: we all learned during COVID also very brittle. So you're
Speaker 4: a CEO. You got a free pass the first time.
Speaker 4: You know, if you had supply chain problems, nobody's going
Speaker 4: to blame you that you had supply chain problems because
Speaker 4: of pandemic. Nobody predicted you get one buy that apple.
Speaker 4: If for some reason you have a supply chain problem, again,
Speaker 4: that's on you. You get fired for that. So companies
Speaker 4: are bringing parts of their supply chain back to the
Speaker 4: United States. That's a ten year story and we're like
Speaker 4: in year two. That's them one theme. Two is data centers,
Speaker 4: which is AI offset offshoot, but it also has industrial
Speaker 4: o implications because number one, the GPUs that Nvidia and
Speaker 4: AMD is selling utilize three times more electricity than a CPU,
Speaker 4: and they're also incredibly hotter, so they require a lot
Speaker 4: more of the whole cooling systems that you have to
Speaker 4: put into those data centers and brings us to theme three,
Speaker 4: which is improvement in the grid. Now, the grid needed
Speaker 4: improvement before because of all the pressure that we're putting
Speaker 4: on it from electrification, etc. But now that you add
Speaker 4: the GPUs on top of it, the pressure on the
Speaker 4: grid is even higher. So you know all the industrial
Speaker 4: companies that deal with utility that are spending a ton
Speaker 4: of money to improve their grids. That's also a very
Speaker 4: long term theme and also pretty much in its early stages.
Speaker 4: And the last part is greenification, which has been a
Speaker 4: long standing theme, but it's going to keep going. And
Speaker 4: you take all four of those boxes and you turbocharge them.
Speaker 4: By the fact that the United States has not had
Speaker 4: an industrial policy in anyone's lifetime, and it has one now.
Speaker 4: The combination of the IRA and the IIJA adds up
Speaker 4: to about one point two trillion dollars over ten years,
Speaker 4: So that'll turbocharge all the four themes that it just
Speaker 4: spoke about. That's why infrastructure is so interesting.
Speaker 2: So I remember one of the last times we spoke
Speaker 2: to you, you mentioned a specific company, Quantus Services, which
Speaker 2: does electrification of the grids something like that.
Speaker 4: It's an engineering construction company, and one of the things
Speaker 4: that it does is if utility wants to build a
Speaker 4: new plant, et cetera, Quanta builds it for.
Speaker 2: Them, and that one is up. I think around forty
Speaker 2: percent since we spoke to you, which has been like
Speaker 2: less than a year or so. Are those the kind
Speaker 2: of companies that you're trying to find?
Speaker 4: Yes, they're those. Then there are some, you know, materials
Speaker 4: companies that are going to be building the roads, the bridges,
Speaker 4: et cetera, and you know, everything basically that surrounds that world.
Speaker 2: Would you do pure commodity plays? I mean, copper was
Speaker 2: a big one.
Speaker 4: I don't do commodities. These are the things I don't do.
Speaker 4: I don't do commodities. I don't do oil, I don't
Speaker 4: trade currency. I don't trade commodities and do any of
Speaker 4: that stuff. I just buy stocks.
Speaker 3: Say more about some of these because everyone knows in video,
Speaker 3: but you do see this in the sell side research
Speaker 3: that's coming out, which is that everyone is looking for
Speaker 3: these secondary and tertiary plays on AI and so quantus services.
Speaker 3: Congratulations on the good pick there, But what are the
Speaker 3: other types of companies that you're looking at as part
Speaker 3: of this in areas like cooling, which is obviously going
Speaker 3: to be huge, or you know, electrical component We got
Speaker 3: ism manufacturing out yesterday, transformers can you to be in
Speaker 3: shortage for basically three straight years? What is your process
Speaker 3: and how are you going about identifying the secondary and
Speaker 3: tertiary maybe AI data center plays out there.
Speaker 4: Well, I mean there are it's you know, it's all
Speaker 4: the offshoots of the four boxes that I mentioned. There
Speaker 4: is the cooling part, there's the grid construction part that
Speaker 4: there are the utilities that are more on the green
Speaker 4: side than on the not green side. I mean, there's
Speaker 4: just a lot to do. I mean, the other thing
Speaker 4: that people are that we're trying to figure out is, Okay,
Speaker 4: there's Nvidia, there's a MD There's there's Microsoft, you know,
Speaker 4: one of our newer stocks. There's Oracle, you know, anyone
Speaker 4: who has a huge database of anything consumer businesses. You know,
Speaker 4: in the world of AI is probably sitting on a
Speaker 4: gold mine. Whether the question is whether they can monetize it.
Speaker 4: And then then the next level, which I don't have
Speaker 4: an answer to, is Okay, everybody's trying to invent apps.
Speaker 4: Whose apps are going to do well? Although my guess
Speaker 4: is that one of the bigger beneficiaries is probably going
Speaker 4: to be Apple, because at the end of the day,
Speaker 4: the consumer I can't possibly predict what apps are going
Speaker 4: to do well. But let's assume they're a bunch of them,
Speaker 4: and let's assume that a bunch of them are for
Speaker 4: the consumer. I have no idea what those are, but
Speaker 4: let's assume that they exist, they are created, people are
Speaker 4: going to use them on their phone, so AI is
Speaker 4: going to have to be on the phone, which so
Speaker 4: you know, assume what I'm hearing is that Apple is
Speaker 4: talking to every AI creator in the world to say,
Speaker 4: you know, come on our platform because we'll make your
Speaker 4: app more efficient. They'll probably roll something out in June
Speaker 4: when they have their I don't know if it's an
Speaker 4: investor day or tech day, but you know, Apple potentially
Speaker 4: eventually is going to be one of the bigger beneficiaries
Speaker 4: in the second wave.
Speaker 2: Speaking of waves, This is one of the reasons we
Speaker 2: wanted to talk to you. How do you separate the
Speaker 2: hype around owned AI versus the reality the real opportunity
Speaker 2: there because we are seeing this dynamic in the market
Speaker 2: now where you know, companies are just mentioning AI in
Speaker 2: their press release. Right, everyone's doing AI, everyone's looking into AI.
Speaker 2: And again, one of the reasons we like talking to
Speaker 2: you is because you are well known for the due
Speaker 2: diligence that you do on various things, most famously on
Speaker 2: the housing market before two thousand and eight. So how
Speaker 2: are you separating the sort of fact from fiction here?
Speaker 4: Well, I mean, the facts are that AI at this
Speaker 4: point is really only benefiting a very small number of companies,
Speaker 4: most of whom were very, very very large. So that's
Speaker 4: we have focused our attention on everything else at this
Speaker 4: point seems to me to be hype or potential, and
Speaker 4: we don't own those companies. We own the ones where
Speaker 4: what's obvious. After that, we'll sing.
Speaker 3: It, you know. Tracy asked about the due diligence process,
Speaker 3: and I sort of want to keep driving at this
Speaker 3: because you mentioned one company, but like, there are a
Speaker 3: bunch of companies out there that probably sell some component
Speaker 3: that is useful for utilities. There's probably various companies out
Speaker 3: there that sell cables that connect those and video chips
Speaker 3: from one to another, and there's various companies that sell
Speaker 3: cooling solutions, et cetera. And so in that due diligence process,
Speaker 3: like how do you start that, Like what is your
Speaker 3: sort of open up the window of like what does
Speaker 3: it look like the process of identifying them?
Speaker 4: Well in terms of let's talk on the infrastructure.
Speaker 3: Yeah, yeah, yeah, that's the part of it.
Speaker 4: I have narrowed down that world to where I think
Speaker 4: it's significant to about eighty company Okay, And of those eighty,
Speaker 4: I would say about thirty are very very interesting. The
Speaker 4: other fifty or not so interesting at this point?
Speaker 3: Is that a function of when it's the eighty or
Speaker 3: the thirty? Is that about talking to people in the
Speaker 3: space and saying, hey, what products do you use?
Speaker 4: No, I mean it's I mean, I've been doing research
Speaker 4: on this for the last two years.
Speaker 3: Yeah, so what does that look like.
Speaker 4: It's a lot of work, It's a lot of reading,
Speaker 4: you know, it's going to a lot of meetings. You know.
Speaker 4: The area that I find is not interesting, for example,
Speaker 4: is residential solar Resisolar, I think is just an area
Speaker 4: that did very, very well during COVID, but was actually
Speaker 4: a major beneficiary of zero rates because people who put
Speaker 4: a you know, it costs about thirty thousand dollars to
Speaker 4: put a solar system on your roof, and ninety nine
Speaker 4: percent of people finance it. And when they were financing
Speaker 4: it during COVID, they were financing it at three percent,
Speaker 4: and today, if they need to finance it, they're going
Speaker 4: to need to fancy it at around nine And one
Speaker 4: thing I learned in great school is that nine is
Speaker 4: a lot more than three, and so sales are negative.
Speaker 4: Now how long they'll stay negative, I don't know, but
Speaker 4: I'm not interested in speculating about it, because the fundamentals
Speaker 4: right now are poor. On the other hand, you know,
Speaker 4: just from a pure fundamental perspective, some of the solar
Speaker 4: panel companies that sell stuff to utility they're doing quite well.
Speaker 2: So the other thing that's happened since we last spoke
Speaker 2: to you is that we are about ten or twelve
Speaker 2: months closer to a presidential election in the US. Does
Speaker 2: the infrastructure thesis take a hit if we were to
Speaker 2: get Trump in office?
Speaker 4: This perception is reality, so the perception would be that
Speaker 4: a Republican administration would be less positive on gratification, and
Speaker 4: so maybe some of those stocks would take a hit
Speaker 4: because of rhetoric. I think the reality is number one,
Speaker 4: and the states that benefit for most of this stuff
Speaker 4: are actually red states, including on the solar side. And
Speaker 4: number two. You know, one of the reasons why US
Speaker 4: solar panel companies, like a coupley like First Solar doing
Speaker 4: so well is because there are major tariffs against Chinese
Speaker 4: solar producers. Those tariffs were created by President Trump, not
Speaker 4: by President Biden. President Biden just reaffirmed them. So at
Speaker 4: the end of the day, I don't think it's gonna matter,
Speaker 4: although there'll be a lot of noise.
Speaker 3: On the near shoring. You know, this is one of
Speaker 3: those things where it's always hard, at least from my
Speaker 3: perspective to disentangle like what's talk. You know, you see
Speaker 3: a lot of like there might be like a McKinsey
Speaker 3: white paper about the benefits of near shoring, and it's like, okay.
Speaker 4: But oh I don't care about stuff.
Speaker 3: Yeah no, no, I know, I know. So I'm trying
Speaker 3: to like understand like the what are they doing specifically
Speaker 3: the companies, the industrial companies that you're talking to, what
Speaker 3: actually is being built either in the US.
Speaker 4: You know it is a long like, you know, two
Speaker 4: hour conversation kind of Look, there's some factories that are
Speaker 4: being built here. There's some chip factories being bilit here.
Speaker 4: There's some other kinds of factories being built here. You
Speaker 4: know they All you need to do is listen to
Speaker 4: let's say the Eaton conference call when they report, to
Speaker 4: understand that they're doing very very well, and they'll do
Speaker 4: very well for a long time because of those trends.
Speaker 4: Eating corp Yes, etn etn'. I don't own it, but
Speaker 4: I done a lot of research on it. You can't
Speaker 4: own everything. And they're a company saying what, that's a
Speaker 4: company that does electrification for factories.
Speaker 3: Yeah, this stalks on well, and they're saying what specifically on.
Speaker 4: Their calls, they got a lot of orders.
Speaker 3: Okay, that's what they're saying. I'm looking at those share
Speaker 3: Eating Corporation, POC manufacturers engineered products for industrial vehicle construction,
Speaker 3: commercial on aerospace markets.
Speaker 4: Or take a company right products, fluid connect Take a
Speaker 4: company like a newer company. It's not it's an older company,
Speaker 4: but it's a new company listen called CRH which is
Speaker 4: a materials company. The headquarters is in Ireland, but seventy
Speaker 4: five percent of the business in the United States. They
Speaker 4: do roads, cement, all that stuff. And on the commercial side,
Speaker 4: things are picking up, and they're partially picking up because
Speaker 4: of the IRA and the IgA. Money just starting to
Speaker 4: be spent. And one of the things that was sent
Speaker 4: on the conference call by the CFO was that this
Speaker 4: is this is now golden age for infrastructure. I never
Speaker 4: heard anybody say I call this a golden age for
Speaker 4: their industry, but he said it.
Speaker 2: Yeah, some of the stocks they look a little ai
Speaker 2: ish when you look at the charts.
Speaker 3: Street line yeah, straight line up.
Speaker 4: So CRCH is funny because this is a perfect example
Speaker 4: of why the thesis that markets are efficient is sometimes nonsense.
Speaker 4: So CRCH was a Irish listed UK listed company with
Speaker 4: seventy five percent of its businesses in the US. So
Speaker 4: materials companies in Europe sell it literally half the multiples
Speaker 4: of US companies for whatever reason. And of course all
Speaker 4: the cell side analysts who covered CRCH were European analysts,
Speaker 4: and the people who cover Volcan materials, let's say, are
Speaker 4: US analysts. So crch and September relisted in the US
Speaker 4: under thesis said hey, we might get a better valuation
Speaker 4: because we're seventy five percent US, and all of a
Speaker 4: sudden people are And that's what we started to buy
Speaker 4: it because we said to ourselves, this thing sells it
Speaker 4: less than half the multiple of its US comps because
Speaker 4: it has a different audience.
Speaker 2: That's so funn that's like cell side analyst arbitrage.
Speaker 4: That's exactly what, exactly right, it was cell side analyst arbitrage,
Speaker 4: and all of a sudden you had US analysts pick
Speaker 4: it up and say, wait a second, this is seventy
Speaker 4: five percent US. What am I missing? Huh?
Speaker 2: So one thing that comes up in infrastructure conversations is
Speaker 2: this idea of crowding out. So the government is spending
Speaker 2: billions and billions of dollars through various programs on building
Speaker 2: out infrastructure, I identifying new opportunities, and you know, we
Speaker 2: speak to people like Jiggershaw from the Department of Energy's
Speaker 2: Loan Office program about how he makes his investments as
Speaker 2: a private investor. Do you ever feel like you're competing
Speaker 2: with the government in this area in things like renewables
Speaker 2: or green energy, or innation.
Speaker 4: I mean, I don't do private investing, so it's not
Speaker 4: my problem. I just do public equities.
Speaker 2: Okay, But as a non government investor, do you feel
Speaker 2: like it's harder to identify opportunities because the government is
Speaker 2: in the mix now more than they used to be, or.
Speaker 4: It's just another part of the story.
Speaker 2: Huh, how do you take it into account?
Speaker 4: They're spending money just trying to figure out who's benefiting.
Speaker 4: Just follow the money, follow the money.
Speaker 3: On electrification, you mentioned the grid, and there seems to
Speaker 3: be this incredibly wide consensus that the grid is not
Speaker 3: currently sufficient.
Speaker 4: That is what in Silicon Valley and the tech world.
Speaker 4: That's what they're worried about. They're all talking, they're all
Speaker 4: petrified of it.
Speaker 3: Who's going to pay for it?
Speaker 2: Is?
Speaker 3: This was not something the IRA spent a lot of
Speaker 3: money in a lot of areas, but it did not
Speaker 3: really do anything for the grid itself. And there is
Speaker 3: even a lot of acknowledgement.
Speaker 4: Well, there's five hundred billion dollars in tax credits for
Speaker 4: green energy stuff. Sure, absolutely, And so you know a
Speaker 4: company Lightinexterra, which is will build let's say a solar field,
Speaker 4: gets a tax credit to do it. Yes, so that
Speaker 4: does that does help.
Speaker 3: Then there's the lines and the wires, and so there's
Speaker 3: all these questions about regulations, and there's the question about money,
Speaker 3: et cetera. Who's paying for basically the I mean you
Speaker 3: mentioned generation on the solar field side, who's paying for
Speaker 3: the lines that will connect all these solar fields?
Speaker 4: All the utilities are doing that. Okay, So if you
Speaker 4: look at the end of every year, when all the
Speaker 4: utilities are put their fourth quarter, at least most of them,
Speaker 4: they put out their three year capex budget projections, so
Speaker 4: they only comes out once a year. So we just
Speaker 4: went through that period. So of the twenty companies that
Speaker 4: are very good Newburger Bermam Utility Analyst covers, the average
Speaker 4: increase in the three year capex budget is twenty percent.
Speaker 3: Over the last year over the last year.
Speaker 4: In other words, a three year combined forward is twenty
Speaker 4: percent higher than than last year's three year budget. That's
Speaker 4: basically twenty percent because you're adding one more year or
Speaker 4: something like that. That's a lot of money, you know,
Speaker 4: and it's been going up and up and up and
Speaker 4: up and up every single year because utilities keep spending
Speaker 4: money to improve their grids.
Speaker 2: What's the investment opportunity there though? Do you buy the
Speaker 2: actual utilities or do you buy the sort of like peripheration.
Speaker 4: You can buy some of the utilities, you know, Unfortunately,
Speaker 4: utilities are very interest rate sensitive stocks. So and you know,
Speaker 4: in a day life today, probably I'm guessing because rates
Speaker 4: or op utilities will go down.
Speaker 3: But the market opens in two minutes.
Speaker 4: But I think some of the utilities that are more
Speaker 4: on the greenish side are an interesting opportunity.
Speaker 2: So you've been looking at the infrastructure space for two
Speaker 2: years now, as you mentioned, what was the surprising thing
Speaker 2: you learned or how does this particular industry vary from
Speaker 2: other areas that you have looked at previously.
Speaker 4: I think the big change is that if you take
Speaker 4: all the eighty companies, most of them are what would
Speaker 4: traditionally be considered very cyclical companies, very traditional cyclical, cyclical
Speaker 4: companies with no good secular story other than how's the
Speaker 4: economy doing. And for the first time and since I
Speaker 4: can remember, this whole group now has a real secular story.
Speaker 4: You know, not that they're not sick, they are cyclical,
Speaker 4: but they have secular tailwinds that they've never really had before,
Speaker 4: and those tailwinds are going to last quite a long time.
Speaker 3: That's the change the xcel u E t F has opened.
Speaker 3: It's down a little bit, but down about a tenth
Speaker 3: of a percent. There you go. You can count that.
Speaker 3: Count that count for me. Yeah, count that as a
Speaker 3: w So. Sticking on this theme of the grid and electrification,
Speaker 3: actually you mentioned oh now it's up, it's up, so
Speaker 3: I'm taking it all. Okay, now it's flat.
Speaker 4: Well, you know what they say about our business. Peacock today,
Speaker 4: feather duster tomorrow.
Speaker 3: That's a good one. No, this is the question I
Speaker 3: want to ask those three year projections that the utilities
Speaker 3: are coming up with, and you sort of talk about
Speaker 3: this shift from cyclical industries to secular, how did those
Speaker 3: three year projections compare us a five years ago and
Speaker 3: no one was talking about AI and no one was
Speaker 3: talking about the elect or very.
Speaker 4: I wish I wrot my charge, okay, and I don't
Speaker 4: have my chart, but my guess is that the cap
Speaker 4: the three year CAPEX budget today versus five years ago,
Speaker 4: it's probably fifty percent higher at least. Yeah.
Speaker 3: This is something that Jiggershah who Tracy mentioned, has talked
Speaker 3: about which is then basically for the first time and
Speaker 3: forever actual there's growth, and then demand which there basically
Speaker 3: wasn't before.
Speaker 4: Correct.
Speaker 2: Wait, can I ask something slightly off topic, but I
Speaker 2: think is of interest. So we recently had the sentencing
Speaker 2: of Sam Bankman freed, and he was the subject of
Speaker 2: a Michael Lewis book, as were you in a very
Speaker 2: different capacity. Have you heard from Michael Lewis at all?
Speaker 2: Do you keep in touch with him?
Speaker 4: We haven't spoken in a couple of years now.
Speaker 2: Did you follow the SPF trial very marginally?
Speaker 4: I have really an opinion about it.
Speaker 2: Did you read the book?
Speaker 4: I did not read the book.
Speaker 2: Okay, this isn't a very interesting line.
Speaker 3: I like that was a good line of questioning, Tracy.
Speaker 1: I try.
Speaker 3: It had the potential, had.
Speaker 4: The potential to go somewhere. Unfortunately it's not going on.
Speaker 4: The guest shot it down.
Speaker 2: Yeah, all right. So I hear all this stuff about
Speaker 2: excitement about data centers, and as far as I can tell,
Speaker 2: like part of the play is investing in I guess
Speaker 2: data center reads something like that, Well they're only two.
Speaker 4: Yeah, right?
Speaker 2: Or you invest in like HVAC and the companies that
Speaker 2: do the cooling around them. Yeah, so how do you
Speaker 2: actually play that thesis? That's what I don't get.
Speaker 4: Well, I mean, like I said, you can own everything,
Speaker 4: So I mean, I'm not gonna talk about what I
Speaker 4: have a position at these things. You know, Verdive is
Speaker 4: the sort of the pure play to sell cooling stuff
Speaker 4: into data centers. The stock has gone stratispheric. You know,
Speaker 4: the multiple is really high, so you're playing there's a
Speaker 4: lot of risk in that, not that the fundamentals are bad.
Speaker 4: Equin X and Digital Realty are a more steady eddy
Speaker 4: kind of play. You know, what you're dealing with is
Speaker 4: that the whole AI story is coming and so the
Speaker 4: demand is going to go up, but you're still dealing
Speaker 4: with CAPEX budgets having come down in tech, so the
Speaker 4: growth is still not great or as good as people
Speaker 4: would hope, but it's coming. So that that's seen and
Speaker 4: yang on the data centers and they are only two
Speaker 4: of them.
Speaker 3: One of the things that we've seen with data centers,
Speaker 3: and I think it was a few weeks ago, there
Speaker 3: were some headlines about Microsoft wanting to have on site
Speaker 3: nuclear power generation and we've talked a little bit about
Speaker 3: on this show about the hope the promise of small
Speaker 3: modular reactors, which haven't really taken off, but maybe that
Speaker 3: could be a solution for some of these huge CAPEX data.
Speaker 3: Have you looked at nuclear at all?
Speaker 4: I haven't looked at nuclear. The regulatory situation there is
Speaker 4: just so complicated, you know. The one kind of I
Speaker 4: think it was a Constellation Energy is the utility that's
Speaker 4: done incredibly well because it has nuclear, but it's not creating,
Speaker 4: as far as I know, more nuclear plants. It's just
Speaker 4: that the value of its existing nuclear plants have gone
Speaker 4: up a lot.
Speaker 3: That is a nice looking stock. On the other hand,
Speaker 3: New Scale who's tickers literally SMR standing for small modular reactors,
Speaker 3: That stock has not done so well, though it did
Speaker 3: get a pop. I guess on that Microsoft headline.
Speaker 2: It is interesting. One of the things that's sort of
Speaker 2: emerging from those conversation is even though we're talking about
Speaker 2: new technologies and things like that, a lot of the
Speaker 2: benefits seem to be accruing to the biggest players in
Speaker 2: the market. So like the big companies, I don't think
Speaker 2: this time last year anyone would have expected Microsoft to
Speaker 2: emerge as a leader in AI, and yet that's exactly
Speaker 2: what's happened. Is that what people should be focused on, Like,
Speaker 2: who's going to dominate these CAPEX heavy tech plays. It's
Speaker 2: going to be the guys with the money and the
Speaker 2: like existing connections.
Speaker 4: I mean, that's two parts to this. There's no question
Speaker 4: at this point the dominant players are the big boys
Speaker 4: and they're going to be spending the money. And then
Speaker 4: you know, they'll be interesting smaller companies that create apps,
Speaker 4: and we have no idea who those are at this point.
Speaker 4: None one day they'll show up on your phone.
Speaker 3: Something I'm curious about with the data center reads is
Speaker 3: that their reads. I mean, I'm sure, I know they
Speaker 3: talk about the AI opportunity and the demand for compute
Speaker 3: that's going to in theoretic theoretically keep exploding for years.
Speaker 3: But on the other hand, like they're not Google, they're
Speaker 3: not Amazon with AWS, they're not in Nvidia. Is there
Speaker 3: a risk that like they just can't compete with the
Speaker 3: sort of like specialized, more tech forward companies that are
Speaker 3: at the very cutting edge of this.
Speaker 4: I mean, you know, the hyperscalers want to build their
Speaker 4: own data centers, but you know, an Equinex for example,
Speaker 4: services everybody who's not a hyperscaler, So they will do
Speaker 4: really well when all the apps that are going to
Speaker 4: be created get created and people need to put their
Speaker 4: stuff in the cloud, they'll do it through equinex. So
Speaker 4: it really Digital Realty is more of a hyperscaler.
Speaker 3: Can you see more about Oracle? For a long time
Speaker 3: I sort of thought of that. They always seem to
Speaker 3: be straddling in my mind where it's like, and I
Speaker 3: don't know that much about the company, but they always
Speaker 3: seem to be sort of on the cusp of like,
Speaker 3: are they in the category of the hyperscalers. Are they
Speaker 3: sort of a legacy software database business that you know, well, they.
Speaker 4: Are legacy software database business that's moving to the cloud. Yes,
Speaker 4: they're an AI play. You know. The problem with the
Speaker 4: stock has been that every couple of quarters they have
Speaker 4: a really bad quarter and they say sorry by this
Speaker 4: most right, But in this most recent quarter it seems
Speaker 4: to have at least for now gotten their act together.
Speaker 3: And what's working for them.
Speaker 4: You know, the demand because of AI or moving stuff
Speaker 4: into the cloud, to move their database into the cloud,
Speaker 4: seems to be increasing. Their problem, they say, is that
Speaker 4: they haven't been able to buy enough chips to satisfy
Speaker 4: the demand. You know, when you think about that, that's
Speaker 4: probably it's a better problem to have than the alternative.
Speaker 4: And they seem to be getting their act together, so
Speaker 4: you know, they finally announced a good quarter and people
Speaker 4: got excited about it, which is why the stock finally
Speaker 4: did well. That's a more recent purchase of ours.
Speaker 2: Have you tried any of the AI chatbots yet? Chat gpt,
Speaker 2: you're too old? You know you can make you can
Speaker 2: make comic books on some of them.
Speaker 4: Yes, that you should make a comic book on a
Speaker 4: chat chat Joe.
Speaker 2: I didn't realize Steve's a comic book fan.
Speaker 3: Yes, so is there what's the comic book play?
Speaker 4: There's no comic book investing plan that I know of
Speaker 4: comic You know, the comic bit is a small.
Speaker 3: Business, but you're really into comic books totally.
Speaker 4: I own the one of the largest digital comic book
Speaker 4: collections in the world.
Speaker 3: What does it mean?
Speaker 2: What is that.
Speaker 4: Way?
Speaker 3: What is it?
Speaker 4: Instead of buying a physical book, you now read your
Speaker 4: book on your kindle. So comic books became the same thing.
Speaker 4: There was an app called Comicsology where you would buy
Speaker 4: your comic on Comicsology and you read it on your iPad,
Speaker 4: and Amazon bought it, and so my comic book collection
Speaker 4: is now in my kindle. So the size of my
Speaker 4: comic book collection, I'm very proud to say, as of
Speaker 4: this morning, was ten eight hundred and sixty three comics,
Speaker 4: on which I have read every single one, for real,
Speaker 4: for real, I'm doing this since twenty twelve.
Speaker 3: You know, I imagine, like, I don't know, I mean,
Speaker 3: what's the attraction, what's the attraction spending so much of
Speaker 3: your time here in life?
Speaker 4: I like to read.
Speaker 3: I read a lot of books, read non comic books.
Speaker 4: I read a tremendous number of books, books, nonfiction and fiction,
Speaker 4: and I've always enjoyed reading comics, and the comics have
Speaker 4: actually gotten very, very sophisticated in terms of literature, and
Speaker 4: I enjoy reading them.
Speaker 2: What's your favorite?
Speaker 4: Oh, that's easy. The greatest comic book ever written is
Speaker 4: Sandman Oh by Neil gam Yeah.
Speaker 2: I used to have a Sandman themed tarot card deck
Speaker 2: for some reason, even though I know.
Speaker 4: The first season on Netflix was actually quite good.
Speaker 3: What's it about? I don't know anything about.
Speaker 4: Salmon is the god of dreams.
Speaker 3: My son is into Spider Man, so I'm trying to
Speaker 3: like bond with him by like getting him.
Speaker 4: I could write a dissertation on Spider Man.
Speaker 3: Oh literally, what would.
Speaker 4: You actually have a little might have a literary theory
Speaker 4: of Spider Man.
Speaker 3: Good, tell me this. I need some stuff to like
Speaker 3: bond with my son over this.
Speaker 4: Well, you should get your son to read the newer
Speaker 4: Spider Man who's called Miles Morales. Oh yeah, he loves
Speaker 4: Lyles Miles. So my literary theory on Spider Man is
Speaker 4: that Peter Parker was actually Jewish.
Speaker 3: Metaphor keep going, see here's why.
Speaker 4: So first of all, the guy who created him, Stanley
Speaker 4: is Jewish or was Jewish. Who is Peter Parker? So
Speaker 4: Peter Parker is raised by his elderly, kindly aunt who
Speaker 4: looks like your Jewish grandmother. He marries the girl next door,
Speaker 4: who's who's the gorgeous non Jewish girls every Jewish boys fantasy,
Speaker 4: and and and he and he's consumed by he's a
Speaker 4: science geek nerd. And he's consumed by a sense of
Speaker 4: guilt and social responsibility. So who is that? That's that
Speaker 4: Jewish kid? This is this that's my literary theory. I've
Speaker 4: had it for a very long time.
Speaker 3: Do you think Superman is Jewish.
Speaker 4: Definitely not, absolutely not, although he was created by Jewish guys.
Speaker 3: Yeah, because I thought he was Jewish because some of
Speaker 3: the other names of his like relatives, and I don't Again,
Speaker 3: I'm not a big comic person, but like they have
Speaker 3: sort of I thought they sounded sort of Niskay, you're
Speaker 3: way off.
Speaker 2: Okay, I'm desperately trying to think of some sort of
Speaker 2: finance or markets related.
Speaker 3: Comic book, some way to bring this.
Speaker 2: We could just talk about comic books.
Speaker 4: Well, the only thing you could bring it up to
Speaker 4: is I have no opinion on Disney, Okay, but I
Speaker 4: can tell you what I think is wrong with the
Speaker 4: Marvel comic book movies.
Speaker 2: Tell us Disney owns.
Speaker 4: Disney owns Marvel, and that's been a big source of
Speaker 4: their profitability. So I think the problem with Marvel is
Speaker 4: that they've lost their story. And they are two parts
Speaker 4: of this. So part one was they had a great story.
Speaker 4: It was a very complicated story where the villain only
Speaker 4: got revealed years after they started the whole process. You know,
Speaker 4: it was multiple stories with tangents, but in the end
Speaker 4: all wolve it's way back into the last two movies.
Speaker 4: And then it was over, and they have not been
Speaker 4: able to find a new story, and they've been basically
Speaker 4: floundering because they don't have one. And the other major problem,
Speaker 4: which is even more serious than the first, is that
Speaker 4: there's a concept in comics called the trinity. So in
Speaker 4: DC it's Superman, Batman, and Wonder Woman. That's the core,
Speaker 4: And in Marvel it's Captain America, Thor and Iron Man.
Speaker 4: And at the end of the last Marvel comic, iron
Speaker 4: Man's dead. Captain America is over ninety years old, and unfortunately,
Speaker 4: since then, Thor has been made into a comedic joke.
Speaker 4: So you've lost your trinity. So even if you had
Speaker 4: a story, nobody, I don't who's going to care because
Speaker 4: because people care about those three characters with anything else
Speaker 4: and they're gone, can't make thesis.
Speaker 2: They you just start the whole thing over. Well, you
Speaker 2: can read both Spider.
Speaker 4: Man, but you know you have to get new, Uh,
Speaker 4: you have to start for fresh. I don't know if
Speaker 4: they're willing to do that yet.
Speaker 3: This is such a refreshing, interesting take. We could just
Speaker 3: talk about this because I do know like as someone
Speaker 3: who I kind of like going to the movies, but
Speaker 3: unlike you, I was never a big comic book reader
Speaker 3: during that sort of Marvel era of movies, when it
Speaker 3: just seemed like the only movies that were in the
Speaker 3: theaters were just these endless superhero movies. I just like
Speaker 3: totally tuned down, and so I was there religiously.
Speaker 4: Yeah.
Speaker 3: So, but I for one was like kind of I
Speaker 3: am relieved and sort of the idea of Hollywood's are
Speaker 3: going post superhero and maybe making movies again like Oppenheimer
Speaker 3: with normal people.
Speaker 4: By the way, Dune Part two was very good.
Speaker 3: I've been meaning to.
Speaker 2: I haven't seen it yet.
Speaker 3: No spoilers, I haven't seen it yet either, but I
Speaker 3: don't know. I for one am excited about a sort
Speaker 3: of post superhero.
Speaker 4: That's that's fine. I'm just talking about the problem with Marvelers. Yeah,
Speaker 4: but it's but it's a big connect to Disney.
Speaker 3: But right, but it's connected.
Speaker 4: Right.
Speaker 3: So it's like these stories have just gotten tired for
Speaker 3: people because there's nowhere to go for them.
Speaker 4: Well, you you need a new story, you need and
Speaker 4: they haven't found one, you know. So if I go back,
Speaker 4: you know, and I'll show you how into this. I
Speaker 4: Am Loki. Season three was terrible. The Marvel's movie, which
Speaker 4: is recently was awful. Guardians of the Game, Like, what
Speaker 4: made it awful? Because they all look awful. It was
Speaker 4: just stupid. The story was dumb, it wasn't interesting, and
Speaker 4: they tried to make it too much of a They
Speaker 4: have a tendency to try and make the movies too funny,
Speaker 4: and it doesn't translate very well anymore. And then the
Speaker 4: Guardians of the Galaxy Part three was so boring. I
Speaker 4: almost walked out three times.
Speaker 2: Was that one disturbed me because there's a lot of
Speaker 2: animal cruelty in that one and it was just kind
Speaker 2: of sad to watch.
Speaker 4: There was a lot of animal cruelty to it. They
Speaker 4: tried to make it relevant. Yeah, it was just a
Speaker 4: bad story.
Speaker 2: Yeah. Has the market for comic books changed in the
Speaker 2: sense that so everyone knows if you have a really
Speaker 2: successful comic book. Nowadays you can get a franchise attached
Speaker 2: to a film franchise. Does anyone come up with characters
Speaker 2: based on the idea of like what will play well
Speaker 2: on screen? Overall? It feels like you don't actually get
Speaker 2: that many new characters in new comic books.
Speaker 4: That many new comics there really.
Speaker 2: Are seems a shame. It seems like it would solve
Speaker 2: the story problem if we were actually coming up with
Speaker 2: new stories.
Speaker 4: Well, there's new stories, and then there's new characters. There's
Speaker 4: always new stories. But you know the problem with Marvel
Speaker 4: is they don't have a story. They just don't have
Speaker 4: a story.
Speaker 3: I didn't realize that. I didn't anything about this. I
Speaker 3: just sort of assumed that there every superhero thing was
Speaker 3: just sort of this endless story that could go on forever.
Speaker 3: Well it does.
Speaker 4: But when you're making movies, yeah, you know, they what
Speaker 4: they had was this They had all these different origin stories.
Speaker 4: But then at the end of the day, all the
Speaker 4: movies were going towards this one central story, which was
Speaker 4: the last two movies, and then it was over. So
Speaker 4: now you got to like start again, and they haven't
Speaker 4: been able to find how to start again.
Speaker 2: Here's my desperate attempt to bring us back to our
Speaker 2: core content. If you could come up with a comic finance,
Speaker 2: investing markets economics crossover, what would it be?
Speaker 4: Oh, boy, I don't know, I don't know.
Speaker 2: That's that's that's super portfolio.
Speaker 4: No, no, you know. I used to joke when I
Speaker 4: was Halloween, I'd take my kids around just as me
Speaker 4: and they'd say, who I say, I'm a hedge fund manager.
Speaker 4: I'm the scariest person.
Speaker 2: That's low effort.
Speaker 3: Should we go back to some of your big themes?
Speaker 4: Sure? Why not? Okay, this was more fun though.
Speaker 3: I mean, actually, this has been a true light bulb
Speaker 3: moment because all I knew is that people weren't really
Speaker 3: watching the Marvel movie is the way they were three
Speaker 3: or four year old. And now for the first time
Speaker 3: it took me.
Speaker 4: Especially now that one of my favorite characters has always
Speaker 4: been four h huh and the last movie was so bad.
Speaker 4: I was offended. Really, yes, it's like, how dare you
Speaker 4: do that to my character?
Speaker 3: Interesting? God, I really don't know exactly where to take this,
Speaker 3: but let's I want to let's just maybe go back
Speaker 3: to some of the infrastructure sure questions. It sounds to
Speaker 3: me like and maybe this is a sort of investing
Speaker 3: philosophy question. And you mentioned the sort of the cell
Speaker 3: side analyst arbitrage with that one company that got listed here.
Speaker 3: You mentioned the fact that even if there's a change
Speaker 3: in administration, that doesn't necessarily change the underlying stories. It
Speaker 3: sounds to me like, from a philosophical perspective, your view
Speaker 3: is there are big long term trends and don't count.
Speaker 3: Don't presume they're all priced in immediately. Even if we
Speaker 3: can all agree that there's ten years of growing electricity demand,
Speaker 3: there's ten years of demand for greater cooling solutions or
Speaker 3: whatever it is, or more cement or more copper.
Speaker 4: I'm not a great believer in it's all priced in. Yeah,
Speaker 4: that's I don't subscribe to me.
Speaker 3: Yeah, that's sort of one that I wanted to get
Speaker 3: you on, Like, how do you think about that question?
Speaker 3: Because I have, like the way I think I have
Speaker 3: journalists brands, so I assumed if I know about it,
Speaker 3: it's already priced in.
Speaker 4: I mean, you know what people say, it's all priced in.
Speaker 4: My question to them is always how do you know?
Speaker 4: Did you get the old planet Earth into group therapy?
Speaker 4: And ask everybody like is it priced in?
Speaker 1: Like?
Speaker 4: How would you know that? Look, this is a story.
Speaker 4: It's a story that's going to last a long time,
Speaker 4: and as long as it keeps going, people are going
Speaker 4: to want to own it. I mean it gets back
Speaker 4: to what I said before. In good times, people traffic
Speaker 4: and stories and as long as the story is there
Speaker 4: by the stock. I mean, if you go back to
Speaker 4: you know the Internet bubble. What killed the Internet bubble?
Speaker 4: It wasn't valuation. It wasn't that it was all priced in.
Speaker 4: What killed it was that the US engine to a
Speaker 4: recession and these companies' fundamentals fell apart. That's what killed It.
Speaker 4: Wasn't that that they were very expensive. Well obviously they
Speaker 4: were in retrospect. So this, you know, they have this
Speaker 4: infrastructure store. I think it is just going to go
Speaker 4: on for a very very long time. And as long
Speaker 4: as that's the case, people want to own so many stocks.
Speaker 2: All right, Steve, it was so good talking to you again.
Speaker 2: We talked about infrastructure, AI, crypto, and of course comic books.
Speaker 2: Slightly unexpected, but a lot of fun. Thank you so
Speaker 2: much for coming back on our thoughts. Thank you, Joe.
Speaker 2: That was really fun. I did not expect us to
Speaker 2: spend twenty minutes talking about books, but I enjoyed it.
Speaker 3: No, I'm really excited tonight. Like I said, I'm going
Speaker 3: to go home and tell my son that like him,
Speaker 3: Peter Parker is Jewish, and see if that mean. Like
Speaker 3: I said, I got a bond with my son over
Speaker 3: his Spider Man affinity. So that'll be a line.
Speaker 2: You got to develop a literary theory of Spider Man,
Speaker 2: just like Steve. That's what you need to do. No,
Speaker 2: there is a lot of interesting stuff in there. I
Speaker 2: thought the point about stories, so you know, in good
Speaker 2: times people are into stories, and then what really tends
Speaker 2: to knock those theses are when the bad times start,
Speaker 2: and that's when things start crumbling. So far, you know, again,
Speaker 2: it is now April of twenty twenty four. We do
Speaker 2: not seem to be on the immediate cusp of a recession,
Speaker 2: so you can see why people continue to get excited
Speaker 2: about these stories. The other thing I thought was interesting
Speaker 2: was the idea that like, okay, well, a lot of
Speaker 2: the infrastructure programs have been started under the Biden administration. Yeah,
Speaker 2: but there are aspects and themes that emanated from the
Speaker 2: Trump administration, so things like the subsidy for solar panels
Speaker 2: in the fact that we're not importing as many Chinese
Speaker 2: solar power panels as we used to and that would
Speaker 2: be expected to continue. So yeah, that was interesting totally.
Speaker 3: In general, I liked his point at the very end
Speaker 3: about his belief that things aren't just priced in immediately
Speaker 3: and as long as things are good, people will write
Speaker 3: the story I mean, look, so a year ago. By
Speaker 3: a year ago, so April twenty twenty three, it was
Speaker 3: unambiguously understood that in video was a key player in AI, right,
Speaker 3: it was everyone had used Chad GPT by that point,
Speaker 3: everyone knew was trained on in video chips. Everyone's like, oh,
Speaker 3: this is crazy, And in that time, in video is
Speaker 3: up over fourfold. And I don't think there's like some
Speaker 3: new information that about in video or AI that's come out.
Speaker 3: It's basically like, oh, just the storage is very good.
Speaker 3: And maybe some of the numbers and the degree to
Speaker 3: which other companies have piled in or wanted to buy
Speaker 3: chips is true. But to his point, these this idea
Speaker 3: that it's all priced in the moment we're aware of
Speaker 3: the situation is probably a good thing to internalize.
Speaker 2: Yes, And I always think life would be so boring
Speaker 2: if you went around just assuming that everything was priced
Speaker 2: in immediately, right, Like, what are we even doing here?
Speaker 2: If we really believe that?
Speaker 3: Yeah, why do we have a investment industry at all?
Speaker 3: If everything I kind of still believe that, but.
Speaker 2: I don't take I refuse to believe it.
Speaker 3: Well, you would be a better investor than I would, No.
Speaker 2: I wouldn't okay, shall we leave it there?
Speaker 3: Let's leave it there.
Speaker 2: This has been another episode of the Odd Thoughts podcast.
Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 3: I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 3: Follow our producers Carmen Rodriguez at Carman Arman dash Ol
Speaker 3: Bennett at Dashbot and kel Brooks at Keil Brooks. Thank
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