SPEAKER_01 0:00

Hey Justin. Hi. I'm trying to uh control my composure. Yeah, yeah. We we we always have technical difficulties in the latest episodes. It's kind of interesting. Um that's what makes it fun.

SPEAKER_04 0:12

That's what that's what makes it lot live, you know? Yeah. It's the real production. Yep. Yep. Uh all right, let's uh jump into it. What do we have today? What do we have on the talk about? We have a lot. We're gonna talk uh your your portfolio made a new purchase. We're gonna talk about that. We're gonna talk about how Rivian, uh Rivian's margin cap compares to Ford spending. There's a lot of news happening with Meta. Uh Rocket Lab has been very volatile the past two days. So we're gonna break that down. And of course, Micron, they have their earnings report today. So we're gonna keep our eyes out for that. And listener questions. So if you have listener questions, feel free to shoot them in the chat. Let's start with your portfolio. So you bought a new stock, or should I say fund?

SPEAKER_01 1:04

Uh what did what did you buy? Okay, so the Rivian Venture Fund, which we talked, we had it at Robinhood. Robinhood Venture. You said Rivian.

SPEAKER_05 1:14

Jeez.

SPEAKER_01 1:16

Uh the the I guess I were live. Uh yes. The Robin Hood Venture Fund. We did a 20-minute deep dive on it where uh we talked about all the benefits relative to a VC fund. And uh they had their IPO last week, and I did buy at the IPO price of $25 per share. Uh, and uh immediately it dropped post-IPO, and I think uh latest price is around $22 a share. I don't I don't have the exact pricing in front of me, but I think $23. Is it $23 now? So it's already down roughly 10%. Um, but uh this is the type of investment that if you were to make it as an accredited investor in a VC fund, you would essentially be tied up on that investment for uh at least five years, most likely 10 years or even longer. I literally have investments in venture funds that I have made uh that I've made seven, eight, nine years ago, uh, and I still cannot exit them. Uh and certainly uh if I wanted to exit them, even though the uh the stated valuation or the um net value of the portfolio is supposedly significantly higher than my investment, I can't even uh exit those positions for less than my investment. So the fact that the Robin Hood venture fund, not Rabian venture fund, but Robinhood venture fund is uh is 10% is down 10% doesn't really surprise me. The fact that you can actually get in and out of it at any time you want, and you can today buy it for less than what the um uh the uh the the market value of those uh companies are um is actually a very positive thing. It goes to show what a what a great opportunity this is for people who invest in venture funds in particular. One of the other caveats that I had mentioned is that basically uh investing in uh venture funds is not necessarily this great thing that anybody should do. Uh, I actually now tend to uh much prefer to invest in individual companies, public companies, as opposed to venture funds. But I did want to have a stake in Robinhood's venture fund largely to sort of discover up and coming companies, which um uh which are generally like on track to become a publicly traded company at some point down the road. Uh and if uh Robinhood's um picks turn out to be winners, the uh the the fund's value will go up over time as well. So um this is not one of those investments that I'm like super excited about. It's a very, very small portion of my portfolio. I think I put less than a quarter of a percent of my portfolio into it, or roughly a quarter of one percent.

SPEAKER_04 4:08

Um, but yeah, it's do you do you think you'll invest more in them, or is this just like a little it's is it similar to like Bitcoin where like you have a little bit invested and you're not really touching it?

SPEAKER_01 4:22

Um so I'll I'll talk about Bitcoin uh separately from this because it's not like Bitcoin, but it is something that I don't expect to touch for for a long time. I kind of want to see how it turns out. Uh and if it turns out great, like over the course of uh the next, let's say, three to five years, then I might invest more um in especially future funds. So we'll see. We'll see. I mean, I don't have a um I don't have a specific uh uh thing in mind as far as like how much I'm going to invest. I just don't expect this thing to outperform my the rest of my portfolio, and therefore it's not a massive priority right now.

SPEAKER_04 5:01

But yeah. And in regards to like discovering new companies, even like they just released this fund and they already added two new companies, I believe, which was Stripe. And when they announced the fund, they said that they were working on a deal with Stripe, and I think that officially went through. And then they also did a deal with Eleven Labs, which is like an AI voice company.

SPEAKER_01 5:25

That's right, that's right. Um, so uh I had never heard of uh 11 Labs, and it took it, you know, that company is phenomenal. I was checking out their products, and um their products are like amazing. So um, yeah, it's a it's a company that would have never came on my radar. Okay, so let's talk about uh Ricky and Dustin. Before we talk about anything else, I'm already getting text messages from people that Micron has killed it. Oh we have to we have to check out Micron. Do you want to share your screen? Sure. Breaking news. Uh so actually let me go. Look at those numbers. Holy macro. Okay, here we go. Okay, Micron, 23 billion, 23.8 billion estimate was 19.1 after it had uh been bumped up because the uh original estimates after last quarter were in the 18s. They came in at 23 billion. They beat their 19 billion dollar estimate by an additional 4.7 billion, 24 beat, and then the EPS of $12.20. Wow. Wow. Two very, very, very large beats. $40 and a 1% beat on EPS. That just blows me away. Then the stock is ultimately 1%? What is ultimately? This is a case of uh the the stock price absolutely not matching what is happening in reality.

SPEAKER_04 7:06

So actually, this the stock price is now down after hours. I just dropped it in a way.

SPEAKER_01 7:11

I kind of like that. I I don't know. This is how crazy is that? Unless there was some uh some additional details that we're missing here. But um but go to like look look at those uh revenue numbers. That last revenue bar is the 23.8. The previous revenue was 13.6. So from 13 to 23, they added over 10 billion dollars of revenue quarter over quarter. What is that? Like uh 10 divided by 13. That's a 80, 77 percent increase in revenue quarter over quarter. And last quarter was a record revenue quarter for them. Yeah, and this is this is a that is unbelievable.

SPEAKER_04 7:58

Look at that, look at that chart. And this kind of goes back to what you were saying a while ago of like um, you know, there were these revenue boom cycles. This cycle, if this is a cycle, it's unlike any of their their others. Wow.

SPEAKER_01 8:14

Um I've never seen anything like that. Even Nvidia did not kill it in that way, um, quarter over quarter. I'm just I'm gonna go to the words right now.

SPEAKER_04 8:27

Right now we're looking at Q1 2012 to Q2 2026.

SPEAKER_01 8:34

Yeah, anybody who's selling their stock right now in Micron, what what were they thinking? Like, what were they thinking or expecting that they would sell after they see those numbers? This is what I don't understand. Like, this is why the market is such a uh such a weird place. You know, uh if you're buying a company uh and this company just destroys their revenue guidance, which were already incredibly high and unprecedented, you know, in terms of growth, I I think Nvidia may be the only company that has ever grown at that size, at that scale, um, uh the percentage-wise at uh at that scale. Um yeah, I can't think of another publicly traded company that is multi-billion dollar uh quarterly revenue that has grown that fast. That is incredible, incredible growth. Wow. Uh I can't wait for their call. So that that should be a very interesting call.

SPEAKER_04 9:36

Yeah, and we'll keep an eye and see if uh they release their slide deck uh and we'll uh talk on that if if we yeah, if we if we get it. Okay. So in the meantime, let's talk about uh Rivian and Ford. You did a post on, I think you posted it everywhere, uh Savvy Trader, Earnings Hub X uh comparing Rivian's market cap to Ford's EV spending. So can you break that down for us?

SPEAKER_01 10:05

Yeah, so um I think a lot of people know that um Ford just took a approximately a $20 billion write down and canceled the F-150 Lightning, um, which they had invested roughly $20 billion into building um in this one vehicle, and uh they gave up on it because you know they they determined that maybe the truck market doesn't want an EV. So the reason I had put that out as a comparison to Rivian is that the entire traditional car industry has been spending a ton of money. In fact, Ford's the rest of their EV lineup, they've spent over $40 billion making EVs, and they still don't have a lot to show for it. They have the Mustang E, which is still not profitable. Um, but you know, the profitability aspect aside, it's also declining sales numbers. It's not necessarily uh an extreme success. The only company that has been able to um shine in the EV space is Tesla. Uh the rest of the car industry has spent over $100 billion and has very little to nothing to show for it. And in fact, they're doing write-off after write-off cancellations of projects after cancellations, and they're sort of going back to uh focusing on uh their internal combustion engine vehicles. So uh in comparison, Tesla is now a profitable company, it's the number one uh EV company, and um and they're you you know they they have kind of shifted away from their focus being EVs for a little bit on the Robo Taxis and uh Optimus. But aside from that, their strategy of building everything in-house, building the entire full uh stack of electronics, software, battery technology, uh all the components that they need, putting that together in-house, uh, and even the autonomy and autonomy chip in-house, uh, there has only been one company that has done that, Tesla, successfully, and then one other company that is literally following in their exact footsteps, and that's Rivian. Uh and and they're sort of like on this verge of uh getting all of that done, uh, which uh they have been getting done, but just at a smaller scale. They now have their fourth vehicle coming out with the R2. Um, but Rivian uh has invested roughly $25 billion to get to where it's at. Um and uh and it's and its products are being received more successfully than Ford's or GM's or uh even BMW or Mercedes or VW's EV vehicles. So uh it's having more success following in uh uh uh in Tesla's footsteps. But what's fascinating about it is that you can buy the entire company today. Its market cap is just $19 billion. So what I was saying is that the value-wise, when you look at the entire company and the price of it as uh as a whole, the value that you get with Rivian is significantly better than any other product. Uh, and the the probability of success within the EV world is probably higher than any other traditional car maker because they're sort of like doing the doing things in the right way in the same way that Tesla has been doing it, which surprisingly no one else has been trying to do. So no one else has their own charging network, for example. No one else has uh the full stack of self-driving software, even building their own chips, but Ribian has been able to do all of it in-house. So it's been fascinating to watch. And um, I'm still blown away that you can buy this company for 19 billion for the whole thing. So that was just spent like double that on their EV. That's right. That's right. And they don't have a charging network, they don't have uh you know self-driving software, they're they're uh they they don't have uh the chips, they don't have the electronics, they still don't have great software that controls the entire system, entire vehicle that can be over there, updated, so uh still pretty significantly behind.

SPEAKER_04 14:20

Okay, I do apologize for the whiplash, but I want to go back to Micron because we now have the slide deck. All right, let's do it. So let's go over it.

SPEAKER_01 14:34

All right, what did uh what do they do? So you uh do you want to hit the highlights or should we just skim through them? What was what do you think the best way to do this? You're you're you're the shareholder here. So uh fiscal key three single quarter revenue guidance exceeds the full year revenue for every year in our company's history through fiscal 2024. That is unbelievable. Oh, I think I was just logged out of Earnings Hub. That's crazy. But we're probably getting a uh that's interesting. Yeah, probably contact support about it. Who does that email go to?

SPEAKER_02 15:20

I don't know, some crazy guy, I think.

SPEAKER_01 15:23

Okay, we're back. All right, let's do it. Uh let's go to the next slide. Let's see what else we're gonna do.

SPEAKER_02 15:36

Technology, data center server demand.

SPEAKER_01 15:49

A lot of text. Okay, so we're we're just like skimming through the um slide that deck that they have provided. Okay, here we go. Fiscal year 2026 revenue 23.9 billion, revenue up 75%, quarter over quarter, up 196% year over year. Those numbers, like 196% year over year for a 20 almost $4 billion revenue company. Just mind blowing. Okay, let's go to the next slide.

unknown 16:18

Okay.

SPEAKER_01 16:19

Um performance by technology. So they have their DRAM division, which uh did $18.8 billion representing 79% of total revenue in fiscal year or fiscal quarter 2026. Um the NAND technology, $5 billion representing 21% of total revenue in fiscal quarter, uh, second fiscal quarter of 2026, um, up 169% year over year, both unbelievable numbers. So just to put things in perspective, NAND is the solid state drive technology that goes into both like MacBooks and servers as well, um, instead of the spinning drives that like Seagate and Western Digital traditionally use to make. So uh that's the NAND flash technology. Let's go to the next slide.

SPEAKER_03 17:10

And are for are both of these technologies supposed to, is there supposed to be a shortage for or just the oh yeah, yeah.

SPEAKER_01 17:16

There's a ton of shortage for NAND as well, and that's the reason Sandisk has been skyrocketing because uh Sandisk makes also the NAND technology as well. In fact, the uh one of the co-founders of Sandisk is the current Micron CEO. So um so his background is all that NAND technology stuff, which is a five billion dollar business for them right now. Um, we're looking at the quarterly business unit, financial results, cloud, cloud memory. That's interesting. Uh core data center, uh, mobile and clients, automotive, and embedded. Okay, so this is all probably the uh DRAM business. 7.7 billion cloud memory. I assume they're cloud memory, they're referring to data center, core or wait, what is what could possibly cloud memory referred to?

SPEAKER_04 18:11

Um not sure what the difference is, unless if it's more like AWS like hosted, like traditional versus but uh core data center, they've separated out.

SPEAKER_01 18:27

Um but anyway, let's go to the next slide. See if they project what they're expecting for next quarter. Non-gap operating results. Cash flow. Hold on on this slide. Let's stay on the cash flow slide. 1.4 billion toward repurchasing 14 million shares, 1.8 billion towards dividends pay uh paid. This has already happened in uh the last quarter. 3.2 billion return to shareholders from share repurchases and dividends. Okay.

SPEAKER_04 19:04

Cash flow from crazy. They have a crazy annual dividend, right?

SPEAKER_01 19:11

Um, I don't think they've had a significant dividend historically. I think that that might be something that they have recently started. But cash flow from operations, uh $11.9 billion, almost $12 billion. Uh net capex, $5 billion, adjusted free cash flow, $6.9 billion. Um buybacks in the quarter was $350 million. Dividends paid out of uh 15 cents per share on April 15th. Okay. Uh liquidity to have what was that last uh 20 billion? Uh 20.2 billion in liquidity at the end of the quarter. So extremely strong cash position. Uh what else we have? The guidance. Oh my god. 33 billion. I thought they were going to be flat this year. How is next quarter?

SPEAKER_02 20:05

Plus or minus probably in a billion.

SPEAKER_01 20:10

How is this uh even possible? This is this is blowing my mind right now. And they're guiding to diluted earnings per share of $19 per share in one quarter. Give or take 40 cents. Have you seen anything like this before?

SPEAKER_04 20:31

Like in no, I think to your point, it's just very similar to Nvidia's like crazy billion dollar growth.

SPEAKER_01 20:40

You know, when they were asked on their call last quarter, I remember specifically them saying that uh they don't expect to have significant growth in revenue for the remainder of the year after this last quarter that they just reported, this $19 billion, right? With the $19 billion, which was Q2 2026. Right. So they have beat that by coming in at 20, what was it, 22 or 23 billion? Um and then and then I was thinking the rest of the year they're gonna have this $23 billion bar, but they're now projecting next quarter to be $33 billion, which just I which is 50% higher than this quarter. Again, quarter over quarter growth of 50%.

SPEAKER_04 21:26

Well, this is what comp more companies should be.

SPEAKER_01 21:28

If you showed me these numbers and asked me, guess what the stock will do over the course of the next week, I would say it'll be up 50%.

SPEAKER_04 21:36

Um we'll check back into the stock price um after we're done with the slides. But this is what more companies should be doing, where they should be underpromising and over delivering. Um, and we'll see if you know they beat next quarter with this guidance. But, you know, this this is uh at least with some of my stocks, maybe not yours. This has been an issue with like um EO where you know right. Yeah. Where there you have these companies um that don't set the right expectations in the wrong way.

SPEAKER_01 22:12

But they but their the expectation they set was so high that I thought they were gonna fall short of it uh with the $19 billion revenue estimate and eight dollars and sixty cent uh EPS, but they just blew that out of the water. It they set the expectation high and still blew it out of the water. Uh yeah, that that is beyond belief for me. That's unblue.

SPEAKER_04 22:37

Okay, it actually looks like we're at the end of the this deck anyway. Um after hours they're they're up again, but just one percent.

SPEAKER_01 22:46

So 466. Is it possible? Yeah, we we're not getting the correct numbers there. Like is it possible? Yes. Is it unlikely? Let's do it. Let's just do a sanity check uh with Google or somebody. Yeah, no.

SPEAKER_04 23:02

Google has it down half a percent.

SPEAKER_01 23:05

Okay after hours. So yeah, no, we we got the right numbers. That's so interesting to me. Um I might buy more tomorrow if that uh if the stock continues to be down. I mean, this is uh this is kind of uh and the the stock is hitting all-time highs, right? Yeah, it it it's hovering around all-time highs. But those numbers are just unreal.

SPEAKER_04 23:31

Yeah, but like the last two days it's made new all-time highs, I believe.

SPEAKER_01 23:38

That's possible, but it's like hovering around the same, you know, it hit like 450 a share just just even a few weeks ago.

SPEAKER_04 23:45

Yeah, but like year to date, which I know is roughly when you started uh buying, like it started shooting up from around $300 to around $450, and then was a bit stagnant, but has broken out since. And again, this is before earnings even happened. So we'll see.

SPEAKER_01 24:07

All right, fascinating. I'm gonna be listening to the call uh later today, obviously. Um yeah, and I'm sure we'll talk about that uh in the next episode as well.

SPEAKER_04 24:16

Uh okay, let's go to Meta. Uh there's been a lot of news about Meta the last week, but the two pieces I want to definitely hit on is they're expecting or the rumor is they're gonna do 20% layoffs. Um, and then I think this might also be a rumor, but I don't I'm I'm not sure. Their newest latest model, avocado, is supposed to be delayed, and this is uh different than Llama, where it's going to be a proprietary model, it's not gonna be open source. Um what are your what are your thoughts on this? And are there any other news items uh for meta that you want to talk about? Because they're also delaying or not delaying, they're shutting down Horizon Worlds as well. There's a lot going on.

SPEAKER_01 25:02

Yeah, so it does uh look like they're focusing more of their efforts on AI and AI related stuff. Um those efforts may have improved their uh productivity internally to where they might be letting go of 20% of their staff. Obviously, that's a very good thing from a profitability standpoint. So Meta's just continued to is going to continue to be a cash cow, uh, generating huge amounts of profits. The fact that they haven't yet been able to produce anything, despite their heavy investment in AI and AI-specific product, is somewhat disappointing. But fortunately, the market, in my opinion, has been discounting that value to zero anyway, because the company's existing product lines, the Facebook, Instagram, and WhatsApp revenue, has been growing 20% year over year. It's outpacing the growth of uh Microsoft and Google and Amazon, despite those companies having AI revenue and and uh Meta not having any AI revenue. So um, if they reduce expenses even further, that's all upside. I view the company just continuing to get stronger. Um, now, you know, it's never a positive thing when a company's behind and uh on a particular technology and hasn't been able to catch up. I'm sure Mark Zuckerberg is frustrated about that, which might be why you're starting to see the consolidations and the layoffs, just because uh he addresses the problems that his companies have, you know. So it's all a positive sign as far as I'm concerned. Um, I haven't seen anything that has worried me about Meta. Um the stock price continues to get more attractive. So this is another case where you know the company just continues to become stronger, but the stock price is not reflecting it, especially when the market has been rewarding other companies that have not even done nearly as well. So when there's a discrepancy between the market and what the market is doing with comparable stocks and a particular company that I'm interested in, I usually double down on those type of investments. And um, I have been with Meta in particular. I bought it as uh high as I think 700 and some change uh more recently. So um, but this doesn't deter me. Like this doesn't make me worried about it at all. It in fact it just makes me feel more convinced in my investment thesis, right?

SPEAKER_04 27:33

You know, a lot of people focus uh in regards to AI around revenue generating results. And wow, that's half the story. The other half is can it reduce expenses? And that this is potentially an example of that, where like really AI just has to do one to have a meaningful impact, and it's probably gonna end up doing both. Um, you hate to see the layoffs, but as a shareholder, um, it's good for a company to be run more efficiently. So yeah.

SPEAKER_01 28:07

So you, you know, one thing at a macro level, the layoffs might start to become a problem down the road, right? Um so you know, if the market was punishing everybody, that would be one thing, but it's not necessarily punishing everybody, it's sort of like selectively punishing. Um at a macro level, the layoffs might become a problem down the road because uh block, for example, just let go of 40% of their staff because of AI. Amazon has been reducing their staff because of AI. If Meta is next, reducing staff because of AI uh efficiencies and you know, replacing these um high-end positions, by the way. They're they're software engineers. It's not just like them replacing their marketing teams or you know, like um maybe uh lower paid staff. It's not just them that are getting affected, it's also the the high-paying software engineering positions that are getting affected. Um it it is something that makes you kind of go, hmm, I wonder if this is good long term, and how quickly will these people find other jobs or do something productive in the in the market. So, you know, there there is a little bit of concern in the back of my head that the macro conditions long term, if the software engineers positions, which used to be considered the protected jobs, uh, are getting replaced already with AI, then no one is safe. Right. And from that standpoint, um, there might be some you know overhanging uh clouds that uh that we need to worry about long term. So right.

SPEAKER_04 29:50

If if um unemployment rate's too high and consumers can't consume because they don't have a paycheck, you know, that's not a very uh optimistic outlook. Right. Exactly. Exactly. Um going back to avocado, I'll give Meta the same feedback that I think I gave Apple when they did the deal with Google to for Gemini to Power Siri, which is the rumor of why they're delaying avocado is it just doesn't hold up against the top competing models. And my perspective is just release it anyway. Like if that's if that's the best thing you have, it's then you at least you're and any user that's in that's uh interacting with their current llama models is it's gonna be an improvement on their own platform. You know, maybe people aren't going to be using avocado in cursor just yet. Uh, but at least get it out there is my perspective. Because the problem is the longer you wait, it's not like everyone is stagnant, everyone is constantly improving their model. So the bar is only getting higher and higher and higher.

SPEAKER_01 30:58

So well, I think I think that the that uh I think that might be a better strategy for them to wait. Like I and hear me out, because I'm not a hundred percent sure that that's a better strategy for everybody. But in Meta's case in particular, they've put out a lot of half-baked or not good enough products out there. You know, Meta Horizon was is another example. Uh the AI in their meta glasses has been okay. It's not like great, you know, especially when you compare it to things like Chat GPT. So uh they're starting to get a lot of uh you know, like criticism, deservedly, that their products are like not, you know, meeting them, meeting the expectations of users. And they spent a lot of money last year and you know, got a lot of attention because of the billions of dollars in signing bonuses in collectively that they were giving to these sort of superstars that they brought brought in and assembled a super team of AI engineers. So if that super team comes out with something, their first product, so up until this point, we're we're giving them a like, okay, they started from scratch, hit the reset button. But if their first product is lackluster, I think that everyone's gonna dismiss Meta. So they can't release their first product and have it be a lackluster product that doesn't meet expectations. It needs to be at least something that's superior, it does something better than everybody else.

SPEAKER_04 32:25

So my counter to that is Google Gemini. The first version of that was garbage. Yes. And then they were able to perfect it because I think this market or the consumer is very forgiving because all the models are so fluid. The the top model is constantly changing. So I I think maybe in uh a different market, like if it was just like software and trying to build the best social network, it could be different where like you're going to miss out on a bunch of users because they wrote you off. But with these models, people are constantly trying different ones and finding the new best one. Um so I don't know. Yeah. Uh the the other going back to your point of like maybe they should wait. If you're Mark Zuckerberg and you know there is something internally that's going to get you ahead where you're gonna surpass that bar, then yeah, it makes total sense to wait if you have that type of confidence. And I'm hoping that's the case. Uh, because obviously he has more insight into what they're doing internally than we do. Um so there is that self-religing.

SPEAKER_01 33:33

You're right about uh Google being able to sort of uh uh get over their horrible introduction to AI with absolutely very bad product releases, but um yeah. Google has has the had the luxury of uh you know search being so top of mind and like something that is so front and center, and then just giving you AI results when you just go search for something that they were able to sort of force their way back in with it with a much better AI product. Um, I don't know if Meta has that option. Uh not as they do not as strong. They do have you know three billion daily active users, but those daily active users are not searching for things inside of you know the their platform. So um it's a little bit different, right?

SPEAKER_04 34:27

But yeah. Okay, let's talk about Rocket Lab. The last two days have been very volatile. I think it was like up yesterday, maybe like 10, 8%, and now it's down today. Like 10, 11%. Uh what is going on with Rocket Lab?

SPEAKER_01 34:45

Yeah, I'm I'm actually not sure why there was so much excitement yesterday where the stock went up so much. Um, I think that might just be a uh day-to-day result of some analysts loving the stock suddenly or upgrading it or giving it a higher price target. But after the market closed yesterday, they announced that they're raising another billion dollars or up to a billion dollars of uh cash by selling stock on the open market. Uh and uh, you know, obviously that dilutes the company, that dilutes existing shareholders by roughly 5%, because they're about a $40 billion uh market cap company selling, you know, you know, one uh actually less than one uh five percent because they're a $40 billion market cap company uh selling one billion. So what is that like less than 3%, actually? Let me look them up just to make sure. Yeah, their market cap is almost 40 billion. So not a lot of dilution, a billion dollars of cash. They already had a billion. They're not spending cash like crazy, but the two billion does give them the opportunity to either do uh big acquisitions or even invest in uh additional satellite technologies like a potential Starlink competitor, which is ultimately what I want Rocket Lab to do, right? And I I think Peter Beck has sort of hinted at doing this, but um but he hasn't sort of committed to to creating a Starlink competitor. I want I want Rocket Lab to build a Starlink competitor, uh, and I think that would be an amazing thing for them to use their cash on. So if they're raising cash to do things like that, acquisitions or uh more satellite uh tech building, accelerating their satellite technology so that they can build this Starlink competitor, I think that would be amazing. An additional billion dollars of cash just makes the company stronger. Um there's nothing, no downside that I see. The market has punished them today for um for doing that uh by 11%. So the market doesn't like it when when uh shareholders get diluted for whatever reason, even as small as that is, a 3% dilution is nothing, less than a 3% dilution. Um, in my opinion, for a billion dollars extra in cash for a company that's not yet profitable, that gives my me a lot more peace of mind that then 3% dilution takes away. Right. So I view it as a very, very positive thing.

SPEAKER_04 37:11

Yeah, it seems like Rocket Lab as a stock is just very volatile. Like this is not the first time it has run up quickly and then dropped just as quickly. Just as quickly, yeah. Yeah, it's just like the nature of the beast. Um, especially that the the run-up over the last year or two has been absolutely insane. So yeah, yeah.

SPEAKER_01 37:34

So I mean, overall, you could argue that maybe it's you know, like uh it's been overvalued for some time, and maybe the the you know 11% down is justified, but being up yesterday, 10%, what was the sort of justification for that? So to me, neither one is really justified, right? Like does it it didn't make sense for it to be up 10% yesterday? It doesn't make sense for it to be down almost 12% today. So um, but long term, this just makes them a stronger company.

unknown 38:03

Okay.

SPEAKER_04 38:03

Before we get to listener questions, I have a question for you, which is um, what is one investing belief that you used to hold that you no longer believe in?

SPEAKER_01 38:17

I think that probably has to do with the diversification. Going into the investing world in my 20s, I thought that diversification was the smart thing to do. Um, and I can't tell you how many times I talk to people who uh start out investing in the stock market where uh their initial thinking is that I want to be diversified because you know the natural thing is that nobody wants to lose their money, obviously. Um so uh diversification is the way in which people um people think about investing. And and I think, and also that's by the way, the number one advice that you get from uh from the professionals. And I'm not a professional, so you should not take my line of thinking. But um, but I think that that's one thing that I no longer do is think that diversification is the way to go uh from an investing standpoint. Uh in fact, one of the jokes is that um my portfolio is diversified. Now I lose money in all the different in a bunch of different sectors as opposed to just one. Um so uh, you know, after being diversified for some period of time, I would say the first five years and then maybe even for more than 10 years, a little too diversified because I still had half of my portfolio invested in index funds or whatever, and the other half I played with personally, where I was sort of picking stocks. Um, I I just decided that that wasn't uh producing the result. The diversified portion wasn't producing the results that I wanted that I was looking for, and I ended up making much more concentrated bets. And um, ever since I've done that, the my portfolio has shined and um has done exceptionally well, uh, far better than the market. Uh and the results sort of speak for themselves. But yeah, I think that's a big change of mindset that I took.

SPEAKER_04 40:20

Yeah, it seems like to me you want to diversify so you're not out of the game if you know if a stock does really poorly or if a company goes under. And investing in the SP 500 is great if you're if you don't want to have to think about what to invest in or you don't want to do your due diligence. But if you are an active investor, then investing in the SP 500 might be, to your point, overdiversifying yourself because you don't need to invest in 500 companies to solve the problem of, oh, I don't want to be out of the game. Right. Um where right now you're invested in, I think, like six stocks, which I think sufficiently solves that problem from my perspective.

SPEAKER_01 41:12

I I think so too. I mean, it it's the the probability that um you know I would lose all of my money is uh in six different companies is very, very low. Um, but certainly if you could have similar returns invested in the SP 500, that would be a way safer way to go. But you can't get similar type of returns um because the risk factor is lower. Um but also like uh the SP 500 might provide a false sense of security for some because uh it's a weighted index, meaning a significantly more, uh a bigger portion of it is invested in companies like Apple and Amazon and uh Microsoft and so on. And and those companies have historically provided the biggest upside returns anyway. So, you know, if you're user of these products, why not just buy those products instead of the SP 500, you know, though those companies. Um so my view on SP 500 investing is is just not very positive. Okay, let's get to listener questions. Let's do it. Adrian, are you around? We we might have to bring her back in. Oh, yeah, I see. Now we can hear you. Hey and see myself.

SPEAKER_00 42:37

Okay, I don't know what happened there, but um okay, I'm gonna be selfish and I'm gonna ask uh question from my own self.

SPEAKER_01 42:49

Okay, go for it.

SPEAKER_00 42:52

So, what do you guys think about the Amazon outages after that supposed AI uh mishap? What do you think? It looks like companies might be losing a little bit of confidence in AI.

SPEAKER_01 43:10

So I think um I I don't know about Amazon outages, but uh but I think you might be re referencing a note from Amazon where um they had a meeting internally that uh told their software engineers that they needed to review AI generated code before submitting it and put pushing it into production. Is that is that what you're referring to, Adrian? And and Dustin, if you know anything about that, like maybe you can correct me if that's wrong.

SPEAKER_00 43:41

Um, go ahead, Dustin.

SPEAKER_04 43:43

Yeah, I think there's been some outages. Uh I don't I don't remember if it was AWS or someone else. Um and the they at least the scapegoat was increased use of AI um cause you know, not Yeah, not doing something exactly correctly and then making its way to production.

SPEAKER_01 44:05

Yeah, my my view uh uh on that is that the the pendulum sort of is gonna probably swing a little bit before it settles down, but um people are gonna be a little over reliant on AI and then things are gonna go wrong as they already have in some cases, and then they're gonna be like, oh, wait a second, we need some more safeguards around this. Um, and we should make sure that humans are reviewing the code which Amazon just put into play. So I suspect that that those things will just work themselves out, but uh AI is not going away, it's it's just becoming more and more a prominent part of every company's um workflow. You know, I don't know if that answers your question, Adrian.

SPEAKER_00 44:45

But I my husband is in um the tech world and he was like, Did you hear about Amazon's outages? I guess it led to like a 99% drop in sales on the Amazon website, and so then they were kind of everybody was kind of like nervous about how AI was being applied.

SPEAKER_01 45:05

Anyway, I'm sure the 99% drop was for hours or or maybe minutes, not not uh days.

SPEAKER_00 45:13

But okay, sorry, I just had to be self-in.

SPEAKER_01 45:16

Um, no, go for it.

SPEAKER_00 45:18

Okay, so let's go to there's someone who um wants you to rank these five companies: Nvidia, Amazon, Google, Axon, and Melly, and they know it's not financial advice.

SPEAKER_01 45:37

Um of those companies, I think Nvidia would be the only one that I would invest in. Um and I still haven't invested in Nvidia.

SPEAKER_04 45:45

So that would be funny that you say that because you literally just owned Google.

SPEAKER_01 45:51

Yeah, but I uh bought Google at half the price uh that it's currently at and sold it. But um so so I I think the potential for uh NVIDIA is the highest. Um I I don't know Meli very well. Meli is not a uh US-based company, right? Uh no. That's that's the Amazon of Brazil or something. Yeah, Micardo uh Libre or something. Yeah. Uh Axon is a pretty cool company, but I think uh Axon's price uh it's not like the financials don't so the the financials don't support the current valuation, but Axon has been like on a tear in terms of execution and revenue growth and profit profit growth. So uh both Meli and Axon, I'm sure, are great companies, but I wouldn't even consider them. Uh so I would probably rank these as Nvidia, my number one pick, then Google, then Amazon, uh, and then maybe Axon and Mali. So that would be the five order just to play along for this hypothetical. What about yours, Dustin?

SPEAKER_04 46:56

Yeah, I'm very similar. I would do Amazon, Google Tide. Those are the two stocks that I actively own right now, then Nvidia, then Axon, which I absolutely love as a company. I learned about Axon back in 2012. I don't even know if they were a public company back then. Um and like they just dominated the market. I had to do a presentation on like um it was a hypothetical presentation of what cameras should police officers use. And it was like when the it's first started being becoming a thing. And it Axon was the clear winner back then, and I think they're still the clear winner now.

SPEAKER_01 47:36

Uh by the way, excellent is uh a Phoenix-based company, which is where uh over that I'm Scosto, yeah. And it's run by its founder, Rick Smith, uh, who I've met. He's a great guy. I think uh the mission of the company is great, uh, is to save lives essentially, so the police don't use lethal force. Um, I think uh, you know, as much as people hate tasers, they probably hate bullets even more. So I think they're they're onto the right things, but um but valuation-wise is the only reason I have been invested in that company, but it's a it's a good company, I agree.

SPEAKER_04 48:11

Sorry, kids and then and no, and then Melly's last similar reasons uh as you. Uh I'm just not I don't know as much about them, and I'm not as interested in that space. Cool. Not financial advice. That's right. It even says it on the uh on the yeah, but if in case no one is watching, or no one, if in case you're a listener, someone is listening instead of watching.

SPEAKER_01 48:40

All right. Uh Adrian, what else do we have?

SPEAKER_00 48:43

Okay, we've got is Robinhood a buy at this price level?

SPEAKER_01 48:48

Um, I uh bought Robinhood as high as in the 90s, so I think it's a great price. Um, I think the company continues to execute and their uh product roadmap looks great. They're about to release banking, they're about to release a platinum card, they continue to grow their existing businesses. I love Robinhood at uh at this price point. Um, so I have been a buyer personally, but of course I can't speak for you. But yeah, what do you have anything to add to that, Dustin? Do I have anything to add to this?

SPEAKER_04 49:23

This is our infamous bet.

SPEAKER_01 49:25

Um, but uh by the way, Dustin and I have a bet in case you don't know. Uh Dustin believes that Robin Hood will hit at least uh or go down to it uh in the downward direction to at least $54 a share. So up for 60. The bet is for 60. That's right. So if it hits $60 a share uh or lower, uh I owe Dustin uh one share in 2024. And he's uh 2026, what am I saying? Uh and he is very confident that he's gonna win this bet.

SPEAKER_04 49:57

So yes, I'm very confident. So not financial advice. Um, I would not be I own Robin Hood at these prices, but I would not be buying Robin Hood at these prices. And I am more confident of that than now than when I made the bet. Um, and the reasons for that, I'll just get into it a little bit, is I it's strictly based on Bitcoin and how Robinhood is correlated to Bitcoin. I think Bitcoin is in a bear market right now, it's been going down. It I think it will continue to go down for a little while. Uh, it popped up a little bit over the past couple of days, but I still think it's in uh a downtrend. And Robinhood, I expect, will uh go down relative to Bitcoin. And that was the part of my thesis that I think I was more questioning, but it's still fairly confident in. And that's what we've seen. So I want to just show this screen right here. So this is Robinhood's price compared to Bitcoin. So the higher this goes up, it means Robinhood is outpacing um Bitcoin in its growth, which is what we saw happen, right? Like Robinhood absolutely killed it last year as opposed to Bitcoin. But now, since December, the valuation has been dropping faster than Bitcoin. And that's what I anticipate will continue to happen until Bitcoin goes back into a bull market. Um, so that $54 price is um calculated by Bitcoin being roughly uh $60 worth sixty thousand dollars a coin and Robinhood being worth 0.0009 Bitcoin. Right now it's worth 0.0010 Bitcoin or 001. So we're getting there.

SPEAKER_01 51:54

So so the reason I'm laughing is because I feel like sometimes people see patterns in things that uh that no no pattern either should exist um or does exist. Now, in in Robinhood's case, I I think no pattern should exist, but uh but to your point, it has existed because for whatever reason the market has correlated uh Bitcoin and Robinhood's pricing. But one way to think about it is that let's say Bitcoin were to go to zero tomorrow, and not just Bitcoin, all cryptocurrency were to go to zero tomorrow, right? Uh, what would be the value of uh Coinbase, right? Just you know, like because Coinbase is all about crypto, well, the value of Coinbase should be like very close to zero. It makes would make sense for that correlation to exist. But what would be the uh value of Robinhood? Well, Robinhood gets roughly 16, 17% of its uh revenues from uh crypto. Uh and potentially, you know, if you take off the top 15% of the revenues, you might be taking off out 40 or 50% of the profits. So it makes sense for it to be somewhat correlated. Um, but it's not going to zero. And in fact, it's it, you know, probably still going to recover and be a could continue to be a great company. And five years from now, no one would ever even miss the crypto portion of the business. Um, so that's the way I look at it. And uh, you know, I think that pattern is just temporary. Uh, and it has these breakout moments where it sort of breaks the pattern and then like resynchronizes with Bitcoin and and people see the pattern again.

SPEAKER_04 53:36

So uh well, I I don't think it I think it's always the stock has always been correlated with Bitcoin. Um I don't think it goes out of sync. They go up together, they go down together, they just go up and down at different rates. Um, but eventually it will break out. And I agree with you that they shouldn't be correlated or as correlated as they are. Um, but I'm just pointing out how it's worked in the past, and I don't see any reason why it's going to break that correlation in the near future. Gotcha. What else do we have, Adrian?

SPEAKER_00 54:10

Uh so excuse me, another Rivian related question. Is Scout a threat to Rivian? I asked because I learned about Scout recently and was surprised to learn they are owned by VW.

SPEAKER_01 54:24

I think Scout is um uh VW's version of a product that looks very similar to uh to Rivian's product. And um I I don't see that as a major threat. Uh I just see that as another option. And um, and basically Rubian makes money selling products to VW anyway. So um them licensing the technology on software and all that is all a positive thing for Rivian. So no, I I I'm not worried about Scout. Uh and it's probably not gonna come out for at least another uh year or two. So uh basically Rivian is gonna be able to sell every R2 vehicle that it can make over the next couple of years anyway, just because of the way that vehicle is getting received and getting raid reviews and uh price point and everything just seems to be very much uh it's going to be a success, it feels like.

SPEAKER_04 55:21

Yeah, my take, this is not uh a winner-take all uh area, right? Like there's going to be a bunch of EV uh cars and manufacturers in the future. Um and this is what should be happening. There should be a bunch of different options. Right, right.

SPEAKER_01 55:39

Well, another way to sort of look at it, just to sort of reiterate your point, Dustin, is that right now some somewhere around 7% of vehicles sold are electric. And some so at some point down the road, that's gonna be more than 90%. It's going to be reversed. 93% of cars today are still ice internal combustion engine vehicles. And at some point in the future, it's going to be 93% are going to be electric. So we need a lot more electric variety in order to get there.

unknown 56:07

Yeah.

SPEAKER_01 56:08

What else do we have?

SPEAKER_00 56:09

Are we ready?

SPEAKER_01 56:11

Go for it.

SPEAKER_00 56:12

What do you think about the article in well uh I want to say that Apple may benefit the most from local LLM LLMs, which will run on an Apple devices next year. And it's one of the reasons Apple did not build its own AI infrastructure.

SPEAKER_01 56:32

I am not I don't have uh fond views of uh Wall Street Journal um journalists. Uh especially with these kind of speculations, I feel like it's over their head. But um the the my view on Apple missing the boat is just because he, you know, they don't have the right people in place. There's zero chance in a world where Steve Jobs was running Apple that Apple would not be playing in the AI space and would not be one of the main players of that space. And anybody who thinks that uh this is you know 4D chess that Tim Cook is playing and saving their money on um on CapEx spend just I feel like doesn't understand the technology enough. Now, Apple has had such a huge lead on hardware, especially local personalized hardware for such a long time that I don't think that lead is changing anytime soon. Their new MacBook Neo is a perfect example of that. They're gonna continue to do well, but they're they're not gonna lead in this AI space. And you know, I just don't see that changing anytime soon.

SPEAKER_04 57:44

So there's two pieces to this. First is there's an element of recency bias in regards to everyone buying uh Mac minis to run OpenClaw, um, which I think is more of a fad than anything else. At the same time, I do think local LLMs will become more popular and potentially the most popular way of using an LLM in the future, uh, but any computer or device will be able to do it in the future. It's not going to be specific to Apple. Um, and the reason why I believe this is where every uh LLMs are going is because right now, with Meta laying off, you know, potentially 20% of their workforce and using more and more AI, and I know they they own the model, so maybe it's a bad example, but let's say it's Company X doing this, they don't want to have to pay per token. Like they want to reduce their expenses uh as much as possible. So if they could run uh the LLMs locally, then they're just buying the hardware at that point. We're I don't think we're at a place where uh a company can be doing that at scale, but I I believe a lot of companies are gonna move away from uh the token model if if if the the local tech gets there.

SPEAKER_01 59:14

Yeah, go for it.

SPEAKER_00 59:15

Okay.

SPEAKER_01 59:16

Maybe last question.

SPEAKER_00 59:18

Uh okay. Do you use stop loss given the political climate and the current constant noise on a crash being imminent?

SPEAKER_01 59:28

I don't necessarily think that a crash is imminent. Um maybe from the standpoint that like market the markets crash every now and then, from that standpoint, maybe crashes are imminent, but knowing when to get out and when to get in is very hard to predict. So um historically speaking, you know, we for the past over a hundred years, we've been in many, many wars, uh, many uh incidents that have occurred. Uh, you know, COVID being one of the most recent examples of massive crash, and then a rebound that happened like within weeks later, then tariffs being another example of massive crash, then rebound happening weeks later. No one predicted either direction, um, the crashes or the rebounds occurring. So if you're a long-term investor, sort of like having this mindset of uh writing it out is is the way that I have approached it, and uh because I am a long-term investor, and uh that's my perspective on it. Now, you know, if uh if I was going to make some changes uh from a macro level perspective, it would probably be the job loss thing due to AI, which is not happening overnight. It's going to take years for it to happen. Um, but that is something that is a concern. And what I might do is I might just slowly move more and more towards having a higher percentage of cash. Um but but other than that, I I probably wouldn't make any other major moves for myself.

SPEAKER_04 1:01:07

Yeah, I'll underscore or underline your point of um if I had a stop loss set, I just wouldn't know when to get back in personally. Uh the two points you make uh of given the political climate and given the constant noise about a crash being imminent. Unfortunately, those are two constants of you know, there's all there's just constant uh divisiveness politically, and there's always going to be a large group saying stocks can go lower, even after the uh COVID crash. There were a lot of people saying that stocks are gonna go lower, lower. So it's very difficult to know um when to when to get out and when to get back in. But like me, I'm also a long-term investor, so I am comfortable riding the waves.

SPEAKER_01 1:01:54

Um, you know, and hopefully, you know, they're not too bad. To reiterate your COVID point, by the way, when it was down, there was more voices than ever saying that it will continue to go down much, much further. And like the sentiment and uh vibe was far more negative. Uh, and then all of a sudden things turned around. And again, like at the time when it seemed like the sentence set sent or sentiment was the worst. So um it would be easy to miss you know, both the exit and re-entry points in both directions, and even worse, missing the exit and then panicking and then exiting and then missing the re-entry and then buying later when it was at the highs in 2021 was something a lot of people did. So you know, it's uh it's it's better to be sort of more keel headed in uh and long-term perspective, having a long-term perspective than then trying to sort of time time the markets. Um and we'll end there.

SPEAKER_04 1:03:00

Um you asked me to come up with a new outro. I didn't. And so that's all I have to say about that. I appreciate everyone for listening.

SPEAKER_01 1:03:14

Okay, very cool. Uh Adrian, anything else that you wanted to touch on before we exit?

SPEAKER_00 1:03:21

Well, I had a whole um thing on Rivian. I think I know more about Rivian than you guys, so I was just gonna go for about 20 minutes on Rivian, but a deep dive by by people are looking for.

SPEAKER_01 1:03:34

Yeah, that was by the way, the the bar is not very high for you to know more than us on any subject. So please yeah, well, but I don't know. Thanks everyone for listening or watching. Bye.