SPEAKER_01 0:00

Justin, we have so much to cover today. I'm excited. Excited too. I don't know if we're gonna fit it all in an hour or we might have to go a little over, but we'll see. Um, let's just do a quick rundown. We both sold some stocks uh between now and last episode. So we'll talk about that. Tim Cook, CEO of Apple, is stepping down. Um Amazon. Well, be careful what you wish for. But we'll talk about that. Uh Amazon uh is going to invest $25 billion in anthropic. Uh RBI, Robinhood's venture fund, is investing $75 billion in OpenAI. And of course, we have Tesla earnings, more topics than what I just listed because we have so much on the docket, and as always, listener questions. So let's jump into it. Hamid, I believe you sold some Rocket Lab. I think you maybe sold you did two transactions of uh Rocket Lab between now and last week.

SPEAKER_02 0:57

Yeah, roughly 7% of my Rocket Lab. Uh, I trimmed 7% of my Rocket Lab approximately. Um, and um it's funny because when I look at my portfolio, I own companies that I absolutely love. I own six companies that I absolutely love. Rocket Lab is uh on top of that list. Um, I love Peter Beck. In fact, most recently, he just announced that he is taking a pay cut down to $1 salary, eliminating his pre-existing uh options um incentive program, not asking for a new program. So his entire compensation going forward is $1, literally annually, um, and in order for the company to cut costs so that he can hire more engineers. Um, and when he was asked about, you know, like uh but like why or whatever, and his view is that like I already own 10% of the company, uh, and uh I don't need any more, you know, like what am I gonna do? And this is uh an amazing contrast uh to you know, Elon, who not only has asked for already owned 12% of Tesla, much bigger company, much larger numbers, but asked for an additional 13% to get to the 25% number so that he could do the AI things underneath Tesla. And it was not about the money, it was about um control. But then we find out now that uh uh with SpaceX, he owns 40% of the company, has a similar sort of compensation package where he gets additional percentages based on hitting various targets, and he has supermajority control uh of roughly uh 80% of voting rights for SpaceX, meaning like there is no chance that anybody could override Elon Musk, even if he sold half of his shares. Um, yet he's still asking for additional compensation, and he's the world's richest person. So big contrast between Rocket Lab CEO, uh Peter Beck and uh you know Elon Musk. But uh I I love Peter Beck. He's just a fantastic CEO. He's the company is executing brilliantly. Uh so why am I trimming shares? Well, the reason I'm trimming shares is because the company um is not inexpensive, even though its future is extremely bright. It is, you know, um uh the market cap of the company is such that it's uh it's valued at a broad, you know, more than 80 times revenues, and that is a pretty rich valuation. Now you have to go forward quite a few years in order to sort of like be able to justify the valuation. And that's the reason Rocket Lab in particular is what I'm trimming so far or have been trimming. Um, but I I also need to build up my cash position so that I'm in a more comfortable uh level. So that's the reason I've sold Rocket Lab, not because I've lost enthusiasm for the company. I think the company is in great shape going forward as well.

SPEAKER_01 3:52

Yeah, and you're slowly building up cash. I think it's at like 3.5% now, as opposed to like it was basically at zero at one point.

SPEAKER_02 4:00

It was like below 2%, but uh it's coming back up, it's coming back up slowly but surely.

SPEAKER_01 4:07

Um yeah, I sold Robin Hood and Ethereum. So last week we talked about how Robinhood uh price action popped from the pattern day trader rule change that the SEC did. Um and I just felt after our discussion, you know, we both agreed the the pop didn't make sense. I think the valuation is fine here. Obviously, Robinhood's still uh well below its all-time highs, but I still fully believe that Robinhood is going to $60 and $54 later this year. And I would be upset with myself if I didn't take advantage of this pop and take some profits here, as opposed to, you know, just fully riding it out. And I would be less upset with myself if I took profits here and Robinhood did, you know, shoot back up to all-time highs. Um so I did sell eight percent of my position, so nothing too major.

SPEAKER_02 5:10

I noticed um that Bitcoin is uh rising again. Is that changing your view on Robinhood as well because of that their correlation?

SPEAKER_01 5:20

No, it's oh it's only furthering my view on Robinhood. Good question. So for Robinhood to hit $60 and $54, two things need to happen. The first is Bitcoin needs to be in a bear market. And yes, Bitcoin is going up. I don't think it's out of the bear market by any means. Typically, these last for around a year. Doesn't mean it has to happen this time, but um Bitcoin is a highly uh cyclical asset. And unlike Micron, there's no catalyst I see that's changing that um for now. Uh so I I think Bitcoin is in like a more of a relief rally than anything else, and it's not changing its its larger trend. Um, and Bitcoin can certainly go up higher than right now it's at 78k, and it it can go up much more than this and still be in that longer term down downward trend. Um the reason why I still strongly believe Robinhood's going down from here is yes, Bitcoin's going up, but Robinhood and Bitcoin are still moving together, and that's the second part that need that needs to happen. They need to they need to move um roughly at the same time, which I think pretty much every day I I've been like eyeballing it. They both either go up together or down together, um, which is it's more correlated than I uh anticipated, at least since I've been tracking it. Um and then the the reason why I sold Ethereum is basically for the the same or similar reason. Ethereum hasn't had as much of a pop, but I I felt like you know, there's more room down, I think, for Ethereum. For for crypto as a whole. I and I've been trimming my crypto positions since the beginning of this year, end of last year. I forgot when I started doing that. Um so it's just more of that. And I actually sold like 40% of my Ethereum position.

SPEAKER_02 7:27

Okay, that's a pretty substantial uh decrease. Okay. Yeah. And you haven't bought new stuff.

SPEAKER_01 7:36

Uh you're sitting on the cash. Yeah. So my cash position is up to 12.5%. I think when I made the sales, it was actually at 13%, and my cash has gone down with the market being uh green. Okay. So makes sense.

unknown 7:53

Yeah.

SPEAKER_01 7:54

So uh portfolio updates. Yes, those are the portfolio updates. Oh, and of course, after I made those sales, uh both Robinhood and Ethereum went up immediately. So similarly, since you've sold. So thank you for all of those. So I'm happy to do it. Very cool. All right, uh, what's next? Okay, let's talk about Apple. Uh, their CEO, Tim Cook, is stepping down September 1st. Um, he's moving to a executive chairman role.

SPEAKER_02 8:28

Um I I just want to say all Apple shareholders should thank me for for this change because uh when Apple released the MacBook Neo, um I said whoever is responsible for the MacBook Neo should be immediately promoted to CEO, replacing Tim Cook. And sure enough, this is the guy who was responsible, I forget his name, um uh John Turnis. John Turnus, thank you. John Turnis is the guy who was responsible for the MacBook Neo. Uh, and he is replacing Apple CEO Tim Cook. That particular post on X, by the way, went surprisingly viral and it got a ton of views, uh, which unexpected. Yeah, a lot of pushback. People really loved uh a lot of investors apparently really loved Tim Cook, but apparently Apple agreed with me. So um, but here's why I'm excited because A, this guy is an engineer, uh, B, he understands what the core of Apple, uh Apple's strength is all about, which is building absolutely amazing products, top-tier products, uh, but for the masses. So priced in such a way that the masses can afford. Uh and uh, you know, under Tim Cook, they had gotten away from that to some degree, you know, with coming out with a three-$3,500 Vision Pro, for example, $6,000 monitor, uh, you you know, uh Mac Pro that was like ridiculously priced. Uh just the wheels on the Mac Pro cost as much as a computer did. This was just like $400 for wheels on underneath this sort of like cabin. Um I mean, it was just kind of uh insane, right? And uh, and of course, uh, I'm sure not everyone inside of the company uh uh agrees with those types of pricing and uh product strategies. Uh that's why you need somebody who gets it, who gets it on the product side, but also gets it on the uh pricing side uh and can create products for the masses. Uh and clearly uh John Turnus gets it with a $599 MacBook that uh is a phenomenal product for that price point. Uh and what also excites me is that uh it's not too late for Apple to get into the AI game. Uh and under new leadership, that is a real possibility because Apple still controls the gateway in which people access AI, whether it's through their MacBook or iPhone, they have a pretty substantial reach. And if they come out with a good product on the AI side of things, they they actually can uh still be a massive player in in that regard. So uh I'm super excited about it. Not excited enough to buy the stock, but uh but you know, you know, I think this has an opportunity to make one of the greatest companies in the world and a company that I absolutely love and have been using the products of uh continue to be relevant for decades longer.

SPEAKER_01 11:29

So I have a lot of your thoughts here. Yeah, yeah. So uh first off, I think Tim Cook has done an incredible job for Apple shareholders, right? When he took over, Apple was a $350 billion company. Now they are a $4 trillion company. So that has been fantastic if you are a shareholder. If you're not a shareholder, which I am not, and you are not, I think he's done okay. Uh the magic and spark, and I know it's impossible to replicate what Steve Jobs did, but that has disappeared from Apple's products. The only killer product they have released, in my opinion, under Tim Cook, is what you're using right now, and that's the AirPods. Everything else has been fairly lackluster. All of the upgrades have been fairly lackluster. Um would you say until the Neo? Well, the consumption yeah, the feat the feature is um the the price as opposed to like the product, right? Like if I if I'm ignoring pricing from from everything, like even the um uh Vision Pro is not an incredible product because you can't really do much with it, you know? So I mean like it's a pretty incredible product, but so yeah, it's yeah, no, it's impressive, but you can't you can't do a workout class, right? Right, yeah, yeah. Um so but going back to the neo, one of the biggest accomplishments outside of the neo uh specifically of John Turnus is the transition from Intel to Apple Silicon, which was incredible. Like not only did it totally reinvigorate the the MacBooks and what they can do and how powerful they are and and how they handle power consumption, but the transition of going from Intel to Apple Silicon where all your applications still worked is mind-boggling. It was seamless. The last time they did that, they went from PowerPC to Intel, and that was all yeah, that was that was terrible, right? Like nothing worked. Um, and and that was a much harder transition, even though that was also a very necessary transition. Arguably, Apple wouldn't be where they were today if they didn't uh move to Intel. Yeah. Now, in regards to what do I think of John Turnus? So I don't know too much about him. I know he's uh currently the SVP of uh hardware engineering, so I'm not positive he's the guy to solve the AI piece. He might be, I don't know. I do think there's a good chance he could solve the the the products are missing a spark, and they hopefully they're going to be they're gonna start releasing some cool uh products down the road. Now going back to AI, I actually think it's not ideal, but it's okay if Apple misses AI for a very long time. And the reason for that is that once already missed AI for a very long time.

SPEAKER_02 14:43

That's true.

SPEAKER_01 14:43

So if they continue, if they continue to miss AI, I think they can continue to miss AI and be totally fine for for a while. So how much longer do you think? Uh I I don't know. Let's let's say five years. Really? You think they can miss it for another five? And I'll explain why. Because how many users are going to switch from a Mac to a PC or from an iPhone to an Android phone because of AI today? And the answers are probably minimal, at least right now, until Windows and Android will do something incredible. Because their users are going to be using their products. If Apple decides to execute on AI in five years and just kill it, because they control the OS, they could make their their AI the, you know, have access to all the internal APIs. It could be fully integrated. Yes. Um, and then they could they could become a dominant player. It's very similar to what Google just did with Gemini, which they were very late on Gemini being like a great model, but then they put it in front of every Android user, and the integration's fantastic. The model is now fantastic, and now I use Gemini every day, which was not I couldn't say a year ago.

SPEAKER_02 15:55

So so a couple points. Google was only uh two years late against OpenAI, and still OpenAI controls something like 70% of consumer market versus Google, which is growing market share. So you're right that they didn't completely miss the boat because of their impact. And this is sort of why I'm saying Apple has some time, but I don't know if that time is five years, because I think it's possible it'll be five years. But what I think we might be missing is not knowing what hardware might come out that takes advantage of AI more integrated. So if, for example, OpenAI comes out with a hardware product that makes phones less relevant or the iPhone less relevant, sure, that could change the game quite quite a bit. Now, Apple still will have time after that, but but they have to act quickly. And this is why I think they should operate as if they only have a year left, but they might realistically have two or three, or maybe five years left, optimistically. Um, I don't think they have more than five years, though, uh before some kind of hardware AI integrated product is going to take over. And I'm not even sure we can imagine what that might be yet.

SPEAKER_01 17:10

Right. And obviously there's been several players that have tried to do this, like the humane pin and and others.

SPEAKER_02 17:18

But yeah, I and Meta is definitely working on you know glasses, you know, you know, wearable type of uh uh technology. They might be a player in it. That might be interesting, but but yeah, I I new CEO increases the possibility that something might happen for sure.

SPEAKER_01 17:36

Yeah, I would say I'm overall optimistic, like you, but more on the product side of things than the AI side of things. But this is definitely a good catalyst for AI, just because it's a an unknown variable as opposed to Tim Cook, which has definitely not done a great job in this department. Yeah, agreed. Um so next on the list, Amazon uh is set to invest $25 billion in Anthropic. $5 billion is immediately uh going to Anthropic, while the remaining $20 billion is gonna be set uh by specific milestones. On the flip side, Anthropic has committed a $100 billion uh like I don't I don't think investment's the right word, but uh they're gonna spend $100 billion on AWS infrastructure and usage over the next decade. So it's one of it's another example of one of those cyclical deals that everyone loves.

SPEAKER_02 18:39

It's it's not a closed circle, but which I think the the part that I think people get wrong about uh cyclical deals is that it's not uh Amazon paying um uh or you know buying anthropic product, and then anthropic buys uh Amazon product. It's consumer or businesses buying anthropic product, Amazon buying shares in Anthropic, uh, which sort of like ensures that they have enough money, investments, capital to continue to build out their products and not worry about profitability. And Anthropic continues to be an Amazon customer. So this is not exactly circular because the consumer part and businesses that are paying Anthropic have nothing to do with Amazon, and they have, you know, uh it's it's not money going in a direct circle. So this is a fantastic way, in my opinion, for Nvidia, Amazon, uh, hyperscalers in general to be using their money to make sure that these um these companies remain their customers as opposed to somebody else's customers, uh, because Google could potentially start investing in Anthropic and get their cloud um deals instead of Amazon, right? So they're all fighting to make sure that they remain their customer. Um and uh and it helps the ecosystem essentially continue to grow rapidly with investment money that all of these companies need. I think it's a perfectly good use of capital. I I love it. Uh Amazon, I think, owns something like 20% of Anthropic now, which is pretty amazing. Um and if Anthropic becomes a multi-trillion dollar company, for every trillion, that 20% is worth another $200 billion to Amazon. So uh it's all around goodness as far as you know I'm concerned.

SPEAKER_01 20:27

I'm kind of curious what are your thoughts on or on it? I I agree. Um overall positive. I mean, especially Anthropic, for those who don't know. So they uh their main product is Claude, which seems to be at the uh the front runner right now for engineer AI use. Um I know we've been using it internally at Abitra and Earnings Hub. Um, and it seems like they've just been killing it. The and the main reason for that is their focus from the beginning has been for developers as opposed to open AI, which has been uh more generic. Uh they they're trying to be the best at everything, which is easier said than maybe done. Uh what are your thoughts on this deal as it relates to companies like Micron and the memory uh short?

SPEAKER_02 21:18

Well, yeah. I mean, uh by the way, part of this deal was something like uh uh Amazon committing to five gigawatts of data centers, which is like it's kind of mind-blowing numbers, but these every one gigabott, uh gigawatt data center costs roughly um $10 billion to build out. So Amazon is going is basically committing to building out $50 billion worth of data centers um in order to comply and and like um address the needs of their customers like Anthropic. So you know, every one of these data centers is going to be flushed with Yeah, at first I thought it was me. It was Yale. So uh these data centers are gonna need uh NVIDIA chips, but then besides the chips, they're gonna the AI chips, they're gonna need memory, high bandwidth memory, and storage space, the NAND flash storage uh solutions, that uh both of which Micron uh is one of the leaders in uh and one of only three companies that makes these products. So uh it just continu the the AI craze just continues to be um uh moving in such a way that there does not seem to be no one can easily predict when the plateau is going to happen. Um and and therefore the um this is extremely good for not just NVIDIA, but also for Micron, who's very supply constrained and will continue to be supply supply constrained in the uh at least foreseeable one, two, three years into the future. The one year is almost guaranteed because they've already said that they've sold out the next year's capacity, but it appears that maybe even two or three years uh they're gonna be supply constrained as well, which uh based on current growth rates, you know, Micron might become a uh three, four hundred billion dollar revenue company before it plateaus, right? Or before the growth slows down significantly. So the cyclical argument for Micron just seems to be extremely weak. And every day it just gets weaker as as these uh deals continue to flourish and multiple gigawatts of data centers are planned for and keep coming online. So uh I'm I'm continue I continue to be extremely bullish for Micron's future.

SPEAKER_01 23:50

So another investment in the AI world was Robin Hood's uh initial venture fund, public venture fund, RVI, announced that they are investing $75 million in open AI. RVI is up over 20% today uh from this news. What are your thoughts on this deal? And I know it's very different than the Amazon deal. Does it make sense for someone who's interested in investing in open AI buy RVI versus if someone's interested in investing in anthropic buying Amazon? Because both of these companies are private companies.

SPEAKER_02 24:29

Yeah, so um $75 million uh investment into open AI, likely this is at a roughly $800 billion valuation, although that's uh that I don't think that has been disclosed. Um and uh RBI is approximately a $650 million fund, if I'm if I remember correctly. So $75 million is about 12% of RVI. So the way to think about it is that uh 12% of our RBI is invested in Open AI. So if, for example, um you know Open AI doubles in valuation, uh then that $75 million becomes $150 million. And you know, that increase is roughly 12% increase in uh in RBI's uh value, right? So that's the perspective that you know you should have on it if you're buying a stock based on um what invest what investments it holds. Now, in RBI's case, all of its investments are the open AI kind, meaning like they're all private companies that hope to go public, they're fast growing, they're extremely successful because you know they're they're at their later stages of their growth right before IPO, and that's the time frame that uh Robinhood Venture Funds is investing in them. So they're in a pretty good position to own a bunch of these companies that are all in a pretty similar type of uh profile, that they're all fast growing, um promising uh startups. Uh whereas if you're buying Amazon, for example, to uh indirectly invest in Anthropic, well, Amazon's investment in Anthropic, let's say they own 20% and it doesn't get diluted, uh, is currently worth somewhere in the neighborhood of $100 billion on a company whose total market cap is $2.7 trillion. So that's 127th of the market cap of Amazon or less than, you know, what, 3, 4%? Um so you know, uh if if it doubles in valuation, then you're talking about a 3-4% increase in the market cap of Amazon. If Amazon's own business doesn't continue to do well, right? Like and and doesn't grow because of that. So uh buying indirectly just because a company owns a small per sh percentage of uh another company just seems like not the best reasons to do it. RBI, because they this is what you know the fund does, it's a better reason to own RBI as opposed to owning Amazon for that reason. And it's a bigger chunk of RBI, meaning it's 12% as opposed to four, three or four percent.

SPEAKER_01 27:21

Are there any companies you want RBI to invest in that they haven't already?

SPEAKER_02 27:28

Well, Anthropic would have been uh the better one. Like if if they had said they had invested $75 million in Anthropic at the you know $350 billion evaluation, because I think Anthropic may already have surpassed um uh OpenAI's revenue run rate. It's almost certain that they have, just because recently they have been on fire. Uh so the the rumors are that they have added over $10 billion of ARR just in the last month of uh operations because of Claude Cowork. So, and and most of them to businesses. So you know, anthropics growth rate seems to be very exciting. I would love for RBI to be an anthropic uh uh owner and make a similar type of investment in them uh as opposed to just OpenAI. But yeah, that's probably the only other one that I I hope they don't invest in SpaceX at the $1.5 trillion evaluation right before it goes public, but uh remains to be seen.

SPEAKER_01 28:30

Um okay. You did a post a couple hours before the podcast. There was a Rivian new Ribbian interview with RJ that Bloomberg did, and you had some takeaways. Uh they talked about the the factory uh getting hit by a tornado recently. They talked about some R2 news. So might you break that down?

SPEAKER_02 28:52

Yeah, so the a lot of the uh Ribbian investors were concerned that uh their factory got hit, the roof was torn off, and this might affect the R2 um uh product launch, essentially, which is expected to be any day now, deliveries going into customers, and it might affect the ramp up of the R2. And uh this morning's interview basically RJ indicated that yes, they they had damage, but the team sort of swarmed on like fixing it, and it's it's their logistics area that got hit the hardest, and uh they've already rerouted stuff, worked over the weekend really hard to get things done. He does not expect to have any kind of schedule impact on the R2 launch. So uh it seems to be immaterial. Uh, he also reiterated that they're just on track uh with the R2, that the R2 LIDAR version will come out later this year. Uh, that later this year for for all versions of R2 and also the R1 Gen 2 versions, they'll have point-to-point uh driving, uh hands-free driving, which means you just put in the address. This is similar to full self-driving in Tesla, but you have eyes on where you pay attention. Uh, so that is still on track. He's uh he reiterated that it's on track for later this year. All of that is super exciting. Like I'm excited for Rivian's future, as you know. Um, but I I I I don't again, like, I don't know what the stock is gonna do, but like the they're just nailing it on uh milestone after milestone. And I couldn't be more excited for a company that uh is in my portfolio.

SPEAKER_01 30:30

So and he reiterated that they're gonna have like limited eyes off capabilities next year. Is that right?

SPEAKER_02 30:39

That's right. That's right. Um and uh and that too, meaning hands-off and eyes off, or what he consider uh he's calling level three self-driving capabilities, will also be in all versions of R2 and second gen R1s. Um one of the questions that he was asked was about uh whether or not people need the LIDAR version of the R2 in order to get the best capabilities. And uh and it seems like the the improvements that um the LIDAR version of the R2 might um bring, A, is going to affect or improve the entire fleet, uh the entire fleet's self-driving capabilities. And then the stuff that will be specific to R2 with LIDAR might not even come for quite some time after that. So exactly when these two uh these diverge is uh remains to be seen. I mean, it might be that uh the capabilities of uh the second generation self-driving hardware that they have in the even R1 vehicles is going to be on par with everything for the next couple of years. Uh, but we'll see. At some point in the future, they might diverge, but we don't know when.

SPEAKER_01 31:56

Gotcha. Um okay. Let's talk about uh or last week we talked about an article that I wrote. Um it went over how I think AI can really transform the software industry. This week I wrote another article, and this is not going to be a weekly thing. This was just this all came from me using perplexity computer and like it kind of blowing my mind a little bit. Um this week I I I took it a step further and was thinking through well, what if AI doesn't just overhaul the software industry? What if it overhauls every possible industry, digital, physical, whatnot? Um, because I think a lot of people that talk about the future with AI go to the uh ends of the spectrum of it's either utopia or it's doom. And the reality is it's it's gonna be somewhere in the middle. There's there's no way it's either uh extreme, or at least it's it's not very probable. But the first place I think we'll see this play out is in the markets, which is everyone's talking about like an impending AI bubble similar to the dot-com bubble. And while that's certainly possible, I don't think that's likely. What I do think is likely is that AI is going to be the pin that pops the employment bubble if things go in the best and worst way possible, right? Like if AI does what people say it's going to do, it's going to be terrible for employment theory. Um, and obviously people can there's the argument that new jobs will be formed, and that can certainly be the case. But regardless, if AI is able to do these things and is able to do them in a faster way than then we can create new jobs, there's going to be some transitionary period that's going to hurt employment, that's going to hurt consumer spending. Um what are what are your thoughts on that? And the article is in the description below, by the way, if you want to read the whole thing. It goes into a lot more detail than that.

SPEAKER_02 34:06

I love I love your article, by the way. So let me encourage people who want to learn more about what you're thinking to read that article. But um, but fundamentally, let's talk about the jobs bubble um that has been predicted for a few years that is about to happen. And so far has not happened, right? So in the past, we've now had uh the chat GPT moment since four years ago. Uh and uh what what is it, four years and then a little bit, or is it three and a half years, somewhere in the four-year range. Uh, but so far, jobs have continued to grow, which is surprising. Uh, I think most people would not have predicted that four years ago, uh, or three years ago, or two years ago, or one year. Everyone is sort of like waiting for this uh jobs bubble to burst. Uh, and uh and it's it's kind of a surprise as to why it hasn't. So, you know, maybe the answer to that is because we're on the verge of having AI be able to replace people, but like the AI hasn't been good enough, but it's about to be good enough, like this year, maybe. And that's when it's gonna start bursting. Um, let's take that as the, you know, like the possibility or likely scenario. Well, it turns out that there is so much demand for AI that we don't have enough capacity, right? So uh if we were going to replace a million people's jobs, what that would mean is that we need way more ability to process these tokens that these jobs would be replacing, or these uh AI compute would be replacing, uh, way more tokens need to be processed. And uh the AI factories, as uh Jensen puts them, don't yet exist to be able to replace a million jobs. So you know, and a million wouldn't even impact, it would be a drop in the bucket. You know, like we would uh really need tens of millions in order for a bubble burst to be happening on an annual basis. Um, and it does not seem like we have AI capacity to be able to address the the jobs of 10 million different people. So with AI. So that would be my perspective on it, that like uh we might be forced to have a slow transition where these jobs are getting replaced by AI just because we don't have the capacity, the AI capacity to do it, and it might actually be a 10-year transition, even though AI might be able to do the job this year, right? And it might take another 10, 15 years before we can actually uh see the impact or the bubble bursting. If it takes 10, 15 years for the bubble to burst, well, during those 10, 15 years, all of a sudden new jobs are gonna be uh popping up, new entrepreneurs are gonna be formed, there's gonna be all kinds of things that are happening that um didn't exist you know today, doesn't exist today, and we can't even conceive of them today, just like the iPhone sort of made being an Uber driver possible, right? So those type of uh jobs might still be created with AI or because of AI that we don't uh we can't even think of. And that's why I'm not as worried about a job bubble bursting in the same way that a lot of AI doomers are.

SPEAKER_01 37:15

Right. I think the I think your the point about like we don't have enough tokens is fantastic, and I hope that is the case because it'll just make the transition, if there is a transition easier. The biggest uh surprise factor could be like a deep another deep seek moment where like if there's a really capable model that's way more efficient, that could that could change things, or if it if um more companies are just running models locally, you don't need to go to uh a data center. Uh you could just do it in-house. That could also change things. So there's a definitely a lot of question marks, but I think the way everything's working today, you're exactly right. There's no it's gonna be very hard for it to be a immediate transition, even if the best model, you know, in the world is released tomorrow. Yeah.

SPEAKER_02 38:11

One uh good thing to note there is that there have been these deep seat moments every year for the past three, four years, and roughly a 10x improvement in performance from these AI models. Uh, and still we don't have, you know, like I think I think I mentioned this in a previous podcast where um today we're doing AI at like roughly 10,000 times faster than we were just five years ago. And uh and still we need more capacity so to to do all the things that we want to do. Uh and and it turns out there's a lot of stuff we want to do, including just random TikTok videos that might be consuming a ton of those tokens, right? Like, so it's it's definitely interesting. So we might uh we might gear the tokens more towards those types of activities as opposed to job replacement activities.

SPEAKER_01 39:02

Right. Um okay. We actually blew through the doc and we did a great job being uh succinct. Um we currently don't have the Tesla earnings data, so I'm still waiting on that, but I think we could go to listener questions.

SPEAKER_02 39:20

Why don't we have Tesla uh earnings report yet? Do you know? I don't know.

SPEAKER_01 39:25

I've been I've been busy doing a podcast. There's only so much I can I could do while we're live.

SPEAKER_02 39:32

No, no, I'm I'm not saying like uh what why don't you have it? I'm just saying, is it because Tesla hasn't released it yet? Or the stock is up after hours. Three. If anyone knows, feel free to uh leave us a comment. Yeah. It it looks like uh it must have been positive because the stock is up $14 after hours to 401. Um yeah. All right. Should um Adrian, should we go to questions? Do we have questions that uh we can help answer for people?

SPEAKER_00 40:06

Yeah, do you hear me?

SPEAKER_02 40:08

Yes, we should gain.

SPEAKER_00 40:09

Okay, okay, we've got a few questions. Um let's people are asking about your cash position, Hamid.

SPEAKER_03 40:20

Okay.

SPEAKER_00 40:20

Um so this person says, Hamid, if you were to deploy more cash into your portfolio, which positions would you add, if at all?

SPEAKER_02 40:32

So um let me pull up my portfolio here. Uh and uh we'll just go through real quick. Um Rocket Lab as uh as I've said, and this is how I I view it. So let me just zoom in here a little bit so that you can kind of see what what I'm looking at. Um so looking at the uh earnings hub score area of uh of each stock, and I'll just very rapidly go through them. Rocket Lab is currently not yet profitable and trading at 86 times revenues, 86 times sales. Uh that's a really high valuation, so I'm currently not looking to add to Rocket Lab. Micron, on the other hand, um, is currently trading at a um uh PE of 22. It's a very profitable company. It's growing very rapidly at 86% in the past trailing 12 months, uh, at price sales ratio of 9.5. Uh and um in the next 12 months, it's anticipated that Micron will have roughly $100 worth of uh earnings per share. That puts its forward PE at below five, uh, you know, roughly a $500 stock uh divided by $100 per share. Um a forward PE of five in technology in such a fast-growing company where all of its supply is sold out. All of these things are just unprecedented. Micron just continues to remain to be, in my opinion, the most undervalued stock that I know of of like some major companies that are in tech and profitable. So Micron just seems like a company that I would continue to accumulate. At my last or my highest price purchase is around $440 a share. I think it's still at $500, it's still undervalued, in my opinion. But um, but I already own 20% of my portfolio is in Micron. So I'm not adding to that. Um Robinhood, uh, again, is one of these companies that is uh executing exceptional 52% annual growth. Uh this company can continue 50% annual growth for quite some time. The market in financial sector is large enough to where um they can uh do well for many years. Uh a PE, a past PE of 42, this is trailing 12 months. Um, and uh it it if it continues to grow at a 50% year uh annual rate. If you fast forward just a couple of years, all of a sudden it becomes extremely cheap. Now, is it extremely cheap at $90? Not to the same level as Micron, but again, Micron's uh criticism is that it's a cyclical business. There will be eventually a glut of DRAM chips and maybe oversupply, and their prices would be suffering. Robinhood does does not have that kind of criticism of its um of its future. So um that's why it gets a little bit of a premium relative to uh Micron. Um but again, like I'm not adding to any of my positions. So just just so that like we're clear on that. Uh but but it's good to sort of know what my perspective is on each one of these stocks. Um Meta uh is of the tech companies, of the uh megacap uh tech companies, meaning Google, uh Apple, Amazon, um Meta, and um who's the other one that uh I'm not thinking of no, I think that's that's all of them. And Microsoft. And Microsoft, yes, thank you. Of those five, which I think Meta sort of falls into this sort of group of five category, Meta is the lowest priced one based on PE, uh, yet has the fastest growth, uh, sales growth with uh 22% sales growth. So um I'm extremely excited for Meta's future, and I think it it remains to be one of you know like undervalued relative to others. Um and then last uh but not least is Bumble, which uh uh the Bumble, by the way, has risen over 30% in the past month alone. But even so, the the valuation of this company is 0.6 times revenues. It has a $900 and some million dollar change, uh, some change, $960 million revenue run rate, uh, and uh is a profitable company, but um it's trading at a uh price point where the expectations for this company is that dating apps don't matter anymore and the future is uh is bleak and this is a dying company. That's the way the market has decided to trade Bumble. But uh if Bumble comes out and changes that uh narrative to with a new AI-based product, which they have been working on um over the past uh year, and they expect to release by June, July timeframe, if they change that narrative, all of a sudden Bumble could become a uh multi-billion dollar company because of their revenue and um uh profitability. So um that's how I look at the entire uh space. And um I'm not adding to my positions largely because my cash position is too small for me to be super excited at these levels. So hopefully that gives a way long-winded answer than than the person was even asking for, but yeah.

SPEAKER_00 46:09

Uh let's go to just, I know you kind of have touched on this, but just to make sure we get the question answered. Hi, Hamid, what percentage of cash you feel comfortable with in the current market?

SPEAKER_02 46:22

I I think you generally um I like to be more than 10% in cash. Um 20%, I think, is a comfortable number for a portfolio my size, just so that when there are major opportunities, as I saw, for example, with Micron, that I could execute on them. Um but what that would mean is that if I saw as you know, uh similar opportunity to Micron and I got super excited about it, I just couldn't invest as much as I would want to, or I'd have to sell something in order to um invest in it. And I prefer not to be in a situation where I have to sell something in order to invest in something else. So ideally 20% so that I can have um powder, if you will, uh dry powder to take on new investments. But um uh but 10% over 10% is where I generally aim to be yet.

SPEAKER_00 47:12

You ready for another one?

SPEAKER_02 47:14

What would yeah, let's let's do it. But be uh while you look for another one, Dustin. What's um what's your current cash position? You you touched on it earlier, but 12.5%.

SPEAKER_01 47:24

Okay. So this is comfortable level, obviously. Yeah, yeah, I I'm with you. At least right now, I'm I'm I like 10 to 15 percent cash position. Um and I'll probably deploy that more into crypto uh later in the year or next year. Uh and then there's uh another, yeah, maybe half of that will go into stocks or something, is at least my current idea, but we'll see. Okay. Adrian?

SPEAKER_00 47:57

Okay, you ready to? We we love talking about um Micron.

SPEAKER_02 48:02

Let's do it. Yes, we do.

SPEAKER_00 48:05

Why choose Micron over SK Hinks, given that SK Hinks is both that HBM market leader and trades at a significantly lower PE ratio?

SPEAKER_02 48:16

Um, I don't even look at uh companies that are not uh US based. So uh that would be my primary reason. Um I I love Micron's position, and uh I think it's um uh you know why not uh bet on an American-based one that has a diversity of products? Uh it's not just about HBM, they also have nan make NAND chips for storage. So they're they're in a fantastic position to continue to grow. And I think they're even increasing their uh market share in HBM markets away from Samsung and H SK Hinks. So uh I like their execution in in all of those things. Even if I did invest in non-US based companies, I don't think uh I would be buying one of them as opposed to micron. So and then you also get uh uh exposure to um currency conversion as well if you're going after uh you know foreign-based companies.

SPEAKER_00 49:17

So okay, one more quick micron. Oh, sorry. Um hello, can I buy micron at this level?

SPEAKER_02 49:28

You sure can. Yes. As long as you have possibility, the possibility exists. I think uh the the question is uh, is this uh has it gone up too much?

SPEAKER_01 49:40

Uh yeah. I mean we did hit all-time highs in micron today, which is I think a good thing to note. No, yeah.

SPEAKER_02 49:47

So so uh first of all, no one can predict what what it's gonna do. And I like we want to be clear that we don't provide investment advice, so that like uh these are just our opinions. But let's say, let's ask the question would I, Hamid, buy Micron at let's say $500 a share if I didn't own it uh at an all-time high? And the answer is yes, I would. Uh, because again, it has one of the lowest uh uh valuations relative to its growth rate, relative to its profitability, relative to the future future projections for at least the next one, two, three years. Um, I think even at $500, it would be undervalued. My view on Micron is that there's no reason why this stock should really be trading under $800, $900, maybe even $1,000 right now. Right. Um, but uh the market obviously disagrees with me, so you should not be listening to me. Do your own uh research on that.

SPEAKER_01 50:50

But yeah, I uh bought Micron roughly three weeks ago um for the first time. It was my only purchase of Micron. I would not be buying Micron. Again, this is not investment advice, but for me, I would not be buying Micron here. Um I agree with Hamid that there is a ton of potential upside, but personally, I just don't like to invest uh in stocks that are hitting all-time highs. I like to buy a stock on my terms, not the stock's terms.

SPEAKER_02 51:23

When when I uh just you know, you know, uh when I first bought Micron at $300 a share, it was at all-time highs. And that was in December, and it's already at close to $500. So had I not bought it at the $300 per share uh number, I would have missed out on on a uh what 50%, more than 50% increase already.

SPEAKER_01 51:49

So that's that's the risk. But I do find for me, and again, we're we're we differ a little a bit in how we invest, obviously. Like that rule has saved me more than it has hurt me.

SPEAKER_02 52:02

Yeah, right. I I can I can see that, but that might be because a lot of people get attracted to stocks after they go up a lot and they don't do the valuation uh metric, like meaning they're they don't look at the valuation, is the valuation justified anymore? Um and in a lot of cases it's not, right? Right, and this is part of the reason why I'm not still accumulating Rocket Lab. Is the valuation of Rocket Lab cheap? The answer is no. So you might have to wait a long time before Rocket Lab um has a doubling event, if you will, right? Because the valuation is not cheap. So yeah, it's fair.

SPEAKER_00 52:39

You ready?

SPEAKER_03 52:41

Yes, let's do it.

SPEAKER_00 52:43

Okay, I think this this might be our last one. So another company we love with the official start of R2 today. Do you think we ever see sub $14 Rivian again, or are they off to the races?

SPEAKER_02 52:57

Unpredictable. So uh I love that we get like uh specific questions about price points. Uh and you know, we reiterate this every single episode, at least multiple times. Uh, and that is that no one can predict the future, and therefore we have no idea whether or not Ribbian can hit sub-14 dollars or even sub-10 for that matter. Um but but you know, looking at Ribbian as a uh company that has this enormous amount of technology and products that its customer base seem to love and is on the verge of releasing a new product that its customer base uh will likely love. The reviews on this new product are to uh appear to be uh phenomenal. Looking at a company that is in its position with all of the infrastructure, all of the technology, all of the products, all of the manufacturing facilities that literally take at least a dozen or more years to build out, and this entire company is valued at roughly, you know, $22, $23 billion today. That just seems extremely cheap. Now, can the market take it and make it even cheaper? Yes. Absolutely it can. Uh, can the market all of a sudden wake up to its potential and be like, this company should be worth $50 billion? Yes, it can do that too. I have no idea which one it might do first, but uh, but I'm betting on the latter uh in the long term, right? So uh I don't know if it, you know, you know, if Rivian will hit $14 again, but uh but my guess is that five years from now, it's far more likely to have exceeded $50 or $100 billion valuation uh than for it to go down to $14 a share.

SPEAKER_01 54:42

Yeah, that's the right mentality of where will it be in X many years, assuming you're a long-term investor. The one other thing I'll add is let's say, for argument's sake, Rivian objectively should be at $20 a share. I'm not saying it should be at $20 a share. I'm just saying for the argument, it should be at $20 a share. So in theory, it should not go to $14 a share. Well, several things could happen that could bring it down to $14 a share. The tornado that hit their factory could have hit a more critical part where all of a sudden they can't make R2s. That that would bring it down significantly. And then there's things that are just totally irrelevant to Rivian's business, which is like, what if there is a larger market correction or uh you know there is some sort of bubble that bursts, that that could also bring it down to $14 a share. So that's right. That's why it's really hard to say, you know, as um uh definitively it can or can't go to $14 a share. It could it could go below $14. We just, you know, no, it's impossible to predict. But to Hamid's point, thinking about where Rivian could go in the future, five years out, 10 years out, it seems unlikely, I think, to both of us, again, not investment advice, that Rivian would be anywhere close to $14 a share. Right. And that's why we invested in it.

SPEAKER_02 56:08

Exactly. Awesome. Then if we uh we don't have anything else, we'll end it right there. Thank you very much, everybody, for watching, listening. Um, make sure maybe we haven't asked for a while, Dustin. Maybe maybe we have to like, comment, subscribe.

SPEAKER_01 56:24

I thought I wasn't supposed to say that anymore. I you know, I've been it's I've been itching to say that at the end of every episode. I just want to I just want to give them something to do, you know. Like, comment, and subscribe. Yeah, it's it's a it's uh a little fun game. And check out the article that I wrote uh in the description. You could also subscribe to our portfolios for free on Savvy Trader. You could see all of our uh exact moves and get notifications uh when we make trades. So yeah. I got I got it all out now. Thank you. I feel good.

SPEAKER_02 56:57

Very cool. All right, thanks everyone. Bye guys.