2026 Predictions with Dan Ives and Chris Verrone | The Real Eisman Playbook Episode 40

We're going to do a year-end review.

We're going to talk about next year because there's just not that much to talk about. Dan Ives of Wedbush, Chris

talk about. Dan Ives of Wedbush, Chris Veron of Strategus. Right after

Liberation Day, April 7th, we were down 20 plus% relatively quickly on all the major averages. And just think of how

major averages. And just think of how the narratives have shifted so many times.

>> I think this is like a top [music] two or three crazy year that I've had in my career.

>> When you're talking to investors on the tech trade, what are the big concerns?

The big concern is just when's monetization of AI going to happen? Is

it going to be quick enough that investors are not going to be like white flag you got to stop spending and become self prophecy to have a view that this is an AI bubble? We're just in the early

days of the demand cycle. But given

China, given where they are from an energy perspective, it is an arms race what we need to do.

>> Whatever rates have done hasn't helped housing at all.

>> No, just housing is just dead. I think

it's a very important frankly next couple weeks for these housing stocks.

>> What's your prediction for next year?

>> Bitcoin's weakness kind of the first hint of the first tell that 26 is not about owning purely liquidity driven high beta speculative assets. [music]

It's about owning real stuff.

>> I'm not interested in predicting the end of the world anymore because believe me, it was no fun the first time around.

[music] >> Get the popcorn out. It's going to be, you know, obviously a lot of ups and downs.

>> [music] [music] >> Hi, this is Steve Eisman and welcome to the real Eisman playbook. And here we have two great guests today. Dan Ies of

Wedbush, Chris Veron of Strategus who is the market strategist. And we're going to do a year-end review. we're gonna

talk about next year because there's just not that much to talk about.

[laughter] >> So, let me give you each an opportunity.

Let's let's we'll do predictions later.

Let's just >> Chris, you're the market strategist.

Give us your view of this absolutely insane, exhausting year. Before we get to just how insane and the ups and downs and the twists and turns of the year were, let's also first start by just

saying how consistent a few things were throughout the course of the year and really have been so consistent for two or three years. The premise of our call for two years has been so long as banks are involved and so long as credit is

calm, the trend of the market's probably still up. And if you look at what's

still up. And if you look at what's continued this year, all the bank stocks have continued to work. Credit

conditions have remained remarkably calm. I think until those change, we

calm. I think until those change, we would be reluctant to kind of move away uh from the bull call here. Now, put

this in context of what was a very nuanced year from point to point. You

know, you entered 2025, expectations were high. Trump had just won. Animal

were high. Trump had just won. Animal

spirits were running wild. The bar of expectations was set high and that kind of moved us into the April tariff disaster. I I I'll never forget we held

disaster. I I I'll never forget we held a conference call that Sunday night after the big uh down move that Thursday and Friday, >> right after liberation. Liberation Day,

April 7th. Uh we think about what could go right from this condition. I mean, we were down 20 plus% relatively quickly on all the major% point to point.

>> I mean, sentiment went from euphoric in January to absolutely rock bottom. And

our own sentiment composite. You were in the second percentile historically. You

think about what can go right from that condition. And I remember being on your

condition. And I remember being on your show uh Steve in in June or July talking about you know a market that was up 25% over 3 months yet bullishness was still

hard to find. So here we are now three, four, five months on for men and just think of how the narratives have shifted so many times and Dan this is certainly

uh in your world but from January of deepseek to April of tariffs to you know chat GPT going to eat Google's lunch to Google's eating everybody's lunch think how the narrative has changed

>> and then in my world what hasn't changed banks have been involved credit's been calm uh 10ear yields have been really stable >> remarkably stable remarkably stable.

>> Okay, Dan, take it away. Give us the year from your perspective because it's been so boring for you.

>> Oh my god. It's like, you know, it's funny like, you know, doing this since like late 90s, you know, there have been certain years where they're just, you know, that you feel like they're just

much more crazy than others. I think

this is like a top two or three crazy year that I've had in my career. Part of

it goes back to like on one hand the AI revolution where it's year three of a 10-year buildout capbacks. You start off in the

buildout capbacks. You start off in the beginning of the year everyone's that go to the deepseek moment which ultimately ended up really being essentially f you know you got to add two commas to what they spend and those are essentially

stolen Nvidia chips. But the reality is is that >> say that again think everybody's >> if you go back to deep sea because a lot of times people be like how come no one talks deep because because instead of

spending 6 million they were spending 600 million in reality and the chips they were using were essentially stolen

Nvidia chips through Singapore. I mean

that that that's the reality right? So

when everyone's like, "How could Deepsek do it with two matches, a dollar, and like a bag of McDonald's, and why would you why would these companies be

spending 300 billion?" Like, uh, dude, that's cuz like that's a Cinderella. I

mean, if you want to believe that. So, I

think the thing is like that took time to manifest. Big tech then had a double

to manifest. Big tech then had a double down. Capbacks, Nadella, Davos, we're

down. Capbacks, Nadella, Davos, we're good for our 80 billion, the whole thing. Then obviously like the spending

thing. Then obviously like the spending I mean the spending was you know I'd say probably 20 to 30% more than we expected. You go to Liberation Day I'd

expected. You go to Liberation Day I'd say the same thing. That was probably like maybe a handful of times in my career that was like a moment of like potentially economic Armageddon just

because knowing that that was going to cut the tech trade to its knees. And for

the first time in 30 years the US is ahead of China when it comes to tech.

And it was that was almost like an emotional time because for me so many times you're in Taiwan, China, see 18 hours in a fab all the innovation technology land in New York airport there's a fist fight the Dunkin Donuts

and then you're like dude there's a reason you like how far behind we are.

The reality is first time we're ahead in terms of US tech circular financing going from good to bad. Google New York City cab drivers bearish on the stock going into this year. [laughter]

>> Oracle good.

It's the only MAG7 stock actually outperforming the S&P this year, I believe, is Google, right?

>> But go back. If we sit here a year, >> by a lot, >> by by a big number, >> it's up over 60%.

>> Remember a year ago, they're going to get broken up by DOJ. Better chance of me playing for the Knicks. Then the

reality is like AI >> I would go I wouldn't go that far.

>> Yeah, you never [laughter] possible. Who

knows? Then all of a sudden, AI eating their lunch. Search is going to be done.

their lunch. Search is going to be done.

They're behind. Now you look at Gemini.

So it's get the popcorn out. But it's

going to be, you know, obviously a lot of ups and downs.

>> So, right now, what would you say are when you're talking to investors on the tech trade, what are the big concerns that you're hearing from people?

>> The big concerns and and you know, and you hit on some of them, but the big concern is just, you know, the spending's there, the capex is there.

The question is like when's monetization of AI going to happen? Is it going to be quick enough that investors are not going to be like white flag you got to stop spending and become self-own

prophecy? The data center build out the

prophecy? The data center build out the open AI too big to fail trade is that almost like a centerpiece and are they good for their bills or whatever? And

that's why I think the reality is like it's easy to get fearful if you're on the 30th floor of a New York City office building or metro north. But for someone like myself, three and a half million

air miles last 25 years, seeing it front and center, you have a much different view in demand and supply for Nvidia chips are 12 to1 in Taiwan.

>> And Dan, I I think two things can be true at the same time, right? Some of

these stocks that >> uh had remarkable runs over the last couple years can have 20, 30, 40% draw downs and everything you're saying could still be true.

>> And I think we need to separate that a little bit. agree.

little bit. agree.

>> You know, there are some names that I would say are on the periphery of the AI story which were once viewed as AI darlings which actually, as you know, Steve, have not made any progress now all year. I'm thinking of a name like

all year. I'm thinking of a name like Eaton, right? That was viewed as very

Eaton, right? That was viewed as very much in this infrastructure buildout.

Um, it was up sharply off the April lows, but it's actually pointtooint unchanged since I think April of 24, right? That's a long time for something

right? That's a long time for something that you would consider one of these darlings to be uninvolved. Well, the

problem with Eaton, just a little bit of push back, is they have other businesses of of course, >> and so it's it's not as pure an AI trade. They've got legacy businesses

trade. They've got legacy businesses that aren't doing as well, >> but when they viewed as part of that AI trade, all the other stuff, right?

>> And to to your point, part of the problem too is that just because you say AI 30 times in a conference call doesn't make you an AI play. So investors too is trying to decipher who are the winners,

who are the the frauds, the fake ones.

And I think that's >> so let me push back a little bit on the AI trade because I'm pushing back more academically than reality because I own all these stocks.

>> But it seems to me I completely accept what you're saying about the demand. There's no question the demand is there. There's no question the capex is there. It seems to me if

that there are two potential pitfalls to the whole AI trade and I like your feedback from it. So the first one is just you're building all these data centers.

Are you going to have power? Now there

are two data centers in Santa Clara, California, which were on the drawing board in 2019 that are are fully functional and they only have one problem. They can't plug in because it's

problem. They can't plug in because it's just the utility out out in California can't supply the power. So it takes, as you all know, it takes time to build all

this stuff. So I think there's a

this stuff. So I think there's a legitimate argument to be said that some of this stuff may take longer than than people think and that would that would cause a delay. That's not that doesn't say mean that the AI trade is wrong.

It's just that maybe it gets pushed out, we have a correction, etc. I think the more interesting critique is the argument that you you find on

Twitter which was very much like a minority opinion and now is gaining some credence which is that continuously scaling LLM models is becoming now

diminishing returns. Now they used there

diminishing returns. Now they used there was a guy Gary Marcus who was like the only person on Twitter that I could even find that had this argument. So I just read him not knowing anything. Okay,

this guy's just saying something nobody else is saying. I got to read this guy.

Couple weeks ago, um, one of the co-founders of Open AI took adopted exactly the same position. So, I'd be curious what you're hearing because if

if if it turns out that you're getting diminishing returns now in scaling LLM models, then maybe you're going to see maybe six to nine months from now orders

start to pull back because the thing that eats the chips is are is are these LLM models. I'd be curious what you're

LLM models. I'd be curious what you're hearing. Look, 3% of US companies have

hearing. Look, 3% of US companies have gone down the AI path today.

>> Okay?

>> In Europe, zero. They're basically

trying to build blockbuster videos.

Asia, exchina, it's less than 1%. Middle

East just starting, sovereigns are starting. So, just to take a step back

starting. So, just to take a step back like where we are, how early days we are in the AI buildout, I would say like from the Palunteers to the Mongos to the snowflakes to everything we see on

hyperscalers, >> look, use cases are accelerating on the enterprise. So even though like that

enterprise. So even though like that whole argument on LM my view is like that is just tip of the sphere relative to where this is going as an enterprise

consumer trade next few years it's all about enterprise but my also view is like humanoid robotics is going to be real in the next three to four years autonomous is going to be re in the in our we're not talking just in our

lifetime we're talking about the next three four five years so my view on a data center perspective is there's more data centers under construction today than active data centers in the United

States. I do agree with you. The biggest

States. I do agree with you. The biggest

constraint is energy. So, I'm a huge believer in nuclear energy and you know where we need to take.

>> By the way, even if you're a believer, which I am a believer, too, >> you know, you don't just wave a magic wand, build a nuclear power plant. I

mean, it it t it takes time.

>> But given China, given where they are from an energy perspective, it's it is an arms race what we need to do.

>> Well, the language you've been using, Steve, is you know, so much of this maybe 2.0 or 3.0 know AI trade might be the war beneath our feet, right? All the

resources and the commodities and the metals and the rare earths and the energy that's necessary to to do what Dan believes is coming to fruition here.

So, you know, I look at maybe what was maybe the more important or one of the more important developments of the last four or five months is this turn in commodities, right? This may not be a

commodities, right? This may not be a cyclical signal. This may very well be a

cyclical signal. This may very well be a reflection of AI 2.0 of the raw material necessary to make this happen. I mean

look around the world whether it's G Vernova in US whether it's Seaman's energy in Europe whether it's Mitubishi heavy in Japan right you could kind of go um geography by geography and say

this power theme really transcends national borders here this is a really really prevalent theme >> no those are great thought and I I think also like you like you know I think you

you do particularly an awesome job where sometimes like from a macro and comm summarizing it in a way that also It also dovetales into the themes too.

>> Well, like what are the super themes, right? So, we could look at this move in

right? So, we could look at this move in commodities and you could come up with three very different answers. By by the way, I was watching CNBC today and they were talking commodities and the commentator was was was he all he was

talking about >> was that this is a contraia currency trade like the basement of the dollar by commodities

and with with absolutely nothing about AI involved with what >> so let's think about why here for a moment. So you could say commodities are

moment. So you could say commodities are turning up here because there's some cyclical signal the real economy is getting better. I'm okay with that

getting better. I'm okay with that answer. You could say commodities are

answer. You could say commodities are turning up here because we're in this geopolitical resource nationalism. Okay,

that sounds reasonable as well. You

could say commodities are turning up here because of this debasement trade.

Maybe, maybe not. You could say they're turning up here because they're the raw material necessary for a lot of the stuff that you focus on, Dan. And I

don't particularly care which is the correct answer. I think the stocks are

correct answer. I think the stocks are blunt instruments. Um, any one of those

blunt instruments. Um, any one of those could be right. I don't think Rio or BHP or Freeport is going to distinguish what is the correct uh reason why. Do you

view like like like Rio as like an AI like a third?

Yeah. Do do you view like some of those as like third fourth derivative AI trades?

>> Yeah, I I I do and I think you could actually start to view some of the energies in that in uh in that capacity as well. I had a fascinating

as well. I had a fascinating conversation last week with a gentleman who's one of the biggest players in the physical delivery crude world and of crude of crude and I I I was I was um I

was pressing him a little bit on you know help me understand why the oil chart looks so bad but actually the ENTP names are all getting better and he's like well it's it's it's simple um AI is

making the geological survey so good that the break even of crude is falling so that's good for the stocks not bad for the stocks so you know there's this really I have not heard that Yeah. So,

you know, that's crazy.

>> And I think Dan, like, you know, maybe 2.0 or 3.0 here. If we're talking about a general purpose technology, the the winners of AI are who all the benefits occur to, >> of course,

>> and that's probably what's on the come here. Then there's a whole trade about

here. Then there's a whole trade about that. Like, see, my whole view is like

that. Like, see, my whole view is like like our whole thing is like in in our IV ETF, we talk it's like the second, third, fourth derivatives of AI because

it's not just about in 2020, 2020. It's

like own a godfather of adentin own Microsoft Palunteer. Now it's about how

Microsoft Palunteer. Now it's about how do you play the derivatives infrastructure nebius some other names like that.

>> So give us some derivative trades that that you're focusing on now. I mean to me like derivatives first off like in software now Palunteer being our number

one but I think I look at names like Snowflake and MongoDB that are really the use case software names as these use cases get deployed on the enterprise I think those are going to be huge plays

the protection of it I think the area that's that's getting overlooked is cyber security I look at crowdstrike powto as huge derivative trades on the cyber security side of the of the AI

piece And then from an infrastructure perspective like Nebius is a name that we're super bullish on. You know, iron in terms of a name that's a power play.

It's also on crypto, but that's a name I think's going to be a data center power play. G Vernova is one of our favorites.

play. G Vernova is one of our favorites.

I mean, we're we're now at a point now where it's like all we're doing we're trying to spend our time figuring out whether it's the microns, wearing semis, wearing software to to play the the AI

revolution.

Chris, what are you thinking?

>> You know, it's funny when I look at what we've owned in our own ETF. Um, it's

kind of evolved from the traditional pure play AI stocks again to more of the derivatives. Could banks be a derivative

derivatives. Could banks be a derivative here of >> right like when you think about >> Okay, this one I got to hear.

>> When you think about banks going to be the organizational efficiency that some of this stuff in an industry that's been organizationally inefficient for much of the last 20 or 30 years. So you just

start going industry by industry and you begin to wonder, you know, who are the benefits really uh occurring to right now. I mean, look at the strength you're

now. I mean, look at the strength you're beginning to see. Now, it's nent, but I think it's beginning to happen in some of these consumer stocks, right? Again,

the [clears throat] users uh not the producers.

>> I have found it notable all year kind of some of the analog semis that frankly outperformed a lot of the traditional AI ones. I mean, look at the micron numbers

ones. I mean, look at the micron numbers today. We sit here on

today. We sit here on this is a stock that's already doubled from from where it was a couple months ago. But we've seen what Samsung has has

ago. But we've seen what Samsung has has done this year. We've seen what Highix has done this year.

>> And it's amazing when you meet with like like when you're in Korea like SK and like especially like in Asia so many of them are like it's a memory play. I

think this is a memory super cycle.

>> No, I I I think the the tricky part here is trying to get an understanding of when the bar is being raised too high on the speculative side of the economy. At

the same time, when you look at some of the parts of the real economy, whether it's consumer sentiment that are very, very depressed, it's this very odd environment where >> I've been saying it's a K-shaped economy.

>> Yeah. Your area is like rock and roll exciting >> and then you talk to people who cover consumer staples, housing, you know, your traditional consumer stuff. And

it's depressing.

>> Oh, it's depressing. And you see, I think the miss consumer sentiment survey is in the second percentile of the 40-year range or something like that.

Now, ironically, that's actually where you should be buying consumer stocks. As

silly as that sounds, um, you know, the the excess returns from that condition are generally pretty good, but it's this very very bizarre sentiment framework where, you know, the speculative fever has been there for much of the year. At

the same time, all the real economy stocks, which I think are getting better here, um, is where sentiment's probably most depressed.

>> We'll come to that.

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go to Oracle because Oracle seems to me is almost like >> the poster child for the debate. So

>> give us your thinking on Oracle. What

are you hearing from people on both sides as as you talk to investors?

>> So first off like look Oracle is not a hyperscaler. So the reality is like

hyperscaler. So the reality is like Microsoft, Amazon, Google like they are hyper they build data centers. Oracle

doesn't build data centers. So the

reality is like when you think about open AI coming to them the 300 billion and they basically have about 500 billion that of revenue combined 300 of

that being open AI that now they have to fulfill over the next two three years >> by building >> by building so when you look at where

Oracle plays my view is like okay are they taking on debt is there quote unquote like is that out of the realm freak cash flow going down. Is that

typical Oracle? Of course, it's not. But

the reality is that Ellison, the whole team at Oracle understands they have the opportunity. It's there. They they see

opportunity. It's there. They they see the numbers that if they take on some debt, build these data centers. I'm not

going to say you're not going to have like headlines and you know and and you know we could talk about thinly traded CDS and everything like that but my view

is is that this has gotten way overdone.

I mean I'll compare it to like Google earlier this year. I could compare it to like other times at Meta going back to 2022 times where everyone's like question the business model. The reality

is is that Oracle is gonna play a huge role in this data center bill and I actually think on large cap if there's a table pounder name where we sit here

today going to next year it's Oracle. I

mean that's >> before before you jump in. So when

you're talking to investors who are negative on Oracle, what are they saying to you?

>> They're like you're telling me Open AI is good for their bills. That that's

that's revenue that they're going to be able to fulfill. Open AI is doing whatever X amount of revenue and they have a trillion dollars you of opportunity that they're trying to go

after. And my whole point is it's year

after. And my whole point is it's year three of a 8 10 year buildout. And the

reality is open AI is building out essentially a new economy from a consumer and enterprise perspective. And

I just view it as the fact that that's viewed as bad today in terms of being associated with open AI. I couldn't

disagree more and I think that continues to be the trade, right? Like anyone

that's associated those stocks ever since the Altman sort of podcast interview with, you know, with Brad and others have has gone down.

>> You know, it's uh I say it kind of somewhat um somewhat jokingly, but it's true. I've gotten more questions on

true. I've gotten more questions on Oracle CDS in the last two or three weeks than I did on Cityroup CDS in >> not all our viewers. So, let me give an explanation. So, so

explanation. So, so >> CDS is credit default swaps and it's a measure of risk. So, if you wanted to basically short

Oracle debt, what you could do instead is buy credit default swaps. And so that what that what would happen is spreads would blow out and right now Oracle debt is trading like junk.

>> Yeah.

>> And so people look at that and they say, well, it's not just the equity markets that think something's wrong with Oracle, it's the debt markets. And we

all know the debt markets are much more intelligent than the equity market.

That's a typical argument.

>> And what people don't understand is that the credit default swap market is not what it was pre- great financial crisis. It's much more illquid. So if

crisis. It's much more illquid. So if

somebody wants to go out and short Oracle debt or buy credit default swap, >> that stuff moves on very very very little. So the fact that that Oracle's

little. So the fact that that Oracle's credit default swaps have blown out, it ain't great. Trust me, you know, for

ain't great. Trust me, you know, for Oracle if they want to raise some debt, but it's not necessarily really indicative of what the fixed income markets really seriously think.

>> It's also a reminder, I think the Oracle example here in particular is hold your narratives very, very lightly. I mean,

think about what was it January, February, kind of into the April lows.

Nvidia at one point was an $86 stock, right? In that correction, was it was it

right? In that correction, was it was it really?

>> Yeah, it got down to about 868. I think

that that was right about the low cuz you know our our view going into the year was hey semis go down uh 50% every 3 years and all Nvidia's friends had already gone down 50 last summer summer

of 24 I thought Nvidia would be next I didn't think it would happen in six days as it did in April of 25 but you know you kind of got to the mid 80s on on Nvidia I think the low was

88 and the high previous high was 160 that's that's kind of close enough so we're kind of in that ballpark of Oracle here what's it 40ish from the highs would have more than that. So you're

kind of in the zone where again you might want to think about okay >> but by the way it's actually shocking when you think about how in such a short a period of time from the moment that they announced

>> open when they from the moment they announced their backlog when they reported third quarter >> to today >> it's only two or three months you would think you would think it's a different world

>> but but also I dis but also like one of the narratives that's also important for like viewers is like 75 to 80% of spending that's going to happen in tech

over the next 12 to 18 months is being driven by that's funded by free cash flow from they're not taking on debt for AI spent. So I think there's a

AI spent. So I think there's a perception like companies taking on debt and debt to fund this that that's actually wrong rela funded just from true cash flow from big

tech.

>> Can I propose a theory? I'm curious uh your view on this. I've been thinking about this. I think one of the things

about this. I think one of the things people got wrong in late 22 going into 23 was when bond yields started to go up kind of the view was oh uh tech's in

trouble in that environment but I I think they they missed the idea that these were self-unders right so higher rates penalized other parts of the market much more now well here we are now three years later and they're not

selfunders anymore or they're not to the same extent they were selfunders so is the risk here um actually higher long-term interest rates uh over the next year or so because of the debt load

that these companies are now taking on.

>> I think but it's still outside of Oracle the debt load's been >> diminished.

I think Google took on has taken on >> maybe 15 billion more in long-term debt for >> when you look at a percentage of market cap.

>> Yeah. And even on the convert now you can make an argument like as Fed cuts depending on who whoever gets in Fed chair that like midcap names do they start to do more converts converts like

that they need. So you can make an argument that that could happen but in terms of large cap it goes back it's still so small. Well, like let's not forget on the rate side, you go back to

99 2000. I think what people forget is

99 2000. I think what people forget is that final 6 months where I think NASDAQ doubled in the fourth quarter of 99. Uh

10ear yields went from 4 to almost seven, [clears throat] right? That's a big move into the Nikk

right? That's a big move into the Nikk peak in 1989. Uh JGB yields went 4 to8 uh in 19 uh in 1989. So I mean 10ear

yields have just gone 390 to 415. So,

like let's let's take it easy a little bit on the [laughter] on the rate concerns.

>> But by the way, just to switch gears for a second, hasn't helped whatever rates have done hasn't helped housing at all.

>> No, just housing is just dead.

>> Yeah. I mean, I I think it's a very important, frankly, next couple weeks for these housing stocks, right? So,

you've had you had what were very good rallies in Dr. Horton, etc. over the course of the summer >> and they gave it back >> gave back by half of it, right? Uh Dr.

kind of hanging out right at very very critical support here. If housing has a shot in 26, I think the stocks have to be anticipatory of that right now and have to turn up.

>> Let me let me say something about that because I'll tell you what when I'll know.

>> Yeah.

>> The Trump administration is serious. You

know, if you go back to the campaign, you had uh the Democrats talking about uh giving, you know, helping first-time home buyers by giving them money. Yeah.

>> And that wasn't going to help anything because that would just cause housing prices to go up.

>> And then you have then you have this administration talk about um >> 50-year mortgage.

>> Same thing. You know, it's just going to cause housing prices to go up. The the

problem with affordability in the United States is local.

>> It's all local. It's

>> it's impact fees that that communities put on that add 10 to 15% to the cost.

It's it's regulations that prevent um home builders from building smaller smaller homes. So, I'll know

smaller homes. So, I'll know when the politicians of this country are serious about tackling real affordability if they start to withhold

money from states un and with literally withhold money from states unless they start to hurry up the process of approving things. Until then,

approving things. Until then, >> it's pure interest rates. I have no I have no I have no long-term prediction about rate. I think rates would have to,

about rate. I think rates would have to, you know, the tenure would have to go to like three and a half for there to be really a real good bump in house.

>> I think the problem with tenure yields going to three and a half is then you begin to wonder why. Like what are we missing on the economy side? What's

weakened here? Like I mean the reality is tenure yields have been in a range for three years. They've you know 375 on the low side, maybe 460 on the high side. Um I can't think of good uh good

side. Um I can't think of good uh good reasons why we escape that range on either side.

>> That's so interesting. It's like but you do see so many investors going into 26 you're either on especially in tech you're either on this side

>> or this side I'm saying like bull or bear it's a very divisive bull bear debate in terms of what's happened on the >> so let's talk about something divisive Tesla

>> okay so so here I have I have no I have no skin in this game okay and I never have I've short the stock years ago got my head handed them me. But my problem

is I just don't trust Elon. I don't

trust what he says. I mean, example, >> he said a couple of conference calls ago that he was going to have 500 autonomous vehicles in Austin. He's got 80.

>> So, you know, the the the basic business, the electronic vehicle business, that's not doing well because the credit, all the the government

subsidies have gone away. That's bad.

>> Robotics is on the come.

EV, you know, electronic vehicle autonomous driving is on the come. It's

all to me it's all hype and and and until I actually see that the his robo taxes really work autonomously, I'm I'm on the sidelines. You tell me what you

think.

So look and obviously like for me you know knowing Musk you know from the early days and being such a believer in there were so many times where like

things like they were a year and a half late 2018 like you could argue like you know they were on the verge of like a bankruptcy or pseudo bankruptcy. My view

is like Musk right now is is a wartime CEO. Like what does that mean? What that

CEO. Like what does that mean? What that

basically means is that he's so laser focused almost like in a war time but war time being the battle versus other attack and you know the competition that

he understands that this autonomous chapter robo taxis it's going to be the most important chapter ever in Tesla's history and to to your I understand the

skepticism but I believe we sit here a year from now you're in 30 cities the geoence area significantly expands you're basically at level four.

>> Okay, so let me push back. Imagine that

that does not happen that that a year from now within time frame that it's important we're basically where we are today.

>> What do you think then?

>> Then that would be I mean that that's like a bare thesis. Like that would be one way that stocks like a whatever sub $300 stock if that happens. I think it's 6 to800 cuz they >> because you think it it happens. It's

binary.

>> That's my target too. And Steve, I I think the the problem here is you lay out this very elegant reasoning, which may very well be true, of why none of this stuff plays out. Yet, one problem, the chart looks great,

>> and it's probably probably the best chart of the MAX 7 uh uh at this point.

So, if I'm going to kind of lean on narrative or lean on price action, I'm always going to choose price action. So,

the price action is encouraging me to be more imaginative about what could happen over the next year or two years. And

whether it's 600 or 800, I'll take either. But I think the direction's

either. But I think the direction's higher >> just because of the way the chart looks.

Yeah, it's it is emerging as the leader in in max >> and I would just add to your point like when it comes to physical AI plays in the world in my there's Nvidia and Tesla

those are the two best physical physical >> what I'm saying like instead of like when you talk about just traditional AI like software use cases LM physical AI

being like robotics car me I'm physical actual AI and you look what everything like Nvidia is going after like the robotics the >> look at fuk in Japan that's

>> what's I don't even know what that is >> Japanese robotics I mean you want to see a pretty chart go look at a 20-year chart of fuk like this is the real deal >> okay >> humano robotics in Japan and in China is

ahead of where we are in the US >> let's switch gears for a sec let's go to financials for a bit >> tell me what you're thinking I mean the charts look great so >> what are what are you thinking >> here's what I'm thinking

>> by the way what's very interesting about about just the whole financials group.

The banks are great.

>> Insurance looks better.

>> It's getting better.

>> I mean, it it ain't great. Payments

looks awful.

>> Payments have been terrible for a while.

>> And um so it's real. I mean, when people are focusing on financials right now, it's Goldman. It's Morgan Stanley and

it's Goldman. It's Morgan Stanley and maybe some of the and maybe the regionals because maybe there's M&A. But

tell me what you're hearing.

>> I mean, Goldman Sachs is behaving as the old Goldman Sachs is certainly what the chart implies. I mean, this has been the

chart implies. I mean, this has been the leader in financial services now for two years. I want to focus on Bank of

years. I want to focus on Bank of America.

>> Okay.

>> Spent 20 years in the confessional booth, right? BAC last

booth, right? BAC last >> and and confessing >> and the whole time many sins [laughter] to repent.

>> Many sins.

>> The last high in Bank of America was November of 2006 until this until this week.

>> This week November 2006 >> until this week.

>> By the way, Cityroup will never get there >> because of the dilution.

>> Because of the dilution. By the way, do you know this?

>> Yeah.

The high inroup >> it's un >> is like 550.

>> It's unachievable. Never say never in our lifetime. Never say never, but it's

our lifetime. Never say never, but it's like and that's because of the delusion.

>> I want to think about this. For 20

years, these money center banks have had their hands tied behind their back as they repented of the sins of the financial crisis. I think that's over.

financial crisis. I think that's over.

We are in a deregulatory uh regime here >> to a degree. I mean, we're not going anywhere close to where back to where we were in 2006 in terms of the leverage,

but nor should we and and we should not, but it but it's good but but some of the handcuffs are being taken off and the and these companies, by the way, these

companies are much much better run than they were. That's not even a comparison.

they were. That's not even a comparison.

>> Let's remember something though.

>> It can't just be a deregulatory story because it's happened in Europe. It's

happened in Japan. It's happened in LAM.

Find me a bank stock in the world that hasn't made a new 52- week high in the last couple days. Good luck. You're not

going to find any. So, there's something global here. It's been the case for 2

global here. It's been the case for 2 years. It's largely gone unnoticed,

years. It's largely gone unnoticed, unobserved, unimbraced. Um, the

unobserved, unimbraced. Um, the financials are still very much leadership. Now, talk about some of the

leadership. Now, talk about some of the lagards within the sector. I actually

think insurance might be inflecting back up here. You had chub breakout this

up here. You had chub breakout this week. You have AIG acting better, but

week. You have AIG acting better, but focus on some of these alternative private capital stocks. You had very deep corrections in huge huge huge corrections in Apollo in Blackstone. And

>> by the way, it's it's so unusual >> in a bull market for these companies like Blackstone and Apollo to be down on year. They're down 10 15% on the year

year. They're down 10 15% on the year >> after an incredible down even more >> now. I think from peak to trough they

>> now. I think from peak to trough they might be down 30 or 40. Those are pretty deep corrections for stocks in long-term uptrends. So if you wanted to kind of

uptrends. So if you wanted to kind of poke around and say what could be a surprise next year relative to consensus I mean people got very bearish on these names in that October November growth

scare remember all the credit Jeff um >> people got I >> people got so hysterical I got calls over one of those weekends that Jeff was

was filing for sake you know >> it was crazy the irony here is Steve is probably partly to blame that everyone in this business thinks anything idiosyncratic has the potential of being systemic.

>> Oh, people want to predict the end of the war. Most things remain.

the war. Most things remain.

>> By the way, I I have a joke about that.

The problem is that there's so many people in this world who want to be me.

>> Yeah.

>> And and you know what? The position is taken.

>> Yeah. The position there's only one.

There's only [laughter] one. And you

know what? I'm not interested in predicting the end of the world anymore because believe me, it was no fun the first time around.

>> Yeah. I know that's Oh my god.

>> But you look at these global financials and you know what's uh remarkable? Wells

Fargo, which is often considered like the the weakest of the actually made new highs before most of them a year ago, right? Goldman and Morgan Stanley two

right? Goldman and Morgan Stanley two years ago made new highs. Bank of

America finally in on the act. This is a $55 stock today. I don't think it's a $55 stock next year.

>> What is >> BAC? I think BAC

>> BAC? I think BAC >> I think 75 is a conservative target.

>> Interesting.

>> We could get more aggressive uh if we wanted to.

>> You know, people got really down on Brian Moyahan and >> they forgot. I mean, he was handed >> from Ken Lewis like disaster. I mean, he

needs to be he needs to be admired to a degree that he actually fixed the company.

>> What he's done is amazing.

>> And guys, don't don't sleep on these regionals uh as well. I mean, curve.

>> Okay. So, let's talk about the regional.

I've had this thesis for a while. People

thought I was crazy at the beginning of the year, which is we have not had >> a bank M&A wave in this country since the '9s. I know. And it's been

the '9s. I know. And it's been completely discouraged by the regulators. And it's actually I actually

regulators. And it's actually I actually I completely changed my mind about this about a year and a half ago, two years ago that we actually need a bank M&A wave because >> it can't be that only JP Morgan and

Wells Fargo are going to be able to afford all the tech.

>> Yeah.

>> You got to merge these banks and make them larger so they can afford they can afford to compete. And this

administration, I think, is on board with that. And the fact that Coma

with that. And the fact that Coma finally put its shareholders out of its misery is an indication I think what's what could potentially happen.

>> So I I think if you want a surprise for next year, I mean for two years it's been the money centers over the regionals. I would entertain the idea

regionals. I would entertain the idea that 26 is more about regionals over money center banks in terms of where the leadership is found in an otherwise very healthy banking system. Um you know you

you mentioned Kame. I mean this is just finally getting back to highs that haven't been seen in 25 or 30 years. Um

if that >> if that I mean I think about PNC just broke out uh regions just broke out. I

mean there's a lot of these um steeper curve probably helps you you quietly have seen the 230 curve go right back to the highs here. To me that's a pretty constructive backdrop for uh for these regional banks.

>> So let's talk about w within everything you do. Let's talk about what stuff that

you do. Let's talk about what stuff that you do that's been kind of hasn't done so well which you think might do well.

And let's talk about sectors that have been done poorly >> like the defensive. Is there is there any hope? Let's talk.

any hope? Let's talk.

>> I mean for me it's really software. I

mean right now software is like a do not enter police lines like [laughter] yellow tape.

>> Salesforce is turning.

>> I know. So if I said it would be like >> Salesforce, Adobe service now like the traditional software.

>> Everybody knows the bare case. The bare

case is AI is reducing the cost of creating software. the moes are not as

creating software. the moes are not as big as they used to be.

>> Get out of the way. What's the contra argument?

>> So my contra argument is like you cannot discount the install base of what benny off and Salesforce have built these install like look these software models.

Okay, are pieces of them getting eaten by AI? Yes. But they have massive

by AI? Yes. But they have massive install bases. They're building out

install bases. They're building out their own AI suites. the software phase of AI is now coming because companies have built the infrastructure that they could actually start to deploy these use

ca they couldn't do it till basically you know the last few months so my view to your point like I'm a believer that you're going to see a turnaround some of these software names I also think you're

going to see massive M&A >> in software I think >> if there's going to be one area you talk about overdue you talk about like regionals or you know in terms on the on

the banking side software is so overdue for >> M& why why >> because there's so many companies where like maybe they had like a certain silo

and the reality is is that that's been compressed growth's gone from 40% to 15% and especially in midcap software >> you know Dan I I'm sure you look at it I

would encourage everyone to take a look at this uh we look at the software semi ratio we look at it equally weighted so it's not just you know what is Nvidia doing versus Microsoft what is the average software stock doing versus the

average semi that might be starting to bottom here. In the last couple weeks,

bottom here. In the last couple weeks, there's been some positive price action there, which we haven't seen effectively all year. You're starting to see

all year. You're starting to see Salesforce inlect here a little bit. I'm

not there yet uh on Adobe >> Service.

>> Um >> I mean, Service Now, I mean, they they have they have washed out Snowflake here as well to your point earlier where like those start to get interesting, especially when you think about it

through the lens of beta, right? Semis

have been the hood ornament of beta for the last four, five, six, seven, eight months basically since the low uh in April. Beta tends to burn very very

April. Beta tends to burn very very bright for six, seven, eight months off low. Then it becomes more of a normal

low. Then it becomes more of a normal performing factor. So I wonder if the

performing factor. So I wonder if the beta impulse is probably behind us at this point.

>> Interesting.

>> Yeah.

>> What what about you? Like what are like what's like the area that you think like if there's one that you think is going to like that's been a lagger?

>> Yeah, I I think this turn in healthcare is a real deal. Um and listen and we could say there's some defensive element to there to that it it may be it may not be but >> when you say healthcare which parts of healthare I'm talking about

>> it's a broad statement healthare >> the most important healthcare stocks after 18 months of indifference are back in gear look at lily look intuitive surgical look at nutera look at the turns even like Bristol and and BMI

>> about health health insurance has that turned I >> no that has not turned I mean that was the only game for 15 years where the insurers and the HMOs I think that's over. I think pharma and biotech is the

over. I think pharma and biotech is the leadership or the leadership that's on the come uh into 2016.

>> So you would not bottom fish United Healthcare like that.

>> I would not. I think these are long long-term broken trends uh in the HML space >> on healthcare. Is there also like to your point is there like an AI trade component where you could start to

actually get multiple expansion because of like AI where there's like farmer biotech.

>> So you hear that a lot, right? That the

AI application will allow drug discovery to become right >> or diagnostic discovery or diagnostic discovery like >> if AI is very good at finding order

right it should very quickly be able to help in the pharmaceutical and biotech space whether or not that's actually happening I think you got to I mean it should be obvious right what CEO would

not want to talk about how accreative this is to their business so it should be obvious and it should be obvious soon that's not the foundation of My healthare call. The foundation of my

healthare call. The foundation of my healthcare call is the sector got to a 25-y year waiting low in the S&P 500.

>> Say that again.

>> You have to go back to Hillary care to the last time healthcare's weight uh earlier.

>> What's the weight now of healthcare? And

with the S&P, it's like it's less than >> got like borderline uh single digits uh earlier in the year. 25 years waiting low. So what do we look

low. So what do we look >> by way for one second?

The this tells you everything you need to know about the US economy. the the

waiting of in just infoch in the S&P is 35%. The next

35%. The next >> but wasn't really >> Oh, it's more than that. But I'm I'm just take I'm just taking strictly the strict category is 35%.

>> The next category is financials at 14.

>> Wow.

>> So the second largest se now obviously it's much bigger than 35%. You had

Google and all that stuff.

>> The second largest sector is 60% lower than just pure info techch. It'd

be 80% lower if you add in all the other stuff that's in consumer discretionary.

>> What's staples three? What's energy two?

What's materials one? REITs one. I mean

these are big segments of the US economy.

>> The the S&P needs to rejigger because because there there are categories now that are basically irrelevant.

>> Yeah.

>> Yeah.

>> I mean you see >> energy is 3%. Who cares what you know?

>> I gave I even see like my like in my fir when you have like morning meetings or whatever it would be like tech and then some of the other like you know it's like because just from a from a you know

interest perspective you have investors that are like real estate investors REITs and now they're like well maybe I could kind of focus on some of these

like quasi sort of like techreated REITs >> right? So, what's been left for dead

>> right? So, what's been left for dead this year? Just just so we could review

this year? Just just so we could review like what's didn't what we focus on what's done well. Let's focus on what's done poor.

>> Anything defensive left for dead. So, if

we're talking about consumer staples as an example here, I would encourage people to start paying attention to Coke here. Uh, quietly acting better.

here. Uh, quietly acting better.

Hershey's is quietly acting better.

>> Um, I mean, Estee Lauder's probably turned here in a very meaningful way.

Maybe there's a China read, uh, on that name, but Staples roundly have been left for dead. Am I ready to say that they're

for dead. Am I ready to say that they're going to be your leadership next year?

I'm I'm skeptical of that. But listen, I know I don't know. I want to be open to where the the prices and the and the markets take me. I'm certainly um um I certainly don't think that would be uh

uh impossible, particularly into a midterm election year where you have tended to see a defensive leadership uh fabric anyway. So, I'm alert to that for

fabric anyway. So, I'm alert to that for next year. I'd say the other place kind

next year. I'd say the other place kind of left for dead and we hinted at it is some of these private capital private credit stocks, the Apollo's, the Owls, the the Black Stones, which

>> I mean they were incredible for so many years prior. They had a bad 2025. Um I

years prior. They had a bad 2025. Um I

wonder if that's that's passed it uh at this point.

>> Well, my my view on that is first of all the the two sort of what people are calling canaries in the coal mine which are first brands actually did not originate in private credit. Those are

public credits, but they're viewed as like >> you know what could happen. I I actually think that I mean for those who were negative on

private credit, the simple argument was that in 2020 private credit was two trillion and today it's three trillion.

>> So that's a lot of trillion. [laughter]

>> It's a trillion. And and you know if you want to make an argument that that you know there's bad stuff in there, you can make that argument. The problem is that you have actually no data to back it up because it's not like you know pre-

great financial crisis you could look at the monthly securization data you could see what what was happening here you there's there's no information so it's pure conjecture

>> my view is that whatever has happened in private credit is not going to cause a recession but that when there is a recession whoever made mistakes is is going to get is going to get shown

>> but I don't see at this point a recession on the horizon so I I I don't I see see what the issue is.

>> I mean, I think if anything, the the market seems okay with the idea that we're through a soft patch, >> right? So, there was a confident hit in

>> right? So, there was a confident hit in the spring around the tariffs. It showed

up in weak data in 3Q and 4Q. I think

the market's anticipatory of an economic turn here. I think the discretionary

turn here. I think the discretionary stocks are suggestive of that. I think

the commodities are I think the transports, all these real economy signals might say, hey, the the risk in 206 is right tail risk, not not left tail. And I think what we were talking

tail. And I think what we were talking about before too is like what's amazing is like I can never remember a market where narrative changes could be so

dramatic week to week. Like that's the one thing that's like crazy about this market. Like the the you could the

market. Like the the you could the narrative changes.

I I was >> so quick. I was traveling basically like you basically since Labor Day until last week, right? And in October and November

week, right? And in October and November going from Jeff to first brands to um you had that day where Trump said the tweet about the Chinese and the market

was down 3% from that >> and then Sunday being >> remember [laughter] Friday after after some golf Sunday I'm good to go to the Nvidia reversal day on the earnings in

November watching in real time being on the road watching sentiment erode and what gets revealed is how fragile sentiment still is And it doesn't take a lot to to shake the tree. We were down

5% on November 20th from the highs. And

the narrative was suddenly, oh my god, the Fed's going to skip the December meeting. Uh the economy uh is much

meeting. Uh the economy uh is much weaker than we think. Think how quickly the narrative shift. It's wild.

>> But basically on that point, I agree the economy is probably better than people think. And I don't think the Fed's going

think. And I don't think the Fed's going to be quick so quick to cut. But then

again, we don't know who the next Fed chairman's going to be.

>> We don't. Listen, the two-year yield, I've joked and I've uh sometimes this joke gets laughed, sometimes it doesn't, but but but who needs Fed speakers when you have the two-year yield, right?

Right.

>> And what's a 2-year yield?

>> 346, >> right?

>> Where it's been for 5 months, somewhere between 340 and 360. That's probably

where the market believes the neutral rate should be. Whether that's two cuts next year or one cut next year, I don't think it's terribly different.

>> Getting to that point. So that means that it m over the next year or two there's two Fed cuts. If

>> that's not the the narrative of the market.

>> So >> it can't be because if if >> do you remember how many cuts were priced in when we started this year?

>> No.

>> Six.

>> Six.

>> How many did we get?

>> Three. Right. If you told anyone in January, hey, you're not getting six cuts, Dan. You're only getting three. Oh

cuts, Dan. You're only getting three. Oh

my god, S&P is going to be down 20%.

>> See, that comes to my point. I actually

think that what that because the Fed is not in an aggressive cutting mode, people's sort of hyperfocus on it is kind of a waste of time that you know

what happening in your world totally is is is what's important. It you know if the if the AI comes going >> it'll be fine. Look how quickly like if

you even go back like you have the Oracle whatever blue owl pulling out [clears throat] data center Michigan whatever it is >> then all of a sudden Micron reports like it's like okay one day it's like Ted

Striker flying the airplane like everything's fine you know and I think that's the thing it's just it's like you see the >> the nervousness of some of the trades but I just it just continues to be like

you have 3 to four trillion being spent the next two to three years you're in a fourth indust industrial revolution that we happen to be living in to have a view

that this is an AI bubble you we're just in the early days of the demand cycle what do you make of the view I've thought about this I'm curious your take

that if you go back to the 992000 experience the gains in productivity didn't really show up in the data until after the NASDAQ >> had peaked >> do you think about that today

>> I mean I view it as like the use cases are all starting to get deployed in enterprise in consumer and I actually think this is one where like we're still

in the software use case phase. So my

view is like we don't it's a tech bull market for in my view at least another two years. So I don't think we even hit

two years. So I don't think we even hit the sort of rubber hits the road for another few years because you're not really even going to see the monetization is going to be much bigger

than I think the stocks are factoring in next year.

Well, let's focus on that for a second.

So, you got Chad GPT, you got Anthropic, you've got Gemini, you got Perplexity.

Reminds you a little bit of the railroads. You don't need so many

railroads. You don't need so many railroads. I mean, what what do what do

railroads. I mean, what what do what do you think there could be maybe a shakeout in the sense that you don't need four, five, six, you know, massive

LLM models? You maybe need only two or

LLM models? You maybe need only two or three. And then and then that means that

three. And then and then that means that let's say I'll just throw out open AI.

Maybe open AI falls by the wayside and their ramifications. What what do you

their ramifications. What what do you think about?

>> I think it's a winner.

>> It's a winner takes most market but not all. Like so in other words like you'll

all. Like so in other words like you'll have much more defi. You're going to have the top three or four models that continue to be but you even see like if meta llama like that's starting to sort of dissipate.

>> But look to me the AI story is not about the models. It's about the data and it's

the models. It's about the data and it's about real I want models are going to get cheaper and cheaper. The AI trade is about the data and the use case buildout of what that looks like.

>> So who what would be your top three on that theme alone?

>> I mean on that theme I mean to me it's like you you have to own Google for not just because of where I see Gemini but also because of what's happened on GCP.

what's GCP >> like Google Cloud in terms of like my view like in the enterprise and the hypers scour side how they're benefiting >> right >> you know two in terms of just what we see on the enterprise you got to own

Microsoft because that's right their backyard in ter from a hyperscalower perspective >> and look poundant I believe is a trillion dollar market cap next two three years I mean no one has a better

mousetrap relative to use cases >> so let's press that for a second when you go out and talk to people within the tech community What do they say about

Palanteer and how and how they compare to let's say MongoDB or anybody else out there? It's in my whole career I've

there? It's in my whole career I've never seen a company outside you said Nvidia on chips but just from like an actual like a software

perspective that is so on another level of every other company in the whole >> what do you like what what do you hear from people >> because the reality is like look Palunteer even though they did it for

threeletter agencies DoD and every sort of western government for for a decade their technology what it was behind sort of you know closed doors, cloak and

dagger, that technology is now going to major corporations. And when CIOS

major corporations. And when CIOS understand what they can do, it's it's almost kind of like, you know, it's game set match type thing. And that's why and remember, they're doing this without

direct sales force.

>> They don't ever cut prices. And that's

Palunteer basically had a commercial business that went from 20 million to a billion in basically a year and a half.

I mean that's just the real. So that's

why when investors like it's so expensive most expensive stock I ever looked.

>> Oh it is very expensive >> 100%. But my view is like if you just

>> 100%. But my view is like if you just focus on valuation over the next one two years you miss every transformational growth stock the last 20 years. I feel

like you have to look be able to look out okay four to five years what does the commercial business look like? Has

double the margins of the government business? Could earnings go up 3 4x from

business? Could earnings go up 3 4x from where they are today? Could free cash go from three billion to whatever it's going to be 8 to 10 billion. Okay. See,

I think those are some of the numbers that you have to go through rather than sometimes just, you know, living in a more >> saying what you said about if you focus on valuation, you miss some of I think

>> the transformational growth names and me and you have talked about this. It's

like if you ju when you look at like Apple and '08 after financial crisis, oh, it's a one-year cycle with AT&T. Why

would you ever leave a black? Why would

you ever go away from a black bear? You

had to have an understanding what Apple was going to build as a services as ecosystem way to monetize it. If you

look at Nvidia 2022, you had to understand the ability what they could do if they actually came out with an AI chip instead of viewing them as a gaming company. But you wouldn't see that in

company. But you wouldn't see that in the numbers over the next year or two. I

just think with the transformational growth stories from pound to Tesla to many others if you just look at it over the next 12 18 months you miss

>> the longer term story now look you have to be a believer do you have to be more valuation agnostic relative yeah but but I'm just saying like how many investors that I've

known that have had to redo their resume two three times different hedge funds because they had to stay valuation centric and couldn't own certain Mag seven names. They had a short pounder,

seven names. They had a short pounder, whatever it may be.

>> That's why it's good to be a trend follower.

>> Well, [laughter] >> no, but but you but don't a blessing.

>> No, but don't you like we've talked about it's like don't you think like there's certain need like you >> you can't get intimidated by stocks in my world that are up two three 400%. Um,

you can't be intimidated by that. And

you also have to identify, >> well, you could be intimidated, but you could hold your nose.

>> Well, but at uh at the same time, you have to be very alert to, you know, what has had a 50% haircut still in the throws of a long-term uptrend, right?

That's where you really have to make your money and lean into those. And you

know, I think there may be an opportunity in first half or second half of next year kind of in your world to see, you know, if we get a good correction here. What shakes out? Who's

correction here. What shakes out? Who's

in the long-term uptrend? What can we really lean into? I mean, think back to late 2022. I mean, all the MAX 7 stocks

late 2022. I mean, all the MAX 7 stocks bottomed exactly where they should, right? Right at the long-term uptrends.

right? Right at the long-term uptrends.

There's going to be another moment like that in the next year or two, and you got to be ready to act.

>> So, let's do predictions. What's your

prediction for next year? I think we're in this um handoff in the first half of 26 from some of the real speculative parts of the economy to the real economy. And I think

economy. And I think >> and when you say real economy, you mean what?

>> I think this is transports, regional banks, housing, um chemicals, commodities, uh having their say here and they've largely been off the playing field for

2, three, four years. I ironically don't think it's out of step with the AI theme because these may be AI derivatives in some respect and I think certainly the commodity space may be the raw material

for a lot of the things Dan's talking about. So I like real economy stuff. Um

about. So I like real economy stuff. Um

I think Bitcoin has been telling us for four or five months now that there's this there's this handoff happening to the real economy stocks.

>> Well, let's let's talk about what's happening in crypto because we haven't we haven't talked about crypto. First of

all, how do the charts look on crypto?

>> They don't look great.

[laughter] You know, you don't need to don't need to be a trained uh trained chartist. Listen,

chartist. Listen, >> what do you think's going You know what my problem with with having even like a discussion about crypto in this is like >> Okay, so it's down. The charts look bad.

That's like the extent of my of my discussion. Like like I I don't know

discussion. Like like I I don't know what else to say. There's no there's no PE. There's no price to book. You know,

PE. There's no price to book. You know,

what's the thesis is to own it. I I you know I I'm sort of bewildered by what I I'm bewildered when it goes up. I'm

bewildered when it goes down.

>> I mean you've basically have had three and a half to four year cycles on crypto and we're kind of at the end of a three and a half to four year cycle where I think you get 12 months of violent range. Um I'm not convinced this rally

range. Um I'm not convinced this rally that tried to begin a few weeks ago is over yet. I could see this rallying back

over yet. I could see this rallying back to 105 10. I think there's a lot of sellers up there on Bitcoin uh who were late to the game uh who bought it late.

>> But what's the message, Steve? And I've

wondered for a few months now, is Bitcoin's weakness kind of the first hint of the first tell that 26 is not about owning purely liquidity driven,

high beta uh speculative assets. It's

about owning real stuff uh with carry uh versus Bitcoin with no carry. So I I I'm very open to that being the message as we think about why or what Bitcoin's trying to tell us.

>> Interesting. Interesting. Dan, what you >> Yeah, I mean like look, I think [clears throat] I think tech stocks are going to be up 20% plus because but I think a lot of those could actually be

driven by the second, third, fourth derivative as the AI theme plays out. I

think in large cap I think you're going to see like what I I I think names like Microsoft and Oracle could actually be significant outperformers over the next year. And I think the big theme is going

year. And I think the big theme is going to be like Apple is going to get into the AI game with the Gemini partnership.

you're seeing new leadership there. I

think Apple as a large cap name could be the one that has like the just a massive move because there's no AI component at this point because they haven't done but now >> I love the chart I own it

>> and and now you what you're starting to see play out is like new leadership >> DOJ win with with Google sets it up for that big Gemini partnership. So that's

the one with that install I love it sort of sh like >> would you still say it's the most underweight kind of among the names?

Yeah >> mean by investors >> by investors.

Apple.

>> Yeah, because because look, Apple every if you you know every event I've been at for Apple I felt like Michael J. Fox

back to the future, right? Like it was always kind of like you know where like where's they at? You're at every they f cooks finally been like clock struck midnight time to shift the leaders bring

people from the outside. They're not

going to do acquisitions but Apple's ready to play ball. And I think look, I think the theme is like you said, we're gonna have these white knuckle moments, but the reality is like we are early in

this tech trade that has >> So I I completely agree with you other than the two risks that I outlined earlier before. Sure. If that the energy

earlier before. Sure. If that the energy is that's a real risk because that always takes longer to do stuff than you think. And the whole LLM thing I think

think. And the whole LLM thing I think is more serious.

>> I think I think we should leave it to the states to figure that out. You know,

every time I go into a motor vehicle, I feel really comfortable that the states could have control of AI. No, I'm

joking. But I'm saying the reality is the F it needs to be federal road map.

>> No, I agree with that.

>> I mean, would you add one more risk to that? It's just rates. Um,

that? It's just rates. Um,

>> they haven't really moved here, but they've moved in Germany. We know they moved in Japan. Um, I think it would be silly not to be alert to the idea that you could get up a pretty a pretty bad

move in rates. I think that's look if if if the economy is stronger than people think in the early part of the year, you could get the 10 year back to four and a half. Then people start to get nervous

half. Then people start to get nervous and they start to have a they start to have a whole narrative about, you know, you got to get rid of your speculative stocks. You know, I I I could read the

stocks. You know, I I I could read the headlines already.

>> I could see that.

>> Okay, guys, that was it was really great. Thank you.

great. Thank you.

>> This is so fun. Happy New Year to both of you.

>> Happy New Year. Healthy and prosperous, right?

>> Definitely.

>> Great.

>> That was great. Have a great one. Thank

you. Have a good day. We'll talk again next year.

>> Okay. Look forward to it.

>> Thank you.

>> This podcast is forformational purposes only and does not constitute investment advice. A host and guests may hold

advice. A host and guests may hold positions [music] in stocks discussed.

Opinions expressed on their own and not recommendations. Please do your own due

recommendations. Please do your own due diligence and consult a licensed financial adviser [music] before making any investment decisions.