Beware The "Drag 7" Stocks
44:02 Share

The twenty first of november, thursday, one P. M. On the east coast. Guy here, then there, soon to be joined by hood. Carter bracin worth, you missed yesterday, wednesday, of course, if it's wednesday, it's butter's. We dropped a little butterfly ledge on the piece and we also teased, uh, that little webbing or we're if they call a webinar that's going to be fun, we get that on a ten am. So we'll put that slide up a little bit later.

How are you? I'm doing great guy. dam. This is one of those sorts of days where I think you and I were chatting. We were chatting with .

a man that actually .

shortly after the opening and we ow that reversal, you know make that take down the whole market guy, you know, were so I don't know the invidia we thought that that was a really important macro event. What was the implied move? Eight nine percent.

How did they do IT? So at one point, we're up four percent um after the opening, then we went down about three percent. Here we are probably unchanged.

Fascinating day. I mean, we were talking to think around ten thirty, quoted to eleven this morning on the east coast, and the market had reversed, and we hung up the phone and off to the races. We go.

But nobody wants to hear about that. What they do want to see there was run down, and this is one of our Better ones. The max.

Now cross that out. It's like the old learned skinned red JK. Pull that up.

I'll call IT up later. One more four from the road. That's what that is. Reminisce enough. So drag seven stocks AMandas.

So good mobile stock market chart check that's a great quality of breakfast and worth how how will bit going go? no. And I do a little. Audience, q and a.

yeah, I no doubt let's start with this kind of drag seven. And I think that is interesting on a day. And I know you know this is not something that I think that was unexpected. I think the move is unexpected that the department of justice, ftc, whoever held these regulators are right. They want google as one remedy for the santa trust uh, case against them to sell off chrome.

You're going to see lots of some of the parts and there's going be lots of other sort of, you know, folks out there are saying he, listen, some of this stuff may not be bad for unlocking value. Let's pull up the google here for a second guy is at one point, this was down sixty percent, down about five and a hundred percent. Um pretty big move. I I think IT really speaks to the fact that maybe, you know, folks think that this is just the first part of this remedy process. But when you draw those lines, man, and you put together, I mean, maybe it's not a perfect up turn guy, but you know we're through that one fifty and that looks like we get easily go down, I don't know, to the one four fifty five, so I don't know.

No, it's interest. So through one hundred fifty moving averages, you said, I mean, the trend will continue with time to get to go higher. So IT probably gets us about, to your point, one fifty four, one fifty five, and then you take a look and see what happens.

I mean, that tree lines bit up trin since the spring, whether or you like that trend or not. And that's what we're looking at here. And quite Frankly, if you do look, IT has been a series of higher lows since April, which will still be intact even if we trade down to one fifty four, one fifty five.

So now this one, I think becomes interesting. But to your point, now there's headline risk around IT. There's been headline risk for quite some time.

Yeah, I guess the last point we can make up on this is that this was also a named that you had been lagging some of the other max seven because of some of the fits and starts that they had with their large language model and how they're kind of integrating gemini into their products and services. And you know you and I got kind of build up on the name into the print IT had that kind pier. I got to one eighty four.

You kind of hung around there for a little bit. And you, here you are. I mean, a lot of folks, you've said, IT, listen, regulating massive overhang, but how do you trade IT, right? That's the thing that we've heard again and again.

And so you know to me, I think you probably have to wait you have to wait and see what the sort earnings impact or some of these moves to the company take their eye off the ball as they start thinking about clear off certain division that they might have to do. I think IT probit takes longer than I expected. I look at on evaluation, guy, you expected earnings growth next year, about twelve percent.

Unexpected sales growth of about eleven percent. We've been pointing this out. The gross margin for this company is going down considerably four points in the last year from twenty twenty three down about sixty three eighty this year.

And I supposed to turn down a little bit next. So it's training about eighteen times next year. Pretty cheap, but maybe it's cheap for a reason.

Well, that's exactly right. I mean, when things are cheap IT forgues, I mean, i'm not comparing target and google, but people look evaluation, say it's cheap. It's going to be a value place.

Sometimes things aren't cheap for a reason. I think you're finding IT here. Microsoft, by the way, is another one that again since july hasn't traded particularly well.

You know, people, I think look, I think the optimists will say we're treading water here. We're sort of building a base for the next like higher. That could be the case.

I mean, the pessimists will say the broader markets been extraordinary. This stock is participated for the last four, five months. Maybe there's a problem.

I think those support lines are probably right. We've been sort of vacillating through the hundred and fifty eight, both on the upside. In the downside, I guess, technically, the thing that should be concerning is flat lining of the moving average. And if we continue to trade in this fashion, that flat line will start to turn lower and then we know what happens from there.

Yeah I guess the thing that concerns me rather than the technicals here, obviously, IT has not confirmed any the new highs in the sp in the nasdaq over the last few months or so. But really is the kind of multiple expansion our front dug cast over there at sea breezes has been highlighting this.

We've been talking about this for an awful long time, fifteen percent earnings and cells growth next year, trading about twenty eight times IT seems expensive for a stock that kind of stuck in the money here. I would expect forward earning estimates to come down a little bit. And you know, when you think about the underperformance of the stock, it's up about a one percent on the year over.

And aza, that's up twenty six percent or so. It's kind of telling you that at some point, all of this investment, all of this capacity that they say their capacity constrain despite them continuing to build at breakneck sort of fashion. At some point you're going na have a glut of that capacity in the cloud business of the companies of the the customers don't find the use cases, don't have the return on investment.

So that's my two sense here, guys. I wanted get your thought here. If you look at amazon, this one down about two percent, IT feels like this is the most closely aligned to what might happen in a regular ory sort of environment as the google do. You see IT that way, especially after that very nice break out there after a names. And IT looked like he was kind of off to the races.

But here you go. I think that's a conclusion that market participants are making. Now we talked about the break out that we saw that made sense.

We thought that the break out, you'd get a probably a back and film of that prior high that we saw in july that happened now where in the mist of an overshoot. So maybe we get up to that sort of up. Tron line has been in place since August, August fifth lows longer term chart, I think we'll give you a little more indication.

This is a static chart. Mean, I can put up A L O N G - T E R M chart just for some perspective here. I mean, I think just what I think is happening is we're doing a little work.

And what was prior resistance? Prior resistance becomes, therefore, ally support, and we should hold here. What I want to throw up real quick is that microsoft chart that illustrate potential for a hedden shoulders s top.

It's going to look very similar to what you did. I think I was a ml a week to have for so ago. And you can look at IT.

I mean, IT looks like that's what's forming here. I think if we, sara, to take out that support, that head and shoulder will be validated. Then he started talking about a measured .

move to the downside then no doubt about IT. I'm going to bring Carter and right now that he's got some great work to share with us the worth worth charting guy. We're going to get to his msci, all world, uh, you know, global, all world.

whatever is country that.

But before we get to that work, and it's pretty brilliant, we're going to hit some cyp to stuff to Carter. I wanted pull up this invidia chart. Okay, it's a log chart. And I drew an uptrain channel from the end of twenty twenty two here.

And I just want to see how I look here with this thing because know when you look at this sort of Price action that we've had, this consolidation, if you will, is about a voluable move. Over the last kind of four or five months, we had a thirty percent picks to drop to client IT looks like IT bounced everywhere. IT should have. And now when you look at this, does this have room to the upside of, I don't know, one ninety two hundred box and and i'm not saying i'm turn and bullsh on this thing or whatever, but I look at that fourteen day rsi is right there in the middle .

yeah I mean um I would play for the break. Uh so uh well defined train line and it's hovering sort of ominously are threatening to undercut the the train line. Um so the I suppose what you're saying could all back to the time and sure, but the behavior day to day and week over week and relative to the market is poor, right? And so in that sense, I think a bia beware. Certainly it's one thing to be long and to not add that, that seems provided to be long and maybe reduced um but just to buy fresh new in video x increasing exposure. The name IT doesn't seem like to play here .

right so I throw my two sense in real quick I corner but if put up instead of the static chart. Up like a one year chart. AManda and I could tell you what I think potentially happened today.

Back in march, and we talked about this, you had an engulfing pattern to the downside. We suggested that, that set up invited to trade significantly lower IT took some time, but IT did. If you recall the move, we probably saw them about a thirty thirty five percent move from peak to trough over that period of time.

Subsequent, I think, was june tenth. Same and golfing pattern. IT was by August fifth at the stock, I think went from about one forty two and change.

I think we pray in ninety dollars you can do that math. That was a significant move as well. Then obviously, off to the racist.

What we have here today potentially is the same type of set up. So you ve got to watch this one really closely then. We've already put in the new all time high today, check that box. We've traded lower, check that box, the third boxes to see what we close. Yeah.

I guess my take is that and this has less to do with the technical and has more to do with what we heard from the company last night. They didn't really say anything that we hadn't heard over the last few weeks about demand. The next gen um you know chip, but IT wasn't good enough.

The guidance in the beat, right? So we've been talking about this is saying, well, when that happens, the stock should find IT should find sellers and like and to me, it's basically unchanged on the day, you know. So you had a little utility in the morning.

So I guess my is like what is going to be the thing that brings IT down because they keep talking about demand for this next gene chip that's gna go on for quarters. I know at some point I will stop. I know at some point you'll have a beat and raise that is a little less than what we just last night. And so the question is, do people start thinking about IT on the sequential basis and say, okay, well, the giggles up because we're not going to have the sort of beat and raises that we had that drove the sort of performance from the start of going through to just about now, right?

So i'll attempt to answer that quickly before we get on the quarter stuff. So if you go back to march, if you recall, there was really no commentary that suggested you'll see a move. IT really was based on the technical formation that we saw.

And then obviously, the subsequent move into sort of April, may and the same thing happened back in june. It's not like they said anything necessarily that was different. IT was a technical set up that we saw big volume day and golfing pattern, and nothing's really changed.

So I guess what I would say is it's not necessarily what they say, but every once a while, you get these patterns. We're trying to do sit of pattern recognition. So that's what i'm watching today. You have a potential for that. Listen, that could close at one sixty in the whole thing is mood or IT could close at one forty.

then will have a conversation tomorrow. Yeah, in Carter, you just mention the relative strength to the p to the, as that let's pup the age for a second. here. We know that this is largest component. I mean, this thing just doesn't act particularly well. So is that part of the way you're thinking about um you know taking profits in the video if you have them because the rest of the sector, other than a handful in names, taiwan's semi broadcasts don't trade particularly well.

Uh right. I mean, that is the and so you can look at an equal way index that depicts history clearly clearly has ruled over a bullish to be arriving sal cell in video. But the point is that after a catalyst has come and on, what's the catalans now just for between now and four? P M.

wo the cat tomorrow between now and next.

right? I mean, you've just had in the stock very muted red on its response, learning. So at a minimum, I would sell call all if I were long. But the point is, is not a place for new capital day to day, week over week on an inner media basis. There are other things are more interesting.

yeah. And I guess the point that will just kind hit on when we talk about the bitcoin and some of the related names, I mean, these are handful names that are still you just attracting a great deal of the enthusiasm that relates to the stock market, specifically in technology. I'm carding let's look at your msci all country world index. You highlighted this, I think, about a week ago and your reiterating some of the calls here. Walk us through what you're saying.

please. yeah. So looks like highly quality D S M. P. Uh, what this captures is, uh, eighty five percent of the global opportunity set within the active market. And so it's from twenty four developed countries that would be the U K. In germany and france in the U S.

Twenty three emerging uh countries, emerging markets, things like a poland for stance or uh Philippines so forth。 And um this is you know the point is many would say we're going to break out here and that's a perfectly reasonable bt um but let's let's put in some other characterizations. That was the two thousand peak there you seen we know what happened then you had the O A O nine bear market that was o seven pig.

We had the twenty twenty two pig when that sell off. Well, looks commuted on this chart. That was a twenty seven percent decline in the twenty twenty two beer market, thirty seven percent for the next one hundred.

And here we are again, up against the upper band. The laws are very precise, too, to the penny, the financial crisis low and the covet law. And so again, this thing is, uh, this kind of thing is very annoying to economists and C, F, A members because they don't want to accept that some of these things are, uh, are are very real.

So the question is, the bull says IT breaks out here you might have another iteration of this chart so the arrows a sort of captured and then finally last one, you know I just put in this barby where a barby bold so um do you have to um you know sell IT all no but I mean, you know there are lots of things whether it's evaluation that one could argue for, whether it's the fact that warn buffer is holding more cash ever held. The man who is obviously proved himself to be quite a stood at timing is why he's saying no timing. He holds cash at the high.

And guess what? He did the financial crisis low he was, what was he doing? He was seller puts right gold, is bAiling out gold's tax and more.

He was. He was the final. So he's very much a time. We're just by saying that he's not um and I think his judgment here is to buy everywhere this makes sense .

to me down and this sort of I think dub tells nicer. We were exactly what we've been talking about when court just mention there's a reason why the information warning profit now has over three hundred and twenty five billion dollars. City, not a baLance sheet that's up from, I think, two seventy five a couple months ago.

It's because he sees exactly with Carter sees and you know this is one way to look at IT. The other way, obviously is that buffet indicator that we talk about all the time, that's the will show five thousand, which record tell you there are not five thousand socks in IT, oddly enough. But you know who's you that's close enough for government work, but you take that market cap divided by GDP and now we're either side of two hundred and two percent. And i'll say that again, you know his sort of antena goes up at about one hundred and thirty percent, and this is historically, I think, the highest we've ever seen. So when you overlay that with Carters chart, I mean, it's bie beware and IT doesn't mean things can go higher but buyer beware .

then yeah and it's one of those days where doesn't seem to be too many buyers or be wearing a much love. I can even say that, but if if you get my drift here so well, I mean, to go IT goes back to, okay, we thought in video might be able to take down mega cap tech. We have the google news, but IT just seems like you money is flowing into the banks of and only once to pull up the bk x here.

We had that huge one day move after the election. We've consolidated really for two weeks at the upper end of that move, that closing day on november six. And here we are.

Looks like we want to break out here. So there's lots of stuff going on here that just seems very, very bullet from a Price action standpoint. But IT seems a little bit divorced from some of the reality.

If you think about what are some of the headwinds that we have going forward, IT seems like everybody every headline I see is about terrace and and every sort of company um in amErica seems to be worried about that. But the stock market investors are not particularly um here's another area which Carter you on fast money last night, this is pretty astounding. I had been looking at the microstrip.

Gy, um they own, what do they own? Guide, thirty billion dollars were the big coin. He raises money every time.

Michael seller, he can to buy more bitcoin. I mean, talk to me. Guy, you know, Michael seller, he's been on our show, I think probably four times over the years. I mean, there's very few shows that we do that gets more interest than when he's on. And he's just a true believer as long as we known him for five years.

But this money worth math is without question. Yes, I do know him. He's a brilliant man. You say what you want? I mean, I know there's one side of the equation thinks it's all the permutations and all the jacking or suggestive of something a consortium all really bad and really badly in terms of how they raised that by bit going use all those different things, create convertible bonds. I mean, it's all very complicated, but it's all somewhat ten us as well.

But there's no denying the fact that regardless of how they've done IT, theyve accumulated that many that many bitcoin on their baLance sheet at the at the market after you just said. And you know they probably bought IT in an average Price either side of forty seven and forty eight thousand, so you can start to do that math. Now the problem is that I think, and I want to steal Carter thunder, but I will for a second, if a man were to pop a microstrip ratee chart over the last, it's call IT three or four months, this was a hundred dollar stock, give or take, in september IT traded north of five hundred and forty hours.

Today that is probably. Over that same period of time, bitcoin is probably gone up about forty five percent or so. So the question asked to ask themselves is why are we seeing this level type of moves and what could potentially happen to pitch coin? We're go down to ten percent, which is probably what carders is going to talk about now. So cardi, am sorry to do that, but I just thought I bring that up.

Yeah I mean, you know it's I mean, I I don't know any about you know him or whatever is is Operating business to the they sell things the revenues I I don't know but what we do know is um it's steep and I incorrectly I I use the log uh chart to mute the rate of change for the note to clients.

Um but um you're talking about just in the past what two two years fifteen to five hundred and then of course from the August low um having gone up fireworks, a bitcoin is doubled from its always low and this is up uh hundred to five hundred on field gaps. It's got a lot of issues. Uh so my thinking is and and its relationship with um here its relationship with bitcoin is also uh d couple you know someone send me a client, send me something.

What was that was that the the one faces is that the the the more expensive the stock gets right relative to bitcoin, the more money they can raise because they've been raising a dead and equity to buy yet more bitcoin, a fly wheel effect. Now, when I heard that, I was fell on the floor. Uh, I don't understand what that means other than that sounds like.

well, IT means that works until IT doesn't. I mean, you're seeing I mean, you're seeing today is a the last week is a great example of how this works. There's the other side of that mountain as well that I think, no, your notes suggested we want to be under pressure.

I know cast put out all year today that resorting microstrip gies that's before the stocks sold off. So good for dung and good for your note as as well. But you know this is I don't want to use the term sort of house of cards, but just in terms of the math associated with IT, given the move over the last couple of month, and that's exactly that.

Yeah, it's one of those things that I mean, it's just kind of speaks to um just the euphoria that we're saying that we see we had this great conversation um with Steve cork, the head of brokers at Robin and hold the other day. We dropped IT on the on the tape podcasts and he made a really good point. Just how investors on their platform and they have twenty four million funded accounts, right? And it's not the same platform that IT was.

Then people are thinking there are real little h you know options and meme dogs and crypto s and all coins and all that for a stuff a few years ago. I mean, they move to wear if they see opportunity, right? If the stock market feels overly value, they may move to summit class different one or whatever.

And so when I look at this, okay, that makes sense that they're piling in a big coin. Theyve had two big reasons this year to do IT. The creation of all those etf earlier in the year, right? And then obviously the idea of like deregulation, I think gry gangs is quitting today and he's been somebody who would like has been a real opponent, right to deregulation in the space.

But what on earth makes sense that you would play three times the N A V of the holding in this business? When you can just go buy bitcoin, you can go by in etf, you go do whatever. But the problem is that I think doug said he's like dipping his toe the water.

It's a really expensive barrow. It's a really you know what to stock. There's no reason why I can go up another fifty percent right corner does no .

there's not sure. Yeah what is the answer that question that you are asking? Why why are people doing in?

I don't know. I mean you well.

I mean you're doing IT because you get in the moves you're seeing, right?

I mean, they're doing a bit well.

I agree. I want to be Crystal clear. I agree with everything you both just said. But the moves we've seen over the last couple a month and a half or so in microsoft, specifically when you over late against bitcoin is exactly why they're doing IT doesn't make mathematical sense.

IT doesn't make really investment theses sense either, but it's playing out the way they wanted to. Now I will say this is this is by definition, IT cannot last. Something will trigger the other side of this equation. I'm not smart enough to know what IT is theoretically you could be just a ten fifteen percent self and bitcoin or something else um but this is a tenuous move at best in my open.

I and we really appreciate you being here. Um great work, as always, will see probably on fast money, right? Hey guys, so something else that seems a bit divorce from the Price action in bit.

Cole's put up coin base for a second here, right? This is a stock that you know had this great run. Um I I think this is also not too different than the Robin hood customer that we talked about.

This is a different company than IT was in twenty, twenty and twenty one. I mean the institutional kind of argument that they have for custody and the like, you know. So it's a very different company.

Is IT expensive? sure. Is that one of the few games in town? Yeah, probably.

So does IT deserve a premium? No data about it's had this big run. Now you know, listen, you could say that downturn line is what IT is. It's above that you don't mean. So now you have a little bit of support to the downside.

You know, this is one you talk about not wanting to chase and having the movie your feet at some point, you know never ever stock where you had to start to move your feet. I think it's this we're approaching levels that we last saw, like many things in the fall of twenty twenty one valuation to your point and does not make a lot of sense. I don't see what the volume is today.

Maybe you can point up for me, this is the stock that typically trade sixteen million shares or so a day. My senses you're going to see over the last couple days, probably three, four x that this is the sort of the deep end of the pool. Now so know do we get to those november twenty, twenty one high maybe um but again, this is one is not as it's not as I think severe obviously is M S T R but is in that same vain yeah to your point is traded seven .

hundred hundred and five billion shares already know one of the other things we just got to hit this a little bit. We probably should have last night and fast money as he was coming. Look at the snowflake.

And I will say that you know, a couple days ago on the market call, you said, I think you called IT a barrier h to bullet reversal. This was in front earnings. Now that's all finding good.

I saw the numbers that they reported and look good. I mean, their expectations were really low. You see what was going on with the chart.

You highlight the fact that you just picking its head up about one hundred and fifty day moving average, but for this stock to be up nearly thirty five percent today, what does that say to you about investors? This is a fifty eight billion of our market cap company. I just want to give you some much because you and I ve talked about this on a Price to sales metric.

Now if AManda can show us a five year IT trades IT thirteen times one hundred and seventy five times earnings. Now all of that, think about what just happened to all of those valuation metrics. S, with the thirty five percent rally right there.

And I know a lot of people go back and they look well. And twenty one after they went public to this, that everything was a different time. So are we going back to that time? Guy.

no, we're not. And I want to be clear. I mean, this is one where we looked at IT.

IT looked to me like, excuse me, I was a barrister. Both reversal. You know, did we think that I think this would have no probably night.

You know, we talked about potentially doing the gap that we created earlier this year at some point. I mean, it's starting to play out. Does that mean the fundamental of change? Absolutely not.

Is IT divorced from reality? Yeah, probably a little bit, but not nearly as much as I was a few years ago, were made absolutely no sense. But to specifically answer your question, you know you say what are investors doing?

I don't even know if it's investors anymore. You know, I think so much of this is just computer machine generate waters. And if you don't run into cell orders and just they take stocks to where they do find eventual cellars, which is sort of the marketplace that we find ourselves in, doug cast talks about this all the time.

The mechanism of the market, I don't want to say, is broken. It's changed. And that's something the David and horn said, I want to say earlier this year, he used the term broken.

I'll use the term change and you have to adapt to IT. IT doesn't mean that they have fixed the ills of this company, doesn't mean to make sense evaluation. All IT means is, you know, people come in or machines come in looking for um areas to buy and when they finally do find the sewer, that's where IT stops. And I think that we're seeing today.

Yeah, no doubt. I mean, just my two cents on the kind of broken mechanics of the markets and you have been doing this long time dog been doing IT longer when you talking about dug in the work that he does. And he's I wouldn't say he's an active trader.

He's a guy who puts on intermediate term sort of positioning. He likes to look at sentiment. I hope i'm quoting him currently.

I read this stuff every day so I get a sense of very transparent you know um so he has the ability to move his feet right if you think about a David in horn over a Green light, he's been doing this long time. He's you know a long term investor. He build big positions.

And I think some of the frustration that you have is when you see these sorts of this connects, if you're not particularly simple, IT can be really frustrating, right? On the long and the short side we are talking yesterday, target was down twenty one percent. This comes three months after they guide IT up the company, guide IT up another guiding down.

so. I mean, some of those things are yeah really frustrating. Um you know when these companies that you know you take a position in and they have no visibility or they're very poor at forecasting their own business, that's when you get these sorts of gaps. And you know he makes IT hard to kind of stay in the game.

guy. Well, I mean, OK, i'm not looking to best target, although last night on the show I said I know i'm not looking to make any friends here I call what IT is. They're and I can use the term because I was on television.

I'll use the term here. There's just a poor Operator and I said that flat out. And remember, they gave guidance.

I don't know what I was a month or months a half or so ago. I don't know what's changed, but clearly something did. So you know, Karen talks about IT all the time.

I sort of agree with her. But if you don't have visibility, don't give guidance and we can agree to disagree on that one, but you see what happened. So in terms of target, just not it's not this.

And i'll say this again, as much as IT is an indication on what the consumer is doing. It's not an entirely of the consumer. It's an entitled on target, and that's what we're seeing.

And I think yesterday, I want to say I was doing or bank don't at me if i'm wrong, they lowered their Price target to one of five. And if you do a long ger term chart, I mean, that's probably where it's going. I mean, they are just ziggy when they should zg um they have some problem to and you can see what i'm talking about in terms of that level.

Then yeah, I just want to say one thing and Carry i've been going back and forth in this and fast money, I think for ten years when he says that I don't think company should give guidance. That is the talking point of a CEO or CFO or somebody who doesn't want to be pegged every three months to what wall street or investors are expecting. I think about the opposite way.

If you're an investor, you should demand as much transparency as you can get. You are an equity holder of that company. You are basically by every share that you buy, you're giving an endorsement to that management and their strategy.

And why would you expect anything less know? So that is the norm. And so that brings me back to I don't think that's ever changing.

If you look at the way information and and access to, you know tools to trade and do invest has been democractic zed over the last ten, fifteen years. Why would there any be? Why would there any be? Why would there ever be a reason? Easy for me to say why you would take back that norm that is existed in the markets for decades now.

It's fair enough. I listen, I might disagree with you. If you have visibility and you and you think you can give clear guide dance, you should absolutely do IT.

I mean, target gave guidance and a month or so later whenever IT is, I mean, that proved to be wrong. I mean, there certain companies, I think, have that visibility. I think the other companies to think they do, but clearly done.

So what's I guess, to push back? And I don't want to get bogged down in this. What's Better you know, to give guidance that people take as sort of gospel by the stock on the back of only for a month later, the start going down twenty percent.

And one day, I an easy answer is that those managements who don't deliver, then they basically lose credibility. And that is a big knock on owning that stock. And you know, people used to say this about g number back in the day, how jack wells would manage their earnings. So they never had big beats and they never had big, you know, misses, and they would beat by a penny a recorder. Now that worked until IT didn't IT.

but IT worked for decades, you know, IT worked until he left. And then people realize that, you know, they were just basically adJusting real state holdings to beat by a penny and that, you know, there was some again. I mean, if you go back, I can really look, jeff melt wasn't really the problem which you eat.

The problems which is were were created years, years prior. And it's a it's a good conversation to have. And I get I see both sides of the argument, but we're probably getting bogged.

This is I actually think people like this, I mean, like to me, guy looks like every story, every amazing story, cisco used to do the same thing. Member john chAmbers, like they basically had this ability to kind of just put IT up, put IT up, put IT up until they weren't, you know, until the november of two thousand and seven. But that's every story that he has ever existed in the market.

When I start the business, l was the monster, was the gold standard of text tax. Now I can't get out of its own way. And it's been that way for a decade.

And so they lost visibility. They lost misdeem ted. They did a whole host of things. I had five CEO and last fifteen years or so. So I mean, like to me, I think credibility of management is very important. And I think that's why those data points are increasingly important, especially as you kind of take the human element out of a lot of investing guide.

Fair enough. Let's take a look at some questions we just opened. So we're mesh b if you thought the question up, I just want to make a pointer thing we did address IT in terms of snowflakes.

Hopefully we mess. We answered the question for you. Um this is from situation room.

Has I W M finally made the turn? Where might me get the bicycle throw out the I wm? I mean, IT looks as though, you know, we're right there. And what's happening is it's all predicated on what danish and talking about for a while, this moving bank. So I don't think we've made the term yet.

And if you go back again, if you do a longer term chart, you will see what i'm looking at in terms of these levels being pretty big resistance. You know, I think we make the turn and i'll try to get an exact number for you. So bear with me. I'm so I am just typing. But if we can close above here ago, a close above two forty five, lets say I think that would validate the turn in my opinion so that's what i'm looking at the end yeah the one thing i'd .

say is like i'm just unsuppressed with the performance. This is the election. When you think about some of the other sectors the way that theyve rally, you think about the way the K R E has acted as the region bank index.

And to your point, there's a bunch of small cap stocks in this sort of thing. I mean, IT almost filled in the whole gap. I november six, right? And so here we are.

We're still below at the S M. P, the azteca about to make new hides. So I just don't find the Russell too interesting. Who didn't we have on with a strategist a couple weeks? So I don't know .

as marco was belsky oh yeah.

bells ky was talking about small caps and he basically was very dismissive. He just thought they're basically a useless sort of thing to focus too much energy .

on the way the way it's constructed. But it's it's more thematic. But yes, one hundred percent. I mean, I think the idea what we've talked about, I don't think it's the best constructed etf, but IT also speaks to people's view of the economy.

And if the theoretically of small cap stocks are doing well, IT should be predicted on a strong economy. So I told to get IT. Here's a good when I like this system.

J, S, which is higher guys bitcoin allocation, or blue targui GPA. His G, P, A was zero point zero zero. So my bitcoin allocation equals that a blue talk? Uh, G P, A.

And i'll be honest with you. I mean, i've said all the time, I don't really get IT. I don't understand that you tried to understand that I read books about IT. It's not intuitive to me. IT doesn't mean it's not viable, just doesn't mean to .

make sense to me. By the way, one of my favorite movie lines of almost every movie that i've seen, i've been on the earth for fifty two years. I probably started watching like adult movies like one thousand nine hundred and seventy seven guy was my first one with like star wars.

Maybe I saw the jaws after wars.

No, you don't. The line by dean warmer and who who is the kid? Fat.

drunken to drink and stupid is no way to go through lifeson.

Yeah and you got funny. You do this thing um all the time you do IT with that was a rose the other day you said, you know the wicket which SHE wasn't the villain you said was the wizard like dear warmer was not the villain in animal house. Like let's be honest, right like um in .

school when at the very end where the .

blue she's given that speech to the fortune y house was IT over when the germans bombed Pearl harbor.

R that could be that .

can favorite line um ever now so you couldn't .

make that movie today for Better, for worse but that's neither here nor there this is for you from mark mica who said day, thank you, mark and am reading I found while read from here, can you give your input on a call spread that goes out two or three months and the stock hits the short call strike early within weeks? What do you hoped to maximize? So this is we've talked about this the number of times in terms of you could put on a call spread, you can look into a call spread and I think this is sort of talking to that yeah.

So this is actually a really good question about how to manage an option trade. And I love that guy. He does that often times I will lay out a call spread buying and near the money call, selling out of the money call.

You know, we don't like to sell a calls that are too cheap, right? Like so usually i'm looking for something that is maybe a fifteen delta. What does that mean? That means it's got about fifteen percent probability of being in the money.

So when I put a all spread in, i'm actually targeting the level in which I want the stock or the underlying to go to see your questions specifically is that if you get to that short strike and you have a lot of time, well, there is an opportunity cost right of leaving that short call on. So IT depends what your camera IT depends what your time or izon is. You got to remember, you can always cover that short call and maybe you rolled up the long call a little bit.

So you're taking a loss on the short call, but you're lacking in a part of the game. In that longer, you know, on the longer one. And then you just kind of define your risk. You know, maybe you do another conspired.

Maybe you do A I got one more for you then, and I don't know the answer this, so I apologized. This is from Edward Morgan. Help guys with my old, with my memory.

What's the equal? Wait, small caps Carter talked about, not the I W. M. I don't know the answer and i'm not suggesting you made. So I am not looking to see you.

I talk for like ten seconds and i'll go to the plex.

It's I go from dog um bear with me a second I net dog just talked about you know this incoming presence, fascination with bitcoin on the back of talking about the one for a week or doors stronger doll. I mean, there's something that's got to give here with the U. S.

Doll and bitcoin that I don't think the market fully comprehends yet. And I think to a certain extent, you know, japanese yields are going higher while their currency is going lower. There's a problem there. And there could be a scenario where our yields start to go higher and our currency starts to weaken, which is not a good thing. You know, I haven't figured out how that happens, but it's happening in japan ahead down.

Yeah, I had did IT before I could get IT from the perplex S M I D, S M I D. I want to say one thing before we get out here, guys um I was that a um I am going na name names here. But I was at a meeting in in the last week um with a bunch of investors, a bunch of bankers and a bunch of founders of tech founders and there was a very prominent person in this group who is kind of holding court put the thing together.

And I was interesting because you know you and I you we're focused on the markets. We're staring at the markets. We have to look at all these other inputs. I think dug.

And what I am thinking about this is kind of doug tweet that you just read, right? So like here's an issue or here's a scenario where markets have been moving all over the place for last two and a half weeks based on an outcome of a political event, right? And you know this person who who made this point is that, okay, we had this, you know, surprising outcome in our election.

And IT seems that a lot of americans, and thankfully, pretty come about everything right. If you were on the other side of this, you know, administration that's coming in, you want IT to work out, not the bad things you don't mean, but you want the things that keeps our country secure. You want the economy to continue to grow, you know all those sorts of things, right? Nobody wants bad outcomes.

But you know, is interesting that this person has been all around the world in the capacity in which he does. He talks to a lot of business people. A lot know about politicians.

The whole world is very nervous. The whole world is nervous about this transition. And I think that's really interesting.

And I don't think there's anything Priced into our markets. And i'm not trying to fear monger here. IT was just a very so boring, you know, sort of conversation. And until you, we started this thing by saying that russia launching I C B M in the ukraine, I C B M are used to put nuclear warheads on in, send them overseas because they have a long rains, that kind of the point.

And so after russia just changed their nuclear doctor and then a week later, they sent A I C B M, you don't have to be a political science major to put that together. What they're trying to intimate. So and i'm not again, no, I certainly hope none this happens, but it's just weird that people are following the crap out of like you know snowflake and microstrip gic, all the other stuff and and people just don't give a shit about anything else.

No, you're right and the world is nervous and I think not i'm not playing devils advocate because I agree with you, but the the optimists will say that's the exact reason they wanted to elect former, present and now president elect trump in the first place to make the world nervous because that works to our bit and a much suggesting it's right or wrong, but they're two sizes. Now you're talking about launching.

If you had told me a week ago, given the run the market IT had, that you would have the headline that we'd LED with and you say, okay, where's the fix? I would say twenty five, maybe thirty S M, P, down one hundred, handles gold, up, fifty box by yellow down significantly in the form of a flight quality that that that would make sense fundamentally. But all those things, none of it's happening.

And so here we are. But you know what? That's neither here nor there because we have something to announced. We talked about IT yesterday, the side of december tenth. We're excited about this then, along with our good friends, at fact, set transforming the financial landscape aid role in revolutionary, revolutionizing technology and workload. This is something we talked about that their conference a year so ago ish, and this is something we have talked about on december tenth.

Yeah and just really quickly in a time where people are kind of trying to figure out what are the use cases for A I, whether it's been machine learning, evolving you into some of the other technology that's really caught, I think, the world by storm over the last couple years.

I mean, you know financial institutions and specifically a data company like facts, you're getting real benefits from know the playing technology so we can spend some time thinking about that. And really you know what that means for we use facts that every day, and we have been for a very long time, what are some of the new benefits of using some general I tools that been kind of bolted on to some of the processes that we use. So to me, i'm really looking forward to this also guy.

looking forward to IT. Um we are going to have our podcast dropping tomorrow. We a conversation with Terry duffy, the CEO of C M E group. IT was a great conversation and we had early this week when we're naples, florida. Dane is going to join us for the a block of that conversation, which are probably talk around some of the things um that we didn't mention on market call this week, but we look forward to the day we do.

Thanks, everyone for being here. Go check out the on the tape podcast. Go subscribe to the market mature that drops every day right after the close, summarizing some of the most important stories in the markets. We'll see them all on monday, guy, for the market all again.