The Compound and Friends
00:53:48 · Josh Brown, Michael Batnick
[00:53:48] S0: where about where everyone else values it? [00:53:50] S1: It's not precise. But what I thought was interesting is you can see the guesstimated market cap on Hyperliquid. There is a ton of volume, like, I think 20,000,000 in the last twenty four hours. Whatever it is. It's it's a ton of money being traded. Look at this. So Anthropic, they have they have it pegged at 1,770,000,000,000, and they have OpenAI at 1,400,000,000,000. Or if they [00:54:20] S0: roughly what The Wall Street Journal is saying, according to investors. [00:54:25] S1: And so if they if they if the IPO price at $1.1500000000000, yeah, there would be a pop. I mean, at least that's what is being implied today. So Matt Levine was writing about this today. He said the perps are we're talking about the perpetual futures on hyper liquid. He said the perps are in a sense, just a recreational prediction market on the price of the stock, not a derivative instrument tied to the price of the stock by arbitrage mechanisms. But a really important thing we have learned about finance in the last few years is that prediction markets are pretty accurate. That is if you have a platform where people can make real money bets on some outcome, their bets will tend to give a pretty accurate and well calibrated estimate of the actual outcome. End quote. And it was pretty damn right about SpaceX. I know it's pretty right about Cerebras. And I know that's only two, but we don't have a million a million of these in the history. I think I think of guessing at [00:55:14] S0: where the open's gonna be?
00:55:14 · Josh Brown, Michael Batnick
[00:55:14] S0: where the open's gonna be? [00:55:15] S1: Where the market cap is. This is a pretty good approximation where the market is today. One point seven seven and one point four. [00:55:21] S0: I guess the only thing I want to know is how deep and how wide these prediction markets are and whether or not they can be actively manipulated by somebody with a vested interest. And if you tell me it's millions of people trading, then I'm okay with that. [00:55:37] S1: The open interest is $100,000,000 There's $31,000,000 in twenty four hour volume. Dollars 31,000,000. [00:55:42] S0: That's fine. Then I am satisfied with that statement. Lot. And [00:55:47] S1: And and guess what? It's not it's not morons trading this. Like, the... It's it's it's it's Susquehanna. It's Jane Street. It's professionals that are trading this. [00:55:56] S0: I agree. [00:55:57] S1: Alright. Let's let's let's keep moving. Make the case. [00:56:00] S0: Well, do they anthropic chart? ChartKitMap did this. People are pissed. Shared this. People are mad about this too. What do you think people said when I posted it? [00:56:13] S1: Well, they have $800,000,000,000 in commitments. I don't know. What do they say? [00:56:16] S0: Yeah, that's no, they have a trillion dollars in commitments. Who cares how much cash they have? Showing ChartKitMatt of Exhibit A is showing actually Anthropic has more cash on its balance sheet than any of the Mag-7s other than Alphabet at 100 because 31 [00:56:35] S1: guess what? Well, people are [00:56:36] S0: saying money raised is not the same as cash flow generated. We
00:56:36 · Josh Brown, Michael Batnick
[00:56:36] S0: saying money raised is not the same as cash flow generated. We [00:56:40] S1: know Genius. Well, guess what? There will be more money raised. Right? Maybe another $100,000,000,000 that's gonna be on the balance sheet. And I think what's impressive is that everybody says the cost of compute, they're burning cash, they're burning cash, they're burning... They lost $80,000,000,000. No. They didn't. That's impressive. They have... They're doing a lot better job managing the cash than I would have thought. I know that they have a lot of commitments. Everybody knows that. I thought this was impressive. [00:57:07] S0: Alright. That brings me to make the case. Here's what I have to say to all the Internet tough guys and all the Substack bears that are rooting for the collapse of the human race and everyone else that is somewhere along the spectrum of skeptical to rabid dog. Do yourself a huge favor. If you're so sure at how this is all gonna turn out, you know it in your bones that this is 1999, about to turn the clock over to the year 2000, and we are going to see a historic collapse in the stock market or in AI stocks or both, what are you so mad about? You're about to become a fucking billionaire. Look at you. Start picking out interiors on that Lamborghini Urus. How do you pronounce it? Is it Urus? [00:58:12] S1: I don't [00:58:13] S0: even know what SUV. That's ugly as shit that that everyone in Miami has. Is it a Urus? [00:58:20] S1: Don't
00:58:20 · Josh Brown
[00:58:20] S0: Start picking out interior leathers and wood grain in your Lamborghini Urus because you're about to be a billionaire, and I'll show you how. There's there's an ETF sponsored by Roundhill called the neo... The Roundhill Neocloud ETF. I can't believe they launched this, and I love those guys, but they did. NCLD, N Cold. So much talking, so much conviction, so much fury. Do yourself a favor. The next best thing to convincing everybody that you're a genius, which I get it. I want people to think I'm smart too. The next best thing is prove it. Become a billionaire. If OpenAI is a Ponzi scheme and Anthropic can't raise the money and the data centers are faking their depreciation and blah, blah, blah. Don't just talk about it. Here you go. Because an opinion is not a position. Opinion will make you reputation capital, not dollars. So let's see your position. Here, put this chart up. This is 44% below its high already. It's only $84,000,000 in AUM. So you might need options against this or something. This is what you wanna bet against. If you want to be a billionaire, and you could, you could potentially be right. I don't know what's going to happen. Here you go. Very simple. Let me tell you what's in this Frankenstein. The number one asset is US treasuries. Sounds safe, right? But it's not. They're using the treasuries notionally to take risks in nonpublic companies that are themselves Neoclouds. They're buying into swap contracts that give them exposure to Neoclouds that aren't even publicly traded yet. That's how all in this is on the Neocloud concept. And then the stocks it owns, swaps on Nebius, swaps on CoreWeave. It owns iRen, Common straight up. Hut eight and Galaxy, which I think are crypto data centers. I don't even know. Then it's got all these mid cap things like Riot and Cipher and other things that people have lost a lot of money on. And then it's got penny stocks too, like WhiteFiber and CleanSpark and all kinds of meme shit. These should fundamentally be zero if the AI bubble camp ends up being right, and they could be. So what are you so mad about? This thing, thing, this ETF, I guess, if all of its components are worthless or faking their numbers or involved in some sort of Ponzi, and if it's 2,008 in tech, here you go. Take this and turn it into a billion dollars. You're smart people. You know how to do that stuff.
01:01:23 · Josh Brown, Michael Batnick
You know how to trade options and build, I guess, like leap positions. I don't know. Whatever you wanna do. Pick out your Urus, pick out the interior, and what's the problem? It's sitting here all for the taking. So that's the case that I'm making. If you're so angry about AI that you're in people's YouTube streams, like people's YouTube comment centers being mad at them just for talking about the ticker symbols, don't waste it on the moment. The opportunity of a lifetime is right in front of you. Let's see. Let's see if you have the guts. What do you think about that? Sure. No. Seriously. Great opportunity. Right? So it was... Sitting right here. I might show some of this thing. [01:02:16] S1: Core Weave is in a 60% drawdown. [01:02:20] S0: Yeah. But it's a Ponzi scheme, I thought. [01:02:21] S1: Is it go... Is it going to zero? I don't know. I don't know. I don't think it is. I don't know anything about the stock. [01:02:28] S0: I've been reliably I've been reliably told that the whole thing is a house of cards that is being secretly funded by NVIDIA and its musical chairs. And when the music stops, everybody's dead. That's what I've been told. [01:02:44] S1: Alright. Snark aside, I do wonder if you are [01:02:47] S0: I'm not being snarky. I don't own these stocks. I don't own CoreWeave. You couldn't pay me. [01:02:53] S1: If you wanted to bet against the AI trade, would that genuinely [01:02:58] S0: would be shoot your this. [01:02:59] S1: Oh, yeah.
01:02:59 · Michael Batnick, Josh Brown
[01:02:59] S1: Oh, yeah. [01:03:00] S0: If the AI trade... If we have a bear market because of AI, what do think they're going to do to these stocks? [01:03:08] S1: Yeah. [01:03:08] S0: They're going to go to $2 Some of them will be bankrupt. [01:03:12] S1: All right. Let show you this retry and we'll get out of here. This is a JC special. And you're not gonna guess this, but I'm gonna try my best to give you like... No. It's it's it's because it's not a stock. It's a ratio chart, but I'm gonna try and make it easy. It is it is one style box versus another. And, obviously, that's a major, major, major reversal. [01:03:35] S0: Wait. One style box versus another? Okay. So that's Quality versus momentum? [01:03:43] S1: Close enough. It's large value versus large growth. [01:03:48] S0: Not close enough. This is this is totally different one. [01:03:51] S1: I mean, directionally right. Whatever. Quality, momentum, value growth. It's directionally right. That's that's a hell of a chart. [01:03:58] S0: Yeah. He's never last. [01:04:00] S1: What do you mean? He's... [01:04:02] S0: They never last. [01:04:03] S1: Yeah. No. I agree with you. John Like, it'll like [01:04:05] S0: it'll go... It'll run it'll run for six weeks to six months, and then and then NVIDIA goes to 300, and everyone's like, can't believe I bought those stupid stocks. [01:04:13] S1: I pretty much agree with you. John, do I have one more? Similar shit? Value outperformed growth by the large... Oh my god. I didn't realize it was this extreme. 1993. Wow.