Anpanman - Navigating the Wall of Worry: Margin Calls, AI Tizzy, and the SpaceMobile Outlook

[Music] [Music] [Music] This is the AST Space Merriotide Gas. [Music] We just basically come here from the Singles. Let's see where you are. We don't want the music even to know that it's connected by something. [Music] The opportunity that we have is very, very, very large. [Music] Hey everyone, thanks for joining this midday space. I figured I'd fire it up because just seeing all the concertation out there, I figured it would be good to just start a space and help people breathe a little bit, release. I think I wanted to cover a few things and just remind people that this is the market. It's a living, breathing thing and you're going to have volatility and when the market has to process new information or when it's faced with a wall of worry, you're going to have periods of volatility. This is why I've been saying for many years now, don't be on margin use leverage and margin sparingly only tactically for a short period of time. You don't want to be caught in situations where you have conviction in something and then a decision is made for you because you're over leveraged and you end up having to get tapped out. Certainly, some of the moves in the market today are indicative of that where I think there's quite a bit of degreasing that's going on. Some people might be getting margin calls and so you're going to see some of these exaggerated moves. But today, this week, we started off with some concerns around AI, basically usurping every one of their jobs and then that died down for a bit and the market rallied off of the back of that after digesting. I think it was a citrini, the piece that that person had put out in visioning a scenario of 2028 where AI disrupts a ton of white collar jobs and unemployment goes to 10% and as young people would say they were do-maxing and that got the market in the tizzy. But yeah, today there's a whole host of other things for the market to worry about including aforementioned piece. But I didn't want to cover some of those things and just kind of go through why the market is having this big visual reaction and also just a reminder to people that stocks can go up and down for no reason. Like I've seen whether it's AST or T1 Energy or some of these other names, people frantically trying to find a reason why the stock raised it down. Right. And so I think a first step for anyone who's planning to invest in the markets and be active and you know, be invested in single names, you have to put together a watch list of the sector that your particular companies are in. So if it's a RISD, you should also be tracking rocket lab, firefly, intuitive machines, red wire, Carmen, some of these other names because when you have context, it gives you the ability to say, okay, well, my particular stock is down 5, 6, 7, 8%, but the entire sector is down the same amount. Maybe there's nothing going on with the company. It's just beta, which is market movement. Every stock has some level of beta co-movement with the market. And so it may not be something that's impacting your particular company, but it could be something that's impacting all the companies. And so for T1 Energy, that would include names like for solar, in phase, SDG, CSIQ, some of these other names, but yeah, once you have the context like, you know, and giving Dave the stock is up a lot and the entire sector is also up. Then maybe it's not your brilliance that your stock picking brilliance that's causing the stock to be up, but it's actually the sector. Perhaps you've got macro guys or factor guys who are looking for exposure in that sector and they're buying that, that, you know, a various names or they might be buying ETFs, which hold a basket of those names. And so you're going to have co-movement, right? And so today is no different. You know, there's been, I mean, T1 Energy in particular, there's people who are using AI and trying to find, you know, different reasons why the stock is down. The stock is down because the sector is down. And I pointed this out earlier, the stock had outperformed the last two days and that was in the face of first solar having a pretty bad, well, they had a good quarter, but they had bad guidance and first solar was kind of the proxy for the sector. In particular, and I'll talk about it a bit more, but those were company specific issues around international. And so T1 Energy did pull back a little bit, but it pretty much hung in there, which quite candidly was a bit of a surprise to me. But now you're seeing it kind of give back some of those, that staying power and now it's catching up with first solar and CSI Q and some of these other names. And so it's not, you know, God hasn't chosen your stock to go shit on or there's not something nefarious going on or some problem. It's the market and sometimes it's hard to from a psychological perspective to accept that that perhaps something's out of your control and you don't really know what's going on. As any, any perfectly normal human being, you want to know exactly the reason and cause for things, right? I mean, it's just, it's just part of human nature to have an explanation for why something is happening in one way or this, you know, this is why we pursue science and these other things. And so when a stock price is down, the first inclination for people that don't follow a sector will be like, well, why is it down and, you know, what's going on here? And oftentimes it's the market, right? And so I think it's something keep in mind when we talk about high beta. Beta is the movement that a stock price will have relative to the market. And so when the company has high level beta. So, you know, Russell 2000 is down 2.2% right now, which is a really big move. When you have higher beta names, they'll, they'll move at a higher multiple of 2.2%. They might move, you know, three times that move or two times. But anyway, but I think it's, you know, something to keep in mind. But as I, you know, take a step back and look at the market. We've got this whole new wall of worry. So Iran, I'll just go through a list here, but you know, Iran has been percolating a bit. You know, it seemed like we were going to get some relief. It seemed like perhaps talks between the US and Iran were going or we're expected to go OK. I mean, who knows what the ultimate outcome is going to be. But obviously the US is is gearing up for a potential attack and you know, there was some due today that I a IEA inspectors. I have noticed, you know, different movements and work around the old facility in Iran that was bombed. And so there's some concerns that perhaps talks aren't going to resolve anything that the US is going to go in the US and and or Israel or in combination, depending on sequencing and there's even. All host of you know, commentary and analysis of you know, is this really it is a US lead it. But yeah, that's a big concern going into this weekend on top of that you had PPI come in hotter than expected due to stickiness around services. And because of that, you know, the market started pulling back, especially high beta names because the reason why a high beta names pull back if if inflation is hot is that in that scenario, you're not going to be looking forward to rate cuts. And at worst you might have rate hikes, you might have increases interest rates. And then on top of that, you know, when you are in a situation where rates are coming down and perhaps the quidities being put into the market, that's generally supportive of higher valuations. It's also supportive of, you know, companies that are dependent on funding going forward. So companies that don't make money currently will need to raise capital via equity. And so that's that's predicated on valuations being robust. And then of course, if they're borrowing money being in a low rate environment helps. And so with hot PPI, you know, that that has put the market on notice about potential rate cuts and. And so, you know, sectors are reacting accordingly. And so whether you pick the sector if it's if it's quantum names, if it's space names. If it's crypto, if it's any of these sectors defense next generation defense name, they're all down, they're all down pretty big. And so, yeah, that's that's just kind of the nature of the beast right like the market adjust to new information and it looks for a trend. And so if if inflation starts to trend a little higher than you know, people are going to be concerned about potential rate cuts, which generally speaking are when you're in an injury, an injury environment, of course, for the right reasons. But if it's the economy is going strong and and rates are coming down, that's going to be very simple. imported for growth companies. But if rates are coming down, for example, and the economy's doing poorly, then there are some offsetting balance there, right? If you're in a financial crisis and rates are getting cut and liquidity's being pumped in the market, there is gonna be some level of volatility and a pullback in valuations, of course, and toll things settle out. But yeah, a hot PPI number, I mean, just throw that into the mix. The other thing, this whole idea about AI killing jobs, that people kind of digested that and were able to process it. And you've got, you had a number of people come out whether it was like Citadel or some of these other experts. Well, you know, this Intrini analysis, or the narrative that they put together, there were all these different flaws, right? And so I guess that gave the market some level of comfort. And then of course, block yesterday came out and said they were gonna, what was it? They're gonna remove, I think it was 40 or 50% of the workforce. And so, you know, then stock price like gaped up 20% on that news. And then of course, this whole narrative around AI replacing jobs came back to the, came back front and center. And the whole idea there is that, you know, white collar jobs will get disrupted. And then, you know, it causes this cascading effect, where if you don't need humans and for these jobs and, you know, corporates, corporations will extract a lot of profits, but then for what to end, right? Because then those white collar jobs that are lost, you know, you don't have that income being spent. And then it basically loses, you know, housing values come down, you know, restaurants, you know, any number of things, cars, it all kind of cascades, right? So if you get to a point of unemployment of 10%, that's not good for the economy. But I think, you know, there's some nuances to it. And of course, people with this whole AI scare, people are trying to price it and everything immediately. But I think, you know, me personally, I think there's gonna be winners and losers in that situation where, you know, perhaps some white collar knowledge workers are going to get loose jobs, but then, you know, people become more productive. But I also think that for a number of these jobs, there's a certain element of human experience and judgment that can't be replaced, right? And so maybe I'll do another space about this in the future, but I do think there will be kind of the pendulum, the pendulum is swinging right now to AI everything, but I think eventually it will go too far and people will realize the limits of that and the pendulum will swing the other way where people are going to pursue human expertise, human judgment, you know, I talked about this with my wife earlier today about how sports is one area that's not gonna be disruptive by AI because the fact that who wants to watch a soccer game with robots playing each other, you wanna watch humans and the whole enjoyment of sports or music performances or any of these things is that you have a great level of empathy and understand the achievement that these humans have obtained. And so having robots do it, it makes you indifferent 'cause I think when I look at AI Slop that gets posted on Twitter, you immediately tell like that's AI driven and then I've met you before, like I've gotten to this mode where I just gloss over it 'cause it doesn't really add anything, whereas for me having real human perspective and opinions matters more. And so I think in the future you might end up in this bifurcation where people will go seek human content and some, like people talk about like movies are gonna be totally AI generated. That's fine, but then when I go to the theater or when I watch something, I will want to know that a human made something 'cause there's this connection and value in that, it's just like, when I think about what is it like food, people put a premium on organic food versus food that's not organic or it's processed. And so I think there's gonna be this bifurcation where people are going to pursue things that are human generated or whatever it is, right? But anyway, but yeah, I mean, I didn't mean to go off on a tangent, but that's another thing to throw in there. Another area of concern for the markets is private credit. And so I have a small position in the company called Pagaya, which has been getting absolutely demolished. And that company is exposed to private credit, although they generate private credit, ABS vehicles and the like, but overall, for those people that are following the news closely in capital markets, private credit is this kind of area that is ballooned in size versus public credit where these credit securities are traded, private credit are closely held, securities are still like public market for them. And so this is an area that's exploded over the last few years. And so within whether it's private or public credit for that matter, there has been concerns around a few high-profile bankruptcys. For example, there's a new bankruptcy out in the UK of a mortgage lender that I believe there was fraud there. There's been like two big frauds here in the US, one is first brands and the other one is tri-color. And so when I'm adding on top of that, the skittishness, you also have, for example, these industries that are perceived to be being disrupted by AI, their credit is started to underperform pretty significantly, right? So software credit, for example, software has been, you know, whether it's like private equity firms like Vista or Tom Abravo, you've got a number of, you know, for the last, I guess, three decades. Software has been a very attractive area for private equity to go in. You do a leverage buyout. You take out a lot of costs. You cut development costs and you basically run these things for profit. And this is typically for like, you know, legacy software where an enterprise is using some old software, they pay for maintenance and they keep it going. And so, and then you've got these PE guys who come in, they buy it, they might improve it to a degree, they might, you know, merge it with other things. And then they raise prices, right? And so, however, with the advent of AI and if you think about like what, andthropic is doing the cloud, it's like, hey, we can develop our own tools. We don't need to use some of these, whether it's legacy software or it's newer stuff, like software as a service, we're just gonna like do our own thing, right? And so that's been a huge hit to the credit markets 'cause then people, what's been going on software, people are trying to extrapolate that to other areas that might get disrupted by AI. And so, with a few of these like credit blowups and then you've got, you know, sectors that are under pressure from the potential of AI, you've got like banks, business development, corporations and private equity firms that are taking pretty big marks this past quarter. And so that's been way on the markets. And so, yeah, I mean, use, I just listed off one, let's say one, two, three, four, four different things, right, that's getting the market into just a today. And then you've got of course February, month end, today's last trading day for February. And so hedge funds, which are, you know, portfolio managers and also, you know, the hedge fund in total, like portfolio managers are judged by month and month performance and then those numbers are reported to LPs. And so the moves today are being further exasperated by people wanting to either cut risk or clean up their books and, you know, have the ability to explain why they either had, well, most likely had like a bad February. So all these things are kind of playing into it. And I think, you know, it's, again, it's important to understand like what's going on at the macro level, if you're going to be an investor in single names because I think, you know, for AST, Chase Mobile, for example, today they announced the satellite, satellite or SAT code JV, the new name, and they released a, you know, Votifone put out a press release and they put up a website which is great news. And you've got a quarterly update, which is coming on Monday. And so I think there's a bunch of positive stuff that's about to come, but that said, the macro is too strong, right? Like yesterday, I guess I'll talk specifically about the space sector yesterday, you had RocketLab report earnings which, you know, I think the earnings were okay. And they also revealed like some new areas of business for them, which typically would excite the market. But of course, you know, everyone was focused on Neutron, you need to lay to, I believe the fourth quarter of this year for launch. But, yeah, I mean, the market, you know, RocketLab wasn't down that much, you know, is maybe down two percent or so, but then, you know, you have this selling on top of selling due to these market concerns. And of course, you know, for high beta names, it's gonna be, it's gonna exacerbate that, right? And so in particular, why I mentioned RocketLab is that it is a, you know, a proxy for the space sector. And, you know, I've talked about this before, but AST and RocketLab kind of trade in tandem. And so if one is up, the other one typically will go up if one goes down, the other one will typically kind of move down with it. And so in this case, you know, RocketLab was off today, based on results. And so AST naturally is going to fall, right? And so we'll see what the Monday update brings for. or the fourth quarter, which some people have asked, what do I expect? I mean, so AST already pre-announced Q4 results, so that shouldn't be a surprise. They already announced revenues, operating expenses, CAPEX, and that was on the back of doing the most recent credible, which for those that remember, of course you remember, stock was at 96, and they, with conversion premium, they effectively raised at 116. And I will say, like the company has been good about timing their raises, they've actually raised capital at high levels right before things kind of outside of just company-specific stuff, but when the sector has tended to have a drawdown. But yeah, that quarter, the update on Monday, shouldn't be a surprise in terms of financials. Things that I would be looking for, of course, is an update on production, launch cadence. Will we get some information about the batches of satellites that they're working on, and will those get down to the Cape? When does that going to happen? When are they going to launch on Falcon 9? And then, of course, I would expect that for that update, we'll probably get a firm launch date for Blue Origin New Glenn, Bluebird 7, which someone, at least on Twitter, had mentioned like March 6 as a potential date, which I knew is aggressive, but then there has been some, I guess, data points that have corroborated, not March 6, but perhaps March 8th, or sometime thereafter. So that's why I'd gone out there and said that, I think that data point looks aggressive, but it seems pretty close. But we'll find out on Monday. But I think, as I mentioned before, it's important to understand that space, this all the space actors down a lot today, and ASD space mobile is like no different. And yeah, I'm expecting to get a good update on Monday. I will say, though, that going back to expectations was at Redwire reported yesterday, and I was actually surprised to see that company rebound quite a bit, even though the results were mixed, I'll say. But that's, again, the sector had sold off into that print and then had rallied. And so I think Redwire kind of followed this sector as well. But yeah, as I said before, I think it's important to kick a step back, look at all the names in this sector. It's always good to have a watch list. And so instead of beating yourself up over why the stock is down, that gives you some perspective that it's something bigger than just your name. It's actually macro factors. And so I'm going to move on to two-one energy. There's some people I think who pointed out EOS, as potentially impact in the company. And to be fair, like, or to be candid, I've never really understood that the investment interest in that name, and this is not to knock on anybody, but it just wasn't something that kind of fit my profile in terms of investing. But I did in the interest in this is kind of an extra because I do normally. I did listen to the management call yesterday because I was thinking, oh, it's down quite a bit. Over 30%, maybe there's some timing issues. Maybe there's some hiccups here, but they can get through it. And so I listened to the call. And it seemed like the company-- and I don't know the full context, but it seems like the company had given a reiterative Q4 guidance. I think it was in the middle of the fourth quarter. And then, of course, when they announced results yesterday, they missed very significantly. And so the amount of trust that people had with the company and to their credit, they took ownership of it and said they'd need you to do better and all these different things. But the magazine that this was huge, right? So the company, I think the analysts were the consensus estimates for $94 million. They came in at $58 million. And the Gross margins-- this is where I don't quite understand the company. But analysts were predicting negative 24% gross margins. And the company came in at negative 94%. And this is an improvement from, I guess it was like a few quarters ago where they were down at negative 3% and 40% gross margins, which, to me, in terms of the business model and for longevity, I think the street had looked at potentially in the out years at 20 to 30% gross margins. And so maybe people were hanging their hats on that. But then now, the street, let's see. Where does the street now? I think long-term gross margins, maybe in 27, 16%, 33% in 28. So it's still pretty good, I guess. But for margins to be that negative-- I don't know. That was a bit of a head scratcher for me in terms of, when people talk about valuing companies based off of revenue multiples, yeah, you can value companies on revenue multiples as long as that gross margins are pretty high. But when they're negative, I'd argue that-- I mean, obviously, like, somebody has to get to scale. But for the gross margin level per unit, if it's going to be negative, I don't think using revenue multiples is all right, metric. But when I listened to the call, it seemed like a management, it was all self-inflicted wounds. They had execution issues, and they pretty much bundled the ball. And so they had to cut guidance. And it's unclear how much of this-- or it seemed like it was solely execution. I don't know about customer demand or anything like that. But for EOS, what they're doing is brand new. It's something unique. They're doing some type of battery storage systems. At an enterprise scale for data centers. But then when people are conflating that with, like, well, maybe that's the reason why T1 energy is down. These are two very different things. And the reason why I say that is that T1 energy already has a solar module plant that's up and running, that's generating revenues and profits. They're building a new solar cell fab, which-- there's some risk there, of course. But then both of those, the module plant, which is already up and running, and then the solar cell fab, they're based off of tried and true designs from Trina Solar. And so it's not as if they're reinventing the wheel. It's actually leveraging existing technology. And so it's a very different level of execution risk and risk reward. And so they're very different. That said, there could be some cross-ownership. For example, I know a lot of retail investors who own T1 energy, some of them might own EOS, EOS, which I've seen people post about it. And so to the extent like there's some cross-ownership and people are de-risking, then that can certainly impact stock rights. And that's something that you see in the space sector, too, where people have cross holdings and a number of names. And so that's why you have co-movement. Or it's just like at a higher level, that ETF owns a group of names. And you've got people selling ETF and ETF as a result, because people are selling it. You've got market makers who then redeem. They'll actually shrink the number of ETF shares that are traded out there. Because during the arbitrage process, they will buy the basket of securities, and then they'll redeem the ETF and make a spread. And I won't go into the mechanics of that. But yeah, you might have some co-movement because of similar ownership between the two. I looked at the institutional ownership, and there are some overlap, but not really that much. But yeah, I think people conflating EOS's results to T1 energy on the one hand. Yeah, they're both like earlier stage companies in the energy sector. And so that's maybe the two things they might have in common, but outside of that, they're very different, right? And very different in terms of execution risks and what level they are at. Because I think EOS, for example, let me just look here. So this fourth quarter for EOS, they reported 58 million revenue, negative EBITDAB 71 million, for this coming quarter that, let's see, E1 energy is reporting. They're projected to do about 369 million of revenue. Gross margin of 21%, and EBITDAB of $40 million. And we've gone through a few people have posted about this before, but I think the company has already kind of indicated that they are-- the amount of revenue that are going to generate in the fourth quarter is more than the entire year. And obviously, people will be focused on guidance as well, which, let's see, for 2026, the street, at least, has 1.1 billion of revenue in guidance, or that's what they're expecting. And 105 million of EBITDAB. And that compares to 2025, which should end at $774 million in revenue in 21/22 million of EBITDAB. So yeah, a very different company than EOS, which the image before, has very negative gross margins and is losing money and overfist. And they're trying to do something that's hard and something do. But with that comes execution risk. And it seems like listening to that management team, they need help. They've got to bring in real money. operators to get that company back on track. But yeah, so that's, I guess that's my, my duty on it. But if you look at the solar names, I mean, you know, whether it's CSIQ, it's down 13% solar edge, down 15 and phase down 10%. You know, a number of these companies are down quite a bit. I mentioned for solar earlier, you know, the stock was off. I think it was down, let's see. You know, they reported results earlier this week. And the stock was at, let me look here. No, 245. And then when they reported results, like, you know, drop down to the 200s and now it's at 196. There were some company specific issues there. They they had, they they they have a big plant in Malaysia and Vietnam, which they basically have had to muffle due to tear issues, but they're also upgrading those plants as well. And so guidance for the company came down pretty significantly. And then they also have a big exposure in India where they manufacture modules and cells. And in normal days, they would export those to the US in addition to the ones from Malaysia and Vietnam. But due to tariffs, they've had to pull back on that. And so now the companies like try and sell those products into the Indian market, which, you know, is a protected market like the US. However, I think there's like some competitive issues there. I quite candidly, I haven't followed first all or that closely. But yeah, those seem to be company specific issues, which cause them to cut guidance. Whereas if you looked at their numbers, their US, their expectation for US demand is up pretty markedly. It was up pretty, pretty decent in in 2026. And so, so yeah, I think, as I pointed out before, when first solar reported the results and it came off, I was actually quite surprised that that T1 energy hung in there pretty well. Because I think people were able to digest that news and understand that it was international exposure for first solar. And, you know, T1 energy did come back a bit. But over the last two days, it's outperformed, the rest of the sector, and then of course today, you know, it's hard to overcome all this macro stuff right. And so, it's been selling off. And that's on top of, you know, T1 energy being a big winner for retail investors, hedge funds, you know, since last year. And so, you know, when you're in a position, in a situation where you have to deleverage or you're trying to protect profits, you typically will try to focus or some of you try, you know, the tendency is to focus on winners. And so, you're seeing some of that, you know, unfold today. But, um, yeah, I think, I think, um, the key thing for people is to make sure, as I mentioned before, you know, don't be over leverage, don't be on a tremendous amount of margin. If you're like sweating every tick of a stock price move, that probably means that you're too big, right? Or you have too much exposure. And so, it's in days like this where you want to have dry powder and be able to go in the offense. And, and if not, like, it's okay to do nothing, right? Um, as long as you understand what you own and you have confidence in it. And, you know, right now, for me, like, my perspective is there's, yeah, there's a lot of worry that's being priced in the market, whether it's AI disruption, the credit markets. I mean, I think out of everything, of course, you know, Iran is big too. I think inflation is probably cooling. I think Iran, it will resolve itself, you know, we'll figure that out. AI, I think, is like, it's probably a bit overdone in terms of, you know, the pendulum of expectations have gone too far. But in terms of credit, I think that's something to keep an eye on, right? So I think if we have additional blowups in credit and you start seeing some real stress in the credit markets that spill over into the equity markets, that can be, you know, a potential, a potential, you know, big, big thing to overcome where, you know, you've, you've got the Fed who's, you know, solely focused on inflation and, you know, of course, you know, the job market as well. But if there is a credit event, and so the last big one we had was, if you guys will recall, when Silicon Valley Bank and Republic Bank, first of all, like, and a few of these others, you went under, you know, that was a situation where, you know, the Fed had to step in and arrange the marriages of these failed banks and provide liquidity to the markets. You know, you could have some type of event like that in the coming weeks or months. And so that's something to keep an eye on, right? Because in those types of situations where there's market uncertainty and people don't know how bad things are on the credit side. And, you know, if there's one cockroach, maybe there's more, more, you know, failures of companies that are widely owned in terms of credit, then that can, that can obviously bring in a high level volatility and market uncertainty. But again, this is why you don't go out on margin. You don't, you know, have too much leverage. Because if that type of event happens and you have a situation where, you know, the Fed has to step in, which is like, you know, there's a lot of volatility and then what the regulators have to step in and the Fed comes in, they lower rates, they like, put liquidity into market. Then you want to be positioned for that, right? You want to be able to ride into that. And then there will be bargains. Because then the, when you have those type of events where like, you know, VIX goes up really high, you know, I've talked about in the past where typically when VIX goes a 50 or 60, like those are huge buying events, like in terms of deploying risk, you want to have room to do that, right? And that's, you can't do that when you're over, when you have too much margin or your over leverage and you're being tapped out. So anyway, yeah, those are some of my thoughts. I don't know if people had questions. I'm going to look at any comments. But yeah, I think the most important thing is like take a deep breath. If you are concerned about your particular company, it probably, the moves right, is it moves today, probably have nothing to do with your company. It has more to do with the macro environment. And yeah, just think about why you're invested, you know, we always talk about like this idea of re-underwriting your thesis, you know, has anything changed. And you know, one thing that has changed is the fact that markets have sold off and higher baiting them so down. And so from a relative valuation perspective, you know, if the entire sector has sold off and your company has followed it too, then perhaps like the fundamental value is not going to be as high as it was yesterday, right? And so it's not as if these things are, you know, etched in stone, like you could have a company that's executing and generating a tremendous amount of cash flow, but if market sentiment is really bad, like no one's going to care or they're not going to be cared to at a certain extent. However, if the company can use the execute, like that will ultimately get priced in. And of course, that will depend on, you know, do is the intratate environment supportive, like if it interest rates are low, that means valuation multiples are high or if interest rates are high, that means valuation multiples are low. And so all these things kind of play together. And so just keep that in mind, like when you do do have days like this where, you know, not everything can be, not everything is particularly up to a company or executives, right? Like I've seen people sit, people lament that, you know, this company's executives, they should have, they eat ahead of their earnings results, like they should put out an update, right? They should talk about this or that. And it's like, no, that's what the quarterly update is for. And unless it's like very material news that has to go out right now, typically companies will wait and they'll announce order. And so yeah, just take a deep breath. If you're, if you're having a hard time kind of, you know, dealing with volatility, again, perhaps you might have too much risk on maybe, and it's okay to decross. Because you always want to be in the right state of mind, in markets, whether they're in good times or bad times. And when I say right state of mind, like in good times, sometimes people take, you know, good performance as a, as basically like a command to go take more risk or like, hey, things are going so well, I'm going to leverage up more. And I will say like, there's this one guy I saw on Twitter, I feel pretty bad. And I was sharing it with a few other people. But there's this one guy who, I think he's long PATH, which I don't really know that well. But this guy, I think it made a lot of money on Tesla and lemonade, I think. And you know, he had done that on margin. And so I guess as of a last few months ago, he was like, this guy, I mean, he had really big account. Like he, I think he had like $19 million, but he was margined for another 20 and he was long this one company. And, you know, I think it had worked out initially. And then it's just been a complete ride down. And he's had to meet margin calls sell his position. I mean, margin calls sell his position. And I think he's down to like $1 million, which is absolutely brutal for someone who has a portfolio of $19 million. Right. And so, and that's, that's like the double edged sword, right? Like you, when you use margin, as I say, as I said before, like use it tactically, use it sparingly. It's something that's temporary. If you are lucky, then counter blessings and call it a day and get out of margin, right? Because soon or later, if you're heavily in margin, it's going to come back to bite you and you're going to get taken out to the wood shed at the wrong exact room time. And this goes for, you know, people who are selling volatility as well, you know, there's people today, I think we were selling puts, cash or credit puts. Hey, it's free money. It's not free money. Like I think there are eos. There was like, there were a few posts yesterday where people had sold way out of the money puts. They get it was free money heading into earnings. And then of course, the company comes out with big surprise and it's down 30, 40% and do what I've told people in the past, which is, you know, this whole notion of, I'm going to sell a put at a lower strike and I'll be happy to take delivery of that stock because it then my average cost goes down. That depends, right? Like it depends on why the stock is down. Like if the stock is down for bad reasons, you're not going to want to take delivery of that stock at that price or perhaps any price. And so I saw a few people who got tagged pretty hard on that. And so especially for these, you know, earlier stage companies, that's not something you want to do because things happen, right? And if you truly believe in a company, you want to be able to ride the volatility and when you sell puts, that's selling insurance. And yeah, it works until it doesn't. And then what's something sometimes people don't recognize is that when you sell puts, you might have enough cash for the initial exercise, but if they can tease to go down and you pick up a ton of deltas, then you're going to have to put in more money. And that's where more jacoles come. So, yeah, just keep that in mind. Like it's not, there's no free lunch. And that goes, you know, if you're long stock and you're shorting puts, you're basically increasing risk exponentially, because you're going to get long even more stock if the stock craters and you're losing money from your long position. And so, yeah, just be aware, like it's not, I know a lot of people on Twitter say, Hey, I'm selling puts. It's a great strategy. It is until it isn't. And when it's not, it can be really bad. So, yeah. Anyway, I'm easier. There's, I don't think there's any comments. But anyway, but yeah, that's, that's pretty much it. I just wanted to catch up and, you know, give people something to listen to and, and just take a pause. Like I think, as I said before, it's important to take a deep breath and know what you own and volatility, you know, at the macro level when stuff like this happens. There's not much you can do about it, right? Like they're not much you can do in terms of the company that you hold. There's not anything going on with it unless, of course, there is news. But, um, but yeah, that's not indicative of, you know, if the thesis hasn't changed and the company hasn't announced anything material, then nothing has changed, right? The environment has changed and that can impact your holdings and, and there's a whole confluence of factors, whether people are overlaveraged or a longer name and they're getting liquidated. I can all plan to it. But, um, yeah, I think Kuk had it right where he's like today sucks. I'm going to go out surfing and so sometimes that's, that's a good thing to do. And if you are, you know, in a position where, you know, maybe you've got yourself in a bad position and, um, you're down and maybe you are on margin, it's also okay. Also, okay, to take some losses, right? To, I remember when I was working the head of an industry and, um, you know, there are periods when things don't go right and things go the exact opposite ways, like if you're long things and you're short things, they, they go the opposite way. Sometimes you take losses, you decross and you get your mindset, right? And, and you live on and fight another day, right? And so, um, I think, I think this idea of, of people holding on for dear life, like if you're overextended, um, that's not good. Or if you're over-invested, like that's not good either. Like you, you want to make sure that from a mental perspective, you're banking the right decisions. And so I think key thing is, you know, you want to be in the game. Don't be over leverage. Um, you know, the market, the Russell is down 2.3%. I mean, the market, S and P's only down 0.8% and Nasdaq's down 0.7%. But yet these high beta names are, they're down, you know, many multiples of that. And that's just part of, that's just part of, you know, the market, right? Where these names will in, in good environments, they're all performed significantly. And then in bad environments, you know, today people are buying health care names are buying like Dow, you know, energy names. A lot of a lot of, um, you know, dividend, you know, consumer staples, what you, what have you anything that's defensive. Um, and so yeah, but when if things kind of blow over and, and, um, the, maybe there's no like conflict in our end and then people kind of come to their senses on AI, um, these things will blow over, right? And you'll see continued our performance when these higher beta names and of course, lower beta names, um, burning back to where they were. So anyway, now I'm rambling. So, uh, I'm going to cut it there. But hopefully it's just helpful for people to hear and, um, yeah, I'll, maybe I'll do another space this weekend. Um, once we, um, you know, once I guess some of the more this news comes out and and maybe the market's stabilized a bit. But, but yeah, as a reminder, we've got a number of earnings coming up, um, A.C. Space mobile is going to report after the market on Monday, um, a few other names that I'm involved in, Bridger aerospace, um, strata critical or also reporting next week. And then for the, and this was, this is kind of the, the funny thing. There was like a number of people on Twitter saying T1 energy was reporting earnings was it yesterday? Uh, and then the day before, um, but yeah, officially the company is not set at earnings date. They typically have announced earnings, um, later in March. So I think it's like last year they marked, they announced, um, March 17th. And so, uh, I think Bloomberg has them reporting for the around the same time. And so yeah, they'll say they're earnings date and we'll hear from the company, um, which I think is going to be chock full of a lot of interesting news, whether around monetization of 45 X tax credits, um, you know, their perspective on the, the build out of Austin, G2 Austin, which is their new solar fab, um, solar cell fab. And then of course, any color around offtake agreements, um, the whole host of things, uh, for them to cover. So anyway, that's it. And we'll catch up again soon. Everyone, um, take it easy. Have a great weekend. Uh, if you're feeling stressed, go out for a walk, uh, do something relaxing. Cause, um, the market's still going to be here. We can come back. Take care. Thanks for listening to the AST space, Merva podcast. 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